Did Bill Clinton Really Create a Budget Surplus? Part 1
President Bush is annoying me with his fiscal irresponsibility. The federal budget deficit is out-of-control and I don’t forsee it getting better in the near future.
Democrats are also quick to criticize President Bush and the growing federal budget deficit. They especially like to point out how the federal budget went from running a surplus under Bill Clinton to running a deficit under President Bush.
Is that a fair comparison?
Let’s analyze the situation.
There are three fundamental ways to eliminate a budget deficit:
1) Increase tax revenues.
2) Decrease spending.
3) Do a combination of 1 and 2.
Democrats imply that Bill Clinton was fiscally responsible, controlled federal spending and enacted policies that caused economic growth. They believe the surplus was caused by President Clinton’s firm hand at the economic/budgetary wheel.
Curious to find the true story, I did some research, consulting the best source of information I could find about the federal budget – the federal budget itself.
Here is the data, directly from the Federal Budget for Fiscal Year 2006. (All amounts are in millions of dollars.)
During Bill Clinton’s presidency, from 1992 to 2000:
- Spending increased by 29.49%.
- Tax revenues increased by 85.58%.
Obviously, Bill Clinton did not control federal spending since it increased by almost 30% during his tenure. What saved his goat was the dramatic 85.58% increase in tax revenues.
So the raw data show that although federal spending increased dramatically during Clinton’s term, tax revenues increased even faster!
That’s why there was a budget surplus - tax revenue increased at a faster pace than Bill Clinton could spend it. The surplus had nothing to do with his ability to intentionally balance the budget.
Coming soon – Part 2!