The Forgotten Five

Missing Economic Fact #3: Domestic Social Spending Continues to Soar

During budget negotiations between the White House and Congress earlier this year, CBS correspondent Wyatt Andrews told viewers that President Clinton had "a budget plan that promises lower federal taxes, cuts in spending, and a balanced budget in five years, and that's the proposal from the President, a Democrat."

From this story and almost all other reporting on this year's budget deal, one would think that Congress and the White House were imposing discipline on the federal budget and finally making difficult choices. One would be wrong.

"Despite the dramatic decline in the budget deficit in recent years," reports Stephen Moore of the Cato Institute, "federal social spending is now at record levels both in real dollars and as a share of national output." Specifically, Moore notes that in "the past ten years federal domestic expenditures have risen by 34 percent after inflation. Total nondefense outlays now consume 17.5 percent of gross domestic product (GDP), up from 15 percent of GDP in the 1970s and ten percent in the 1960s."

Republicans in Congress have done nothing to slow this growth, either. According to Moore, "In their first three budgets (FY 1996-1998), the Republicans have increased domestic spending by $183 billion compared to a $155 billion increase in the three years prior to GOP control of Congress."⁵ Furthermore, Bruce Bartlett of the National Center for Policy Analysis writes that because of additional spending on health and welfare in last summer's budget agreement, "the federal budget deficit next year actually will be higher than it would have been without the budget deal."⁶ Both Bartlett and Moore observe that the domestic spending cuts in the deal are all conveniently put off until 2002, when there will be a different President and Congress, and therefore are not binding.

So how has the federal budget deficit fallen so precipitously? Moore points out that almost "all of the reduction in the budget deficit over the past decade has been attributable to the 'peace dividend' reductions in the military budget. Pentagon expenditures have fallen by $100 billion and three percentage points of GDP since the height of the Reagan Cold War buildup -- almost exactly the same amount that the budget deficit has fallen."⁷

For reporters to portray Congress and the President as skinflints, when only one part of the federal budget (defense) is growing smaller, is simply inaccurate.

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