Hillary Clinton and other liberals talk a lot about the surplus when Bill was President. They use it as an example that there would be surpluses if Hillary were President. There is one problem with that ‘example.’ It never happened. The Clinton Surplus is a myth.
Time and time again, anyone reading the mainstream news or reading articles on the Internet will read the claim that President Clinton not only balanced the budget but had a surplus.
The following is from the site of Craig Steiner, who has laid out the information very clearly.
The claim is generally made that Clinton had a surplus of $69 billion in FY1998, $123 billion in FY1999 and $230 billion in FY2000. In that same link, Clinton claimed that the national debt had been reduced by $360 billion in the last three years, presumably FY1998, FY1999, and FY2000–though, interestingly, $360 billion is not the sum of the alleged surpluses of the three years in question ($69B + $123B + $230B = $422B, not $360B).
While not defending the increase of the federal debt under President Bush, it’s curious to see Clinton’s record promoted as having generated a surplus. It never happened. There was never a surplus and the facts support that position. In fact, far from a $360 billion reduction in the national debt in FY1998-FY2000, there was an increase of $281 billion.
Verifying this is as simple as accessing the U.S. Treasury (see note about this link below) website where the national debt is updated daily and a history of the debt since January 1993 can be obtained. Considering the government’s fiscal year ends on the last day of September each year, and considering Clinton’s budget proposal in 1993 took effect in October 1993 and concluded September 1994 (FY1994), here’s the national debt at the end of each year of Clinton Budgets:
|FY1994||09/30/1994||$4.692749 trillion||$281.26 billion|
|FY1995||09/29/1995||$4.973982 trillion||$281.23 billion|
|FY1996||09/30/1996||$5.224810 trillion||$250.83 billion|
|FY1997||09/30/1997||$5.413146 trillion||$188.34 billion|
|FY1998||09/30/1998||$5.526193 trillion||$113.05 billion|
|FY1999||09/30/1999||$5.656270 trillion||$130.08 billion|
|FY2000||09/29/2000||$5.674178 trillion||$17.91 billion|
|FY2001||09/28/2001||$5.807463 trillion||$133.29 billion|
As can clearly be seen, in no year did the national debt go down, nor did Clinton leave President Bush with a surplus that Bush subsequently turned into a deficit. Yes, the deficit was almost eliminated in FY2000 (ending in September 2000 with a deficit of “only” $17.9 billion), but it never reached zero–let alone a positive surplus number. And Clinton’s last budget proposal for FY2001, which ended in September 2001, generated a $133.29 billion deficit. The growing deficits started in the year of the last Clinton budget, not in the first year of the Bush administration.
Keep in mind that President Bush took office in January 2001 and his first budget took effect October 1, 2001, for the year ending September 30, 2002 (FY2002). So the $133.29 billion deficit in the year ending September 2001 was Clinton’s. Granted, Bush supported a tax refund where taxpayers received checks in 2001. However, the total amount refunded to taxpayers was only $38 billion . So even if we assume that $38 billion of the FY2001 deficit was due to Bush’s tax refunds which were not part of Clinton’s last budget, that still means that Clinton’s last budget produced a deficit of 133.29 – 38 = $95.29 billion.
Clinton clearly did not achieve a surplus and he didn’t leave President Bush with a surplus.
So why do they say he had a surplus?
As is usually the case in claims such as this, it has to do with Washington doublespeak and political smoke and mirrors.
Understanding what happened requires understanding two concepts of what makes up the national debt. The national debt is made up of public debt and intragovernmental holdings. The public debt is debt held by the public, normally including things such as treasury bills, savings bonds, and other instruments the public can purchase from the government. Intragovernmental holdings, on the other hand, is when the government borrows money from itself–mostly borrowing money from social security.
Looking at the makeup of the national debt and the claimed surpluses for the last 4 Clinton fiscal years, we have the following table:
|FY1998||09/30/1998||$69.2B||$3.733864T $55.8B||$1.792328T $168.9B||$5.526193T $113B|
|FY1999||09/30/1999||$122.7B||$3.636104T $97.8B||$2.020166T $227.8B||$5.656270T $130.1B|
|FY2000||09/29/2000||$230.0B||$3.405303T $230.8B||$2.268874T $248.7B||$5.674178T $17.9B|
|FY2001||09/28/2001||$3.339310T $66.0B||$2.468153T $199.3B||$5.807463T $133.3B|
Notice that while the public debt went down in each of those four years, the intragovernmental holdings went up each year by a far greater amount–and, in turn, the total national debt (which is public debt + intragovernmental holdings) went up. Therein lies the discrepancy.
When it is claimed that Clinton paid down the national debt, that is patently false–as can be seen, the national debt went up every single year. What Clinton did do was pay down the public debt–notice that the claimed surplus is relatively close to the decrease in the public debt for those years. But he paid down the public debt by borrowing far more money in the form of intragovernmental holdings (mostly Social Security).
So, when someone tells you that Clinton paid down the national debt, or had a surplus during his term, you can now give them the facts. That never happened.