Despite some tax cuts, the size of the U.S. government has increased rapidly under President Bush and the Republican-controlled Congress. Washington leaders looking to improve the economy could learn a lesson or two from Ireland, which has consistently achieved high rates of growth over the last 15 years by successfully slashing government spending.
Under the Republican Congress during Clinton’s years in office, spending jumped from $1.46 trillion to approximately $1.74 trillion — an increase of just under $300 billion. Most of the 300 agencies that the House Budget Committee listed as “unnecessary” in 1995 — those that were supposed to be “zeroed out” — actually received increases in federal funding by 2000. Some, such as the Department of Commerce, saw budgets increase more than 41 percent.
Despite strong rhetoric leading up to the 2000 election, pairing a Republican president with a Republican Congress has done nothing to reverse this trend. Spending has actually increased more rapidly under Bush than it did under Clinton. Total real discretionary outlays during Bush’s first three years have increased 23.8 percent.
Post-9/11 spending is not the only cause driving the spending increases. Nondefense discretionary spending has increased by 20.8 percent. The departments that saw the biggest increases include Labor (56 percent), State (32.5 percent) and Veterans Affairs (29.4 percent). Two departments that were on the original 1995 list of “unnecessary federal agencies,” the Department of Education and the Department of Commerce, have seen their budgets increase by 60.8 percent and 9.6 percent respectively during Bush’s first three years.
Tax cuts alone do not mean less government or more economic freedom. All government spending must be taken from private-sector wealth. When spending increases, the sphere of private-sector economic activity decreases. Government spending must be paid for by borrowing, inflating, or taxing. Cutting taxes while increasing spending only changes the avenue through which private-sector activity