President Bill Clinton announced yesterday that the 1995 US budget deficit had dropped to $164bn (pounds 104bn), down nearly a quarter from $203bn figure a year ago, and cut nearly in half since he took control of the White House.
The President spoke as Republicans in Congress began the process of voting through the programme of sharp tax and spending cuts in their budget. Mr Clinton threatened once more to veto it.
He was clearly buoyed by the figures, which may strengthen his hand in what promises to be a drawn-out political battle over future spending. "Today America is on the move, the economy is growing, " he said, while the Republican plan "mortgages our future".
The yawning US budget deficit has been a driving political issue since before the 1992 election which put Mr Clinton in power. Republicans, led by the House Speaker Newt Gingrich, have produced a package to balance the budget within seven years.
The President, by contrast, is asking for 10 years to do the same job. He has worked consistently to portray Republicans as uncaring, in cutting programmes from student loans to farm support and health care for the elderly. Yesterday he demanded a new budget "balanced in a way that reflects our values and our economy".
The White House figures showed the deficit has also fallen as a percentage of the economy, from 4.9 per cent of gross domestic product to 2.3 per cent today, and that economic growth overall averaged 3.3 per cent, higher than projected.
Mr Clinton accused Republicans of threatening "economic blackmail, pure and simple," by their threat to refuse to extend the national debt ceiling, currently at $4,900bn, if he does not accept their budget by mid-November. Such drastic action, though highly unlikely, would effectively close down all but the essential functions of the US government, threatening a default on its debts.Reuse content