WASHINGTON. Many independents who normally lean toward the Democratic Party are now voting Republican. The reason is simple. The Democrats have strayed too far from their historical norm as a party. Independents yearn for a return of the Bill Clinton Democrats who once flourished in an era when bipartisan deals could still get done.
While many newer and typically younger Democrats lean far to the left, the party’s core is trying to return toward a more centrist position. This is essentially the position that Bill Clinton occupied when he was president. Bill Clinton recognized that he had to change some of his views in order to move the country forward. So did the Bill Clinton Democrats of the 1990s.
Clinton pivots to win a second term
Since Clinton notably raised taxes early in his first term, the nation’s recovery from the 1991 recession was sluggish. During his 1996 re-campaign, he promised to jump-start the economy. He abandoned any thoughts of a reviving the notion of a National Health Insurance policy. He appointed his wife, Hillary, to head up the commission to study the issue in 1993.
Working largely in secret, Hillary and the committee came up with a complete National Healthcare System design. Each citizen would get a health care card similar to a Social Security card, and health care would then be run by the Federal government. The voters soundly rejected that plan in the election of 1994. Voters reacted negatively to this proposal. So much so that the GOP gained control of the House of Representatives for the first time in forty years.
Bill knew he needed to pivot and pivot fast to win re-election in 1996 after this notable debacle. To jump-start the economy, Clinton subsequently asked Congress to reduce the capital gains tax rate from 28% to 20%. In addition, as a followup, he boldly declared that the “era of big government is over” during his 1996 State of the Union speech. His view at the time was in contrast to the views of many in his party. It proved a realistic approach to the voters’ negative response to “Hillarycare.” Clinton knew how to read the electorate.
Clinton and the GOP reduce taxes, jump-starting the economy
The result of Bill Clinton’s political pivot was his 1996 re-election victory. This was llargely due to the pre-emptive tax cuts he worked out with the GOP. Unsurprisingly, the nation’s economic growth averaged more than 4% annually over the next four years, proving the point.
The adaptable Clinton also proved he could work with the suddenly Republican-controlled House of Representatives. Along with new Speaker of the House Newt Gingrich, Clinton notably reduced the rate of growth of government spending. In 2019, such an accomplishment seems miraculous.
Better yet, the capital gains tax rate reduction clearly resulted in high economic growth. In addition, revenue from the capital gains tax actually increased. The reduced rate encouraged more capital investment and more economic growth, so investors applied the new lower rate to larger amounts of income. The math is simple. After all, isn’t 20% of $1,500 ($300) more than 28% of $1,000 ($280)?
Independents and even some Republicans that voted for Clinton in 1996 did so because they identified with his bipartisan deals to reduce taxes and hold the line on government spending. They believed their vote for Clinton was justified. After all, the Federal government eliminated the deficit and ran a budget surplus annually from 1997 to 2000. Under Clinton, the Federal government actually seemed to work: a rarity in the modern era.
Why did Al Gore stumble and fall in the Y2K election?
Though many regarded him as a shoo-in, Al Gore barely lost the Presidential election of 2000. One primary reason for that surprise loss was his clearly stated desire to expand the role of the Federal government. This effectively put him at odds with the very policies that re-elected Bill Clinton in 1996. Arguably, these policies helped persuade the U.S. Senate that voting to impeach the President would be viewed with hostility by a majority of American voters.
With regard to the issue of taxation, Gore opposed across the board tax cuts that, based on the Clinton/GOP example, could further stimulate the economy. Instead, Gore wanted tax cuts targeted to lower income earners while actually raising taxes on the top 1% of income earners.
Gore’s cuts would have reduced capital formation and slowed the economy, which was still staggering in 2000 due to the stock market’s dot.com collapse. Further, Gore wanted to re-open the hot button issue of expanding government involvement in health care. Worse, he wanted the government to pay for high-priced prescription drugs for selected groups of Americans.
Voters recognized that Gore’s essentially socialist positions, if put in force by law, would slow the economy that Clinton accelerated. His proposed policies would increase government spending, with the result that the Federal government budget would again run a deficit. Given these positions, still unpopular at the time by modest margins, Gore attracted an insufficient number of independent voters to his side, resulting in his defeat.
Obama’s “fundamental transformation” further distances Democrats from Bill Clinton’s model
After winning 2008’s open presidential election, America’s new president, Barack Obama, took the Democrats further away from Clinton’s principles. And further away from its core constituency than the party had ever gone before.
In the teeth of the Great Recession – the worst business debacle since the Great Depression – Obama raised taxes on all Americans. He particularly singled out the highest income earners. At the same time, he vastly increased government spending, resulting in huge successive budget deficits. In fact, Obama added more than $9 trillion to the $11 trillion that was the total of all deficits combined, under every president prior to Obama’s two terms.
Whatever happened to those Bill Clinton Democrats?
All of which brings us to our current and ongoing political maelstrom in Washington. Where are those productive, frequently bi-partisan Bill Clinton Democrats today? What happened to President Clinton’s policies of lower rates of taxes, a reduced role for the Federal government and the elimination of budget deficits?
By the beginning of 2019, Democrats seem to have lost sight altogether of their significant accomplishments during the Bill Clinton era. Despite losing the Senate to the GOP – again – their sweeping House victory in the 2018 off-year elections appears to have gone to their heads, leading them to believe they run the nation’s capital now.
Today’s Democratic Party clearly embraces the socialistic notion that the Federal government should control key markets like health care and education. They aim to fund this ruinous utopia with their favored formula. That means higher taxes on all Americans, particularly the highest income earners, plus increased government spending and a complete lack of fiscal discipline.
While those policies may appeal to Americans who have suffered during the long eight years of Barack Obama’s 2% or less growth economy, they won’t appeal to the majority of Americans. Including many who’d voted the Democrats back into control of the House. Such a ruinous tax regime won’t appeal to independents either.
So where are all those Bill Clinton Democrats today?
— Headline image: Cartoon by Branco. Reproduced with permission and by arrangement with Legal Insurrection.