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For the first time in 30 years a President has submitted a balanced
budget to Congress. After decades of budget deficits, Clinton's
$1.7 trillion budget is projecting a $9.5 billion surplus next year.
The Clinton budget achieves balance three years ahead of the 2002
target. Overall, Clinton's budget projects a 3.9% increase in federal
spending. The increased spending would be offset by increased revenues,
largely from the proposed $65.5 billion tobacco settlement and from
$23 billion in increased taxes from the insurance industry and Wall
Street.
Clinton proposed #130-$150 billion of new spending on child care,
education, Medicare, transportation, research, and the environment
over the next five years. His plan also calls for a 3.1% increase
in pay for Federal employees and the armed forces.
More than half of the budget is earmarked for Social Security,
Medicare, Medicaid, and other entitlement programs. Spending for
these programs will increase by 6% this year. Other domestic programs
and agencies will receive a 5% increase. Defense and foreign aid
spending will remain virtually unchanged. The Department of Agriculture
was the only cabinet-level agency whose budget was decreased.
Tax cuts, amounting to $24.2 billion through the year 2003, were
also a part of the new budget. The principal beneficiaries would
be low- and middle-income families with tax breaks coming for child-care
costs and energy efficiency.
There are already plans for the projected surpluses that may total
$1 trillion by 2008. Mr. Clinton wants to stockpile these surpluses
until Congress and the administration can come up with a plan to
revamp Social Security. It is thought that unless Social Security
is modified by 2029, it will only be able to take care of 75% of
projected retirees. (Updated May 19, 1998)
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