Potomac Profligates Arc the Republicans up to the challenge of reining in Big Government?
Armey, Dick
Potomac Profligates Are Republicans up to the challenge of reining in Big Government? BY DICK ARMEY At LTHOUGH MANY SAW THE REPUBLICAN TAKEOVER of the executive branch as a big opportuni- y to...
...I suggest that the president embrace a plan that allows individual workers to invest up to the full 6.2 percent of their income currently withheld by Social 14 THE AMERICAN SPECTATOR MARCH 2004 Security into private accounts...
...It was my responsibility as majority leader to sit on overzealous spenders, so I became particularly unpopular...
...In light of these outrageous shortcomings, taxpayers are rightfully wary of calls for more federal spending...
...But the Republican majority must remember that it was elected as the party of limited government...
...economic policy...
...Citing a study by the Club for Growth, the Wall Street Journal notes that the average annual spending increase under Bush far exceeds that of President Clinton...
...Enormous waste, redundancy, and inefficiency plague federal spending programs...
...BY DICK ARMEY At LTHOUGH MANY SAW THE REPUBLICAN TAKEOVER of the executive branch as a big opportuni- y to roll back big government, those hopes have been frustrated, particularly since 9/11...
...The real drivers in the federal budget are these programs, particularly Medicare, Medicaid, and Social Security...
...Balancing the budget or generating a surplus did little to promote fiscal discipline...
...Reining in spending energizes disenchanted voters...
...Reforms are required, and the longer they are delayed, the more difficult they will be...
...Incentives, the cost of capital, and economic growth have become key considerations in federal fiscal policy for the first time since Ronald Reagan...
...The administration is also asking Congress to adopt new budget enforcement mechanisms to force Congress to remain within prescribed spending guidelines...
...The president needs to dust off his veto pen and reject the next excessive spending bill that comes across his desk...
...Congress has done little to promote fiscal responsibility and long-term economic growth...
...The morally repugnant and economically destructive death tax has been repealed (albeit temporarily...
...Fiscal restraint isn't just good policy, it is also good politics...
...In 2002, mandatory spending consumed 56 percent of the budget...
...But the spending problem surfaced much earlier, with spending hikes approaching 15 percent in 2001 when a surging economy brought in surplus revenues to Washington...
...None of this, however, suggests that advocates of limited government, including George W. Bush and Republican leaders in Congress, should give up...
...While the vote for the tax cut came down to the wire, with Vice President Cheney called in to break the tie, new spending measures are moving through Congress with substantial majorities...
...Democratic presidential candidates and critics of President Bush's economic policies blame the budget deficit on tax cuts...
...Federal spending has increased by an astounding $586 billion ($404 billion after inflation) since 1998...
...Equally important, by proposing to make every American worker an owner and investor, George W. Bush could fundamentally transform the political debate in the 2004 elections...
...In 1930 federal outlays accounted for 3.4 percent of gross domestic product...
...When we first set out to reform Medicare in 1995, Republicans focused on giving seniors more control over their healthcare decisions...
...The congressional leadership must support the president in this fight against Potomac profligates...
...The fiscally conservative principles that got it elected will keep it elected...
...At some point—and we are not far from it—spending increases will threaten the political viability of future tax cuts...
...Current Budget Chairman Jim Nussle is an equally capable and committed advocate of fiscal discipline...
...Paul Ryan (R-W1) in the House, and Sen...
...Discretionary spending as a percentage of the total has gone from 68 percent in 1962 to just 36 percent 20 years later...
...I understand that it is almost always easier to win friends by using the federal treasury...
...Last year it was 12 percent and the year before 13 percent...
...The recent omnibus kicked it up 9 percent more, according to the Heritage Foundation...
...Caving to media pressure, the Senate voted 93-0 to extend the child tax credit to those who were not paying taxes in the first place, at a price of $10 billion...
...Imagine an election season where the president runs on a domestic platform of tax relief for all working Americans and entitlement reform that gives individuals ownership and control of their retirement savings...
...More recently, we saw it in Oregon, a state Al Gore won in 2000, when voters last month rejected a tax increase at the ballot...
...Rank and file members, under pressure from spending interests back home, complained...
...In truth, higher spending and lackluster economic growth are the real deficit drivers...
...Everyone complained...
...Request letters were written, just as they had been under the Democrats...
...DICK ARMEY way bill will offer a perfect opportunity for him to pick a fight with big spenders...
...The Republican Congress lost its nerve during the budget showdown with the Clinton administration in 1997, and serious efforts to control spending went out the window after 9/11...
...We did not finish the job in 1995, and we missed another opportunity this year...
...But this political victory came at the expense of the substantive reforms that were originally proposed by the White House...
...When we act like Democrats, we lose...
...The GAO continually monitors "high risk" federal programs with poor financial accountability and the Office of Management and Budget has identified $35 billion in erroneous payments made by federal agencies...
...When Republicans act like Republicans, they win...
...Rather than make tough choices, outlays have increased by almost 30 percent since the year 2000...
...But it worked...
...NI Dick Armey, former U.S...
...10 THE AMERICAN SPECTATOR MARCH 2004 DICK ARMEY PRESIDENT BUSH SIGNS THE MEDICARE PRESCRIPTION DRUG, IMPROVEMENT AND MODERNIZATION ACT OF 2003 ON DECEMBER 8, 2003...
...The president would accomplish several goals with such a Social Security reform proposal...
...The added value of our leadership-imposed spending discipline is that it allowed members to have their cake and eat it too...
...These are programs whose growth is written into federal law, so-called "mandatory spending...
...IN MY NEW BOOK, Armey's Axioms, there is a chapter entitled: "Conservatives are afraid the public will not understand, liberals are afraid the public will understand...
...The economy's lackluster performance is responsible for more than half of the revision, with the remaining 24 percent attributed to higher federal spending...
...Appropriators complained...
...We saw a clear demonstration of this in 1994 when voters chose between Hillary's government-run healthcare system and our Contract with America...
...Imagine a second term Bush presidency with a political mandate to lead on Social Security, and enough reform-minded senators to carry his agenda on Capitol Hill...
...MARCH 2004 THE AMERICAN SPECTATOR 13 POTOMAC PROFLIGATES serious national debate on tax reform...
...Liberals everywhere were outraged...
...I have spent a great deal of time in politics and I understand the temptations to make short-term compromises...
...Of course, Democrats complained about the imperial leadership thwarting the will of Congress...
...With an unfunded liability of $13 trillion, Medicare needs fundamental reform...
...Comparing tax cuts to spending cuts makes Washington's bias toward spending clear...
...This is the Alamo for Big Government liberals, and they will fight tooth and nail to keep the program that made generations of voters dependent on the Democratic Party...
...Their chairman complained...
...Both are young, ambitious legislative entrepreneurs who have survived and thrived politically while embracing true reform...
...This was demonstrated again in 2002, when Senate Republican challengers like Sununu and Elizabeth Dole embraced personal accounts and trounced opponents who tried to silence them with scare tactics...
...If you believed the media, we were the most insensitive ogres in the history of American government...
...House Majority Leader, is chairman of Citizens for a Sound Economy...
...President Bush has proposed and signed into law the largest tax cuts in American history, significantly reducing marginal tax rates and reducing the cost of capital...
...Reports suggest that such a proposal is soon to be introduced by Rep...
...IN TRUTH, THE FERVOR over discretionary spending growth overlooks an even larger problem in the federal budget...
...It is time for the Republican leadership in Congress to recover its nerve on spending...
...When we took control of Congress in 1995, the leadership seized control of the spending process...
...They plan to demagogue the issue regardless of what Republican candidates choose to say or not say...
...As Brian Riedel of the Heritage Foundation notes, "Despite reports of heartless budget cutting, the past few Republican Congresses have distinguished themselves by outspending their predecessors...
...Not wanting to jeopardize his foreign policy agenda, President George Bush hasn't used the bully pulpit to reimpose the discipline enjoyed in the early years of the Republican takeover of Congress...
...Higher taxes lost in a landslide, despite the dire spending cuts predicted by the Democratic governor, the legislature, and virtually every editorial page in the state...
...Oregon is a left-of-center, swing state...
...The next bloated highCongress has done little to promote fiscal responsibility and long-term economic growth...
...This is particularly true when it comes to debates over the size of government...
...This will set off alarm bells about perilous cutbacks in federal programs, but these criticisms are based on the assumption that all current spending is useful...
...But pro-growth tax policy is only half of the national fiscal equation...
...today government spending is roughly 20 percent of GDP...
...Speaker Hastert, another able leader, needs to wrest the budget process from the appropriators, who will never live within spending limits unless their greedy hands are tied...
...Since 1930, the longest streak of surpluses has lasted only four years, and the government has been in deficit more than 80 percent of the time...
...As a promising start, the White House in its new budget is seeking to cap growth in non-defense or security related discretionary spending at one half of one percent...
...Much of it is not...
...Meetings with appropriations staff were held where the lobbyists hired by local interests could present their sophisticated econometrics findings demonstrating $10 of value for every dollar of federal money invested in X, Y or Z. And when the spending limits imposed by the leadership appropriately squeezed all such pork out of the final bill, individual members of Congress could pass the buck "I tried, but the Speaker is really committed to the spending caps passed out of the Budget Committee," they could say...
...In fact, federal spending during the surplus years was brisk...
...12 THE AMERICAN SPECTATOR MARCH 2004 According to the GAO, "by mid-century, absent reform of these entitlement programs, projected federal revenues may be adequate to pay little beyond interest on the debt and Social Security benefits...
...Spending discipline is also vital...
...White House insiders claim that the president personally believes that his willingness to offer a positive vision for Social Security reform was one of the deciding factors in his victory...
...Surplus tax revenues are a scarce commodity in Washington, and unless they are returned to taxpayers through tax cuts, they are soon funneled into spending that expands the size of government...
...Imposing such discipline is never a painless process given Washington's institutional dependency on fat budgets...
...As any appropriator will be quick to tell you, real spending growth is on autopilot in the form of entitlement spending...
...N EVEN BIGGER opportunity going into November is on Social Security...
...The average rate of spending increases from 1998 to 2003 has been 7.4 percent, a rate of growth that far exceeds the rate of growth in the average family's income...
...An aggressive transition to significant personal accounts would, in effect, represent the largest debt reduction plan in the history of the United States...
...So Congress must pursue both entitlement reform and discretionary spending cuts...
...Even worse, the president's tax cuts are scheduled to expire, and calls for increased spending raise serious questions about whether Congress will make these cuts permanent...
...When a county commissioner requested help with getting an earmark in an appropriations bill to fund a new highway or sewer system, business as usual appeared to work...
...It is important to remember that the Bush administration has vitally changed the direction of U.S...
...The Budget Committee immediately became, for the first time, an integral part of the appropriations process...
...Again, we skipped over the seniority system to find a chairman willing to do the hard work of saying no...
...Literally billions are unaccounted for by the federal government...
...He would demonstrate to the conservative political base that he is serious about moving money and power out of the hands of Washington politicians while proposing a plan that aggressively addresses the massive unfunded liability of the current Social Security system...
...The simple fact is that Republicans own the proposals that provide the only meaningful solutions to this nation's fiscal challenges: tax relief, renewed spending restraint, and entitlement reforms that empower individuals with ownership and choice...
...Overall spending slowed dramatically and discretionary spending actually fell, right up to the moment Republicans blinked during the "government shutdown" standoff with the Clinton White House...
...President Bush enjoys a oncein-a-generation opportunity to lead the country in a national debate over fundamental restructuring of the two biggest line items in the federal budget, Medicare and Social Security...
...The prescription drug legislation recently signed into law may have provided Republicans an important victory by taking away an issue the Democrats are supposed to own...
...On average, real disMARCH 2004 THE AMERICAN SPECTATOR 11 POTOMAC PROFLIGATES cretionary spending increases under Bush have averaged 8.2 percent compared to 2.5 percent under President Clinton...
...Given runaway spending, the GAO says that "the relevance or 'fit' of particular federal programs, policies, or activities to today's world and the future must be re-examined...
...Democratic appropriators have even taken to quoting me—positively—on the House floor...
...The deficits plaguing Washington are now threatening the president's across-the-board tax cuts...
...p RESIDENT BUSH IS AWARE of the need for fiscal discipline, and he understands that stronger economic growth alone cannot solve the deficit problem...
...Imagine the Republican opportunities in 2004...
...Given a clear choice between higher taxes and limited spending, the voters spoke loud and clear...
...We violated the seniority system to choose a Budget Committee chairman who had already demonstrated a zeal for spending discipline, John Kasich...
...he understands that stronger economic growth alone cannot solve the deficit problem...
...A more aggressive plan must identify and eliminate wasteful or unnecessary spending...
...Despite a chorus of Chicken Littles from some Republicans in Congress, the Bush White House has continued to advocate the principles of individual ownership and control through personal retirement accounts...
...Even liberal Multnomah County, which went with Al Gore in 2000 by 35 points, opposed the tax measure...
...DISCRETIONARY SPENDING has been increasing annually at double-digit rates...
...By now, everyone knows about the policy mistakes of the last three years: a massive expansion in farm subsidies, the largest expansion of federal education spending since the Great Society, and a new prescription drug benefit for seniors...
...But as the president himself has demonstrated, the Third Rail has no more juice...
...The president has proposed nothing less than a fundamental change in the way our tax code treats savings, opening the door to a President Bush is aware of the need for fiscal discipline...
...More ominously, bipartisan support pushed through a $534 billion prescription drug benefit—a price tag higher than the tax cut—that in the end did little to address the underlying institutional failures of the Medicare program...
...In a bold oke of political leadership, George W Bush embraced the third rail of politics in his successful bid for president in 2000...
...The free rein congressional appropriators have assumed in the past two budget cycles threatens the future of limited government and lower taxes...
...According to the Office of Management and Budget, the three Bush tax cuts were responsible for only 23 percent of the upward deficit revisions since 2001...
...With a slim majority in the Senate, and an even smaller pro-reform plurality in Congress, the reforms pushed by President Bush and Ways and Means Chairman Bill Thomas were systematically stripped from the recently enacted prescription drug bill...
...Now that would be an election worth showing up for...
...I suggest that the president embrace a plan that allows workers to invest up to 6.2 percent of their income into private accounts...
...John Sununu (R-NH) in the Senate...
...The latest budget from OMB reports deficits of $521 billion for fiscal year2004 and $364 billion for fiscal year 2005...
...As the GAO notes, these problems will only increase as the baby boom generation begins to retire and place more strains on federal programs and outlays...
...Once tight limits on spending categories were passed out of the budget committee, the leadership made sure that appropriators observed them...
...PHOTO/COVER PHOTO: KRT/CHUCK KENNEDY Democrats are using the ballooning deficit as a weapon to attack Republicans and the most important domestic policy accomplishments of the Bush administration...
Vol. 37 • March 2004 • No. 2
