Bill Clinton: “Ladies and gentlemen, now that the two Houses of Congress have completed action on their tax plan, I would like to make…”

“Ladies and gentlemen, now that the two Houses of Congress have completed action on their tax plan, I would like to make some comments and offer my plan for what I think should be done with the tax portion of the balanced budget agreement. By way of background, let me point out again, as I have said many times, I was determined to change the economic policy of the United States Government when I became President. We abandoned trickle-down and the big deficits and instead adopted an invest-and-grow strategy: reduce the deficit, invest in the education and skills of our people, and make sure we sold more American goods and services around the world. That has contributed, along with the ingenuity, hard work, and productivity of the American people, to the healthiest economy we've had in a generation. I want the balanced budget we ultimately pass to continue to reinforce that strategy and our values. The agreement that we signed with the Republican and Democratic leaders of Congress reflects the invest-and-grow strategy. It is in balance with our values of honoring work, strengthening families, and offering opportunity. It eliminates the deficit, it invests in education, it extends health care for more of our children while securing Medicare for our parents, and it provides for an affordable tax cut for the American people. America's families deserve a tax cut, and they deserve one that reflects their values. It is, after all, the energy and dedication of the American people that has produced our present prosperity, that has made it possible for us to balance the budget. The American people should receive a dividend from this prosperity because they have produced the strength that has enabled us to achieve it. The dividend should be reflected in policies that help them to strengthen their families and educate their children. Two different tax cut bills have passed the House and the Senate. The bills contain many good elements, but I do not believe they represent the best way to cut taxes, nor are they consistent with the balanced budget agreement. They are not close to the roughly $35 billion the agreement explicitly provides to help people provide for higher education costs; they do an inadequate job of opening the doors to college, therefore. They direct far too little relief to the middle class. They include time-bomb tax cuts that threaten to explode the deficit. They do not do enough to keep our economy going. Today, as lawmakers from both Houses prepare to begin final negotiations with our administration over the details of a tax cut, I offer my plan to cut taxes. My plan reflects America's values, helping families pay for college, raise their children, buy or sell a home, pay for health care. It honors the budget agreement. It is the right plan for America. This reflects the approach of Democratic alternatives that were offered in Congress, but it also reflects the priorities of the Republicans as well. The $85 billion tax cut I submit has five central elements. First, the tax cut plan will focus on education, our Nation's highest priority, with $35 billion in targeted tax cuts. To offer opportunity in the new and rapidly changing economy, we must make the 13th and 14th years of education, the first 2 years of college, as universal as a high school diploma is today. To that end, my proposal will give young people a HOPE scholarship tax credit worth up to $1,500 for the first 2 years of college. It gives further tax cuts to help pay for 4 years of college. It provides tax relief to pay for training and learning throughout a lifetime. It will allow parents to save in a tax- free IRA for their children's education, and it will use tax incentives to help communities rebuild and modernize their schools. Education is how we will meet the challenges of the 21st century, and the core of our tax cut must be to help families pay for education. The tax cuts can do for our children what the GI bill did for Americans a generation ago. Second, my plan gives families a $500 tax credit for every child under 17. This plan, unlike the tax cut proposals put forth by the congressional majority, would give working people who earn lower salaries the child tax credit as well. A rookie police officer or a starting teacher, a firefighter or a nurse who earns $22,000 deserves a child tax credit. They are some of our hardest pressed working people. They are paying taxes now, and I will fight to give them the same tax relief that other Americans would receive. Third, to honor our commitment to bipartisanship, the plan allows taxpayers to exclude 30 percent of their capital gains from taxation. It also gives a capital gains tax cut for buying and selling a home. The capital gains cut is targeted, more prudent, and less likely to explode the deficit in the years to come than the plan of the congressional majority. Fourth, my plan provides estate tax relief to help parents who want to pass small businesses and family farms on to their children. Fifth, the plan provides tax incentives to encourage businesses to hire people off welfare. It will also provide tax cuts to businesses that clean up urban toxic waste sites known as brownfields and convert these sites to productive use. It will create 20 more empowerment zones to attract businesses into disadvantaged neighborhoods, and it includes tax incentives to revive our Nation's Capital. The brownfields and the empowerment zones were both mentioned in the budget agreement as items that the leaders would work hard to include in the final tax bill. It is now time for all the leaders who did the agreement to work together to achieve that. Only by bringing the spark of private enterprise into our inner cities will we truly break the cycle of poverty that holds too many of our people back. In addition, the Senate, by bipartisan agreement, departed from the budget agreement to support a 20 cents per pack tax on cigarettes. I will support this change. Unlike the Senate version, however, I believe these revenues should be used entirely in ways that focus on the needs of children and health care. This tax cut plan that I have just outlined embodies the best ideas offered by Democrats. It reflects many of the priorities of the Republicans, such as the capital gains cut. It is balanced. It is fair to the middle class. It will foster economic growth without hurting our vulnerable citizens. And it is consistent with the budget agreement. It is the right plan for America. And I will do my best and fight hard for it in the weeks to come.”