Now Cut Government

Bush has done a splendid job pushing two significant tax cuts through Congress in his first term in office-and because major provisions in the latest cut will sunset after next year, he may well push through yet a third significant tax cut (to make this year’s package permanent) before the term is over.

Serial tax cuts of a certain size are a good thing, even if the ideal policy would be one massive tax cut that simultaneously simplified the system and dramatically reduced the overall burden of taxation on the economy. Still, Democrats who argue that the tax cut the President signed last week won’t help small businessmen or working Americans are distorting the truth-as they usually do-to fit the class war rhetoric that is their perennial campaign theme.

As Bush pointed out when he signed the law, a family of four with an income of $40,000 will see its federal tax bill drop from $1,175 to $45. Three million households will be removed entirely from the federal income tax rolls. Jenny Thiessen and her husband, David, who is a staff sergeant at Offut Air Force Base in Omaha, Neb., the President noted, wPresident ill have a better chance to pay for their daughters to go to college because they will pay $1,300 less each year to the federal government.

Piece by Piece

If the Democrats had their way, Nancy Pelosi and Tom Daschle would get to spend that money instead of the Thiessens.

It is good that they won’t have that opportunity because they, and the Republicans in Washington, too, already spend far too much of our money.

This is the flipside of the national fiscal equation that our all-Republican government must now start to address: If the Republicans in Washington can deliver serial tax cuts, why can’t they deliver serial spending cuts, too?

We don’t need the entire federal welfare state to be dismantled overnight-although that would be nice, and fully justified on both moral and constitutional grounds. We would be satisfied to see the entire federal welfare state taken apart piece by piece.

Yet, now, just the opposite is happening. Even with the federal budget largely under Republican control (the GOP has held the House of Representatives every year since 1995), federal spending has continued to trend upward.

In his speech signing the tax cut last week, President Bush said, “We must hold federal spending to a responsible level. Our budget this year calls for discretionary spending to rise by only 4%, or as much as the average household income will go up this year.”

Sorry, that is not holding federal spending at a reasonable level-and obviously represents no effort at all to cut spending.

This is “discretionary”, not mandatory, spending President Bush is talking about increasing by 4%, which is more than the rate of inflation. If an all-Republican government thinks it can get away with increasing discretionary spending every year, when will the federal government ever get smaller, let alone be squeezed back within the limits set for it by the Constitution?

The answer is never. And that should not be acceptable to the Conservative Movement.

When Ronald Reagan was elected President in 1980, government in this country absorbed 29.9% of the national income in taxes of one kind or another, according to the Tax Foundation. This year, government absorbed 30.0%. In 23 years of serial tax cuts, countered by serial tax increases, we’ve made no net progress.

If Republicans are ever to reduce the burden of government, they must first reduce the government.

Will Increases Never End?

In the years since President Reagan was first elected, spending for the federal Departments of Education and Health and Human Services have gone up dramatically.

Education Spending
(In Billions)
HHS Spending
(In Billions)

Source: “Historical Tables of the Budget of the United States, Fiscal Year 2004”
Figures are in constant dollars.