In Fiscal Discipline, It's a Race to the Bottom: Caroline Baum July 14 (Bloomberg) -- Today's presidential candidate is expected to posture as a fiscal conservative. At minimum he will claim to be more fiscally conservative than his opponent.
President George W. Bush already has earned the scarlet ``S'' for presiding over the biggest spending binge since LBJ's Great Society. Presumptive Democratic nominee John Kerry has proposed new spending that far exceeds the estimated savings from cost cuts. Both claim they will cut the deficit in half in four years.
Based on one's track record and the other's proposals, the relevant question for voters might be: Which candidate is the least fiscally irresponsible?
Total federal spending rose 29 percent during Bush's first term, according to Veronique de Rugy, a research fellow at the American Enterprise Institute, a conservative think tank in Washington. (The figure includes estimates for fiscal year 2004 and 2005.)
In inflation-adjusted terms, the 20 percent increase under Bush still pales in comparison to Lyndon Johnson's 35 percent surge. Then again, the federal government was so much smaller four decades ago, it didn't take many dollars to produce a big percentage gain.
Viewed in dollar terms, the actual increase under Bush ($500 billion) dwarfs that under LBJ ($78 billion), de Rugy says.
Unknown Devil
Protecting the homeland and fighting the war on terror became a necessity following the Sept. 11 terrorist attacks. In fact, they are among the legitimate functions of the federal government as laid out by the founders.
Take out defense and spending on entitlement programs such as Social Security and Medicare, which are on automatic pilot, and non-defense discretionary spending soared 36 percent during Bush's four years as president, de Rugy says.
So much for the devil we know. The devil we don't know, John Kerry, has promised to cut the deficit in half in four years, pay for every program he proposes (re-institute the ``paygo'' rule so that every spending increase/tax cut has to be offset by a spending cut/tax increase), make health care affordable and cut taxes for the middle class.
Alas, the numbers don't add up, according to Drew Johnson, a policy analyst with the National Taxpayers Union Foundation, the non-partisan research arm of the National Taxpayers Union.
Fuzzy Math
``Even after $30 billion in proposed savings, John Kerry plans to introduce $226 billion in new spending -- in his first year alone,'' Johnson says in a new study entitled, ``One Hand in Your Pocket: How Kerry's Campaign Pledges Stand to Cost Taxpayers Billions.''
Johnson looked at all of Kerry's proposed savings -- including cutting corporate welfare and terminating 100,000 federal contracting jobs -- offset them with his proposed new spending and came up with numbers that suggest Kerry's promise to pay for every new program without increasing the debt is pure hokum.
``Kerry's proposals increase spending by a cumulative $621.76 billion over a four-year presidential term,'' Johnson says. ``That translates to an average increased tax burden of $6,066 for every person paying federal taxes in America over Kerry's first term.''
In other words, repealing tax cuts for the rich will impose a bigger tax burden on everyone.
Blind Faith
In all instances, Johnson gave Kerry the benefit of the doubt, using the lowest available cost estimates (often from the Kerry campaign) for spending proposals and the highest estimates for savings.
Kerry's proposed spending caps, while creating the appearance of austerity, are ``porous,'' Johnson says, with many major categories of discretionary spending, including military and homeland defense, education and health care, exempted.
For his part, Kerry touted his voting record as a reason Americans could trust him to deliver on his promises.
``I have a voting record that, on the most critical budget votes of the last 20 years, helped balance our budget and pay down our debt,'' Kerry said.
Unfortunately, that record doesn't hold up well under the microscope. The NTUF's VoteTally and BillTally, which track, respectively, congressional members' votes and the cost of most bills, show just the opposite.
``No other Senator proposed more new federal spending during the 106th Congress than John Kerry,'' says Johnson, referring to the 1999-2000 congressional session. ``And from 1997-2002, Sen. Kerry voted to increase federal spending by a cumulative total of $731 billion.''
Now or Later
Maybe candidate Kerry is trying to atone for Senator Kerry.
``Since announcing his candidacy, John Kerry has offered 70 policy proposals affecting federal outlays, only five of which would decrease government spending,'' Johnson says. ``Overall, Sen. Kerry proposes spending $770.6 billion over five years to fund his projects, while suggesting just $35.99 billion in budget cuts.''
That leaves $734.62 billion unaccounted for, which will be passed on to U.S. taxpayers in the form of either higher taxes today or more government debt today and higher taxes tomorrow.
On the issue of government spending alone, it's hard to decide who's worse: Kerry or Bush.
``Neither has any sense of priorities,'' AEI's de Rugy says.
No wonder voters disregard politicians' promises and vote their pocketbook. With two big spenders parading as fiscal conservatives, who can blame them?
To contact the writer of this column: Caroline Baum in New York at cabaum at bloomberg.net.
To contact the editor responsible for this column: Bill Ahearn at bahearn at bloomberg.net.
Last Updated: July 14, 2004 00:03 EDT