Friday, July 08, 2011

Barbara Boxer, LIES, the Federal Budget, and the National Debt


Posted at 06:00 AM ET, 07/01/2011

“Barbara Boxer’s blatant rewriting of history
By Glenn Kessler

‘I think we ought to go back to the people and the party that was the only party and the only people to balance the budget in 40 years. I hate to break it to my Republican friends, but that is the Democratic Party. We are the ones who did it. We did it when Bill Clinton came into office. We did it after hard work. We did it after painful cuts. We did it with smart investments.’
—Senator Barbara Boxer (D-California), June 29, 2011

Each party in Washington seems to have their own narrative. Senator Boxer’s comment above, from a long floor speech Wednesday lambasting Republicans for pushing a balanced budget amendment to the constitution, is a case in point.

In Boxer’s telling, the budget surplus that emerged in 1998 and continued for four years sprang forth from a critical moment—the passage of Bill Clinton’s 1993 deficit-reduction bill. For those who don’t remember, it was a cliffhanger vote in both houses of Congress, with not a single Republican lawmaker supporting it.

‘Lucky for us, a lot of us are still here who made that fateful vote. We didn’t have one Republican voting for that budget, and when they came to the floor—I have all the quotes, chapter and verse—they said: This is horrible. It will never balance the budget. This is going to lead to a depression. This is the worst thing,’ Boxer recounted.

Boxer added: ‘But we know what happened. We not only balanced the budget, but we had a surplus. We not only had a surplus, but the debt was going down so fast we thought we would never have to have Treasury bonds again. On top of that, we created 23 million jobs.’

But is that really what happened? Were Republicans—who controlled the House and essentially the Senate when the budget was in surplus in 1998, 1999, 2000 and 2001—irrelevant to the process?

The Facts

President Clinton’s deficit plan certainly was a political and economic gamble.

Clinton believed that if he crafted a credible deficit plan, Wall Street traders would bid up the prices of Treasury bonds, leading to a decline in interest rates.

The lower interest rates, the theory went, would reduce mortgage costs for homeowners and make it cheaper for businesses to obtain loans for investment and expansion. Lower overall interest rates would also give the Fed more maneuvering room to fine-tune the economy.

Clinton set a target of cutting the deficit by $496 billion. Hefty tax increases on the top two percent of taxpayers were an important element, but Clinton also had to include enough changes in social policy to win over the party’s progressive wing, such as a boost in Head Start funding and a major expansion of a tax credit for the working poor.

Certainly, Republicans predicted gloom and doom if Clinton’s plan was passed into law.

According to statements supplied by Boxer’s office, Senator Orrin Hatch (R-Utah) said, ‘Make no mistake, these higher rates will cost jobs.’ Senator Charles Grassley (R-Iowa) chimed in, ‘I really do not think it takes a rocket scientist to know this bill will cost jobs.’ And then–Senator Phil Gramm (R-Texas) declared: ‘I want to predict here tonight that if we adopt this bill the American economy is going to get weaker and not stronger, the deficit four years from today will be higher than it is today and not lower.’ (And it was! See the figures below from the Treasury Department!—my addition)

(Note to lawmakers on both sides of the aisle: such over-the-top predictions are really foolish.)

But here’s the important point: the Clinton plan was never intended to achieve a balanced budget. After the bill’s passage, the Congressional Budget Office estimated that the deficit would decline modestly—from $290 billion in 1992 to $200 billion in 1998. In the phrase of the era, there were still ‘deficits as far as the eye could see.’

Indeed, the Clinton budget plan was actually slightly smaller, on an inflation-adjusted basis, than the deficit-reduction package signed into law in 1990 by President George H.W. Bush ($770 billion versus $830 billion). Many Republicans also opposed that deal—which Boxer supported—because it included higher taxes. (And probably cost George H.W. Bush the election since he had earlier proclaimed: “Read my lips! No new taxes!”—my addition)

Fast forward to 1995. The Democrats lost control of the House and the Senate, largely because of bruising budget battle. Clinton’s fiscal year 1996 budget again proposes $200 billion deficits every year for the next five years. So, again, the target in 1998 (when surpluses later emerged) was a deficit of $196 billion.

But Republicans immediately set the goal of achieving a balanced budget within seven years. After resisting for a few months, Clinton shocked many fellow Democrats by announcing that he, too, would embrace the idea of a balanced budget.

As The Washington Post editorial page put it at the time, Republicans had forced Clinton’s hand: ‘Mr. Clinton’s new position on the budget is much better than the old one. He should have taken it six months ago. The Republicans have driven him to say that he too wants, if not to balance the budget, at least to get the deficit into the neutral zone.’

Boxer’s staff referred us to an article by Michael Linden of the Center for American Progress (The name says it all!—my addition) to make the case that the GOP had little to do with achieving a balanced budget. Linden wrote the analysis in response to an article by former House speaker Newt Gingrich claiming major responsibility for achieving the surplus. (Like we said, each party has their own narrative.) [and as I’ve repeatedly said, Congress passes the budget NOT the President!—my addition]

In the article, Linden asserted that ‘virtually the entire fiscal improvement’ in the mid-1990s was due to Clinton’s 1993 budget and an improving economy, ‘and particularly the interaction between them.’ He argued that legislation passed by Republicans between 1995 and 1997 ‘combined to actually worsen the fiscal situation—albeit slightly.’ (Because he wrote it, it doesn’t make it true! Progressives LIE!!!—my addition)

In an interview, Linden conceded that he was only writing about the 1998 surplus.

Legislation passed by Republicans and signed by Clinton—such as the Balanced Budget Act of 1997, welfare reform and other bills—‘definitely had an impact after 1998 but we were already at a balanced budget at that point,’ he said. (Boxer, incidentally, opposed welfare reform, which was predicted to reduce the deficit by $55 billion over five years.)

But even Linden’s argument about 1998 is one-sided. He ignores the substantial shift in the policy debate in Washington that occurred because of the GOP takeover of Congress.

He also glosses over the fact that the government ended up with a gusher of revenue that had little to do with Clinton’s 1993 budget deal: capital-gains taxes from the run-up in the stock market, as well as taxes paid on stock options earned by technology executives.

Clinton, in essence, was lucky to become president just as a revolution in computer and information technologies was unleashed.

From 1992 to 1997, CBO estimated, revenue increased at an annual average of 7.7 percent in nominal terms, or about 2.4 percentage points faster than the growth of the gross domestic product, the broadest measure of the economy. CBO Deputy Director James L. Blum in 1998 attributed only 1 percentage point of that extra tax revenue to the 1993 budget deal. The rest, he said, came from capital gains.

Between 1994 and 1999, realized capital gains nearly quadrupled, the CBO concluded, with taxes on those gains accounting for about 30 percent of the increased growth of individual income tax liabilities relative to the growth of GDP. (Linden says: ‘I can’t really answer the question about how much Clinton had to do with the economy. He presided over it.’)

There were other factors as well, such as lower than expected health costs that reduced an expected drain on the budget. Clinton’s predecessor also had kicked in motion a huge decline in defense spending (which Clinton accelerated) and also had overseen a painful restructuring of the banking industry. Even a potential shock, such as the Asian financial crisis in 1997, brought the silver lining of lower oil prices that bolstered the U.S. economy.

Credit Clinton with this, however: When the prospect of budget surpluses emerged in 1998, he adroitly blocked GOP demands for a tax cut by forcing a bidding war on how much to reserve for Social Security—a political maneuver that likely prevented the surpluses from disappearing as quickly as they appeared. We all know what happened after Clinton left office.

The Pinocchio Test

Boxer’s staff suggests her floor statement should be read in the context of Republicans coming to floor this week and lecturing Democrats about the tide of deficits, without acknowledging their own role in promoting tax cuts, higher military spending and other programs that have helped erode the nation’s fiscal standing. Fair enough.

But one alternative history does not give license to invent another one. When we started examining this question, we thought Boxer’s comment might be worth a couple of Pinocchios. But the more we dug, the more we decided that her comments had begun to cross a line, especially since she had been an active member of the Budget Committee during the 1990s.

Boxer literally wipes away any Republican contribution to the process—and also claims credit for creatin
23 million jobs while ignoring broad historical changes in the U.S. economy that had little to do with inside-the-Beltway sausage-making. This is more than just spin; it is a rewriting of history that borders on the absurd.”

Note Also: According to the information below, the national debt increased every year from 1980 to the present—EVERY YEAR! If there were real budget surpluses, why did the national debt increase each year?


“Historical Debt Outstanding - Annual 1950 - 1999
* Rounded to Millions

Includes legal tender notes, gold and silver certificates, etc.

The first fiscal year for the U.S. Government started Jan. 1, 1789. Congress changed the beginning of the fiscal year from January 1 to July 1 in 1842, and finally from July 1 to October 1 in 1977 where it remains today.

To find more historical information, visit The Public Debt Historical Information archives.

09/30/1999________________ 5,656,270,901,615.43
09/30/1998________________ 5,526,193,008,897.62
09/30/1997________________ 5,413,146,011,397.34
09/30/1996________________ 5,224,810,939,135.73
09/29/1995________________ 4,973,982,900,709.39
09/30/1994________________ 4,692,749,910,013.32
09/30/1993________________ 4,411,488,883,139.38
09/30/1992________________ 4,064,620,655,521.66
09/30/1991________________ 3,665,303,351,697.03
09/28/1990________________ 3,233,313,451,777.25
09/29/1989________________ 2,857,430,960,187.32
09/30/1988________________ 2,602,337,712,041.16
09/30/1987________________ 2,350,276,890,953.00
09/30/1986________________ 2,125,302,616,658.42
09/30/1985_______________ *1,823,103,000,000.00
09/30/1984_______________ *1,572,266,000,000.00
09/30/1983_______________ *1,377,210,000,000.00
09/30/1982_______________ *1,142,034,000,000.00
09/30/1981_______________ *0,997,855,000,000.00
09/30/1980_______________ *0,907,701,000,000.00

Obviously, I stopped at the 9/30/1980 debt total when we were actually under a trillion dollars in debt!

Remember: Congress passes the budget NOT the President. It is Congress’s responsibility!

We hit our first trillion dollar debt in 1982.
Our first 02 trillion dollar debt in 1986.
Our first 03 trillion dollar debt in 1990.
Our first 04 trillion dollar debt in 1992.
Our first 05 trillion dollar debt in 1996.
Our first 06 trillion dollar debt in 2002
Our first 07 trillion dollar debt in 2004
Our first 08 trillion dollar debt in 2006
Our first 09 trillion dollar debt in 2007
Our first 10 trillion dollar debt in 2008
Our first 11 trillion dollar debt in 2009
Our first 12 trillion dollar debt in 2010
Our first 13 trillion dollar debt in 2010
Our first 14 trillion dollar debt in 2011


“Monday, June 13, 2011: The Federal Government’s National Debt Continues to Soar!


National debt by fiscal year end:
(Note: I rounded the cents)

President Bush took office in January of 2001

09/30/2000 = 05,674,178,209,887. (Democrats gain control of Senate in 2000 election)

By the way, 9/30/2000 is during the last year of President Clinton’s Presidency. I recently heard a Democrat actually claim that Bill Clinton ended the national debt. TOTAL NONSENSE!!!

09/30/2000 = 05,674,178,209,887. (Republican Congress)
09/30/2001 = 05,807,463,412,200. (split Congress)
09/30/2002 = 06,228,235,965,597. (split Congress)
09/30/2003 = 06,783,231,062,744. (Republican Congress)
09/30/2004 = 07,379,052,696,330. (Republican Congress)
09/30/2005 = 07,932,709,661,724. (Republican Congress)
09/30/2006 = 08,506,973,899,215. (Republican Congress)

From the end of the fiscal year of 2000 to the end of fiscal year 2006 before the Democrats took control of Congress in January of 2007, the federal debt increased by 2,832,795,689,329 dollars in six years (That’s almost three trillion dollars in 6 years!)

09/30/2007 = 09,007,653,372,262. (Democratic Congress beginning January 2007)
09/30/2008 = 10,024,724,896,912. (Democratic Congress)
09/30/2009 = 11,909,829,003,512. (Democratic Congress)
09/30/2010 = 13,561,623,030,892. (Democratic Congress)

From the end of the fiscal year of 2006 to the end of fiscal year 2010 after the Democrats took control of Congress in January of 2007 and before the Republicans regained control of the House of Representatives beginning in January of 2011, the federal debt increased by 5,054,649,131,677 dollars in four years (That’s over five trillion dollars in 4 years! Or, 1,263,662,282,919 dollars [$1.2 trillion+] per year over 4 years!)

Also, if you’ll do the math, the difference between 2008 and 2009 fiscal years is 1,885,104,106,600 dollars. That is over 400 billion dollars more that the story claims is the highest deficit (“nearly match the $1.41 trillion record reached in 2009”). I don’t know why the discrepancy but I would guess the story is using preliminary, unrecalculated numbers. (The yearly deficit reported is from the Treasury’s website and I copied and pasted the numbers so the numbers are correct as given from that site.)

The federal government DOES NOT have a revenue problem! The federal government has a SPENDING problem! The federal government is spending 40% more than it is taking in in revenue!!!

And we still don’t have a passed budget for 2011-2012 because the Democrats in the Senate have blocked passage of the proposed budget from the House of Representatives and have not passed an alternative budget! Why Not? Because the Democrats want to continue spending money!!!”

The reason why I posted the material that I did yesterday and as I’ve said repeatedly, our fiscal problems are not the cause of our decline as a nation. They are a symptom, but not the cause. Even if we solve all our fiscal problems we are in deep trouble if we do not deal with the cause. The cause is our moral decay and our refusal to be obedient to the WILL of GOD! The nation as a whole has been rebelling against GOD!!! That NEVER works out well for a nation in the end!!! NEVER!!!

From Acts 12: 18-23: “In the morning ,there was no small commotion among the soldiers as to what had become of Peter. After Herod had a thorough search made for him and did not find him, he cross-examined the guards and ordered that they be executed.

Then Herod went from Judea to Caesarea and stayed there a while. He had been quarreling with the people of Tyre and Sideon; they now joined together and sought an audience with him. Having secured the support of Blastus, a trusted personal servant of the king, they asked for peace, because they depended on the King’s country for their food supply.

On the appointed day Herod, wearing his royal robes, sat on his throne and delivered a public address to the people. They shouted, ‘This is the voice of a god, not of a man.’ Immediately, because Herod did not give praise to God, an angel of the Lord struck him down, and he was eaten by worms and died.’”

If GOD struck down a king for NOT giving praise to GOD, what will he do to a nation who has turned their back to HIM after all the blessings HE has bestowed upon that nation?

Read Genesis 18: 16 through Genesis 19: 29. From Genesis 19: 23-29: “By the time Lot reached Zoar, the sun had risen over the land. Then the Lord rained down burning sulfur on Sodom and Gomorrrah—from the Lord out of the heavens. Thus He overthrew those cities and the entire plain, including all those living in the cities—and also the vegetation in the land. But Lot’s wife looked back, and she became a pillar of salt.

Early the next morning Abraham got up and returned to the place where he had stood before the Lord. He looked down toward Sodom and Gomorrah, toward all the land of the plain, and he saw dense smoke rising from the land, like smoke from a furnace.

So when God destroyed the cities of the plain, he remembered Abraham, and he brought Lot out of the catastrophe that overthrew the cities where Lot had lived.”

If GOD destroyed the cities of Sodom and Gomorrah for unrepentant sin including the sin of homosexual behavior and turned Lot’s wife into a pillar of salt for her disobedience, what will HE do to a nation who has turned their back to HIM after all the blessings HE has bestowed upon that nation?

Read Daniel 5: 1-31. From Daniel 5: 22-31: “‘But you his son, O Belshazzar, have not humbled yourself, though you knew all this. Instead, you have set yourself up against the Lord of heaven. You had the goblets from His temple brought to you, and you and your nobles, your wives and your concubines drank wine from them. You praised the gods of silver and gold, of bronze, iron, wood and stone, which cannot see or hear or understand. But you did not honor the God who holds in His hand your life and all your ways. Therefore He sent the hand that wrote the inscription.

This is the inscription that was written: MENE, MENE, TEKEL, PARSIN

This is what these words mean:

MENE: God has numbered the days of your reign and brought it to an end.

TEKEL: You have been weighed on the scales and found wanting.

Peres: Your kingdom is divided and given to the Medes and Persians.’

Then at Belshazzar’s command, Daniel was clothed in purple, a gold chain was placed around his neck, and he was proclaimed the third highest ruler in the kingdom.

That very night Belshazzar, king of the Babylonians, was slain, and Darius the Mede took over the kingdom, at the age of sixty-two.”

If GOD destroyed the nation of Babylon for dishonoring HIM, what will HE do to a nation who has turned their back to HIM after all the blessings HE has bestowed upon that nation?

It’s time, it is past time to TAKE BACK THE NATION!!!
It’s time, it is past time to TAKE BACK THE NATION!!!
It’s time, it is past time to TAKE BACK THE NATION!!!