I am tried of hearing that Clinton balanced the budget. Simply not true.
Let us establish one point definitively: Bill Clinton didn't balance the budget.
Yes, he was there when it happened. But the record shows that was about the
extent of his contribution.
Many in the media have flubbed this story. The New York Times on
October 1st said, "Clinton balances the budget." Others have praised
George Bush. Political analyst Bill Schneider declared on CNN that Bush
is one of "the real heroes" for his willingness to raise taxes -- and
never mind read my lips. (Once upon a time, lying was something that
was considered wrong in Washington, but under the last two presidents
our standards have dropped.) In any case, crediting George Bush for the
end of the deficit requires some nifty logical somersaults, since the
deficit hit its Mount Everest peak of $290 billion in St. George's last
year in office.
And 1993 -- the year of the giant Clinton tax hike -- was not the
turning point in the deficit wars, either. In fact, in 1995, two years
after that tax hike, the budget baseline submitted by the president's
own Office of Management and Budget and the nonpartisan Congressional
Budget Office predicted $200 billion deficits for as far as the eye
could see. The figure shows the Clinton deficit baseline. What changed
this bleak outlook?
Stephen Moore is director of fiscal policy studies at the Cato Institute.
Newt Gingrich and company -- for all their faults -- have received
virtually no credit for balancing the budget. Yet today's surplus is,
in part, a byproduct of the GOP's single-minded crusade to end 30 years
of red ink. Arguably, Gingrich's finest hour as Speaker came in March
1995 when he rallied the entire Republican House caucus behind the idea
of eliminating the deficit within seven years.
Skeptics said it could not be done in seven years. The GOP did it in four.
Now let us contrast this with the Clinton fiscal record. Recall
that it was the Clinton White House that fought Republicans every inch
of the way in balancing the budget in 1995. When Republicans proposed
their own balanced-budget plan, the White House waged a shameless
Mediscare campaign to torpedo the plan -- a campaign that the Washington
Post slammed as "pure demagoguery." It was Bill Clinton who, during
the big budget fight in 1995, had to submit not one, not two, but five
budgets until he begrudgingly matched the GOP's balanced-budget plan.
In fact, during the height of the budget wars in the summer of 1995, the
Clinton administration admitted that "balancing the budget is not one
of our top priorities."
And lest we forget, it was Bill Clinton and his wife who tried to
engineer a federal takeover of the health care system -- a plan that
would have sent the government's finances into the stratosphere. Tom
Delay was right: for Clinton to take credit for the balanced budget is
like Chicago Cubs pitcher Steve Trachsel taking credit for delivering
the pitch to Mark McGuire that he hit out of the park for his 62nd home
The figure shows that the actual cumulative budget deficit from
1994 to 1998 was almost $600 billion below the Clintonomics baseline.
Part of the explanation for the balanced budget is that Republicans in
Congress had the common sense to reject the most reckless features of
Clintonomics. Just this year, Bill Clinton's budget proposed more than
$100 billion in new social spending -- proposals that were mostly tossed
overboard. It's funny, but back in January the White House didn't seem
too concerned about saving the surplus for "shoring up Social Security."
Now for the bad news for GOP partisans. The federal budget has not
been balanced by any Republican spending reductions. Uncle Sam now
spends $150 billion more than in 1995. Over the past 10 years, the
defense budget, adjusted for inflation, has been cut $100 billion, but
domestic spending has risen by $300 billion.
We have a balanced budget today that is mostly a result of 1) an
exceptionally strong economy that is creating gobs of new tax revenues
and 2) a shrinking military budget. Social spending is still soaring
and now costs more than $1 trillion. Is this the kind of balanced
budget that fiscal conservatives want? A budget with no deficit, but
that funds the biggest government ever?
So the budget is balanced, but now comes the harder part: cutting the
budget. Bill Clinton has laid down a marker in the political debate
with his "save Social Security first," gambit. That theme should be
turned against him and his government expansionist agenda. Congress
should respond: No new government programs until we have fixed Social
Security. This means no IMF bailouts. No new day care subsidies. No
extending Medicare coverage to 55-year-olds. (Honestly, if Clinton has
his way, it won't be long till teenagers are eligible for Medicare.)
The budget surpluses over the next five years could easily exceed $500 billion.
Leaving all of that extra money lying around within the grasp of vote-buying
politicians is an invitation to financial mischief. If Congress and the president
use the surpluses to fund a new spending spree, we may find that surpluses are
more a curse than a blessing.
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