On May 28, President Bush signed into law his third tax cut in as many years and fundamentally transformed Republican policy. The old Republican promise was that a new president would fight for one tax cut and then oppose tax hikes. The new Republican policy is now an annual tax cut.
The annual tax-cut strategy has been a major center-right victory, but now the conservative movement’s focus must turn its attention to limiting the growth of government, as the size of government has increased by nearly 10 percent since calendar year 2000.
Each year, Americans for Tax Reform releases a report which details the total cost of government to American taxpayers and calculates the date of the year the average American is done paying for those costs. The Cost of Government Day report has become a true measure of whether the conservative movement is achieving its goal of shrinking the size of government. And this year’s report demonstrates that the conservative movement has a lot more work to do at the federal, state, and local levels to prevent government from growing out of control. Today, July 11, is this year’s “Cost of Government Day,” the date in the calendar year when the average American worker has earned enough money to pay off his or her share of the burdens of government at all levels. Cost of Government Day falls five days later in 2003 than it did in 2002, and it is now at its highest level since 1993. This year is the third year in a row that there’s been a Cost of Government Day increase, and the average American worker needed 17 additional days this year to pay for the cost of government than that worker did in 2000. The current increases are in stark contrast to previous years, as the Cost of Government Day declined eight straight years from 1992 through 2000. After that unprecedented period of decline, the average American worked 20 days less in 2000 than in 1992 to pay for the cost of government. Since 2000, however, the increases of the past three-years have nearly wiped all the cost-declines achieved since 1992. As a result, Americans will work more than half of the year for themselves and their families. They will work 87 days to cover the cost of federal spending, 43 days to cover state and local spending, 39 days to shoulder the cost of federal regulation, and 24 days to pay for state regulation. All told, that’s over four months to pay spending, and another two months to cover the regulatory burden. The growth in the cost of government has been driven largely by enormous increases in federal spending. In fact, more than 3 additional days were needed this year to pay for increases in federal spending and 10 additional days since 2000. The rise in federal spending over the past three years is in direct contrast to the previous trend when spending as a percentage of national income declined every year from 1993 until 2000. By the end of the Clinton administration, the average American worked 15 days less of the year to pay off their federal spending burden than in 1992. In just the past three years, however, two-thirds of the unprecedented eight-year decline has been eliminated. Accordingly, nearly 60 percent of the total cost-of-government increase since 2000 is due to the rise in federal spending. Some analysts have concluded that this increase is due to higher spending on homeland security and the costs of war in Iraq. This is only partially true. Yes, the federal government has increased spending for military and homeland-security purposes, but Congress has also substantially increased spending on everything from education to healthcare to agriculture. Additionally, state governments continue to spend at breakneck speed despite crying poverty, and regulations both at the federal and state levels continue to rise. All told, the size of government has increased by 10 percent over the past three years. Americans must work more than half the year to pay for the cost of government and there is no end in sight with a new $400 billion prescription-drug entitlement program set to be enacted. Accordingly, the conservative movement must double its efforts to rein in the spending and regulatory madness that has taken place over the past three years. Without spending and regulatory discipline, the bold objectives we have worked so hard for over the past twenty years — such as a flat-rate consumed income tax, Medicare reform, and of course Social Security reform — will be much harder to achieve. Limiting the growth of government will set the infrastructure for all the other center-right victories we seek to achieve in the future. —Grover Norquist is president of the Americans for Tax Reform.