Politics & Policy

Clinton Economics

Not so bad in the rear-view mirror.

I had an interesting experience last week. I wrote an article for the New York Times on Bill Clinton’s economic record. I concluded that looking only at this aspect of his presidency, he wasn’t so bad. In many respects, he was better than George W. Bush has been. Reading this, a number of commentators mistakenly thought that I now think Clinton was a good president. This is a misreading of the point I was trying to make.

I simply recited the facts. The budget went from deficit to surplus on Clinton’s watch and lower spending played a key role. He even abolished an entitlement program through welfare reform. By contrast, the deficit has exploded under Bush, in part because spending has risen well above what can reasonably be justified by the recession, Iraq, and homeland security. And he is the first Republican president in history to create a new entitlement program (for prescription drugs).

Furthermore, Clinton was a far more committed free trader than Bush has been. Perhaps Clinton was only interested in sucking up to multinational corporations to get campaign contributions, rather than actually achieving free trade. I don’t care. He rammed the North American Free Trade Agreement through Congress — at considerable political cost to himself — while Bush imposed steel tariffs, raised agriculture subsidies, and in the process torpedoed the Doha Round of trade negotiations. It is a rare week when the Bush administration doesn’t promulgate some new anti-trade measure — usually against China — under the guise of “dumping,” “fair trade,” or some other protectionist euphemism.

I tried to make clear that I thought Clinton’s “success” was due more to gridlock than good intentions. After 1994, a Republican Congress pretty much blocked his worst efforts, such as nationalizing health care (which was actually eviscerated by a Democratic Congress in 1993). But on the other hand, I think Clinton deserves credit for recognizing that the winds had changed. He adapted appropriately. A more committed liberal ideologue would have tried harder to pursue the Democratic agenda than Clinton did.

Where Clinton ultimately failed economically, in my opinion, was not so much in what he did as what he didn’t do. When cyclical and other factors led to the emergence of large budget surpluses in the late 1990s, he chose to sit on them rather than use them to fundamentally restructure Social Security. This would have benefited both him and the Democratic party by giving them a monumental achievement and by taking away the money that Republicans later used to cut taxes far more than Democrats would have liked.

We all know why this happened. In 1998, when the surplus first emerged, Clinton was completely absorbed by the Lewinsky scandal. I tried at the time to persuade some of Clinton’s people that Social Security reform would change the subject and give Republicans something else to focus on — but to no avail. Thus, a historic opportunity was lost due to a tawdry indiscretion. Future generations will suffer as a result.

When George W. Bush took office, he chose to focus on tax cuts and has put off all serious discussion of Social Security reform. I persuaded myself that this was justified because tax reform was equally important and because some elements of the Bush tax program did lead modestly in the right direction. But much of the 2001-2003 tax cuts was wasted on worthless give-aways that did nothing either to improve the tax system or stimulate growth.

Nevertheless, like most conservatives, I figured that a bad tax cut was better than no tax cut. At least it kept politicians from spending the money. What I never imagined is that they would spend it anyway, without any thought of fiscal responsibility. The orgy of spending, culminating in a massive, unfunded expansion of Medicare for prescription drugs, was the last straw. At this point I realized that any hope of controlling spending by cutting taxes was a pipe dream.

It was then that I started looking more fondly at the Clinton experience. Like disco music, it seemed awful compared to what came before. But compared to what came after, it looks a lot better.

I am not alone. In recent days, conservative columnists Charles Krauthammer, Max Boot, and Dick Morris have each written columns noting how fundamentally conservative Clinton was in practice, if not philosophically. Meanwhile, prominent left-wingers like Max Sawicky, Robert Pollin, Michael Meeropol, and Jim Cullen have excoriated Clinton for exactly the things conservatives praise him for — budget surpluses, free trade, welfare reform, etc.

It would be a mistake to assume from this that any conservatives are suddenly going to vote for John Kerry just because Clinton looks better in the rear-view mirror. They might if he ran as Clinton’s clone. But to paraphrase Lloyd Bensten, I know Bill Clinton and John Kerry is no Bill Clinton.

– Bruce Bartlett is senior fellow for the National Center for Policy Analysis. Write to him here.


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