Commentary

Clinton’s Budget: Return To Spender

By Stephen Moore
This article originally appeared in the Investor’s Business Daily.

After scanning Bill Clinton’s proposed $1.73 trillion budget for fiscal ‘99, one wonders whether there is a single problem in America that the president thinks can ‘t be solved with a new federal program.

Call it the return of the nanny state in Washington. The White House budget blueprint calls for an avalanche of new spending — everything from federal baby-sitting subsidies and the further federalization of schools to expanding welfare for immigrants and infusing another $18 billion into the failed International Monetary Fund. And that’s not to overlook the most expensive expansion of Medicare in 10 years.

The price tag for this blizzard of new federal programs? At least $200 billion over the next five years.

Until now, most of the initiatives in the area of school construction, crime prevention, infrastructure and transportation have never been considered federal responsibilities.

As House Budget Committee Chairman John Kasich, R-Ohio, put it: “I guess we won’t need state and local governments anymore.” There has never been a presidential agenda more contemptuous of federalism and the 10th Amendment.

All of the budget’s chunky-sized pieces of red meat for left-wing special interests in Washington make a mockery of the president’s State of the Union sermon on America’s entering a new era of fiscal integrity.

Yes, it’s true that this year’s budget will end in a surplus. That isn’t because of any tightfisted budgetary restraint in recent years - by Republicans or Democrats - but because the federal tax burden this year will now reach its highest level since the end of World War II. Never mind that America isn’t in a war anymore - hot or cold.


Republicans should declare all of the president’s budget busters dead on arrival.


What about the president’s boast that America now has the “smallest government in 35 years?” In fact, we have the smallest military in 35 years - but that’s all. Social spending as a share of the national economy stands at 17.5%, a record burden of government. By the end of Clinton’s term in 2001, total federal domestic outlays will be nearly $400 billion higher than when he first took office.

This budget also further exposes Clinton as the anti-tax-reform president. The blueprint conspicuously lacks any vision of how to junk our monstrously complex and economically crippling tax code.

In fact, the budget is crammed with policy suggestions that would require a myriad of new credits, deductions and loopholes that, if adopted, would bloat the 9,000-page tax code - already twice the size of the King James Bible - with several thousand new lines of legalese. In short, this is a budget only a tax attorney could love.

The White House preaches that its top fiscal priority in this new era of budget surplus politics is to “save Social Security first.” Governments all over the globe - in Chile, Argentina, Mexico, Poland and Australia, to name a few - have abandoned state-run, pay-as-you-go Social Security schemes for safer, privatized plans with higher rates of return. Such a bold approach is nowhere to be found in the Clinton budget - the president’s plan is a subterfuge to delay genuine Social Security reform.

Republicans should declare all of the president’s budget busters dead on arrival. They should then match the White House’s call for new spending with $200 billion in supply-side tax cuts in order to repeal the record high federal tax burden facing American workers today.

This is what they should do. But so far, many congressional Republicans have simply responded to the Clinton budget offensive with enormous programs of their own. Republicans are even debating whether to bust the spending caps in last year’s vaunted five-year budget deal. But it’s futile to think they can outspend Bill Clinton.

The ‘99 White House budget opens wide the vault of the federal treasury to seemingly every special interest group in Washington. What Clinton has unveiled isn’t the agenda of a moderate New Democrat - it’s the era of big government back with a vengeance.

Stephen Moore is director of fiscal policy studies at the Cato Institute.