Originally posted by: ProfJohn
If you want to give Clinton credit then give him credit for being smart enough to look at the Republican victory in 94 and change his direction (give some credit to Dick Morris who helped him come up with triangulation.)
Prior to the Republican take over Clinton proposed nearly one trillion in deficit spending over the five year period between 1996 and 2000. After their take over he proposed a budget that would end up being balanced around 2000.
The reason the budget was balanced prior to 2000 was due to good economic growth and drastic cuts in the defense budget.
When Clinton took office in 93, the previous twelve years of trickle down economics had run large deficits both during economic boom and bust periods. In 93 the annual interest payments on the national debt were the third largest items after defense and social security. Between the large budget deficit and the trade deficit, in order to finance spending and attract that kind of capital without loss in value of the dollar, interest rates had to be high. Those high interest rates worked out to be an indirect tax on people with mortgages, car payments and credit card debt.
His plan was to work the deficit down, which would create new jobs by bringing down interest rates since the government wouldn't be competing with the private sector for borrowing money. The target was to cut the deficit in half in four years. The fear was that the cuts, though good long term, would cause a short term slowdown, so he tied in a small short term targeted spending package along with business tax cuts.
By the time the Republican Congress took over in early 95, Clinton's budget was to balance the budget in ten years. The Republicans proposed to do it in seven years, with large spending cuts in education, health care and environment. Clinton did not want to plan to balance it faster because the contractionary impact, if too large, could risk slowing economic growth. In November the government shut down because both sides, though agreeing on a long term balanced budget outlook, disagreed on where the cuts would come from to pay for that balanced budget. At the time a USA Today/CNN poll suggested Americans by wide margins have soured on the Republican agenda, with 60 percent saying he [Clinton] should veto the budget bill and 33 percent saying he should sign it. Despite the public support the Republicans held strong and kept it a stalemate.
By Clinton's re-election in 96 the budget fight lasted all of 95, caused a shutdown by the end of that year, and for nearly six months dragged on through the first half of 96. It would be misleading to say that the stalemate was responsible for the economy, certainly not for the entire four years he had been in office. During that time, there were 11 million new jobs and the lowest combined unemployment and inflation in 28 years. If you want to say those things happened just because Clinton sat there, go ahead. But it would be impossible to declare that those things happened because of the Republicans. Their first year and a half as the controlling Congress resulted in a stalemate and did not get their economic policies pushed through.
As growth continued to increase, Clinton introduced in 97 a balanced budget within five years. The economic growth took unemployment under 5 percent, boosting payrolls, profits and most importantly, tax revenues. Because the growth was so staggering over the previous four years, the deficit had shrunk from $300 billion plus to a little over $70 billion in five years. Far better than Clinton had planned.
You act as if the significant economic expansion and balanced budgets happened during Republican control of the budget. The majority was already done by the time the Republicans got their first budget passed, and that budget was a compromise since the American people (maybe out of sheer chance) sided with Clinton during the shutdown.
I will give the Republicans alot of credit for the welfare reform passed in 97, it was bipartisan with 70 percent support in both houses. During Clinton's presidency, welfare rolls dropped from 14.1 million to 5.8 million.