There's Nothing New about Big-Spending Presidents

Article excerpt

Which presidents were the biggest domestic spenders in the 20th century? Contrary to most people's expectations, higher domestic spending growth occurred under the watch of Republican rather than Democratic presidents. This is because domestic government activity has been less a result of presidential ideology than of opportunity or crisis.

That is not to say that the Republicans are the real "big government" party. In fact, domestic spending over the last century has had little relation to campaign promises to expand or contract government. Instead, it has been driven by more practical considerations -- the expansion and contraction of available sources of financing for government activities.

Today, the easy financing mechanisms that fueled most of the 20th-century domestic spending growth no longer are available. This, combined with the high and automatic expansion of entitlements, is driving the long-term budget crunch. The floundering of government is far more than an issue of changing ideologies or philosophies of government. A primary cause is the dramatic reversal in fiscal flexibility.

Over the last 100 years, of the five presidents who reigned over the largest domestic spending growth, four were Republicans. Taken in order of expenditures, they were Richard Nixon, Herbert Hoover, Dwight Eisenhower, Harry S. Truman (the lone Democrat), and George Bush. This ranking was obtained by measuring the change in domestic spending as a percentage of gross domestic product (GDP) between the fiscal year of a president's inauguration and that of his successor's inauguration. For example, the measure for Bush would be the change in domestic spending as a percentage of GDP between Fiscal Years 1989 and 1993.

Presidential ideology and political party do not appear to play a strong role in determining domestic spending. The top two spenders -- Nixon and Hoover -- are considered to be among the most conservative of the century. Yet, together they produced almost three-quarters of the domestic spending growth over the 100-year span.

In contrast, the liberal New Dealer, Franklin D. Roosevelt, is at the bottom of the list. Domestic spending actually fell by 3.6% of GDP during his tenure. The main factor was that the massive World War II defense buildup crowded out domestic spending. Under FDR. defense outlays increased by 37% of GDP. Domestic spending fell as the nation devoted more than a third of its resources to the war effort.

Perhaps more importantly, FDR's New Deal programs primarily were short-run or counter-cyclical in nature, focusing on unemployment compensation and jobs. Much of the spending was not intended to be permanent and, by the end of his presidency in 1945, the nation had reached the full employment levels of World War II. Non-cyclical programs, such as retirement and health, remained quite small. Even at the end of the Truman Administration in 1953, domestic spending was 1.6% lower than it had been when FDR took office two decades earlier. Finally, much of the rise in domestic spending in response to the Depression occurred prior to Roosevelt's presidency, under Hoover.

Moreover, from the turn of the century until the end of the Wilson Administration in 1921. the Progressive Era presidents did not increase their domestic expenditures by much. Spending on domestic programs fell under William Howard Taft and, when combined with outlays under Theodore Roosevelt and Woodrow Wilson, yielded almost no growth for this era (a net increase of merely 0.6% of GDP).

During the Progressive years, activist governments focused on strengthening regulation of monopolies. food, drugs, railroads, and currency. rather than increasing social programs. The government continued to concentrate domestic spending on veterans. as had been done since the Civil War. Outlays for veterans accounted for well over 40% of domestic expenditures for almost all of the Progressive era. …