- The Washington Times - Friday, December 6, 2002

Sen. John Kerry is thinking of running for president. We should elect him, he claims, for his courageous stance on balancing the budget. "Reagan and Bush never submitted a balanced budget to Congress, but Clinton did," claimed the Massachusetts lawmaker. He even says the proposed Bush tax cuts are the cause of the current budget shortfalls, but in the same breath says that the tax cuts will not help the economy because most of them will not go into affect until the end of the decade.
In the coming months, budgets and deficits will no doubt top the agenda of Congress, especially once the president's budget is submitted to Congress in early February. It might be useful to examine the history of how we achieved a balanced budget under a Republican Congress, when no Democratic Congress achieved the same in the past 30 years, which will shed light on the ludicrously false claims of Mr. Kerry.
President Reagan took office in early 1981, facing an inherited deficit of$80 billion, an inflation rate of 14 percent, (which required a $75 billion increase in the non-defense portions of the federal budget just to keep pace) and an economy moving toward the second dip of a double recession. The increase in the deficit by Fiscal Year 1982 to some $127 billion was in large part due to these factors, not any cut in taxes. The Reagan income-tax rate reductions did not kick in until the final quarter of fiscal 1982. The next year's deficits of $207 billion were due entirely to a recession inherited from the disastrous and bubble-headed economic program of Mr. Carter, which reduced revenues by $17 billion, and additional cyclical government social welfare spending of $40 billion (with an additional $20 billion to rebuild the military).
When the Reagan tax-rate reductions kicked in, and the economy began its record peacetime run of economic growth, the deficit came down to under $150 billion by the end of Mr. Reagan's two terms, and annual revenue to the U.S. Treasury had soared from $617 billion to $991 billion, an increase of some $374 billion, or 60 percent. Unfortunately, our failure to restrain spending, which also increased by some $398 billion over the same period, did not produce a balanced budget.
The war with Iraq and the pause in the U.S. economy resulted in a relatively mild recession in 1991, increasing the annual deficit another $100 billion by the time Bill Clinton took office. But the much-vaunted deficit reduction program adopted by a Democratic Congress in September 1993, which Mr. Kerry voted for, was a carbon copy of the budget deficit package adopted by the Democratic Congress in 1991. (The Clinton administration package increased taxes some $40 billion more than Bush administration deal, but both were essentially written by the barons of Democratic tax-and- spend Messrs. Rostenkowski, Byrd, Panetta and Mitchell all of whom Mr. Kerry embraced.) And both plans were complete frauds projected levels of federal spending were artificially inflated to make new federal spending increases look "moderate" by comparison, with tax increases "required" to pay for the new spending.
Thus it is that Alice Rivlin, Bill Clinton's director of the Office of Management and Budget (OMB), would submit a report to the president in January 1995 that projected a federal deficit of some $465 billion by the year 2000. She warned that while a robust economic growth of nearly 5 percent was what the Clintonistas had inherited, two years later growth was barely above 1 percent, long-term interest rates were increasing, and long-term deficits were "as far as the eye can see," to repeat one of Mr. Kerry's favorite bumper sticker policy positions.
When the newly minted Congress controlled by Republicans pushed forward a balanced budget, the Clinton White House said such a policy would be "dangerous," and "not needed." Mr. Kerry agreed. When the Republican Congress cut taxes, including the capital gains tax, Mr. Kerry said no. (No doubt, his idea of fiscal brilliance is to dump a luxury tax on yacht-building in America, a policy adopted by a Democratic Congress that destroyed this industry in America and actually lost revenue.)
Republicans in Congress adopted a balanced budget in 1997. The chairmen of the House and Senate Budget Committees, John Kasich and Peter Domenici, finally secured Mr. Clinton's signature on this historic legislation. Government spending was restrained; taxes were actually cut, with a child tax credit and capital gains rate cut leading the way. With a record increase in capital-gain tax receipts of $100 billion a year, and with those earning over $75,000 a year paying an increase of some $125 billion in overall taxes due to the expanded economy and stock market, the budget moved into surplus. But Mr. Kerry opposed both key ingredients of this success story growth-enhancing tax incentives and restraints in government spending. Ironically, an annual reduction in government spending between 1997 and 2002 of 1 percent from what was enacted would have produced a balanced budget today even in light of the recession, tax cuts and terrorist attacks.
Without the tax reductions enacted by President Bush in the spring of 2001, the U.S. economy would have remained in recession, an economic downturn given to us by President Clinton and his Democratic friends in Congress like Mr. Kerry, who obviously found it more politically exciting to try and destroy Microsoft, chase interns around the White House, ignore terrorism, dismantle the defenses of our country, and leave an incoming president with a growing deficit, slowed economy, a shaky security situation worldwide and a slumped stock market.
All of which Mr. Kerry denies, of course, just as he is blind to the economic and security disaster left to President Reagan in 1981, some 20 years ago, by his famous friend Jimmy Carter.

Peter Huessy is president of Geostrategic Analysis, a defense consulting firm in Potomac.

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