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. Last Updated: 07/27/2016

Clinton Budget Raises Spending, Cuts Debts




WASHINGTON -- President Bill Clinton, blessed with a booming economy and burgeoning surpluses, on Monday sent Congress 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.


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, Clinton 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 5 million of the 44 million Americans without insurance and making greater gun-control efforts.


Even before the budget reached Capitol Hill, Republicans were complaining about the increased spending and stingy tax relief. 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.


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.


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 $184 billion, according to documents obtained by The Associated Press.


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.


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 Jackson 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 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, Clinton proposes using $350 billion of the $746 billion in non-Social Security surpluses for debt relief.


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.