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Budget-debt deals from 1995 & 1997
Government show-downs of 1995 and 1997
In 1995, under the leadership of Speaker Gingrich and Senate Majority Leader Dole, the “Contract with American” pledged to cut spending and lower the rate of government spending. This lead to a fall, 1995 show down between the GOP Congress and President Clinton on the appropriations process and the debt limit increase. President Clinton vetoed appropriations bills because they cut too deeply or the rate of increase in spending was too low. The main political point made by the President were the cuts in Medicare part B premium and environmental programs. At the same time, the national debt limit needed to be increased. Congress held the debt limit legislation hostage. They threatened not to pass it until the President started signing the appropriations bill. Ultimately they passed a debt limit extension but added provisions for lower spending and a seven-year balanced budget plan. President Clinton vetoed the debt increase bill. The debt increase bill he vetoed was to extend borrowing authority through Dec. 12, 1995.
Treasury Sec. Rubin moved money from other funds to avert a borrowing crisis.
Ultimately, the Congress was able to come to an agreement on the debt and the government spending bills in late Jan. of 1996 lasting into March of 1996. Several government shut-downs occurred including furloughing employees within federal government agencies and departments. The final deal was agreed to in March to keep unfunded departments going and to raise the debt ceiling. The agreement allowed for a freezing of spending levels and a path to a seven year balanced budget plan.
In an effort to show the American public that the President was willing to move to the right, President Clinton said in his State of the Union address on Jan, 27 of 1996, “the era of big government is over.”
In the radio address from Jan. 27, 1996 during the major negotiations with the President on the debt, Sen. Judd Gregg (D-NH) said the following: “America has always offered the next generation more than the preceding generation. This is our tradition. Thus it is wrong—immoral, really—to be borrowing against our children’s future.”
In 1997, during the next debt show-down between Congress and the President, Speaker Gingrich and Senate Majority Leader Lott were the main players. This began in the spring of 1997 when the debt needed to be increased again. Because of the sore feelings from the last negotiating round in late 1995 and 1996, the leaders were very suspicious of President Clinton and his advisors. As a result, the members of Congress took extra care to write the legislative language that resulted from the deal. The deal was basically agreed upon in mid May, 1997. However, the legislative language wasn’t created and voted on until the summer of 1997 and ultimately signed into law in Aug. of 1997. The debt deal was almost unanimous with the Senate passing the debt increase by a vote of 92 to 8.
