Liberals tout Bill Clinton’s excellent economic record but ignore the fact that he achieved that record by implementing conservative economic policies.
* As much as liberals like to talk about Clinton’s 1993 tax hikes, they ignore the fact that Clinton’s 1993 tax reform bill left most of Reagan’s tax cuts intact and in fact constituted a massive tax cut compared to the tax rates that existed shortly before Reagan took office, i.e., the tax rates under Jimmy Carter. Just look at the Carter and Clinton tax rates for people earning over $35K per year:
CARTER
$35,200+ 43%
$45,800+ 49%
$60,000+ 54%
$85,600+ 59%
$109,400+ 64%
$162,400+ 68%
$215,400+ 70%
CLINTON
$38,000+ 28%
$91,850+ 31%
$140,000+ 36%
$250,000+ 39.6%
And let’s compare Clinton’s tax rates with Reagan’s tax rates:
REAGAN 1986
$0.00+ 11%
$3,000+ 15%
$28,000+ 28%
$45,000+ 35%
$90,000+ 38.5%
REAGAN 1988
$0.00+ 15%
$30,950+ 28%
CLINTON
$0.00+ 15%
$38,000+ 28%
$91,850+ 31%
$140,000+ 36%
$250,000+ 39.6%
As you can see, there was not a gigantic difference between Clinton’s and Reagan’s tax rates. Both sets of rates were a huge improvement over Carter’s rates. After Clinton’s 1993 tax bill, most Americans were being taxed at rates that were close to the rates they had been paying under Reagan, and all Americans were paying much lower tax rates than they had been paying under Carter.
The middle class actually enjoyed a tax reduction under Clinton. The total federal tax rate for middle-income families dropped from 24.5 percent in 1992 to 22.8 percent in 1999, the lowest tax rate since 1978. For families at one-half the median income, the effective federal tax rate was cut from 19.8 percent in 1992 to 14.1 percent in 1999, the lowest tax rate since 1968.
* Clinton’s 1996 budget still projected $200 billion annual budget deficits, totaling $2.7 trillion over 10 years, confirmed by CBO. So what did Clinton do? He imposed spending restraint, signed welfare reform, and signed a hefty tax-cut bill.
* Clinton signed spending bills that imposed badly needed fiscal discipline. Total federal discretionary spending, as well as the subcategory of non-defense discretionary spending, declined from 1995 to 1996 in actual nominal dollars. In constant dollars, adjusted for inflation, the decline was 5.4 percent.
By 2000, total federal discretionary spending was still about the same as it was in 1995 in constant dollars. Total federal spending relative to GDP declined from 1995 to 2000 by an astounding 12.5%, a reduction in the federal government relative to the economy of about one-eighth in just five short years.
Yes, Clinton reluctantly agreed to this fiscal discipline, and it took a government shutdown to get him to support it, but in the end he did support it, much to the dismay of diehard liberals like Tom Harkin. Also, keep in mind that the spending levels that Clinton proposed in negotiations with Congressional Republicans were far lower than those supported by Congressional liberals.
* Clinton not only restrained spending to modest net growth levels, he cut taxes. In 1997, he signed the Taxpayer Relief Act, a tax-cut bill that, among other things, created a new $500 child tax credit, raised the income limit for deductible IRAs, nearly doubled the estate tax exemption, and slashed the capital gains tax rate by a whopping 28%, or 8 percentage points. And what happened to capital gains revenue after the rate cut? In 1995, just over $8 billion in venture capital was invested. By 1998, the first full year in which the lower capital gains rates were in effect, venture capital activity reached almost $28 billion, more than a three-fold increase over 1995 levels, and it doubled again in 1999. At the same time, total federal revenue rose every year after the 1997 tax cuts, and it rose at a slightly faster rate than it did before the tax cuts.
* In 1996, over the loud objections of ardent liberals, Clinton signed a historic welfare reform bill, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. This bill, incredibly enough, block-granted welfare to the states and allowed them to set up their own systems under a basic set of federal guidelines that gave states wide latitude. Among other things, the bill ended welfare as an entitlement, placed a five-year limit on receiving welfare paid with federal funds, banned the granting of state professional and occupational licenses to illegal immigrants, and required welfare recipients to begin working after two years. Estimates vary, but no credible analyst denies that the welfare reform bill saved the federal government billions of dollars and cut the number of welfare recipients by at least 40%.
* As a result of Clinton’s spending restraint, welfare reform, and tax cuts, the circa $200 billion annual federal deficits that had burdened the budget for over 15 years were changed into historic surpluses by 1998, peaking at $236 billion in 2000. Timothy Lee:
Richard Rahn:
* Older liberals like to forget, and younger liberals probably have no clue, that the liberal wing of the Democratic Party was very unhappy and indeed “furious” with Clinton over a number of issues, especially welfare reform, spending, and taxes. Two of Clinton’s aides resigned in protest over the welfare reform bill.
Links:
Correcting the Clinton Record: Tax Cuts, Spending Restraint, Moderation
Recovery From Tax Cuts, Not Govt Spending
https://www.usnews.com/news/blogs/d...ich-presidents-have-been-best-for-the-economy
Memo to Obama fans: Clinton-ism was a success.
To Fix the Budget, Bring Back Reagan…or Even Clinton
The Case for Newt Gingrich
The Clinton Presidency: Historic Economic Growth
Washingtonpost.com: President Seeks Balm for Anger Over Welfare Bill
TWO CLINTON AIDES RESIGN TO PROTEST NEW WELFARE LAW
The broken promises of Bill Clinton
The Clintons’ War on Drugs: When Black Lives Didn’t Matter
Articles: The successful Clinton economy was based on tax cuts. No, really...
FY2001 Budget: III. The Clinton-Gore Economic Record
Correcting the Record: The Truth About Tax Reform & Debt
The Dangerous Myth About The Bill Clinton Tax Increase
* As much as liberals like to talk about Clinton’s 1993 tax hikes, they ignore the fact that Clinton’s 1993 tax reform bill left most of Reagan’s tax cuts intact and in fact constituted a massive tax cut compared to the tax rates that existed shortly before Reagan took office, i.e., the tax rates under Jimmy Carter. Just look at the Carter and Clinton tax rates for people earning over $35K per year:
CARTER
$35,200+ 43%
$45,800+ 49%
$60,000+ 54%
$85,600+ 59%
$109,400+ 64%
$162,400+ 68%
$215,400+ 70%
CLINTON
$38,000+ 28%
$91,850+ 31%
$140,000+ 36%
$250,000+ 39.6%
And let’s compare Clinton’s tax rates with Reagan’s tax rates:
REAGAN 1986
$0.00+ 11%
$3,000+ 15%
$28,000+ 28%
$45,000+ 35%
$90,000+ 38.5%
REAGAN 1988
$0.00+ 15%
$30,950+ 28%
CLINTON
$0.00+ 15%
$38,000+ 28%
$91,850+ 31%
$140,000+ 36%
$250,000+ 39.6%
As you can see, there was not a gigantic difference between Clinton’s and Reagan’s tax rates. Both sets of rates were a huge improvement over Carter’s rates. After Clinton’s 1993 tax bill, most Americans were being taxed at rates that were close to the rates they had been paying under Reagan, and all Americans were paying much lower tax rates than they had been paying under Carter.
The middle class actually enjoyed a tax reduction under Clinton. The total federal tax rate for middle-income families dropped from 24.5 percent in 1992 to 22.8 percent in 1999, the lowest tax rate since 1978. For families at one-half the median income, the effective federal tax rate was cut from 19.8 percent in 1992 to 14.1 percent in 1999, the lowest tax rate since 1968.
* Clinton’s 1996 budget still projected $200 billion annual budget deficits, totaling $2.7 trillion over 10 years, confirmed by CBO. So what did Clinton do? He imposed spending restraint, signed welfare reform, and signed a hefty tax-cut bill.
* Clinton signed spending bills that imposed badly needed fiscal discipline. Total federal discretionary spending, as well as the subcategory of non-defense discretionary spending, declined from 1995 to 1996 in actual nominal dollars. In constant dollars, adjusted for inflation, the decline was 5.4 percent.
By 2000, total federal discretionary spending was still about the same as it was in 1995 in constant dollars. Total federal spending relative to GDP declined from 1995 to 2000 by an astounding 12.5%, a reduction in the federal government relative to the economy of about one-eighth in just five short years.
Yes, Clinton reluctantly agreed to this fiscal discipline, and it took a government shutdown to get him to support it, but in the end he did support it, much to the dismay of diehard liberals like Tom Harkin. Also, keep in mind that the spending levels that Clinton proposed in negotiations with Congressional Republicans were far lower than those supported by Congressional liberals.
* Clinton not only restrained spending to modest net growth levels, he cut taxes. In 1997, he signed the Taxpayer Relief Act, a tax-cut bill that, among other things, created a new $500 child tax credit, raised the income limit for deductible IRAs, nearly doubled the estate tax exemption, and slashed the capital gains tax rate by a whopping 28%, or 8 percentage points. And what happened to capital gains revenue after the rate cut? In 1995, just over $8 billion in venture capital was invested. By 1998, the first full year in which the lower capital gains rates were in effect, venture capital activity reached almost $28 billion, more than a three-fold increase over 1995 levels, and it doubled again in 1999. At the same time, total federal revenue rose every year after the 1997 tax cuts, and it rose at a slightly faster rate than it did before the tax cuts.
* In 1996, over the loud objections of ardent liberals, Clinton signed a historic welfare reform bill, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. This bill, incredibly enough, block-granted welfare to the states and allowed them to set up their own systems under a basic set of federal guidelines that gave states wide latitude. Among other things, the bill ended welfare as an entitlement, placed a five-year limit on receiving welfare paid with federal funds, banned the granting of state professional and occupational licenses to illegal immigrants, and required welfare recipients to begin working after two years. Estimates vary, but no credible analyst denies that the welfare reform bill saved the federal government billions of dollars and cut the number of welfare recipients by at least 40%.
* As a result of Clinton’s spending restraint, welfare reform, and tax cuts, the circa $200 billion annual federal deficits that had burdened the budget for over 15 years were changed into historic surpluses by 1998, peaking at $236 billion in 2000. Timothy Lee:
The fact is that spending restraint, not higher taxes, account for the late-1990s budget surpluses. In the year 2000, the federal government spent $1.77 trillion and received $1.88 trillion in revenues. Compare that to 2011, when the federal government spent $3.63 trillion and received $2.31 trillion. Does any reasonable person believe that government was too small in 2000, or twice as effective in 2011 after spending approximately doubled? Of course not. Additionally, federal spending under Clinton and the Republican Congress fell to 18.2% of gross domestic product (GDP) in 2000, versus approximately 25% of GDP under Obama. (Correcting the Clinton Record: Tax Cuts, Spending Restraint, Moderation)
Richard Rahn:
President Clinton was elected in 1992 with a pledge not to increase taxes, on which he promptly reneged (though not severely), but he did restrain the growth in spending, and economic growth did pick up.
By 1996, the Republicans were in control of Congress, and they and the Clinton administration sharply restrained spending growth and cut the capital gains tax rate in 1997. The result was robust economic growth, low unemployment, and a few years of budget surplus. (Recovery From Tax Cuts, Not Govt Spending)
By 1996, the Republicans were in control of Congress, and they and the Clinton administration sharply restrained spending growth and cut the capital gains tax rate in 1997. The result was robust economic growth, low unemployment, and a few years of budget surplus. (Recovery From Tax Cuts, Not Govt Spending)
* Older liberals like to forget, and younger liberals probably have no clue, that the liberal wing of the Democratic Party was very unhappy and indeed “furious” with Clinton over a number of issues, especially welfare reform, spending, and taxes. Two of Clinton’s aides resigned in protest over the welfare reform bill.
Links:
Correcting the Clinton Record: Tax Cuts, Spending Restraint, Moderation
Recovery From Tax Cuts, Not Govt Spending
https://www.usnews.com/news/blogs/d...ich-presidents-have-been-best-for-the-economy
Memo to Obama fans: Clinton-ism was a success.
To Fix the Budget, Bring Back Reagan…or Even Clinton
The Case for Newt Gingrich
The Clinton Presidency: Historic Economic Growth
Washingtonpost.com: President Seeks Balm for Anger Over Welfare Bill
TWO CLINTON AIDES RESIGN TO PROTEST NEW WELFARE LAW
The broken promises of Bill Clinton
The Clintons’ War on Drugs: When Black Lives Didn’t Matter
Articles: The successful Clinton economy was based on tax cuts. No, really...
FY2001 Budget: III. The Clinton-Gore Economic Record
Correcting the Record: The Truth About Tax Reform & Debt
The Dangerous Myth About The Bill Clinton Tax Increase
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