- The Washington Times - Wednesday, October 13, 2004

John Kerry has pledged he’ll restore Clintonomics, which “paid down the debt,” “created 23 million new jobs” and “lifted millions out of poverty.” The splendid 1990s, however, were not splendid because of the Democrats or Bill Clinton or even Clinton’s much ballyhooed Treasury Secretary Robert Rubin, now a Kerry adviser. It’s a nice Democratic Party myth, but far from accurate.

Some recent history is in order. After Mr. Clinton’s election, the president went full-bore left, pushing for the largest tax increase in history (the words of the late Sen. Daniel Patrick Moynihan), a special $72 billion energy tax and vastly increased domestic spending, including federal takeover of the entire health-care system, equal to one-seventh of America’s yearly domestic output.

Poised to drop these economy crushers on the nation, the president was largely foiled by a feisty Republican minority, outgunned at the White House and in both houses of Congress. True, he did get a hefty tax increase through Congress. But with Senate Minority Leader Robert Dole and House Minority Whip Newt Gingrich leading the charge, the congressional Republicans significantly scaled back the initial Clinton tax offering, rallied to deep-six a $16 billion stimulus package and knocked off the broad-based energy tax as well.

Hillary health care, exposed as an enormously complex and expensive boondoggle, was also collapsing under steady Republican hammering, with a nice assist from a devastating critique in the New Republic. On Sept. 26, 1994, Majority Leader George Mitchell, Maine Democrat, the chief Senate sponsor of Hillarycare, officially raised the white flag.

Little over a month before the November balloting, Mr. Gingrich and more than 300 House Republican candidates nationalized the election by proclaiming their support of the very non-Clintonian, non-Democrat “Contract With America.” Under the Newt-designed “Contract,” the Republicans pledged to give the average American family major tax relief, cut taxes substantially for investors, make wholesale changes in the welfare system and balance the budget.

Less than six weeks later, the American voter, turned off by “Clintonomics” and intrigued by the Contract, handed the Democrats a historic defeat. The Republicans not only captured the Senate, but amassed a majority in the House for the first time in 40 years, enthroning Mr. Gingrich as speaker.

Thus the Clinton effort to socialize a huge chunk of America had been blunted; Clinton economic policy, as pursued from 1992-94, was now over. How, then, can Mr. Clinton and the Democrats be given credit for an economic program that was largely thwarted?

Indeed, Mr. Clinton himself knew his first two years had been disastrous, certainly for his party. Panicked by the popular verdict on his presidency, he brought in adviser Dick Morris to save his administration from total ignominy. Mr. Morris’ instructions, as outlined in his book, “Behind the Oval Office”:

“[W]ork to eliminate the deficit, require work for welfare, cut taxes and reduce the federal bureaucracy.” Mr. Clinton, though kicking and screaming all the way, eventually adopted Mr. Morris’ advice. By the spring 1995, the president had abandoned Hillarycare for good and was proposing balanced budgets, albeit initially more for show.

Then he informed an October 1995 fund-raiser in Texas that “I think I raised them [taxes] too much, too.” In his 1996 State of the Union address, he grandly pronounced “the era of big government is over.”

The president then acquiesced in a series of important Republican initiatives. In election year 1996, he signed, reluctantly and with liberals raging in opposition, a historic Republican welfare reform program, eliminating scores of federal welfare regulations and transferring critical spending authority to the states.

The initial results — which Mr. Clinton took credit for at the Democratic Convention in 2000 — were spectacular, with caseloads falling like stones in just a couple of years.

More Clinton concessions were to come. The following August, Mr. Clinton signed into law a bipartisan balanced budget measure that not only restrained spending, but included several critical Republican tax-relief items. Among them: a solid, middle-class tax cut, which Mr. Clinton had promised in the campaign but had conspicuously dumped after his election.

The GOP-sponsored cut came in the form of a $500-per-child tax credit, which would amount to about $75 billion over a five-year period and proved a godsend to millions of American families. The measure also contained substantial tax relief elsewhere, a nearly 30 percent cut in the capital-gains tax burden, a serious decrease in estate taxes, repeal of the alternative minimum tax on small business and a new retirement savings account, known as the Roth IRA.

Equally important, as former Congressional Budget Office Director June O’Neill has noted, the Republicans weren’t imposing on the country — or even threatening to impose — the kind of dangerous domestic spending programs and regulations that could cripple an economy.

The result: The economy bloomed. Money flowed into the U.S. Treasury largely because people became wealthier. Taxes on income and capital gains soared, not because rates were raised but because taxes were being lowered. Spending was restrained, GDP rose at a healthy 4 percent clip and the Dow Jones average more than tripled by the time Mr. Clinton left office — and remains at stratospheric heights to this day.

The Ronald Reagan peace dividend, with an assist from George H.W. Bush, also proved crucial in generating the surpluses the Democrats keep bragging about. According to John Shalikashvili, chairman of the Joint Chiefs under Mr. Clinton, and William J. Perry, Mr. Clinton’s defense secretary: “This ‘peace dividend,’ amounting to about $100 billion a year, has been a major contributor to the balanced budget that our economy now enjoys.”

Mr. Kerry to the contrary, then, the booming ‘90s were a Republican phenomenon. The economy, for a myriad of reasons, including the dot-com bubble, corporate scandals, September 11, 2001, and the end of the peace dividend, has been not nearly as robust since Mr. Bush took office. But to the extent it has recovered, Mr. Bush’s supply-side tax cuts — vigorously opposed by Mr. Kerry, Mr. Edwards and their economics guru Mr. Rubin — have obviously been crucial.

Republican-oriented policies, not Clintonomics, have again saved the day. Voters should take note.

Allan H. Ryskind, a Capitol Hill reporter for many years, is editor at large for Human Events.

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