Yet another budget betrayal.

• Author: Henwood, Doug
• Position: Federal budget for the 1997-98 fiscal period

During the great 1995 government shutdown, the Financial Times editorialized that "Mr. Clinton has at last hit on an effective strategy for taking on the Republicans over the budget. First, cede the most important principles to your opponents. And second, earn maximum political capital by battling in a principled manner over the details." It was deadly accurate then, and it applies equally to the balanced-budget deal that Clinton recently consummated with the Republican Congressional leadership. The Republicans can rightly claim to have achieved most of the fiscal promises in the Contract with America, while Clinton can claim to have protected some mainly symbolic programs. The budget deal will cut services to the poor and the middle class, and give a big tax break mainly to the rich--yet another chapter in the state-sponsored upward redistribution of income.

But those essential facts aren't the product of the May 1997 deal; they were established long ago. Despite the political and media fuss, the numbers published by the House Budget Committee look remarkably similar to those the President proposed in his own budget in February. Measured as a share of the Gross Domestic Product (GDP), most major budget categories show differences only in the hundredths of a percentage point. The big numbers--total revenues, total spending, and the deficit--in both documents are nearly identical. Both budgets would reach balance in 2002. Clinton proposed expenditures equal to 18.9 percent of GDP, with receipts at 19.0 percent; the budget deal proposes that both come in at 18.9 percent. If those numbers hold, then the U.S. government will have cut its share of GDP by more than 4 percentage points since 1985, the biggest peacetime shift in the history of reliable numbers.

Clinton was elected in 1992 in part on promises of public investment in America and its people. Unlike his Democratic predecessors Dukakis and Mondale, he said little about the deficit, and kept the hair shirt in the closet. But once he was elected he rejected expanded government spending in favor of budget-balancing. The only decent thing he did, in fiscal terms, was to raise taxes on the richest 1 percent of the population, something he subsequently apologized for. Though Clintonites blame the 1994 election for his austere turn, his budgets were tight from the first, and each has gotten successively tighter.

In a budget sent to Congress in early 1993, only months after his inauguration, Clinton proposed a deficit reduction totaling 2.5 percent of the GDP--with a revenue increase of 1 percent, and spending cuts of 1.5 percent. The budget proposed in early 1994 was even more austere. Federal investment--the centerpiece of his 1992 economic platform--would have fallen to the lowest level since 1950, measured as a share of GDP (the measure in all subsequent...