“For four years, we balanced the budget and paid off $405 billion in debt. We’ve done it before, we can do it again.”
-- Newt Gingrich, in a video announcing his campaign, May 11, 2011
“When I became speaker, the Congressional Budget Office projected $2.7 trillion in deficit over the next 10 years. Four years later, when I left the speakership, the Congressional Budget projected a $2.3 trillion surplus over the next 10 years.
We cut taxes to get to a balanced budget. We had the largest capital gains tax cut in history.”
-- Newt Gingrich during a meeting with employees of an insurance company in Des Moines, Iowa, Nov. 14, 2011
Nothing like harking back to the Clinton 1990s -- or the years following the Republican revolution, whichever you prefer -- to remind Americans of their nation’s potential. Back then, the economy was booming, the federal government stopped running deficits and just about everyone seemed to have a job.
No doubt those were good times, just as Gingrich describes them. But how much credit can he claim as former speaker of the House? And how accurate were the figures he cited? We looked back at the debt and budget numbers during his time as a Congressional leader to find out.
Gingrich served as speaker from January 1995 to January 1999, which means he helped influence the budgets for fiscal years 1996 through 1999. He can’t claim much credit -- if any at all -- for subsequent years.
During the first half of his speaker term, the federal government ran a combined deficit of $129 billion. It finished the second half with two consecutive surpluses totalling $195 billion. Overall, Gingrich helped balance the budget for two years (not four), producing a net surplus of $66 billion.
The government ran two additional surpluses in 2000 and 2001, but Gingrich had left Congress by then. He shouldn’t claim credit for those years.
Gingrich hit the target with his claims about turning a projected 10-year deficit of $2.7 trillion into a projected 10-year surplus of $2.3 trillion. The numbers vary slightly depending on which budget outlook you use from the Congressional Budget Office (the agency publishes updates throughout the year, and the estimates change a bit), but he still got it right.
We should mention that the federal government began weening itself off chronic deficits before Gingrich became speaker. The reverse began in 1993, as The Fact Checker has pointed out in previous article that touched on the economic growth of the mid- to late-90s.
The budget surpluses resulted from spending cuts and an explosion of the economy--in particular, the stunning rise in the value of technology stocks (capital gains revenue soared for the Treasury). But President Clinton had just as much to do with the policies and prosperity of that era as any other politician from the upper echelons of power. While it is true that the Gingrich-led Republicans pushed him to consider a balanced budget, it was Clinton’s tax-increase in 1993 (which Gingrich opposed) set the stage for the bounty of revenue that followed.
Other economic factors, like lower energy prices and the lack of a major war, had little to do with the government budget decisions.
As for Gingrich’s debt-reduction claims, we covered that topic back when he announced his candidacy. Our math -- based on White House historical tables -- showed that gross debt rose by $700 billion during his time as speaker. Publicly held debt fell $450 billion during the surplus years, but, once again, Gingrich wasn’t in office for much of that time.
We cross-checked our White House numbers with data from the U.S. Treasury to make sure our previous conclusion was right. It was.
The Treasury numbers show that total public debt stood at $4.5 trillion the day Gingrich became speaker, and it jumped to $5.7 trillion by the time he left office. That’s an increase of $600 billion after adjusting for inflation.
Overall, the national debt rose between 13 and 16 percent after adjusting for inflation. Gingrich spoke inaccurately by suggesting that he helped reduce the amount.
Regarding the capital-gains tax cuts Gingrich referenced, he’s right that they represented a historic reduction. The Taxpayer Relief Act of 1997 lowered the capital-gains tax rate by 10 percent for the top bracket, and by seven percent for the lowest.
Not even the Bush tax cuts lowered rates that much -- they dropped the capital-gains rate by five percent for the highest bracket and three percent for the lowest.
THE PINOCCHIO TEST
Gingrich spoke accurately about the federal government turning deficits into surpluses, but he exaggerated his involvement, taking credit for years in which he was no longer serving in public office.
In terms of debt, the numbers increased during Gingrich’s time in office, so he’s wrong about the reduction.
The former speaker redeemed himself a bit with his comments about the tax cuts, but his overall remarks warrant three Pinocchios.
Check out our candidate Pinocchio Tracker