Uncle Sam's Habit; Spending, Spending and More Spending

Article excerpt


The headline tells it all. In the 1988 presidential election campaign, White House speech-writer Peggy Noonan tried to lock up Vice President George H. W. Bush's tax pledge with that "read my lips" line. The lock broke down, however, when President Bush, No. 41, and his budget director, Richard Darman, didn't look very hard for wasteful programs to cut but instead gave in to GOP pressure to boost spending and taxes - upsizing government even more.

The rest, as is said, is history. For as Cato director of tax-policy studies Chris Edwards holds here, now the feds are bleeding red ink, spending blindly and heading for a possible financial crisis. Why? Well, in the first four Bush II years, the White House encouraged or failed to veto big jumps in outlays for agriculture, education and health care, while defense spending, especially with the Iraqi war, zooms.

Right off, Mr. Edwards performs a graphic service in measuring the size of pre-Katrina 2005 federal spending of $2.5 trillion in a pie chart with the following seven slices: 1. interest ($177 billion); 2. defense ($495 billion); 3. discretionary nondefense ($467 billion); 4. Social Security ($517 billion); 5. Medicare ($325 billion); 6. Medicaid ($186 billion); and 7. other ($284 billion).

Mr. Edwards also worries about eight "tentacles" of what he calls the 2005 federal fiscal "octopus," which include: 1. grants to states and localities ($426 billion); 2. estimated annual cost to citizens of regulations ($877 billion); 3. loans via $1.2 trillion outstanding loan guarantees ($250 billion); 4. federal executive, legislative and judicial branches' payroll ($281 billion); 5. taxes paid via 61,224 pages of tax laws plus IRS regulations ($2.1 trillion); 6. transfer payments to individuals ($1.1 trillion); 7. government purchases, procurement and other ($459 billion); and 8. rise/persistence of government "businesses" such as USPS, TVA, Amtrak and Corporation for Public Broadcasting (no overall figure available).

To be sure, this book focuses on spending and not taxes and regulations. Still, the author sees the feds more and more "manipulating society through these two tentacles as well." On taxes, Mr. Edwards notes Congress and the IRS tripling the number of pages on tax rules and exceptions (loopholes) in the last 30 years. …