America’s roiling debate over how to stimulate the ailing economy — and save the beleaguered middle class — will soon be joined by a familiar and authoritative voice. Former president Bill Clinton is now speaking out with increasing frequency and force, as he did last Friday at a Georgetown University conference on his administration’s stewardship of the longest and largest economic expansion in American history, and as he will continue to do in coming weeks with the publication of a new book titled “Back To Work: Why We Need Smart Government For A Strong Economy,” to be published by Knopf on Nov. 8.
The conference at Clinton’s alma mater marked the 20th anniversary of a series of speeches he delivered there in 1991 as a newly minted presidential candidate, when he laid out a detailed agenda to renew American government after a dozen years of stagnation under the Reagan and Bush administrations. Its message, delivered by Clinton himself along with speakers including former Treasury Secretary Robert Rubin and Gene Sperling, the chairman of President Obama’s National Economic Council, could scarcely have been clearer: Contrary to the Tea Party, government (and taxes) are not the problem but part of the solution; and the nation’s growing income inequality is a serious obstacle to growth and stability that must be addressed — by government.
Clinton’s old economic team gathered under a banner with the title “Clinton-Gore Economics,” a subtitle that summed up the real message: “Understanding the Lessons of the 1990s,” and an opening address by Rubin that recalled the real conditions confronted by the new president and vice president in early 1993. Those poor conditions, with high unemployment and the biggest deficit in U.S. history, inspired the creation of a National Economic Council to mirror the National Security Council. Clinton and his team shared a “powerful belief in market forces,” said Rubin, but also “an equally strong belief in the role of government” to channel and regulate those forces. “The critical role of government in the 1990s,” noted Rubin, contains a powerful “lesson for today.”
Rubin’s remarks were followed by a panel chaired by John Podesta — the former Clinton White House chief of staff who founded and led the Center for American Progress until this month — with five panelists that included several of the top White House staffers who pushed the first Clinton-Gore budget through Congress despite a hostile Republican minority. Economists Laura Tyson and Alan Blinder, Congressional liaison Thurgood Marshall, Jr. and domestic policy chief Bruce Reed (who handles similar duties now in the Obama White House) discussed the gamble that they took in seeking to raise taxes and make some modest entitlement cuts in a downturn, hoping that the resulting lower interest rates would fuel growth. More challenging than that gamble, however, was the bitter opposition of the Republican caucus — whose predictions of a new depression swayed moderate Democrats in both houses, forcing Gore to cast the tie-breaking vote in the Senate. (Back then the filibuster was not misused as it is by the Senate minority today to require a supermajority for passage of every major decision.)
A second panel, chaired by former White House Chief of Staff Erskine Bowles, who recently chaired a deficit reduction commission with former Wyoming Republican Senator Alan Simpson, examined the policy decisions that Clinton pursued as president, which included both important social investments in health care for children, infrastructure, and communications as well as regulatory reforms and deregulation that have raised questions with the passage of time. But none of that would have been possible without the initial battle over taxes that Clinton so narrowly won.
The human symbol of those struggles was present too: Marjorie Margolies, the former Democratic Representative from Philadelphia who cast the deciding vote in favor of Clinton’s 1993 budget. Known back then as Marjorie Margolies Mezvinsky, her married name, she joked that although the tax hikes in that budget only affected the top one percent, “They all lived in my district,” which had been represented by Republicans for a century before she was elected. She lost her seat in the Democratic bloodbath of the 1994 midterm (but eventually gained a daughter-in-law when Chelsea Clinton married her son Mark).
The tax increases that Margolies supported didn’t lead to a Depression, as Newt Gingrich, Tom DeLay, Dick Armey, and other conservatives of that time had warned, but helped to dramatically reverse the national decline of the Reagan-Bush era and fostered an unprecedented boom. Those inaccurate Republican prognostications, a premonition of Tea Party ideology, remain highly relevant in today’s debate over how and whether to invest public money, how best to reduce the deficit, and above all how to ensure a future of high employment and renewed prosperity.
In his closing remarks, which no doubt presage themes in his forthcoming book, Clinton compared Washington’s current divisions and dilemmas to those of his own time. “When I came here in December 1992,” he said, “the country had many manifestations” of the ills that plague America today — notably “a big increase in income inequality.” That intractable and increasing inequality, which has grown far worse despite a respite during his presidency, “is not healthy for a society that depends on an idea of opportunity and social mobility.”
The solution, he said, is not to scapegoat illegal immigrants or to pretend that government, taxes, and regulations are the problem. As the president who oversaw a period of prosperity, productivity, and innovation, Clinton emphasized the difference between “invest-and-grow economics and trickle-down economics.” It is that philosophical difference, rather than particular policies, which remains salient for American voters today.
“We cannot sustain this level of inequality,” warned Clinton. “And there is not a single example of a successful economy in the world that is pursuing a militant anti-government philosophy.” Looking back on his record as president, he said, “I was proud of many things — but proudest that after eight years, confidence had gone up in government again.” The question that haunts the Obama administration — and a Congress whose survey ratings are even lower — is how and whether that confidence can be restored once more.