THE PRESIDENT'S ECONOMIC PLAN:

An Overview

The President's plan provides a sharp contrast between his policies and those of the Republicans. The President wants to balance the budget over a reasonable period of time -- 10 years -- so he can protect Medicare, and invest in education and training and other priorities for the American people. Because Republicans balance the budget more quickly, and also provide a huge tax cut for the wealthy, they have to slash Medicare and Medicaid and cut education.

• To help raise living standards of average Americans, the President's plan will:
  • balance the budget, freeing up capital for private investment;

  • invest in education and training to give Americans skills to get high-wage jobs; and

  • take the first, serious steps to reform the health care system, expanding coverage and reducing costs for average Americans.

• By contrast, Republican policies will:
  • increase the "education deficit;"

  • turn Medicare and Medicaid into second-class health care systems; and

  • give huge tax breaks to the wealthy.

Republicans would balance the budget the wrong way: To reach balance in 7 years and provide a huge tax break for the wealthy, they would slash Medicare and Medicaid and cut deeply in education and other investments that help raise average living standards.

The President's plan builds upon the policies of his first 2-1/2 years that cut the deficit, created nearly 7 million jobs, controlled interest rates and inflation, expanded trade to create more high-wage jobs, and rewarded work by cutting taxes for 15 million families. The President is also building on his efforts to create a new kind of government, one that creates opportunity, not bureaucracy, and provides the tools that average Americans need to build better lives for themselves and their families.

Highlights

• The President, who has cut the deficit from $290 billion in 1992 to an estimated $190 billion this year, proposes to balance the budget by 2005.
  • Republicans, none of whom voted for the President's 1993 plan, now want to balance the budget the wrong way -- cutting Medicare, education, and other important priorities deeply to fund a huge tax break for the wealthy and reach balance in 2002.

• The President proposes to take a first, serious step toward health care reform, providing net savings of $124 billion in Medicare and $55 billion in Medicaid by 2002 while expanding coverage and initiating insurance reforms.
  • Republicans would simply cut over $430 billion from Medicare and Medicaid, enough to turn them into second-class health systems.

• The President would save $64 billion in non-health entitlements by 2002 by reforming welfare, farm, and other programs.
  • Republicans would cut too deeply; for example, by increasing interest costs of student loans.

• The President would cut $200 billion from discretionary programs by 2002 by eliminating, cutting, or consolidating hundreds of programs and targeting available funds to defense, education, children, and anti-crime efforts.
  • Republicans would cut education and anti-crime programs; for instance, their cuts would throw hundreds of thousands of children off Head Start and nutrition programs, and gut the President's anti-crime efforts.

• The President would target tax relief to middle-income Americans, enabling them to more easily raise their children, pay for post-secondary education, and save for the future.
  • Republicans would provide a huge tax break whose benefits would flow disproportionately to the wealthy, and also would raise taxes on millions of working families.

• The President proposes to work with Congress to save $25 billion by eliminating unneeded corporate subsidies.