Published
in: New York Times (National Edition), Tuesday, June 27, (2000), Pages
A1 and A20:
"Clinton Raises Estimate of Surplus and the Stakes
on How to Use It".
Original Text and Figures (with WebEditor's
Comments):
Additional References:
Links to Other Sites:
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By Richard W. Stevenson (WebEditor's
Comments in Parentheses).
Washington, June 26 -
President Clinton raised his projection of the federal budget surplus
today by nearly $1.3 trillion for the next decade, putting a breathtaking
sum of new money on the table as the two parties and their presidential
candidates battle over tax cuts, spending, and how to prepare for the nation's
long-term challenges.
Fig.
1.
(Estimates over the last 6 months of projected cumulative 10-year
Federal budget surpluses, including the Medicare Trust Fund and other Trust
Funds, but not the Social Security Trust Fund.)
The new estimate brought the total surplus projection to slightly
less than $4.2 trillion for 2001 through 2010. Of that, $2.3 trillion is
projected to come from the Social Security system, and is considered by
both parties to be off limits for tax cuts or spending programs.
Fig.
2.
(Annual changes in sources of funds for the increasing federal budget
surplus, not including Medicare and Social Security payroll taxes, and
the effects of overall economic growth. Note that the tax revenue appears
as a slightly smaller number over the course of the 10 years, while the
overall economy effect shows a marked increase each year. The effect of
payroll taxes to the Medicare Trust Fund and the Social Security Trust
fund is not shown.)
In setting out his budget framework, Mr. Clinton also stressed that
he would put the government on a path to eliminate the $3.5 trillion national
debt (owed to private sources, and not including $2.2 trillion now owed
to the Trust Funds) by 2012, a year ahead of his previous schedule, and
to use part of the non-Social Security surplus to help extend the solvency
of Medicare ( but not re-pay the Medicare Trust Fund for funds currently
taken from that Trust Fund for general expenditures and to buy out current
private bond-holders).
Fig.
3.
(Annual changes in projected revenue sources to the federal budget
over the next 10 years. Payroll taxes to the Medicare Trust Fund and the
Social Security Trust Fund are Zero for 2000, since Treasury Secretary
Lawrence Summers is diverting these funds to his program to buy out the
private owners of government bonds. These payroll tax Trust Funds continue
to increase at a reduced rate over the next ten years, despite such raiding
by the Treasury Department, while corporate income taxes decrease as a
fraction of the total revenue annual increase each year.)
The new surplus projections are to some extent subject to changes
in the economy, and any nasty economic surprise could dim the chances of
the surpluses materializing (and dim the chances for re-paying the looted
funds of the Medicare Trust Fund and the Social Security Trust Fund).
Mr. Clinton acknowledged as much today. He said it would be a mistake
to allocate all the projected surplus at this point, and he proposed a
$500 billion "reserve fund" to be held aside until the fiscal situation
becomes clearer and voters send a message about what they want to do with
the money.
Additional References:
1. "Gore Proposes Tapping Budget Surplus for
Medicare Prescription-Drug Benefits".
2. "Social Security Trust Fund Used to Reduce
National Debt".
3. "Bush and Gore on the Future of Social Security
and Medicare".
4. "Gore's Plans for Medicare and Social Security
Trust Funds".
5. "Wall Street
Journal on the Social Security Trust Fund".
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