On the spending side of the ledger, I can’t dispute Alan’s general notion that the federal government is too big and spends too much money–we’ve agreed on that point since we both worked in the Ford administration more than 30 years ago. President Bush feels the same way, and that’s why he has steadily reduced the annual rate of growth in non‐security discretionary spending.
The key here is to notice that Cheney is only referring to “non‐security discretionary spending.” What Cheney wrote isn’t necessarily wrong. But to make it true, you need to ignore all spending on entitlements (like Medicare and Social Security), everything the Pentagon does, and interest payments on the national debt.
What you’re left with is a very small slice of the budget. About 13%, actually. Asking Greenspan to grade the president using only this very narrow criterion is like asking your college to re‐compute your graduation‐day GPA using only four of the classes you took.
Why ignore the rest of the budget? After all, the Bush administration did have a hand in expanding many parts of it – the Medicare drug benefit is Exhibit A. Nor is everything the Pentagon does related to the operations in Iraq and Afghanistan. And the rising costs of the national debt are a result of the GOP’s unwillingness to cut spending in the face of deficits.
So, what if we put everything back into the mix except the money spent on the Department of Homeland Security, the security‐related functions of other federal agencies, and the operations in Iraq and Afghanistan? (The last of these has been estimated by the Congressional Budget Office as recently as January of this year.)
Doing that, you’ll notice the growth rate has not declined steadily. In fact, as you can see in the chart below, the rate has jumped all over the place. It never went below 3% and, thanks to election‐year spending sprees, sometimes went as high as 9%. The average annual growth rate since 2001 was 5.8% — faster than the average annual growth of GDP during that period (4.5%) and almost twice inflation (3%).
Looks to me like Alan Greenspan is on the right side of this fight.