WHAT CLINTON DID FOR ECONOMY: In 1992, the U.S. economy had ground to a halt. Ten million Americans were out of work, and the federal budget deficit had soared to nearly 300 billion dollars. With real wages continuing to fall, families were having an increasingly difficult time making ends meet.
President Clinton sent Congress a budget package aimed at stemming the flow of red ink and getting America’s economy moving again. The Clinton plan included $500 billion in deficit reduction, investment credits for urban areas, and a substantial increase in the earned income tax credit for working families.
Republicans in Congress predicted economic disaster and refused to supply even a single vote for the President’s budget package. House Majority Leader Dick Armey thundered on the House floor that "Dreams will be put off . . . and the deficit will reach another record high."
The American economy proceeded to set a record for the longest economic expansion in history. Instead of the record budget deficits Armey envisioned, by 2000 we had a record surplus. More than 22 million new jobs were created, and unemployment levels were at their lowest in decades.
Those of us who voted in favor of the President’s plan had made the right decision. And the benefits of fiscal discipline should have been evident to all.
Unfortunately, the message apparently didn’t get through to everyone.
On June 7th, President Bush signed into law a $1.35 trillion tax cut skewed to the wealthiest Americans. Republicans in Congress supported the Bush tax cut with the same unanimity as they opposed President Clinton’s budget plan in 1993.
Many of us objected that the tax cut would trigger a raid on the Social Security Trust Fund and shortchange such important priorities as education and prescription drug coverage for seniors. We instead called for fair and fiscally responsible tax relief, which would protect the Social Security surplus. But the President and his advisors dismissed our arguments, at the time claiming there will be enough money for everything.
This week, the non-partisan Congressional Budget Office (CBO) put the rosy scenarios to rest. In an eerie echo of years passed, the CBO announced that the once record federal budget surplus had shrunk by nearly 50 percent since President Bush first came to office. Worse still, instead of using what could have been record surpluses to shore up Social Security and Medicare for future generations, the government will have to tap about $9 billion of the Social Security surplus this fiscal year just to meet its current obligations.
CBO should have titled the report "Wrong, Again."
The result is that Congress returns from the summer recess to face dwindling government reserves, a lagging economy, and insufficient resources to invest in a Medicare prescription drug benefit, education, or even the President’s vaunted National Missile Defense system.
Many of us had hoped that the 1993 budget plan would put an end to an era of deficit spending and lagging economic growth. We cast some difficult votes to put our nation’s fiscal house in order and our economy back on the right track. Sure enough, as the surplus numbers rose, the economy grew. Jobs were plentiful, wages were high. Businesses had new opportunities – both here in the United States and abroad. There was even enough money in the budget surplus to safeguard Social Security and Medicare for today’s seniors and help protect it for the next generation.
It’s time for President Bush and the Republicans in Congress to take a page from a playbook proven to work. During the 1990's, we were able to both maintain fiscal discipline and invest in important social priorities, because our very commitment to lower deficits spurred economic growth. President Bush and the Republicans in Congress abandoned this tried-and-true approach, opting instead to pass a trillion dollar tax cut. Now, as economic growth hovers dangerously near zero, the once-record surplus has all but disappeared, and Social Security has been tapped, it’s time for the President to rethink his plan. He must come forward with a new budget, without the "fuzzy math" that landed us in this predicament to begin with.
No more gimmicks. No more feel-good rhetoric. Let’s face up to the task at hand and have an honest debate about our nation’s budget priorities. A little candor would go a long way towards putting our fiscal policy back on the right track.
Congressman Marty Meehan represents the 5th District. He serves on the House Judiciary and Armed Services Committees. Meehan resides in Lowell. |
