Even as he pushes $150 billion in new “stimulus” spending, President Obama argues that to avoid the fiscal cliff we must return to Clinton-era tax rates for wealthy households, with a top marginal rate of 39.6% vs. the Bush-era 35%. Clinton’s was an age of balanced budgets and economic growth.
But it was also an era of budgetary restraint in which both parties, not just the GOP, still produced budgets.
It was one, too, in which a Republican Congress led by House Speaker Newt Gingrich produced welfare reform, killed the precursor to cap and trade — Bill Clinton’s BTU tax — and stopped ObamaCare’s predecessor, HillaryCare, dead in its tracks.
As the Cato Institute’s Steve H. Hanke points out, when President Clinton took office in 1993, government expenditures were 22.1% of GDP. When he departed in 2000, the federal government’s share of the economy had been squeezed to a low of 18.2%, a decline of 3.9 percentage points. No other modern president has even come close (see table).
Under Clinton, federal spending averaged 19.8% of GDP. In contrast, spending under Obama over the past four years has averaged 24.4% of GDP.