Bill Clinton offers path on economy

Read the June 27 Newsweek cover story, with a smiling Bill Clinton filling the cover, and the headline “14 Ways to Save America’s Jobs,” and you will be reminded why and how Clinton began his first term as president with a $300 billion deficit and a stagnant economy emerging from a recession, and ended after two terms with a trillion-dollar-plus surplus and 23 million new jobs, not to mention a 65 percent job approval rating. 

Out of the 14 ideas advanced by Clinton, all are deficit-neutral (i.e., they are self-financing) by making use of either lower energy costs to finance job-creating green energy projects or tax incentives and tax cuts offset by returning to the tax brackets that existed for wealthier people in his administration. But almost all of them are grounded in the private sector or in unique public-private partnership — classic ideas from the Democratic Leadership Council that he led and that was centrally responsible for making him president of the United States. 

{mosads}For example, Clinton points to the self-financing of the energy retrofit of New York City’s Empire State Building. It hired an energy service company to install new heating and air conditioning, lighting and insulation and energy-efficient glass — reducing electricity usage by 38 percent, recovering the total cost paid to the energy company in less than five years. Moreover, said Clinton, “the project created hundreds of jobs and cut greenhouse gas emissions substantially. We could put a million people to work retrofitting buildings across America.”

Clinton cited another job-creating, private-sector, self-financed program that worked in Arkansas that could go national: HEAL, or Home Energy Assistance Loan. First, a company, with a little government support, such as loan guarantees similar to SBA loans, creates jobs by making its own building more energy-efficient. Then, with the savings from the utility bill, the company creates a fund to offer interest-free loans to its employees to finance the same work on their homes, with the loans repaid through energy cost savings. According to Clinton, “That would keep the construction industry busy for a couple of years, creating a million jobs that would ripple through the whole community, spurring even more growth and energy conservation benefits.” 

Similarly, Clinton points out that New York’s Mayor Michael Bloomberg started a program to hire and train young people to paint New York’s black tar roofs white. Aside from immediate job creation, adding tax revenues, just white-painting roofs can lower electricity bills by 20 percent on a hot day, with the cost of the paint and the labor recoverable (advanced by government or the building owner) in a week. “In the current environment it’s been difficult for the mayors to get what is otherwise a piddling amount of money to do it everywhere,” Clinton says. “Yet lowering the utility bill in every apartment … frees cash that can be spent to increase economic growth” — and jobs.

On the conservative side, Clinton favors cutting corporate taxes to make America more competitive and keep jobs flowing into the U.S., rather than outward. He points out that America’s corporations pay the second highest tax rate in the world, which is one of the reasons why too many companies take their jobs elsewhere and deposit trillions of dollars offshore. However, Clinton also favors closing tax loopholes for the wealthy — a position favored by 80 percent or more of the American people, according to most polls, yet opposed by congressional Republicans. Go figure. 

This is the approach taken by Simpson-Bowles, Clinton points out. He states: “Lower the rates to be competitive, but reduce the loopholes that cause unfair disparities. We all need to contribute something to help meet our shared challenges and responsibilities, including solving the debt problem.”

There it is: the perfect Clintonian, Democratic Leadership Council balance between progressive goals of social justice and innovative government based on fiscal and individual responsibility. 

Bill Clinton shows Democrats and Republicans stalemated on the national debt a pathway to compromise by mixing liberal and conservative principles reflecting the great center of the country. 

It’s called, to use two favorite Clinton expressions, getting back to the solutions business and focusing on the economy, stupid.

Davis, the principal in the Washington law firm of Lanny J. Davis & Associates, which also specializes in legal crisis management, served as President Clinton’s special counsel from 1996-98 and as a member of President George W. Bush’s Privacy and Civil Liberties Oversight Board.  He is the author of the book Scandal: How ‘Gotcha’ Politics Is Destroying America.