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In fight over size of government, it's a draw

Recent US budgets show a 'middle road' has replaced a push to shrinkgovernment.

Washington's annual White House-Congress budget clash has increasingly become a fight over relatively small programs and policies, as opposed to a sharp ideological clash about the proper size of the federal establishment and its role in American life.

President Clinton has famously said that the era of big government is over. But as Republicans have learned since taking control of the House in 1994, that does not necessarily mean that an era of smaller government has arrived. The result: fiscal stalemate, with the appearance of political "victory" dependent on the outcome of a few small battles.

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"The last few years have shown there is a great deal of political support for a government that is roughly the size it is right now," says James Horney, an analyst at the Center on Budget and Policy Priorities. "The real issue is what happens over the next 30 years, as the retirement of the baby boom puts a tremendous amount of strain on the system."

Just because the stakes are arguably smaller doesn't mean that budgetary debates have become less bitter. This year's deadlock has lasted so long that it has required a series of five short-term stop-gap funding bills to keep the government running. The new fiscal year began Oct. 1, yet as of mid-November only eight of the 13 appropriations bills needed to fund the nation's business had been passed.

In recent weeks, Republican congressional leaders have had some success in defining the parameters of the budget endgame. Their focus on halting the long-standing practice of using funds generated by the Social Security trust funds to pay for other government purposes scored some political points with voters and caught their Democratic colleagues off guard.

Whether that translates into gains in the voting booth in 2000 is another matter. Polls show that the public continues to believe that Democrats are more trustworthy stewards of the Social Security system.

It also masks the tactical retreats Republicans have had to make as they struggle toward adjournment. Earlier this year, they vowed to stay under the strict budget caps of the 1997 balanced-budget agreement - yet spending bills have already busted those caps by $31 billion.

Education, housing, and other social priorities have not been cut, as the most fiscally hawkish of the Republicans wanted. Indeed, in some cases they have received billions more than last year. The final education debate between Congress and the White House was more about how to divvy the cash up than about how much there should be.

"Over the last five years, the GOP has done an OK job of restraining spending, but they lost some of their discipline last year and this year," says Scott Hodge, a senior fellow on tax and budget policy at the Citizens for a Sound Economy Foundation. "This year, they're outbidding Clinton in a number of areas."

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But if the Republicans have abandoned their efforts to push for a substantially smaller federal government, they have turned back Democratic moves to expand Uncle Sam's reach. Neither Mr. Clinton's original health-care reform proposal nor his more recent attempt to expand Medicare to include prescription-drug coverage has come close to passage.

Middle road

The result has been a middle road that voters appear to prefer. In 1994, when the GOP revolutionaries won control of Congress, the US budget was about $1.39 trillion, in 1992 dollars. It has increased slightly every year since, even after adjusting for inflation. The comparable figure for 1999 was about $1.48 trillion, according to the Office of Management and Budget.

A slow rise in the amount paid out for Social Security, Medicare, Medicaid, and other benefit programs is the primary engine behind the overall increase. Defense, by contrast, has been the hardest-hit category, shrinking from $272 billion in 1994 to an estimated $241 billion last year, in inflation-adjusted terms.

So if the government isn't spending any less, how come the US government has begun to run big surpluses after years of deficits? Simple. Tax receipts have grown much faster than outlays. The IRS took in $1.2 trillion the year Newt Gingrich became Speaker of the House. Last year, receipts were at least $1.8 billion.

All this doesn't necessarily mean that the era of big government is padding back in on quiet feet. Spending may be going up somewhat each year, but overall the economy is growing more rapidly. Federal outlays were equal to 19.7 percent of the US gross domestic product last year, their lowest level since 1966.

And congressional actions have kept the overall rise lower than it otherwise would have been.

"There has been restraint in discretionary spending, and Medicare has grown much slower in recent years than anybody anticipated," says Mr. Horney.

Past budget goals

But neither has the smaller federal establishment that was the goal of President Ronald Reagan come to pass. Mr. Reagan remains the only recent chief executive under whom domestic spending actually shrank, after adjusting for inflation.

But domestic discretionary funds - chicken inspectors, the FBI, and most of the other nondefense functions that voters would consider the federal government - regained their 1980-era high in 1994.

In recent years, "it is kind of a stalemate for all intents and purposes, with the president getting the appearance of having won by getting accommodations around the edges," says Mr. Hodge.

(c) Copyright 1999. The Christian Science Publishing Society

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