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.

Next: A Serious Step Toward Health Care Reform

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