By: Mary Mostert, Analyst, Banner of Liberty (www.bannerofliberty.com)
March 1, 2001
In spite of being upstaged in his first weeks in office, first by the antics of his outgoing predecessor, Bill Clinton, then by a threatened takeover by a bear market on Wall Street and yesterday by an earthquake in Washington State, George W. Bush is actually doing quite well. The media, on the other hand, seems to really be having a problem trying to get a grip on the current political situation in Washington. On both sides of the political aisle, I don't think that most of those doing the reporting have realized that we are quite suddenly in a new environment.
The Associated Press, for example, reports today that the Democrats are "Setting the stage for a long political battle" in their rejection of President Bush's tax cut proposal, warning that "it would squeeze out funds needed to improve American lives and return the nation to huge federal deficits. " What they Democrats don't seem to grasp at this point is that most people believe that the Federal government is incapable of improving their lives. Increasingly, the working people are feeling that the only way to improve their lives is to keep more of their own money, rather than giving it to the Federal government.
Few Americans realize that there has been a huge shift in the last eight years in where their tax money is being spent. For example, According to the White House Office of Management and Budget, in 1962, more than half of the budget, 52.9%, was spent for national defense. Domestic spending was 14.2% of the budget .
By 1999, only 16.2% of the Federal budget was spent for national defense. In 1962, domestic spending was 14.2% and in 1999 domestic spending was 16.4% of the nation's total expenditures.
Federal mandatory programs, Social Security and entitlement programs in 1962 were 21.6% of the total budget. In 1999, Federal mandatory programs, Social Security and entitlement programs were 52.7% of the Federal budget. Entitlement programs has taken the place of National Defense in our nation's list of priorities in Washington, D.C.
And that, folks, tells the real story of the Democrats opposition to the Bush budget proposals. For forty years the Democrats have used the growing entitlement programs as a means of staying in power. It's worked well. The fear of losing that lever of power was the motivation behind news events such as Jesse Jackson threats following the Supreme Court decision on the unequal re-counting of the Florida ballots.
A tax cut, the Democrats rightly fear, will slow the move to the re-distribution of wealth that the Democrats has fostered for decades, bill by bill, program by program. In 1960 and 1980, when Presidents Kennedy, a Democrat, and President Reagan, a Republican, cut taxes, the Congress of course was controlled by Democrats and it is the House of Representatives that has the sole power, under the U.S. Constitution, of creating revenue for the nation. Article 1 Section 7 of the Constitution state:
"All bills for raising Revenue shall originate in the House of Representatives."
From 1953 to 1995, 42 years, the House of Representatives was controlled by Democrats with a Democrat Speaker. It was not Ronald Reagan's tax cut that caused the deficits. It was the Democrats' insistence on increased spending that caused the deficits.
In 1980, the last year of the Carter Administration, the total outlays approved by Congress was $1,087.8 Billions. In 1989, the last year of the Reagan Administration, the total outlays approved by Congress was $1,395. Billions - an increase in 8 years of $307.2, or an average annual increase of 38.4 billion per year.
When the Republicans captured the House of Representatives and Senate in 1994, and Newt Gingrich became Speaker of the House, the average annual increase began to drop. In four years, From 1996, when the 104th Congress approved $1,560.6 billion in a protracted battle with Bill Clinton, to 1999 when they approved $1626.2 billions the average annual increase was only $16.4 billion -That was less than one half the increase by Democrat Congresses during the Reagan Administration.
And then Newt Gringrich was forced out, a presidential election year loomed, and the 1999-2000 budget increase approved by a Congress intent upon getting re-elected in peacetime in one year was a whopping $44.1 billion. President Bush referred to that huge increase last year in his speech Monday night.
What we are now hearing from the Congressional Democrats who were IN the House of Representatives during all those years is an effort to blame an ailing Ronald Reagan for their own behavior. Charles Rangle, a member of the Democrat Socialists of America and ranking Democrat on the tax-writing Ways and Means Committee said yesterday: "In the early 1980s, under another charismatic Republican president, we passed tax cuts that sounded good at the time but led to years of deficits and put our economy in bad shape."
What created the problems we now have was not the Reagan Tax Cut, nor will it be the Bush Tax Cut. It is the pork barrel spending and the entitlement programs passed by the House of Representatives. Senator Tom Daschle of South Dakota, Senate Democratic Leaders, said that the Bush Tax Cut would "consume nearly all of the available surplus, at the expense of prescription drug coverage (for seniors), education, defense and other critical priorities."
Sen. Robert Byrd, D-W.Va., the ranking Democrat on the Senate Appropriations Committee, said that in 1981 he listened to those who said he should give the new president a chance. But "it took years for us to work our way out of the deficit ditch," he said. "We should not engage in this colossal gamble."
The Bush budget provides increases in education spending and even for a prescription drug coverage program and sets aside ALL funds collected for Social Security to be spent in Social Security. The Democrats have been spending Social Security money for decades for new entitlement programs. And, Charles Rangel, who has been in Congress since 1970, Tom Daschel who has been in Congress since 1986, and Robert Byrd, who has been in Congress since 1958 have sponsored and voted for those bills that spent Social Security funds.
Those were the men who promised Ronald Reagan they would cut spending to make his tax cut plan work - and they didn't abide by their promise. They SAID they would cut $1 of spending for every $3 in tax cuts. Reagan knew the tax cut would generate more tax money coming into the Treasury - and it did. When Ronald Reagan came into the White House in 1981, the total tax receipts were $599.3 billion. When he left office in 1989, the total receipts were $991.2 billion.
Had the Democrat controlled House of Representatives merely curtailed, not halted, just curtailed, their spending, there would not have been huge deficits. President Bush was right in his statement Monday that his proposed tax cut, which the liberals think is to large and the conservatives think is too small is too small, is actually "just right" as Goldilocks proclaimed about baby bear's porridge and chair.
It's going to be interesting to see who wins this year in Washington, D.C. Goldilocks or the bears - of spending in Washington and the economy in the Stock Market.
To comment: mmostert@bannerofliberty.com
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