The great Clinton economy began when he embraced the essence of Reaganomics: tax cuts, spending restraint, welfare reform, free trade and the end of his own budget-crushing entitlement program, universal health care.
Clinton, it is mostly forgotten, was on the verge of becoming a failed president in his first two years. Even the Democratic-controlled Congress had defeated his much touted stimulus package and an enormous hike in energy taxes. HillaryCare, the forerunner to Obamacare, was dead in the water by the summer of 1994, with the Senate Democrats hoisting the white flag on this signature issue on the eve of the Congressional elections.
Clinton’s most significant achievement was a huge but unpopular tax rate increase that Obama seems determined to duplicate. So unappealing was his record, the Republicans swept both houses of Congress in November for the first time in four decades.
Newt Gingrich, the political warrior who led the GOP comeback, was enthroned as House Speaker, poised to push through his Reaganite Contract with America. Clinton’s first term was in shambles and it was only half over.
A panicky president, consulting Dick Morris, then decided to steal from the Reagan
playbook, though neither Clinton nor Morris has ever given the iconic GOP president the credit he deserves. Slowly but surely Clinton began tacking to the right, (though he had embraced one Republican idea earlier, the NAFTA free trade pact). Beginning in 1995 he deep-sixed HillaryCare for good, then hinted he would work with Republicans on a decent balanced budget proposal. In an October 17 fundraiser in Houston, he signaled tax cuts were very much in play: “I think,” he conceded, “I raised them [taxes] too much.”
“Era of big government over”