THE WHITE HOUSE

                         Office of the Press Secretary

For Immediate Release                                            August 21,

                                August 21, 2000

The Honorable J. Dennis Hastert
Speaker of the House of Representatives
Washington, DC 20515

Dear Mr. Speaker:

     When Congress returns from recess, I know we can work together on
fiscally responsible tax legislation that includes marriage penalty relief,
as well as tax cuts for college education, long term care, retirement
savings, new markets and child care.  This is the right approach for

     As it now stands, however, your party continues to support an
irresponsible tax strategy that abandons the fiscal discipline that led our
country out of deficits and toward the economic prosperity we enjoy today.
Moreover, the Republican position on taxes leaves nothing for Social
Security, Medicare, prescription drugs or improving education, and would
actually drive America back into deficits.

     As you know, this Administration has a record of success when it comes
to protecting Social Security and Medicare.  In the 1998 State of the Union
address, President Clinton first called on Congress to "Save Social
Security First," effectively designating Social Security as the first
priority for projected surpluses.  At the very same time, members of your
own party were advocating across-the-board tax plans (S.3, H.R. 3).  If
those tax bills had passed, we would still have a deficit today.  In 1999,
President Clinton proposed a specific Social Security plan that today would
extend the life of Social Security to at least 2057.

     Earlier this year, Vice-President Gore proposed a Medicare lockbox to
ensure that the money in Medicare is used only for Medicare, and not for
tax breaks and other spending.  If this lockbox is enacted, we would extend
the life of Medicare to at least 2030.  In contrast, the so-called lockbox
passed by the House contains legislative loopholes that leave the surplus
vulnerable and would not add a single day to the life of Social Security or

     In the twelve years prior to the Clinton presidency, the national debt
quadrupled.  Since his election -- and through the passage of the 1993
economic plan and the 1997 Balanced Budget Act -- record deficits have
turned into record surpluses.  We are on track by the end of this year to
have paid off $360 billion in debt.  If we stay on the course outlined by
President Clinton, we can make America debt-free by 2012, for the first
time since Andrew Jackson was President.  The Republican fiscal strategy -
including your $2 trillion tax plan and the Republican Presidential
nominee?s Social Security proposal - would leave America permanently in

     It is also a fact that the true cost of your tax cuts would drain away
more than $2 trillion of the budget surplus and drive America back into
deficits.  This is just a matter of simple arithmetic.

     According to your own calculations, the tax cuts you passed this year
would cost $734.2 billion over ten years, which with interest would drain
over $900 billion of the budget surplus.  (This assumes that the so-called
marriage penalty legislation continues in effect after 2004, which your own
Joint Committee on Taxation estimates would cost $292.5 billion over 10
years, rather than the $89.8 billion number you used in your estimates.)
     Add this to the tax cuts proposed by the Republican nominee and
endorsed by your caucus, which would cost $1.3 trillion over 9 years,
draining $1.6 trillion of the surplus including interest.
     Eliminate the duplicate provisions, and the tax cuts passed this year
and endorsed for next year by the Republican Party would drain over $2
trillion of the budget surplus.

     Your colleagues voted for these tax cuts.  Your party endorsed these
tax plans in Philadelphia.  If you take exception with this analysis,
please be clear about which of the tax cuts passed this year or proposed
for next year you would now renounce.

     The President has proposed a responsible and fiscally disciplined
budget that extends the life of Social Security and Medicare, provides a
voluntary Medicare prescription drug benefit, invests in education by
reducing class sizes and building more schools, provides targeted tax
relief to help middle-class families, and pays off the debt by 2012.

     The Administration shares your goal of completing the budget process
as soon as possible.  However, the Congress has not sent the President any
appropriations bills that fund domestic programs.  We look forward to
working with you to fund key priorities of importance to the American
people, including initiatives to fight crime, protect the environment,
improve health care, enhance medical and scientific research, and
strengthen public education.

     President Clinton is strongly committed to working with you on a
fiscally disciplined budget that addresses the needs of working families.
Let?s all work together to continue the strategy that has helped America
enjoy unprecedented prosperity over the past eight years.


                              John Podesta
                              Chief of Staff to the President

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