AMAC Exclusive – By Andrew Abbott
Republican leaders looking to retake the House and Senate next year would do well to start reminding Americans of a chapter of recent political history. It’s a story that would help Republicans explain to voters who are worried about the economy that their only hope is a GOP victory this fall—which would send a powerful signal to both markets and consumers.
Bill Clinton likes to brag that he brought prosperity in the 1990s. The truth is that after promising a middle class tax cut, he passed the biggest tax hike in history and threw the economy into reverse. In addition, he spooked the economy by aggressively pursuing another giant threat to small businesses and family incomes—the big government healthcare takeover known as Hillarycare.
After an economic downturn from 1989-1991, George H.W. Bush’s final year had seen a strong recovery with 3.63% GDP growth. Thus, in January of 1993, Clinton had inherited a booming economy. But Clinton’s big government policies rapidly put the breaks on this resurgence. Job and wage growth slowed while trade deficits soared and productivity was low. Economists began to feel that the rosy predictions of the early 1990s were suddenly looking less and less realistic.
Once Newt Gingrich and Congressional Republicans won in 1994, however, all of that began to change—and quickly. First, Gingrich’s Republican Revolution transformed the morale and the culture of the country. Businesses and consumers relaxed because they recognized there would be no more taxes and little new regulation—and as a result, they were willing to invest and spend once again. That was the first big step in rebuilding the economy Clinton had destroyed.
Almost as quickly, the new Republican Congress began to implement the policies they had run on and won on—the plans laid out in the platform known as the Contract with America. The Contract promised a balanced budget, tax cuts for families, welfare reform, a rollback of crippling government regulations, a crackdown on violent crime, and more. This was the common-sense agenda that had swept Republicans into unified control of Congress for the first time since 1952, with the GOP picking up 8 Senate seats and 54 House seats, and even the incumbent Speaker of the House, Democrat Tom Foley, losing his re-election bid.
Upon becoming Speaker in 1995, Gingrich and the new Republican majority set to work fulfilling their promises to the American People with unprecedented speed. When their policies kicked in—including the largest capital gains tax cut ever—they spurred the economy even further.
In addition to these historic legislative accomplishments, Gingrich’s Congress achieved something else: they forced Bill Clinton back to the political center. Seeing the success of the Contract with America—both politically and economically—Clinton executed one of the most spectacular reversals in the history of American politics.
After spending his first two years governing from the hard left, Clinton shamelessly declared that “the era of Big Government is over” by his 1996 State of the Union Address one year into Gingrich’s new Congress. For the remainder of his term, he pursued an agenda that was largely dictated by or ripped off from Congressional Republicans—leading to the only balanced budgets in our lifetimes.
The economic results of these developments are well known: From 1997 to 2000, GDP grew at over 4% in an extraordinary economic boom. But the achievement was not Bill Clinton’s. Seen properly, it was Gingrich and Congressional Republicans’.
Today, Republican leaders should explicitly remind Americans of this history, and point out to voters that they have a similar opportunity before them. Just as George H.W. Bush handed his predecessor an economy that was rapidly recovering from recession only to have it wrecked by a Democrat president tacking left, Donald Trump gave Biden the strongest economic recovery in history. As we know, Biden proceeded to quickly squander it.
Just as in 1994, however, the election of large Republican majorities in the House and Senate would produce an immediate change in the national morale and economic culture. Biden’s weak economy would begin turning around the day after the election. The results would be seen instantly. Coupled with a legislative agenda of strong pro-growth policies, a Republican Congress could go a long way toward saving the U.S. economy, creating jobs, and producing a rapid return to prosperity. And who knows—perhaps Biden would even have the sense to take a page out of Bill Clinton’s book, and race back to the political center to save his presidency, and the economy along with it.
Andrew Abbott is the pen name of a writer and public affairs consultant with over a decade of experience in DC at the intersection of politics and culture.