Why does the Tea Party attract such vitriolic opposition, whether from Obama’s IRS or big-government Republicans like Karl Rove?
The answer is simple. People in Washington don’t like the Tea Party because this citizen uprising is making it difficult to engage in business-as-usual shenanigans.
I shared a couple of columns (here and here) back before the 2010 elections about the potential impact of the Tea Party, but it wasn’t until earlier this year that I put together some hard numbers showing that this small-government movement has made a difference.
Simply stated, Washington’s spending trajectory is still headed in the wrong direction, but we’re becoming Greece (or Portugal, Spain, Italy, etc) at a significantly slower pace.
That’s hardly libertarian Nirvana, to be sure, but let’s remember the golden rule, which is that fiscal policy is headed in the right direction so long as the private sector grows faster than the burden of government spending.
And that’s what’s been happening. Indeed, we’ve even experienced a couple of years with no growth in the size of the public sector! Here’s some of what Steve Moore wrote for today’s Wall Street Journal.
According to the Congressional Budget Office, annual outlays peaked at $3.598 trillion in fiscal 2011. After President Obama’s first two years in office, many in Washington expected that number to hit $4 trillion by 2014. Instead, spending fell to $3.537 trillion in fiscal 2012, and is on pace to fall below $3.45 trillion by the end of this fiscal year (Sept. 30). The $150 billion budget decline of 4% is the first time federal expenditures have fallen for two consecutive years since the end of the Korean War. This reversal from the spending binge in 2009 and 2010 began with the debt-ceiling agreement between Mr. Obama and House Speaker John Boehner in 2011.
This chart shows what’s happened to federal spending over the twenty years. We’ve gone from decent policy under Clinton to profligacy last decade and now a period of fiscal responsibility.
As you can imagine, President Obama is not happy about this development, particularly since sequestration was a huge political and policy defeat for the White House.
So it’s understandable he’s trying to seduce GOPers into a budget deal that would replace sequestration with tax hikes. Steve explains this would be very misguided.
As long as Republicans don’t foolishly undo this amazing progress by agreeing to Mr. Obama’s demands for a “balanced approach” to the 2014 budget in exchange for calling off the sequester, additional expenditure cuts will continue automatically.
But even if Republicans don’t fall into Obama’s tax-hike trap, we shouldn’t overstate this victory. After all, recent spending cuts are not overly impressive when you compare them to the spending orgy that took place during the Bush Administration and the early years of the Obama Administration.
Admittedly, this fiscal progress follows the gigantic budget blowout that began with the last year of George W. Bush’s presidency and the first two years of Mr. Obama’s. In fiscal 2009 alone, federal spending surged by $600 billion. That same year, outlays as a share of GDP reached a post-World War II high of 25.2%. But by the end of this fiscal year, outlays as a share of GDP could fall to as low as 21.5%. At least for now, the great Washington spending blitz of the Obama first term is over.
Moreover, some of the “spending cuts” are simply a back-door form of revenue, an issue I explained when comparing the fiscal record of all Presidents from LBJ to Obama.
Some $80 billion of the outlay savings have come from one-time partial repayments back to the government for the hundreds of billions spent on the bailouts of banks and of Fannie Mae and Freddie Mac.
But let’s not pick too many nits. We’re making a bit of progress, which is bad news for all the interest groups feeding at the federal trough.
The sequester is squeezing the very programs liberals care most about—including the National Endowment for the Arts, green-energy subsidies, the Environmental Protection Agency and National Public Radio. Outside Washington, the sequester is forcing a fiscal retrenchment for such liberal special-interest groups as Planned Parenthood and the National Council of La Raza, which have grown dependent on government largess.
That being said, Steve notes that the short-term progress will quickly fade away if nothing is done to deal with entitlements.
…the fiscal story isn’t all rosy. The major entitlements remain on autopilot and are roaring toward insolvency. Thanks in large part to Mr. Obama’s aversion to practical fixes, the Congressional Budget Office calculates that through July of this year Social Security, Medicare and Medicaid spending are up $73 billion from just last year. This doesn’t include ObamaCare, which is scheduled to add $1 trillion of new costs over the next decade.
Remember, though, that there’s a huge difference between genuine entitlement reform and gimmicks such as price controls and means-testing that merely translate into a year or two of illusory savings.
Let’s close on an upbeat point. As Steve explains in his conclusion, the left must be glum that Obama’s reelection wasn’t the trigger for a new expansion of the welfare state.
Liberals had hoped that re-electing Mr. Obama, the most pro-spending president since LBJ, would unleash another four years of Great Society government expansion. Instead, spending caps and the sequester are squashing these progressive dreams. Welcome to the new fiscal reality in Washington.
I’ll go even farther than Steve. It’s not just that Obama’s victory didn’t translate into bigger government. I think the 2012 election was a closing chapter in an unfortunate era of big-government Republicanism.
And as illustrated by this poll showing a hypothetical contest between Reagan and Obama, the American people would welcome the chance to support a candidate who favored small government and free markets.
[…] noting that there was a five-year nominal spending freeze between 2009 and 2014 (back when the Tea Party was influential), so it is possible to achieve multi-year spending restraint in […]
[…] There are some glaring inaccuracies in Milbank’s column, starting with the absurd notion that big-spender Trump (he increased domestic spending at a faster pace than Jimmy Carter, Bill Clinton, or Barack Obama) is somehow connected to the principles that animated the Tea Party. […]
[…] 3. The “Tea Party” election of 2010 resulted in a GOP-controlled House that was somewhat sincere about controlling federal outlays. […]
[…] who were upset by the bipartisan waste and corruption of Washington. And I think they even had a positive – albeit only temporary – […]
[…] the exception of 2010-2014, when the Tea Party briefly had a grip on the Republican Party, the burden of government spending has been increasing […]
[…] government spending actually has declined for two consecutive years. That hasn’t happened since the […]
[…] I’m in a good mood (or being naively optimistic, some might argue), I applaud them for blocking Obama’s spending agenda. The fights over sequestration, debt limits, and government shutdowns have made a real difference. […]
[…] I’m in a good mood (or being naively optimistic, some might argue), I applaud them for blocking Obama’s spending agenda. The fights over sequestration, debt limits, and government shutdowns have made a real difference. […]
[…] that Obama’s efforts to impose further statism have been largely stymied, particularly after the Tea Party election of 2010. There have been lots of skirmishes in recent years, to be sure, with Obama winning a few (such as […]
[…] With great fanfare in 2011, the White House and Congress agreed to boost the debt limit, but only because both parties agreed on some modest caps to control the growth rate of discretionary spending. […]
[…] translates into a smaller burden of government spending. Indeed, government spending actually has declined for two consecutive years. That hasn’t happened since the […]
[…] translates into a smaller burden of government spending. Indeed, government spending actually has declined for two consecutive years. That hasn’t happened since the […]
[…] translates into a smaller burden of government spending. Indeed, government spending actually has declined for two consecutive years. That hasn’t happened since the […]
[…] moral of the story is that lowering overall budgets – as happened in 2013 – is the only effective way of reducing […]
[…] we’ve even made a small bit of progress against big government in the past few […]
[…] we’ve even made a small bit of progress against big government in the past few […]
[…] It turns out that DC is not as fat and happy as it was one year ago, and the likely reason is that the federal Leviathan got put on a modest diet. […]
[…] two biggest takeaways are that a spending freeze (similar to what we got in 2012 and 2013) would almost balance the budget in 2016 and would definitely produce a budget surplus in […]
I think the next time we need to cut spending, we need to look at the amount of spending we send to countries that hate us. If America is pinching pennies, these countries should understand that we can’t support them the way we have in the past. We shouldn’t cut things like the military that protect us while supporting countries that want to do harm to us.
[…] at least based on the aforementioned Keynesian perspective. The burden of government spending declined in 2013, both in nominal terms and as a share of economic […]
[…] step in the right direction and it almost surely happened because government spending has been restrained for the past two fiscal years. And when government doesn’t grow, that means less loot for those that have learned to milk […]
[…] favorite post of the year, for what it’s worth, reveals my fiscal […]
[…] a cut because the budget might have grown even faster. Indeed, the nation actually has enjoyed a two-year spending slowdown that substantially reduced government spending as a share of GDP. In other words, my Golden Rule […]
[…] GOP Congress and Bill Clinton cut some taxes and reduced the growth of federal spending. And the successful sequester came about because of the bipartisan 2011 debt limit […]
[…] it would be even better to actually cut government spending – which actually did happen in the 2012 and 2013 fiscal years (thanks to the Tea Party and […]
[…] government spending actually has declined for two consecutive years. That hasn’t happened since the […]
[…] government spending actually has declined for two consecutive years. That hasn’t happened since the […]
[…] while I’m glad the Tea Party has helped restrain government spending in the past two years, that’s just an interim […]
[…] restraint is a welcome development. Indeed, the sequester helps to explain why we’ve seen two consecutive years of lower spending in Washington for the first time since the […]
[…] while I’m glad the Tea Party has helped restrain government spending in the past two years, that’s just an interim […]
[…] while I’m glad the Tea Party has helped restrain government spending in the past two years, that’s just an interim […]
[…] over the past two years in America. Total federal spending didn’t grow in 2011 or 2012, and that de facto two-year spending freeze has led to a big reduction in the size of the public sector relative to […]
[…] That is good – but there is plenty more to be done. […]
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[…] But I don’t think I’m being totally irrational. I’ve pointed out, for instance, that we can make progress if we simply restrain the growth of government so that it expands slower than the private sector. Surely that’s not asking too much, right? Heck, we’ve done that for the past two years! […]
QE1 + QE2 = $2T
How is that reflected in the chart above?
[…] That “unproductive” Congress, by the way, reduced the burden of federal government spending from more than 24 percent of GDP to about 21.5 percent of economic output. […]
[…] That “unproductive” Congress, by the way, reduced the burden of federal government spending from more than 24 percent of GDP to about 21.5 percent of economic output. […]
[…] But let’s close on an upbeat note. Whether you give credit to the Tea Party, to Republicans, to gridlock, or to Obama, the good news is that the federal government in the past two years has been wasting money at a slower rate. […]
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[…] government spending being lower than it was the year before. Something to keep in mind just in case you thought the Tea Party didn’t make a difference or if you didn’t think sequestration was a big […]
[…] can argue, of course, that the Tea Party deserves credit for recent fiscal progress, much as they can claim that Clinton’s relatively good numbers were the result of the GOP […]
[…] Here in America, at least we have a counter-balance against the socialist in the White House. The Republicans in the House of Representatives have effectively stopped the Democrat pursuit of higher taxes. This together with the rising influence of the Tea Party movement on the Republican party has, as Cato Institute senior fellow Dan Mitchell reports, brought the Obama spending binge to a halt. […]
Reblogged this on The Conservative New Ager.
How many Trillions of dollars has the Fed injected into the US economy during this same period. Will we not be paying ever increasing amounts for our goods when all these dollars chase after the same goods causing inflation? What benefit have we seen if the value of our dollar is drastically decreasing?
[…] Very Good News: The Tea Party Has Altered the Spending Trajectory in Washington […]
It’s OK to nitpick, when analyzing the actions of nitwits.