Commentary

Bill Clinton’s Fiscal Fraud and Fantasy

By Stephen Moore
February 28, 1997

Like second marriages, Bill Clinton’s $1.7 trillion federal budget is the triumph of hope over experience.

The gap between rhetoric and reality in this 1,500-page, six-pound monstrosity (appropriately printed with a dollar-bill green cover) resembles the Grand Canyon. The White House describes its fiscal blueprint as “lean and mean.” But how is a budget that expands federal outlays by $56 billion in 1998, $74 billion in 1999 and $55 billion in 2000 lean and mean? How is a budget that calls for a massive new entitlement program — Medicare for children, with a $20 billion price tag — fiscally responsible? And how could a president who boastfully campaigned on having “ended welfare as we know it” propose neutering that law by requesting $21 billion in new welfare benefits? The new welfare law hasn’t even been tested yet, and the White House is in full retreat to placate its leftwing poverty industry constituency.

Yet, strangely, the Republican response to this Clinton fantasy has been mostly respectful (particularly compared with the way Democrats used to greet the Reagan budgets). House Ways and Means Committee chairman Bill Archer of Texas says the budget is a starting place for compromise. So was the Alamo! But in its every detail, this budget warrants, not respect, but ridicule.

Does this new era of political civility that the Washington establishment has so celebrated mean that conservatives in Congress are no longer permitted to call a fraud a fraud? The Republicans aren’t so much engaged in civility as they are accessories to a crime. Only a few economic realists in the GOP, such as Senate Budget Committee chairman Phil Gramm of Texas, have lambasted the Clinton budget as “a sham.”

The Republican counterattack has been so pitiful that even the Washington Post’s criticism has been sharper. The Post called Clinton’s budget “illusory.” “More than anything else,” the Post said, “it seems to tread water. It is not remotely the powerful document the President pretends.”

What is it that makes this such a deceitful document? First, the “spending cuts” are a fantasy. More than two-thirds of the budget savings would come in 2001 and 2002, when Bill Clinton won’t be president anymore. The Clinton budget gives new meaning to the phrase “passing the buck.”

Bill Clinton’s “targeted” tax cuts are more fiscal hocus pocus — here today, snatched away tomorrow. The net tax cut in the president’s plan is $22 billion over the next five years. That’s a whopping tax cut of 0.3 cents on the dollar. Don’t spend it all in one place. But wait. It gets worse. The Clinton tax increases are permanent. The tax cuts expire after 2000. The long-term impact of the Clinton budget is to raise our taxes, not lower them.

The most dangerous feature of the Clinton budget is that it’s crammed with fiscal time bombs. Clinton plants seeds of new spending programs throughout the agencies of government. If Congress allows those seeds to germinate, they will almost certainly flourish in the never never land that Washington calls “out years.” The price tag for new and expanded programs in the president’s budget, include a 34 percent increase in the Department of Education budget, from $29 billion to $39 billion; 26 percent more for Goals 2000; 35 percent more for bilingual education; $200 million for the Reading Corps, a new Clinton invention; a 31 percent hike for Americorps, Clinton’s army of $7.00 an hour “volunteers”; $1.5 billion more for failed foreign aid programs; funding for ten American Heritage Rivers — whatever they are; and on and on.

Everyone knows that entitlements are bankrupting the nation. So naturally Bill Clinton endorses more of them. He wants $20 billion in welfare spending restored. He wants $17 billion for guaranteed government health care for children — Hillary’s revenge. And he wants $21 billion for a broad assortment of other new open-ended income transfer programs.

If it seems that this can’t possibly add up to a balanced budget, that’s because it doesn’t. The deficit of $107 billion in 1996 will float in the wrong direction this year and next, rising to $124 billion under the White House budget in 1998. Only in 1999 does the deficit start (allegedly) falling. Bill Clinton promised last year to balance the budget by 2002 using honest numbers. Surprise, surprise. He’s reneged. The Congressional Budget Office says that the Clinton budget will produce at least a $37 billion deficit in 2002. After that, the deficits get larger each year.

What Bill Clinton has offered is the largest budget anywhere, anytime in the history of the planet. Even as the defense budget falls each year, total nondefense federal expenditures would rise by almost $225 billion by 2000.

To believe somehow that all of these numbers add up the way the White House suggests they do, is to believe the O.J. is innocent, that there really is a tooth fairy, and that the era of big government is truly over.

Stephen Moore is director of fiscal policy studies at the Cato Institute.