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Press Release

    Omnibus Spending Outrage

    02/21/2003

    Watching the new Republican Congress work together almost makes me wish for gridlock. Spending is out of control.

    One of the first measures passed by the party of limited government is a massive, record-breaking spending bill for FY 2003. The GOP didn’t waste any time smashing open the piggy bank.

    Granted, spending discipline in Washington first broke down in the wake of 9/11. That’s at least forgivable for FY 2002. We need to fully fund the war on terror, and all of the increased security measures in our harbors and airports. But that’s a bit of a myth, too. Much of this new spending is just worthless pork or welfare. It seems 9/11 is giving the big spenders in Washington perfect political cover.

    Sadly, the new Republican Congress missed a golden opportunity to begin to slow spending this year. The Daschle Senate never passed most of the appropriations spending bills for FY 2003. There was a chance for the new GOP Congress to pass a long-term “continuing resolution” that would have grown government more or less with inflation. That would have been a remarkable statement of principle.

    Instead, they porked out, passing a sweeping Omnibus Appropriations bill that burns a staggering $397 billion of your money. What’s more depressing is that they passed this bill in a political off-year. Usually, Congress waits until an election to go this crazy on spending.

    President Bush, in his recent rhetoric and in his proposed budget for 2004, begins to apply the brakes to the runaway spending bus. He would only grow discretionary spending by 4 percent. That’s still too fast, especially with economic growth slipping to zero. But when the government grows at 22 percent over the past two years, 4 percent starts to look really good. Yet, even if Congress can stick to 4 percent, it’s probably not realistic for FY 2004. With looming war in Iraq, additional discretionary spending is extremely likely. We could easily top 7.8 percent growth in the next budget year.

    And, frankly, if Bush really believed the 4 percent growth rule, he would have vetoed the Omnibus Appropriation for FY 2003.

    To be clear, this column isn’t about deficits. I’m not worried about deficits that come from tax cuts, like the excellent package the President has proposed. That’s because marginal rate tax cuts will spur enough economic growth to make the deficit shrink. What I’m worried about are deficits due to out-of-control government spending. That red ink doesn’t lead to anything positive in the way of long-term growth. Instead, deficit spending saps resources from the private, productive sector.

    It’s also really hard to understand the performance of the GOP. Individually, and in the leadership, there are a number of excellent men and women who are committed to our Constitution and the values of free markets and limited government. But let’s look at the results. As a group, the GOP now seems as addicted to spending as the leftists who ran the U.S. government in the 1970’s. In fact, the last time government grew faster was between 1976 and 1978, when Jimmy Carter led an expansion of 24.8%.

    President Bush is hard to figure out, too. This year, he is proposing a sweeping policy agenda: expanded trade, strengthened welfare, personal retirement accounts for Social Security, and dramatic welfare reform. We couldn’t ask for anything more. Frankly, there hasn’t been a President this bold in a long, long time. It’s a heroic agenda. Yet, Bush failed to use the veto—he doesn’t even publicly threaten to use the veto-- at all on spending. No wonder the White House got rolled again this year on discretionary spending.

    Maybe Bush is crazy like a fox? Is he using less important discretionary spending to deliver votes later this year for urgently needed reforms in Social Security, Medicare, and the tax code?

    That would be wise. The real issues for taxpayers today are not discretionary spending. But, all of these hundreds of billions of dollars start to add up, and the spending surge limits our ability to pay for real reform in Medicare and Social Security.

    But, the way government spending has ballooned under President Bush is not sustainable. The long-term trend lines are pretty unhappy.

    Consider again that discretionary federal spending will jump 7.8 percent this year. At this rate of growth, the federal government will double in size in about 9 years and triple in size in just 15 years. And, of course, that’s just the discretionary pot. Over the next decade, Medicare will continue to run massive deficits and Social Security’s surplus will degrade into red ink. American finances could look a lot more like Japan’s or Brazil’s in just a dozen short years. And this is from the new GOP Congress. When, exactly, should conservatives officially sound the alarm?

    I’m sure Congress and the President and their staff make excuses and tell themselves, “Well, this is just a one-time binge. We’ll tighten up next year.” Sure. That’s what compulsive gamblers and alcoholics tell themselves, too. In the meantime, America is on the path to spending oblivion, one year at a time.