Clinton Unveils Revised Budget Plan to Balance Deficit by 2005

President Bill Clinton has presented a new federal budget plan that aims to balance the deficit by 2005, a goal the administration has long emphasized. The plan, dubbed Clinton II, promises to make significant cuts to federal entitlement programs, including Medicare and Medicaid, while also investing in education, job training, and anti-crime initiatives. This revised plan differs significantly from the original budget submitted by the President last February, and it has been welcomed by municipal leaders who see it as a constructive step towards eliminating the federal deficit.

Key Takeaways:

• The Clinton II plan proposes to balance the federal budget by 2005, a goal the administration has long emphasized.
• The plan includes significant cuts to federal entitlement programs, including Medicare and Medicaid, with proposed reductions of $295 billion and $122 billion, respectively, over the next decade.
• The plan also invests in education, job training, and anti-crime initiatives, with the President promising to increase federal spending for these programs.
• The plan would cut domestic discretionary spending by 20% over the next seven years, with cuts averaging 20% for city and town programs.
• The plan uses optimistic economic assumptions, including an "economic dividend" from moving towards a balanced budget, which would add $170 billion to the plan's revenue.
• The plan would increase investments in some key city priorities, including programs directed to reduce crime, help children, and finance modest health care reform.
• The plan promises to clear the way for Congress and the administration to focus on implementing a far-reaching deficit reduction plan and controlling federal entitlement spending before this Congress adjourns.

Statistics:

• The Clinton II plan proposes to cut $465 billion in entitlement spending over the next decade.
• The plan proposes to cut $43 billion in unspecified corporate tax subsidies.
• The plan would achieve savings of $517 billion over seven years, with $751 billion in expenditure cuts over ten years.
• The plan would increase federal tax expenditures by $96 billion.
• The plan would increase defense spending by about $25 billion.
• The plan would cut funding for anti-crime assistance by $7.8 billion.

Sources:

• Weekly (no date provided)
• NLC President Carolyn Long Banks
• NLC First Vice President Greg Lashutka, mayor of Columbus and chair of NLC's Special Committee on the Federal Budget and Entitlements