On Jan. 23, 1996, Bill Clinton told the nation, "The era of big government is over." If so, it sure didn't last very long. Today, the era of big government is back with a vengeance, ushered in by a massive new prescription drug entitlement, a pork-laden energy bill of grotesque proportions and a trade war with China.
What few people, including myself, ever thought would happen was that this new era of big government would be implemented by Republicans controlling both Congress and the White House. It makes me long for the good old days of gridlock.
In his new book, "In an Uncertain World," former Treasury Secretary Bob Rubin extols the Clinton administration's fiscal record. He correctly notes that the federal budget deficit was close to $300 billion when Clinton took office and had a surplus of more that $200 billion when he left. Nowhere in the book, however, does he credit the Republican Congress, which was elected in 1994, for the turnaround.
On the contrary, Rubin's book is filled with disdain for Republicans, especially Newt Gingrich, who blocked Clinton administration initiatives at every turn. And of course, Clinton returned the favor by blocking Republican initiatives, with the notable exceptions of welfare reform in 1996 and a tax cut in 1997.
Yet it was the combination of the two -- a Democratic White House and a Republican Congress -- that was really responsible for the budgetary turnaround. Each side was checked from enacting new spending programs. The result was that the budget was virtually on automatic pilot for most of the Clinton administration. In other words, we have gridlock to thank for the fiscal turnaround, not Clinton's leadership, which mostly involved sticking his finger in the wind to see which way the polls were blowing.
Rubin would also have us believe that the Clinton administration's fiscal policy is what led to the economic boom of the 1990s, primarily by bringing down interest rates. But the record tells us that rates didn't really fall until Republicans took control of Congress. In that month, long-term interest rates actually were higher than they had been when Bill Clinton took office. The Treasury's 30-year bond rate was 7.34 percent in Jan. 1993 and 8.08 percent in Nov. 1994. It was while Democrats and Republicans cohabitated in running the federal government that we really saw rates decline and the economy take off.
Bruce Bartlett is a former senior fellow with the National Center for Policy Analysis of Dallas, Texas. Bartlett is a prolific author, having published over 900 articles in national publications, and prominent magazines and published four books, including Reaganomics: Supply-Side Economics in Action.
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