Let the Battle for the Budget Surplus Begin

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The media gods couldn't have asked for better timing. On Thursday Bill Clinton will deliver his last State of the Union Address, where he'll attempt to boost his legacy by rehashing much of the ambitious domestic agenda he took office with in 1992. And he'll do it with the knowledge that the nation is sitting on a huge budget surplus. On Wednesday the Congressional Budget Office presented Congress with three budget scenarios for the next decade with projected surpluses of up to $1.9 trillion. The report concludes that the bulk of the $5.7 trillion national debt, including money borrowed from Social Security, can be paid off by 2010 if none of the surpluses are spent. Upon news of the report Tuesday, the President immediately moved his plan for wiping out the debt — which includes some spending proposals, such as on Social Security and Medicare, and modest tax cuts — up two years, to 2013.

Word of the projected surpluses also came less than a week before the year's first primaries, and just when the candidates are fighting to lay claim to the best plan for stewarding the robust economy. The biggest beneficiary of the rosy projections could be the man sitting next to the podium during the State of the Union Address. After denouncing the President as a disappointment just a few months back, Al Gore has been referencing his boss at every opportunity in recent weeks. But, to varying degrees, the projections are good news for all the candidates: They make Bill Bradley's $65 billion-per-year health care proposal seem less fiscally risky — likewise George W. Bush's trillion-dollar tax cut — and they could position John McCain to score points with conservatives by expanding the size of his proposed tax cut while still making generous provisions to pay down the debt. One thing remains clear: In the coming weeks all the players will be clamoring for a slice of prosperity pie.