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Tuesday, April 17, 2007
Budget Perception Vs. Reality
Ask a friend (who doesn't do fiscal policy) to sum up the fiscal policy of the Bush era, and more likely than not, they'll tell you it's been one of "big spending."
That's been my experience, at least. And Republican presidential candidates seem to be playing off that perception. Many of them have been issuing a call for greater fiscal discipline, achieved by spending restraint and reductions.
None of the candidates are terribly specific about where the spending reductions would come from. That could be because, aside from homeland security and the military, the Bush era has not seen a substantial uptick in spending. Many agency budgets have been cut. And these spending cuts are making a visible impact on people- the Katrina disaster and the tragic conditions at Walter Reed hospital are a good examples of where underfunding has affected the quality of government services.
Spending will probably go up just to recover lost ground or maintain the current level of services, as well as to meet the nation's growing needs in health care, education, and public investment.
In his column today, Stan Collender ($) asserts that the inevitability of increased spending will make a tax increase necessary.
In other words, unless there is far more tolerance for higher deficits than has yet been the case, a significant tax increase is in the offing.
This is not a political statement and should not be taken as an indictment of either party. Republicans and Democrats will both want to boost spending in some areas and be powerless to stop increases in other areas.
But it's impossible to read the federal budget tea leaves these days without honestly admitting that federal spending is going to rise in every category to meet the country's needs and our expectations of how well the government should perform.
Collender thinks that public perceptions about fiscal policy will change as people feel the impact of the decline in the quantity and quality of government services. That seems right. But I also think the people who shape public perceptions (the media, politicians, advocates, etc.) about government could speed this transformation along, too, if they did a better job of contextualizing and disaggregating government spending, as well as playing up the real impact that spending cuts have made on people all over the country.
Posted by Matt Lewis
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