How Big Government Will Fall
By Donald Devine

One has to admire the liberal capacity to whistle past the graveyard. Rather than face the fact government is out of funds to pay for new programs, progressives are now forced to deny there even is any such problem as big government.

Bill Clinton once said the era of big government was over but the thinker he gave credit as inspiration for his “New Democratic” thinking, E.J. Dionne, now claims that big and small government are simply “catchphrases” that “explain remarkably little about what politicians do or what voters want.” He then cites Republican spending on Iraq, farm programs and health care as examples of “conservatives” favoring big government. On the other side, Michigan’s Democratic Governor Jennifer Granholm is presented as a liberal facing a tough budget fight who wants to “put that old stuff aside” about big government and all just agree only on whatever spending is really needed.

In other words, it is not about big or small government for liberals or conservatives but how to spend what the taxpayers will pay. Translation: we should just give the progressive experts the money they want and let them make the decisions for us. It is the same-old, same-old that we should all be reasonable and become good progressive. But things have changed. Taxpayers will no longer give more. Dionne in particular has been a consistent advocate for a national health care system for all Americans. But he recognizes that people are probably not willing to pay the large costs and suffer the restrictions on medical availability this would require without some offsets and changes elsewhere.

This dilemma is excruciating as progressives near power. Now that Democrats are in charge of Congress, they have proposed a large expansion of the children’s health program (by calling people “children” up to 25 years of age and defining “low income” up to 400% of the poverty level). But to win Congress, now Speaker Nancy Pelosi had also promised to “end irresponsible budget policies” and “restore pay-as-you-go budget discipline.” So they propose to pay for the increase by cutting the popular Medicare Advantage program and increasing an insurance tax by $375 million the first year. Granholm too proposes to save money to pay for her new programs in health and education by shortening sentences for less dangerous criminals and turning some crimes into misdemeanors so she can cut prison expenses.

The problem is these modest offsets to the new spending probably will not cover its long term costs and certainly will do nothing about the looming entitlement crisis. Over the next few years at the national level, spending will explode and fewer taxpayers will be available to support it. High-cost, low tax-paying seniors will surge from 12 to 20 percent of the population and the productive young will decline. If nothing is done, by 2030 Medicare, Medicaid and Social Security will consume 75 percent of the national government’s real budget, according to the Congressional Budget Office, eating up the whole national government--with people less willing and able to pay the bills.

It is amazing how tough budgets make progressives deal with reality. Explaining Granholm’s relative pragmatism, Dionne notes that at the state and local levels unlike the national, “the relationship between the taxes citizens must pay and the government programs that voters want is more explicit.” But this fact that states and localities are more tied to concrete budgets is precisely why small government conservatives--and incidentally America’s Founders—prefer the smaller government of states over a big and remote national government that can borrow and inflate the money supply without anyone understanding the “relationship,” allowing it to be ignored.

It is not as if Dionne really does not understand this—after all he recognizes the states are limited and the national government basically is unrestrained—but he suffers the perpetual progressive dilemma: recognizing the difficulty of paying for the bills but constantly seeking more and more government programs to resolve more and more concerns. Indeed, after Bill Clinton was elected president, Dionne warned that if progressives did not undertake reforms in Medicare, Social Security and the other entitlements these programs would absorb the national government so that progressives would have no new money to spend to solve the nation’s problems. President Clinton even considered entitlement reform early in his administration, calling it an obligation to the memory of Franklyn Roosevelt. But events soon intruded and the promise went unfulfilled.

No political party has elected a president of the same party whose unpopularity has been as high as George W. Bush’s today. So President Hillary Clinton just might get the opportunity to fulfill the obligation, if not for Franklin for Eleanor. Once in power, the entitlement facts will demand her attention. Notice the unprecedented recent reference by the Comptroller General of the U.S., David Walker, to the “striking similarities” between America’s current situation and the factors that brought down Rome, including “declining moral values and political civility at home, an over-confident and over-extended military in foreign lands and fiscal irresponsibility by the central government. With the looming retirement of baby boomers, spiraling healthcare costs, plummeting savings rates and increasing reliance on foreign lenders, we face unprecedented fiscal risks.”

Walker advised the candidates for president: “They need to make fiscal responsibility and inter-generational equity one of their top priorities. If they do, I think we have a chance to turn this around but if they don’t, I think the risk of a serious crisis rises considerably.” I bet Hillary will listen. Notice how reasonable and responsible she has become as she approaches power. Her major “big idea” is a national public service academy. Politically, it is clever. It sounds progressive to train all those good bureaucratic experts to solve all of the nation’s problems. Actually, there already is a Federal Executive Institute—and it did not prevent the Katrina fowl-up—and no one trusts the experts anymore, anyway so it is silly policy. But it sounds like she is doing something—and it costs nothing! Smart.

Facing the very dilemma Dionne predicted back in the 1990s, President Hillary will be forced to try and cut entitlements to allow her and her progressives friends to implement their other expensive dreams. However, to solve the problem with additional taxes, it would require a 30 to 50 percent increase—impossible politically or economically. So she will have no choice. By then the squeeze will be too apparent to ignore. She—or some other future progressive--will have to shed other domestic programs in order save enough funds to make the bargain.

That is how big government will end. Solving the enormous entitlement crisis will force many current national programs to states, communities and the private sector. That is not the liberal plan but the inevitable result. Sure the remaining entitlements will still be large as will national and homeland security but many of the other responsibilities arrogated to the national level by Mr. Roosevelt will be forced back where they belong to smaller governments, paradoxically accomplished by a progressive Democrat, and in the not too distant future.

Donald Devine, the editor of Conservative Battleline Online, was the director of the U.S. Office of Personnel Management from 1981 to 1985 and is the director of the Federalist Leadership Center at Bellevue University.