In his often-trenchant criticism of supply-side shamanism, the New Republic’s Jonathan Chait tends to inflate the significance of President Clinton’s 1993 budget reconciliation package with its tax hike on the wealthy. He’s at it again here, as he chides a Wall Street Journal columnist for doubting whether tax increases can reduce the deficit.
Do Republican predictions of fiscal Armageddon, circa ’93, look foolish in retrospect? Yes.
But the idea it was Clinton’s boldness alone—just a triviality that he was dealing in those days with a deficit-hawkish Republican Congress—that cleaned up a fiscal mess is equally risible. I was a (lowly) congressional staffer in those days; I remember the appropriations fights, the threats of White House vetoes, the howls of protest at cruel Republican budget slashers.
In his book The Big Con, Chait allows that Clinton benefited from the business cycle—an understatement in itself.
Yet even this gives Clinton too much credit.
It was Contract with America-era Republicans that established the rhetorical framework within which the aforementioned budget fights occurred.
Here’s liberal columnist E.J. Dionne assessing the Clinton presidency in an exchange with Robert Kuttner:
[D]uring the mid-1990s, Clinton himself tacked further to the right than the situation required. He embraced a Republican view of welfare reform. He went along with a brutal immigration bill and assaults on civil liberty in the name of crime control. He accepted the idea of a balanced budget—and then when an economic boom pushed the budget into surplus, he declared that he would pay off the entire national debt.
And here’s the Clinton White House’s own website, boasting of a rather important piece of legislation conveniently unmentioned in narratives of deficit reduction that stop at 1993:
[H]e signed the Balanced Budget Act of 1997, a major bipartisan agreement to eliminate the national budget deficit, create the conditions for economic growth, and invest in the education and health of our people.
It’s critical to remember, too, that ’90s-era surpluses were never cold cash under the federal mattress, but, rather, projections that evaporated with the NASDAQ meltdown, 9/11, and, yes, the Bush tax cuts of 2001.
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