When President Clinton entered office, the deficit was at its highest dollar level in history: $290 billion, and it was predicted to grow to over $600 billion by early in the next century. Such an exploding deficit could not be sustained. Interest rates would rise, driving the deficit still higher, and sending the economy spinning out of control.
To meet the threat posed by the massive deficit, the President came forward only 27 days after his inauguration with a line-by-line, specific plan for half a trillion dollars of deficit reduction. The President fought the special interests to pass the largest deficit reduction package in hist ory -- $505 billion. The plan cut over $255 billion in spending and over 300 domestic programs. Yet it also included tax relief for over 15 million families earning under $28,500, made millions of small businesses eligible for tax cuts, and increased investment in education and technology. Only the top 1 percent of individuals and corporations saw their income taxes increase.
As a result of the deficit reduction plan:
President Clinton's approach to cutting the deficit is smart, tough and responsible. For example, he targeted such obsolete government agencies as the Interstate Commerce Commission for elimination. His guide for deciding whether to cut a government program is simple: does it help prepare our nation for the challenges of the next century? Now we plan to go further. In his fiscal 1996 budget, the President has proposed another $81 billion in deficit savings for the next five years and signed a law cutting $16 billion from this year's budget. Now, he has a plan that will balance the budget while preserving key investments in education and training, and strenthening Medicare. That means a stronger economy and more opportunities for hard working Americans.