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Has Big Government Won?
Bush-level spending has conservatives increasingly restless.


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The Republican party’s conservative base is becoming increasingly restless with George W. Bush’s unwillingness to restrain the growth of federal spending in any way. Last week brought another shot across his bow when the Manchester Union Leader, one of America’s most important conservative newspapers, attacked him for caving-in to big spenders. The occasion for the Union Leader’s Aug. 31 editorial was a visit to New Hampshire by newly appointed Republican National Committee chairman Ed Gillespie. According to the paper, Gillespie basically said that the Republicans’ long-time war against big government has now ended. Government won.

As the Union Leader put it, “the party’s new chairman, energetic and full of vigor, said in no uncertain terms that the days of Reaganesque Republican railings against the expansion of federal government are over.”

Gillespie was not quoted in the editorial, although his interview with the Union Leader editorial board was on the record. In a subsequent editorial on Sept. 3, the paper explained why it drew the conclusions it did. This time it did quote Gillespie as saying that “fiscal responsibility” was defined by him (and presumably President Bush) as meaning only that federal spending would increase at “a slower rate of growth” than if the Democrats were in power. Obviously, this is a pretty low threshold for success.

Writing in the New York Post, John Podhoretz came weakly to Bush’s defense, as he conceded the basic point: “Bush has not fought to control the size of government.” (Emphasis in original.) The reason, he says, is that the war on terror takes precedence over everything and Bush can’t fight on every front simultaneously. Therefore, the effort to control big government must take a back seat.

This is a plausible argument, but one that is fatally flawed. Bush is not the first president to face a serious threat to America’s national security. The situation confronting Ronald Reagan in 1981 was far worse, with the Soviet Union at the peak of its power and a U.S. military that had been severely weakened by Democrats during the 1970s. As bad as today’s terrorist threat may be, thousands of nuclear missiles aimed at the U.S. were a much greater threat.

Yet despite the need to rebuild America’s defenses, Reagan never let it be an excuse to give up on controlling domestic spending. It would have been a lot easier for him to buy the votes needed for national defense by loosening the domestic spending reins. But he never did and fought hard to bring domestic discretionary spending down from 4.7 percent of the gross domestic product in 1980 to 3.1 percent by 1988. That is equivalent to reducing spending by $165 billion per year in today’s economy.

By contrast, George W. Bush has raised domestic discretionary spending by 0.4 percent of GDP in just his first 2 years in office — equivalent to $630 billion over the next decade if sustained.

A key reason why Reagan made his effort is because he understood that the health of the U.S. economy was critical to national security and the defeat of Soviet communism. He knew that big government is a drag on the economy — not just because of the high taxes that go with it, but because it preempts resources that the private sector can use more efficiently. Thus, an increase in government’s share of GDP will eventually reduce growth even if taxes don’t rise.

In the end, Reagan won the Cold War not by defeating the Soviets militarily, but by showing them that we had economic resources they could never hope to match. They simply couldn’t afford to keep up.

Another problem with the Bush approach to spending is that he is not just giving away relatively inconsequential pork-barrel projects. Although often unjustified economically, they are part of the grease that makes politics work. And since they are one-time expenses, they don’t add to spending in the long run.

Where the Bush administration has behaved irresponsibly is by initiating a new government entitlement program to subsidize prescription drugs for the elderly. This is not a one-time outlay, but one that will burden taxpayers forever. Moreover, the administration refuses to make even the most minimal effort to ensure that the least-bad bill comes out of Congress. It has signaled over and over again that President Bush will sign any drug bill, no matter how ill conceived.

Ronald Reagan had his faults, but he never conceded the principle that government should be as small as possible to do what it has to do. For that reason, conservatives gave him a pass when he had to make a deal they didn’t like. I don’t think George W. Bush can assume that he will get the same consideration just because of the war on terror.



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