Advancing a Free Society

Why the Clinton ‘95 strategy might not work this time

Monday, April 11, 2011

In 1995 a new Republican House and Senate majority passed two bills. The first slowed the growth of government spending and balanced the budget. The second cut taxes. Because Medicare and Medicaid spending accounted for much of projected future spending growth, most of the savings in the Balanced Budget Act of 1995 came from Medicare and Medicaid.

President Clinton vetoed both bills. In 1995 and 1996 he had two fiscal messages:

  1. 1995: “Republicans are cutting Medicare and Medicaid to pay for tax cuts for the rich.”
  2. 1996: “Medicare, Medicaid, Education, and the Environment.”

The second was colloquially known as “M2E2.” Both strategies were effective.

It is not yet clear that there is a revival of or a successor to M2E2, in part because the President has been emphasizing so many different government spending priorities. He may, however, be preparing to return to the 1995 Clinton message.

On Fox News Sunday today, Presidential senior advisor David Plouffe said the President would offer a new budget proposal this week. He said the President would propose additional savings from Medicare and Medicaid. He signaled that the President was open to changes in Social Security, but said nothing about a new Presidential proposal in that area.

The President is obviously moving right (his team would probably say “to the center”) in reaction to last year’s election, recent Republican success in the appropriations negotiations, and the new Ryan budget. The President is setting himself up for the possibility of a negotiated fiscal deal with Congressional Republicans, and is also trying to position himself rhetorically for the 2012 election if there is no deal.

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