Praising President Obama for his willingness to confront Congressional Republicans over the debt and deficits, former President Bill Clinton warned against excessive spending cuts in a slowly recovering economy. If the Republicans and Democrats achieve a deal before the August 2 deadline for a national debt default, he told The National Memo in an exclusive interview this week, they can all be winners — even the Tea Party.

“I think there’s a real chance that austerity first, far from putting a confidence boost into the economy, will further dampen growth,” he told The National Memo in an exclusive interview this week. Drawing a contrarian lesson from the United Kingdom, where the Conservative government’s budget-slashing policies have slowed growth and depressed revenues, he added, “I think there’s a chance the British will end up with a bigger deficit because tax revenues will drop more than spending will be cut.”

The former president, who now runs the William J. Clinton Foundation and the Clinton Global Initiative, also offered his own perspectives on how to reduce federal spending over the next ten years – while doing the least possible damage to entitlement programs, infrastructure, education and health care. But he would prefer to postpone most spending cuts and tax increases until the economy is stronger than at present.

“In broad outline, a good deal would be one that combined spending cuts with revenue increases, and phased them in — in a way that didn’t start until we’ve got more growth than we’ve got now,” he said. Splitting deficit reduction more or less evenly between cuts and taxes would work best, he added, and pointed out that there are multiple possibililities within the current federal budget to save hundreds of billions of dollars, while doing little social or economic damage to the country. He pointed to a March 2011 report by the Government Accountability Office — the official Congressional auditing agency — that found dozens of examples of duplication and waste.

“If you just go through the GAO report — I did this weekend, the whole 400 pages — there’s just tons of opportunity to save money, a lot of money, maybe as much as $100 billion a year,” said Clinton, ranging from better maintenance practices in the military and more competitive bidding throughout government to more efficient collection of unpaid federal taxes:

If you could collect 25 percent, just 25 percent, of the $340 billion a year owed in taxes and not paid under the current tax system, just one-fourth of that; and if you ended these direct payments to farmers that have nothing to do with farm prices, where [they] get more if [they’re] bigger and richer, and which were supposed to be phased out; and you did a smidgen of what [GAO auditors] recommend on information technology and transportation and building management — you’d have a trillion dollars over a decade.

If you put a third of the $170 billion in no-bid federal contracts up for bid – and you had the same success that we had when [the Clinton administration] pushed contracts from no-bid to bid…Just those two things, alone — collecting 25 percent of taxes owed and not paid, and bidding out a third of the $170 billion in no-bid contracts out for bid in transparent process — would give you a hundred billions dollars [in annual savings].

In the military, 18 percent of the maintenance budget, according to the GAO, is caused by corrosion in planes, cars, weapons systems. Simple anti-corrosion measures have a return on investment somewhere between 11 to 1 and 60 to 1. Unbelievable!”

According to the former president, who achieved budget surpluses before leaving office in 2001, “a real conservative — as opposed to an anti-government, anti-tax conservative” could play a highly constructive role in the current debate by insisting that Congress thoroughly enforce the GAO findings as federal policy. But that would require the Republican majority to behave as if they are “serious about making government work instead of wanting it to fail.”

Clinton expects that the President and Congress will ultimately work out a budget deal before August 2, and that “everyone will win” as a result.

“The President will win because a terrible thing was averted,” he said. “Even if people agreed with him — just like they agreed with me on the [1995] government shutdown –the consequences of not paying our bills could be so great that [voters] could blame everybody. That was his risk. But he’s proved willing to take it and I think he should have and I’m proud of him for doing that.” Likewise, he said, both Republican and Democratic Congressional leaders will win because they helped to avoid a global economic crisis.

“And I think the Tea Party will win because they won’t be outed,” he said ruefully. “In other words, if this thing happened, you might have a successful third party candidacy for President — if our credit got down-rated and everybody’s interest rates went up. But I think the Tea Paty would be toast, because they’ve been going around telling everybody this is no big deal.”

More likely, he concluded: “They’ll all live to fight another day.”

Previously: Bill Clinton Says He Would Invoke Constitutional Option “Without Hesitation” to Raise Debt Ceiling and “Force the Courts to Stop Me”