THE CLINTON/GORE ADMINISTRATION LARGEST SURPLUS IN HISTORY ON TRACK, PAYING OFF THE DEBT BY 2012
September 27, 2000
Today, President Clinton will announce that we:
Estimate a surplus of at least $230 billion in FY2000.
Remain on track to pay off the entire debt by 2012.
Will reduce the debt by an estimated $223 billion in FY2000 and
more than $360 billion over last 3 years.
LARGEST UNIFIED SURPLUS EVER AND THE ONLY ON-BUDGET SURPLUS SINCE MEDICARE WAS ESTABLISHED
Instead of a $455 billion deficit, the surplus this year will be at
least $230 billion. In 1992, the deficit in the Federal budget was $290
billion - the largest dollar deficit in American history. In January
1993, the Congressional Budget Office projected that the deficit would
grow to $455 billion by 2000. Today, the Clinton/Gore Administration
is estimating that the surplus will be at least $230 billion this year
- the third consecutive surplus and the largest surplus ever, even after
adjusting for inflation. Compared with original projections, these
results mean that there is over $685 billion less of a government drain
on the economy and over $685 billion more that is available for private
investment in this one year alone.
--Largest unified surplus as a share of the economy since 1948. The
2000 surplus is projected to be 2.4 percent of GDP - the largest surplus
as a share of the economy ("GDP") since 1948.
The third consecutive year with a surplus-for the first time in
over 50 years. The estimated surplus of at least $230 billion follows
a surplus of $124 billion in FY 1999 and $69 billion in FY 1998. The
last time America had three surpluses in a row was over fifty years
ago in 1947-49. The FY2000 surplus marks the eighth consecutive year of
fiscal improvement for the first time in American history - surpassing
the pre-Clinton-Gore best of five straight years.
The second consecutive surplus excluding Social Security. Excluding
Social Security, the surplus is projected to be $80 billion this year.
This is the second consecutive surplus on this basis, for the first time
The first surplus excluding Social Security and Medicare. This is
the only on-budget surplus since Medicare was established in 1965.
(The on-budget surplus excludes Social Security and Medicare surpluses).
LARGEST DEBT REDUCTION EVER
The President's plan to eliminate the debt by 2012 remains on track.
President Clinton's budget proposes to reduce the debt held by the
public by $2.9 trillion over the next decade and to eliminate it by
2012. The President's debt reduction comes from saving the entire
$2.3 trillion Social Security surplus, the entire $403 billion Medicare
surplus, and $192 billion of the on-budget surplus for debt reduction.
Interest payments would be eliminated. Currently, we spend 12 cents
of every Federal dollar on interest payment. These payments, which
were once projected to grow to 25 percent of all federal spending in
2012, would be eliminated under the President's plan by that time.
On track to pay down more than $360 billion in debt over three years.
In 1998 and 1999, the debt held by the public was reduced by $140
billion. The government paid down an additional $223 billion in debt
held by the public this fiscal year alone. That will bring the total
debt pay down to more than $360 billion the largest three-year debt
pay-down in American history. In contrast, under the 12 year tenure of
Presidents Reagan and Bush, the debt held by the public quadrupled
The debt held by the public is on track to be $2.4 trillion lower in
2000 than was projected when the President took office. In 1993, the
debt held by the public was projected by the Office of Management and
Budget to balloon to $5.85 trillion by 2000. Instead, shrinking
deficits, and growing surpluses in the last three years are projected to
bring the debt down to $3.4 trillion in 2000 - $2.4 trillion less than
expected. In 1993, the debt held by the public was 50 percent of GDP
and projected to rise to 65 percent of GDP in 2000. Instead, it has
been slashed to a projected 35 percent of GDP under the President's plan
and would be completely eliminated by 2012.
REDUCING SPENDING WHILE CUTTING TAXES FOR MIDDLE-INCOME FAMILIES
Federal spending as a share of the economy is the lowest since 1966.
Spending restraint under President Clinton has brought spending down
federal spending from 22 percent of GDP in 1992 to a projected 18
percent of GDP in 2000 - the lowest since 1966. At the same time,
President Clinton has increased strategic investments in education,
technology and other areas that are vital to growth.
The smallest Federal civilian workforce in 40 years. The Federal
civilian workforce increased from the time when President Reagan took
office to the time when President Bush left office. In contrast, since
President Clinton and Vice President Gore took office, the Federal
workforce has been cut by 377,000 - by nearly a fifth - and is now lower
than at any time since 1960.
While balancing the budget, running large surpluses and paying down
the debt, the Clinton-Gore Administration has provided tax relief for
working families. The tax cuts signed into law by the President in 1993
and 1997 - for example, the expanded Earned Income Tax Credit, the $500
child tax credit, the $1,500 HOPE Scholarship Tax Credit, and expanded
IRAs have reduced taxes for American working families. The total
Federal tax rate for middle-income families has dropped from 24.5
percent in 1992 to 22.8 percent in 1999 - that's the lowest tax rate
since 1978. For families at one-half the median income, the effective
Federal tax rate has been slashed from 19.8 percent in 1992 to 14.1
percent in 1999 - that's the lowest tax rate since 1968.