Good economic news: deficit falls again From $290 billion in '92, to $22.6 billion today, a 90% drop, Clinton says

October 28, 1997|By BOSTON GLOBE

WASHINGTON -- Against the backdrop of yesterday's bad economic news of a steep decline in the stock market, President Clinton found some good news to announce: a steep decline in the budget deficit.

Clinton said the deficit has fallen to $22.6 billion, the lowest level in more than two decades, and is down from its peak of $290 billion in 1992, when he first took office.

"That is a reduction of $267 billion -- more than 90 percent -- even before the balanced budget law saves one red cent," Clinton said, referring to the five-year balanced budget agreement he worked out with congressional Republicans this summer to eliminate the deficit by 2002.

In a speech at the annual meeting of the Democratic Leadership Council, a centrist political group he helped found, Clinton credited his administration's economic policies for the lower-than-projected number.

The $22.6 billion deficit for the fiscal year that ended Sept. 30 is far lower than the $125.6 billion that government analysts predicted at the start of the year. The drop largely has been attributed to stronger than expected U.S. economic growth and rising tax revenues.

By comparison, the fiscal 1996 deficit was $107.3 billion.

"The deficit reduction plan of 1993 was supported only by Democrats and acted in the face of the most withering partisan criticism and real political risk that cost some members their positions in Congress," Clinton said.

"Well, it's time for the naysayers to admit they were wrong. It worked, and America is better for it," he said.

As Clinton spoke at a downtown hotel, the Dow Jones industrial average was experiencing a free fall in its biggest one-day point drop in history.

The Dow was down 554.26 points after trading was halted early. Clinton did not comment on the market losses in his 27-minute speech, which he delivered in a hoarse voice he blamed on the changing weather and the wear of weekend celebrations for his wife's 50th birthday.

"If you listen closely, you will hear that I am in my annual voice-loss mode," Clinton told the audience.

After lauding the budget figures, Clinton appealed for help with another part of his economic strategy: the right to speedily negotiate new trade agreements with other countries without changes by Congress.

Clinton said he needed "fast-track" authority to accelerate exports and keep the economy healthy. The issue has pitted him and moderates who make up the Democratic Leadership Council against more liberal Democrats.

"For the life of me, I can't figure out why anybody in the wide world believes it will create jobs for us to stay out of markets that other people are in, when we can win the competitive wars," Clinton said.

"Walking away from this opportunity will not create a single job. It will not save jobs. It will not keep a single child in another country out of a sweat shop. It will not clean up a single toxic site in another nation," he said.

Before Clinton spoke, Al From, the Democratic Leadership Council president, took a jab at labor unions, which are financing a multimillion-dollar campaign opposing fast track.

From said he found it "astonishing" that some Democrats "have chosen this moment to launch a high-profile, lavishly financed effort to derail Clinton's successful economic strategy."

Pub Date: 10/28/97

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