AMAC Exclusive – By Andrew Abbott
Republican leaders looking to retake the House and Senate next year would do well to remind Americans of a chapter in recent political history. It’s a story that would help Republicans explain to voters worried about the economy that their only hope is a GOP win this fall — sending a powerful signal to both markets and consumers would send.
Bill Clinton likes to boast that he brought prosperity in the 1990s. The truth is that after promising a middle-class tax cut, he passed the largest tax hike in history and turned the economy upside down. He also spooked the economy by aggressively cracking down on another huge threat to small businesses and family incomes — the big government takeover of health care known as Hillarycare.
After an economic downturn from 1989 to 1991, George HW Bush’s last year had seen a strong recovery with GDP growth of 3.63%. In January 1993, Clinton inherited a booming economy. But Clinton’s big government policies quickly put an end to this resurgence. Employment and wage growth slowed while trade deficits soared and productivity was low. Economists began to sense that the rosy predictions of the early 1990s suddenly looked less and less realistic.
However, after Newt Gingrich and Congressional Republicans won in 1994, all that began to change—and fast. First, Gingrich’s Republican Revolution transformed the country’s morale and culture. Businesses and consumers relaxed because they realized there would be no more taxes and few new regulations – and so they were ready to invest and spend again. That was the first major step in rebuilding the economy that Clinton had destroyed.
Almost as quickly, the new Republican Congress began implementing the policies it had pursued and won – the plans laid out in the platform known as the Treaty with America. The treaty promised a balanced budget, family tax cuts, welfare reforms, a rollback of crippling government regulations, a crackdown on violent crime, and more. This was the sensible agenda that gave Republicans unified control of Congress for the first time since 1952, with the GOP winning 8 Senate seats and 54 House seats, and even incumbent House Speaker Democrat Tom Foley losing his re-election bid .
When Gingrich became Speaker in 1995, Gingrich and the new Republican majority went to work to fulfill their promises to the American people with unprecedented speed. When their policies took hold – including the largest capital gains tax cut of all time – they pushed the economy even further.
In addition to these historic legislative achievements, Gingrich’s Congress achieved something else: They pushed Bill Clinton back into the political center. Seeing the political and economic success of the treaty with America, Clinton carried out one of the most spectacular reversals in the history of American politics.
After spending his first two years governing from the hard left, Clinton shamelessly declared in his 1996 State of the Union address that “the era of big government is over,” a year after Gingrich’s new Congress began. For the remainder of his tenure, he pursued an agenda largely dictated by or ripped off by congressional Republicans — resulting in the only balanced budgets of our lives.
The economic consequences of this development are well known: from 1997 to 2000, the GDP grew by more than 4% in an extraordinary economic boom. But the achievement was not Bill Clinton’s. In fact, it was Gingrich and the Republicans in Congress.
Today, Republican leaders should be a forceful reminder to Americans of this history and to alert voters that they have a similar opportunity ahead of them. Just as George HW Bush handed his predecessor an economy that was quickly recovering from recession, only to have it ruined by a left-leaning Democratic president, Donald Trump handed Biden the strongest economic recovery in history. As we know, Biden wasted it quickly.
As in 1994, however, the election of large Republican majorities in the House and Senate would bring about an immediate shift in national morale and economic culture. Biden’s weak economy would begin to turn around the day after the election. The results would be seen immediately. Coupled with a legislative agenda of strong pro-growth policies, a Republican Congress could go a long way toward bailing out the US economy, creating jobs and speeding the return to prosperity. And who knows – maybe Biden would even have the sense to take a page out of Bill Clinton’s book and run back to the political center to save his presidency and with it the economy.
Andrew Abbott is the pseudonym of a writer and public affairs consultant with over a decade of DC experience at the intersection of politics and culture.
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