If exaggerations and distortions are repeated often enough, they can become conventional wisdom, which may eventually acquire the status of historical truth. At least that’s what the Clinton administration and its admirers are hoping as they try to shape how present and future Americans evaluate the 42nd president of the United States. Nowhere is the distance between the claim and the reality greater than on the subject of the federal budget.
During last year’s campaign, Al Gore habitually claimed that the administration was responsible for the biggest fiscal turnaround in U.S. history. In its official review of the last eight years, the White House claims that thanks to “President Clinton’s economic leadership” and the “tough and sometimes unpopular choices” he has made, “record budget deficits have become record surpluses.”
Some people who should know better have been chanting similar hosannas. James Fallows writes in the February issue of the Atlantic Monthly that one of the president’s biggest achievements came early in his first term, when he “rammed through a tax-and-budget bill that turned a chronic deficit into a surplus.”
Turned a deficit into a surplus? Though it may surprise his fans, Mr. Clinton never said his 1993 budget bill would do anything of the kind. In fact, the budget he submitted the following February, after the package was approved, envisioned a never-ending river of red ink.
It projected that the deficit would decline from $255 billion in 1993 to $173 billion in 1996, at which time it would stop shrinking and resume growing. By 1999, according to the Clinton plan, the shortfall would add up to more than $200 billion. That was as close as he cared to come to achieving a surplus.
But he soon reconsidered. In his next budget, Mr. Clinton forecast even bigger deficits than he had the year before. No one watching him back then particularly among his friends imagined that he had the slightest intention of balancing the budget, much less paying down the national debt.
To portray Mr. Clinton as the man who gave us the budget surplus, you have to ignore someone equally as important: Newt Gingrich. The real progress on the deficit came only after the GOP won control of Congress in 1994 and Mr. Gingrich became speaker of the House. Congressional Republicans were the ones who said that a parade of $200 deficits from here to eternity was not good enough. Prodded by Mr. Gingrich, they insisted on adopting a plan to finally bring expenditures into line with revenues.
Mr. Clinton’s initial response was to run screaming from the room. His economic advisers not only denounced the GOP spending cuts as unspeakably brutal but attacked the very notion of balancing the budget. Alice Rivlin, the White House budget director, and Laura D’Andrea Tyson, the head of Clinton’s National Economic Council, both warned that cutting the deficit to zero could bring on a recession.
But in May 1995, both houses of Congress approved the Republican plan. At that point, seeing that he was losing the battle for public opinion, Mr. Clinton abandoned his own position and embraced the dreary goal of making the federal government live within its means.
Even then, though, he was in no hurry, putting off the historic occasion for a full 10 years meaning that the red ink would not vanish until 2005. “It took decades to run up this deficit,” insisted the president, “and it’s going to take a decade to wipe it out.” In fact, it took less than three years to wipe it out, thanks to a stunning combination of good luck, Alan Greenspan and a flood of tax receipts that eliminated the need for spending austerity.
Does that mean Mr. Clinton had nothing to do with our current fiscal health? Of course not. Certainly his 1993 budget plan, including a tax increase opposed by every Republican in Congress, made a significant difference. “I would give 25 percent of the credit to Mr. Clinton, 25 percent to the Republican Congress, and 50 percent to the Federal Reserve and the economy in general,” says Robert Bixby, executive director of the bipartisan anti-deficit Concord Coalition.
Mr. Clinton, of course, may insist he’s responsible for the long economic expansion that generated the fiscal windfall. Actually, it dates back to early 1991, when someone named George Bush was president. Mr. Clinton’s biggest contribution was simply reappointing the Fed chairman who was there when he arrived.
When it came to the deficit, Mr. Clinton was more lucky than good. And not the least of his good fortune was to have opponents who saved him from himself.