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budget fnl
Page 1
PRESIDENT CLINTON DELIVERS THE FIRST BALANCED
BUDGET IN A GENERATION AND A MAINSTREAM TAX CUT
Roughly $900 Billion in Net 10 Year Deficit Savings.
First Balanced Budget since 1969.
Largest Investment in Higher Education Since the G.I. Bill in 1945:
$1,500 HOPE Scholarship to Help Make Two Years of College
Universally Available.
20% Tuition Tax Credit for College Juniors, Seniors, Graduate
Students and Working Americans pursuing Lifelong Learning to
upgrade their skills.
Single Largest Investment in Health Care for Children Since 1965.
A $500 Per Child Tax Credit for Approximately 27 Million Families.
Critical Long-Term Entitlement Reforms -- Extends Solvency of Medi
Trust Fund for at Least a Decade.
Brownfields and Empowerment Zones Tax Incentives to Revitalize o
Nation's Distressed Areas.
A $ 3 Billion Welfare-to-Work Jobs Initiative Targeted to High Povert
Areas.
Treats Legal Immigrants Fairly -- Restores Health and Disability Bene
THE FIRST BALANCED BUDGET IN A GENERATION
FIRST BALANCED BUDGET SINCE 1969
Net savings of roughly $900 billion over ten years.
1993 Economic Plan has cut the deficit more than 75% from $290 billion
budget. fnl
Page 2
in 1992 to $67 billion or lower in 1997. This agreement finishes the job --
balances the budget in 2002 and puts the budget in surplus at least
through 2007.
SINGLE LARGEST INVESTMENT IN HEALTH CARE FOR CHILDREN SINCE THE
PASSAGE OF MEDICAID IN 1965
An unprecedented $24 billion for children's health care.
Guarantee of meaningful health coverage including full range of benefits to
as many as 5 million uninsured children.
Provisions to ensure that states use this investment to provide health care
coverage to children who do not currently have health
insurance and that there are adequate cost protections so
that families are not burdened with excessive costs so
that care is affordable.
CRITICAL LONG-TERM ENTITLEMENT REFORMS
Between $400-$450 billion in ten-year Medicare savings.
Extends the life of the Medicare Trust Fund for at least a decade.
Prepares Medicare for the 21st century -- more choice, competition,
improved payment systems.
$4 billion in preventive benefits to fight diseases like breast cancer,
diabetes & colon cancer.
$1.5 billion to help pay the premiums of low-income Medicare beneficiaries.
PROTECTS THE PRESIDENT'S CRITICAL DOMESTIC PRIORITIES. The Budget
Agreement, which will be enacted in the Appropriations bills in the fall, includes
99% of total amount of President's 5-year Domestic Discretionary Budget.
Largest education investment in 30 years.
Pell Grant expansion -- maximum grant increased to $3,000.
New child literacy initiative consistent with President's America Reads.
Head Start expansion -- on track to 1 million children in 2002.
Full funding for President's training budget, including Job Corps.
President's FY 98 budget request for EPA Operating Budget
National Park Service full funding for operations budget, plus land
acquisition and state assistance, and Everglades Restoration.
Superfund -- clean-up of 500 toxic sites in next four years (if policies can
be worked out).
COPS -- funding on track to put 100,000 more police officers on streets
by 2000, plus full funding for overall Violent Crime Reduction Trust Fund.
MOVES PEOPLE FROM WELFARE TO WORK & TREATS LEGAL IMMIGRANTS
FAIRLY
budget fnl
Page 3
$3 billion to help states and local communities move people from welfare
to work.
$12 billion to restore both disability and health benefits for 350,000 legal
immigrants in 2002 who are currently receiving assistance or become
disabled, ensuring that they will not be turned out of their apartments or
nursing homes or otherwise helpless.
Preserves the minimum wage and other labor protections for welfare
recipients moving from welfare to work. Does not include the
House-passed provision to leave workfare participants unprotected by the
Fair Labor Standards Act and other employment laws. Protects workers
from displacement by those leaving the welfare rolls, and establishes a
strong process for workers to raise grievances with an independent
agency.
A MAINSTREAM TAX CUT
On December 15, 1994, President Clinton proposed the Middle Class Bill of Rights,
which included a $500 Child Tax Credit, an expanded IRA to allow people to
withdraw money tax-free and without penalty for education, and a tax deduction
for post-high school education expenses. Each of the President's proposals is
included in this budget:
A CHILD TAX CREDIT FOR APPROXIMATELY 27 MILLION FAMILIES.
$500 Per-Child Tax Credit for approximately 27 million families with 45 million
children under 17. The credit begins to phase out for couples with incomes above
$110,000.
13 million children from families with incomes below $30,000 will receive the
child tax credit
-- up to 7.5 million* more than would have under the Congressional plans.
Families earning under $30,000 such as young teachers, police officers,
farmers, and nurses who work hard and play by the rules will now receive the
Child Tax Credit. *Comparison to House passed bill; vs. Senate bill: 5.9 million.
A VICTORY FOR MIDDLE CLASS PARENTS TRYING TO PAY FOR THEIR
CHILDREN'S COLLEGE AND FOR WORKING PEOPLE TRYING TO UPGRADE THEIR
SKILLS.
$1,500 HOPE Scholarship to make the first two years of college
universally available. The final agreement includes the President's initiative
to help make the 13th and 14th grades as universal as a high school
diploma is today. Students will receive a scholarship of 100% on the first
budget. fnl
Page 4
$1,000 of tuition and fees and 50% on the second $1,000.
20% Tuition Tax Credit for college juniors, seniors, graduate students and
for working Americans pursuing lifelong learning to upgrade their skills.
The 20% credit will be applied to the first $5,000 of qualified education
expenses through 2002, and to the first $10,000 thereafter. The
President has long understood that the economy is changing and that
people need the opportunity to enhance their skills throughout their
working lives. This is why the President insisted on the 20% tuition tax
credit that is in the final bill and was a major improvement over the bills
passed by Congress.
TAX INCENTIVES TO REVITALIZE OUR NATION'S DISTRESSED URBAN AREAS.
A key component of the President's tax cutting agenda has been to spur economic
activity in distressed areas of our nation's cities. This budget reflects the
President's agenda:
A New Tax Cut Plan Helps to Clean Up and Redevelop Brownfields. The
3-year Brownfields tax incentive will reduce the cost of cleaning up
thousands of contaminated, abandoned sites in economically distressed
areas by permitting clean-up costs to be deducted immediately for tax
purposes. This will, in turn, encourage redevelopment of these areas.
The Treasury Department estimates that this $1.5 billion tax incentive
would leverage more than $6 billion for private sector cleanups nationwide,
allowing redevelopment of 14,000 brownfields.
New Empowerment Zones (EZs). The budget includes a second-round of
EZs -- 15 urban and 5 rural EZs. The new EZs will benefit from a different
blend of tax credits from the first-round communities. For example, the
EZs will be eligible for the Brownfields tax incentive, special expensing of
business assets, and qualification for private-activity bonds.
HELPING MOVE PEOPLE FROM WELFARE TO WORK
A Welfare to Work Tax Credit. This provision will give employers an added
incentive to hire long-term welfare recipients by providing a credit equal to
35% of the first $10,000 in wages in the first year of employment, and
50% of the first $10,000 in the second year, paid to new hires who have
received welfare for an extended period. The credit is for two years per
worker to encourage not only hiring but retention.
$3 Billion to Help Move 1 Million People from Welfare to Work. Includes
President's proposal to create $3 billion Welfare to Work Jobs Challenge to
move long-term welfare recipients into lasting, unsubsidized jobs. These
budget.f
Page 5
funds can be used for job creation, job placement and job retention efforts,
including wage subsidies to private employers, and other critical
post-employment support services. The Labor Department will provide
oversight but the dollars will be placed in the hands of the localities who
are on the front lines of the welfare reform effort.
PRESIDENT CLINTON DELIVERS
THE LARGEST SINGLE INVESTMENT IN CHILDREN'S HEAL
CARE SINCE THE PASSAGE OF MEDICAID IN 1965
The President fought hard to ensure that the Budget Agreement includes $24 billion
to provide meaningful health care coverage to as many as five million of our
nation's ten million uninsured children. This investment includes a meaningful
benefits package, ensures that states use this money to cover uninsured children
and not replace existing public or private spending, and guarantees adequate
cost-sharing protections for families.
INVESTS UNPRECEDENTED $24 BILLION FOR UNINSURED CHILDREN. The
President insisted on increasing the investment for children's health from
$16 billion to $24 billion by including revenue from a new tobacco tax.
Because of the President's leadership, this budget will contain the largest
children's health care budget increase since the enactment of Medicaid in
1965. Including these additional revenues in the children's health initiative
will not only further reduce the number of uninsured children, but it will also
serve as a financial barrier to help prevent our children from starting smoking
budget.
Page 6
in the first place.
ENSURES MEANINGFUL HEALTH CARE COVERAGE, WHILE ALLOWING
STATES TO DESIGN THEIR OWN BENEFITS PACKAGES. The President
fought hard to ensure that this investment guarantees the full range of
benefits -- from checkups to surgery -- that children need to grow up strong
and healthy. The President also worked to ensure that prescription drugs,
vision, hearing, and mental health coverage now offered at the state level
are extended to millions of uninsured children.
GIVES STATES THE FLEXIBILITY TO DESIGN BENEFITS THAT MEET THEIR
NEEDS. States will be able to choose from any of four benefits packages:
(1) the FEHPB model; (2) the benefits package of the most popular state
HMO; (3) the state employee plan; and (4) the actuarial equivalent of any of
the three stated benefit plans as long as prescription drugs, vision, hearing,
and mental health services now offered in these plans are guaranteed to
equal at least 75 percent of the value of these services.
SUPPLEMENTS, NOT SUPPLANTS, CURRENT HEALTH CARE COVERAGE.
Includes provisions to ensure that states provide health care coverage to
children who do not currently have health insurance. It requires that states
maintain their current Medicaid eligibility levels of spending to access Federal
dollars to ensure that this investment is not used to replace public or private
money that already covers children.
ENSURES ADEQUATE COST-SHARING PROTECTIONS. The President
fought to ensure that families are not forced to shoulder excessive costs for
their children. The Agreement guarantees that families under 150 percent of
poverty will be protected against overly burdensome cost sharing.
budget.
Page 7
PRESIDENT CLINTON DELIVERS A $500 CHILD TAX CRE
FOR APPROXIMATELY 27 MILLION FAMILIES
MAIN FEATURES OF THE CHILD TAX CREDIT:
Age. Covers children under 17.
Amount per child. $400 in 1998. $500 thereafter.
Income limits. Begins to be phased out for couples making over
$110,000 and for one parent families making over $75,000.
"Stacking." Child tax credit will be calculated or "stacked" before the
EITC, and will therefore be available for the up to 7.5 million children
in working families who have incomes below $30,000 and who were
denied the child tax credit under the congressional bills.
For families with more than two children -- Refundability to cover
out-of-pocket income and payroll taxes. Because many large families
have little income tax liability, but pay significant out-of-pocket payroll
taxes, the child tax credit for these families is partially refundable.
These families will receive a child credit for their income taxes plus the
extent to which their out-of-pocket (employee share) payroll taxes
exceed their EITC.
Savings Incentive. Taxpayers will be given the opportunity to
contribute $500 each year to an education Individual Retirement
Account (IRA). Earnings would accumulate tax-free in the account,
and no taxes will be due upon withdrawal for an approved purpose.
A CHILD TAX CREDIT FOR FAMILIES WHO WORK HARD AND PAY TAXES.
13 million children from families with incomes below $30,000 will receive the child
tax credit
-- up to 7.5 million* more than would have under the Congressional plans. Families
making under $30,000 like young teachers, police officers, farmers, nurses and
others who work hard and play by the rules will now receive the Child Tax Credit.
*Comparison to House passed bill; vs. Senate bill: 5.9 million.
budget. fnl
Page 8
President Clinton worked to ensure that under any final agreement, these young
parents would receive a child tax credit to make it easier for them to raise their
children.
Consider a family of four with two small children: the father is a rookie
police officer making $23,000, and the mother has chosen to stay at home.
Both congressional bills would have denied this family, and millions of
others, the child tax credit. Under the final agreement, this family will
receive a child tax credit of $675.
President Clinton's
Agreement
House Bill
Senate
Proposal
Child Tax Credit for
family of rookie
$767
$675
$0
$0
police officer making
$23,000
PRESIDENT CLINTON DELIVERS EDUCATION TAX CUT
TO HELP MIDDLE CLASS FAMILIES PAY FOR COLLEGE
THE PRESIDENT'S HOPE SCHOLARSHIP AND TUITION TAX CREDIT
From the beginning, promoting expanded educational opportunity has been the
centerpiece of President Clinton's budget and his middle class tax cut proposal.
Promoting education is the centerpiece of this final tax cut bill:
$1,500 HOPE Scholarship to make the first two years of college universally
available. The final agreement includes the President's program to advance
the goal of making the 13th and 14th grades as universally available as a
high school diploma is today. Students will receive a scholarship of 100%
on the first $1,000 of tuition and fees and 50% on the second $1,000.
20% Tuition Tax Credit for College Juniors, Seniors, Graduate Students and
working Americans pursuing lifelong learning to upgrade their skills. The
20% credit will be applied to the first $5,000 of tuition and fees through
budget.f
Page 9
2002, and to the first $10,000 thereafter.. The President has long
understood that the economy is changing and that people must have the
opportunity to enhance their skills throughout their working lives. This is
why the President insisted on the 20% tuition tax credit that is in the final
bill and is a major improvement over the Congressionally-passed bills.
A SUMMARY OF ADDITIONAL EDUCATION TAX CUTS
Education and Retirement Savings Accounts. Allows penalty-free IRA
withdrawals for undergraduate, post-secondary vocational, and graduate
education expenses. Additionally, taxpayers are given the opportunity to
deposit $500 into an education IRA. Earnings would accumulate tax-free and
no taxes will be due upon withdrawal for an approved purpose.
Employer-Provided Education Benefits. Extends Section 127 of the tax code
for three years, which allows workers to exclude $5,250 of employer-provided
undergraduate education benefits from their taxable income.
Student Loan Interest Deduction. Allows a deduction for up to $2,500 per year
of interest on education loans for expenses of students enrolled at an institution
of higher education. This deduction will be available even if the taxpayer does
not itemize deductions.
Community Service Loan Forgiveness. In most circumstances, a loan that is
forgiven is considered income and is therefore taxable. To encourage programs
that offer loan forgiveness to borrowers who take lower-paying,
community-service jobs, the agreement excludes from taxable income both loan
amounts forgiven through programs run by nonprofit tax-exempt charitable or
educational institutions. Currently, the exclusion generally covers only certain
forgiveness arrangements between students and government entities.
Repeal Cap on Tax Exempt Bond Issuance by Colleges and Universities.
Repeals the $150 million bond cap that affects private higher education
institutions and certain other charitable institutions. The repeal applies to
tax-exempt bonds issued by these institutions to finance new capital
expenditures.
budget.fnl
Page 10
PRESIDENT CLINTON DELIVERS A BUDGET THAT STRENGT
AND PRESERVES MEDICARE
The Budget Agreement preserves and strengthens the Medicare program, saving
$115 billion over five years and extending the life of the Medicare Trust Fund for at
least ten years. It modernizes Medicare by including new market-oriented reforms
that have proved successful in the private sector plus $4 billion in new preventive
benefits. As this agreement strengthens and preserves the Medicare program, it
also creates a Medicare Commission to examine the long-term needs of the
program so that Medicare will be prepared for the retirement of the baby boomers.
SAVES APPROXIMATELY $115 BILLION OVER FIVE YEARS. Includes
about $115 billion in savings over five years and between $400-$450 billion
over ten years.
EXTENDS THE LIFE OF THE MEDICARE TRUST FUND FOR AT LEAST
TEN YEARS. This agreement will keep Medicare solvent until at least 2007.
IMPLEMENTS NEW MARKET-ORIENTED REFORMS INCLUDING:
(1)
Empowering the Secretary of Health and Human Services to
implement competitive market mechanisms;
(2)
Opening up new options that offer more choice among competing
health plans and have proven effective in the private sector, including
Preferred Provider Organizations (PPOs) and Provider Sponsored Organizations
(PSOs);
(3)
Providing Americans with meaningful choices by reforming annual Medigap
enrollment; and
(4)
Building on Medicare's success in controlling hospital costs, restructuring
the payment systems for home health, agencies, skilled nursing facilities and
hospital outpatient departments so that rates are set in advance through a
prospective payment system.
INCLUDES $4 BILLION OVER FIVE YEARS FOR NEW PREVENTIVE
BENEFITS. Expanding coverage for mammograms and colorectal screening and
improving self-management of diseases like diabetes.
ENSURES NEW PREMIUM PROTECTIONS FOR LOW-INCOME MEDICARE
BENEFICIARIES. The budget agreement invests $1.5 billion over five years
to pay the premiums for beneficiaries up to 135 percent of poverty.
Beneficiaries over 135 percent of poverty to as high as 175 percent of
poverty will get assistance as well.
budget.fr
Page 11
TAKES STEPS TO ENSURE THAT VULNERABLE HOSPITALS ARE
PROTECTED. The Agreement reduces the Medicare Disproportionate Share
Hospitals cut from $2.4 billion in the Senate-passed bill to $600 million over
five years.
ESTABLISHES A MEDICARE COMMISSION. The agreement creates a
17-member Medicare Commission which contains eight Democrats and eight
Republicans and a Chair who will be selected jointly by the President and the
Congressional leadership. The Commission will release a report in 1999 and
require an 11 of 17 majority to ensure that its recommendations are
bipartisan.
THE BUDGET AGREEMENT PROTECTED THE PRESIDENT'
PRIORITY PROGRAMS, INCLUDING EDUCATION, ENVIRON
AND LAW ENFORCEMENT
The Budget Agreement achieved 99% of the President's budget for
non-defense discretionary spending over the next 5 years. While priority items
are protected, there are $61 billion of savings in non-defense discretionary
outlays over the next 5 years -- a 10% real cut by 2002. These priorities will
be ratified in the appropriations process under the budget agreement.
LARGEST INCREASE IN EDUCATION INVESTMENT IN 30 YEARS
The budget agreement endorsed President Clinton's overall plan for investing in
education and training -- $63 billion more than the Republican plan over five
years. With the tax cuts for education, this represents the largest increase in
the Federal investment in education in 30 years. The agreement specifically
calls for:
Increases funding for Head Start to continue on road to achieve
enrollment of 1 million kids in 2002.
budget.
Page 12
Largest Pell Grant increase in two decades - boosts the maximum 1998
Pell grant from $2,700 to $3,000, and expands the program to more poor
independent students.
Adopts the President's budget request to launch a child literacy initiative
consistent with his America Reads program.
Increases funding for bilingual (27% increase) and immigrant education
(50% increase).
Includes all of the $579 million increase in funding requested by the
President in his FY 1998 budget of $5.3 billion for Training and Employment
Services, including Job Corps.
BOLSTERS ENVIRONMENTAL ENFORCEMENT AND KEY PROGRAMS
Provides a 9% increase for EPA's Operating program which includes
research, enforcement, state grants and regulatory programs.
Doubles the pace of Superfund cleanups, if policy details can be worked
out.
Provides a 6 percent increase for operation of the National Parks, and a
more than doubles funding ($156 million) for Everglades Restoration.
PUTS MORE POLICE ON THE STREET
Protects funding for the Community Oriented Policing Services (COPS)
initiative, which should put 100,000 more police officers on the street by
2000.
URBAN INITIATIVES
Expansion of Community Development Financial Institution Fund.
PRESIDENT CLINTON DELIVERS TAX CUTS
TO CLEAN UP AND REVITALIZE URBAN AREAS
THE BROWNFIELDS TAX INCENTIVE WILL REDUCE THE COST OF
budget.fnl
Page 13
CLEANING UP THOUSANDS OF CONTAMINATED, ABANDONED
SITES IN ECONOMICALLY DISTRESSED AREAS by permitting
clean-up costs to be deducted immediately for tax purposes. This
will, in turn, encourage redevelopment of these areas. The tax
incentive will be available for three years. The Treasury
Department estimates that this $1.5 billion tax incentive would
leverage more than $6 billion for private sector cleanups
nationwide, allowing redevelopment of 14,000 brownfields.
THIS PROPOSAL IS A MAJOR PRIORITY FOR MANY OF
AMERICA'S MAYORS. Chicago Mayor Richard Daley, writing
recently on behalf of the U.S. Conference of Mayors, urged Ways
and Means Chairman Archer to include the President's Brownfields
proposal in the tax bill: "This is a high priority for communities
across the nation." [Letter to Chmn. Archer, 6/11/97]
CREATES NEW EMPOWERMENT ZONES. Under the President's
1993 Empowerment Zones and Enterprise Communities initiative,
participating communities develop a strategic plan to spur
economic development, and they receive Federal tax benefits,
social service grants and flexibility in use of Federal funds in order
to put these plans into effect. The EZs and ECs are urban or rural
areas with high poverty and unemployment rates.
A Strong Start since 1994. The 105 communities selected as
EZ/ECs in 1994 amassed over $8 billion in public-private
commitments. In the six urban Empowerment Zones, the
private sector has made or pledged $2 billion in new
investments.
A Second Round to Build on Successes. In response, the
President proposed, and the bill includes, a second round
of EZs -- 15 urban and 5 rural EZs. The new EZs will
benefit from a different blend of tax credits from
first-round EZs. They will be eligible for the Brownfields
tax incentive, special expensing of business assets, and
qualification for private-activity bonds.
AND TO MOVE PEOPLE FROM WELFARE TO WORK
A WELFARE-TO-WORK TAX CREDIT. This provision will give
employers an added incentive to hire long-term welfare recipients
by providing a credit equal to 35% of the first $10,000 in wages in
the first year of employment, and 50% of the first $10,000 in
wages in the second year, paid to new hires who have received
budget. fnl
Page 14
welfare for an extended period. The credit is for two years per
worker to encourage not only hiring, but also retention.
$3 BILLION TO HELP MOVE 1 MILLION PEOPLE FROM WELFARE
TO WORK. Includes President's proposal to create $3 billion
Welfare to Work Jobs Challenge to move long-term welfare
recipients into lasting, unsubsidized jobs. These funds can be used
for job creation, job placement and job retention efforts, including
wage subsidies to private employers, transportation and other
critical post-employment support services. The Labor Department
will provide oversight but the dollars will be placed in the hands of
the localities who are on the front lines of the welfare reform
effort.
PRESERVES THE MINIMUM WAGE AND OTHER LABOR
PROTECTIONS FOR WELFARE RECIPIENTS MOVING FROM
WELFARE TO WORK. Does not include the House-passed
provision to leave workfare participants unprotected by the Fair
Labor Standards Act and other employment laws.
PROTECTS WORKERS FROM DISPLACEMENT BY THOSE
LEAVING THE WELFARE ROLLS, and establishes a strong process
for workers to raise grievances with an independent agency.
PRESIDENT CLINTON FOUGHT TO PROTECT
OUR MOST VULNERABLE PEOPLE
Several provisions in last year's welfare reform bill had nothing to do with the
goals of welfare reform. The President said so at the time and promised to work
to correct these provisions. That's why he fought to ensure that any agreement
protects the most vulnerable in our society. The President fought to better
protect:
CHILDREN
KEEPING THE MEDICAID GUARANTEE. Preserves the Federal guarantee
of Medicaid coverage for the vulnerable populations who depend on it, and
contains additional investments to extend coverage to uninsured children.
Also ensures that 30,000 disabled children losing SSI because of the new
tighter eligibility criteria keep their Medicaid coverage.
budget. fnl
Page 15
LEGAL IMMIGRANTS
CURRENT RECIPIENTS. Restores both SSI and Medicaid benefits for
immigrants now receiving assistance, ensuring that they will not be turned
out of their apartments or nursing homes or otherwise left helpless.
CURRENT RESIDENT NONRECIPIENTS. Does not change the rules
retroactively. Immigrants in the country as of August 22, 1996 but not
receiving benefits at that time who subsequently become disabled will also
be fully eligible for SSI and Medicaid benefits. The budget will restore
benefits to over 350,000 legal immigrants in FY 2002.
REFUGEES AND ASYLEES. Extends the SSI and Medicaid eligibility period
for refugees and asylees from 5 years after entry (the limit in the welfare
bill) to 7 years to give these residents more time to naturalize. Adopts
Administration proposal to treat Cuban and Haitian entrants and Amerasian
immigrants as refugees to preserve benefits for these groups that have
endured extraordinary hardships.
POOR ELDERLY AND DISABLED, INCLUDING CITIZENS
RECIPIENTS OF STATE SSI SUPPLEMENTS. Does not include the
House-passed provision that would have repealed the maintenance-of-effort
requirement applying to State supplementation of SSI benefits which would
have permitted States to reduce or eliminate benefits to almost 3 million
poor blind, elderly and disabled individuals.
PEOPLE WHO WANT TO WORK BUT CAN'T FIND A JOB
235,000 MORE WORK SLOTS. Last year's welfare reform bill restricted
food stamps for able-bodied childless adults to only 3 out of every 36
months, unless they were working. This move ignored the fact that finding
a job often takes time. The budget bill provides nearly $1 billion for an
estimated 235,000 work slots over 5 years and food stamp benefits to
those who are willing to work but, through no fault of their own, have not
yet found employment.
ALLOWS STATES TO EXEMPT UP TO 15 PERCENT OF THE FOOD STAMP
RECIPIENTS (70,000 Individuals Monthly) WHO WOULD OTHERWISE BE
DENIED BENEFITS AS A RESULT OF THE "3 IN 36" LIMIT.
budget.f
Page 16
AN HISTORIC BALANCED BUDGET: BUILDING ON THE PRESIDE
STRONG RECORD OF DEFICIT REDUCTION AND GROWTH
President Clinton has achieved a balanced budget agreement that includes
critical investments in education, health care, and the environment while
strengthening and modernizing Medicare and Medicaid -- just as he promised last
year. This achievement finishes the job of balancing the budget, a key priority
for the President since he took office.
ONLY FOUR YEARS AGO. In 1993, the President inherited a budget deficit of
$290 billion that was expected to explode to over one-half trillion dollars in
2002. A decade of large deficits had weakened the foundation of our economy
and sapped our power and prestige abroad. Unemployment was 7.5% in 1992,
and job growth was sluggish.
THE PRESIDENT PASSES HIS 1993 ECONOMIC PLAN. President Clinton
addressed this problem of fiscal instability immediately on a pledge to cut the
deficit in half. Working with Democrats in Congress, he implemented an
economic program designed to reduce the deficit and to invest in critical
priorities, such as education and training. The 1993 economic plan has
exceeded all expectations: the deficit has fallen by more than 75%, dropping for
a likely fifth year in a row to $67 billion or lower in 1997; equipment investment
has been the strongest since Kennedy was President; the economy has
produced over 12.5 million new jobs; and the unemployment rate this year is the
lowest in 24 years.
THE PRESIDENT ACHIEVES BIPARTISAN AGREEMENT TO FINISH THE JOB.
The President began his second term determined to fulfill his goal of balancing
the budget. As we head into the next century, this bipartisan agreement
protects our priorities, solidifies the nation's economic foundation, restores faith
in our ability to govern ourselves, and bolsters America's preeminent position in
the world economy. The balanced budget agreement includes roughly $900
billion in 10 year net deficit savings and delivers the first balanced budget in a
generation.
The First Balanced Budget in a Generation* *
GYear 1993 Deficit ProjectionCurrent Deficit Pathe
1993
$310
$255
1994
$302
$203
1995
$301
$164
budget.
Page 17
1996
$298
$107
1997
$347
$67
1998
$387
$90
1999
$429
$90
2000
$475
$83
2001
$521
$53
2002
$576
$1 Surplus
BUDGET STAYS IN BALANCE. In addition to delivering a balanced budget in
2002, the budget agreement delivers budget surpluses for each of the
second five years of the budget window, 2003-2007, putting the nation on a
solid fiscal path at a critical time as the baby boom generation edges toward
retirement.
Year
Surplus*
2003
$5
2004
$20
2005
$24
2006
$30
2007
$34
*
Numbers from the budget agreement. Final Budget numbers from reconciliation still being
tallied.
The Balanced Budget Delivers
a Mainstream, Middle Class Tax Cut
How Typical American Families Will Benefit
Example #1
Consider a family of four with an income of $40,000 a year. The father is a
carpenter who makes $25,000, and the mother works at a local department
store and makes $15,000. They have two children, a son who is 14 and a
budget.
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freshman in high school and a daughter enrolled full-time in her first year at a
state university. Her tuition is $5,000 a year.
This family benefits from the tax cut in at least two ways. They will receive a
child tax credit of $500 for their son, plus a HOPE Scholarship of $1,500 for
their daughter. In total, they will receive a $2,000 tax cut.
Tax Cut
Family of four with two children
aged 14 and 18 and $40,000 income:
Child Tax Credit for 14 year old
$500
HOPE Scholarship for 18 year old
$1,500
Total tax cut:
$2,000
*
Tax Year 1999
Example #2
Consider a family of three making $55,000 a year. The father has a degree in
accounting and works for a local business in the accounting department. The
mother works part-time at the local library. They have one daughter aged 7.
The father would like to return to school to prepare for his CPA examination.
He is going to attend the local liberal arts college. He has signed up for two
courses with total tuition of $4,000.
This family will receive a $500 child tax credit for their daughter and an $800
tuition tax credit to help pay for the father's course work.
Tax Cut
Family of three with one child
aged 7 and $55,000 income:
Child Tax Credit for 7 year old
$500
Tuition tax credit
$800
Total tax cut:
$1,300
*
Tax Year 1999
budget.
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Example #3
Consider a family of three making $80,000 combined. They have a daughter
who is 17 years old and is trying to decide where to go to college. She is
leaning towards a private liberal arts school. Her parents are staring at tuition
payments in excess of $10,000 a year for four school years and wondering how
they will pay for it.
This tax cut will help. Their daughter will be eligible for a $1,500 HOPE
Scholarship in each of her first two years in college. During her junior and
senior years, she will be eligible for a tuition tax credit of $1,000. (because four
school years fall across five tax years she will be eligible for another $1,000 in
the fifth year).
Year
Tuition Tax Credits
1998
$1,500 Hope Scholarship
1999
$1,500 Hope Scholarship
2000
$1,000 Tuition Tax Credit
2001
$1,000 Tuition Tax Credit
2002
$1,000 Tuition Tax Credit
Cumulative Tax Cut to Help
Pay for Daughter's Education
$6,000
Example #4
A single mother lives with her six year old daughter in California. She's been
working as a bank teller for several years and her pay is now $20,000 a year.
Working towards becoming a loan officer, she is taking one course a semester
towards a bachelor's degree. Her tuition is $1,000. This family will receive a
$500 child tax credit for the daughter and a $200 tuition tax credit.
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Tax Cut
Family of two with one child
aged 6 and $20,000 income:
Child Tax Credit for 6 year old
$500
Tuition Tax Credit
$200
Total tax cut:
$700
*
Tax Year 1999