Opinion Editorial | |
| Monday, November 30, 1998 | |
Clinton And Republicans Share Credit For Budget Balancing |
Fiscal year 1998 ended on September 30 and both the White House and Congress congratulated themselves on achieving the first balanced budget since 1969. It is hard to believe, but less than three years ago, Bill Clinton and the Republican Congress were locked in a titanic budget struggle because Republicans wanted to balance the budget by 2002 and Clinton thought this was too much deficit reduction too fast. Indeed, as early as January this year neither side thought balance was achievable before next year at the earliest.
Needless to say, both sides tried to claim credit for the improved budgetary situation. Clinton pointed to his 1993 budget package, which was enacted without a single Republican vote. Congressional Republicans, on the other hand, noted that in his first budget after Republicans took control of Congress in 1994, Clinton projected continued triple-digit deficits for as far as the eye could see. That budget projected a deficit of $275 billion in fiscal year 1998 alone. Republicans therefore claim credit for this turnaround.
In truth, both groups contributed to elimination of the deficit, as shown by a comparison of the last budget before Clinton took office, fiscal year 1992, and the most recent completed budget, fiscal year 1998. The figure illustrates changes in major budget categories as shares of the gross domestic product (GDP), in order to more accurately show relative changes over time (see figure).
On the tax side, higher revenues fell mainly on individuals. Individual income taxes have risen by 2.2 percent of GDP since 1992. (GDP was $8.4 trillion in fiscal year 1998.) This means that individuals paid $185 billion more taxes in 1998 than they would have paid had taxes remained at the 1992 percentage of GDP. On the outlay side, national defense has borne the brunt of spending cuts, accounting for almost three-fifths of the total reduction. However, showing the impact of Clinton's priorities, spending has risen for health programs and Medicare. Republicans can point to lower welfare spending and reductions in many appropriated programs that fall into the "other" category. On balance, one would have to say that the data suggest more of a Clinton influence, as shown by the fact that higher taxes and lower defense spending account for 80 percent of the deficit reduction. But the timing of the reduction certainly shows that Republicans in Congress played an important role as well. Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, November 30, 1998. Home | Support Us | All Issues | Social Security Debate Central | Contact Us |
