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Despite the fact that the Republicans control the White House, the House of Representatives, and 30 governorships, the nation is now in the midst of the biggest government spending spree since LBJ. Incredibly, the domestic social welfare budget has expanded more in just two years ($96 billion) under George W. Bush than in Bill Clinton's first six years in office ($51 billion).
Although many economists portray this surge in spending as a stimulus to growth, the opposite is true. The runaway federal budget, which is up nearly $300 billion in just the last two years, and the parallel hike in taxes and debt needed to finance this spending binge, is America's single most ominous domestic economic danger sign.
Governments can only grow by capturing resources at the private sector's expense. That's what's happening now. Over the past year and a half, government has been the single fastest growth sector of the economy. It has grown faster than construction, services, housing, and even consumer spending. In 2001 the recession-racked private-sector economy grew by a microscopic 0.5%. But there was no recession in government: its spending was up 6% for the year. For the first quarter of this year, data indicates that private-sector activity rose by 5% as the economic recovery has taken hold. But government's spending soared twice as fast. This pace would make Tip O'Neill blush.
Even more discouraging is the spending trend line. Every year since the Republicans first took control of the House in 1995, spending roadblocks have been further removed. Domestic spending actually fell by an impressive 3% in real terms in the 104th Congress (1995-96) when Republicans seized control of the House and Senate for the first time in 40 years. The next Congress raised spending by 4%, the next by 11%, and this one is on pace to raise the budget by 15%. All of this is reminiscent of the old Reagan quip that to say that Congress spends like drunken sailors is an insult to drunken sailors.
Sure, the Democrats in Congress share a big part of the blame. The spending spree has worsened now that Tom Daschle is running the Senate and that prince of pork, Robert C. Byrd, is ruling the appropriations process. But one only need look at the vote on the Farm Bill — a bill that will distribute million-dollar welfare checks to America's wealthiest farm businesses — to see that the pro-spending virus endemic in the Democratic party has spread to the GOP.
I've covered federal budget issues for nearly two decades. If the Farm Bill wasn't the most fiscally rancid legislation I have seen, it's certainly in the top three. Yet two out of three Republicans voted for it, and, worse yet, Mr. Bush not only signed it, he crowed that it would secure the "independence of the American farmer." Independence from what exactly? The free market?
The bill is only the first of many budget-busting, anti-enterprise spending bills that are racing toward the president's desk. The emergency military supplemental spending bill has become a Christmas tree for special interests and is $3 billion over budget. The energy bill, with its emphasis on tax credits for windmills and boondoggle oil-conservation projects, is a bill that only Al Gore could love. Congress will also soon send Mr. Bush a $100 billion bill to provide free prescription-drug benefits for seniors, and a $6 billion bill for baby-sitting subsidies. And the president says he wants $5 billion more for failed foreign-aid programs. All this comes after last year's education bill that will nearly double the Department of Education budget over the next six years and institutionalize a federal presence in our local-school system.
The immediate way to reverse the fiscal collapse in Washington is for Mr. Bush to start dusting off his veto pen. The energy bill, the appropriations bills, the prescription drug bill all should be rejected in the name of fiscal sanity. This president has no vetoes so far. The White House has been reluctant to wield the veto power because they see this as a huge withdrawal of scarce political capital. Wrong. History proves that strong presidents — from Roosevelt to Reagan — make strong use of the veto. Mr. Bush can make a powerful case for rejecting obese spending bills: They are not just economically wrongheaded, they weaken the critical war on terrorism by diverting scarce tax dollars away from our vital national-security needs.
Republicans wrongly believe that they can bank on a spend-and-elect model to secure their House majority and then capture the Senate this November. The opposite is likely: The current spending binge, on top of the president's steel tariffs and his signature on the anti-First Amendment campaign reform bill, may severely demoralize conservative voters and set the stage for an electoral surge back to the Democrats. After all, if it really is big government that the voters want, why not pull the lever for Democrats, who are not amateur, but major-league big spenders.
John Boehner, the savvy Republican from Ohio who was a major part of the Republican Contract with America revolution in 1994, recently lamented that "we Republicans seem to have forgotten who we are and why we're here." He's right. Republicans are suffering from a politically lethal identity crisis. If the budget bulge that we're now witnessing were happening under a Democratic presidency, Republicans would be howling in indignant outrage. If the tidal wave of spending isn't soon reversed, the Republican Party may soon discover that it is both redundant and replaceable.
Stephen Moore is president of the Club for Growth. This article originally appeared in the Wall Street Journal on May 13, 2002.