Clinton announces $1.87 trillion projected surplus

WASHINGTON - President Clinton said Monday he wants to use the staggering surpluses now forecast in the federal budget to pay off the national debt by 2012, and offered a bargain to congressional Republicans to end the so-called ''marriage penalty.''

The White House estimates the total surpluses at $1.87 trillion over the next 10 years. Announcement of the new estimate - which is more than double the $746 billion forecast just four months ago - pours massive new sums of money into this year's budget fight and roils this year's presidential and congressional election campaigns.

Clinton wants to spend part of the surplus to pay for prescription drugs for the elderly - a benefit currently lacking under the federal Medicare program. The White House and congressional Republicans have competing plans to pay for a drug benefit.

Democrats and Republicans also differ over how to end the tax disparity for married couples, who often pay more than if they filed individually.

Clinton said he called congressional GOP leaders Monday to offer this deal:

''If Congress will pass a plan to that gives real voluntary Medicare prescription drug coverage available and affordable to all seniors consistently with the principles of my plan ... then I will sign a marriage penalty relief law,'' Clinton said. Each initiative would cost about $250 billion over 10 years, he said.

''This is a proposal for true compromise that asks each party to accept some of the positions of the other party in the name of progress,'' Clinton said.

Clinton wants to save the entire Social Security surplus of $2.3 trillion over 10 years and devote it to paying down the public debt.

In addition, he proposes to save the entire Medicare surplus of $403 billion over 10 years and devote that to debt reduction as well.

''A 6-year-old today ... is living in an America that is 3.5 trillion dollars in debt,'' Clinton said during a Rose Garden appearance. ''We can eliminate that debt by the time that child enters college.

''Twelve years from now people from my generation will be entering retirement knowing that Social Security and Medicare will be there for them.

''Quite simply, an economic plan that invests in our people, and pays down the debt, is the wisest choice we can make to honor our values and ensure a better future for our children.''

Clinton also proposed setting aside some of the money for a 10-year, $500 billion ''reserve for America's future'' that could be used for debt reduction, tax cuts, buttressing peoples' retirement plans or whatever else lawmakers decided.

Clinton's dramatically bigger surplus forecast has been expected for weeks, thanks to the huge piles of revenue the robust economy has generated for the federal government. Nonetheless, the mountains of projected cash were infusing a new uncertainty into election-year politics.

The extra money could make it easier for the two sides to strike a wide-ranging budget deal on taxes and spending, though the temptation remains for many members of both parties to leave major conflicts unresolved so they can trumpet their differences during this fall's campaigns.

John Feehery, spokesman for House Speaker Dennis Hastert, R-Ill., said: ''These numbers are the result of the fiscal responsibility of the Republican Congress, and it would be a mistake to throw that responsibility overboard by an aggressive new spending plan.''

The new $1.87 trillion 10-year surplus projection excluded Social Security. It represents the part of the surplus politicians feel free to use for spending or for tax cuts.

With Social Security's own surpluses included, the overall 10-year black ink was being projected at $4.19 trillion, a Democratic official said.

Clinton's enriched proposal for a new prescription drug benefit under Medicare will have a 10-year, $255 billion price tag, $60 billion bigger than his last plan and far bigger than a competing House GOP package.

Eliminating the publicly held portion of the national debt by 2012 would be a year earlier than Clinton proposed in February.

Of the $5.7 trillion national debt, Clinton would eliminate the $3.5 trillion part of it held by the public. The remaining $2.2 trillion is money the government owes its own trust funds for Social Security and other programs.

Vice President Al Gore wants a $500 billion tax cut and more spending for Social Security, health, schools and the environment.

George W. Bush, the presumed Republican nominee for president, wants to use $1.3 trillion of the surplus for a tax cut and more of it for debt reduction and shoring up Social Security.