Defying Gravity — 3 October 2011

It has become commonly accepted that our government has become dysfunctional.  Spending bills, in particular, can’t seem to pass without brinksmanship, and 11th-hour deal-making on the cusp of default.  Standard & Poor’s cited it when they downgraded the US Government’s credit rating, saying policy-making had become “unstable.”

The general public are of the same opinion, giving Congress an approval rating lower than that of the President, and blaming Republicans as much as, or more than, Obama for the serial impasses.  And of course, for Team Obama, the partisanship goes one way.  How many times have we heard that Republicans have chosen “party over country” – the implication being that what Obama wants is good for everybody, but those nasty Republicans just want to retake the White House.

But I believe there is something much deeper going on here.  I think this is part of a Titanic battle to determine the proper relationship between the government and the governed.  The contest is sloppy, fractious, and frequently misinterpreted, as is so often the case in the American democracy, but it is taking place nonetheless.

For decades, the sense in American politics has been that the two parties strive to pull the center of gravity a few degrees either side of center on issues of taxes, spending, and the rules and responsibilities of government.  But when the Obama administration came in armed with overwhelming majorities in both Houses of Congress, the terms of engagement changed dramatically.  Quite apart from the “stimulus” plan that was rammed through Congress without a single Republican vote, the Democrats also passed a rump spending bill with virtually no debate that in the midst of a crisis lifted discretionary spending by 6% over the previous year.

Suddenly, the Federal government, which traditionally had commandeered about 20-21% of the US economy, was consuming 25%, with future plans moving that number northward.  That figure does not include the government influence over medical care – 16% of the economy – that will come as a result of Obamacare, or the additional spending that takes place at the state and local levels.

With Obama, the government lost all modesty about its ability to perform in the economic arena.  It also tossed any notions of fiscal prudence overboard.  Where once deficits in the $200-300 billion range were seen as proof of the Bush administration’s profligacy, now annual deficits over a trillion dollars became common.

With the spending, the deficits, and the over-reach of Obamacare, it became clear to a wide swath of the electorate that the needle was no longer hovering around the the center of the dial.    Instead, these Democrats had endeavored to shift the government’s position in our society to a permanently higher plane – something on the European scale.

This, in turn, awoke the sleeping giant of American politics – economic conservatives, now commonly identified with the Tea Party.   Appalled at the administration’s evident disinterest in restraining the reach of government or the deficits that implies, they helped return the House of Representatives to conservative control.

Theirs is a war not just on spending and debt, but on business as usual in Washington.  The traditional politics often involved tossing taxpayer money at a representative’s favored home district project in return for a needed vote on unrelated legislation.  As is often said, if you’re not at the table, you’re on the menu, and the taxpayer was rarely at the table.

Even when efforts were made to constrain spending, as under Reagan, what typically happened was the exchange of tax increases now for budget cuts to come later.  Reagan himself lamented that those cuts never came to pass.  Today, the equivalent is when President Obama asks for additional spending this year (investment, stimulus, jobs program, call it what you will) in exchange for spending cuts – or tax hikes – down the road.  The spending is real and immediate; the cuts will be deferred, watered down, ultimately forgotten.

It is all part and parcel of the one-way ratchet of government spending.  The gravitational pull is for spending to increase: many programs have automatic spending increases.  Even for those that don’t, this year’s spending becomes the base line for next year’s budget, and the norm is for increases from one year to the next – to the extent that most of the squawking one hears about draconian spending cuts really just involves slower rates of growth.

It is over this mudslide of spending growth that the battle is taking place.  It is why there is a pitched battle even over something as minor as funding for FEMA: the Democrats want to wave it through as “emergency” spending, the kind of thing that added to the spending total (and a small increase in the deficit) but didn’t have to satisfy the normal budgetary tests.  The freshman Republicans are saying “no” – nothing is to be casually swept through.  Funds for spending on A must come from funds budgeted for B.

They know that it takes Herculean energy and ceaseless effort to resist the force of gravity that spending represents in Washington.  If they seem uncompromising, it is because compromise has too frequently meant moving the needle just a bit to the left, in return for promises that never pan out.

It is fair to wonder if the balance can be returned – can the government be cut back to 20-21% of GDP?  That extra money goes into the hands of millions of voters who will miss it if it’s taken away.  But if the effort is not made now, and the higher level becomes a fact of American life, we are doomed to ongoing stagnation – if not a mess like Greece.

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