The Spending Machine - Why Leviathan keeps growing.(why a tax cut will not lead to less government spending)

The big debate in Washington this year is whether to pass President Bush's $1.6 trillion tax cut. Critics, and the neutral observers in the press corps, have called that tax cut "huge," "enormous," and "gargantuan." Such adjectives are rarely used to describe Washington's profligate spending over the last few years-even though it now tops $2.3 trillion annually, and is certain to rise even further-because all that new spending has hardly been debated at all.

There's a bipartisan conceit that whenever tax cuts are on the table, there's a danger of a "feeding frenzy" in which politicians one-up each other until the Treasury is empty. The truth, as Wall Street Journal columnist Paul Gigot has pointed out, is that major tax cuts come along once a generation, while spending climbs every day. The rules of the game in Washington ensure that tax cuts are a matter of intense deliberation, while spending goes up on autopilot.

Consider the fate of the "spending caps" that President Clinton and Congress agreed to in the grand, bipartisan budget deal of 1997. That deal, like the budget plans of 1990 and 1993, raised spending in the short term but was supposed to restrain it in the long term. The long term never came, again in keeping with tradition.

At first Congress overspent by only a few billion dollars. But extra spending in one year has the practical result of raising spending in all future years, since agencies would protest bitterly if the funds were cut. Actually, it's worse than that. The convention inside the Beltway is to measure spending against a "current-services baseline": If a program doesn't receive what it got last year plus money to cover inflation and population growth, its funding is said to have been "cut." Extra spending in 1997, then, meant even more spending in 1998. When Congress proceeded to add to this total in 1998, and again in 1999. . . . well, pretty soon the spending caps were far behind. The caps are still in law. But by now, in 2001, adhering to them would mean cutting federal spending (on everything except Social Security and Medicare) by $100 billion in one year. No way that's going to happen.

And that's how the federal government has managed to commit itself to spending $2.3 trillion more, over the next ten years, than it said it would in 1997. That works out to $17,991 for each of America's 124 million tax filers. Another way of looking at it: If the feds had obeyed their own law, we would have saved enough money to declare a two-year holiday from all federal income taxes. Instead, all that money is being spent.

While spending has proceeded at a particularly brisk pace, thanks to the huge runup in revenues since 1997, it has been out of control for over 30 years. There are, of course, many reasons it has been impossible to restrain. Entitlements are popular. And the beneficiaries of a program almost always have a stronger interest in its expansion than the general public has in stopping its expansion.

But some peculiarities of the budget-writing process also contribute to the problem. For one thing, the "budget resolution" passed by Congress and signed by the president in the spring is not binding on the spending they do in the fall. Nobody is responsible for staying within budget. Instead, 13 "appropriations subcommittees" of Congress write separate bills funding different parts of the government. The chairmen of the subcommittees are more powerful the more money they control, so each one has an incentive to spend as much as possible-especially since the other chairmen will spend the money if he doesn't. The result is, to coin a phrase, a feeding frenzy.