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Clinton Shifts Stance on Budget Balance, Allays Fears on Social Programs

Strategic Insights

— 1 min read

President Clinton appeared closer to working with Republicans on budget balance by 2002, a significant shift from his previous stance. However, he made it clear that he would only support this goal if social programs such as education, technology, and Medicare were not damaged. Clinton's remark at a White House press briefing was met with enthusiasm from congressional Republican leaders, who saw it as a victory for their efforts.

Key Takeaways:

  • Clinton has reduced the timeline for balancing the budget from 10 years to 9 years, citing recent economic improvements.
  • Republicans have pressed for a balanced budget in 7 years, but Clinton has now acknowledged the possibility of reaching it in this timeframe.
  • Clinton has expressed concerns over cuts to social programs, including education, technology, and Medicare, which he believes could be harmed by a rapid budget balancing effort.
  • The president has stated that he will reject a Medicare overhaul plan that cuts $270 billion in program spending over 7 years, effectively shrinking the growth rate of Medicare from 10% to 6.5% annually.
  • Clinton has also clarified his comment on the 1993 tax hike, stating that he was proud of the increase and that it 'was the right thing to do.'
  • Congressional Republican leaders have characterized Clinton's comment as a confession of wrongdoing and are pushing for him to support the GOP's plan to slash spending, balance the budget by 2002, and cut taxes by $245 billion.

Statistics:

  • The government has run a budget deficit every year since 1969, with the deficit widening to a record $290.4 billion in 1992.
  • The deficit has narrowed since then, finishing 1993 at $254.7 billion and 1994 at $203 billion.
  • The government expects to announce the deficit for fiscal 1995, which ended Sep. 30, in the near future.
  • The balanced budget amendment, a major piece of the GOP's Contract With America package, failed in the Senate by a single vote in March.
  • The Republican budget plan calls for cutting $1 trillion over 7 years to end federal deficits and provide money for $245 billion in tax cuts.

Sources:

  • The Washington Post, Oct. 19
  • The New York Times, Oct. 19
  • The Wall Street Journal, Oct. 19

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