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THE PRESIDENT'S ECONOMIC PLAN:
REACHING BALANCE IN 2005
In 1993, the President faced a deficit that was rising out of
control -- from $290 billion in 1992 to more than $600 billion early
in the next century.
The President's 1993 economic plan has cut the deficit
dramatically -- from $290 billion to a projected $190 billion this
year.
More importantly, it cut the deficit as a percentage of the
economy (GDP) -- from 4.9 percent to 1992 to an estimated 2.7 percent
this year and 2.1 percent by the end of the decade.
If not for interest on the debt accumulated between 1981 and 1993,
the budget would be in balance today.
But, largely due to health care costs, the deficit will begin to
rise again -- gradually reaching $266 billion in 2005.
Now, the President proposes to finish the job -- to balance the
budget by 2005.
In 2005, the President proposes to save:
$96 billion in entitlements:
Medicare, $67 billion
Medicaid, $19 billion
Poverty programs, $9 billion
Other entitlements, $1 billion
$92 billion in discretionary spending:
Defense, $27 billion
Non-defense, $65 billion
$6 billion in corporate subsidies.
$117 billion in interest savings.
The President would target tax relief to average Americans,
costing $26 billion in 2005.
All told, the President's plan would bring the budget at least to
balance by 2005.