By
The Associated Press
WASHINGTON - President Clinton issued a farewell budget yesterday projecting nearly $2.5 trillion in non-Social Security surpluses over the next decade. He made one last pitch to use a part of the money for certain favorite programs while cautioning against jeopardizing prosperity by ignoring "fiscal prudence."
Clinton's final budget will essentially serve as a place holder for the incoming administration. President-elect Bush will present Congress with his own spending plan soon after taking office.
Bush has cited the slumping economy as a reason Congress needs to pass his $1.3 trillion tax cut.
Clinton used his last budget report, which was just a bare-bones version of the budget documents that a president normally sends Congress, to laud his handling of the economy over the past eight years and warn against deviating from his path of using most of the surplus to pay off the national debt.
The Clinton budget basically showed what would happen to the government's books over the next decade if all programs stayed in place and grew only at the rate of inflation.
Under these baseline assumptions, which included no new policy proposals, Clinton projected that the overall surplus would total $5 trillion from 2002 to 2011.
Of that amount, $2.54 trillion would come from Social Security trust fund surpluses, which Clinton, Bush and most members of both parties have agreed should be used for debt reduction. Bush has also recommended using part of this amount to buttress the pension program by establishing private investment accounts.
Clinton projected that the rest of the surplus would total $2.45 trillion. That figure includes $532 billion in projected surpluses from Medicare, which Clinton and others have said should also be set aside to reduce the debt and should not be used to pay for tax cuts or more spending.
Clinton's farewell budget projection stood in stark contrast to one Bush's father released in January 1993, days before Clinton took office. That document projected soaring budget deficits of more than $300 billion a year.
Clinton, in his last budget message, said his program, passed in 1993 with no Republican votes, turned the huge deficits into surpluses, which helped lower interest rates for consumers and businesses and laid the foundation for the country's economic boom.
He said this prosperity would be jeopardized if the federal government did not use the projected surpluses prudently by paying down the part of the national debt held by the public, which Clinton said could be eliminated by 2010 for the first time since 1835.
"The favorable long-term budget results in these projections can be realized only with prudent policy - choosing continued reductions in outstanding debt, rather than expensive tax cuts or spending increases - while sustaining private saving, investment and productivity growth," the budget document said.
Clinton reviewed the administration's economic history and the record nearly 10-year-long economic expansion.
"Over the last eight years, I have sought to provide the fiscal discipline necessary to ensure the continuing growth of our economy," Clinton said. "I present this document with pride in our accomplishments and the hope that this progress will continue and grow for all Americans."
Republicans have charged that Clinton is using the pitch for fiscal discipline as a way to thwart their efforts to pass tax relief. They contend that Democrats will eat up the surpluses with increased spending.
Clinton made a pitch for several programs, including a prescription drug benefit for elderly Americans, which he said would cost $253 billion over 10 years.
Other programs that the president singled out in his budget book were some old favorites such as higher spending for school construction, environmental protection and hiring more police.
Bush will have his own priorities, but the president provided estimates of the 10-year costs of his initiatives as a benchmark that supporters in Congress will be able to cite.
