Cutting military spending that had ballooned during the tail-end of the cold war combined with an economy that thrived as computers and the internet began to really take off at the consumer level (cheaper home... or personal computers PC) and dial-up becoming more mainstream and affordable (AOL signup CD's with 100 free hours.)
America was moving away from manufacturing to financial services as well which in the short term allowed wall street to make massive profits. Also note that during Clintons presidency there was very limited military action verse winning over allies via various global trading arrangements.
And what lots of people forget is that Clinton was a more moderate democrat. He didn't really expand social programs all that much, in fact he made welfare more difficult to qualify for as a compromise with GOP legislatures.
So costs were cut, technology was profiting, those budding industries still required human labor which was often domestic, we had cheap goods coming in from other nations and many nations were peacefully joining in on global trade, social services stayed the same and the big baby boom social security drain hadn't began yet and the administration was willing to work with the GOP on legislation. Not too hard to balance a budget with those circumstances.
Keep in mind that a balanced budget was step one in reducing the deficit, they are not the same thing. However, if the trends had been maintained we'd have been deficit free by 2010 or so and we'd have had social security funded for the foreseeable future.
all 12 comments