Commentary

Big Jump In Outlays Shows “Era Of Big Gov’t” Isn’t Over

This article was published in Investor’s Business Daily, Aug. 5, 2003.

We have finally stopped paying for government this year, but just barely. And if the Bush administration has its way, Americans will pay a lot more next year.

Never mind his rhetoric: President Bush is an enthusiastic advocate of big government.

The advocacy group Americans for Tax Reform figures the Cost of Government Day was July 11. That’s when U.S. citizens finally finished subsidizing government at all levels: taxes, deficits and regulations.

Americans spent more than half the year, 193 days, working for politicians rather than themselves and their families.

Republicans blame the Democrats. It’s not true.

The Cost of Government Day generally came earlier on the calendar under President Reagan.

But it rose under the first President Bush, who made his reputation hiking taxes.

Cost of Government Day peaked in 1992, when Bill Clinton was elected president, and fell eight straight years.

Since 2000, Cost of Government Day has moved later on the calendar by 17 days.

The increase from last year was five days. The increase under the current President Bush is matched only by the rise under his father a decade before.

Fast-Growing Outlays

The principal problem is spending. Outlays are up 13.5% over the last three years.

And not to fight terrorism. Non-defense, discretionary outlays have increased 18%, far more than during the first three years of the Clinton administration.

As my Cato Institute colleague Veronique de Rugy puts it, President Bush “is governing like a Frenchman.”

Over the last three years, federal spending increased 2.5 times faster than national income. If outlays had matched national income, the deficit would be only $70 billion, compared to a predicted $475 billion this year.

But because of Washington’s spending frenzy, the deficit will total $1.9 trillion over the next five years.

Yet on Capitol Hill, the administration is worried about too little, not too much, spending.

When the bloated Departments of Labor, Health and Human Services, and Education appropriations bill came before the House in early July, the budget office complained:

  • Spending on Pell Grants to subsidize college was $465 million lower than requested.
  • The Low Income Home Energy Assistance Program, which supplements a score of other welfare programs, was $200 million short of the administration’s desire.
  • Congress didn’t give the administration everything that it wanted for a herd of special interest education programs.
  • Congress didn’t spend enough on drug treatment, HIV/AIDS programs, child mentoring initiatives, or parental group homes.
  • Congress cut the administration’s request for paid volunteerism through AmeriCorps.
  • There wasn’t enough money for health programs or the Social Security Administration.

Not one objection concerned a proposal to spend too much money.

Even worse is the proposed Medicare drug benefit.

Pegged at a 10-year cost of $400 billion, the real increase in the government’s $13 trillion unfunded liability would be about $6 trillion under the House bill.

At its worst, the Senate’s measure might almost double that liability.

But no one takes the $400 billion estimate seriously.

For one thing, that number stops before the baby-boom wave starts retiring, after which costs will explode.

Equally important, federal benefits always lift demand for subsidized services, and election-minded politicians always raise benefits.

Every federal social program has cost far more than originally predicted. For instance, in 1967, the House Ways and Means Committee predicted that Medicare would cost $12 billion in 1990, a staggering $95 billion underestimate.

Medicare first exceeded $12 billion in 1975.

In 1935, a naive Congress predicted $3.5 billion in Social Security outlays in 1980, one-thirtieth the actual level of $105 billion.

Unfortunately, the Bush administration is almost as enthusiastic about regulating as spending.

Analyst Clyde Wayne Crews reports in his annual “Ten Thousand Commandments” that last year the Federal Register devoted 75,606 pages to regulations, more than in 2000, Bill Clinton’s last year in office.

The number of rules was down, but even so, economists W. Mark Crain and Thomas D. Hopkins figure regulations cost the U.S. economy $860 billion annually.

Regulatory growth follows the same general pattern as do outlays. Most recently, it started rising in 2001, the year President Bush took office, and sped ahead in 2002.

The administration points to its anti-terrorism efforts. But the torrent of new rules has come from the Environmental Protection Agency, Interior Department, and Agriculture Department, as well as the Treasury and Transportation Departments.

Despite his pretense of being a conservative, President Bush actually represents the old conservative U.S. Sen. Henry M. “Scoop” Jackson wing of the Democratic Party, which avidly supported the ever-growing welfare-warfare state.

The president is for tax cuts, yes, but advocates increased government spending on just about every government program.

Costly Foreign Affairs

His foreign policy is based on massive government: War around the globe; lengthy occupations and attempts at nation building; increased foreign aid and international social engineering.

His domestic program is equally expansive, with more money for education, health care, Medicare, national service, welfare, and more.

How much will Americans have to pay for government next year?

It certainly will be more than this year. Everyone in Washington, Republicans and Democrats alike, are now for bigger government.

Doug Bandow is a syndicated columnist and a senior fellow at the Cato Institute.