National Review

October 1, 2001

SECTION: Article; Vol. LIII, No. 19

Tax Cut and Spend: The profligate ways of congressional Republicans

By STEPHEN MOORE

In recent weeks President Bush has been crowing that he has trapped spendthrift Capitol Hill Democrats inside the Social Security lock box. The White House theory is that because the Democrats have now pledged never to take another dime from the Social Security surplus fund, they are dangling from the horns of a no-win budgetary dilemma: They must give up either the lock-box gambit (and thus expose themselves as fiscal hypocrites) or their multibillion-dollar wish list of social spending (and thus infuriate their liberal base).

There's one problem with this theory: spendthrift Capitol Hill Republicans, who have their own pricey shopping list when it comes to this year's budget. Bush has pledged to veto spending bills that would tap into Social Security-but repelling the congressional budget raiders will be a herculean task when so many of them are members of his own party.

Here's just one depressing example of the bipartisan nature of today's spending binge. So far this year, legislators have requested an all-time-record number of pork-barrel special-interest projects-bicycle paths, county courthouses, railroad museums, shark-research funds, money for onion growers, and the like. At least half of these slabs of taxpayer-funded bacon would be delivered to Republican districts. The Office of Management and Budget calculates that if every one of these requests were approved, the price tag would reach $280 billion. That's a figure equal to the entire defense budget.

Over the past three years-a period of Republican control of both House and Senate-the rate of growth of federal domestic spending has accelerated from 6 percent to 8.5 percent, during a time of nearly zero inflation. Congressman Pat Toomey, a Pennsylvania Republican who is the fiscal-conservative watchdog on the House Budget Committee, complains that federal appropriations may rise by as much as 10 percent by the end of the year-a far cry from the 4 percent spending increases that Bush sought when he released his budget plan back in January.

What ever happened to the hard-charging fiscal conservatives in Congress who once wanted to shut down agencies and even entire cabinet departments? It was only six years ago, in the winter of 1995, that Republicans were promising a fiscal revolution-a rollback of layer upon layer of failed multibillion-dollar welfare-state programs. For a brief but glorious moment, that is precisely what happened: In 1996, for the first time in more than a decade, many federal agencies saw a decline in their annual budgets. Big government was in full-scale retreat, or so it seemed. But the ethic of fiscal housecleaning proved to be short-lived.

The original "Contract with America" budget in 1995 slated more than 300 programs for termination. Some of these programs-such as the Legal Services Corporation and bilingual-education funding-were little more than political slush funds for special-interest constituencies. Others-such as TVA and the Rural Electrification Administration-were already antique when Barry Goldwater campaigned against them in 1964. And most of the rest were hopelessly ineffectual: the Economic Development Administration, the World Bank, federal transit grants, the Appalachian Regional Commission, and so on.

Not only does nearly every one of these programs still exist; they are actually flourishing. For example, the Goals 2000 education program-federal "free money" that some states have actually rejected because of the meddlesome strings attached-has nearly tripled in size, from $231 million to $688 million. The bilingual-education budget has risen by almost 40 percent, even as voters all around the nation are overwhelmingly rejecting bilingual education because it hinders the ability of immigrants' children to learn English.

Most farm programs were supposed to be phased out entirely with the passage of the Freedom to Farm Act back in 1996, but it turns out that over the past five years payments to agribusinesses have actually soared. Freedom to Farm was supposed to spend $47 billion over seven years, with payments dropping every year; the actual spending was roughly $86 billion, with payments rising every year. This year Congress is rewriting the farm bill-the subsidies, of course, still exist-and a staffer on the Senate Agriculture Committee recently described the bill as "the most costly and least free-market-oriented agriculture bill in at least a generation." Freedom to Farm has been converted into the Freedom to Farm Washington.

Amtrak narrowly escaped the ax back in 1996, when Congress told the railroad's management it had to break even by 2002 or else be liquidated. This year, Amtrak-which President Reagan once aptly described as a "mobile federal moneyburning machine"-will record its biggest losses ever; but House Appropriations Committee chairman Don Young, a Republican, has just voiced his support for a $71 billion taxpayer bailout over the next ten years. That's almost as much as it cost to put a man on the moon.

Of the tiny handful of programs that were terminated, some have since risen from the grave. The wool and mohair subsidy was created in the early 1950s during the Korean War, when these payments to goat- and sheepherders were said to be vital for national security, because the military needed wool uniforms. The Pentagon hasn't used wool uniforms for about 30 years now, so the rationale for the subsidies long ago disappeared. In 1996, the Republicans killed the program; in 1999, it was suddenly resurrected under a different name. The National Sheep Industry Improvement Center was created to provide "temporary" help for sheepherders facing the problems of overproduction and low prices.

Corporate welfare is also as strong as ever. The mercantilist policies of the Commerce and Agriculture Departments are the antithesis of the free-market policies Republicans say they espouse, but the congressional GOP has never made an honest effort to push companies like AT&T and GE off the dole. The welfare-reform package included a two-year time limit for receiving aid, because it was well known that continued assistance simply creates a culture of dependence. Why should firms like Boeing receive Export-Import Bank aid for more than a decade?

Perhaps the most embarrassing fiscal retreat of all involves the Education Department. Republicans had argued in the Reagan years-and again after the GOP takeover of Congress in 1995-that this department should be shut down because it has had no impact on school performance; in fact, there is a negative correlation between federal education funding and academic achievement. But once they lost the fight with Bill Clinton over closing down this dubious legacy of the Carter era (the teachers unions used to brag, "We're the only special-interest group in Washington with our own cabinet agency"), the Republicans adopted precisely the opposite strategy: Now they're determined never again to allow the Democrats to outspend them on this agency. Between 1996 and 1999, the department's budget shot up 38 percent, to $33 billion. In 2000, its funding grew by another $6 billion; and this year's Bush education reforms call for a doubling of the federal education budget over five years. White House officials admit-anonymously and off-the- record-that these funds will do almost nothing to help schoolchildren, but will do a lot to help Republicans save their jobs.

Washington's culture of spending was an important reason the Democrats finally lost control of Congress in 1994; but that culture now thrives on the Republican side of the aisle. In 2001, the federal government will end up spending some $400 billion more than it spent back in 1995 when the GOP took over the Congress. Every dime of that increase has been in domestic social programs; none of it has been devoted to defense. It says a lot about the Democratic party's priorities that the only protest Daschle, Gephardt & Co. have raised about the affordability of a federal program has been against missile-defense proposals.

Jeff Flake, the freshman Republican from Arizona, expresses shock that every vote on the budget in the first six months he was in Congress was to expand the size of the government. "I'm still waiting for a House floor vote to make government smaller," he grouses.

His colleagues evidently don't share his view. In the past two Congresses there has been a stampede to get on the appropriations committees, which, of course, parcel out the dollars. So now we essentially have two parties ruling Capitol Hill: one that wants big government, and another that wants even bigger government. That's not the kind of sharply defined ideological difference between the two parties that will send voters to the polls to pull the lever for Republicans.

If Republicans don't rediscover the ethic of fiscal restraint-if they don't dedicate themselves this fall to constraining spending to 4 percent or so, which is about half what they'd like to spend-there will be disastrous consequences: The entire Bush-GOP fiscal strategy of tarring and feathering Democrats as fiscally reckless will collapse; the surplus will continue to shrink; Republicans will be lambasted as the Bonnie and Clydes who raided the Social Security trust fund; the GOP tax-cutting agenda will be discredited; and Dick Gephardt will be elevated to Speaker of the House.

Then, of course, taxpayers will get to see what a real spender can do.