Remarks As Prepared For Delivery By Vice President Al Gore
Tuesday, April 25, 2000
I’m grateful for this chance to take part in the time-honored tradition of the ABNY breakfast.
I’m here this morning to talk about a tradition that is far more recent: an America that is meeting its fundamental fiscal and economic responsibilities, for the first time in a generation. And I want to describe the kind of economic strategy we need to keep our prosperity growing in a fast-moving, fast-changing new economy.
I’m genuinely proud of what we have achieved these past seven yearsnot just the Clinton-Gore administration, but principally the American people, and American businessincluding so many of the people in this room today. We replaced the largest budget deficits in history with the biggest surpluses. We have over 21 million new jobsmore than 800,000 in New York alone. We are now in the midst of the single longest period of economic growth in all of American history.
This truly is a mountaintop moment for our country. Because of all we have achieved, we have a chance that comes to few generationsto open an era of great progress, and great reforms.
The American people can sense this extraordinary new time of possibility. But they are right to ask: how can we seize its full promise? Will we use this moment responsibly, or will we waste it irresponsibly?
The fact is, this is a time of dramatic changeboth in our economy, and in our capacity to keep our prosperity growing.
In recent years, the Information Age and the explosion of computers and microprocessors across our economy has unleashed a powerful new source of productivity.
Many of you remember how the sharp rise in the price of oil sent shock waves through the industrial economy of the 1970’sleading to higher unemployment and higher inflation at same time.
Today, there is a sharp rise in the availability of information and information technologyat a steadily decreasing cost. And it is leading to lower unemployment and lower inflation at the same time.
More than ever before, we need the right kinds of investmentsin education, research, and developmentto take advantage of the vast opportunities of this Information Age, and keep productivity high.
As our economy changes, old economic assumptions and arguments are changing as well. Some used to judge fiscal policy in this country as if more spending was always the path to greater growth.
They also assumed that larger deficits would stimulate the economy, while larger surpluses would slow it down.
The economic strategy I am proposing is based on a new and different view that lies behind today’s economic recovery.
The overall effect of deficits or surpluses on our economy depends not just on spending, but on the interaction between fiscal policy on the one hand, and financial markets and monetary policy on the other hand.
What links them is an intangible factor, but one that is essential to our future: confidence. Our confidence in our ability to govern ourselves, and make responsible choices for our future.
The confidence of financial markets that our economy and our businesses are a sound investmentin an increasingly competitive global market.
If we stick with disciplined fiscal policy, and if we earn and maintain confidence through our decision-making, then low interest rates and capital costs will do more to promote growth and create jobs than deficit spending could ever achieve.
But if we allow our credibility to be called into question with ever-increasing deficits and debtif we shake the confidence we have worked so hard to buildthat could lead to higher interest rates, draining far more investment from our economy than deficit spending could ever put back into it.
You will find no greater supporter and admirer of the Federal Reserve and its Chairman, Alan Greenspan. I absolutely respect the independence of the Fedeven as I recognize that the better we do our job of fiscal discipline, the easier it is for the Fed to do its job.
If we want to understand what happens when we fail to embrace this new economic dynamism, we don’t have to look back very far.
We saw this irresponsible politics of illusion in the Bush-Quayle years. Budget busting, runaway tax policy, and runaway spendingwithout the responsibility to pay for it, and without the basic respect for the American people to give even the barest indication of how the costs would be met. I remember sitting on the House floor in 1989, during a Presidential address to a joint session of Congress, and hearing these words:
"We must make a very substantial cut in the Federal budget deficit. . .My plan [includes] investment in the future, an attack on the deficit, and no new taxes. . . We can afford to increase spending. . . enough to invest in key priorities and still cut the deficit by almost 40 percent in one year."
One columnist analyzed that plan differentlysaying that it "depend[ed] on optimistic, if not totally implausible, economic assumptions," and did not summon "the will to break the back of [the deficit’s] chronic drain on our economic future."
Sure enough, what followed were higher deficits each and every yearalmost doubling to $290 billion by the time we took office, the highest deficit in American history.
America did not get a dose of economic realism until August of 1993when we fought for and won an economic plan built on the bedrock of fiscal responsibility and hard choicesa plan which passed without s single Republican vote.
We fell prey to the politics of illusion during the decade of amazing deficits. Now we have to avoid the politics of illusion in the decade of amazing surpluses.
This is a test of our memory: have we forgotten the dangers of irresponsibility? Have we forgotten the virtues of responsibility?
My opponent, George W. Bush, has proposed a risky, $2.1 trillion tax scheme that is bigger than anything Newt Gingrich ever tried to get away withand that the Republican Senate itself recently rejected 99 to nothing.
In his post-primary search for rehabilitation, George W. Bush has proposed some new spending in areas like health care and education. I have a lot concerns about the specifics of these proposalsand I’ll be talking more about those concerns in the coming weeks and months. But today, I want to focus on the economic implications.
George W. Bush does not say how he will pay for his proposals. He provides no new money to keep Medicare solvent. He provides for no reduction in the debtand no reduction in interest on the debt. And he calls for privatizing a portion of the Social Security trust fundwithout even examining the implications of his proposal on the soundness of the fund.
Should we really go back to the politics of illusion? After emerging from the Bush-Quayle deficits and recessions, should we really risk a George W. Bush deficit and a George W. Bush recession?
The fiscal discipline which has worked so well for us should not be abandoned because it has succeeded. We have to do what’s right, to prepare for the retirement of the Baby Boomers. We have to meet our responsibility to make the next generation the best-educated generation in our history. We have to keep building confidence that we are capable of making tough choices and sound investmentsto bring the next great surge in productivity.
So let me share with you the basic economic strategy I believe America must follow.
My economic plan begins with fiscal responsibilitya consistent, conservative fiscal policy that keeps interest rates low and helps create jobs. It’s going to take toughness, leadership, and experience to maintain it. A series of bad decisions in one budget could place it beyond our reach for a decade.
And so, if I’m entrusted with the Presidency, I’ll balance the budget every single year, barring a national emergency. I’ll pay down the national debt every single year. I will put us on the road to completely eliminating the national debt by the year 2013.
At one time, many economists thought that eliminating the debt was not important. But in the time we live in, it is essential.
We have to make America debt-free before the Baby Boomers retire, so we can pay our obligations to them in the form of Social Security and Medicare.
We have to make America debt-free now, because, in the new era of globalization, businesses have far better investment opportunities than ever before in history. In this new economy, maximum growth without inflation requires that we take that money out of sterile government bonds, and put it into enterprises that boost our productivity. And moving purposefully to a debt-free America will be one of the best ways to sustain and increase the confidence that is the foundation of our present and future prosperity.
Second, with fiscal responsibility and debt reduction as our foundation, we must save Social Security and Medicare while we have the chance to do it. My plan devotes all the interest savings from debt reduction to shore up Social Securityextending its solvency until at least 2050. And my plan devotes a major portion of the surplus to keep Medicare solvent for the Baby Boomers’ retirement.
Third, we have to make smart investments in our futureso we can take advantage of all the opportunity prosperity brings. We have to give people the skill to succeed in the high-paying new jobs that are opening up. That means innovative investments in educationto raise standards, increase accountability, hire well-trained teachers, and reduce class sizes. We have to target the sources of new jobs and growth. That means doing much more to promote the start-ups and new enterprises that have become powerful engines of growth in the new economy. We have to make sure a growing economy leaves no one behind. And that means building on our empowerment approach, to bring more private capital to neglected urban and rural communities.
Fourth, I have proposed targeted, affordable tax cuts that can help working families, can keep our prosperity growing, and can create new jobs all across our economy. We need carefully-drawn tax cuts to help parents save for college tuition, and to help adults pay for job training and re-training in a changing economy. We need tax cuts to help families buy health care, and pay the costs of long-term care. We need permanent tax cuts for research and experimentationfor small businesses and entrepreneurs, as well as the major research engines of our economy.
Fifth, we need to be aggressive about opening new markets to American products. I support, and I have fought for, free and fair tradeand I will continue to do so as President. Many of my supporters disagree with me on how to do this. I understand their concerns.
And I believe that trade must be a way to lift up living standards around the worldnot drag standards down here at home.
I believe a President should have the authority to negotiate trade agreementsalong with the authority to enforce worker rights, human rights, and environmental protections.
I believe free and fair trade can help create high-paying jobs for Americaand that global competition can make our businesses more innovative and productive. That’s why I have stood strongly for Normal Trade Relations with China. I reaffirm that support today. And in the days and weeks ahead, I will continue to do all I can to build support in Congress for it.
Sixth, we have to continue to reform and reinvent government, to make it smaller and more cost-effective. The past seven years, through our Reinventing Government initiative, we have cut the federal workforce by over 370,000 positions, and saved $136 billion. As President, I will keep rooting out waste and redundancy in government, in order to save taxpayer money.
One important way to make government cheaper, faster, and better is by putting more critical services on the Internet, and taking full advantage of the information revolution that is taking place in private industry. Three years ago, we started an initiative called Access Americawhich is the first step to putting the entire federal government on-line, savings taxpayers billions.
For me, this is about more than making the numbers add upalthough that’s an important start.
This is about something far greater: it’s about meeting our responsibilities to our parents and our children, before we do anything else. It’s about preparing for the future and honoring our values.
That is why we face a fundamental choice todaybetween doing what’s right in the long run, or pursuing a short-term, politically-driven course.
I believe George W. Bush’s entire economic agenda is built on a foundation of irresponsibility and risk.
His $2.1 trillion tax scheme has two problemsit has the wrong priorities, and it’s wrong for our economy.
As John McCain has pointed out, most of the benefits of the Bush tax scheme would go to the few who already have the most. Over 60 percent of the benefits go to the top 10 percent, while 10 percent of the benefits go to the bottom 60 percent. Even many who would do very well under this tax cut know that it’s wrongin terms of both fairness, and our prosperity.
For Governor Bush to offer a giant tax cut in an election year may be good politics. It may seem popular.
I am here today because I believe, along with many of you, that it neglects our vital, long-term economic interests.
America has to put first things first. Our economy is strong. But with the great national challenge of preparing our children for a 21st Century education; with the continuing national challenge of reforming health care; with the coming retirement of the baby Boomers and the imperative of paying down our national debtI believe we must meet those responsibilities, above all else.
Bush economics is casino economics. The Bush tax plan could shatter confidence in our economysending a message to the world that under George W. Bush, the era of fiscal responsibility is over. It could raise interest rates, hurt investment, put all our prosperity at risk, and drive us into inflation and recession.
Let’s understand the difference between the highest deficits in history, and the highest surpluses. According to Goldman Sachs, because we eliminated the Bush-Quayle deficits, interest rates today are two full points lower. What does that mean for a family? It means that an average family buying a home pays $24,000 less over the life of their mortgage. For businesses, low interest rates have meant that investment has grown by more than ten percent for seven years in a rowthe longest period of double-digit growth on record.
Who in this room thinks we should go back?
I believe Governor Bush is equally irresponsible on the issue of entitlementsbecause, instead of putting debt reduction, Social Security, and Medicare first, he treats them as afterthoughts.
His reforms themselves are dangerous. He not only risks having to raid the Social Security trust fund to finance the deficit his tax plan would create, he also supports the privatization of Social Securitywhich would divert money from the trust fund each and every year. Under one modest privatization plan, which would divert just two percent into private accounts, the Social Security trust fund steadily grows insolvent, and would go broke by the year 2024.
How does the Bush plan propose to deal with this? He doesn’t even bother to provide an answer.
He doesn’t put even a dime into Medicare. And because he doesn’t pay down the national debt, as I propose, under George W. Bush, this nation would face higher interest payments. He doesn’t begin to account for this in his economic plan.
Even a rosy Bush scenario is not enough to salvage the Bush economic plan. It will take a lot more than vague promises to cut waste, fraud, and abuse to make the Bush plan anything other than fiscal fiction.
And so the great question in 2000 is simply this: will we waste our mountaintop moment, or will we do what’s right for our country?
If you’re willing to go back to where we were eight years agoif you’re willing to go back to Bush-Quayle economicsthen you should vote for my opponent.
I know what the Bush Republicans will say. They will say: this money belongs to the American people.
The truth is, it is your money. But it’s also your prosperity. It’s your Social Security and Medicare. It your children’s education. It’s your parents’ retirement.
To me, these aren’t just numbers on a spreadsheet. They are fundamental responsibilities. They go to the heart of our values as a people.
If you believe that America has to do the right thingthen I ask for your support.
We are living in an extraordinary momentwith a greater opportunity than ever before to reach for a better America. It is a moment that may not come again for a long time. It is the responsibility of our generation. Now let’s meet our responsibilityto our children, our parents, the ideals we believe in, and the America we are privileged to share.