Special Report No. 76
Executive Summary The Clinton Administration’s newly proposed FY 1999 budget contains a plan that it claims will create a budget surplus of $9.5 billion in FY 1999 and generate additional surpluses in fiscal years 200-2003. The Administration hopes to bring about these surpluses by slowing the growth of most types of federal spending over the next five years and raising a host of taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es and fees.
While the Clinton proposal would hold the line on most types of federal spending it proposes several new spending initiatives. These include plans for increasing aid to education, expanding child-care subsidies, and increasing spending on medical research. The administration’s proposal also contains several provisions which would affect federal entitlement spending. These include a proposal to use any surpluses to bolster the Social Security trust fund and a plan to expand Medicare coverage. It is unclear how the administration would accomplish its objective of bolstering the Social Security Trust Fund. In any case, doing so is likely have only a negligible impact on the long-term solvency of that fund. On the other hand, the administration’s plan to expand Medicare coverage would likely exacerbate the nation’s already serious long-term budget woes.Share