Although there are still about eight months before the next president is inaugurated, it is a good time to start looking at how the Clinton era is likely to be evaluated by budget historians.
First, the most important fiscal aspect of the eight years during which Bill Clinton was president will be that it was the time the federal budget went from being perpetually in deficit to constantly in surplus. (For purposes of this series of columns, the Clinton era is defined as fiscal years 1994-2001 and is obviously based on a number of assumptions about the final results for fiscal 2000-2001.) While a surplus has now come to be expected, the fact that it happened not once but for five consecutive years (fiscal years 1998-2002) and is projected to keep on happening after Clinton leaves office makes it exceptionally noteworthy.
Second, no other White House in modern U.S. history will be able to claim as much black ink as the Clinton administration, including those that were considered to be fiscally conservative. The last time there were five consecutive budget surpluses was during fiscal years 1926-30 (Coolidge and Hoover), and the surpluses in those years were lower as a percent of GDP than those of the Clinton era.
Third, under current forecasts, the deficit will have fallen or surplus risen for each of the eight years of the Clinton presidency. Although the data from the 1800s is a bit sketchy, these eight years of continuous fiscal improvement appear to be unmatched in U.S. history.
Fourth, the Clinton budget era may be best remembered as the point at which the total budget surplus became irrelevant for policymakers and the "on-budget" surplus (the surplus not including Social Security) became the key concept.
Fifth, in large part because of the use of the on-budget surplus instead of the total surplus, and the assumption that took hold while Clinton was president that the annual total budget surplus had to be at least as large as the surplus in the Social Security trust fund, the amount of publicly held federal debt is likely to be reduced more during the eight years Clinton is in the White House than it was during any other previous administration.
Until recently, the publicly held federal debt was not big enough to reduce as much as seems likely to happen while Clinton is in office. On the other hand, the fact that budget politics during this time will have changed so much is by itself very significant, and potentially signals the start of a new era in federal budgeting.
Sixth, the federal budget process has taken a real beating during the Clinton administration. By the time this president leaves office, it will not be at all clear what Congress and the White House are supposed to be doing on the budget or how they are supposed to be doing it. In this respect, therefore, the Clinton budget era will be ending far worse than it began.
Ironically, much or most of this will be the result of the surpluses, which were so rare before the eight years of the Clinton administration that virtually no one planned for how to deal with them when they happened. The combination of the old deficit reduction process, the absolute lack of any political or economic experience, and deciding what to do with a budget surplus means that fiscal policymaking will approach chaos as the administration comes to an end.
Finally, there is also little doubt that budget politics have become far more difficult during the Clinton White House than they have ever been before. Although "dead-on-arrival" was used by Congress long before Clinton was elected to describe the president's budget, and continuing resolutions were hardly new before he took office, the level of acrimony between the legislative and executive branches on budget matters has never been any higher than it is as this administration comes to a close.
Next Week: Part 2: Spending and Revenues.
Question Of The Week
Last Week's Question. The question was: Who would you call to be your lifeline if you were on "Who Wants To Be A Millionaire" and you were asked a federal budget question? The responses were a veritable who's who of federal budget experts and, frankly, there was simply no way for "Budget Battles" to choose which of the recommendations would be the best. As a result, no "I Won A Budget Battle" T-shirt will be awarded this week but two winners will be selected next week.
For the record, in alphabetical order the people who were named by readers as potential budget lifelines (most more than once) were current CBO Deputy Director Barry Anderson, House Budget Committee Counsel Jim Bates, former House Budget Committee General Counsel Wendell Belew, former Congressional Budget Office Deputy Director Jim Blum, former Senate Budget Committee Counsel Bill Dauster, former House Speaker Newt Gingrich, R-Ga., House Budget Committee staffer Richard Kogan, Rep. David Minge D-Minn., Rep. Charles Stenholm, D-Texas, staffer Ed Lorenzen, former CBO Director Robert Reischauer and former Office of Management and Budget Director David Stockman.
This Week's Question. Here is your chance to become a mogul and win your very own "I Won A Budget Battle" T-shirt at the same time. This is the season when book publishers and movie studios bring out the big thrillers and action adventures that are either great beach reading or the perfect distraction when the hot weather drives people inside an air-conditioned theater. This week's question: If you were going to publish or produce the big federal budget blockbuster book or movie this summer, what would it be called? For example, how about "The Attack of the Killer Outlays" or "The Continuing Resolution That Wouldn't End"? Send your response to scollender@nationaljournal.com by 5 p.m. EDT on Saturday, June 3. Remember, two winners will be selected this week.
NEXT STORY: Once again, appropriations schedule falters