In proposing a plan to cut the deficit, Clinton submitted a budget that would cut the deficit by $500 billion over five years by reducing $255 billion of spending and raising taxes on the wealthiest 1.2% of Americans.[26] It also imposed a new energy tax on all Americans and subjected about a quarter of those receiving Social Security payments to higher taxes on their benefits.[27]
Republican Congressional leaders launched an aggressive opposition against the bill, claiming that the tax increase would only make matters worse. Republicans were united in this opposition, as it were, and every Republican in both houses of Congress voted against the proposal. In fact, it took Vice President Gore's tie-breaking vote in the Senate to pass the bill.[28] After extensive lobbying by the Clinton Administration, the House narrowly voted in favor of the bill by a vote of 218 to 216.[29] The budget package expanded the Earned Income Tax Credit (EITC) as relief to low-income families. It reduced the amount they paid in federal income and Federal Insurance Contributions Act tax (FICA), providing $21 billion in relief for 15 million low-income families. Improved economic conditions and policies served to encourage investors in the bond market, leading to a decline in long-term interest rates. The bill contributed to dramatic decline of the budget deficit in the years following its enactment–in 1998, for the first time since 1969, the nation achieved a budget surplus.[30] The surplus money was used to pay down the national debt, which had risen to $5.4 trillion by 1997. The economy continued to grow, and in February 2000 it broke the record for the longest uninterrupted economic expansion in U.S. history—lasting ten years.[31] In the year 2000, the nation was on track to be debt free for the first time since 1835.