President Bill Clinton has sent the US Congress his final budget before his term of office expires in January 2001.

With the government's coffers overflowing, he wants to boost spending on health and education, while still claiming to be able to eliminate the whole federal debt in the next 12 years.

But his proposals have been attacked by the Republicans, who control both Houses of Congress, as "dead on arrival".

Mr Clinton maintained that his $1.84 trillion programme "upholds my policy of fiscal discipline" while "investing wisely in the American people" through economic growth, health, safety and a clean environment.

Under the Clinton plan, the entire US government debt owed to the public of $3.2 trillion would be paid off by 2012 - the first time the US would not have a national debt since the days of President Andrew Jackson in 1835.

The budget includes extra spending on Medicare, the health care system for elderly Americans, notably in expanding the programme to cover the cost of prescription medicines.

Mr Clinton also proposes using a small proportion of the budget surplus to cut taxes, with programmes targeted on helping pay for college education and long-term care for the elderly.

The $2.9bn trillion surplus

The President says that the booming US economy will generate a government surplus of $2.9 trillion over the next 10 years.

That is more than the Congress estimates - but both agree that the potential surplus is much bigger than the $1 trillion estimated last year.

The reason is the extraordinary performance of the US economy, which has now entered its longest boom in history.

The Clinton Administration has boosted its estimate for the growth of the US economy this year from 2.2% to 2.9%.

That is still a much slower growth rate than the 4.2% increase of 1999.

And it says that over the next 10 years, growth will average 2.5%, higher than previously projected.

The budget proposal covers the Federal budget year beginning on 1 October 2001, giving plenty of time for Congress to debate its contents.

Political conflict

Many political analysts think there is little chance that Mr Clinton's programme will pass a hostile Congress during an election year.

Republicans would prefer that the portion of the budget surplus not used to reduce the national debt should go on tax cuts, not extra spending programmes.

"The President is a proposing the era of big government comes back with a vengeance," said Senate budget chairman Pete Domenici.

The Republicans have proposed tax cuts of around $800bn, and so has leading Republican presidential candidate George W. Bush.

Critics say that many of the President's proposals are designed to help the election chances of Vice-President Al Gore.

Disappearing debt

The most remarkable feature of the budget debate is not the squabbling over the detail, but the fact that both political parties are now arguing over a huge surplus, rather than fighting over more spending cuts or tax increases to fund a growing budget deficit.

The US government has had a budget deficit for 70 of the past 100 years, and since 1980 it had built up an alarming burden of debt.

But the 1997 Balanced Budget Act led to the first surplus in a generation, as discretionary spending on most programmes other than pensions and health care underwent a severe squeeze.

By 1999 the budget surplus was $124bn, and it is projected to reach $184bn in 2001.

But that includes a substantial surplus on the payroll taxes that are used to fund social security, the government pension programme for the elderly.

Under Mr Clinton's plan, which has been accepted by the Republicans, any surpluses generated in that way will go straight towards debt reduction.

That will severely limit the room for manouevre for those who either want to increase spending or cut taxes much more in the future.