Excess Federal Spending and the Potential for a Real Mess
By Paul M. Weyrich (12/11/07)
Congressional Democrats came to power in the 2006 election through their ability to exploit the general frustration in the country with President George W. Bush and the Congressional Republicans. The latter group had controlled the legislature for twelve years, and the public's frustration with its failure to enact meaningful financial and social reforms led in part to the Republican loss. Democrats promised serious changes to combat the country's general pessimism about Washington.
In January, Nancy Pelosi (D-CA), newly-elected Speaker of the House of Representatives, pledged a “100-Hour Plan” for reform. One of the reforms scheduled for the first legislative day of the plan was to institute a “pay-as-you-go” policy on the annual budget to reduce the deficit. According to a press release issued by Speaker Pelosi on January 5, 2007, House Democrats “got straight to work [that] week by passing the toughest Congressional ethics reform in history. [They broke] the link between lobbyists and legislation: banning gifts and travel from lobbyists and organizations that retain or employ them, banning travel on corporate jets, shutting down the K Street project, subjecting all earmarks to the full light of day, and reinstating the strict rules of pay-as-you-go budgeting.”
In recent months the President and Congress have been at odds over Congressional spending and the budget. On October 30 President Bush urged Congress to pass the Fiscal Year 2008 appropriations bills. Bush criticized House and Senate leadership for wasting time on a constant stream of investigations and on an endless series of failed votes to pull American troops out of Iraq. They had not been able to send a single appropriations bill to the President’s desk, the worst record for a Congress in 20 years. The President stated in his speech that Congress also had “passed an endless series of tax increases. They proposed tax increases in the farm bill, the energy bill, the small business bill, and of course, the SCHIP bill. They haven't seen a bill they could not solve without shoving a tax hike into it. In other words, they believe in raising taxes.”
One can hardly laud Bush as a champion of fiscal discipline and restraint, although his insistence on cutting taxes has been consistent. But he had a key point in his speech. According to Brian M. Riedl in “The Democratic Congress’s 2008 Budget: A Tax and Spending Spree,” Congress has passed legislation this year that would increase federal spending by a combined $454 billion over 10 years and raise taxes and fees by $98 billion over 10 years. It also has passed a budget resolution that would bring the tax increase to a projected $2.7 trillion. The $454 billion spending increase, it should be noted, contains “$275 billion in discretionary spending above the President’s request and $179 billion in new entitlements over the baseline.”
The “pay-as-you-go” scheme has failed to control spending because the House already has waived the rules. Nor have promises to end pork-barrel spending been fulfilled. Legislation enacted to date has increased spending much faster than tax revenue, resulting in an additional $356 billion in deficit spending. To lower the deficit the Democratic Majority intends to allow most of Bush’s tax cuts to expire, thus attempting to avoid the unpopularity of legislating new tax increases.
According to the Congressional Budget Office’s Monthly Budget Review released December 6, 2007, the increase in the deficit for the first two months of FY 2008 is about $16 billion (after adjusting for all factors). “Increases in receipts from individual income taxes (up by $11 billion, or 8 percent) and payroll taxes (up by $6 billion, or 5 percent) accounted for most of the increase in revenues. Amounts withheld from employees’ paychecks increased by $19 billion (or 7 percent) in October and November relative to withholding in those months last year,” the report states.
Another government agency, the Government Accountability Office (GAO), is worried about the projected increase in deficit spending. GAO released a report on October 31, 2007 entitled “Long-Term Fiscal Challenge: Comments on the Bipartisan Task Force for Responsible Fiscal Action Act.” In it, GAO states that America faces large and growing structural deficits driven primarily by rising health care costs and known demographic trends. The nation’s long-term fiscal outlook is daunting, threatening our economy, our standard of living and ultimately our national security. It urges Congress to have “the courage to make tough choices.”
The President realizes the error of uncontrolled spending and is trying to hold Congress accountable. The American people must do so as well. Otherwise we will have a real fiscal mess on our hands.
Paul M. Weyrich
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