President Unveils Farewell Budget

President Clinton, blessed with a booming economy and burgeoning surpluses, sent Congress Monday a $1.84 trillion farewell budget that would expand government health care, shower billions of dollars on education and other favored programs and still aim to wipe out the publicly held national debt by 2013.

Mr. Clinton's eighth and last budget is heavy with symbolism, from its black and white covers, standing for the new era of a federal government in the black, to its election-year proposals for a range of new programs favored by the Democrats.

In some cases, the president retooled proposals he has made in the past to better fit the campaign promises vice president Al Gore is making in his presidential race in such areas as expanding health care coverage to five million of the 44 million Americans without insurance and making greater gun-control efforts.

"This budget, in short, makes really strong and significant steps toward achieving the great goals that I believe America should pursue in this new century," Mr. Clinton declared. "It maintains our fiscal discipline, pays down the debt, extends the life of social security and Medicare and invests in our families and our future."

Even before the budget reached Capitol Hill, Republicans were complaining about the increased spending and stingy tax relief, reports CBS News White House Correspondent Mark Knoller. The upcoming budget battle promises to be a replay of bruising fights of past years as Republicans who control Congress push for bigger tax cuts and less government spending.

"We won't let the agenda of a lame duck president in any way reduce our commitment to smaller government, paying down debt and providing for tax fairness," said House Budget Committee Chairman John Kasich. "Instead of looking for ways to create new government programs, we should focus on ways to make them work better by rooting out growing waste, fraud and abuse."

But Jack Lew, head of the president's Office of Management and Budget, insisted the administration was following a fiscally prudent course that would protect the record-breaking economic expansion, the source of the gusher in new revenues.

"We're on a course that's a very positive direction for the budget and the economy," Lew said.

Mr. Clinton's overall budget calls for spending $1.84 trillion for the fiscal year that begins Oct. 1, up 2.5 percent from this year. Revenues are projected at $2.02 trillion, leaving a surplus of $1.84 billion.

Both Democrats and Republicans are promising to set aside surpluses generated by the huge Social Security program -- about two-thirds of the total -- to wipe out $3.7 trillion of the $5.7 trillion national debt, the part held by the public.

Mr. Clinton projects this can be accomplished in 2013, leaving the United States debt-free in terms of public obligations for the first time since Andrew Jakson was president in 1835.

But it is the other one-third of the surpluses where the battles will be fought in coming months. Republican presidential candidate George W. Bush has called for using much of this money to provide across-the-board tax cuts and many Republicans in Congress support that approach.

The parties cannot even agree on the size of the non-Social Security surplus. The administration is projecting $746 billion in non-Social Security surpluses over the next decade, far below the $1.9 trillion best-case scenario put forward by the Congressional Budget Office.

Much of that difference is explained by the fact that Mr. Clinton's new budget abandons the old spending limits put in place in 1997 in favor of higher budget caps that allow him to provide more money for favorite programs.

In addition to earmarking the projected $2.17 trillion in Social Security surpluses to reducing the debt, Mr. Clinton proposes using $350 billion of the $746 billion in non-Social Security surpluses for debt relief.

He would provide $351 billion in targeted tax relief, including measures to help the working poor, families with education expenses or long-term health care costs and those saving for retirement.

In the health area, President Clinton would spend $35 billion to help elderly Americans who have particularly high prescription drug costs pay for their medications.

"When I became president, Medicare was projected to go broke last year, 1999," Mr. Clinton said. "Today it's secure until 2015, thanks to the changes that have already been made. This budget contains further reforms, but all the experts say with all conceivable reforms, more money will still be needed."

The budget, however, also calls for $162 billion in new taxes, primarily through closing corporate loopholes and boosting the federal cigarette tax by 25 cents per pack. Congress has rejected similar Clinton proposals in the past.

Click here for the U.S. Office of Management and Budget's web site, which includes the entire budget for fiscal year 2001.

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