What he did
In 1992, billionaire entrepreneur Ross Perot put fiscal responsibility and the national debt on the political radar during his third-party campaign for President. At the time, the debt had doubled in a decade to 47% of GDP. Perot believed this to be unsustainable.
Amid the debate on Capitol Hill this summer over the federal government’s budget and debt ceiling increase, a warrior for fiscal responsibility passed away at 89: Ross Perot.
The Texarkana native and self-made billionaire’s run for the presidency in 1992 garnered the largest share of votes for a third-party candidate since Teddy Roosevelt in 1912. Perot’s platform is remembered for several key issues, including his desire to shake up Washington and his opposition to international trade deals; he famously quipped that the latter would create “a giant sucking sound” as American manufacturing jobs moved overseas. Yet the issue that animated him long after the 1992 campaign was controlling the national debt.
“Ross Perot was a businessman,” noted Russell Verney, a senior political advisor to Perot’s ‘92 campaign and chairman of his less successful 1996 run.
“As a businessman, and as a head of household, he had the stance that you can’t live off of borrowed money,” Verney said. “The country was on a spending binge,” he added, calling that “anathema” to Perot.
Indeed, the country was on a recent spending binge, largely driven by a combination of tax cuts and increases in military spending. The federal debt held by the public, as a percentage of GDP, peaked just after World War II at 106% (according to data from the Congressional Budget Office). It declined steadily until it bottomed out at 23.2% of GDP in 1974. In the years between 1974 and 1992, it reversed, and the percentage more than doubled to 46.8%, a trend expected to continue that Perot saw as wholly unsustainable.
“Ross Perot’s focus on the budget was tied to his notion that the nation’s economy wouldn’t do as well over the long term, for future generations,” said Dean Lacy, a government professor at Dartmouth College who has published multiple studies on Ross Perot’s candidacy.
“He wasn’t focused on the next four years, as most presidential candidates are. He was focused on the next twenty years, and his argument was that the budget deficit would cripple policymakers,” Lacy added.
Verney argued that the “establishment” in American politics wasn’t concerned with the debt. “We elected people to go to Washington to conduct our business responsibly,” Verney said, “and they kept telling us everything was great, but they were hiding that it wasn’t great, because they were running up this massive debt that our children and grandchildren will have to pay.”
Thus, Verney credited Perot with putting the issue in the spotlight. “[Perot] brought it to the American public’s attention,” he said. “He started explaining it to the American public in very simple, easy to understand terms.”One way Perot attempted to do so was through thirty-minute television spots, in which he explained his platform using charts and graphs. The ad that aired on October 16th, just weeks before the election, was titled “Balancing the Budget and Reforming Government,” and it explained in detail Perot’s plans for reducing the deficit.
“We’ve got to balance the budget just like you balance your budget,” Perot says in the ad while pointing his “voodoo stick” — a pointer named after the pejorative term, “voodoo economics,” that his Republican opponent once used to describe the supply-side economic policies that coincided with the increases in debt since 1980. He pointed the stick at a chart showing the Congressional Budget Office’s negative projections of revenue and spending. “Do we have to do it? Of course we do.”
He laid out a plan in the ad that, while focused on bringing down the debt, also brought attention to the issues of income inequality and high healthcare costs. Perot’s plan involved tax increases, spending cuts, and long-term entitlement reforms, but also indicated an openness to ideas other than his own. “I will be delighted if someone can come up with a better idea,” he said, referring to his proposed $158 billion gas tax increase. “Come up with something else, more painless, that’ll give us that [$158 billion], and I’ll drop it in a minute.”
Marc Goldwein, policy director at the Committee for a Responsible Federal Budget (CRFB), a Washington-based think tank that advocates for reduced federal deficits, said that “Perot really pushed the other candidates to focus on it [the national debt] more.”
Goldwein also suggested that Perot should receive some credit for the balanced budgets of the Clinton years.
“President Clinton, who ran on a middle-class tax cut, had to also run on the debt issue, and ultimately, through a series of pieces of legislation and some luck, got to the 1997 budget deal and balanced the budget,” Goldwein said. “Perot deserves a lot of the credit for that.”
The national debt has, of course, come a long way since the good times of the 90s. Driven by combinations of tax cuts and spending hikes and compounded by an aging population and the Great Recession, the annual deficits are high by historical standards, and the debt has soared to 78% of GDP. There is no respite in sight — the Congressional Budget Office projects it to reach 95% in the next decade and continue climbing.
Even as the debt has increased to unprecedented levels, however, it seems to have simultaneously lost the urgency that surrounded the issue before the turn of the century. “Republicans and Democrats don’t want to stop the spending; they just argue over who should benefit from the spending,” Verney said.
Goldwein believes that the issue has retreated in part because of the “growing downward trend in interest rates over time,” which has made the consequences of running up more debt — including those impacting the average American — less visible.
“There are still very serious long-term consequences to debt, even near-term consequences, but people aren’t seeing it as a pocketbook issue the same as when they saw how high their mortgage rates went up, how high their car loan rates were,” Goldwein noted.
“Long-term consequences” include, according to the CRFB’s analysis of the CBO’s Long-Term Budget Outlook, lower economic growth and median incomes and higher interest rates, as well as decreased “fiscal space” to address a crisis, like a war or a recession.
Perot remained active on the issue long after his runs for the White House. In 2008, for instance, he launched a website that, similar to his long-form campaign ads, prominently exhibited charts and graphs to show the increase in the national debt.
“The American people must wake up and face the reality that promises made in the past will soon bankrupt this nation,” the site, accessible now through the Internet Archive, said.
If recent legislation is any evidence, however, the issue of the national debt no longer carries the same salience in either party. The Trump administration’s signature tax cuts and the bipartisan 2018 spending deal will each add nearly $2 trillion to the debt over ten years. As for the Democratic candidates running to replace President Trump, if the lack of a single question about the national debt in twelve hours of primary debates is any indication, the issue isn’t important to them either.
Asked who Perot might support in today’s political moment, Verney declined to speculate.
“Ross was very capable of speaking for himself, and never needed anyone to speak for him,” Verney said. “We’ll leave it at that.”
The United States faces a number of pressing, immediate issues, from access to healthcare to “deaths of despair” to dealing with the effects of climate change. Yet many proposed solutions to these do nothing to address the increasingly precarious fiscal situation, and in fact, many worsen it. Much like the nineties, then, it may take a Perot-like figure — one from outside the current political paradigm — to force a reckoning with the hard choices needed to secure the country’s fiscal future.
Phone interviews with Russel Verney, former Perot campaign official; Marc Goldwein, policy director at the Committee for a Responsible Federal Budget; and Dean Lacy, government professor at Dartmouth College.
Robert McFadden, “Ross Perot, Brash Texas Billionaire Who Ran for President, Dies at 89,” New York Times, Jul 9, 2019, https://www.nytimes.com/2019/07/09/us/politics/ross-perot-death.html
Donald Baker, “H. Ross Perot, eccentric billionaire who made two independent runs for president, dies at 89”, Washington Post, Jul 9, 2019.
The Economist, “Remembering third-party presidential candidate Ross Perot”, Jul 11, 2019, https://www.economist.com/united-states/2019/07/11/remembering-third-party-presidential-candidate-ross-perot
Congressional Budget Office, Data Underlying Figures spreadsheet, “An Update to the Budget and Economic Outlook: 2019-2029”, Congressional Budget Office, Aug 21, 2019, https://www.cbo.gov/publication/55551
Robert Perot, “Perot Campaign Commercial 1992”, C-SPAN, Oct 16, 1992, https://www.c-span.org/video/?33206-1/perot-campaign-commercial-1992, accessed Sep 2019
Committee for a Responsible Federal Budget, “CBO’s 2019 Long-Term Budget Outlook”, Jun 25, 2019, http://www.crfb.org/papers/cbos-2019-long-term-budget-outlook
PerotCharts.com, via Internet Archive, https://web.archive.org/web/20080809055314/http://perotcharts.com/, accessed Sep 2019
Committee for a Responsible Federal Budget, “President Trump’s $4 Trillion Debt Increase”, Jul 25, 2019, http://www.crfb.org/blogs/president-trumps-4-trillion-debt-increase
Marjorie Margolies, “When will the 2020 presidential candidates be asked about America’s debt?”, The Philadelphia Inquirer, Sep 23, 2019, https://www.inquirer.com/opinion/commentary/presidential-election-2020-national-debt-deficit-20190923.html