policybasics-wheretaxdollarsgo-f1Presently the federal government spends 7% of its budget simply on making interest payments on the federal debt.  That’s more than it spends on transportation infrastructure, education, and scientific research COMBINED.  So, there is a practical argument in paying down the federal debt to free up those interest payments given that we really suck right now in investing in roads, bridges, schools, and science.

Although both parties recognize, to a large extent, the problem with the federal deficit, the parties have completely different understanding of why the deficit matters and what is problematic about it.   And nobody in American politics represents the fraudulent Republican thinking on federal deficits than John Kasich.

When Bill Clinton introduced his first budget as President, he proposed cutting the deficit by raising taxes on the wealthy and cutting (and eliminating) spending.  Here’s what Kasich said then:

Rep. John Kasich (R-OH), August 5, 1993: Do you know what? This is now your package. We will come back here next year and try to help you when this puts the economy in the gutter. And virtually every major economic estimating firm in this country says your bill is going to kill jobs. (Congressional Record 1993, Page: H6249)

In another speech, Kasich took it even further and promised to become a Democrat if Clinton’s first budget actually reduced the deficit and didn’t steer the economy into the ditch:

“This plan will not work. If it was to work, then I’d have to become a Democrat.”– Rep. John Kasich (R-Ohio), (7/28/93)

But it did work, and Kasich never became a Democrat.  Instead, when the Republicans took over Congress Mr. “Care About the Shadow People” unsuccessfully attempted to force President Clinton to accept the following:

  • Eliminate the U.S. Departments of Education, Energy, and Commerce.
  • Cutting Head Start funding
  • Eliminating legal assistance for the poor
  • Kasich even voted to tie federal school funding based only if the school district allowed “voluntary” prayer.
  • Kasich was against tax breaks for education, grants and scholarships for need-based college students, and
  • Voted to eliminate funding for the Economic Development Administration, which provides assistance to economically distressed areas to create and retain jobs.

In an attempt of economic hostage taking, Kasich and his fellow Republicans in Congress forced the government to shutdown twice (in ’95 and again in ’97).

In his book “Stand for Something” Kasich himself said:

“Today, with perspective, pundits look back and suggest that shutting down the government under those circumstances was dumb, but I look back and think it was one of the greatest moments of my career.”

Kasich defiantly defended his government shutdown as being pointless and politically dumb a few weeks ago on “Meet the Press”:

CHUCK TODD:

I was reading something, you were talking about the government shutdown that you were a part of in ’95 and ’96 was a good thing. That it led to your balanced budget. What did these guys get wrong with their government shutdown a couple–

GOV. JOHN KASICH:

Well, our shutdown–

CHUCK TODD:

–years ago? And why was your shutdown effective?

GOV. JOHN KASICH:

Our shutdown was about the Clinton administration cooking the books on economic growth so we wouldn’t have to make any changes. They said the economy was going to grow at levels we’d never seen, which meant to get to a balanced budget you didn’t have to do much. Now, I had spent, at that point, about eight or nine years of my life saying, “This needs to be honest. We have to stop misleading the American people.” So when it got shut down, and I was one of the reasons that it happened, I think there was a suspicion that some of our leaders were going to go forward and reach this deal. I said, “No way. You go ahead and try. But, you know, I’m going to have to fight against it.”

CHUCK TODD:

I just find it interesting because most Republicans look back on that and say, “Boy, politically, that was a disaster. It led–”

GOV. JOHN KASICH:

Well, first of all–

CHUCK TODD:

–“to Clinton’s reelection.” You view it as a good thing–b

GOV. JOHN KASICH:

Well, first of all, we didn’t lose any seats. And secondly, we got to a balanced budget.

So keep this in mind, Kasich said the importance of the government shutdown was that it forced Clinton to accept a less optimistic Congressional Budget Office projections for the economy over the White House’s Office of Budget and Management (OBM) forecast.  The difference between the two forecasts created only a difference of $350 billion in projected revenues.

Kasich, at the time of the closure of the 1995 shutdown, said it was a sign that AmeriCorps and the Department of Commerce would soon be history.  (They both still exist.)  To hear John Kasich tell it now in New Hampshire, you’d think he stared Clinton down from across the desk and forced Clinton to support deficit reduction when the reality is Kasich opposed Clinton’s successful efforts to reduce the deficit on Day One and was not even in the room with Clinton during budget negotiations (they literally made him wait out in the hall.)  So, yeah, pretty much everything John Kasich says about this time in his life is an outright lie.

Using the more conservative CBO numbers led to a projection that the federal deficit would be eliminated in seven years (by 2002).  But instead, stronger than CBO forecasted economic growth led to surpluses by 1998 (just like the Clinton WH predicted).  So, the proudest achievement in Kasich’s life is forcing the federal government to accept an economic forecast that proved to be wrong over one that was proved to be accurate.  As a result, the federal government budget made unnecessary cuts.  Regardless, Clinton used the surpluses to begin paying down nearly half a trillion of the federal public debt before leaving office.  When Bill Clinton left office, even the bearish CBO projected that the United States was on pace to retire its public debt by 2010 if it had simply stayed the course.

SPOILER ALERT: This schmuck happened.

SPOILER ALERT: This schmuck happened.

So, what happened?

Kasich and the Republicans moved the goal posts on why reducing the deficit matter to them.   Once the government began running surpluses, they went from caring about paying down the debt to the party of instant gratification.  Kasich endorsed his self-proclaimed ideological “soul brother” George W. Bush who said that government didn’t know better to how to pay of its debt by holding onto those surpluses and OWED it to taxpayers to return it to them.  Except, of course Bush’s tax cuts actually exceeded the surpluses and created instant deficits.

Fiscally conservative Democrats blasted the Republican tax cuts saying the GOP had no plan to explain how they would pay for them (i.e.-prevent them from causing deficits) and Republicans simply retorted that you don’t have to explain how to pay for tax cuts because…. um, reasons and Reagan.

We’ve seen the same from Kasich as Governor.  Although Kasich inherited a state that had ran a nearly billion surplus and has a balanced budget amendment, Kasich used the end of the federal stimulus money to claim there was a “deficit” that required the State to keep funding meant for local governments to be used cover the State’s spending and slash funding for education.  Ever since then, he’s demanded more and more outrageous tax cuts that overwhelmingly benefit the wealthiest Ohioans.

Kasich’s new “people in the shadows” persona is based entirely on his support for Medicaid expansion, which he ridiculously refuses to acknowledges is due to  President Obama’s ACA and has repeatedly said Ohio would no longer do if the federal government prematurely reduces its 100% share of cost… to say, balance its budget.

Deficits are something Kasich uses to justify cutting and eliminating programs that help the poor attain socioeconomic mobility and views them as impediments to tax cuts for the rich.  That’s what his record in Congress and in Ohio amply demonstrates.  He hasn’t changed a bit.

 
  • Loretta

    So the budget negotiations he takes credit for actually occurred when the adults in the room had him sitting out in the hallway. That should be front page news somewhere soon.

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