President Clinton raised the specter of the Great Depression on Saturday in labeling a proposed balanced budget amendment to the Constitution as “extreme fiscal policy” that could hurt the economy.
Republicans countered that Clinton should “call off the dogs” and work with them to win final congressional approval of the amendment in the Senate this week.
With a showdown vote set for Tuesday, supporters claim they have commitments for 64 votes, three shy of the 67 that would send the measure to the states for ratification.
Clinton used his weekly radio address to escalate his attacks on the proposal and then telephoned a handful of key senators, including some fence-sitters, to argue against it.
In his radio address, Clinton said the amendment would require Congress to draft “a drastic combination of cuts and tax hikes, and to cram them in by a date certain, no matter what the economic impacts might be” unless 60 percent of legislators voted to continue deficit spending.
Clinton argued that the amendment would be particularly dangerous in an economic downturn, because it would force tax increases or stiff cuts just when people need government help the most.
“That kind of extreme fiscal policy makes a small recession worse,” Clinton said. “In its most exaggerated form, it’s what helped turn the economic slowdown of the 1920s into the Great Depression of the 1930s.”
Likewise, Labor Secretary Robert Reich, appearing on CNN’s “Evans & Novak,” warned that a balanced budget amendment could curtail the government’s ability to cushion workers and families against the hardships of economic recession.
“You don’t want, in a recession, to have your hands tied behind your back and not be able to expand the economy to get out of the recession,” Reich said.
“You don’t want to limit unemployment benefits to people who may be losing their jobs because of recession,” he said. “The goal is long-term balance, not only of the budget but also of the economy as a whole.”
Clinton also argued that the amendment could take budgeting choices away from elected officials and give them to federal judges if the Congress failed to make needed cuts.
In the Republican response to Clinton’s address, Sen. Larry Craig of Idaho called the proposal “the last best hope for curbing Washington’s appetite for deficit spending and ending the hidden and dangerous practice of piling billions upon billions of dollars of debt on future generations.”
He urged the White House to stop fighting the proposal and “help us convince the last one or two Democrat senators we need to reach that magic 67 votes.”
“Mr. President, call off the dogs and let senators vote their consciences,” Craig said.