WASHINGTON (AP) — On the final day of fiscal 1998, President Clinton will proclaim Wednesday that the administration expects the year’s budget surplus to come close to $70 billion, knowledgeable federal officials said.
The figure will be an estimate only, since data on 1998 revenue collections and federal spending won’t be complete until around Oct. 19. Nonetheless, Clinton is likely to use his announcement of the government’s first surplus since 1969 to claim credit for the accomplishment — and to chide congressional Republicans for proposing to use some of the surplus for an election-year tax cut.
The size of the surplus is considered a surprise. Though the White House’s last official estimate in May of the 1998 surplus was $39 billion, analysts in and out of government have long expected a heftier figure. The Congressional Budget Office, Congress’ nonpartisan fiscal analyst, has been projecting a $63 billion surplus for months.
But its fruition has political significance for both parties, particularly for incumbents eager to cite it as an achievement. Republicans have talked for months about staging a ceremony on the Capitol steps just weeks before Election Day, holding a giant check made out to the amount of the surplus and ceremonially presenting it to taxpayers.
The last federal surplus was in 1969 and totaled $3 billion. The shortfalls peaked at $290 billion in 1992, but have fallen every year since. Economists attribute the improvement largely to a steadily strengthening economy, and to a series of deficit-cutting packages enacted in the 1990s.
Now, barring a recession, analysts expect an uninterrupted string of surpluses for at least the next decade. But looming after that are potentially deep budgetary troubles because of the huge expenses retiring baby boomers are expected to incur on Social Security, Medicare and other federal programs.