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CIAO DATE: 12/03
A Big-Government Bidding War
On The Issues
November 2001
The War on Terrorism and the remarkable turnaround it has inspired in public support for the federal government have prompted Congress and the Bush administration to open the spigot of federal spending.
What's the most conspicuous feature of the new political world, post—September 11? After years of retrenchment, it looks as if the era of small government is over.
The lockbox has been opened, rifled, and picked clean. Just last spring, the Congressional Budget Office was projecting a $304 billion federal surplus. Just a few weeks ago, the two parties were daring each other to touch the Social Security portion of that surplus.
Now, the federal government will have to struggle to balance its books next year and will probably face a deficit of at least $25 billion after paying for relief efforts, reconstruction, security measures, military spending, foreign aid, and an economic stimulus package. The country had thirty years of deficits followed by just four years of surplus. Now it's back to deficit spending.
Plus, there is a new government agency, the Office of Homeland Security, as well as big new government powers. "Our risks have gone up," Attorney General John D. Ashcroft told Congress, "and that's what's giving me such a sense of urgency about the legislation we need to pass to give us the tools to curtail terrorism."
The federal government has acted to bail out the airlines and expand its authority over airport security. President Bush has promised cheering airline workers: "I will work with Congress to put the federal government in charge of passenger and bag screening and all safety inspections."
When President Clinton proposed an economic stimulus package in 1993, he got clobbered for it. Yet now Bush says: "I'm confident we can work with Congress to come up with an economic stimulus package that will send a clear signal to the risk-takers and capital-generators that the government's going to act, too."
Congress has already authorized more than $40 billion in emergency spending, plus $20 billion more for future military and civilian projects. The president wants to match all that new spending with an additional fiscal stimulus of $60 billion to $75 billion in tax cuts. "I propose that the United States Congress, as quickly as possible, pass tax relief equal to or a little bit greater than the monies that we have already appropriated," he said in October.
Meanwhile, congressional Democrats are proposing a wish list of new spending for school construction, mass transit, and repairs and security for government buildings. It looks like a bidding war: Democrats up the ante with new spending, and the president calls their bid with tax cuts. "The whole idea of even trying to balance the budget or controlling spending seems to have been thrown out the window," Sen. Phil Gramm (R-Tex.), lamented.
This is a national emergency, remember. As a conservative activist said recently, "Wars are nasty things. They make governments grow." Moreover, Bush knows what happened when his father failed to respond energetically enough to the recession ten years ago. "We hear the cries of those who have been laid off," this President Bush said on October 4. The day before, he said: "One person laid off is one person too many."
Giving Government Another Chance
There's another force behind the return of big government: public opinion. The public's trust in government collapsed in the 1960s and 1970s. It rebounded a bit during the good economic times of the mid-1980s and mid-1990s, but—until now—it had never gotten back to where it was in the Kennedy era.
The latest Washington Post poll shows the public's trust in government surging to its highest level in thirty-five years. What's happening now is a rally effect—a sudden burst in faith in everything that symbolizes America, including the federal government. The phenomenon is odd because the September 11 attacks could be seen as a failure of government. But Americans are not in the mood for recriminations. People are expressing confidence in government for a simple reason: They see no alternative. This is a matter of life and death.
There's also another reason: Politics has been suspended. A mood of warm bipartisanship has engulfed Washington. "I want to thank the president, who came through for us," said Sen. Hillary Rodham Clinton (D-N.Y.). Indeed, Bush did, with $20 billion in emergency relief for New York.
A lot of Americans think that if you get rid of politics, government will work just fine. That's what once attracted voters to Ross Perot, a nonpolitician who promised to "get under the hood" and fix the nation's problems: government without politics. That is what we seem to have now.
Does the rally to government mean the country is moving to the Left? There's no evidence of that. Congressional Democrats have had to set aside the big items on their wish list—the patients' bill of rights and prescription drug coverage for the elderly, for example. The war on terrorism takes up the whole agenda.
There's no indication that the rally to government is helping Democrats. It's helping incumbents. In a crisis, voters want security, not change. Challengers are having trouble raising money in a de-politicized environment. Because Republicans hold most of the seats up in next year's congressional and gubernatorial elections, that's good news for the GOP.
Does the surge of confidence in government mean anything at all politically? Just this: In a crisis, Americans are willing to give government another chance because they must.
William Schneider is a resident fellow at AEI.
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