One of 2012 GOP presidential contender Newt Gingrich’s favorite claims is that, when he was Speaker of the House in the 1990s, he helped balance the budget four times. In the Fox News debate last night, he said, “as Speaker, one of the reasons some people aren’t happy with some of my leadership is, I actually worked things out with Bill Clinton to get welfare reform, a tax cut, and four balanced budgets signed.”
This is a point that Gingrich drills home in interviews all the time. “If you look at my record, the only Speaker in your lifetime to get to four balanced budgets,” he said during a Fox interview. Watch a compilation:
However, this talking point is much more fiction than fact. For starters, as USA Today noted, “Gingrich was in office for only two of those budget years (fiscal 1998 and 1999). But he continues to claim credit for two balanced budgets that were passed after he left office (fiscal 2000 and 2001).” Furthermore, as Citizens for Tax Justice’s Bob McIntyre wrote, it was actually the 1993 budget, which all Republicans opposed, that laid the groundwork for the balanced budgets that occurred under President Bill Clinton:
Gingrich’s argument comes down to this: In August 1997, Congress passed a bill called the “Balanced Budget Act,” which promised to balance the federal budget five years later, in fiscal 2002. Soon after the bill was signed, the budget was balanced. Therefore, the balanced budget act balanced the budget. But that’s demonstrably false.
In fact, the budget surpluses that we enjoyed from 1998 to 2001 had nothing to do with the balanced budget act. Instead, the surpluses stemmed from a dramatic surge in federal revenues, mainly personal income taxes. Here’s what really happened.
In 1993, Bill Clinton undid some of the Reagan tax cuts for the wealthy, in a bill that every Republican in Congress opposed…Clinton’s 1993 increase in tax rates on high earners applied to a new wave of taxable income from corporate executives cashing in their lucrative stock options (which are taxed as wages). In fiscal 2000, the surplus peaked at $237 billion, and it remained a robust $128 billion in fiscal 2001 (Clinton’s last budget year).
All of these surpluses would have occurred if the Balanced Budget Act had never been enacted.
Gingrich told anyone who would listen that Clinton’s 1993 tax increase would destroy the economy, but just the opposite happened.
Center for American Progress Director for Tax and Budget Policy Michael Linden has actually found that legislation passed by Gingrich’s House Republicans made the budget picture worse in the 90s, not better. “Gingrich and his Republican Congress had nothing at all to do with balancing the budget in 1998. In fact, the net effect of their efforts was to make the fiscal situation slightly worse,” Linden noted. But that hasn’t stopped Gingrich from trotting out the fact that budgets were balanced while he was Speaker in an attempt to bolster his fiscal bona fides.