Two Clinton-era Treasury Department secretaries issued a warning on Thursday about President Trump’s tax and spending bill, saying the administration’s approach poses significant risk to the U.S. economy.
In a New York Times op-ed, Robert Rubin and Larry Summers compared today’s economic landscape to the one they faced in the 1990s and recalled that Trump, on the campaign trail, vowed not to add to the debt and to restore “fiscal sanity to our nation.”
“We served under a president who made that same vow — and who took it seriously,” they wrote, noting the latest GOP legislation, which is headed for a final vote, “does the opposite.”
“We were members of Bill Clinton’s economic team when the federal budget was balanced, the only time that has happened in more than half a century. In nearly every respect, the Trump administration’s approach is the opposite of what worked in the 1990s — and it poses huge risks to our economy,” the Clinton aides wrote.
“Facing a less worrisome set of problems, Mr. Clinton approached the budget process with rigor, openness and an emphasis on facts and analysis. The Trump administration, by contrast, has been characterized by chaos and a lack of discipline,” they added.
The secretaries highlighted parallels between the eras, noting both Clinton and Trump entered office “facing serious fiscal problems” and emerging technologies.
“Then it was the internet, now it’s artificial intelligence,” they wrote.
They said the administration took a different approach from the Trump administration, however, and “followed a strategy of hoping for the best, while planning conservatively.”
“We paired policies that reduced the deficit with others that stimulated investment. That set off a virtuous economic cycle of growth, deficit reduction, lower interest rates and thus more investment and growth,” they wrote. “Fiscal responsibility helped contain inflation because it was accompanied by respect for the independence of the Federal Reserve and recognition of the importance of a strong dollar.
“This current administration risks putting this cycle in reverse by undermining the Federal Reserve, imposing tariffs and passing a tax and policy bill that is more budget busting than big and beautiful.”
The former secretaries criticized the Trump administration for not focusing enough on finding ways to offset the spending.
“Rather than a legislative package that delivers trillions in tax cuts to the top, we should go back to the drawing board and find ways to raise trillions instead,” they wrote.
They said the country could be approaching an “era of technological progress akin to the internet revolution” but financial troubles threaten the country’s “ability to capitalize on it.”
“Luckily, to get back on a sustainable fiscal path, we need not balance the budget, as we did in the ’90s. What we need to do is reverse that trend so that the ratio of our debt to our economy falls, rather than rises,” they wrote.
“Unfortunately, this legislation does the opposite. A responsible Congress would reject it,” they said.
