The Decisive Day: Bill Clinton Supports a Balanced Budget by Gregory Hilton

After the failure of the effort to adopt a Balanced Budget Amendment to the U.S. Constitution in the Spring of 1995, Republicans proceeded to developing a balanced budget for fiscal year 1996. They had not presented a specific plan by the time of President Clinton’s surprise speech on June 13th.
Clinton knew Congress would soon adopt a budget which would be balanced in the out years. Faced with this inevitability he decided to beat them to the punch by submitting his own balanced budget.
This was ironic because the Clinton Administration had worked diligently to stop balanced budget efforts in the past. For example, the President was involved in the effort to defeat the September 1993 bipartisan Penny-Kasich Deficit Reduction Act. It would have eliminated hundred of useless and obsolete agencies, and outlined a specific cuts. A year later Clinton personally made calls to defeat the Balanced Budget Constitutional Amendment. Labor Secretary Robert Reich said “The President is against simply balancing the budget,” and Clinton said “balancing the budget is not one of our top priorities.”
Congressional Democrats, the Clinton cabinet and the White House staff all resented the anti-deficit strategy and Clinton’s new emphasis on a balanced budget.. We now know that this decision and the capital gains tax cut were both key to all of Clinton’s later successes — it turned around the economy and laid the basis for the country’s continuing prosperity.
According to several memoirs the most powerful aide in 1995 was the only person who had correctly predicted the outcome of the 1994 election, Dick Morris. Democrats lost 54 seats in the House of Representatives that year, and 8 seats in the Senate (followed by two defections after the election), giving the Republicans a majority in both houses of Congress for the first time since 1954. The Republicans also had a net gain of 12 governors’ seats in that election.
Clinton had good reason to pay less attention to the people who had given him such bad advice, and he accepted Morris’ advocacy of a balanced budget plan. Morris also said, “We need to tell the liberal Democratic congressional wing to shut up. Their agenda is no longer relevant.”
Clinton’s popularity had declined significantly and many thought he could not be re-elected in 1996. He was no longer the center of attention and said “The President is still relevant” during an April 1995 press conference. His Chief of Staff, Leon Panetta, described this time to NPR: “The statement reflected the president’s concern about the November 1994 election. Republicans won both the House and Senate and not one GOP incumbent lost. There was so much attention focused on Speaker Gingrich, the “Contract With America,” and the efforts on Capitol Hill.
“It concerned him because for two years it was his agenda that he was pushing, and he felt was important to the country. And now suddenly he’s confronting a situation where there’s another agenda that’s being pushed by the Republicans that is consuming most of the attention. And so the real question was where is the relevance of the president in this process?”
The decisive day for the balanced budget would be June 13, 1995, which is the subject of my next article.

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