Jonathan Chait cites the compromise between former president George H.W. Bush and Senate Democrats to increase taxes and cut spending as conservatism’s ‘one success’ in the past few decades. While this may be a somewhat harsh assessment of conservatives’ political successes, I think Chait makes a good point on the merits of the senior Bush’s tax compromise. As the chart below shows, the increased tax revenues, coupled with spending cuts, led not only to smaller government, but also to a more balanced budget than this country had seen since 1969:
Essentially, President Bush struck a deal with the Democrats to increase the top marginal tax rate from 28% to 31%, and the Democrats agreed to a package of spending cuts outlined by the president. As you can see in the above graph, for a very brief period of time following this compromise, revenues outpaced spending. This allowed the next president, Bill Clinton, to continue to balance the budget during his presidency.
