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‘I ! 136 Palitic: by Other ‘
mid-October, when Treasury Secretary James Baker threatened '
allow the dollar to resume its fall unless Germany cut its inte
rates. Investors feared that a further decline in the value of the (1
la: would prompt foreigners to abandon the American stock .
bond markets. These fears sparked the stock market collapse ’
October 19, 1987.
In the wake of the crash, both the administration and Congr
came under increased pressure to reduce the budget deﬁcit. H
ever, the White House remained ﬁrmly opposed to signiﬁcant
increases or cuts in military spending, and congressional Dem
rats opposed any substantial cuts in domestic spending. Negotia
tions between the White House and Congress following the c
thus produced little more than token deﬁcit reductions. As discussed above, the Bush administration engaged in a p '-
tracted struggle with Congress over deﬁcit reduction in 19'!
Congressional Democrats insisted that the administration agree
new revenue programs, while President Bush insisted that
would accept no new taxes. Bush eventually surrendered—at the
cost of his presidency—and a budget that included tax increases
was enacted in 1991. This budget also contained a formula for m
duction of the deﬁcit over a period of several years. Under the'
terms of one element of the budget formula, no new spending pro— .-
grams could be enacted without equal cuts in existing spendin g
programs or the enactment of new taxes to cover any cost increases ,
The administration saw this provision as a mechanism that woul .
block Democratic efforts to create new social programs while Dec
mocrats hoped that the overall package of revenue enhancements ‘
would gradually reduce the deﬁcit and pave the way for new do» 3
mestic spending. , Despite the deﬁcit, congressional Democrats did ﬁnd one way Q
to create new social programs. This was through the creation oft:
new rights, such as the rights of the disabled under the Americans '-
with Disabilities Act (ADA) and the rights of new parents under
family Eeave legislation. These new rights provided deﬁned con
stituency groups with a package of beneﬁts whose costs were home [mammal C meat 137 by business rather than by the deﬁcit—crippled federal treasury.
The cost, for example, of making a workplace suitable for handi-
capped employees fell upon the employer rather than on the pub-
lic. Moreover, by deﬁning the beneﬁts awarded to the disabled as
rights rather than mere beneﬁts, Congress opened the way for the
courts to interpret and expand these new programs without any
need for further action on its part. In recent years the courts have
shown a willingness to interpret rights in an expansive way, and
Congress hoped that in the years to come they would ﬁnd that ad-
ditional rights were impiied by the initial rights and so expand
ADA and the other programs. A number of advocacy groups pre-
pared for campaigns of litigation designed to begin this process of
rights expansion. After his election in 1992 Bill Clinton sought to circumvent the
deﬁcit by introducing a new package of social programs under the
rubric of “investment.” Clinton claimed that spending on educa—
tion, crime prevention, health care, and community services should
be understood as a form of investment in the nation ’5 future rather
than merely a form of current expenditure. At the same time he in—
troduced a new tax program, the BTU or energy tax, to alleviate
some of the costs of these new programs in accordance with the
terms of the 1991 budget compromise. His effort was defeated by
Congress, and as noted above, the deﬁcit continued to restrict the
possibility for new Democratic programs until 1998, when as a re-
sult of three years of sustained economic growth, increased tax revv
enues all but eliminated the federal deﬁcit. THE NATIONAL SECURITY APPARATUS AND
INSTITUTIONAL COMBAT Just as they sought to make political use of ﬁscal policy, the Re—
publicans in recent decades used the military and national security
apparatus as a political weapon. After World War II there had been a bipartisan consensus in
the United States on questions of foreign and military policy.S ...
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- Spring '07