Across the nation, and certainly across Utah, Republicans and Democrats are fighting daily about how our country should address the budget crisis, burgeoning spending, and out-of-control debt. America solved this problem just a few short years ago, why are we still fighting about it?
After watching a few battles in the twitter-sphere this week, local tea-party’ers vs Republicans vs Democrats, the only trend that emerged were the typical talking points: “Cut Spending” from the Republicans, “Tax the wealthy” from the Democrats, and “All government is evil” from the tea party (don’t get us started…). After watching for a few hours, we found ourselves ready to tear our hair out, and wanting to scream the question which should be the most obvious to any sane person:
Have we all forgotten what we did in the 90’s?
As with almost any problem, the solution lies in our own history. It’s not like America has never solved a budget crisis, or created a surplus, or paid off debt. We don’t even have to go back a hundred and fifty years to when the economy really wasn’t comparable. No, we only need to look back to the decade preceding the millennium, when two Presidents, a Republican and a Democrat, guided America into one of our greatest seasons of economic prosperity.
In 1991, President George HW Bush worked directly with Congressional Democrats to institute the Bush Deficit Reduction Act, which modestly cut spending matched with slight tax increases on the top percent of the wealthiest Americans. While not earth-shattering, the Act did soften the ground for future economic stimulation.
After his election in 1992, President Bill Clinton took full advantage of the groundwork his predecessor had laid and, with a majority of Democrats in Congress available to him, passed the 1993 budget. What made this budget unique was that despite passing without a single Republican vote, Clinton’s economic prowess convinced Democrats that they needed to include several major Republican initiatives, including deep cuts to discretionary spending to match their own initiatives of raising taxes on multi-millionaires (it should be pointed out that when we say “raising taxes on the wealthy,” we’re talking about raising their tax rates to the same level as everyone else, not skyrocketing them to radical heights) and lowering taxes on the middle and lower classes.
The 1993 budget was an enormous success, and the claims by Republicans that the higher tax rates would drive business away from the US were proven false (those arguments sound familiar?). After the 1994 mid-terms, when Republicans gained control of the House, Clinton worked closely with Speaker Gingrich and Republicans – passing several more strong budgets which led to heavy surpluses, and developing a near-unprecedented time of economic prosperity nationwide.
Had the tax structures of the 90’s remained in place, the US would have paid off its entire national debt this year (or within the next few years if the housing bubble had still burst), but the early and mid 2000’s wiped out almost all the work accomplished by both Presidents HW Bush and Clinton, and Congress. Tax rates were immediately cut, nearly wiping out the budget surplus and eliminating the revenue which our economic vitality was based on, In addition, government spending dramatically shot up with the two unfunded wars.
Now here we are, a decade later, back to fighting about whether the best course of action to solve our economic woes is to raise taxes on the wealthy back to where their levels were in the 90’s, or to dramatically cut spending. Neither side seems capable or willing to recognize that they each have one-half of the puzzle, and if both fiscal plans were melded together – a strong economic system could be achieved once again.
To his credit, President Obama has signaled that he is willing to compromise on spending, including some possible cuts to entitlements like Social Security and Medicare. But to this point, Congressional Republicans, and to a lesser extent Congressional Democrats, have been mostly unwilling to yield – resulting in the Fiscal Cliff, the Sequester, and an economic recovery that, while still moving in the right direction, has been extremely sluggish.
Our national government has become more divided than ever before, thanks in no small part to national media which feeds on controversy and battling sides in order to boost ratings and drive ad-revenue. Can we get back to actual governance and repeat the good lessons we learned such a short time ago? Time will tell. But American citizens shouldn’t be fooled by the back and forth rantings of partisans who want you to believe that they, and only they, have the entire solution to the problem. They both have the answer, and we can only unlock America’s next era of economic prosperity if we use both sides’ best solutions together as the key.