SuperHack/SuperHack CD.bin/MISC/CG0219A.ZIP/1901

Text File | 1993-02-26 | 34KB | 650 lines

"A Vision of Change for America"

WASHINGTON, Feb. 19 /U.S. Newswire/ -- The following is an
excerpt from "A Vision of Change for America," the Clinton
administration plan to revitalize the economy.

A New Direction

When our Founders boldly declared America's independence to the
world and our purposes to the almighty, they knew that America to
endure would have to change; not change for change sake, but change
to preserve America's ideals; life, liberty, the pursuit of
happiness.

Bill Clinton
Inaugural Address
January 20, 1993

Throughout our history, at every critical moment, Americans have
summoned the courage to change, to adapt our nation's policies and
institutions to address new problems in a changing world.  Today we
must once again find the courage to change.  We must shift our
energies from the Cold War priorities of the past to the economic
priorities of the future.  And we must reverse the distorted trends
of the last twelve years -- slow growth, stagnant family incomes,
growing inequality, an increase in poverty among children, soaring
health care costs, and rising fiscal deficits as far as the eye can
see.

It is not enough simply to stay the course.  We must change our
course.  In the words of Abraham Lincoln, "We must drink anew and
act anew...and then we shall save our country."

Americans have an underlying vision that has sustained us
through previous challenges and that will sustain us through the
challenges we now confront.  It is a vision of economic and
political freedom, of the rewards of hard work and initiative, of
a fundamental sense of fairness, of the family and the community as
the foundations of our strength, and of every generation's
obligation to create a better life for the one that follows.

In recent years, our leaders lost sight of this vision.  They
embraced trickle-down policies that benefitted the wealthy at the
expense of the middle class and the working poor.  We have deluded
ourselves that somehow economic growth and fairness are at odds
when in fact they go hand in hand.  While the privileged few have
prospered, millions of Americans who worked hard and played by the
rules have been left behind.

Our family structures have weakened, often as a result of
economic adversity and government negligence.  Greed and financial
scheming have eclipsed the virtues of hard work and sacrifice for
the common good.  Debt has soared as individuals, businesses, and
governments have lived beyond their means.  Our commitment to
invest in the future and to bequeath a promising future to our
children has somehow fallen by the wayside.

In this report, we share our economic vision for America.  We
attempt, candidly and forthrightly, to explain the challenges that
face us.  For too long, bland pronouncements and fiscal gimmicks
have obscured harsh economic realities.  We offer, instead, a
detailed plan that can, if we work together, transform our vision
and values into reality.

First, we seek an America that can provide rising living
standards for all of its citizens.  To achieve this, we must
fundamentally shift our spending priorities away from consumption
to investment.  Investment is the key to a growing economy that
produces good jobs and high-quality goods and services for
ourselves and for the international marketplace.  We must invest
more in our people, our plants and equipment, our infrastructure,
and our research and development if we are to restore the American
dream for our children.

Second, we seek an America that provides opportunities for all
who want to work hard and play by the rules and that offers
assistance to those who want jobs but cannot find them.  We seek
meaningful opportunities for all Americans -- not just for a
privileged few.  We must give all of our people a chance to acquire
the skills they need to succeed, understanding that in today's
world, education is a lifelong process.  We must support parents in
their efforts to balance the demands of work with the needs of
their children.  And we must commit to fundamental change in our
health care system, to control skyrocketing costs and provide
security for every individual and family.

Third, we seek an America that fosters a spirit of
responsibility and service to community among its citizens.  People
must feel responsible not only for improving their own lives, but
also for helping those in need.  We must reject the idea that the
individual stands in opposition to the community and embrace the
idea that we are all members of the same community.  There is no
them; there is only us.

Fourth, we seek an America in which the government is viewed not
as the enemy of prosperity but as a partner with the private sector
working to foster growth.  Only a government that works can ensure
that view.  Government must be accessible to those it serves and to
those who pay its bills.  It must be responsive to their concerns.
It must be run efficiently and well with respect for the tax
dollars on which it depends.  It must be financed by a fair tax
system that rewards work and requires a fair share from those most
able to pay.  And it must pay its way and live within its means.

Fifth, we seek an America that recognizes the importance of the
environment to the quality of our life, rejecting false choices
between economic prosperity and environmental quality.  We must
demand both for our future, not sacrifice one for the other.

Sixth, we seek an America that is prosperous and confident
enough to continue its role as a world leader.  The nations of the
world look to us to strengthen the international trading system, to
preserve the global environment, to nurture the growth of
democracy, and to maintain global peace and security.  Whether we
will continue to shoulder these global responsibilities depends on
whether we successfully overcome the economic problems we face at
home.  If we fail, America, like the other global powers that
preceded it, will ultimately be defeated not by external power but
by internal weakness.

Productive jobs and rising standards of living; opportunity and
fairness for all Americans; responsibility and community; a
government that works and that continues to meet its global
commitments.  That is our vision.  To achieve it, we must change
our course.

A LEGACY OF FAILURE

Raised in unrivaled prosperity, we inherit an economy that is
still the world's strongest, but is weakened by business
failures, stagnant wages, increasing inequality and deep
divisions among our own people.
Bill Clinton

The election of 1992 was a mandate for change -- and no wonder.
Twelve years of neglect have left America's economy suffering from
stagnant growth and declining incomes.  They have left the average
American family worried about its future, working harder, and getting
less in return.  The specter of rapidly rising health care costs
threatens every family and business.  They have left a mountain of
debt and a federal government that must borrow to pay more than a
fifth of its current bills.  Perhaps most sadly, they have left the
great majority of our people no longer dreaming the American dream.
Our children's generation may be the first to do worse than their
parents.

Such is the sorry legacy of 12 years of short-sightedness,
mismanagement and protection of the privileged.  All of this must be
changed.

A Legacy of Failure: Anemic Recovery from Recession

The U.S. economy grew very slowly in the late 1980s and slid into
recession in the summer of 1990.  Sales and profits fell.
Unemployment rose.  The National Bureau of Economic Research says
that the recession ended in March 1991.  For most Americans, however,
the recession has not ended.  The great American job machine has
ground to a halt and the unemployment rate is higher than it was at
the recession's official end (Chart 2-1).  The fraction of the
unemployed who have permanently lost their jobs is near its record
high (Chart 2-2).

The 1991-93 recovery has been called a "Jobless" recovery -- a
description that is all too apt (Chart 2-3).  The reason is simple:
few new jobs have been created because production has grown so slowly
(Chart 2-4).  Until the last two quarters, this was not a recovery
worthy of the name.  That is the first thing we must change.

In a strong, durable recovery people go back to work in great
numbers, and are able to earn the incomes they need to buy the goods
and services that economic growth produces.  The increase in sales
stimulates investment, and thus generates still more jobs.  The
process sustains itself until the economy is producing at its full
capacity and the labor force is fully employed.

Recently, however, recovery has been slowed by powerful forces
that are reducing the numbers of jobs.  Key industries are laying off
workers to become leaner and more competitive.  The defense sector is
downsizing to reflect the new realities of the post-Cold War world.

Already we have seen the recovery process begin twice, only to
sputter when early signs of growth were not followed by solid gains
in employment.  Now, once again, the long-dormant American economy
seems to be waking up.  This time, we must be absolutely sure that
the recovery is strong enough and durable enough to put Americans
back to work.  The stimulus component of the Clinton economic program
is an insurance policy designed to make sure that the recovery does
not falter again.  It is also a downpayment on the long-term
investments that will encourage lasting economic growth.

A Legacy of Failure: Stagnating Productivity and Living Standards

But mere recovery from recession is not good enough if we return
to the trickle-down policies of the 1980s.  America's economic
problems are deeper than a temporary lull in economic activity.  We
must aim not only for more jobs, but also for better jobs at higher
wages.  We must aim not only to produce at our current capacity, but
also to add to our economy's capacity to create a better life for
all.

The productivity of American labor -- what an average worker
produces in an hour -- has been growing at an agonizingly slow pace
for about two decades.  In turn, real wages have stagnated (Chart
2-5) and family incomes have advanced at a snail's pace.  These
developments more than anything else, explain why the American dream
is fading for the average worker.

Even a small improvement in a nation's productivity growth rate
can yield much higher standards of living in the long run.  Had real
hourly compensation grown at 2.0 percent a year since 1973, instead
of the actual 0.7 percent gain, average American workers would make
almost $5 per hour more (Chart 2-6).  Increasing productivity
growth will have a direct and positive impact on living standards.
We simply must do better.

A Legacy of Failure: Underinvestment and Slow Growth

The slowdown in productivity growth is partly mysterious, even to
experts who have studied it for years.  But no one doubts that part
of the cause is that as a nation we have underinvested: in private
business capital, in public capital, and in "human capital"-the
skills and capabilities of the American workforce.

Chart 2-7 shows that the United States devotes a smaller fraction
of gross domestic product (GDP) to business investments than do the
other major nations with whom we compete in the international
marketplace.  Chart 2-8 shows that American governments at all levels
have been spending a decreasing share of our total resources on
civilian public investment-including both physical investment and the
research and development that underpins future growth.  Studies
indicate that additional investment in private and government R&D,
and in public infrastructure, could yield substantial economic
benefits.

We have also underinvested in education and training.  American
students routinely score far below their counterparts in other
industrial countries on tests of mathematical competence and
scientific knowledge.  Moreover, recent evidence also suggests that
the demand for more highly trained, better-educated workers has been
outrunning the supply.  Chart 2-9 shows that the wages of college
graduates have advanced far faster than those of high school
graduates since 1978; similarly, the wages of high school graduates
have risen faster than the wages of nongraduates.  These growing wage
gaps indicate that the financial returns to education have been
rising.

This evidence suggests that more investment is vital to raising
the growth rate of productivity and boosting living standards.  We
must invest more in business capital, in public infrastructure, and
in the skills of our people.  Our future has been shortchanged for
too long.  We owe it to our children to change course now.  The
Clinton program will do precisely that.

A Legacy of Failure: The Alarming Rise in Inequality

Throughout the 1980s, slow growth in living standards was
accompanied by growing inequality.  The rich got richer while the
middle class paid more in taxes and fell further behind.  In fact,
income gains were so concentrated that people at the bottom of the
income scale actually lost ground: measured in inflation-adjusted
dollars, their incomes fell between 1977 and 1991.  The rising
staircase in Chart 2-10 depicts a simple but useful message: During
this period, the richer you were, the better you did.

Behind these statistics lay very real problems.  Middle-class
families grew disillusioned and cynical while they worked longer
hours but had trouble making ends meet.  Tens of millions of families
lived in fear of losing their health insurance; 37 million had none
at all.  The working poor were forced to choose between feeding their
children and heating their homes.  Hopelessness bred violence in
America's inner cities.  The nation drifted.

It is time to reverse that drift and reorder our priorities.  It
will require those who have profited to bear the greatest burdens and
do right by the people who work hard and play by the rules.  Our
economic plan will redress the inquities of the 1980s.

A Legacy of Failure: A Government That Doesn't Pay Its Way

For more than a decade, the federal government has been living
well beyond it means -- spending much more than it takes in, and
borrowing the difference.  The annual deficits have been huge, both
in dollars and as a percent of GDP (Chart 2-11).  As a result of
all this borrowing, the Federal debt has grown as a percentage of
GDP since 1981, reversing three decades of decline (Chart 2-12).

The Federal deficit is currently swollen by two temporary
factors.  One is the recession, which has reduced revenues and
increased expenditures to aid those adversely affected; the other
is increased borrowing for the savings and loan cleanup.  Even when
these temporary factors are behind us, however a large structural
deficit will remain.  The structural deficit -- the deficit that
would be there even if the economy were producing at full capacity
and the savings and loan cleanup were complete -- was 3.4 percent
of GDP in 1992.  The really bad news is that the structural deficit
not only will remain but will grow even faster than the economy
unless the Government changes course.

The problem of the structural deficit is rooted in the early
1980s, when we cut income taxes and massively increased defense
spending.  Subsequent tax hikes -- in particular large increases in
regressive payroll taxes -- and a slower growth of defense spending
during the second half of the 1980s temporarily halted the growth
of the structural deficit.  Nonetheless, the structural deficit
remained huge by historical standards, and it once again began to
climb relative to GDP by the early 1990s.  Without a real deficit
reduction program, the structural deficit will exceed 4 percent of
GDP by 1997, rivalling the highs of the mid-1980s, and it will grow
at an accelerating rate as a percent of GDP.

At first glance, slowly growing revenues and rapidly rising
outlays, both aggravated by the economy's slowdown during the last
two years, appear to be responsible for our deficit problem.
Correcting for these recession effects, the share of Federal
revenues in GDP is 0.5 percent less that it was at the beginning of
the 1980s while the share of Federal outlays has increased by 1.1
percent. These trends in total revenues and outlays, however mask
some important changes in how the Government raises its revenues
and spends its money.

Major reforms of the Social Security system in 1977 and 1983
sharply raised taxes, stabilized benefits as a percentage of total
Federal spending and caused an accumulation of large surpluses in
the Social Security trust fund.  But taxes to support the rest of
the Government's activities have been cut by as much as Social
Security taxes have been raised.

Adjusting for cyclical effects, the share in GDP of revenues to
support the Government's other spending programs has actually
shrunk by about 1.5 percentage points since 1980.  And the
surpluses in the Social Security fund have been used to fill the
gap.  Instead of adding to national savings to fund the retirement
of the baby boom generation early in the next century, these
surpluses have camouflaged the true imbalances in the Government's
revenue and spending strains.  Consequently, if we do not change
course and revitalize our economy, redeeming the IOUs held by the
trust funds will require major tax increases when the baby boom
finally retires.

While Government spending has increased, its composition has
changed.  After a sharp increase in the first half of the 1980s
defense spending currently accounts for about 22 percent of total
Federal outlays, down slightly from its 1980 share.  Spending on
non-defense discretionary programs has fallen sharply, from about
24 percent of total spending in 1980 to about 17 percent today.
During the same period, public investment by the Federal Government
-- measured as the sum of outlays for non-defense physical capital,
non-defense R&D, and education and training -- has fallen from 8.2
percent to 6.3 percent of total outlays.

In contrast, health care -- Medicare and Medicaid -- and
interest payments on the debt have claimed increasing shares of
total spending.  Between 1980 and 1992, spending on Medicare and
Medicaid rose from 7.8 percent to 13.3 percent of total government
spending.  To make matters worse, large annual deficits, together
with high interest rates for more than a decade, have swollen net
interest payments on the debt.  Interest payments now amount to
almost $200 billion a year.  About three-quarters of the money the
government borrows this year will go to pay interest on the debt
piled up from previous years.

Unless there are meaningful changes in policy, sharp continuing
growth in health care costs and self-perpetuating growth of
interest on the debt will overwhelm projected revenue growth and
cuts in defense spending.  The Federal deficit will continue to
balloon out of control unless we change course.

A Legacy of Failure: Why Deficits Matter

Deficit reduction is not an end in itself. It is a means to the
end of higher productivity, rising living standards and the creation
of high-wage jobs.  In short, it is about securing a better economic
future for ourselves and, even more importantly, our children.

Huge structural budget deficits are harmful for a simple reason:
when the economy is not in recession, each dollar the Federal
Government borrows to finance consumption spending absorbs private
savings that would otherwise be used to increase productive capacity.
Large, sustained budget deficits mean that we must either reduce our
investment at home or borrow the money overseas.

This drain on our savings has caused anemic domestic investment,
especially in comparison with most other advanced industrial
countries (Chart 2-7).  It has retarded growth in productivity and
living standards.  Meanwhile, borrowing from the rest of the world to
maintain investment at even today's depressed levels has increased
interest payments to foreign lenders.  In effect, we have signed over
some of the fruits of today's productivity -- enhancing investments
to the children of Europe and Japan, rather than preserving them for
our own.

Regardless of whether the debt is owed to foreigners or U.S.
citizens, the interest obligation requires higher taxes.  Moreover,
our skyrocketing interest costs squeeze out revenues that would
otherwise be available for other priorities.  Since 1988, for
example, net interest alone has risen by $50 billion, making interest
payments the fastest growing Federal "program." This mounting
interest burden mocks our efforts to fund token initiatives for
pressing social needs: next year's projected increase in interest
payments by itself could fully fund the Head Start program five times
over.

As a result the nation has suffered from another deficit -- the
deficit in public investment in education, e.g., infrastructure, and
civilian technology.  Like private investments, well-chosen public
investments raise future living standards.  Deficit reduction at the
expense of public investment hay been and will continue to be
self-defeating.  The Clinton plan is explicitly and emphatically
aimed at reducing the deficit while increasing much-needed public
investment.  One without the other will not work.

Beyond the quantifiable benefits of deficit reduction -- greater
investment and economic growth -- are unquantifiable but no less
important benefits.

First, deficit reduction could allay anxiety in financial markets.
Large and growing structural deficits could destabilize global
capital markets because of the growing drain of government borrowing
on available funds.  Such anxieties help explain why historically
high long-term real interest rates persist despite a weak economy.
The threat that the United States might ultimately inflate the dollar
to depreciate its runaway debt obligations raises the specter of a
spike in interest rates, a collapse of the dollar, or both.

Second, a credible effort to reduce our structural deficit will
improve our ability to coordinate macroeconomic policies with our
major trading partners, who are concerned about our deficit's drain
on global capital markets.  Putting our fiscal house in order will
improve our leverage in international negotiations.

Finally, deficit reduction will help break legislative gridlock
and reverse public cynicism about government.  Large deficits have
virtually assured that each legislative session has been dominated by
the deficit debate, encouraging budgetary quick fixes that have
shortchanged the nation's long-term public investment needs and
created a deficit of trust.

A Legacy of Failure: Skyrocketing Health Care Costs

Another legacy of the past 12 years is the crisis of rapidly
escalating health care costs-a crisis that threatens the security of
every American family and business.  In 1992, Americans spent $840
billion on health care, or 14 percent of GDP compared with about 9
percent of GDP only a dozen years ago (Chart 2-13).  At this rate
health spending will reach an astonishing 18 percent of GDP by the
year 2000: Americans will be devoting about one dollar of every five
they earn to health care, and the average family's health costs will
rise to almost $10,000 a year.

Rising health care costs are straining the budgets of families,
businesses and government.  They are eating up incomes and
squeezing out other spending.  Individuals are facing soaring
insurance premiums and rising out-of-pocket bills.  Skyrocketing
premiums have forced many businesses to drop or curtail health
coverage for their workers swelling the ranks of the uninsured. More
than 37 million people do not now have insurance coverage.  Many are
dependent on hospital emergency units for care.

Inflation in health care costs is also robbing government budgets
of scarce resources needed for critical investment in our future --
education, job training, infrastructure, and technology development.
If current trends continue, by 1998 the Federal Government will spend
one in every four dollars on health care (Chart 2-14).  State and
local spending for health will rise over the same period from 14 to
18 percent of total outlays.  Exploding health costs threaten funding
for other public priorities.

The rise in health care costs now projected will consume between
25 and 35 percent of total projected GDP growth for the rest of the
decade and will account for over 40 percent of the total increase in
federal spending.  In short, containing health care costs has become
an economic imperative.  Indeed, the potential "health dividend" is
far larger than the peace dividend promised by the end of the Cold
War.  If America spends the same share of GDP on health as our main
international competitors do, last year alone we would have had
$230 billion more to invest in our people.  Similarly, if spending by
employers on health insurance had remained at the 1980 percentage of
total compensation, cash wages for the average worker could have
been $670 a year higher in 1991 without affecting corporate
profits.

Despite these bleak statistics, widespread evidence suggests that
we can control health care costs and maintain quality.  Other
advanced industrial nations have levels of health spending
substantially below ours and have controlled cost growth more
successfully -- even while providing care that matches and often
exceeds our own. Their success offers a strong basis for hope as we
step up to the challenge of fundamental change.

A Legacy of Failure: A Government That Doesn't Work Well

Finally, it is clear that the American people have lost confidence
in their government they believe that government has gotten too big,
that it is out of touch with its citizens, that it wastes money, that
it is ill-equipped for taking on the country's problems or worse,
that it causes those problems and hears only the voices of the
privileged few.

In too many cases they are right.  We cannot deny the evidence.

-- Billions of taxpayers' dollars have been lost to fraud and
abuse.  The worst examples -- scandalous military purchases,
sweetheart deals, the savings and loan debacle, and abuse of
government perks -- have made headlines, but many remain hidden.  We
must crack down on these hidden scandals and catch problems before
they occur, not after.

-- Millions of Americans every year must deal with the maze called
"Federal bureaucracy." The American people deserve a government that
treats them like customers, by giving them more choices and stripping
away unnecessary layers of management and red tape.

-- The size and cost of the Federal government has grown over the
past twelve years.  Despite many promises, administrative costs have
increased and special perquisites for high-level officials have
proliferated.  That is why we have already made real cuts in the
Executive Branch and will do so over the coming years.

Our political system has failed to address many of the most urgent
problems facing the American people -- health care, declining
incomes, job loss, budget deficits.  A large part of the blame
must go to the lobbyists and special interests who profit from
the status quo.  All too frequently they control the agenda
or use their campaign contributions to dominate the debate.
Even as government did less, the ranks of the special interests
grew.  By the decade's end, some 80,000 people will make their
living pleading the causes of the special interests.  To break
the stalemate in Washington, we must attack the problem at its
source: entrenched power and money.

The Clinton Administration is determined to meet a double
challenge.  First we must cut the waste and make government
operations more responsive to the American people.  It is a time to
shift from top-down bureaucracy to entrepreneurial government that
generates change from the bottom up.  We must reward the people and
ideas that work and get rid of those that don't.

Second, we must restructure government to deal with new realities,
both foreign and domestic.  Our defense and foreign affairs agencies
must be reorganized to reflect the new problems of the post Cold-War
era and the global economy.  We must also reinvent our domestic
agencies to serve us more effectively in the twenty-first century.

Public cynicism about government is not merely a political
problem.  Making our government more responsive and improving the way
it works is essential to the future of our children and our
democracy.

A Legacy of Failure: The Price of Not Changing

Reversing the legacy of the last twelve years will not be easy.
Nor will it happen overnight.  But the cost of clinging to the
status quo will be borne by every family and by our children and
their children.  Consider:

(1) If we do not change we could continue to have epidemics of
measles and other preventable childhood diseases; if we find the
courage to change, we could immunize every child.

(2) If we do not change a college education could become the
domain of the privileged, if we find the courage to change,
hundreds of thousands of Americans could go to college in exchange
for national service.

(3) If we do not change, health care costs will continue to
terrorize our families.  If we find the courage to change, all
Americans can have affordable quality health care.

(4) If we do not change, the deficit will continue to grow and
incomes will stagnate.  If we have the courage to change, we can
have a higher standard of living and a government that pays its
way.  The stakes for every American's standard of living are
enormous.  From World War II to the early 1970s we grew more
productive year by year and our standard of living doubled.  At
today's anemic rate of growth, our standard of living will no
longer double every generation-but once every 100 years.  If we do
not summon the courage of change, our legacy will not be worthy of
the nation we have inherited.

Continuing the failed policies of the past 12 years is a choice
without a future. To restore our nation's economic vitality and
reclaim our vision of America, we must change course.  And we must
do it now.

WHAT WE MUST NOW DO

To renew America, we must be bold.
Bill Clinton

What We Must Now Do: Change Is Imperative

To reverse the legacy of failure and move toward our vision of the
future, drastic changes in Federal policy are needed.  We must
soberly take stock of where we are and dedicate ourselves to
revitalizing our economic future.

The over-arching theme of the Clinton Administration's economic
plan is increasing public and private investment in the broadest
sense.  To ensure more productive, higher-wage jobs and greater
economic opportunities for ourselves and our children, we need to
devote a larger share of our current resources to modernizing
factories and equipment, developing skills, and accelerating the
advance of technology.  We must increase the share of the
Government's budget devoted to investment in future growth and must
create incentives for the private sector to shift from consumption to
investment.  The need to increase investment motivates all three
elements of the Clinton econonmic plan: stimulus, investment, and
deficit reduction.

The stimulus package is designed to ensure that recovery from
recession is strong and durable.  It will provide a boost to the
economy in the short run and create up to half a million new jobs.
What we call stimulus in this plan, however, is not a conventional
prescription for adding to consumer demand by cutting taxes or
creating make-work jobs.  Instead, it is a down payment on longer-run
investment.  We selected some investment projects that could be
started quickly-especially those that would create a significant
number of new jobs-and get a fast start on these projects.  Spending
proposals in the stimulus package will be included in a request to
Congress for supplemental funds for 1993.  All of the proposed
spending in the stimulus package is consistent with the proposals for
longer-term public investment.  Tax incentives for immediate
increases in investment by large and small business are also a vital
part of the stimulus package.

The investment package proposes major additions to ongoing
activities that expand America's capacity to produce and provide more
opportunities for current and future workers.  It is designed to help
fill the investment deficit by increasing spending for highways and
other infrastructure, to enhance the opportunities and skills of
future workers, to accelerate the development and use of science and
technology, to improve the delivery of health care for underserved
groups, and to increase incentives and opportunities for productive
employment.  Tax incentives for business investment also continue.

The deficit reduction plan makes a vital contribution to
increasing investment and raising standards of living by gradually
reducing the structural deficit in the Federal budget.  Cutting the
deficit will reduce the Federal Government's drain on national
savings, lower long-term interest rates, and encourage productive
private investment.

The deficit reduction plan is a balanced mix of cuts in ongoing
spending and selected tax increases.  We believe it is fair, that it
contains many changes that would be desirable even without the
necessity for deficit reduction, and that it is a bold assault on the
structural deficits that threaten our future prosperity.

NOTE: For charts call the White House Press Office, 202-456-2100.