THE WHITE HOUSE
Office of the Press Secretary
PRESIDENT CLINTON and VICE PRESIDENT GORE'S NEW BUDGET FRAMEWORK
The President's New Framework has Six Key Components:
A New Social Security Lockbox Strengthens Solvency and Doubles Protection Against Diverting Social Security Resources
The President's Plan is the First Budget Proposal that Calls for Balancing the Budget Each Year -- Without Using Social Security Surpluses -- While Strengthening the Solvency of Social Security and Medicare and Still Leaving Resources for Military Readiness, Key Investments in People and Communities, and Significant Tax Relief
Maintains Commitment to Strengthening Social Security and Medicare First, While Eliminating Our Publicly Held Debt by 2015
SOCIAL SECURITY LOCK BOX PROTECTS TRUST FUNDS AND STRENGTHENS SOLVENCY
Building on a Commitment To Save Social Security First: In the State of the Union Address, the President called for locking the entire amount of the Social Security surplus over the next 15 years for debt reduction and higher returns for Social Security. Stronger budgetary numbers now allow us to lock in the entire amount of the Social Security surplus each and every year, while still maintaining enough funding to strengthen and extend the solvency of Medicare, make needed discretionary investments, and provide targeted tax cuts.
A Basis To Build On: While the President's framework extends Social Security solvency to 2053, he remains committed to working together with Congress in a bi-partisan fashion to enact reforms to make Social Security solvent for 75 years.
The President therefore calls for a new Social Security lock box that:
How the Social Security Lock Box Would Work:
(1) All current-law Social Security surpluses - an estimated $3.1
trillion -- would be devoted solely to debt reduction and national savings.
(2) As an added protection, the receipts and outlays of the Social
Security Trust Fund would be taken out of the budget.
(3) There will be tough protections, including maintaining the pay/go
rules to ensure that the Social Security surpluses can not be used for any purpose other than Social Security.
(4) After a decade of fiscal responsibility, annual interest savings
from that cumulative debt reduction would be transferred to the Social Security Trust Fund, instead of being diverted to other spending and tax priorities. For example, by 2011 we will have reduced the debt by a projected $2.1 trillion, yielding projected interest savings in that year of $107 billion. This amount will be transferred to Social Security.
THE MID-SESSION REVIEW AND MEDICARE
Challenges Facing Medicare: Medicare is one of our most successful public programs, providing critical health care services to our nation's elderly and people with disabilities. Medicare faces serious challenges, however, in the next century.
President's Commitment to Strengthening and Improving Medicare: The President has an unparalleled record of strengthening and improving Medicare. When he took office, the Medicare Hospital Insurance (HI) Trust Fund was projected to be bankrupt this year -- 1999. Today, because of improvements enacted in the President's 1993 budget plan and the bipartisan 1997 Balanced Budget Act, the Trust Fund is projected to be solvent through 2015 and the Medicare spending growth rate per beneficiary is below that of private health spending in the next few years.
Plan to Strengthen and Improve Medicare for the 21st Century: Despite this impressive improvement, Medicare is still projected to become insolvent shortly after the baby boom generation retires. Equally as important, Medicare benefits and payment systems still, in large part, reflect the best practices of the 1960s when Medicare was created.
Today, the President Renews and Extends the Commitment He Made in the State of the Union Address. This framework renews the commitment to dedicating 15 percent of the unified budget surplus to Medicare. Over the 15-year window covered by the President's Framework, more than $700 billion would be dedicated to strengthening and extending the solvency of Medicare - more than the $686 billion from the budget since the surplus has increased.
PRESIDENT CLINTON AND VICE PRESIDENT GORE: WORKING TO HELP CHILDREN AND EDUCATION IN THE 21ST CENTURY AND INVEST IN A SECURE FUTURE
Investing in Our Future: A Children and Education Trust Fund: President Clinton's and Vice President Gore's growth and productivity agenda calls for not only significant debt reduction to spur private investment, but also public investment in a secure future and in the skills, education, and health of our youth to ensure that they can graduate from school with the real competencies needed for the workforce.
This is why, even though since 1993, the deficit has been eliminated, funding in Head Start has increased 67 percent, and participation in WIC has increased 30 percent, the President and Vice President are today going further to propose a Children and Education Trust Fund.
Elements of the Trust Fund:
Programs Included: Among the programs whose resources could be augmented by the Trust Fund are: Head Start, Title I - Education for the Disadvantaged, After-school programs, Class Size Reduction, the Safe Schools/Health Students initiative, Special Education, Pell Grants, Maternal and Child Health Block Grant, childhood immunizations, research on children's health, the Women, Infant and Children Supplementary Nutrition Program, and other education and health programs.
Illustrative Benefits: By way of illustration, this fund could:
Investing in a Secure Future: The Trust Fund will allow this needed investment while maintaining military readiness ($183 over 15 years), and investing in crime prevention, agriculture, veterans, environmental protection, health research, protecting Americans at home and abroad, and other priorities (($183 over 15 years).