The President’s Fiscal Year 2000 Budget
Special Report No. 84
Executive Summary President Clinton’s newly proposed budget plans on a steadily growing series of budget surpluses over at least the next ten years. To ensure the surpluses, the Administration plans to hold the line on most types of federal spending while increasing the current record peacetime level of federal taxation.
Ostensibly to bolster the failing Social Security and Medicare programs, the Clinton plan would use more than three quarters of the projected surplus to reduce federal debt. Another 12 percent would be used to fund private savings accounts, and the balance would fund new spending initiatives.
Some programs would see an increase over the next five years, notably education and training programs as well as funding for roads and other transportation projects. The budget also calls for additional spending for more teachers, after-school programs, and Head Start. The Administration’s plan to use surplus funds to pay down the national debt would significantly lower interest expenses while entitlement spending remains essentially unchanged under the plan.
On the revenue side of the ledger the Clinton plan contains a mix of tax and fee increases as well as a host of tax credits. These would, on net, boost federal revenues by $45.8 billion over the next five years. Revenue raisers include a 55-cent-per-pack hike in the federal cigarette tax and higher corporate income taxes. The revenue reducers are a myriad of tax credits that would subsidize activities ranging from long-term medical care to first-time home purchases in the District of Columbia.