Favorite

Asa as Forrest Gump 



He is smarter and much, much meaner, but Asa Hutchinson still does a good imitation of Forrest Gump.

Gump was the mentally deficient film character whose account of his travels put him at the center of most of the epochal events of the last half of the 20th century.

In a speech to the North Little Rock Rotary Club, Hutchinson, the Republican candidate for governor, took a good measure of the credit for ending the mammoth federal budget deficits begun under President Reagan. You see, he arrived in Congress in 1997 as the representative from the Third Congressional District just in time, by his account, to help the Republicans fashion a budget package that ended deficit spending.

Here, according to the Arkansas Democrat-Gazette, is what he told the Rotary:

“When I went to Congress in 1997 we had a $200 billion deficit. We had deficits as far as you could see in the future and we hadn’t had tax cuts in 16 years. Well, we wanted to enact tax cuts to spur our economy on, to put more trust and confidence and money in the entrepreneurs of our country. We did that, and people said you’ll never be able to pay for the needs and address the problems of the deficit. Well, we enacted tax cuts and balanced the budget three years ahead of time and reduced that $200 billion and balanced the budget.”

That is something to brag about, if it were only true. It is a wild distortion of what happened, and the memories of most Americans cannot be so short that they do not recognize it. But the secret of the successful Republican political strategy in recent times is the expectation that people will always accept pleasant fantasy over disagreeable reality.

First, the government did not run a $200 billion deficit in 1997. When Congress passed and President Clinton signed the budget act to which Hutchinson referred, at the end of July 1997, the treasury had already begun to run in the black. The fiscal year that ended two months later accumulated a deficit of only $21.9 billion, the smallest deficit since 1974.

When Democrat Bill Halter called his hand, Hutchinson’s office said he did not mean that the deficit was $200 billion for 1997 but that there were forecasts then of $200 billion in cumulative deficits over the next five years. But he said what he said.

Those $200 billion deficits were products of the Ronald Reagan and George Bush I administrations. The peak was Bush I’s last year, $290 billion. It went down every year, by big chunks, after the spring of 1993 when Clinton passed, without a single Republican vote, a budget that raised taxes on the well-to-do and slashed spending.

Federal Reserve Chairman Alan Greenspan, testifying two months after Congress passed the 1997 budget act, said the Clinton budget act in 1993 had pushed interest rates down and set off an unprecedented demand for capital equipment and labor — what we call business growth and jobs.

That is important to remember because it is what supply-siders like George W. Bush and, apparently, Hutchinson, say will happen when you cut taxes on the rich and corporations. It just doesn’t seem to happen for them.

But let’s go back to that history that Hutchinson was relating: the reversal that took us from “deficits as far as you could see” to big fat surpluses.

Here is what happened: The deficit had shrunk from $290 billion in Bush I’s last year to $127 billion in 1996 and the gap between revenues and spending continued shrinking early in the ’97 fiscal year until it disappeared and began to run in the black.

Congressional Republicans wanted a big tax cut for the rich and corporations but Clinton resisted. That July they finally struck a deal: smaller tax cuts for the fat cats (capital gains, taxes on rich estates and the alternative minimum tax on corporations) that the Republicans wanted and tax cuts for the middle class that Clinton wanted, mainly child-care and education tax credits. Moreover, they cut Medicare and some other entitlement spending but, at Clinton’s insistence, financed a vast expansion of Medicaid to insure medical care for low-income children.

All the tax cuts for fat cats did not kick in immediately but were to be phased in over several years, so the immediate impact of the budget package the following year, 1998, was projected to fatten the deficit slightly, not shrink it.

But the deficits were already gone. The government would run a surplus of $69.2 billion in 1998, the largest in American history to that point, and then $125.6 billion in 1999 and $236.4 billion in 2000. Big surpluses were forecast through 2020. But by 2002, when the ’97 tax cuts kicked in fully and were to have their impact, the country was running massive deficits again, thanks to more tax cuts for the rich.

Republicans look at the economy with funhouse mirrors. They always look tall and thin.

Here’s the question the Rotarians should have posed to Hutchinson: If the tax cuts for the wealthy caused an instant surplus back in 1997 why did the even bigger tax cuts that were part of Bush II’s economic program — supported by Congressman Hutchinson — seem to produce the opposite: giant deficits as far as you could see?

Hutchinson didn’t bring it up.


Favorite

Comments

Subscribe to this thread:

Add a comment

More by Max Brantley

More by Ernest Dumas

  • Fake economics

    Fake news is a new phenomenon in the world of politics and policy, but hokey economic scholarship has been around as long as Form 1040 and is about as reliable as the news hoaxes that enlivened the presidential campaign.
    • Dec 1, 2016
  • China in charge

    Let's turn to foreign affairs to see how we might calm the flood of anxieties over the coming Donald Trump presidency.
    • Nov 24, 2016
  • A little hope

    It may not be nearly as bad as you expect.
    • Nov 17, 2016
  • More »

Readers also liked…

  • Religion as excuse upends Constitution

    Tirades over religious liberty since the U.S. Supreme Court legalized same-sex marriages nationwide have awakened the ghost of James Madison, the author of the constitutional doctrine on the matter, and it isn't happy that his effort to protect religious inquiry in America is being corrupted.
    • Jul 9, 2015
  • Guns, God and gays

    Many more mass shootings like the one last week in Roseburg, Ore., will stain the future and no law will pass that might reduce the carnage. That is not a prediction but a fact of life that is immune even to Hillary Clinton.
    • Oct 8, 2015
  • AEC dumps ALEC

    No matter which side of the battle over global warming you're on, that was blockbuster news last week. No, not the signing of the climate-change treaty that commits all of Earth's 195 nations to lowering their greenhouse-gas emissions and slowing the heating of the planet, but American Electric Power's announcement that it would no longer underwrite efforts to block renewable energy or federal smokestack controls in the United States.
    • Dec 17, 2015

Most Shared

  • Department of Arkansas Heritage archeologist resigns

    Bob Scoggin, 50, the Department of Arkansas Heritage archeologist whose job it was to review the work of agencies, including DAH and the Arkansas Highway and Transportation Department, for possible impacts on historic properties, resigned from the agency on Monday. Multiple sources say Scoggin, whom they describe as an "exemplary" employee who the week before had completed an archeological project on DAH property, was told he would be fired if he did not resign.
  • Labor department director inappropriately expensed out-of-state trips, audit finds

    Jones was "Minority Outreach Coordinator" for Hutchinson's 2014 gubernatorial campaign. The governor first named him as policy director before placing him over the labor department instead in Jan. 2015, soon after taking office.
  • Lawsuit filed against ADC officials, prison chaplain convicted of sexual assault at McPherson

    A former inmate who claims she was sexually assaulted over 70 times by former McPherson Womens' Unit chaplain Kenneth Dewitt has filed a federal lawsuit against Dewitt, several staff members at the prison, and officials with the Arkansas Department of Corrections, including former director Ray Hobbs.
  • Rapert compares Bill Clinton to Orval Faubus

    Sen. Jason Rapert (R-Conway)  was on "Capitol View" on KARK, Channel 4, this morning, and among other things that will likely inspire you to yell at your computer screen, he said he expects someone in the legislature to file a bill to do ... something about changing the name of the Bill and Hillary Clinton National Airport.

Latest in Ernest Dumas

  • Fake economics

    Fake news is a new phenomenon in the world of politics and policy, but hokey economic scholarship has been around as long as Form 1040 and is about as reliable as the news hoaxes that enlivened the presidential campaign.
    • Dec 1, 2016
  • China in charge

    Let's turn to foreign affairs to see how we might calm the flood of anxieties over the coming Donald Trump presidency.
    • Nov 24, 2016
  • A little hope

    It may not be nearly as bad as you expect.
    • Nov 17, 2016
  • More »

Visit Arkansas

Arkansas remembers Pearl Harbor

Arkansas remembers Pearl Harbor

Central Arkansas venues have a full week of commemorative events planned

Event Calendar

« »

December

S M T W T F S
  1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31

Most Recent Comments

  • Re: Worth it

    • And loyal, to a fault.

    • on December 6, 2016
  • Re: Worth it

    • Alas, Gene's memory ain't what it used to be. He wrote a column some time…

    • on December 5, 2016
  • Re: Forget identity politics

    • Hillarys 'Stronger Together' nonsense failed because she failed to make it a reality. As Gene…

    • on December 5, 2016
 

© 2016 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation