Replies

Excellent post, William, and I totally agree with you by the way.

I'd just like to add a few more facts if I may. I've been following politics since I was a teenager. It's true that Bush SR promised not to raise taxes, "Read my lips, no more new taxes." However, Bush SR. wasn't planning to go into war with Iraq. Let's not forget that the conflict with Iraq cost us plenty, our economy grew weaker and the stock market stagnated. If I recall correctly, the Dow Jones went down 18-17 percent. Unemployment rose and jobs creation slowed; as a consequence sales fell sharply. Adding to that, the interest rates were high due to the savings and loan fiasco. And the most important thing that many have forgotten about is, BECAUSE OF THE WAR Bush Sr. was forced, mainly by the Liberals, to raise taxes as part of his budget agreement.

Of course the Liberals exploited the fact that Bush SR raised taxes and Buchanan capitalized on it. As a result we got the magnificent Clinton whose ability to increase taxes fooled everyone into forgetting this little fact and just talk about Bush SR's broken promise. So, just to remind everyone, Clinton's 1993 tax hike was $241 billion over five years.

Here is a LINK of Clinton's tax record:
Clinton's 1993 tax hike not only broke America's tax hiking record but also Bill Clinton's campaign promise to cut middle class taxes in his 1992 campaign.
Sheepish at negative public reaction from his breaking of both tax hike records and his promises, Clinton admitted in 1995: "People in this room are still mad at me at that budget because you think I raised your taxes too much. Well, it might surprise you to know I think I raised them too much, too."
Bill Clinton promised to cut taxes while campaigning in 1992.
In 1993, Bill Clinton raised taxes by a record $241 billion over five years.
In 1994, Clinton again tried raising taxes with his nationalized health care plan.
In 1995, Bill Clinton admits he raised taxes "too much."
In 1996, Bill Clinton vetoed tax cuts.
In 1997, Clinton finally accepted tax cuts at Republican insistence.
In 1998, Clinton again refused to cut taxes in spite of a growing surplus.
And in 1999, Bill Clinton not only again opposed tax cuts, but sought $100 billion more in taxes over the next ten years (according to CBO), despite a $1 trillion 10-year, non-Social Security surplus.

____________________

The same ploy concocted by the Liberal media and the Democrats to conquer and divide (oldest trick in the book) is being applied here regarding Arnold. He's been accused by the Liberals of being a Liberal on social issues. This, of course, won't deter Democrats and Liberals since they advocate the same issues, but is for Conservatives' consumption. With a little bit of luck the Liberals will be again laughing all the way to the bank when Bustamente wins and Conservatives are left with a deep satisfaction in their hearts while pounding on the table as they exclaim… Ha! We just taught a lesson to the GOP, and if GW doesn't do something about illegals, we're going to teach him as well. Ain't this country great!

Published in the St. Paul Pioneer Press
Sunday, October 4, 1998
Sabo Keeps Sober Eye
on Budget Merriment
Written by Bill Salisbury

Families do it every week.

But when the federal government last week finally managed to balance
its budget -- and end a fiscal year with a surplus after a generation of
red ink -- it was treated as a big deal.

President Clinton announced a $70 billion surplus at a White House
ceremony that had all the trappings on a campaign pep rally. On stage
behind Clinton, as he spoke to an enthusiastic Democratic crowd (no
Republicans were invited), was a digital sign that flashed the word
``surplus.''

While Clinton claimed his administration deserved most of the credit for
restoring fiscal discipline to government, he shared some of the glory
with Democratic lawmakers who made tough tax and spending
decisions that helped erase the budget deficits. Among those he singled
out for special praise was Rep. Martin Sabo, D-Minn.

As chairman of the House Budget Committee in 1993, Sabo, 60,
played a key role in pushing through a package of tax increases and
spending cuts that sharply reduced the deficit. After Republicans won
control of Congress in 1994, he remained a key adviser to the White
House in budget negotiations.

Asked how it felt after years of effort to finally have a budget surplus,
the taciturn Norwegian replied: ``Sort of nice.''

Sort of nice, Martin?

``Well, very nice,'' acknowledged Sabo, a 20-year House veteran from
Minneapolis.

On a day when both parties were vying for credit for the first budget
surplus since 1969, it was refreshing to get Sabo's modest assessment
of the accomplishment.

Balancing the budget is important for keeping the economy growing and
not piling a huge debt on future generations, he said.

But he gently implied that politicians shouldn't risk breaking an arm
when they pat themselves on the back for doing what they were
supposed to do: Manage the budget responsibly.

Clinton claimed he and congressional Democrats laid the groundwork
for balancing the budget when they passed the 1993 deficit-reduction
package.

Republican congressional leaders countered that they deserved the
credit for pushing Clinton into accepting a budget-balancing agreement
last year. ``This is a Republican surplus, and everybody knows it,'' said
Republican National Chairman Jim Nicholson.

Partisanship aside, Sabo said there's plenty of credit to go around,
starting with former President George Bush.

In 1990, Bush, a Republican, and the Democrats who then controlled
Congress, teamed up to put the first big dent in the deficit with a
package of tax increases and spending cuts. Bush paid a high political
price for the agreement because it forced him to break his ``Read my
lips: No new taxes'' promise he made in the 1988 campaign. Angered
by the tax boost, maverick Republicans, led by current House Speaker
Newt Gingrich, turned on Bush, contributing mightily to his defeat at
Clinton's hands in 1992.

Sabo said the 1990 and 1993 deficit-reduction packages took the
biggest steps toward balancing the budget. ``Last year's budget
agreement was not as big as either the '90 or '93 plans in terms of
deficit reduction,'' he said, ``but it was still a very positive act.''

The final step to balancing the budget was relatively painless. Two
years ago, many Democrats warned that it would take draconian cuts in
vital government services to erase the red ink. But because of the
booming economy, Sabo said, we ``were able to do it without a lot of
sacrifice.''

As Democrats and Republicans separately celebrated the first budget
surplus in 29 years, they conveniently overlooked the fact that the
deficits were partly their fault. The Democrats contributed to excessive
spending on the Great Society programs of the 1960s and 1970s, and
the Republicans backed the expensive military buildup in the 1980s.

Now both sides are drooling at the prospect of spending the surplus.
While Clinton says he wants to use the money to ``save Social
Security,'' his administration has proposed a $23 billion spending spree
for ``emergency'' measures. Meanwhile, House Republicans want to
use the surplus for an $80 billion tax cut.

Sabo warned that those spending impulses could jeopardize the
balanced budget. The surplus is largely a product of the booming
economy, and it could shrink or disappear if the economy weakens or
the stock market falls.

``We need to keep our eye on the target and maintain fiscal discipline,''
Sabo said. ``By doing so, we will ensure that Americans will be able to
reap the benefits of the current surplus for years to come.''

You can always count on Sabo to inject a sober note in the midst of a
boisterous celebration.

Thanks Victoria. Excellent post.

Glad you brought up the Democrats' tax increase during GHWB's presidency. The Democrats were chomping at the bit to increase taxes and Bush Sr. reluctantly went along because because that was the only way he could get the Democrat-controlled Congress to agree to a balanced budget.

It was a mistake to go back on his word, but Bush Sr. did so to get a balanced budget. If he hadn't raised taxes, he would have been criticized for not balancing the budget by the same people who criticized him for raising taxes in order to balance the budget. There's just no pleasing the congenitally disgruntled.

To spite Bush Sr. for raising taxes ONCE, these so-called principled conservatives rewarded the party that not only raises taxes EVERY TIME, but also hates everything we stand for. To punish a decent man and fine president for ONE mistake, they helped elect a corrupt, sleazy, lying and treasonous flim flam artist. Cutting off one's nose to spite one's face is incredibly stupid, foolish, self-destructive, short-sighted and counter-productive behavior. But it isn't “principled.”

Good post, Victoria!

You missed one little piece of your timeline. Clinton actually signed one GOP tax cut in 1995, which reduced the capital gains tax rates from 30%+ to a top rate of only 20% for assets held more than 18 months. The 1997 tax cut left the capital gains tax rates intact but reduced the time period for capital gains from 18 to 12 months.

Ironically, these were precisely the tax cuts that drove the stock market and real estate boom of the late 1990s. It wasn't just the fact that the capital gains tax rates were cut, but that the income tax hikes from 1993 remained in effect! With such a large gap between the top income tax rate (38%) and the top capital gains tax rate (20%), wealthy people had a tremendous incentive to invest their money in assets that didn't generate a lot of income but offered a lot of growth potential (real estate and high-tech stocks!).

In addition, unscrupulous wealthy people saw an opportunity to convert their "income" to capital gains at the expense of ordinary investors -- Get a bunch of stock options from your company instead of direct salaries, encourage your employees to use their 401(k) money to drive up the value of your stock, and then cash out before it collapsed. The money you make on the sale of your stock is not income -- it's a capital gain!

Just in case you weren't cynical before you read this post . . .

LOL!