November 23, 2003

Bush's Budget Betrayal

Christopher Westley on Bush's fiscal policy:

One recalls the story about the first President Bush around the time that he was breaking his "No New Taxes" pledge—a profile in cowardice that would cost him reelection. While being pestered by reporters about his decision, he told them not to place as much importance in what he said as in what he did. "Read my hips," he told them, paraphrasing one of his signature lines.

This is a lesson that should be applied to George W. as well. While his political rhetoric is on target with an electorate that demands smaller government, his actions bring forth benighted memories of that other activist president from Texas, Lyndon Baines Johnson.

It wasn't supposed to be this way. Did anyone who voted for Bush think that he would far surpass Clinton in expanding the Leviathan state? In 1999, Harvard University economist Martin Feldstein ominously warned in a Wall Street Journal op-ed that unless President Clinton's budget plans were defeated by congressional Republicans, government spending would increase by $850 billion over the next decade, on top of the $2.5 trillion increase already called for in current law (much of which was off-budget spending).

Little did Feldstein realize that as he wrote, an even more aggressive spender was preparing a bid for the White House under the banner of fiscal restraint and a more humble foreign policy but who, once elected, would make the reckless Clinton look like the model of probity with respect to domestic and foreign policies. Under the Bush Administration, the national debt will increase by more than $850 billion in two years.

Perhaps Feldstein should have checked with his colleague in the Harvard economics department, Jeffrey Frankel, who would not have been surprised by an even bigger government under a Republican president. In an important paper published last year, Frankel noted the discrepancy between the lips and hips of Republican presidents, resulting from Republican rhetoric creating an impression of fiscal responsibility (the lips), and the actual big government policies pursued by Republicans once they reach office (the hips).