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February 12, 2004
Who's to blame for spending increases?
Many conservatives are sharply critical of the President for "spending like a drunken sailor." While I am unhappy with Bush's failure to constrain spending, I don't think he should bear the blame alone--Congress should certainly bear much of the blame--and it's worth understanding how these spending increases came about. In this piece from the Journal, Martin Feldstein points out that much of the spending increases under Bush were the result of Clinton-era appropriations. Excerpt:
Contrary to the complaints of many who criticize the Bush administration for favoring a continued rapid growth of domestic programs, the administration has actually been quite tough in controlling the budget authority for discretionary spending outside defense and homeland security. These limits on new appropriations will restrain spending growth in the years ahead. But the actual outlays of the past few years increased more rapidly than concurrent appropriations because of the delayed effects of the appropriations passed during the Clinton years.Here are the facts. The appropriations for discretionary spending outside defense and homeland security rose 16% in the final Clinton budget, propelling future spending on these programs. The Bush administration reduced the growth of these appropriations to 9.2% in 2002 and then to 2.7% in 2003 and 2004. As a result, such appropriations fell from 3.5% of GDP in the first Bush budget to 3.3% in 2004 (including all supplemental appropriations.) The president's latest budget proposes to keep the 2004 dollar amount unchanged in 2005, implying a decline to less than 3.2% of GDP. Despite these tight controls on appropriations, the earlier appropriations caused actual outlays to rise 12.3% in 2002 and kept their growth at 5.8% in 2004. This long-term effect of past appropriations shows that bringing spending under control requires the passage of time as well as tough budget choices.
I may be a simpleton but the US government has a burn rate like any other organisation with operational responsibilities. So what is the burn rate we the people want our government to have?
Can the government fix mature programs at a certain rate over a long period of time with built in adjustments for inflation, population and other known changes. A few other programs (like war) can be flexible for the obvious reasons.
I am tired of hearing politicians talking about reform and reducing the cost of government. Just tell me what the price is, what my share should be, and then send Congress home for half of the year.
And to incent Congress and other legislatures to think more like business people let's consider the option of paying elected officials market rates for their salaries and subsidizing their election campaigns (if they gather a high threshold of signatures). It would be interesting to see politicians spend their time going door to door for signatures and views rather than raising money constantly in large gatherings.
Problem is the government isn't like other organizations: it doesn't earn any money, so it spends by appropriating, not according to a rational business objective. Also, how does the government figure out one's fair share? Based on what you earn, what you spend, what you invest, what you save? That answer can dramatically affect how productive the economy is.
I'm against public funding of campaigns. First, incumbents have enough of an advantage as it is. But second, I'm offended by the notion that through campaign finance reform I'm prohibited from spending my money on candidates I support but with subsidies I would be forced to spend my money to support candidates that I oppose. That's not Democracy.