Gingrich Campaign Press Release - Amity Shlaes: Republicans Should "Pull a Newt" for Deficit Cuts

Amity Shlaes, author of The Forgotten Man, says "a little more Newt" would have achieved a better debt ceiling deal:

Thank goodness for Mitch McConnell. Thank goodness Republicans in Congress didn't "pull a Newt." Welcome, Clinton Era II.

That's the conventional wisdom about the budget deal reached July 31...If the Tea Party leaders, sons of Newt, keep quiet, we may even move into a balmy period of growth and narrowing deficits, just like during the late 1990s, the thinking goes. This attitude is reinforced by McConnell's loudsuggestion that Gingrich's intransigence damaged the Republican "brand."

Gingrich recently said that McConnell represented a "Washington version of reality that's just not true." And he's right. The conventional wisdom is contrived. The debt-limit deal, which will cut more than $2 trillion in spending over the next decade, is impressive. However, a little more Newt would have got the bond market something it would like even better: a tougher and more enduring commitment from U.S. leaders to reduce our debt and deficits.

Consider what actually happened in the 1990s to Gingrich, theRepublican Party and the budget deficit. He became speaker in 1995 brandishing the "Contract with America," which promised to amend the Constitution to require a balanced budget. Rather than give in to a weak budget proposal, Gingrich forced a government shutdown not once, but two years in a row.

In the short term, Americans didn't approve. CNN polls in July 1995 showed that 44 percent of Americans said Republicans were doing a better job of handling the budget than Democrats were. By Nov. 15 of that year, with the first shutdown underway, respondents had flipped, with 49 percent of Americans approving more of the Democrats' approach and 33 percent preferring the Republican way.

But evidence that the shutdowns did longer-term damage to Gingrich, the party or the country is scant. Gingrich achieved much after the shutdowns, including negotiating welfare reform and some of the budget deals that led to the federal surplus a few years later.

Those who criticize Gingrich's tactics in budget negotiations are forgetting the big story. President Clinton didn't come into office as an austerity champion. He came to Washington to rearrange health care and promulgate Labor Party-style workplace reforms. Had Gingrich and the Republicans not been there, and had Democrats ruled both Houses, Clinton would have heeded deficit doves such as Labor Secretary Robert Reich and adopted a gentler plan for balancing the budget. Reich repeatedly criticized Clinton for "caving" on the deficit.

But thanks to Gingrich and others — especially the House Ways and Means Committee chairman, Bill Archer — Republicans were able to win an agreement from the White House and Democratic legislators to overhaul welfare. The budget-reducing regime that Clinton and Gingrich had agreed to narrowed the deficit each year. Eventually, Archer even got Clinton to cut the capital-gains tax. Government analysts expected the deficit to shrink, but not as much or as steadily as it did.

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Now, after a few weeks' vacation, what everyone — the bond market, the Chinese government, the credit-rating firms – will look for from Washington is a signal that the U.S. will commit to a long-term reduction in deficit and debt and introduce a proposal even more rigorous than the agreement reached Sunday night.

A plan to do so might include a balanced-budget amendment of the sort written into the Contract with America. It may involve a new monetary law that gives the Federal Reserve less discretion in setting interest rates. It certainly should begin with a reform of Social Security. President Barack Obama's own record, whether campaigning or promulgating his health-care policy, suggests that he, like Clinton, isn't temperamentally inclined to go along with such ideas without mega-pressure from the opposing party.

Senator McConnell and House Speaker John Boehner won't be able to apply that pressure without the help of that rash group, so capable of "pulling a Newt," called the Tea Party.

Read the full article here.