Joshua Bolten, the president’s budget chief, took to the opinion pages of The Wall Street Journal a week ago to defend the Bush administration’s record on the budget amid rising complaints. Many of those complaints, as Bolten’s piece notes, are coming from fiscal conservatives dismayed by the massive growth in federal spending under Bush.
Bush’s first three years in office have already brought the most intrusive education bill in history and a farm bill that insured that the nation’s agricultural sector would continue to be a permanent ward of the state. Bush has signed a Medicare prescription-drug bill that amounts to the largest entitlement expansion in 40 years — at a time when entitlements are already spinning dangerously out-of-control. And now a pork-laden omnibus spending bill (one the administration did zilch to clean up) is headed Bush’s way.
Over the past week, almost every major news outlet has carried front-page stories on the rising tide of conservative discontent. Many people who support the president’s tax cuts and his conduct of the war can no longer stomach his expansion of big government via big spending. If Bolten’s response to the critics in the Wall Street Journal represents the best case the administration can make for itself, the criticism is only going to spread and multiply.
Bolten begins by trotting out the same tiresome excuses we’ve been hearing for several years: The deficit was caused, first, by declining federal revenues resulting from a sluggish economy and, second, by the need to spend money to fight terrorism. These explanations are partly true. But the administration could have responded to these trends by cutting low-priority areas of the budget. Instead, Bush signed every spending bill that crossed his desk.
Bolten argues that the president hasn’t vetoed a single spending bill because “He hasn’t had to.” Wrong. The president hasn’t vetoed a single spending bill because he didn’t want to — he just doesn’t have the political will. Each spending bill that has come across his desk has represented an apparently irresistible vote-buying opportunity. If rabbits could vote, Bush would have signed a bill subsidizing their carrots.
Bolten’s figures are misleading and suspicious. He writes:
In the last budget year of the previous administration (FY’01), domestic spending unrelated to defense or homeland security grew by an eye-popping 15%. With the adoption of President Bush’s first budget (FY’02), that number was reduced to 6%; then 5% the following year; and now 3% for the current fiscal year.
The first thing to notice is that the budget director has apparently chosen to exclude more than five-sixths of the total federal budget from his spending statistics. Federal spending is basically of two types: “discretionary” and “mandatory.” The discretionary section is determined annually through the appropriations process. Defense accounts for roughly half of this discretionary spending. All discretionary spending, however, defense and non-defense combined, is only about a third of the total budget.
The other two-thirds of the total federal budget is “mandatory” spending, chiefly Social Security and Medicare. It takes a specific act of Congress to make changes to these programs (the prescription-drug bill is a perfect example). If no changes are made, these programs continue on in accordance with the underlying law. This is a section of domestic spending that Bolten left out. The familiar argument for leaving this spending out is that politicians supposedly have less control over it — it’s “mandatory.” But this is simply not true. Bush chose to increase mandatory spending by signing a $400 billion prescription-drug plan. The budgetary effects of such laws are longer-term in nature than one year’s appropriations, but it’s not true that the president has no control over them.
Despite several phone calls, the Office of Management and Budget was unable to provide the basis for Bolten’s figures, which — even if true — amount to a spin job.
But let’s follow Bolten’s example and ignore the two-thirds of the budget that goes to “mandatory” expenses. Let’s also ignore, as he does, the defense half of discretionary spending. That little section we have left — equal to about one-sixth of the total federal budget — is what’s known as discretionary non-defense spending.
From this one-sixth of the federal budget, Bolten apparently removed the homeland-security spending to create a spending statistic that supposedly exonerates the White House. He calls this number “domestic spending unrelated to defense or homeland security.” It is on this fraction of overall spending that Bolten bases his argument that the Bush administration has not overspent. Bolten claims that in the last year of the Clinton administration, this category of spending grew by an “eye-popping” 15 percent. According to Bolten, the Bush administration has overseen comparatively smaller annual increases of 6, 5, and now 3 percent.
But the latest publicly available spending figures make these statistics look suspect. The Congressional Budget Office’s August budget outlook estimates the cost of homeland security based on the administration’s own classification of spending as homeland-security-related. The numbers CBO came up with show discretionary non-defense homeland-security spending equal to $22 billion and $26 billion for the 2003 and 2004 fiscal years respectively. When you subtract those numbers from total non-defense discretionary outlays, you come up with a fiscal year 2004 increase of 6.3 percent in non-defense, non-homeland-security discretionary outlays — more than double Bolten’s figure of 3 percent.
To calculate the percentage change for the other three years, we must make assumptions due to the unavailability of public figures. So, to find the figure for FY2003, estimate $18.6 billion of spending for FY2002 non-defense discretionary homeland security (assuming that the spending had increased by the same percentage between FY2002 and FY2003 as between FY2003 and FY2004). For the two Clinton years needed to estimate the figures for FY2002 and FY2001, make the extreme assumption that there was zero non-defense discretionary homeland-security spending. Although it’s obvious that a zero-spending assumption is unrealistic, it is the most favorable possible assumption for Bolten’s case.
So, even with such unrealistically sympathetic assumptions for Bolten, we still come up with annual percentage increases in non-defense, non-homeland security discretionary spending — Bolten’s defining statistic in defense of the Bush spending record — that are completely at odds with his story.
Here are the results:
FY2001 (Clinton): + 7.3 %
FY2002 (Bush): + 6.8%
FY2003 (Bush): + 8.3%
FY2004 (Bush): + 6.3%
Compare the above with Bolten’s numbers:
FY2001 (Clinton): + 15 %
FY2002 (Bush): + 6%
FY2003 (Bush): + 5%
FY2004 (Bush): + 3%
A comparison of the two sets of figures reveals two completely different pictures. Obviously, OMB is excluding and/or using different sets of numbers than the standard ones. But what are they omitting? And more importantly, why? It would certainly help matters if OMB made the supporting data available to the public. Until then, one is left thinking, wistfully, that it would be nice if the White House were as good at controlling spending as it is at spin.
— Tad DeHaven is a fiscal policy analyst in Washington, D.C.