Now, we find ourselves in a period of surpluses that were built during the Clinton era on a foundation of fiscal discipline, deficit reduction, and private investment and innovation. But we know that an even bigger wave of deficits will hit us when the baby boom generation begins to retire in 2011. Paying down the debt lowers interest rates and boosts the economy, and it also puts the government's finances in the best possible shape to weather the approaching demographic storm. And the nation can, indeed, afford a responsible tax cut of the type outlined elsewhere in this issue. But when you ask Americans what's the best use for the surplus, by overwhelming margins they say paying down the nation's debts and securing Social Security, Medicare, and other future obligations.
Tax cuts rank way down on their list of priorities.
Congress should heed the American people's choices. Although its impact should not be described in apocalyptic terms, the aging of America will almost inevitably force profound adjustments in U.S. budget policy. The current decade is the calm before the storm. The Clinton prosperity policies reached workers at all levels, driving unemployment to a historic 30-year low of 4 percent. Social Security's share will grow from 4 percent in 2010 to 6 percent in 2025.