Clinton's Last Budget: This Year's Proposal Hinges on Gimmicks, Creative Accounting
WASHINGTON -- Even as he trumpeted his plan to pay off the national debt by 2013, President Clinton quietly suggested an increase in the legal ceiling on how much debt the government can hold.</br></br>Why? The answer lies in the difference between the debt held by the public and the total debt that the Treasury owes, which includes long-term obligations to other government agencies -- notably the Social Security trust fund -- for future benefits.</br></br>Many economists consider the public debt, which the White House projects will decline to zero in 2013 from $3.48 trillion in the current fiscal year, to be the most important. That is what affects interest rates and the government's immediate impact on the broader economy. Mr. Clinton uses that measure when he talks of cutting up the government's credit card.</br></br>But some analysts and politicians consider total government debt a better measure of the government's long-term responsibilities, and that figure rises as aging baby boomers stake an ever-bigger claim on Social Security benefits. Congressional limits on federal borrowing apply to that figure, not just publicly held debt.</br></br>The current statutory debt limit is $5.95 trillion. For the current fiscal year, the debt subject to that limit will be safely below that figure -- about $5.65 trillion. But under the Clinton plan, government debt would cross the ceiling by hitting $6 trillion in 2004 and $6.79 trillion in 2013.