President Clinton said Tuesday that the budget he will send Congress on Feb. 7 will propose paying off the entire $3.6-trillion national debt by 2013--two years earlier than had been expected even a few months ago.

At a news conference, the president attributed the opportunity for a speedup to an economy that is even stronger than had been forecast, resulting in higher tax revenue and lower expenses, and to his own austere budget policies.

At the same time, the nonpartisan Congressional Budget Office issued revised estimates projecting that the federal budget surplus over the next 10 years is likely to top $1.9 trillion--substantially larger than the agency had predicted as late as December.

The CBO also acknowledged that, contrary to previous estimates, congressional Republicans managed to keep from draining any of the surplus in the Social Security trust fund in fiscal 2000, even though they breached the overall budgetary spending caps that Congress set in 1997.


The agency’s estimates showed that, instead of dipping into the Social Security fund by $17 billion, as it had projected in December, the lawmakers actually would end up with the trust fund intact and a $23-billion surplus in the government’s operating budget.

Republicans quickly called a press conference to proclaim victory in their battle to prevent any further drain on the Social Security trust fund. “It turns out that we are right [and] the other side was wrong,” Senate Budget Committee chairman Pete V. Domenici (R-N.M.) said.

Tuesday’s developments set the stage for another yearlong battle over what to do with the burgeoning federal budget surpluses that the government is now projecting for the next decade. The latest projections are also expected to be converted quickly into cannon fodder in this year’s presidential and congressional election campaigns.

Republicans want to continue boosting defense spending and to enact sweeping tax cuts for those with the heaviest tax burdens--mostly individuals and couples in the middle- and upper-income brackets.


But Clinton, who has announced plans for modest new spending programs in his fiscal 2001 budget next month, wants lawmakers to keep the lid on most government outlays and use most of the savings to pay off the national debt.

“Now is not the time to let up on a strategy that is plainly working,” the president told reporters at a news conference intended to call attention to the improved prospects for debt reduction. He asked the Republican majority in Congress “to put politics aside and join me.”

Clinton also used the impromptu press conference to claim credit for the improved budget picture and to divert attention from the Congressional Budget Office estimates, which support GOP assertions that Republicans succeeded in “protecting” the Social Security surplus.

Republicans made what they called “saving” Social Security a major political theme last year. For most of the last 40 years, the government has been borrowing from the Social Security trust fund to finance some of the deficit in its day-to-day operating budget.


The Republicans also took credit for the continuing improvement in the budget picture and for the progress that the government has been making in using part of the surplus to pay off the national debt.

However, Sen. Slade Gorton (R-Wash.) told reporters that Republicans are divided over whether to use the coming surpluses to pay off the remaining national debt or to return the money to taxpayers in the form of massive tax cuts.

The White House said Tuesday that the Treasury had paid off about $140 billion worth of the national debt over the last two years and the budget office estimated that the government ran an overall surplus of $176 billion in fiscal 2000, all of which will go toward paying down the debt.

Economists argue that paying off the debt results in substantial benefits by helping to push interest rates down, reducing borrowing costs for businesses and individuals. It also saves the government billions of dollars in interest costs.


Democrats played down the budget office numbers as overly optimistic and insisted that the government must maintain fiscal discipline. Sen. Frank R. Lautenberg (D-N.J.), senior Democrat on the Senate Budget Committee, dismissed the projections that Republicans had cited as “phony as a $2-trillion bill.”

Indeed, the $1.9-trillion cumulative overall surplus that the budget office projected for the next decade is based on the assumption that Congress will observe the spending caps established in 1997, even though it broke them last year to accommodate GOP demands for higher defense spending.

The Congressional Budget Office projected that, if current spending levels are frozen, the surplus over 10 years would end up at a slightly smaller $1.8 trillion, and if outlays are increased to offset inflation the surplus would be only $838 billion.

Domenici told reporters that, although the spending caps that Congress set in 1997 are still “technically” in force, they “no longer are very relevant.” He said that the Republicans’ “new dynamic” for budget making would be to keep the Social Security trust fund intact.


Clinton said that, if his plan to pay off the national debt by 2013 is realized, it would mark the first time since 1835 that the United States has not been burdened with a public debt.