Bill Clinton claimed the deficit was reduced more than since the Civil War and that his balanced budget would protect Medicare, Medicaid, education and the environment.
On the surface it might appear he reduced the deficit, but the problem was the deceptive way Clinton accomplished this “sleight of hand” deficit reduction. It’s called “cooking the books.”
You see, the government keeps two sets of books… One set showed the rosy picture Clinton wanted to paint for the American public. The other set showed the actual mess that really existed for our national debt and deficit reduction.
Two Separate Books
What President Clinton failed to say was his deficit-reduction package would run up almost 1$ trillion in federal debt. This is because the reported deficit does not include monies “borrowed” from trust funds. This despicable gimmick used by the White House and Congress to cover up the huge federal budget deficit was the looting of the Social Security Trust Fund, Medicaid, Civil Service and military retirements funds. This money may very well not be available to many of us when we grow old.
As for protecting Social Security, Medicare and Medicaid, he robbed those coffers to make his deficit appear lower. To make the deficit “appear” lower, the Clinton administration “borrowed” from the Social Security Trust Fund, and borrowed big. The fund dried up years and years ago. Now they borrow directly from your FICA payments to make the deficit appear lower. Furthermore, Clinton dipped into the Federal Employees Retirement System (FERS) to help reduce the deficit.
Hillary Clinton continued to repeat the lie in her bid for president, frequently noting that her husband left the White House with the nation enjoying record budget surpluses that Bush has turned into record deficits.
If you used the same bogus math to do your taxes that the government uses to spend your taxes, you’d go to jail. If private sector trust funds were handled this way, those responsible would be behind bars.
When will we hold the government just as accountable in spending our taxes as they hold us in paying our taxes? This lying has to stop. The budget is NOT balanced, and saying otherwise is both irresponsible and dangerous.
While his numbers may show a net deficit reduction of $514 billion it adds $936.5 billion to the gross national debt and the debt continues to grow to this day. While Bill Clinton was president, the gross federal debt went up from $4.1 trillion to more than $5 trillion. At that rate, Clinton stacked up more debt in one term than either of President Reagan’s administrations. Not to be outdone by Bill Clinton, subsequent administrations were to send America to ever increasing debt. As of August 31, 2020, the total national debt was $26.70 trillion
Where Does Your Tax Money Go?
In 1984, The Grace Commission Report was presented to Congress, explaining that one-third of all income taxes is consumed by waste and inefficiency in the Federal Government, and another one-third escapes collection due to the underground economy. With two-thirds of everyone’s personal income taxes wasted or not collected, 100 percent of what is collected is absorbed solely by interest on the Federal debt and by Federal Government contributions to transfer payments. In other words, all individual income tax revenues are gone before one nickel is spent on the services which taxpayers expect from their Government.
It is the debt that we are paying interest on, not the deficit. In 1980 it took 12% of the entire government’s income to service its debt. Today, it requires more than 18%, and that percentage is rapidly rising.
Bill Clinton also conveniently failed to tell the American people that he financed his deficit reduction by refinancing long-term Federal Debt Securities with short-term securities. If interest rates are higher when those securities mature, both the deficit and budget will skyrocket and leave our children with economic problems we can’t imagine.
Clinton shifted the burden of his so-called deficit reduction from his Administration to that of a later President. The CBO reported Clinton’s 10-year “balanced budget plan” would leave a $209 billion deficit in 2005. And, nearly two-thirds of the spending cuts in his budget was postponed until the last two years of his seven year plan — long after he was gone from office.