- The Washington Times - Sunday, November 16, 2003

An air of fiscal unreality permeates Congress these days. Federal spending is rising at a record pace, the deficit is soaring and lawmakers are pushing a $400 billion expansion of Medicare.

Preliminary figures from congressional budget committees show discretionary government spending (this is all spending, minus entitlements like Social Security, Medicare and pensions) rose by a whopping 12 percent in the last fiscal year, which ended on Sept. 30.

As Ronald Reagan did before him, President Bush shrinks from vetoing spending bills and has yet to reject one. His preferred approach to fiscal matters is to gently apply the spending brakes, set some budget caps and let rising revenues from a recovering economy reduce the deficit — just as the economy did in the late 1980s and ‘90s.

Mr. Bush had hoped to cap discretionary increases at 4 percent, but his proposed spending ceiling is leaking badly. Senate Majority Leader Bill Frist’s budget adviser, William Hoagland, says the feds spent about $826 billion on discretionary programs in fiscal 2003 — $91.5 billion more than they did last year.

And, overall, government spending grew by more than 27 percent over the past two years, he says.

Much of this increase is due to the wars in Afghanistan, Iraq and on terrorism, and a sizable increase in homeland security spending across several fronts.

Defense spending alone has risen to $407 billion a year. It will no doubt climb higher during this decade. Mr. Bush has said you can’t put a price on freedom and national security. Americans do not want to shortchange our defenses during this age of terrorism.

Nevertheless, nonmilitary spending is way up, too, growing by 8.7 percent to $418.6 billion.

Higher spending, at a time when federal tax revenues have been weak as a result of a three-year economic slump, produces deficits. And we are facing a budget deficit that may surpass $500 billion in red ink.

Throw in the coming elections, when the administration and members of Congress want to ensure that every possible voting bloc is satisfied, and you have a volatile fiscal brew that may blow the lid off Mr. Bush’s spending caps. Spending bills are lined up in Congress as far as the eye can see.

Not that this is all as bad as it may look.

First, as I mentioned earlier, we are at war. It is going to cost a lot to win it. Not just on the military side of the ledger, but also the multiple jobs of rebuilding Iraq and Afghanistan into free, sovereign democracies that will deal a major blow to the Taliban and al Qaeda killers in their midst.

We looked the other way for too many years. The result — the tragedies of September 11, 2001. The weapons, technology and combat forces needed for safety are costly.

Second, as large as it is, observers say the deficit’s duration will be relatively short.

Remember all those hyperbolic stories of the ‘80s when we were told all sorts of terrible things would happen because of the rising deficits? They didn’t. The economy recovered as a result of Ronald Reagan’s tax cuts, the military might the deficits paid for contributed to the downfall of the Soviet Union, and America grew stronger and more affluent.

Mr. Bush’s deficits will similarly decline in the near future as the economy grows under a lighter tax burden. Unlike the Reagan years, though, the cost of the money the U.S. Treasury is borrowing to pay the government’s bills is a bargain — since bond rates are running between 2 percent and 4 percent.

Third, there is time in the coming years to reorganize government and save billions in operational savings — consolidating departments and agencies, eliminating redundant programs, outsourcing more of what government does, and generally shrinking the bureaucracy.

Of course, this doesn’t mean we shouldn’t be doing a better job on the spending front. The Medicare reforms now being considered are far too costly and need to be phased in over a longer period. As they are every year, too many of this year’s appropriations bills are bulging with pork barrel spending that should be cut. Too many favored constituencies are getting billions more in handouts and subsidies.

Someone in the West Wing should pick out a spending bill for Mr. Bush to send back. His veto message could even include the line from his 2000 campaign: “It isn’t the government’s money, it’s the people’s money.”

A veto right now would send just the right message to the big spenders on Capitol Hill — and to beleaguered taxpayers, too.

Donald Lambro, chief political correspondent of The Washington Times, is a nationally syndicated columnist.

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