Posted on March 15, 1993 in Washington Watch
During the 1992 Presidential campaign Bill Clinton spoke of his intention to set and meet major goals during his first 100 days in office. With that target period one-half over, the President seems confident that many of his important initiatives will be realized.
The first few weeks of the Administration were difficult, as the it was forced to respond to constant questions about this or that controversy, but the President’s team now seems to be clearly in control and setting the media agenda. In keeping with this aggressive press strategy, Clinton has elected to eschew the cautious approach to policy which allows for only incremental changes. He has opted instead to tackle several of the most serious problems facing the country all at the same time.
In the process of proposing these sweeping changes Clinton has run into the reason why most politicians prefer the cautious course: the Republicans are complaining and attacking his position, some of the most powerful special interests in Washington are crying out against it, and even some press correspondents are using their positions to criticize Clinton’s plan. But with the opinion polls showing strong public support for Clinton’s program and for the President himself, there is little indication that the President will alter either his proposals for fundamental change or his style of leadership. For the moment at least, it seems that Clinton has made the right political calculations about what the system will bear.
The Budget Game
The new Clinton economic program, for example, has challenged both Republicans and Democrats, Congress as a whole, and several major interest groups.
Twelve years of Republican presidencies and divided government have left the federal budget in a shambles. The Reagan years brought a shift in the tax system—the rich paid less while the tax burden on the middle class increased dramatically. A dramatic increase in military expenditures was accompanied by cuts in a number of domestic spending programs. While overall federal revenues declined federal expenditures did not, and the result was an ever-growing budget deficit and a staggering national debt. The projected budget deficit for this year is $327 billion, a shocking 5.4% of the Gross National Product (GNP). The total federal deficit is now approaching $4 trillion and requires an annual payment of $200 billion just to service the debt. Debt service has risen to become the second largest item in the federal budget.
Clinton’s focus has been an attempt to bring about a dramatic reordering of federal spending priorities, and a redistribution of the tax burden away from the Reagan formula (though nowhere near the pre-Reagan levels). He has proposed a three-part program of budget cuts, tax increases, and new spending. And he has insisted that the entire package be considered as a whole.
Some Republicans and conservative Democrats have come out in support of the spending cuts while strongly opposing the tax increases and new spending. At the same time, some liberal Democrats are eagerly supporting the Presidents new tax proposals and his economic stimulus program (the new spending), but they are trying to avoid consideration of some of the proposed spending cuts.
Clinton has refused to budge or give in to either side—he wants the program considered in one enormous piece of legislation. And it looks like he will get his way. By pressuring some members of Congress and threatening others, and by actively courting still others, it appears that the President will get his way with Congress.
The arcane rules of Congress are the reason Clinton wants the whole package to be considered at once. Consideration of such a massive piece of legislation is called “budget reconciliation”, referring to the process of reconciling a President’s budget objectives with the specific measures that authorize spending and taxation. This means that, rather than allowing the package to be picked apart piece by piece, the President will have Congress act on the legislation under a special set of rules, which limit the amount of time that may be spent debating the specific points. For Clinton’s program, under these rules, groups that oppose the President’s program will not have enough time to mobilize their forces against it.
This week the House Budget Committee accepted the President’s challenge to move on the package as a whole, but to add more specific cuts in spending than Clinton had initially asked for. It is interesting to note that the Democrats, who in the past hesitated to cut spending, are now—under the President’s leadership—almost happy about taking a knife to the bloated federal budget. The White House has even had to caution them not to propose too many extra cuts, out of fear that a too-swift reduction in federal spending could lead to a big slow-down in the economy.
The White House warnings notwithstanding, the Congress has still added $63 billion in new cuts to the Democratic proposal, which the White House has accepted. Clinton might have held a tougher line, but new figures from the Congressional Budget Office showed that the President’s stimulus program would have increased the deficit by the same amount, and so the net effect is about what the President had originally proposed.
Republicans have been frustrated by all of this maneuvering. They had hoped to be the ones to propose extra program cuts, but the Democrats beat them to the punch. Now all they have left is to oppose the new taxes, and with them, the President’s proposed job-creation and economic stimulus program which the new taxes are meant to finance. However, as the polls show, the job-creation proposal is the most popular part of the Clinton program, and the Republicans are finding it difficult to stand in opposition to it.
The Tax Argument
For the past several months now, as the economy showed signs of recovery and the unemployment rate dipped slightly to the current 7% figure, several economists and some Republicans have argued that Clinton’s job-creation proposal is unnecessary and should be scrapped. They argue that the additional spending might be inflationary.
A Republican counter-proposal to the President’s plan, for example, accepts Clinton’s proposed cuts and even his new taxes, but they oppose the $16.3 billion job-creation package, in favor of reducing the budget deficit that much further.
But Clinton has rejected this counter-proposal. The Administration argues that, while the economy is recovering, it is a weak recovery and has not produced significant job creation. Further, the Administration argues, there are structural problems in the economy that can only be addressed through targeted job creation and retraining laid-off workers so that they can find employment in new fields.
But perhaps an even more important reason for Clinton’s insistence on this part of his program is that it formed a centerpiece of his campaign platform, and that he is unwilling to break this important campaign pledge. Another reason suggested even by some supporters is that if the President and his team acknowledge too early in their Administration that the economy has, in fact, recovered, such an admission would take needed pressure off the Congress to act on the changes the President has proposed.
And so Clinton has stood firm in support of his proposals to extend unemployment benefits, invest significant public funds in infrastructure rebuilding programs, create new opportunities for unemployed young people, and retrain the long-term unemployed.
Moreover, with the recently announced closing of 21 military bases and reducing more than 160 others, there is a new urgency to the job-creation program. These cuts mean that many states and local communities are facing the prospect of losing hundreds of thousands of jobs, and the President has sought to soften the blow by announcing immediate relief in the form of federal grants and long-term relief through retraining and a new economic conversion program. This latter effort is designed to assist communities and small industries, which are currently dependent on the military for a large portion of their jobs, to make the shift from military- to civilian-based industries.
It is situations like these, where reduced federal spending creates the potential for large-scale unemployment in particular communities which could in turn lead to economic declines in entire regions, that require additional federal spending over the short term. In order to insure that these short-term spending increases don’t increase the deficit, the President has insisted that new taxes be imposed as apart of the overall economic package.
Another reason for the new taxes has been to fulfill Clinton’s campaign pledge to adjust the tax burden by relieving the burden of the “Reagan revolution” imposed on the middle class.
During the campaign, Republicans rejected Clinton’s claim that he could raise the necessary revenues by increasing taxes only on the wealthy (defined as those making over $200,000 at first, and later those making over $100,000). Former Vice President Dan Quayle produced his own critique of Clinton’s proposal which charged that, if Clinton were elected, he would end up raising taxes on Americans earning more than $30,000. Clinton rejected the charge as nonsense.
But it now appears that Quayle was right. While the major burden of Clinton’s new taxes will fall on the rich, other taxes called for in the President’s program will fall on those earning more than $30,000 annually. This has caused some, including liberal commentators, to charge Clinton with betraying the trust of the voters who elected him.
But once again, Clinton is holding firm. He presented the entire economic program with the theme of “shared sacrifice”—a theme hinted at quite broadly in his Inaugural address. And he knows that this is a risky idea. If he wins and the economy continues to improve and new jobs are created, he will escape criticism and might even be praised. If, on the other hand, his program fails to produce economic growth, in 1996 he can fully expect to be hounded by charges that he broke his pledge in the same way that George Bush was hounded by his “no new taxes pledge” during the 1992 race.
The Other Challenges
As if this economic program were not a big enough challenge for the new President, he has simultaneously sought to address a number of other critical problems as well. Health care reform and campaign finance reform are among the two most difficult areas of American life to reform.
Health care, because it is a $800 billion dollar-a-year is a powerful and entrenched special interest. Every year various groups in the industry pour tens of millions of dollars into campaigns for Senators and Congressmen in order to block reforms that might negatively affect them. Further, groups affiliated with various health-care providers and insurance groups are capable of launching effective public relations campaigns against any measures they find undesirable.
Campaign reform presents an even more difficult challenge, because it requires that Congress must pass legislation that takes away the major advantage of incumbency—the ability to raise and spend large sums of money for reelection. But the members of Congress must not only overcome their own hesitancy, but they must also face down all the big-money groups that also benefit from the current system.
But there are some key realities that will help Clinton’s effort. Rising health care costs playing a major factor in the federal budget deficit, and health care costs as a whole are also severely hampering the ability of American companies to compete internationally. The fact that there are 37 million Americans who are without any form of health insurance is staggering and sobering statistic. The cost of congressional campaigns has doubled in the past ten years (to almost $700 million in 1992). From these and many other symptoms, it is clear to most Americans that some sort of action is needed.
And so Clinton has attacked these two “sacred cows” of American politics, and is he is facing a tremendous battle. The powerful American Medical Association (AMA) demanded to be included in the Presidential Health Care Commission, headed by First Lady Hillary Rodham Clinton; and they were told, politely, “no.” A successful lawsuit by the AMA and others, however, forced the First Lady to make public the meetings of her Committee—though the deliberations on policy can still be held privately. So while the work proceeds, there is rising speculation about what the President will ultimately propose to Congress.
A few things have become clear, however. The First Lady is committed to meeting the President’s goal of presenting Congress a full and detailed proposal by May first. The detailed outlines of the proposal are still shrouded in mystery, but it is expected to extend individual health care coverage to all Americans over a period of years; it will not likely follow the Canadian plan and will probably allow some choice of health care providers; there is definitely going to be a tax increase proposal associated with the program (almost definitely including a “sin tax” on cigarettes and guns and perhaps even on alcohol.)
The First Lady has gracefully assumed her new role, and is proving to be adept and energetic a salesperson as her husband. She has courted the Congress. She is traveling to cities all over the country to hold hearings. She is forming a network of local communities to get public input for the program, and then to help sell the program to Congress.
This will not be an easy sell, but the President is convinced that it must be done. Health care costs must be brought under control or capped—or else the deficit will continue to expand at a crippling rate. And the need for reform is very urgent because of the Demographics of the U.S. population is disproportionally weighted towards the older generations. By the beginning of the next century when the “baby boom” generation—the large group born in years immediately following the Second World war—reaches the age of 65, their collective health care costs under the current system could be high enough to bankrupt not only the federal government but large segments of the private sector as well.
President Clinton has not yet prepared campaign reform legislation, but Congress is holding its collective breath because it knows that the issue is on Clinton’s agenda for this year. And when it comes, it will be Clinton’s third challenge to Congress to produce fundamental change.
At least at this point the President can feel confident that his first 100 days will have brought him closer to his goals. At this point it also seems clear that he will be able to boast of the following achievements early in his term: passage of a family leave bill; an expanded voter registration law; a much-awaited job-creation and economic stimulus package; and a comprehensive proposal for health care reform.
To make certain that his agenda moves forward, he has embarked on the most intensive Executive Branch lobbying effort in modern history—even greater than that of Ronald Reagan’s first term.
Clinton’s courting of the Congress is almost constantly in the news. And, in the words of one Republican member of Congress, the President is “a very persuasive lobbyist.” He is courting individual members—he flatters them, pressures them, and when necessary he threatens them. And Clinton is not just courting the Democrats: some Republicans members of Congress have been invited to join the President aboard the Presidential plane, Air Force One. Others have been invited to join the President for his early morning jogging sessions. One Republican Senator was in Syria when he got a personal call from the President who was seeking support for his budget proposal.
Clinton knows that this personal attention will pay off, as it paid off for him during his twelve years as Governor of Arkansas. But an additional push may be required, and he is preparing for that, too, by building pressure for action at the grass-roots level which could give Congress an extra shove at a crucial moment. The new Chair of the Democratic National Committee, David Wilhelm, announced recently the foundation of a 1,000,000 person Democratic Party lobby to support the President’s program.
This combination of personal lobbying, extensive exposure for the President in key states across the country, and the building of a grass-roots network will—the President hopes—result in passing his program. He has taken on a major set of challenges, and thus far he seems to know what it will take to pass them into law. If current trends continue, President Clinton is likely to have a successful first 100 days.
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