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The Washington establishment believes that the government shutdown of 1995 was a disastrous mistake that accomplished little and cost House Republicans politically.
The facts are exactly the opposite.
While the shutdown produced some short-term pain, it set the stage for a budget deal in 1996 that led to the largest drop in federal discretionary spending since 1969. The discipline imposed by this budget-overall spending grew at an average of 2.9 percent a year while I was speaker of the House, the slowest rate in decades-allowed us to reach a balanced-budget deal in 1997.
This would all have been impossible had Republicans not stood firm in 1995 and shown the American people (and the White House) that we were serious about reducing spending.
This historic success was not an achievement of the Clinton administration. In the summer of 1995, administration officials publicly expressed doubt that our aggressive timeline for a balanced budget was even possible. Instead, the balanced budget was an outcome driven by House Republicans with limited support from skeptical Senate Republicans.
How did it happen?
In the spring of 1995, House Republicans passed a constitutional amendment requiring a balanced budget. Seventy-two Democrats joined us, giving us the required two-thirds majority to amend the Constitution. Unfortunately, the Senate failed to reach this threshold by one vote.
At a three-hour leadership dinner shortly thereafter, House Republicans, including Texas’s Bill Archer of the Ways and Means Committee, Louisiana’s Bob Livingston of the Appropriations Committee and, most important, Ohio’s John Kasich of the Budget Committee, agreed that we were at a crossroads.
A typical group of politicians would have decided that we had technically kept our word in the Contract With America by holding the vote on the balanced-budget amendment, so it was now okay to revert to politics-as-usual and continue deficit spending.
But we weren’t interested in procedural success. We were elected to deliver results. So the House Republican leadership decided that we would voluntarily balance the budget, even without an amendment.
Our constitutional amendment would have set a seven-year deadline to balance the budget. We adopted the same timetable and created a plan that would end deficit spending by 2002. As we developed the reforms and spending cuts, Sen. Connie Mack (R-Fla.) and Rep. John Porter (R-Ill.) encouraged us to be smart rather than cheap. We realized that cutting spending in areas that produce long-term savings was destructive to the goal of a sustainable balanced budget. That is why, in the midst of a broad array of reductions and reforms, we doubled the budget for the National Institutes of Health and increased defense and intelligence funding.
The crisis came late in 1995, when the Clinton White House and Senate Democrats set out to test our seriousness. They made a calculated, cynical decision to use the threat of a presidential veto-which would close the government-to insist that we drop our balanced budget.
This point deserves reiteration. It was President Bill Clinton’s veto of our budget in December 1995 that closed the government. The White House knew that it could use the power of the presidency and the support of liberal media to blame us.
So, we faced a choice. We could cave in and be accepted by the Washington establishment, or we could stand firm for a balanced budget for the American people.
We decided to stick to our principles through a very contentious and difficult period. Our attempt to balance the federal budget was distorted in the news media as an effort to ruin family vacations, frustrate visitors to the nation’s capital and prevent government employees from going to work. For the Republican leadership, the effort to hold together the House and Senate caucuses while negotiating with the White House became extraordinarily exhausting.
Nonetheless, the ultimate result was the first four consecutive balanced budgets since the 1920s, paying off more than $450 billion in federal debt. We also overhauled welfare-the most successful and popular entitlement reform of our lifetime-strengthened Medicare and enacted the first tax cut in 16 years. It was this tax cut that boosted economic growth and allowed us to balance the budget four years earlier than projected. During my years as speaker, more than 8.4 million new jobs were created, reducing the national unemployment rate from 5.6 percent to 4.3 percent.
Those who claim that the shutdown was politically disastrous for Republicans ignore the fact that our House seat losses in 1996 were in the single digits. Moreover, it was the first time in 68 years that Republicans were reelected to a House majority-and the first time that had ever happened with a Democrat winning the presidency.
Neither these historic achievements nor this historic win would have been possible had Republicans not stood firm and showed the country that we were serious about keeping our commitments.
The lesson for today’s House Republicans is simple: Work to keep the government open, unless it requires breaking your word to the American people and giving up your principles. Becoming one more promise-breaking, Washington-dominated, sellout group is a much worse fate-politically and ethically-than having the government close for a few days.
House Republicans should give President Obama the opportunity to sign significant spending reductions and keep the government open, or to veto their cuts and close the government. Similarly, they should give Senate Democrats a chance to accept real spending reductions or make clear that it is their stubborn liberalism that is closing the government.
Another shutdown of the federal government is not an ideal result, but for House Republicans, breaking their word would be far worse.
Newt Gingrich is a senior fellow at AEI.
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