That Was Then, This Is Now (Part 1)

There are essential differences between the shutdown of 1995 and today.

WASHINGTON, DC - DECEMBER 22: US Speaker of the House Newt Gingrich (L) and US President Bill Clinton (R) begin a bi-partisan meeting on the stalled budget talks at the White House, 22 December. President Clinton and republican leaders are meeting to reach a compromise that will reopen the US Goverment. 
National Journal
Major Garrett
Oct. 8, 2013, 5:39 p.m.

These shut­downs are not the same.

Not in ori­gin. Not in le­gis­lat­ive con­tent. Not in eco­nom­ic con­text. Not in polit­ic­al cal­cu­lus. Not in ideo­lo­gic­al mo­tiv­a­tion. Not in me­dia cov­er­age. Not in strategy. And they are cer­tainly dif­fer­ent in tem­pera­ment, per­son­al­ity, and lead­er­ship style.

These dif­fer­ences re­veal a bizarre in­con­gru­ity. The is­sues be­ing fought over now are trivi­al com­pared with those that led to the budget con­front­a­tion in 1995, and yet the con­sequences of stale­mate are far lar­ger.

This is one of two columns I will de­vote to the dif­fer­ences between 1995 and now. I covered the 1995 shut­down, and then a dec­ade later pub­lished a book on its long-term con­sequences. My per­spect­ives are, like any­one else’s, im­per­fect. But the dif­fer­ences between now and 1995 can ex­plain why polit­ics now seems so clot­ted with dis­cord and why the air is rife with non­nego­ti­able de­mands and ab­so­lut­ism.

But first … let’s look at some over­looked sim­il­ar­it­ies. The de­bate then — as now — was angry and per­son­al. In fact, House mem­bers al­most came to blows out­side the Ways and Means Com­mit­tee hear­ing room. Then as now, there was a threat of a gov­ern­ment de­fault. And there was, as now, pres­id­en­tial con­tempt for Re­pub­lic­ans in Con­gress at­tach­ing ex­traneous meas­ures to even a short-term in­crease in the debt ceil­ing. In 1995, Pres­id­ent Clin­ton told the na­tion Re­pub­lic­ans were toy­ing with de­fault and were “deeply ir­re­spons­ible” and that what was oc­cur­ring had no pre­ced­ent. Sound fa­mil­i­ar? There was also, be­lieve it or a not, a bid by a Demo­crat­ic pres­id­ent to find com­mon ground with GOP budget hawks by pro­pos­ing a re­duc­tion in fu­ture cost-of-liv­ing ad­just­ments to So­cial Se­cur­ity be­ne­fits. The no­men­clature now is “chained CPI.” Back then, it was just called an ad­just­ment to the con­sumer price in­dex. Then, as now, it was proffered as an ex­ample of a Demo­crat­ic pres­id­ent’s budget­ary reas­on­able­ness. There was even a Re­pub­lic­an snit over an un­sat­is­fact­ory tele­phone call with Pres­id­ent Clin­ton over budget ne­go­ti­ations.

But the struc­tur­al dif­fer­ences between then and now mat­ter most.

Many have already noted the role ger­ry­mandered House dis­tricts have played in harden­ing par­tis­an di­vi­sions. That is a factor, but I be­lieve there are oth­er, more con­sequen­tial ele­ments to today’s im­passe.

Com­pos­i­tion and le­gis­la­tion: In 1995, Re­pub­lic­ans con­trolled the House and the Sen­ate, giv­ing them in­sti­tu­tion­al clout to pass ac­tu­al le­gis­la­tion that could not be ig­nored. House and Sen­ate GOP ma­jor­it­ies pro­duced a re­con­cili­ation bill that in­cluded a vast ar­ray of spe­cif­ic, pro­gram­mat­ic changes to fed­er­al spend­ing and tax­a­tion. That bill car­ried what all re­con­cili­ation bills carry — polit­ic­al and le­gis­lat­ive tensile strength that no pres­id­ent can ig­nore. After an elec­tion that gave Re­pub­lic­ans full con­trol of Con­gress for the first time in 40 years, Re­pub­lic­ans, ushered in­to power with enorm­ous voter ex­pect­a­tions for change, pro­duced le­gis­la­tion largely con­sist­ent with their un­der­ly­ing 1994 cam­paign prom­ises and tested by the fires of the le­gis­lat­ive pro­cess in both cham­bers. By defin­i­tion, that re­con­cili­ation bill is miles ahead of any­thing so far pro­duced by the cur­rent House GOP ma­jor­ity in terms of spe­cificity, pro­gram­mat­ic am­bi­tion, and dol­lar-by-dol­lar scor­ing. It also trumps any of the cur­rent GOP products in terms of uni­fy­ing Re­pub­lic­ans on policy, polit­ics, and le­gis­lat­ive tac­tics. There were no back­bench fili­busters or sorta-fili­busters to carry a GOP policy po­s­i­tion in 1995. There was ac­tu­al le­gis­la­tion with ag­gress­ive, polit­ic­ally risky com­pon­ents and a fer­vent rank-and-file back­ing that made its po­tency un­avoid­able.

Polit­ic­al tim­ing/cal­cu­la­tions: Pres­id­ent Clin­ton was mid­way through his first term after hav­ing won with only 43 per­cent of the pop­u­lar vote. A South­ern pres­id­ent who won by de­fin­ing him­self as a new-era cent­rist was now fa­cing a GOP ma­jor­ity in Con­gress powered by the first GOP dom­in­a­tion of the South since Re­con­struc­tion.

Clin­ton’s cal­cu­la­tions then were in­fin­itely dif­fer­ent than Pres­id­ent Obama’s now. Clin­ton had to worry about reelec­tion and had to make good on prom­ises to re­spond to the clam­or of 1994 for smal­ler gov­ern­ment. And he did.

The shut­down is largely and prop­erly re­membered as a polit­ic­al de­feat for con­gres­sion­al Re­pub­lic­ans be­cause they were blamed for their stub­born­ness. What is for­got­ten is Re­pub­lic­ans were los­ing ground in pub­lic polls be­fore the shut­down crisis ma­ter­i­al­ized, and yet they still ex­trac­ted sig­ni­fic­ant con­ces­sions from Clin­ton. In Feb­ru­ary of 1995, Clin­ton’s budget pro­jec­ted de­fi­cits of $190 bil­lion (yes, and that was con­sidered nearly as­tro­nom­ic­al back then) for the next 10 years. Clin­ton at the time would not com­mit to a bal­anced budget. In June, he agreed to one in prin­ciple. By the end of the two gov­ern­ment shut­downs, he agreed to a bal­anced budget in sev­en years with the Con­gres­sion­al Budget Of­fice the only cred­ible ac­count­ant — a seis­mic con­ces­sion of power to Con­gress that neut­ral­ized the Of­fice of Man­age­ment and Budget’s his­tor­ic­ally co­equal stature in fed­er­al ac­count­ing.

Pres­id­ents don’t travel this dis­tance by ac­ci­dent, and Clin­ton did not ar­rive at sev­en years to bal­ance the budget be­cause he plucked that num­ber out of a hat. It was the GOP’s bot­tom-line re­quire­ment, and Clin­ton even­tu­ally ac­cep­ted it in the con­text of the gov­ern­ment shut­down to pre­serve his polit­ic­al vi­ab­il­ity and win the polit­ics while giv­ing him space and time to ad­ju­dic­ate the policy later.

There is no sim­il­arly po­tent set of polit­ic­al cal­cu­la­tions for Obama to con­front. He won reelec­tion, and did so after failed ne­go­ti­ations in 2011 over the so-called “grand bar­gain.” Though Obama won’t say it pub­licly, he re­grets ne­go­ti­ations car­ried out in the con­text of a po­ten­tial de­fault in the late sum­mer of 2011, and his polit­ic­al goal is now to per­man­ently re­move the threat or pro­spect of de­fault from fu­ture budget talks. His polit­ic­al goals and in­cent­ives could not be more dif­fer­ent than Clin­ton’s. Free from reelec­tion wor­ries, Obama feels em­powered to shield the re­mainder of his pres­id­ency and fu­ture pres­id­en­cies from the use of de­fault as a tool of for­cing oth­er policy con­ces­sions or dis­cus­sions.

Eco­nom­ic vi­tal­ity: This dif­fer­ence is cru­cial to un­der­stand­ing the pos­sib­il­it­ies of then and the risks and fears of now. The U.S. eco­nomy was in full re­cov­ery from the re­ces­sion of 1990-91, with an un­em­ploy­ment rate of 5.6 per­cent, in Novem­ber of 1995. Gross do­mest­ic product was rising each and every quarter of 1995, and even in the im­me­di­ate af­ter­math of the second shut­down (which las­ted 21 days) it grew at 2.7 per­cent in the first quarter of 1996. In the second quarter of that year, it jumped to an an­nu­al­ized rate of 7 per­cent. Yes. SEV­EN PER­CENT.

Not only was the eco­nomy op­er­at­ing at near full em­ploy­ment, it was on the cusp of an ex­plo­sion of high-tech de­vel­op­ment and the tax rev­en­ue that came with it. Fed­er­al tax re­ceipts in 1995 totaled $1.35 tril­lion in con­stant dol­lars, mak­ing up 18.4 per­cent of GDP. The tech boom poured tax dol­lars in­to fed­er­al cof­fers un­til 2000, when in­di­vidu­al tax re­ceipts totaled $2.02 tril­lion and 20.6 per­cent of GDP — a phe­nom­en­al state of eco­nom­ic af­fairs that cre­ated bal­anced budgets and a per­vas­ive and il­lus­ory sense of plenty. Eco­nom­ic growth was plainly vis­ible to Clin­ton in late 1995, and he cal­cu­lated, cor­rectly, that it would provide the grease ne­ces­sary to cut a bal­anced-budget deal with Re­pub­lic­ans, which he did in 1997. There is no way to un­der­stand the lim­its of today’s cur­rent polit­ic­al im­passe without re­mem­ber­ing how much eco­nom­ic growth cre­ated the polit­ic­al and budget­ary flex­ib­il­ity for Clin­ton and Re­pub­lic­ans to reach an re­l­at­ively easy post-shut­down com­prom­ise. Eco­nom­ic plenty gave both sides polit­ic­al and policy space to de­clare vic­tory.

Today’s eco­nom­ic real­it­ies are com­par­at­ively grim and cre­ate al­most no space to lub­ric­ate com­prom­ise. Amer­ica’s eco­nom­ic real­it­ies since 2008 have re­flec­ted not only the hor­ror of the Great Re­ces­sion but the grind­ing real­ity of slow job growth, vir­tu­ally nonex­ist­ent wage growth, and sub-par GDP growth. When you add a re­flex­ive de­sire in Con­gress to cut dis­cre­tion­ary in­stead of en­ti­tle­ment spend­ing, you are left with a le­gis­lat­ive cul­ture pinched by lim­its — real, scary, and polit­ic­ally haz­ard­ous lim­its. There is a sense of per­vas­ive eco­nom­ic un­ease that makes the tra­di­tion­al obstacles of every mod­ern budget deal much harder to sur­mount.

These are but a few of the sig­ni­fic­ant dif­fer­ences between 1995 and now. There are oth­ers, and we will ex­plore them in Part 2.

The au­thor is Na­tion­al Journ­al cor­res­pond­ent-at-large and chief White House cor­res­pond­ent for CBS News. He is also a dis­tin­guished fel­low at the George Wash­ing­ton Uni­versity School of Me­dia and Pub­lic Af­fairs.

COR­REC­TION: Due to an edit­ing er­ror, a pre­vi­ous ver­sion of this story misid­en­ti­fied chained CPI.

What We're Following See More »
Sanders and Clinton Spar Over … President Obama
8 hours ago

President Obama became a surprise topic of contention toward the end of the Democratic debate, as Hillary Clinton reminded viewers that Sanders had challenged the progressive bona fides of President Obama in 2011 and suggested that someone might challenge him from the left. “The kind of criticism that we’ve heard from Senator Sanders about our president I expect from Republicans, I do not expect from someone running for the Democratic nomination to succeed President Obama,” she said. “Madame Secretary, that is a low blow,” replied Sanders, before getting in another dig during his closing statement: “One of us ran against Barack Obama. I was not that candidate.”

THE 1%
Sanders’s Appeals to Minorities Still Filtered Through Wall Street Talk
9 hours ago

It’s all about the 1% and Wall Street versus everyone else for Bernie Sanders—even when he’s talking about race relations. Like Hillary Clinton, he needs to appeal to African-American and Hispanic voters in coming states, but he insists on doing so through his lens of class warfare. When he got a question from the moderators about the plight of black America, he noted that during the great recession, African Americans “lost half their wealth,” and “instead of tax breaks for billionaires,” a Sanders presidency would deliver jobs for kids. On the very next question, he downplayed the role of race in inequality, saying, “It’s a racial issue, but it’s also a general economic issue.”

Clinton Already Pivoting Her Messaging
9 hours ago

It’s been said in just about every news story since New Hampshire: the primaries are headed to states where Hillary Clinton will do well among minority voters. Leaving nothing to chance, she underscored that point in her opening statement in the Milwaukee debate tonight, saying more needs to be done to help “African Americans who face discrimination in the job market” and immigrant families. She also made an explicit reference to “equal pay for women’s work.” Those boxes she’s checking are no coincidence: if she wins women, blacks and Hispanics, she wins the nomination.

How Many Jobs Would Be Lost Under Bernie Sanders’s Single-Payer System?
17 hours ago

More than 11 million, according to Manhattan Institute fellow Yevgeniy Feyman, writing in RealClearPolicy.

State to Release 550 More Clinton Emails on Saturday
17 hours ago

Under pressure from a judge, the State Department will release about 550 of Hillary Clinton’s emails—“roughly 14 percent of the 3,700 remaining Clinton emails—on Saturday, in the middle of the Presidents Day holiday weekend.” All of the emails were supposed to have been released last month. Related: State subpoenaed the Clinton Foundation last year, which brings the total number of current Clinton investigations to four, says the Daily Caller.