Like Drunken Sailors, Part MMCCXVIII: Congress, and the president, just can't — won't — stop spending

National Review, Sept 15, 2003 by Stephen Moore

Before Congress departed for its August recess, conservatives suffered a series of budget-policy setbacks -- each of which dramatized the sudden ascendancy of big-government Republicanism in Washington.

-- All but 19 House Republicans voted to approve the Medicare prescription-drug bill, the biggest new entitlement program since the 1960s; the Senate passed an even more expensive version. Economic forecasters say the bill will add another $5 trillion of unfunded liabilities to the system -- the equivalent of doubling the national debt with one stroke of the pen.

-- The White House Office of Management and Budget projected a deficit of $455 billion this year, and nearly $500 billion in 2004.

-- The House of Representatives approved a $10 million expansion of the National Endowment for the Arts. For nearly a quarter-century, Republicans have been pledging to eliminate this program outright.

Now let's engage in a quick thought-experiment. Imagine that Al Gore and a Democratic Congress were doing all this profligate spending. Would conservatives stand for it? In fact, none of this budget-bloating is being perpetrated by Democrats (though they are willing accomplices). Fiscal sanity is in retreat, under a solidly Republican regime.

"The votes for fiscal-conservative policies have completely disappeared, even within our own Republican caucus," grouses Rep. Pat Toomey of Pennsylvania. Another of the few remaining budget hawks in the House, Jeff Flake of Arizona, moans that "almost every vote we take on the House floor is to expand the size of the state. Almost none are to make it smaller." Things have gotten so bad in the House that after Republicans approved a $400 billion spending bill earlier this year -- one filled with absurd programs like the Cowgirl Hall of Fame and sweet-potato research -- the GOP leadership brazenly released a manifesto urging members to go back home and boast about the pork.

As a consequence, we are witnessing the worst three-year run-up of the deficit in history. Also, according to a new Cato Institute report, the domestic discretionary budget -- which is where you find the low- hanging fruit of the federal government, like Amtrak and "corporate welfare" -- grew by more than 12 percent last year. It is expected to rise by another 12 percent, or more, this year.

The $1.8 trillion budget that President Bush inherited from President Clinton has swollen to $2.2 trillion -- in an era of almost no inflation. The White House has yet to call for the elimination of even one major government program, and the GOP Congress has happily gone along. We have certainly come a long way from the days when Barry Goldwater declared that he wanted "not to inaugurate new programs, but to cancel old ones."

The Republican failure to cut spending stands in stark contrast to the Bush administration's stellar record in chopping anti-growth taxes. In the Reagan years, supply-siders forecast that we would eventually grow our way out of budget deficits, and they were soon proven correct: With 4 percent real economic growth and 3 percent spending growth each year, tax revenues caught up with and surpassed federal expenditures. But on the new spending path Republicans have put us on, we would need about 8 percent economic growth for six straight years to get close to a balanced budget.

In Bush's defense, it should be noted that the war on terrorism has carried with it a hefty price tag, and that includes the Iraq campaign. The White House is right that a lot of the domestic-spending bulge is for necessary homeland-security measures. But at the same time, the huge burst in education spending, the hike in farm aid, and, of course, that colossal new entitlement, the prescription-drug bill, are wholly unrelated to national security. The administration's central failing in economic policy may be its unwillingness to set and enforce spending priorities. In almost every national-security crisis in U.S. history, the demand for more guns has meant less spending for butter; this administration has approved large budget increases for both.

The White House should start worrying about the political implications of its expanding budgets. On July 26, a group of 20 top conservative leaders from organizations including Cato, the Heritage Foundation, the American Conservative Union, and the Eagle Forum assembled to launch a counteroffensive.

"Conservatives and libertarians cannot be silent on this disgraceful growth of government, simply because it is Republicans who are doing all the spending," fumed Cato president Ed Crane. Everyone in the room nodded in agreement.

Undoubtedly, the most immediate priority for conservatives is to stop the runaway-train drug bill. At stake here is whether Republicans will bust the Treasury the way Lyndon Johnson did in 1965, by creating a Medicare program that now costs five times what it was expected to. A Heritage Foundation report finds that the drug bill would be so expensive that further tax cuts would be politically impossible for at least another decade. This is the biggest battle between statism and free-market policies in Washington since the Clintons' only slightly more grandiose health legislation went down in flames ten years ago.