President of the U.S., 1993-2001; Former Democratic Governor (AR)
Too little government oversight caused 2010 recession
The recession occurred because there was too little government oversight of risky loans without sufficient capital to back them up; the recession was prevented from becoming a depression because of a government infusion of cash to shore up the banking
system; and the downturn hurt fewer people because of the stimulus, which supplemented wages with a tax cut, saved public jobs, and created jobs through infrastructure projects and incentives to create private-sector jobs, especially in manufacturing.
Source: Back to Work, by Bill Clinton, p. 6
, Nov 8, 2011
S&P credit downgrade caused by dysfunctional politics
[In August 2011], Standard & Poor's (S&P) downgraded America's long-term credit rating. The decision was criticized in many quarters because no one doubted the ability of the
United States to pay its debts.
S&P stated clearly that what really upset it was the politics of
Washington, the slow recovery from the recession, and the fact that over the next few years debt in several wealthy countries is projected to go down as a percentage of GDP but the
U.S. debt probably will not do so, mostly because the United States, along among wealthy nations, has had no effective restraint on health-care costs. Above all, S&P thinks America's politics have become dysfunctional.
Balanced approach to recovery: jobs, investment, and debt
If we can restore economic growth and slow down the rise in health-care costs, we should have a better ratio of workers to retirees and more opportunities to create more broadly shared prosperity.
America is also still the world's more entrepreneurial
country. It's easy to start a small business, and for several years small businesses have accounted for a majority of our new job growth.
We simply are not doing what we have to do to stay ahead of the competition for good jobs, new businesses,
and breakthrough innovations. Lots of other countries are hot on our heels with rising incomes, declining inequality, increased educational attainment, and big investments in key drivers of today's and tomorrow's economy.
As the economy recovers, I want America to embrace a balanced approach that creates jobs, raises incomes across the board, and deals with our long-term investment and debt challenges.
The right thing is to put America back in the future business. The most successful countries have both vigorous market economies and active, effective governments working together to achieve common goals.
After World War II, until 1981, government
policies helped us build the world's greatest middle class; reduce discrimination based on race, gender, and sexual orientation; lower poverty rates; open wide the doors of college; increase access to health care; and clean up our environment in a way
that promoted economic growth:
Put as much of the $4 trillion now held in banks and corporate treasuries back into the economy as fast as we can;
concentrate on the areas most likely to produce good jobs that have a positive ripple effect, jobs
in modern infrastructure building, high-end manufacturing, green technologies, and exported goods & services; and
do literally dozens of other things that, when combined, can make a real impact now and also increase our long-term economic growth.
If Congress won't legislate, fix by Executive Order
Q: It seems almost impossible to get Congress to approve anything in any kind of bipartisan way.
A: If [the President] can't get Congress to act, he's got to do everything he can by Executive Order.
I understand why he's frustrated, because a lot of these proposals that he's made are ideas that were first proposed by Republicans, who are all of a sudden now against them and seem to be against them just because
[Democrats are] for them. But he ought to keep fighting for his ideas in Congress.
These kinds of financial/housing crises, if you go back hundreds of years, tend to take five to 10 years to get over.
Source: Time Magazine on "Back To Work" book tour by Bill Clinton
, Jan 21, 2011
1995-97: Cutting capital gains tax helped eradicate deficit
Clinton wanted to raise taxes. But eventually Clinton came around to the idea of cutting the capital gains tax (which Gingrich had wanted all along). So the tax was cut. And revenue poured in! The deficit, which was supposed to take
Inflation is not the only way to repay the debt. Economic growth is the other way. When Pres. Clinton dueled with House Speaker Newt Gingrich over how to balance the budget in 1995-97, each had his pet hobbyhorse. Gingrich wanted to cut spending.
Yes, more. Even though the rates were lower, the economic growth they kindled brought in hundreds of billions extra each year. The proportion of taxes paid by the richest 1% rose from 37% in 2000 to 40% in 2006, even though their tax rate had been cut!
8 years to eradicate, was gone in less than 2 years.
The results of the 2001 Bush tax cut were similar. Bush sliced the top rate from Clinton's 39.6% to 35% and cut the capital gains rate from 20% to 15%. The result? The rich paid more in taxes! MORE?
The massive Clinton tax increase of 1993 resulted in short-term increases in revenues to the government but eventually became an anchor that stopped economic growth. Clinton left the country on the brink of recession at the end of his second term in 2001
The Republican Revolution of 1994 initially proved to be a good counterbalance to Clinton's attempt to expand government. The Republicans stopped Clinton's attempt to take over America's health-care system, forced him to sign a welfare reform plan
(after two vetoes), and finally balanced the federal budget for the first time in decades.
The achievement of the balanced budget was short-lived (it was actually never even close to being balanced if you count what was being borrowed from the Social
Security Trust Fund) and more the result of America's economic expansion than anything done by the Republicans or Clinton.
Unfortunately the good economy and balanced budget created an excuse to increase spending dramatically.
In 1995, Bill decided to balance the budget in ten years because “the pain we’d inflict on our elderly, our students, and our economy” in the GOP 7-year plan “just isn’t worth it.” He promised to cut taxes on the middle class rather than the rich, and he
drew sharp distinctions between his way and the GOP way, particularly on Medicare-cost savings. He insisted the GOP wanted to raise health care premiums for the elderly, while he planned to cut Medicare costs by reducing payments to hospitals.
Source: For Love of Politics, by Sally Bedell Smith, p.213
, Oct 23, 2007
First modern Pres.to use fiscal discipline to balance budget
The budget deficit inherited from the Bush presidency was staggering. Bill Clinton felt a commitment to the kind of fiscal politics out of which Republican presidents had made rhetorical hay for two generations, while presidents from both parties allowed
debt to pile up.
Most of the platform that had been the foundation for Clinton’s victory, which featured a menu of social programs, was instantly challenged. Ironically, those first 100 days, while the bottom sometimes seemed to be falling out of the
new presidency, the course was actually set for a historic economic recovery and boom.
Clinton alone among contemporary presidents grasped the possibilities of the global economy, and what the explosive power of America’s technical invention &
new industries could do for the domestic economy. He became the first modern president to actually exercise, as opposed to merely talk about, the fiscal discipline necessary to cut and even balance the federal budget.
OpEd: 1995 shutdown led to first balanced budget in 40 years
In 1995, Pres. Clinton wanted to phony up the numbers on this first go-round, so we shut down the government. Today, with perspective, pundits look back and suggest that shutting down the government under those circumstances was dumb but I look back and
think it was one of the greatest moments of my career. Why? Well, typically, politicians make their decisions based on votes. And yet in at least this one instance politicians set aside these concerns and stood up for what was right. For our children.
For our shared future. For America. For this one battle, for the time being, we forgot about politics and focused on good government, and if we had to take a beating for it then so be it. And as a direct result of that government shutdown in
1995, we wrote a bill that provided for the first balanced budget in nearly forty years and allowed us to pay down the largest chunk of our staggering national debt in the history of this country.
Borrowing money to pay for the deficit fails our trade laws
With over $400 billion in deficit this year and for years to come, how do they pay for that deficit? First, by taking the Social Security surplus that comes in every month and endorsing the checks of working people over to me to pay for the tax cuts.
But it’s not enough. So they have to go borrow money. Most of it they borrow from the Chinese and Japanese governments. Sure, these countries are competing with us for good jobs, but how can we enforce our trade laws against our bankers? I mean, come on!
Source: Speech to the Democratic National Convention
, Jul 29, 2004
1993 budget signaled the return of fiscal responsibility
Bill's economic plan [finally passed in August 1993]. Before the vote, I had spoken with wavering Democrats. In the end, not a single Republican voted for the balanced budget package. It squeaked through the House by one vote, and Al Gore had to vote to
break a 50-50 vote tie.
The plan wasn't everything the Administration had wanted, but it signaled the return of fiscal responsibility for the government and the beginning of an economic turnaround for the country, unprecedented in American history.
The plan slashed the deficit in half; extended the life of Medicare Trust Fund; expanded a tax cut called the Earned Income Tax Credit, which benefited fifteen million lower-income working Americans' reformed the student loan program, saving taxpayers
billions of dollars; and created empowerment zones an enterprise communities that provided tax incentives for investing in distressed communities. To pay for these reforms, the plan raised taxes on gasoline and on highest-income Americans.
New Clintonism demonstrated in 1997 balanced budget
In the summer of 1996, Clinton's grand first-term dreams had shriveled into a set of proposals. He would spend all of 1997 working on a balanced-budget agreement with the Republicans.
The 1997 Balanced Budget Agreement--the first nominally balanced
budget in 30 years--received insufficient attention. It was, in a way, the ultimate demonstration of the New Clintonism. The real victory wasn't in the "zero" at the bottom line, but in the dozens of line-item skirmishes won.
There was the more than
$30 billion in new tax credits for higher education. There was also $24 billion for a children's health program. He also was able to make the welfare reform revisions he had promised.
The 1997 BBA was an achievement ignored by Clinton's critics on
the left (who wanted bigger social programs), on the right (who wanted less spending), in the press (who mostly didn't notice), and in academia. "These aren't big pieces of legislation. These are scraps off the table," said one critic.
1992: Connected with audience on recession's personal effect
There was a touching, uncynical transparency to the 1992 campaign: The candidate actually seemed moved by the stories he heard along the way, and the stories, more often than not, fit his vision of the challenge ahead.
On Oct. 15, 1992, toward the end of a presidential debate, an African-American woman asked a confusing question: "How has the national debt personally affected each of your lives?"
Bush: "I'm sure it has.
I love my grandchildren. I'm not sure I get... help me with the question."
After more struggle, it was Clinton's turn--and he did something quite extraordinary. He took three steps toward the woman and asked her, "Tell me how it affected you again?"
The woman was speechless. Clinton helped her along, but the words weren't as important as the body language: the three steps he had taken toward the woman spoke volumes about his empathy, his concern, his desire to respond to the needs of the public.
OpEd: Despite personal issues, ran a disciplined presidency
Despite Clinton's gaudy personal failings, he had run a serious, disciplined, responsible presidency. "If you see a turtle sitting on top of a fence post,"
Clinton would often say, "it didn't get there by accident," by which he meant that the historic prosperity and the global peace that attended his time in office were not accidental.
They were, at least in part, attributable to thousands of decision--subtle, nuanced, often risky decision--that Clinton and his advisors had made over the years, decision that lacked the neon explosiveness of the Lewinsky scandal or the
Marc Rich pardon, but which were the true work of the presidency.
Reduced federal deficit from eleven zeroes to simply zero
Clinton's next statement, however, brought an explosion of bipartisan cheers: "For three decades, six presidents have come before you to warn of the damage deficits pose to our nation. Tonight,
I come before you to announce that the federal deficit--once so incomprehensibly large that it had eleven zeroes--will be, simply, zero."
The President basked in the cheers, his jaw set, smiling slightly. For a moment, the
Lewinsky business seemed very far away. And now, he was ready to take his big gamble: "If we balance the budget for the next year, it is projected that we'll have a sizable surplus
in the years that immediately follow. What should we do with the projected surplus?" He paused for effect. "I have a simple four word answer: Save...Social...Security...First!"
1995 budget impasse blamed on Republican intransigence
In the 1995 budget impasse, almost everyone on the White House staff still believed that presidential passivity was the best tactic: Let them suffocate under the weight of their own proposal. But the President was spiritually--and politically--uneasy wit
that course. He said that he might well propose his own version of a balanced budget. With his own balanced budget proposal in place that autumn, Clinton was free to attack the Republicans much harder, and more confidently than he would have it he'd
followed his staff's advice.
The Gingrich Republicans proved perfect opponents for the President. They refused to compromise on the budget. The new fiscal year began without an agreement and the federal government, consequently, shut down for lack of
funds in October; then, after interim negotiations, it shut down for a second time in December. The President, of course, was complicit in this, but the Republicans, who had flaunted their intransigence throughout the year, were blamed for the spectacle.
In February 2000, the United States entered the 107th consecutive month of economic expansion -- the longest economic expansion in history.
22.2 million new jobs have been created since 1993, the most jobs ever created under a single
Administration -- and more new jobs than Presidents Reagan and Bush created during their three terms. 91 percent (19.9 million) of the new jobs have been created in the private sector, the highest percentage in 50 years.
Unemployment is down from
7.5 percent in 1992 to 4.0 percent in June 2000, and in April the unemployment rate was the lowest in over 30 years. The unemployment rate has fallen for seven years in a row, and has remained below 5 percent for 34 months in a row.
The poverty rate has fallen from 15.1 percent in 1993 to 12.7 percent in 1998. That’s the lowest poverty rate since 1979 and the largest five-year drop in poverty in nearly 30 years.
Source: WhiteHouse.gov web site
, Dec 1, 2000
Pay off National Debt to reduce interest payments for all
In 1992, the Federal budget deficit was $290 billion - the largest dollar deficit in American history. In January 1993, the Congressional Budget Office projected that the deficit would grow to $455 billion by 2000. The Office of Management and
Budget is now projecting a $211 billion surplus for 2000 - the third consecutive surplus and the largest surplus ever, even after adjusting for inflation.
In 1998 and 1999, the debt held by the public was reduced by $140 billion, and the
government is projected to pay down an additional $184 billion in public debt this fiscal year alone. Debt reduction brings real benefits for the American people -- a family with a home mortgage of $100,000 might expect to save roughly
$2,000 per year in mortgage payments. Reduced debt also means lower interest rates and reduced payments on car loans and student loans. With the President’s plan, we are now on track to eliminate the nation’s publicly held debt by 2012.
Source: WhiteHouse.gov web site
, Dec 1, 2000
Cut the deficit to lower interest rates
[We put] the nation’s economic house in order by focusing on cutting the deficit in half, bringing interest rates down, and spurring private investment to fire up the nation’s stagnant economy. When I ran for president, job growth had been at the lowest
level since the Great Depression, unemployment was at 8%, and the deficit was soaring out of control. After I was elected, we waged a brutal fight in Congress to pass a new economic plan.
Well, three and a half years later, we cut the deficit by more
than half. In fact, we would have a budget surplus today but for the interest we pay on the debt run up in the twelve years before I took office.
Cutting the deficit further until we balance the budget is vital to our future. The burden of this
deficit drags us down today and jeopardizes our children’s future tomorrow. Lowering it brings interest rates down so more Americans can buy homes and cars, start businesses, go to college, and build a better future for themselves and their families.
Cut defense & ask wealthy Americans to pay their share
Q: You are promising to create jobs, reduce the deficit, reform health care, rebuild infrastructure, guarantee college education, all with financial pain only for the rich. Is it possible?
CLINTON: I believe we can increase investment and reduce the
deficit, if we not only ask the wealthiest Americans to pay their share; we also provide $100 billion in tax relief and $140 billion of spending cuts. Take money from defense cuts and reinvest it in transportation, communications and environmental
clean-up systems.
BUSH: I don't like trickle down government. Clinton says grow government. Government doesn't create jobs. If they do, they're make-work jobs. It's the private sector that creates jobs.
PEROT: We still have a significant deficit
under each of their plans. There's only one way out of this, and that is to have a growing job base. My plan balances the budget within 6 years. We didn't do it faster than that because we didn't want to disrupt the economy.
We need a national economic strategy as well as a human-development strategy that recognizes that what people earn depends largely on what they can learn and whether their economies are organized for change. So the three central ideas in my economic
policy are:
Emphasize education and training, not just of our children but also of our adults.
Give new incentives to the private sector to invest in the economy.
Think a lot about organizing to make change our friend instead of our enemy.
Source: Clinton on Clinton, p. 69, article “Alienated Americans”
, Jul 2, 1980
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