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   From: clinton.lies@clintonfoundation.org   
      
   he government can have a surplus even if it has trillions in debt, but it   
   cannot have a surplus if that debt increased every year. This article is   
   about surplus/deficit, not the debt. However, it analyzes the debt to   
   prove there wasn't a surplus under Clinton.   
      
   For those that want a more detailed explanation of why a claimed $236   
   billion surplus resulted in the national debt increasing by $18 billion,   
   please read this follow-up article.   
      
      
   Time and time again, anyone reading the mainstream news or reading   
   articles on the Internet will read the claim that President Clinton not   
   only balanced the budget, but had a surplus. This is then used as an   
   argument to further highlight the fiscal irresponsibility of the federal   
   government under the Bush administration.   
      
   The claim is generally made that Clinton had a surplus of $69 billion in   
   FY1998, $123 billion in FY1999 and $230 billion in FY2000 . In that same   
   link, Clinton claimed that the national debt had been reduced by $360   
   billion in the last three years, presumably FY1998, FY1999, and FY2000--   
   though, interestingly, $360 billion is not the sum of the alleged   
   surpluses of the three years in question ($69B + $123B + $230B = $422B,   
   not $360B).   
      
   While not defending the increase of the federal debt under President Bush,   
   it's curious to see Clinton's record promoted as having generated a   
   surplus. It never happened. There was never a surplus and the facts   
   support that position. In fact, far from a $360 billion reduction in the   
   national debt in FY1998-FY2000, there was an increase of $281 billion.   
      
   Verifying this is as simple as accessing the U.S. Treasury (see note about   
   this link below) website where the national debt is updated daily and a   
   history of the debt since January 1993 can be obtained. Considering the   
   government's fiscal year ends on the last day of September each year, and   
   considering Clinton's budget proposal in 1993 took effect in October 1993   
   and concluded September 1994 (FY1994), here's the national debt at the end   
   of each year of Clinton Budgets:   
      
   Fiscal   
   Year	Year   
   Ending	National Debt	Deficit   
   FY1993 	09/30/1993 	$4.411488 trillion	   
   FY1994 	09/30/1994 	$4.692749 trillion 	$281.26 billion   
   FY1995 	09/29/1995 	$4.973982 trillion 	$281.23 billion   
   FY1996 	09/30/1996 	$5.224810 trillion 	$250.83 billion   
   FY1997 	09/30/1997 	$5.413146 trillion 	$188.34 billion   
   FY1998 	09/30/1998 	$5.526193 trillion 	$113.05 billion   
   FY1999 	09/30/1999 	$5.656270 trillion 	$130.08 billion   
   FY2000 	09/29/2000 	$5.674178 trillion 	$17.91 billion   
   FY2001 	09/28/2001 	$5.807463 trillion 	$133.29 billion   
      
      
   As can clearly be seen, in no year did the national debt go down, nor did   
   Clinton leave President Bush with a surplus that Bush subsequently turned   
   into a deficit. Yes, the deficit was almost eliminated in FY2000 (ending   
   in September 2000 with a deficit of "only" $17.9 billion), but it never   
   reached zero--let alone a positive surplus number. And Clinton's last   
   budget proposal for FY2001, which ended in September 2001, generated a   
   $133.29 billion deficit. The growing deficits started in the year of the   
   last Clinton budget, not in the first year of the Bush administration.   
      
   Keep in mind that President Bush took office in January 2001 and his first   
   budget took effect October 1, 2001 for the year ending September 30, 2002   
   (FY2002). So the $133.29 billion deficit in the year ending September 2001   
   was Clinton's. Granted, Bush supported a tax refund where taxpayers   
   received checks in 2001. However, the total amount refunded to taxpayers   
   was only $38 billion . So even if we assume that $38 billion of the FY2001   
   deficit was due to Bush's tax refunds which were not part of Clinton's   
   last budget, that still means that Clinton's last budget produced a   
   deficit of 133.29 - 38 = $95.29 billion.   
      
   Clinton clearly did not achieve a surplus and he didn't leave President   
   Bush with a surplus.   
      
   So why do they say he had a surplus?   
      
   As is usually the case in claims such as this, it has to do with   
   Washington doublespeak and political smoke and mirrors.   
      
   Understanding what happened requires understanding two concepts of what   
   makes up the national debt. The national debt is made up of public debt   
   and intragovernmental holdings. The public debt is debt held by the   
   public, normally including things such as treasury bills, savings bonds,   
   and other instruments the public can purchase from the government.   
   Intragovernmental holdings, on the other hand, is when the government   
   borrows money from itself--mostly borrowing money from social security.   
      
   Looking at the makeup of the national debt and the claimed surpluses for   
   the last 4 Clinton fiscal years, we have the following table:   
      
   Fiscal   
   Year	End   
   Date	Claimed   
   Surplus	Public   
   Debt	Intra-gov   
   Holdings	Total National   
   Debt   
   FY1997	09/30/1997	 	$3.789667T	$1.623478T	$5.413146T   
   FY1998	09/30/1998	$69.2B	$3.733864T  $55.8B	$1.792328T   
   $168.9B	$5.526193T  $113B   
   FY1999	09/30/1999	$122.7B	$3.636104T  $97.8B	$2.020166T   
   $227.8B	$5.656270T $130.1B   
   FY2000	09/29/2000	$230.0B	$3.405303T  $230.8B	$2.268874T   
   $248.7B	$5.674178T  $17.9B   
   FY2001	09/28/2001	 	$3.339310T  $66.0B	$2.468153T   
   $199.3B	$5.807463T  $133.3B   
      
      
   Notice that while the public debt went down in each of those four years,   
   the intragovernmental holdings went up each year by a far greater amount--   
   and, in turn, the total national debt (which is public debt +   
   intragovernmental holdings) went up. Therein lies the discrepancy.   
      
   When it is claimed that Clinton paid down the national debt, that is   
   patently false--as can be seen, the national debt went up every single   
   year. What Clinton did do was pay down the public debt--notice that the   
   claimed surplus is relatively close to the decrease in the public debt for   
   those years. But he paid down the public debt by borrowing far more money   
   in the form of intragovernmental holdings (mostly Social Security).   
   Update 3/31/2009: The following quote from an article at CBS confirms my   
   explanation of the Myth of the Clinton Surplus, and the entire article   
   essentially substantiates what I wrote.   
   "Over the past 25 years, the government has gotten used to the fact that   
   Social Security is providing free money to make the rest of the deficit   
   look smaller," said Andrew Biggs, a resident scholar at the American   
   Enterprise Institute.   
      
   Interestingly, this most likely was not even a conscious decision by   
   Clinton. The Social Security Administration is legally required to take   
   all its surpluses and buy U.S. Government securities, and the U.S.   
   Government readily sells those securities--which automatically and   
   immediately becomes intragovernmental holdings. The economy was doing well   
   due to the dot-com bubble and people were earning a lot of money and   
   paying a lot into Social Security. Since Social Security had more money   
   coming in than it had to pay in benefits to retired persons, all that   
      
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