Newt Gingrich - Debt, Deficit, Spending, and the Size of Government
Last Updated: Dec 13, 2011
Summary
Congressman Gingrich is perhaps best known for his role as Speaker of the House in balancing the budget in the late 1990's. When he became Minority Leader in the House, Congressman Gingrich put forth a plan known as the Contract with America that had as it's cornerstone the promise to balance the budget of the United States. The Republicans took control of both chambers of Congress in 1994 based partly on this list of pledges. The Republicans were not successful in passing an amendment to force a balanced budget and an attached measure to provide a line item veto was ruled unconstitutional.
However, the House Republicans led by Speaker Gingrich drastically lowered the deficit each of the next few years and achieved a surplus of funds in 1998. This surplus continued to grow in 2000 even though Speaker Gingrich resigned from the House in January of 1999. In 2001, the surplus was lower than 2000 and by 2001 the country again had a deficit which has grown each subsequent year.
Since leaving office, Congressman Gingrich has been vocal in his desire to see the federal budget balanced again, and the threat that such a deficit and debt are to the US. In 2006, he wrote an article noting that balancing the budget was one of the eleven things that he believed should be pursued politically. A balanced budget was one of those items.
In 2010, he called the Congressional Democrats deficit peacocks as compared to deficit hawks and stated that they spoke often about the need to balanced the budget, but they did little beyond show. He also referred to government as the fourth economic bubble with tech companies, the housing market, and the stock market as the other three bubbles. He stated that the size of the government would eventually swamp the rest of the economy and it would be forced to return to it's normal level. That same year he compared the state of the US economy and government size to that of countries in Europe that were experiencing economic crises. He noted that the US was not immune to these realities.
As part of his 2010 Presidential bid, Congressman Gingrich has touted his previous experience in balancing the budget. He has also listed the promise of fiscal responsibility as one of his key items for economic success. He has signed the cut, cap, and balance pledge.
Contract With America
The Contract with America was a document released by the United States Republican Party during the 1994 Congressional election campaign. The contract was introduced roughly 6 weeks before the 1994 election. The Republicans promised to introduce 10 pieces of legislation after assuming control of Congress. One of those bills was the Fiscal Responsibility Act and would have introduced a balanced budget amendment. The amendment would have required a 3/5 majority in each chamber of Congress. Congressman Gingrich participated in the drafting of the contract and pursued implementing it's provisions once Speaker of the House.
Budget as Speaker
Congressman Gingrich was in office from January 1979 to January 1999. He was speaker of the House from January of 1995 to January of 1999. He therefore had control over the budget for those years. In 1996 the budget deficit was significantly reduced from previous years. The next year, the deficit was again lowered significantly. The budgets for 1998 and 1999 spent less money than they took in, allowing a portion of the national debt to be paid off. This trend was continued after Speaker Gingrich left office in 1999, with the budgets for 2000 and 2001 still producing a pay down to the debt.
The American Eleven
In September of 2006, Congressman Gingrich released an article through the Human Events website noting eleven topics that he would pursue. One of those items was a balanced budget.
Control Spending and Balance the Budget. The House should pass new budget legislation to control spending, leading to a balanced budget in seven years (the length of time we gave ourselves in the Contract with America and which led to the first four balanced budgets since the 1920s), with special focus on programs liberals will fight to increase spending. Let the country see who is really committed to smaller government with lower taxes and who is committed to bigger government with higher taxes.
Deficit Hawks
In February of 2010, Congressman Gingrich wrote an article for Human Events comparing the current deficit to rhetoric put forth by those in charge of the budget.
Deficit Hawks vs. Deficit Peacocks: Fiscal Conservatism vs. Liberal Rhetoric by Newt Gingrich
02/03/2010 It’s not often that I quote the liberal Center for American Progress, but they’ve come up with a term for the Washington liberals posing as budget cutters that is perfect: Deficit peacocks.
As opposed to deficit hawks who are the real fiscal conservatives, deficit peacocks strut around pretending to cut spending through gimmicks like spending freezes that are “freezes” only in the sense that they “freeze” into place previous frenzied spending binges (check out this clever video to see the “freeze” in action).
By pretending to be budget cutters, deficit peacocks engage in an old liberal trick. They promise future spending cuts while approving massive current spending. Then, later, they demand tax increases to pay for all that spending.
Today, deficit peacocks are strutting all over Washington. House Speaker Nancy Pelosi (D-Calif.), Senate Majority Leader Harry Reid (D-Nev.) and President Obama could all cut spending if they wanted to, they just don’t want to.
They’d rather pretend and try to fool the American people. They say, “Wait for the spending cuts.”
I say, “Watch your wallet America.”
By 2020, the National Debt Will Triple Since the Last Republican Budget
There is no small amount of irony in the record $3.8 trillion budget Washington Democrats are proposing for next year -- including a record $1.6 trillion in deficit spending.
Americans fired Republicans in 2006 for their lack of fiscal discipline. Disgusted with congressional spending on bridges to nowhere and other pet projects, voters gave Democrats the majority in Congress.
And look what we got for it.
The last budget produced by congressional Republicans was in 2007. That year, the deficit was approximately $160 billion.
The next year, under the Pelosi-Reid Democratic Congress, the deficit shot up to $458 billion. The next year, in 2009, it was a mind-boggling $1.4 trillion.
In this new budget, of course, the Obama Administration proposes to spend $1.6 trillion more than we have.
(click here to see a full slideshow from the House Republicans Budget Committee)
Since they took over Congress, Democrats have increased non-defense spending by a dizzying $1.4 trillion.
Under their budget, the national debt will almost triple by 2020.
Obama Wants to Cut 1.8% of Deficit. Reagan Requested Cutting Almost 20%
Americans understand that these aren’t just stunningly large numbers on a graph. We understand that government spending this grotesque -- and the tax increases that inevitably accompany such spending -- kills jobs. It is precisely what we don’t need right now.
Tomorrow in Irvine, Calif., American Solutions will host a jobs summit to meet with small business leaders to consider a very different plan, one that will feature job creation solutions that will put Americans back to work. For more information, go to www.AmericanSolutions.com.
Meanwhile, don’t be fooled by the newfound rhetoric of fiscal conservatism coming from President Obama and Washington Democrats.
The President announced with much fanfare that he has identified about $23 billion in spending cuts for 2011. But even if all these cuts were enacted, they would amount to only 1.8 percent of the expected $1.3 trillion budget deficit for next year.
In stark contrast, when President Ronald Reagan came into office, he called for spending cuts that totaled almost 20 percent -- or one-fifth -- of the 1981 budget deficit.
But then again, Ronald Reagan was a deficit hawk. The Democrats in charge of Washington today seem content to be deficit peacocks.
We Kept Our Promise in the Contract to Balance the Budget
In his statement accompanying his budget, President Obama made this offer:
“In order to meet this challenge, I welcome any idea, from Democrats and Republicans … It's time to hold Washington to the same standards families and businesses hold themselves. It's time to save what we can, spend what we must, and live within our means once again.”
I accept the offer to meet this challenge. When I was Speaker, we kept our promise in the Contract With America to balance the budget. We balanced the budget for four consecutive years for the first time since the 1920s. And we did it while paying off $405 billion in federal debt, lowering taxes, and increasing defense, intelligence and scientific research funding.
It can be done, Mr. President. We don’t have to mortgage our children’s future to pay for our present.
The truth is our kids can’t afford anymore deficit peacocks. For concrete ideas on how to be a deficit hawk, go to www.AmericanSolutions.com
From New Deal to Bad Deal
On April 14, 2010 Congressman Gingrich wrote an article stating that government was the fourth bubble.
FROM NEW DEAL TO BAD DEAL: GOVERNMENT AS THE FOURTH BUBBLE
by Newt Gingrich
The next few days offer an appropriate time to reassess government as something we, in effect, purchase through our taxes.
April 15th is an obvious date because it is the annual day when income taxes are due.
April 18th is equally important because it will be the 235th anniversary of American militia firing “the shot heard round the world” when they stood up to British professional soldiers at Concord and Lexington and drove them back into Boston.
On April 18, 1775, Americans began what would turn into an 8-year conflict with the most powerful empire in the world. The arrogance and high handedness of the British bureaucrats and judges had finally driven the Americans to stand and fight for their liberty. (New Hampshire’s state slogan, “Live Free or Die” comes from this experience).
The Americans’ biggest demand was “no taxation without representation.” Their second biggest demand was to curb the power of arrogant imperial judges.
The American Revolution, the Declaration of Independence and the Constitution, which grew out of that experience, give each of us the right to question those to whom we loan power and to assess how they are spending our money and whether they really represent us.
What Do Americans Get For Their Tax Dollars?
Over the last 78 years, Americans have gone from getting a New Deal to a Bad Deal from government.
Many conservatives, including Amity Shlaes in The Forgotten Man and Burt and Anita Folsom Monday in the Wall Street Journal, have shown how the New Deal was never a good deal for America, even if it was popular at the time.
Today, however, the vast majority of Americans recognize that government is too expensive and too ineffective.
This transition to a bad deal is not just at the federal level and in many ways has nothing to do with President Obama or his administration.
We have been in a long cycle of government employee unions, bureaucracies, and politicians building systems that are more and more expensive, more and more inflexible and more and more incapable of meeting the challenges of the modern world. This process has affected Europe and Japan as well as America.
Its final, collapsing phase is being signaled by the Greek debt crisis, the Japanese 21 year cycle of deflation and slow growth and the financial crises in many of our state capitals, of which Sacramento and Albany are the biggest examples.
The Obama-Pelosi-Reid Secular-Socialist Machine is making the bubble problem bigger and more dangerous, but this is simply the last phase of a long process of unionization, bureaucratization and steadily rising costs of government.
Government as the Fourth Bubble
Today government has become the fourth recent bubble.
The first three bubbles were information technology in 1999, housing in 2007 and Wall Street in 2008.
Looking back everyone wonders why we didn’t see those three bubbles coming.
The failure to anticipate them and to take appropriate, corrective steps before it was too late has caused enormous pain in the American economy and for the American people.
This fourth bubble is even bigger and more dangerous. If we don’t get state, federal and local spending under control we will have a wave of crises that will shatter our economy with higher interest rates and a series of state and local defaults.
The federal government will be pushed into inflation (printing paper to get rid of the debt by devaluing it and cheating every person holding American assets), draconian spending cuts or draconian taxes.
I am totally opposed to higher taxes. Higher taxes will crush the American economy and guarantee that China and India will be the dominant economies by 2050.
It is no accident that Jaguar is now an Indian company and Volvo is becoming a Chinese company.
The Western democracies (and Japan) have been steadily strangling themselves with more and more government, more and more red tape, higher and higher taxes.
The drumbeat has begun to force even higher taxes on Americans. The political class refuses to solve the government’s spending problem and prefers to take the money away from citizens.
Yet that is exactly the wrong answer.
When we balanced the budget in the 1990s, we did it with strong controls on spending, real reform of welfare and Medicare, and tax cuts to increase economic growth.
The work we are doing at American Solutions and the Center for Health Transformation seeks solutions which allow us to bring spending under control and reduce the debt before there is a crisis.
This week, every citizen should begin to demand that our elected officials begin downsizing government and reducing the bubble before the crisis occurs.
Every citizen should demand that new contracts with the government employee unions increase flexibility, adaptability and efficiency and reduce the cost of government.
Every citizen should insist that government take steps to eliminate corruption, fraud and theft (which accounts well over $100 billion a year in federal spending alone).
There is no better time to demand action from our elected officials than the week taxes come due.
Denver Post Article
On May 30, 2011 Congressman Gingrich published an article in the Denver Post that was replicated on his campaign website. The article described the need for a balanced budget.
Mandate for a balanced budget
By Newt Gingrich and U.S. Rep. Mike Coffman POSTED: 05/30/2010 01:00:00 AM MDT
The crisis of budgeting in Greece, California, New York and New Jersey are warning signs of the coming crisis of government in Washington, D.C.
A responsible government does not spend any more on necessary government than it collects through a taxation system that maximizes economic growth, jobs, wages, family income and overall prosperity for working people. In Washington today, irresponsible leaders are putting our nation's future in jeopardy by borrowing trillions of dollars more than it can collect in taxes to pay for unnecessary government and in the process making changes to our taxation system that distort economic growth, kill jobs, and make our fiscal outlook even bleaker.
Our national debt is more than $12 trillion, having doubled in the past eight years. The Obama administration's 10-year budget forecast predicts the national debt will triple to $17.5 trillion by 2019. When Medicare and Social Security spending are included, the debt is closer to $65 trillion.
If these numbers do not improve in the next 15 years, the national debt will exceed 100 percent of gross domestic product (GDP), meaning the federal government will owe more than the entire value of the American economy. No nation can endure such reckless spending. So what to do?
An essential first step is that candidates for Congress in 2010 commit to balancing the federal budget by 2015 without raising taxes. Balancing the federal budget is not a wild-eyed dream. It can be done. We know because we balanced the budget in the 1990s for four straight years without raising taxes.
It begins with electing representatives who are committed to the principle of balanced budgets. We held spending at an annual increase of 2.9 percent from 1996-99 (the lowest since the 1920s), and the result was balanced budgets for four years in a row beginning in 1998, where the Treasury paid off $405 billion in debt, 14.3 million new jobs were created, charitable giving increased, and welfare reform led to falling child poverty rates and 2.5 million families leaving the welfare rolls.
The key to achieving these balanced budgets in 1990s was adhering to the principle that the budget would be balanced through spending reductions, government reforms, and the adoption of incentives that reward work, savings and investment — all without raising taxes. We can balance the budget again today if we adhere to the same principle.
We got to our current fiscal predicament because of too much spending; we will start to get out of the problem by cutting spending. We need a spending commission, not the deficit commission the president created. The White House Deficit Commission should therefore rule out any tax increases and focus solely on spending cuts. The focus should be on replacing, not just reforming, failed institutions.
We also need to reward work and savings and investment, which will create new wealth and new jobs. But the first step is for candidates to commit to a balanced budget and for voters to support such a commitment.
Judging by the failure of this Congress to even prepare a budget, a commitment to a balanced budget is only going to grow large enough to have an impact in the context of an election campaign.
A constitutional amendment to require a balanced budget is just the reform that can concentrate the minds of voters and rally them in favor of an effort to balanced budgets. We are encouraged that Democrats and Republicans are committing to support H.J. Res 1, the Balanced Budget Amendment.
Balanced budgets, declining federal debt, lower taxes, low interest rates, and government reform is a recipe for prosperity. It's not a secret. This is what we did to achieve prosperity in the 1990s. We can do it again.
Woodford Times Interview
On May 11, 2011 Congressman Gingrich was interviewed by the Woodford Times and asked about his qualifications. He noted that he has a history of balancing the budget as House Speaker.
How are you differentiated from the rest of the GOP pack possibly going after the nomination?
I am the only candidate who can point to a real record of results on a national level: balancing the federal budget which remained balanced for four years; paying off over $400 billion in debt; welfare reform; the first tax cuts in 16 years; increasing funding for defense and our intelligence community; and lowering the capital gains tax.
Cut, Cap, Balance Pledge
In June of 2011, Congressman Gingrich signed the cut, cap, and balance pledge. While doing so, he pledged to reign in government spending and push for a balanced budget.
Atlanta, GA – Newt Gingrich signed the Cut, Cap and Balance pledge today strengthening his over thirty year commitment to fiscal discipline.
"Balanced budgets are achieved by those who are committed," said Gingrich, who passed the first balanced budget in a generation as U.S. House Speaker. "Fiscal discipline requires lawmakers to be smart not cheap and requires a different type of thinking than we see in Washington. I am proposing bold solutions because we have big problems. I pledge to be a President who will rein in deficits, the debt and out of control spending. It can be done, I know because we've done it before."
The Cut, Cap and Balance pledge was a created by a coalition of over 40 conservative grassroots organizations who are calling on elected officials to support spending cuts and balancing the federal budget.
The pledge reads:
I pledge to urge my Senators and Member of the House of Representatives to oppose any debt limit increase unless all three of the following conditions have been met:
1. Cut - Substantial cuts in spending that will reduce the deficit next year and thereafter.
2. Cap - Enforceable spending caps that will put federal spending on a path to a balanced budget.
3. Balance - Congressional passage of a Balanced Budget Amendment to the U.S. Constitution -- but only if it includes both a spending limitation and a super-majority for raising taxes, in addition to balancing revenues and expenses.
Gingrich was the first presidential candidate to propose a jobs plan which includes balancing the federal budget, bold tax cuts and development of an American energy plan. Combined with significant repeal of Obama era regulation the plan will eliminate the budget deficit and help pay down the national debt.
In June, Gingrich was the first presidential candidate to sign Save America Now's pledge which calls on lawmakers to utilize the Lean Six Sigma fiscal waste reduction method developed by Reagan Administration official Mike George.
Iowa Debate
In August of 2011, Congressman Gingrich participated in the Republican debate in Ames, Iowa. He stated that he opposed the debt commision and that cuts should be made across the board.
BAIER: Mr. Speaker, why are you shaking your head?
GINGRICH: I -- I think this...
BAIER: Is that not an important question?
GINGRICH: Look, I think this super committee is about as dumb an idea as Washington has come up with in my lifetime. (APPLAUSE)
GINGRICH: I mean if you look (ph) for a second, I mean I used to run the House of Representatives. I have some general notion of these things. The idea that 523 senators and congressmen are going to sit around for four months while 12 brilliant people, mostly picked for political reasons, are going to sit in some room and brilliantly come up with a trillion dollars or force us to choose between gutting our military and accepting a tax increase is irrational. This is -- they're going to walk in just before Thanksgiving and say, all right, we can shoot you in the head or cut off your right leg, which do you prefer? (LAUGHTER)
GINGRICH: What they ought to do is scrap the committee right now, recognize it's a dumb idea, go back to regular legislative business, assign every subcommittee the task of finding savings, do it out in the open through regular legislative order and get rid of this secret phony business. (LAUGHTER)
The Palmetto Freedom Forum
In August of 2011, Congressman Gingrich participated in the Palmetto Freedom Forum, which was a discussion on the Constitution and numerous political issues. He spoke about his support for cut, cap, and balance and an amendment to force a balanced budget.
Fox News / Google Debate
On September 22, 2011 Congressman Gingrich participated in the Fox News / Google debate. He spoke about the need for leadership in balancing the budget.
KELLY: Speaker Gingrich, every day the federal government takes in about $6 billion, but spends about $10 billion. So we borrow 40 cents of every dollar we spend. Now, I understand that you believe that if we modernize the federal government that it'll help a lot, it'll save billions. But given the resistance that we've seen in Washington -- the seeming intractable resistance we've seen in Washington to spending cuts, how can you possibly slash spending by 40 percent? How can you do it?
NEWT GINGRICH, FORMER SPEAKER OF THE HOUSR: Well, the way you described the question, you can't.
(LAUGHTER)
KELLY: Well, that's it. Stick a fork in us.
GINGRICH: If -- if you assume Washington remains the way Washington is right now, it's all hopeless. We might as well buy Greek bonds and go down together.
(LAUGHTER)
KELLY: How do you get us out of that?
(APPLAUSE)
GINGRICH: Well, next Thursday in Des Moines, I'm going to outline a 21st century Contract with America. And it's going to be far bolder, far deeper, far more profound than what we did in 1994 or what I helped Jack Kemp and Ronald Reagan do in 1980.
It's important to remember, this month, in the Reagan administration, September 1983, we created 1,100,000 new jobs. Obama's socialist policies, class warfare, and bureaucratic socialism, we created zero in August.
I believe with leadership we can balance the budget. I did it for four consecutive years. We went from $2.2 trillion projected deficit over a decade to $2.7 trillion projected surplus when I left. I think it is doable, but it takes real leadership.
CBS Foreign Policy Debate
In November of 2011, Speaker Gingrich participated in the CBS foreign policy debate. He was asked about spending and he discusses his history of balancing the budget.
Jim Demint: Thank you. And thank you all for being in South Carolina tonight. Federal spending and debt are not only our greatest economic problems, they're our largest national security problem. Yet the president and the Congress continue to spend and borrow at record levels. Just adjusting the spending on existing federal programs will not solve the problem. What federal functions will you eliminate or return to the states in order to balance our budget?
...
Major Garrett: Mr. Speaker, would you please direct Senator Demint's question?
Newt Gingrich: Sure. I think actually, Senator, that there are four interlocking national security problems. Debt and the deficit's one. Energy is a second one. Manufacturing is a third one. And science and technology's a fourth. And you need to have solutions that fit all four.
I mean the thing that most worries me about this super committee is that they-- they-- they fail to understand that innovation and growth have to be at the heart of what we're doing. Example: we should have a training requirement for all unemployment compensation so nobody gets money for doing nothing. Now, that saves money, but it simultaneously enhances the human capital of the United States and makes us more competitive in dealing with China.
We should be opening up offshore so that folks are able to-- deal directly with, for example, $29 billion of natural gas here. In that process, you take some of the royalties and modernizes the Charleston Port, which you need for jobs here. I'm just trying to walk you through a way of thinking.
I helped balance the budget for four consecutive years. I'm not very concerned, if we're serious, what you wanna do is fundamentally reform and overhaul the federal government, fundamentally. While, at the same time, accelerating economic growth to bring unemployment down to four percent. That combination gets you back to a balanced budget.
2012 Presidential Campaign Website Statements
JOBS & THE ECONOMY
"Creating jobs and getting back to 4% unemployment is the most important step to a balanced budget." -- Newt Gingrich
America only works when Americans are working. Newt has a pro-growth strategy similar to the proven policies used when he was Speaker to balance the budget, pay down the debt, and create jobs.
The Gingrich Prosperity Plan
Stop the 2013 tax increase to promote stability in the economy. Job creation moved from stagnant to improving in the two months after Congress extended tax relief for two years. We should continue what has worked by making the rates permanent.
Make the United States the most desirable location for new business investment through a bold series of tax cuts and regulatory reforms, including:
Eliminating the capital gains tax to make American entrepreneurs more competitive against those in other countries;
Dramatically reducing the corporate income tax (the highes in the world) to 12.5%;
Allowing for 100% expensing of new equipment to spur innovation and American manufacturing;
Ending the death tax permanently.
Repeal Sarbanes-Oxley to remove burdensome financial regulation that is holding companies back from taking risks and making new investments.
Implement an American energy policy that creates jobs in the United States versus the Obama plan which borrows money from China to give to Brazil to drill for oil and to then sell to Americans.
Enforce the fiscal responsibility Americans deserve by controlling spending, implementing money saving reforms, and replacing destructive policies and regulatory agencies with new approaches.
Repeal and replace Obamacare with a pro-jobs, pro-responsibility health plan that puts doctors and patients in charge of health decisions instead of bureaucrats.
Voting Record
Balanced Budget Act - Debt Ceiling Increase to $5.95 trillion
In June of 1997, the House passed the Balanced Budget Act of 1997. This legislation included an increase in the debt ceiling to $5.95 trillion and a line item veto for the President which was later ruled unconstitutional by the Supreme Court. The measure initially passed the House in roll call 241, and it's final passage was in roll call 345 346-85. Newt Gingrich voted in favor of this legislation, which included an increase in the debt ceiling to $5.95 trillion.
Newt Gingrich voted in favor of this legislation, which included an increase in the debt ceiling to $5.95 trillion.
Debt Ceiling Increase to $4.37 trillion
On April 1, 1993 the House voted in favor of increasing the debt ceiling to $4.37 trillion 237-177. The legislation was not voted on in the Senate, but passed through unanimously. Newt Gingrich voted against increasing the debt ceiling to $4.37 trillion.
Newt Gingrich voted against increasing the debt ceiling to $4.37 trillion.
TO PROVIDE FOR A TEMPORARY INCREASE IN THE PUBLIC DEBT LIMIT
On August 3, 1990, the House voted to temporarily raise the debt limit to $3,195,000,000,000. The measure succeeded 247-172. Newt Gingrich voted in favor of increasing the debt limit.
Newt Gingrich voted in favor of increasing the debt limit.
Sponsored and Cosponsored Legislation
This representative has not been identified as sponsoring or cosponsoring significant legislation related to this title.
