Posts Tagged ‘deficit reduction’

Advice for Ed: Bill Clinton’s lessons for Ed Miliband

29/09/2012, 01:00:43 PM

by David Talbot

There are many legacies of the Bill Clinton presidency, not all of them, admittedly, particularly advisable, but two should influence Ed Miliband most of all as he strides across the platform in Manchester to deliver his third speech as Labour leader.

Turning the clocks back 19 years, a newly-elected Bill Clinton already faced the most daunting task of his fledging presidency. He had ridden a wave of optimism, with a degree of luck, to easily defeat rival Democrats for the nomination and sweep George H. W. Bush from the White House with consummate ease. But his campaign pledge of “fighting for the forgotten middle class” with tax cuts, investment in education and a new health care plan was immediately in danger upon his inauguration with the realisation that the deficit had to be attacked in order to ensure the long-term health of the economy.

The president was faced with the unenviable situation of being forced into delivering economic pain now so that growth could return years later – just in time for his successors. The first few months of the administration was a fight for the mind of the president as to which strategy to honour.

It was the most important legislative issue of the Clinton presidency. Clinton chose a budget of tax rises, spending cuts and a clear commitment of rein in the deficit. It cleared Congress by two votes and the Senate by a single vote. Enactment of the legislation was viewed at the White House as essential to Clinton’s ultimate success as president.

Seven years later, 21 million jobs and the longest economic expansion in US history, it is fair to say Clinton got it right. The US enjoyed its first budget surplus in nearly 30 years as incomes rose on successive years. It was, though, painful. The president broke a direct campaign pledge and personally paid a heavy price on his political conscience.

The similarity with Clinton in 1993 and Miliband in 2012 are stark. Just as then, the economy is a mess. Unemployment is rising; the deficit is enormous, personal debt frighteningly high, the property market in freefall. The economy is going to be central to the struggle for Downing Street in 2015, just as it was for Clinton’s White House bid in 1992.

The first legacy Miliband should take from this past president is one of fiscal responsibility – that of appealing to those voters who consider themselves conservative on debt and deficit issues. At this present time, whether the Labour party likes it or not, that means three quarters of the British public. The second is that it may be appropriate to break campaign promises, or to go directly against the ideological grain of a party’s thought, because of changing political circumstances.

The villains in the Clinton struggle for his 1993 budget were militant Republicans and in particular Senator Bob Dole and Speaker of the House Newt Gringrich. The US people never forgot their intransigence, including the shutting down of the federal government  in 1995, and duly gave Dole a kicking in the 1996 presidential election and rewarded Gringrich with a mere 14% of the vote in the Republican primaries some seventeen years later.

The Labour leader needs to at long last detail a clear line on the deficit in his conference speech. The early days that ushered in the New Year where Miliband, with his Shadow Chancellor Ed Balls, sketched out a position of fiscal realism seem worryingly long ago.

Miliband has a choice. He can continue the fantasy that a new Labour government would return to the spending levels seen in the boom of the 2000s. Or he can accept, as Clinton did, the political and economic reality in which he now operates in.

Clinton didn’t become president to cut the deficit; but he realised it was a means to an end to achieve the political ambitions he held for himself, his party and his country.

David Talbot is a political consultant

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