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Again, What Fiscal Responsibility?
On spending, the GOP has little room to criticize.


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Veronique de Rugy

J. Edward Carter’s recent guest column for NRO — entitled “Cringe-onomics: Did any of the Democratic presidential contenders take Economics 101?” — was somewhat on target. It’s true that Democrats don’t know much about economics. For instance, they usually fail to understand why tax cuts trigger economic growth and why increasing the minimum wage harms those it is meant to help. Carter is also right to ridicule the call by John Edwards to return to fiscal discipline while proposing “a slew of new federal spending programs.”

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However, considering the GOP’s record on spending, it seems that Republicans do not have much room to criticize.

Recall that when the Republicans gained control of Congress in 1994, they promised to eliminate the deficit and reduce wasteful spending. In May 1995, the House of Representatives even approved a budget plan calling for the elimination of three cabinet departments: Education, Commerce, and Energy. Many advocates of limited government and fiscal responsibility believed that this partisan change — greater Republican power — could, in fact, achieve this goal. For several years, the GOP upheld its commitment to fiscal responsibility by modestly curtailing spending growth and balancing the budget (in 1998) for the first time since the 1960s. Unfortunately, the balanced budgets of the late-1990s created an easy-money mindset in Washington, which sparked a spending spree that continues today.

Total outlays have increased by 28.8 percent in the first four years of the Bush administration, with discretionary spending rising by 40.8 percent (defense spending by 40.2 percent and non-defense by 41.3 percent). Moreover, after only four years in office, President Bush is heading to the record books as one the biggest-spending presidents ever. A look at the ten largest annual percentage increases in discretionary real federal outlays in the last 50 years shows that the Bush administration’s fiscal year 2002, 2003, and 2004 discretionary-spending increases all made the list of the biggest increases.

Both Congress and the administration deserve blame for recent spending increases. For example, the president’s FY2004 budget requested $429 billion in non-defense spending. But actual FY2004 spending will end up being at least $475 billion. For example, when an $87 billion supplemental spending bill was added to pay for operations in Iraq, neither Congress nor the president attempted to offset it with spending cuts elsewhere. Finally, when Congress put together the horrible omnibus bill (which could be best called the “No Pork Left Behind” bill), President Bush failed to veto it.

In their Contract with America in 1994, Republicans committed to “restoring fiscal responsibility to an out-of-control Congress, requiring them to live under the same budget constraints as families and businesses.” Not only have they failed to achieve that goal, they have gone the opposite direction in recent years.

Moreover, these increases are poised to continue. The new budget numbers reveal a 7 percent military increase, which will be followed by another military supplemental in 2005; a 10 percent increase for homeland security; and 11 percent more for the FBI. In addition, after increasing education spending by 70 percent, President Bush has proposed an additional 3 percent increase for education. The National Endowment for the Arts, which has absolutely no legitimate reason to be funded by the federal government, will get a 15 percent increase. All of this comes on the heels of the administration’s recent admission that the cost of its already costly new prescription drug program will be $140 billion more than originally claimed.

It’s not surprising that the latest deficit figure is up another $214 billion to $521 billion. We can expect that supporters of the administration will soon be tripping over themselves to blame the deficit on the war and a slow economy — but profligate spending is to blame. While we should not obsess over the deficit, per se, we should read it for what it is: a glaring sign that this administration is doing a poor job with our money.

To make us feel better, the president announced that he will “cut” about 60 programs. But to cut 60 programs out of the 10,000 or more programs in existence is nothing to brag about. Besides, no one should expect him to fight for these cuts when the time comes. These cuts will be put in the budget to make the administration look responsible. But appropriators know by experience that most presidents won’t fight for it.

When it comes to this Republican president and Congress, it has become almost impossible to tell the difference between the two parties.

— Veronique de Rugy is a fiscal policy analyst with the Cato Institute.



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