Cato Institute
1000 Massachusetts Ave, NW
Washington, DC 20001-5403
Phone (202) 842 0200
Fax (202) 842 3490
 Contact Us
Support Cato

Cato Policy Report, May/June 1997

A Failure of Leadership

by Edward H. Crane

Edward H. Crane is president of the Cato Institute.

The recent "budget deal" (as it's always flippantly referred to here in Washington) brings to mind Thomas Jefferson's admonition that "the natural progress of things is for government to gain ground and for liberty to yield." Call it an early public-choice analysis. The Founders of this nation gave us a decentralized republic with strictly limited national powers. The Constitution was intended to protect us against the "natural progress" of government growth.

Absent constitutional constraints, the bureaucrats and politicians of the federal government generate more taxes, more spending, and more regulations. And they do it with gusto. We know why this is so. It's no secret. The fact of concentrated benefits and diffused costs means that over 90 percent of those testifying at appropriations hearings favor the appropriation in question. (Indeed, of the 50 organizations that testified most frequently before the 104th Congress, only the Cato Institute never testified in favor of increased federal spending, according to a study by the National Taxpayers Union Foundation.)

Then there is what Milton Friedman calls the tyranny of the status quo, about which the "budget deal" speaks volumes. Add the public-choice dynamic itself, and you've got a recipe for runaway big government. With the decline of constitutional authority that began in earnest when Franklin Roosevelt threatened to pack the Supreme Court in 1936, the anchor that limited the range of the ship of state was cut loose.

And so we find ourselves presented with a proposed five-year federal budget that increases so-called discretionary domestic spending by some $70 billion; increases entitlement spending (while creating a new $15 billion entitlement); and fails to eliminate a single government department, agency, or major spending program. Leadership from both the Democratic and Republican parties hailed this institutionalization of big government as a "historic" achievement.

Sen. Phil Gramm (R-Tex.), one of the dwindling number of Republicans who seem to care about out-of-control spending, points out that of the $350 billion employed to reach this alleged balanced budget, fully 99 percent comes from assumptions about future economic growth, changes in the Consumer Price Index, and lower interest on the national debt. Only $3 billion comes from actual policy changes.

Even the proposed tax cuts amount to a paltry $80 billion over five years. The reductions in the capital gains tax and the death tax are commendable, if far too modest. The president's proposed college tax credit and the GOP's proposed $500-a-child tax credit, however, are examples of the misuse of the tax code for social engineering purposes. They also would create huge new constituencies against fundamental tax reform, which is what is ultimately needed.

Surely this bipartisan assault on the common sense of the American people will redouble the call for term limits. As columnist George Will points out, "Democrats and Republicans pretend to be brandishing clenched fists at each other, but they really are shaking hands across the barricades." Indeed, while leaders of both parties pay lip service to the Constitution, no one wants his political options constrained by it.

In his powerful study, "Dereliction of Duty: The Constitutional Record of President Clinton," Timothy Lynch, assistant director of Cato's Center for Constitutional Studies, documents Clinton's disdain for constitutional constraints on his power. From issues of free speech to warrantless searches to federalizing crime, Clinton ignores the enumerated powers of the federal government and virtually laughs at the Tenth Amendment.

The problem is, the Republicans are just as bad. House Speaker Newt Gingrich is fond of quoting his intellectual gurus, Alvin and Heidi Toffler, to the effect that the Constitution was fine for the industrial age but is somehow inadequate for the "Third Wave" of the information age. Perhaps that explains why the Republicans passed up a marvelous opportunity to reinvigorate the enumerated powers doctrine when the Supreme Court struck down the Gun-Free School Zones Act in 1995 by declaring for the first time in about 60 years that Congress had acted beyond its constitutional authority. One of the final acts of the 104th Congress was to pass another such law, this time using the flimsy justification of the commerce power.

Americans rightly perceive the "debate" in Washington to be adrift, with no principles other than reelection to guide it. Yet the United States Constitution sits there for all to see what the basis of the debate should be. It is about the legitimate powers of the federal government. It is about abolishing federal departments—^Energy, Education, Commerce, Labor, and more. It is about abolishing corporate welfare and the welfare state. It is about privatizing Social Security.

Yet, in an otherwise laudable speech at a GOPAC dinner recently, Gingrich managed to speak for nearly an hour without once mentioning a government program he would eliminate.

America deserves better than this. Without a commitment to principle on the part of advocates of small government, big government will simply continue to get bigger. Barry Goldwater and Ronald Reagan, while not libertarians, were nevertheless committed to the principles of limited government to the extent they were willing to lose elections rather than give up their principles. As a result, they started a revolution to recapture the American heritage of individual liberty. Would that the current leadership of either party had that vision or that courage.

This article originally appeared in the May/June 1997 edition of Cato Policy Report.