Principled Conservatives Are Not Happy With President Bush

…and frankly, that is a good thing.

Conservative Republican economist Bruce Bartlett testified before the Senate Democratic Policy Committee, this is what he said:

Statement by Bruce R. Bartlett

September 23, 2005

Thank you for the opportunity to testify before you this morning. As you know, I testify as a Republican—I have served in senior political positions in Ronald Reagan’s White House and George H.W. Bush’s Treasury Department, and as executive director of the Joint Economic Committee, a cosponsor of this hearing. However, I do not represent the Republican Party or any organization with which I may be associated. I am here speaking only for myself.

I testify as someone who is very disenchanted with his party’s fiscal policy since 2001. Unlike the other witnesses, I am less concerned about the deficit per se or about the size of the tax cuts enacted over the last five years. Rather, what really bothers me is the increase in spending and expansion of government that my party has been responsible for.

I used to believe that the Republican Party was the party of small government. That’s why I became a Republican. I don’t believe that the federal government has the right to one penny more than absolutely necessary to fulfill its essential functions as spelled out in the Constitution. I think government is over-intrusive and could do what it has to do far more efficiently and at lower cost, which means with lower taxes.

Therefore, it bothers me a great deal when Republicans initiate new entitlement programs, massively expand pork-barrel spending, and show the most callous disregard for fiscal integrity. Not too many years ago, Ronald Reagan vetoed a politically popular highway bill because it contained 157 pork-barrel projects. The latest bill contained at least 5,000. Yet President Bush signed this $295 billion bill into law, despite having promised repeatedly to veto a bill larger than $256 billion.

For the life of me, I cannot understand why President Bush seems so incapable of using his veto pen. His father knew how to veto bills. He vetoed 29 of them in his four years in office. But in his first four-plus years, this President Bush has vetoed nothing. He is the first president since John Quincy Adams to serve a full term without vetoing anything. Curiously, Adams is also the only other son of a former president to become president—and his father, John Adams, didn’t veto anything, either.

When I complain about this to the White House, they tell me that it is very hard to veto bills when your party controls both Congress and the White House. But this explanation is simply implausible. Franklin D. Roosevelt had huge Democratic majorities, yet vetoed a record 372 bills. John F. Kennedy, Lyndon Johnson and Jimmy Carter also had large majorities of Democrats, yet Kennedy vetoed 12 bills during his short presidency, Johnson vetoed 16, and Carter vetoed 13.

I won’t bore this committee with numbers. You know them as well as I do. Suffice it to say that our fiscal situation is dire and growing worse by the day. My principal concern, however, is not with today’s deficits—even if they are swollen by Katrina and Rita-related emergency spending. What worries me is the retirement of the baby boom, the first of which turns 62 in 2008. I’m not saying that we are close to driving off a fiscal cliff, but clearly the implications of this event have not impacted on policymakers in any way whatsoever.

I have struggled with a way to illustrate the consequences of an aging population and its effect on the budget. This is the best I have been able to do. Social Security’s unfunded liability comes to 1.2 percent of GDP in perpetuity (1.4 percent without the trust fund)—about what is raised by the corporate income tax—according to that program’s actuaries. The comparable number for Medicare is 7.1 percent of GDP—about what is raised by the individual income tax. And remember that these figures are for the unfunded portion of these programs, so they are over and above payroll taxes.

The chilling conclusion, therefore, is that virtually 100 percent of all federal taxes, on a present value basis, do nothing but pay for Social Security and Medicare. Unless there are plans to abolish the rest of the federal government, large tax increases are inevitable.

Let me be clear that I am no advocate of higher taxes. I’m the one who drafted the Kemp-Roth bill back in the 1970’s and I have spent most of my career looking for ways to cut tax levels and tax rates. But that was predicated on an assumption those supporting tax cuts also wanted to downsize government. I never saw tax cuts as a substitute for spending cuts, but more as sugar to make the medicine go down. My ultimate goal was to reduce both taxes and spending.

Unfortunately, few in my party seem to share this philosophy any longer. For many, tax cuts have become a substitute for spending cuts. It truly amazes me how often I hear people on my side talk about cutting taxes as if this is the only thing necessary to downsize government. They seem genuinely oblivious to the fact that the burden of government is largely determined by the level of spending, not taxes. Nor do they understand that in the long-run, all spending must be paid for one way or another. Increasing spending today, therefore, absolutely guarantees that taxes will have to be raised in the future.

I am often criticized by friends on my side of the aisle for implicitly endorsing tax increases. I do no such thing. I am simply adding two and two and getting four while my friends seem to think there is some way of only getting three.

They also criticize me for implicitly abandoning the fight to cut spending and downside government. Again, I plead innocent. It is not I who has abandoned the fight, but my party. I don’t need to remind anyone here that the biggest spending increases in recent years passed Congresses with Republican majorities largely without Democratic votes. Nor do I need to remind anyone here that during the Clinton years we not only went from budget deficits to budget surpluses, but did so to a large extent by cutting spending—something my conservative friends seldom acknowledge.

Here’s the basic accounting. Defense spending fell by 1.4 percent of GDP between 1993 and 2000, and domestic discretionary spending fell from 3.8 percent to 3.3 percent. Even spending on entitlements fell for temporary demographic reasons, from 10.2 percent of GDP to 9.8 percent. Finally, interest on the debt fell, largely because of falling interest rates, from three percent of GDP to 2.3 percent. The result was an overall decline in spending of three percent of GDP, from 21.4 percent to 18.4 percent, the lowest level since 1966, before the Great Society geared up.

On the revenue side, individual income taxes rose by 2.5 percent of GDP, mainly as the result of rising incomes that pushed people up into higher tax brackets and higher capital gains taxes from the booming stock market. Corporate income taxes and payroll taxes added another 0.8 percent, for a total revenue increase of 3.3 percent of GDP. Thus lower spending and higher revenues constituted a fiscal turnaround of 6.3 percent of GDP, which explains how a deficit of 3.9 percent of GDP in 1993 became a budget surplus of 2.4 percent by 2000.

I don’t give President Clinton full credit for this performance. I think most of the credit goes to gridlock. Mr. Clinton wouldn’t support the Republican Congress’s spending and it wouldn’t support his. So for a blessed six years, government effectively was on automatic pilot. Sadly, unified government has led to an utter lack of restraint by my party that is simply inexcusable. It is extremely dismaying for me to hear House Majority Leader Tom Delay say that there is no fat in the budget and that Republicans have cut it to the bone. This is, quite frankly, ludicrous. My real fear, however, is that he may actually believe it.

I remain convinced that given the total lack of fiscal responsibility demonstrated by the Republican Party that very large tax increases are inevitable. I believe that the fiscal hole is now so large that it is unrealistic to think that we can just tinker with the tax system, as we did so often in the 1980’s, and raise enough revenue to pay for spending commitments that have been made. And under the circumstances, I have no faith whatsoever that spending will be significantly restrained—at least not by my side. They would first have to admit error and beg for forgiveness from people like me, something I don’t expect to be forthcoming any time soon.

Therefore, like it or not, we must travel the same route taken by the Europeans, who long before us made peace with the welfare state and tried to figure out how to pay for it with the least negative impact on economic growth and incentives. They all imposed a broad-based consumption tax called the value-added tax as an add-on tax to all the others. I think it is only a matter of time before we are forced to do the same thing and the longer we wait the more painful it will be when it is finally done. Unfortunately, we are more than likely going to have to be forced into it by a financial crisis of some sort. It would be better to avoid that cost and deal with our fiscal situation rationally. But I see no leadership on either side that would allow that to happen.

I don’t know when, where or how a financial crisis will develop. I only know that trends that can’t continue don’t. Since it is unlikely that the vast fiscal imbalance will be resolved with a whimper, it becomes a certainty that it will end with a bang. Among the areas ripe for triggering a crisis are a popping of the housing bubble, a crash of the dollar, a mistake by some big hedge fund, excessive tightening by the Fed and others too numerous to mention. It will take extraordinary luck and skill to avoid every boulder in the stream and I have little confidence that this administration has the personnel to even give us a fighting chance. There are too many Michael Browns at senior levels of the government today and too few Bob Rubins or Alan Greenspans.

Contrary to popular belief, I don’t think the American people are a bunch of children who only want hand-outs from the government and will only reward the party that promises them something for nothing. Experience and academic research confirm that they are more likely to support the candidate who treats the public purse with prudence and trust and not as a piggy bank to be routinely broken on a whim. In short, I think there is a political market for the party and the candidate who speaks honestly about the nature of the fiscal crisis that is looming. The payoff may not be immediate and the public trust has to be earned by more than just rhetoric. But if, as I believe, some event will eventually change the political landscape, voters will remember who spoke the truth and who mouthed the platitudes.

It’s dirty work, but someone has to do it. Since my party won’t do it, yours is going to have to. If it’s done right, your party will gain at the expense of mine and you will deserve the benefits and my party will deserve the electorate’s disdain.

16 Responses to “Principled Conservatives Are Not Happy With President Bush”

  • I supported Steve Forbes during the Republican Presidential Primaries. I still think he would have made a better choice all around.

    Even so, I think that Bartlett is being a jerk by taking the easy way out of this because the Dems would be much worse in terms of economics than President Bush.

    He goes on about how bad the socialistic policies and spending binge of the President have been and then he basically says, “vote for the party of the socialists.”

    We knew that by nominating President Bush we were getting a “compassionate conservative” instead of a mean old regular conservative like Steve Forbes, or one would think, Mr. Bartlett.

  • Dems would be much worse in terms of economics than President Bush.

    I think you need to back this up. It is a myth since Reagan all of the Republican presidents have bloated the deficits and teh democrat lowered it. I think much of the credit goes to Clinton. don’t forget, the president proposes the budget.

  • Reagan also started the trend that led to Bush Jr., by tripling the national debt to fund his giveaways.

    Bush got caught holding the bag for that a bit, and then worsened things with his own foreign-policy overreaching and nonexistent domestic policy.

    Bush Jr. is simply the apex of conservatism as it *actually operates*, as opposed to how conservatives would like to see it operate on paper.

  • Also, of course, no conservative ever wants to admit that Clinton was an extremely competent president, despite all evidence and historical record to the contrary.

    Clinton took a very large political risk, in firmly refusing to acquiesce to the Republican desperation for unneeded tax cuts. As a result of Clinton’s leadership, among other long-term benefits, we had a surplus that was invested into T-Bills for Social Security.

    And if it weren’t for that far-sighted action on Clinton’s part, we might not have Social Security today.

  • The deficit in and of itself, which is a long-term projection (which fluxuates) anyway, doesn’t appear to have actually have been
    very consequencial in terms of economic growth due to the conservative economic growth policies of Presidents Reagan and Bush. The most competent things that Clinton did for the economy and to improve the domestic situation was to finally sign on to Welfare Reform (after rejecting it a few times and seeing that he couldn’t keep doing it and keep the Democrat Party in the game) which got millions of people off the roles and into productive activities. You can’t underestimate NAFTA either. That’s another thing that he should be applauded for. But the guy was a sleazebag. What kind of a man, much less a President of the United States, is unfaithful to his wife? I don’t know, it just didn’t say anything good about him. Character does count. Especially in high level positions such as the one he was elected to hold and maintain.

    He wasn’t as bad as Jimmy Carter in terms of National Security, but it is pretty difficult to for anyone to be more incompetent. It would take alot of effort.

    Clinton was no match for bin Laden, who declared war agains the U.S. so many times without an effective or serious response (emboldening the jihadis) as the threat metastisized; Kim Jong Il; Saddam; Rwanda; or Sudan in terms of advancing America’s interests. I think that propping up the murderous Arafat by inviting him to the White House more than any other foreign leader morally legitimated Islamo-fascism as a sort of negotiation tool.

    On the economy, again, with the progress that has been made in terms of advancing the case and interests of democratic government and civilization so far, during this time of conflict, despite the deficit (again a projection based on government inefficiency) the economy when President Bush was re-elected was still better off than it was under Clinton with lower inflation, lower unemployment, faster productivity growth, faster labor compensation growth, more economic output, and more exports… I’m paraphrasing from here

    That’s just for starters. But of course, we would like to see better from President Bush.

  • “Extremely competent”? I’m not buying it.

  • I wouldn’t even say that President Bush is and I’m a strong supporter.

  • Actually, the proper response to the Social Security Pyramid Scheme/problem would be to reform it.
    If the government is supposed to be “saving” your money for you (I don’t mind a voluntary as opposed to compulsory system) it should actually be doing it rather than spending it the whole time and expecting other people to give you their money.

    And I always find it funny that the party with the wealthiest individuals in it telling Americans that tax cuts are “unnecessary.”

  • But the guy was a sleazebag. What kind of a man, much less a President of the United States, is unfaithful to his wife? I don’t know, it just didn’t say anything good about him. Character does count. Especially in high level positions such as the one he was elected to hold and maintain.

    Well, the current man in the White House, George W. Bush, probably has not cheated on his wife.

    But he has brought us larger government than Clinton, more spending than Clinton, less revenue than Clinton, four years of increasing poverty reversing the trends that existed under Clinton, a staggering amount of debt to the point that China now controls the fate of our dollar, three of the largest intelligence failures in history (9/11, WMD, not capturing Osama Bin Laden) on his watch, a decaying infrastructure, a government medicare giveaway to pharmaceutical companies by forbidding gov’t to haggle over drug prices; and along the way, fired multiple high-level employees simply for telling the truth to congress.

    I’ll see your Rwanda and I’ll raise you a Darfur plus the multiple projected millions dead in Africa due to billions Bush promised that aren’t arriving. I’ll see your N. Korea, and I’ll raise you a N. Korea with six nukes. As for American interests, I call to see how Clinton damaged them. Clinton was adored in Europe. Bush has damgaed, perhaps permanently, our relationship with European allies that go back sixty years.

    As for the economy being better when Bush was re-elected, the question is, better for whom? Not for the poor. Not for the middle class, especially if they ever get medical bills. Not for the McJobs that people are having to settle for.

    So, which would you prefer: a doctor who cheats on his life, but most of his patients heal without complications? Or a doctor who doesn’t cheat on his wife, but all his patients have all sorts of problems?

    In a perfect world, I would prefer my leaders to be spotless in their private lives. But that is not what they are hired for. They are hired to run the country effectively, care for it’s citizens, and safeguard this country’s future.

    The most that Clinton has been effectivley faulted for, is lying about a consensual extramarital affair. George W. Bush has simply done an awful job as president.

  • If the government is supposed to be “saving” your money for you…

    But that is not what Social Security is supposed to be doing for you.

    SS is supposed to be keeping those who are currently elderly or infirm from dying due to poverty. It does this by collecting a small percentage from people who are currently working, and using that to keep our elderly citizens, who have built this country with their working years, to live out their remaining years with a modicum of security.

  • And I always find it funny that the party with the wealthiest individuals in it telling Americans that tax cuts are “unnecessary.”

    You aren’t listening close enough. If it’s true that the Dems are the party of the wealthiest, then it becomes especially interesting: they’re saying that tax cuts for THE WEALTHY aren’t necessary.

    Let Bush propose a tax cut that is not a giveaway to the wealthy, but instead *only* cuts taxes for the middle class and the poor, and that would be a different situation entirely.

  • Social Security is NOT saving my money for me. Social Security is a safety net for the whole country. Once my money goes into Social Security, it is no longer my money. And anyway, Bush’s personal account BS would have reduced the amount of money available, by giving it away to already-obscenely-wealthy Wall Street brokerage firms. Social Security would have trillions upon trillions of dollars lying around if it hadn’t been repeatedly pillaged by presidents and congresses, both Democratic and Republican, for years and years.

  • The amazing thing to me is that it has taken so long for real Republicans to recognize that Bush IS NOT ONE OF YOU. He runs the government for the benefit of his friends and cronies, not because be believes in the goals of improving the nation. He doesn’t care. As Jim wrote, the Democrats have proven themselves to be much better fiscal managers than the Republicans could dream of being. I admire the goals of the Republican party (small government, etc. are fabulous ideals!) But until they can actually begin to work towards implimenting them, I am afraid that I will have to vote with the Democrats, as they are the only ones who seem to be capable. Blindly following an ideal or philosophy is directly opposite to Burke-style conservatism. (It’s kinda like being a communist, or part of the French revolution).

  • You know, I wandered onto here attacking. I apologize for that.

    Conservatives were definitely fooled by Bush and his administration, as were moderates and even some liberals. It speaks well for you that you are starting to realize what’s going on.

    Hopefully we can move forward from this administration, and make a country that lives up to it’s highest potential, and works for everyone.

  • Dismal Scientist

    Bruce R. Bartlett has the intellectual honesty of checking his politics at the door when it comes to the analysis of hard facts.

    As a fellow economist, I can only applaude him.

    The facts may not always be what some factions want to hear, but, we would be doing the public a great disservice if we diluted our analyses for political reasons.

  • “I’ll see your Rwanda and I’ll raise you a Darfur plus the multiple projected millions dead in Africa due to billions Bush promised that aren’t arriving.”-Jim

    What promise has president Bush broken regarding Africa? The administration has, besides pledged more money for humanitarian aid than any other administration including Clinnochio’s- and promoted reforms and the development of Africa’s economies. The left has betrayed humanity with its unfortunate affection for fallacies and moral insoucience despite which America now has to spend time to reform her education system in order to properly promote the most beneficial model for government and economics that the world has known because the left has been busily working to undermine it.

    Instead of the socialist model of handouts and dependency on an international scale, there must be a sea change towards promoting the, to a large extent, neglected and misunderstood values that made America so great.

    How can you even compareBilldo’s policy towards Rwanda where 800,000 were slaughtered as he deliberately set out to do nothing where the policy was to deny that a genocide was going on while looking the other way to President Bush, even on Sudan where the administration had to push for more international involvement there?

    “As for American interests, I call to see how Clinton damaged them. Clinton was adored in Europe. Bush has damgaed, perhaps permanently, our relationship with European allies that go back sixty years.”

    I don’t care if the backstabbing Euroweenies don’t “love” President Bush. What matters is that more Americans do than don’t. Much more relevant to America’s security was the way that Billdo slashed America’s HUMINT capabilities by half and drastically reduced America’s military while Islamofascist attacks against the U.S. were on the rise and the world was becoming more dangerous.

    “As for the economy being better when Bush was re-elected, the question is, better for whom? Not for the poor. Not for the middle class, especially if they ever get medical bills. Not for the McJobs that people are having to settle for.”

    I suppose that it wasn’t enough to you to demonstrate your ignorance when it comes to the War on Terror, you also had to display your ridiculous ignorance about economics, here.

    First, wages are higher, even adjusted for inflation, than when President Bush took office. And I don’t think that trying to resurrect class warfare is going to alleviate the problem of poverty. That’s been tried before.

    The problem with you libs is that you feel like saying things, even if they aren’t true. I think that you do it especially because of that.

    That McJobs meme just doesn’t stick: the Bureau of Labor Statistics 2002-12 Employment Projections states that “Employment growth will be concentrated in the service-providing sector of the economy. Education and health services and professional and business services represent the industry divisions with the strongest projected employment growth: projected to grow twice as fast as the overall economy. Information, leisure and hospitality, and transportation and warehousing are other service -providing industries that are projected to grow faster than average.

    “The 10 occupations adding the most jobs employ a large number of workers and come from a wide range of occupational groups.”

    And even worse than your spurious arguments is the way that you libs infantilize Americans by portraying us as some sort of passive mindless mass that needs to be controlled by the government for our own good.

    “Social Security is NOT saving my money for me. Social Security is a safety net for the whole country. Once my money goes into Social Security, it is no longer my money. And anyway, Bush’s personal account BS would have reduced the amount of money available, by giving it away to already-obscenely-wealthy Wall Street brokerage firms. “-Biff

    In other words, you don’t want to allow workers to invest in stocks and bonds with money that they are already committed to by a compulsory 12.4% deduction of their income because that would in terms of Marxist economic ignorance and moral confusion mean “giving it away to already-obscenely-wealthy”? And this is sane because… ??

    I’m sorry, Biffy, but I’m going with Ken Mehlman on this one: Every single person who works for the federal government, including every member of Congress, has the choice to set up a personal retirement account so they have a more secure retirement. The AARP’s website encourages its members to, quote, “take advantage of the power of compounding, which is essentially, the buildup of investment gains on previous gains over time. Albert Einstein reportedly called compounding, ‘the most powerful force on earth.’

    All Americans should have the same choice of personal retirement accounts. If it’s good enough for Federal Employees, if it makes sense for AARP members, then every single worker in America should be able to choose ‘the most powerful force on earth’ for a more secure retirement.

    Today about half of Americans invest in stocks, but 45% don’t have enough to begin their own investment portfolios. A good approach to S.S. reform would be to change that. You see, the system needs to be modernized. IRAs and 401ks didn’t exist when S.S. was started up. As the Secretary of the Department of Housing and Urban Development has pointed out, privatization will help lift minorities out of poverty. Black seniors disproportionately are more dependent on S.S. yet they receive less financial security;

    “An individual who owns his retirement security–a concept central to the president’s plan for reforming Social Security–would enjoy many of the same benefits homeownership provides. And under the plan, even the lowest-income workers would have the opportunity to build equity.”

    To paraphrase Norman Cantor here, because you have to give credit where it is due: In the model of civil society, most good and important things take place below the universal level of the state. The family, the arts, learning and science, business enterprise, and technological processes, these are all above and outside the state level. These are the work of individuals and groups and the involvement of the state is remote and disengaged.

    True social security is provided by the American family. But that is exactly what has been under assault by libs at the cultural and political stage. Take, for example, the consequences, as Thomas Brewton has pointed out, of LBJ’s “Great Society” project: Within five years after institution of the Great Society, we were in the hitherto unknown waters of economic stagflation: an economy dead in the water, while prices of everything soared and interest rates, even on prime credits, leaped toward 20 percent per annum, levels never before endured in this country.

    One of the claims made for social justice, starting with Rousseau in the 1750s, is that redistributing wealth to achieve social justice will eliminate crime, because the poor will no longer be poor and will have no need to resort to crime. In other words, criminals are the victims of the society that protects private property.

    In real life, outside liberal fantasy-land, while welfare-related spending tripled, violent crime rose exponentially. Large sections of Harlem and other neighborhoods like Bedford-Stuyvesant were reduced, building-by-building, to burned-out hulks occupied by drug dealers. In the bad old days before the New Deal, people could safely cool off on steamy summer nights in the city’s parks. Under the caring, social-justice administrations of the 1960s and 1970s, doing so was an almost certain way to get raped, mugged, or murdered.

    Today almost 70 percent of black children are born to single mothers. So rather than racial ignorance, the main problem is economic ignorance.

    Its difficult not to notice that the destructive force of economic ignorance has moved into the old home of racial ignorance, the Democratic Party. My theory is that this is because a political organization geared more towards populism than principle naturally will have a stronger gravitational pull for some pretty unsavory human trends than one that models itself more closely to the government of the most advanced civilization in the world.

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