03/04/2014 09:03 pm ET Updated Mar 05, 2014

How Bill Clinton's 'F***in' Lie' On The Debt Kneecapped Democrats

WASHINGTON -- An internal Clinton administration memo, released last week, appears to show economic adviser Gene Sperling decrying parts of a planned speech by President Bill Clinton on the federal debt as "a fuckin' lie."

The handwritten memo from Clinton speechwriter Jeffrey Shesol is part of a treasure trove of documents released by the William J. Clinton Presidential Library that reveal an administration attuned to the political benefits of a balanced budget and eager to credit deficit reduction with economic success. Liberal Democrats have been frustrated by the politics of the debt in the years since. President Barack Obama and members of Congress have been dogged by economically flimsy GOP charges that government spending -- even during a deep recession -- is bad for the economy. The new documents show some of that rhetorical groundwork being laid by Clinton.

The memo, dated Dec. 27, 2000, details Shesol's notes of a discussion among himself, Sperling, Jack Lew and others over plans to have Clinton declare that his outgoing budget surplus would make it possible for the federal government to eliminate all its debt by 2009. Lew, who was director of the Office of Management and Budget under Clinton, is currently treasury secretary. Sperling is leaving the Obama administration this year.

In the memo, Shesol appears to credit "Gene" with a host of criticisms of the debt elimination claim. "We really can't do that ('pay down by 2009')," Shesol writes, crediting Gene. "2009 comes from us not putting any new progs in -- no tx cuts, no prescription drugs, etc. -- a budget w/ no new initiatives." On the following page, Shesol scrawls, "'It's a fuckin' lie.'"

Read the full text of the memo here, starting on Page 130.

On Dec. 28, 2000, Clinton gave a speech declaring that the federal government could pay off the national debt by 2009, provided it "dedicat[ed] the entire surplus to debt reduction."

The numbers were based on projections from Lew's OMB, similar to those from the Congressional Budget Office, that predicted several years of budget surpluses. The projections turned out to be wildly incorrect.

Shesol, a historian and partner in the firm West Wing Writers, told HuffPost that the memo shows the meticulousness of Sperling and Lew, both of whom declined to comment for this article.

"It's totally unclear what specifically 'fuckin' lie' is in reference to -- it's a stray comment, and the specific context is lost, I'm afraid, to history," Shesol emailed HuffPost. "But what you see here in general, over the course of this conversation, is evidence of Gene Sperling’s and Jack Lew’s incredible scrupulousness with regard to economic data, projections, and the like. You see a lot of attention being given to stating things accurately, even if it means softening a claim."

But the "fuckin' lie" memo also offers insight into the political maneuvering behind the numbers presidents use to describe the economy. The meeting participants are keenly aware of the political value of the Clinton budget surplus, and Sperling, in particular, appears eager to set expectations for the next administration at an unreasonably high level.

"Gene: Best place for us: set out in seemingly non-pol. way a marker they cannot reach," Shesol wrote in the memo.

The newly public Clinton documents also show the administration's willingness to place extraordinary significance on Clinton's deficit reduction. Two drafts of a Rose Garden speech that he would deliver on Sept. 23, 1999, announcing his veto of a GOP tax cut, feature this text, which was also part of the final speech:

"In the 12 years before I became president, irresponsible fiscal policies in Washington had piled deficit upon deficit and quadrupled the national debt. As a result, interest rates and unemployment were rising, wages were stagnant, and growth was slow."

While it is true that Presidents Ronald Reagan and George H.W. Bush had racked up large budget deficits, economists do not consider those deficits a significant cause of the recession in the early 1990s. More fingers are pointed at the savings and loan crisis, in which dozens of regional thrifts failed due to bad real estate loans.

Nor is Clinton's fiscal responsibility generally credited for the economic conditions at the end of his presidency, which were fueled in part by a stock market bubble. Nevertheless, in the same September 1999 speech, Clinton declared that "a new economic strategy of fiscal discipline, expanded trade, and investment in our people" had resulted in "the longest peacetime economic expansion in American history, with 19.4 million new jobs, rising wages, and record-breaking levels of home ownership."

The "fiscal discipline" note was particularly salient, since Clinton was vetoing the Republican tax cut on the grounds that it was not fiscally responsible.

CORRECTION: This article originally stated that Gene Sperling left the Obama administration in January. Although he was once scheduled to depart at the beginning of 2012, he had not officially cut ties with the White House at publication time.



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