The Era of Small Government Is Over
Reason magazine|June 2021
Is there any hope to check the growth of the state?
By Eric Boehm

It was a full quarter-century ago when President Bill Clinton delivered one of the few quotable State of the Union addresses in American history.

“The era of big government is over,” he proclaimed on January 23, 1996. It was more of a political statement than a policy goal—indeed, Clinton proceeded to spend the next hour outlining a long list of things the federal government ought to do. But it wasn’t just a bumper sticker catchphrase. “We know big government does not have all the answers. We know there’s not a program for every problem,” he explained. “And we have to give the American people [a government] that lives within its means.”

That succinct conception of limited government likely would, if expressed today, make any Democrat effectively unelectable—at least on the national stage. For that matter, the idea that Americans would be able to help themselves best if government got out of the way would place Clinton, circa 1996, outside the emerging mainstream consensus of today’s Republican Party. Acknowledging the limits of government power to improve people’s lives and worrying about the cost of a large and growing government is, it seems, so last century.

In 1996, the federal government spent a grand total of $1.56 trillion—about $2.4 trillion in today’s dollars—and ran a deficit of about $106 billion. While tiny by today’s standards, both parties saw that shortfall as unacceptably high. Republicans had won control of Congress for the first time in 40 years in 1994 by promising fiscal restraint and with talk of a balanced budget amendment. Heading into his own reelection in the fall, Clinton was meeting his opponents head-on with his 1996 speech. Both parties could play the deficit-hawk game.

This was not an out-of-the-mainstream position among Democrats at the time. Just two months earlier, during an impassioned speech on the Senate floor, a high-ranking Democratic senator also insisted that his party was not about to cede deficit politics to the other side.

“I am one of those Democrats who voted for the constitutional amendment to balance the budget. I have introduced, on four occasions—four occasions—entire plans to balance the budget,” he recalled. Referring to the Republican takeover of Congress in 1994, the senator made a bold prediction. “I know it did one thing,” he said. “It made sure that there was nobody left in the left of my party who said, ‘In fact, we don’t care about moving the budget toward balance.’”

Twenty-five years later, that senator is now president of the United States. Just weeks after taking office, Joe Biden’s first major legislative achievement was the passage of a $1.9 trillion COVID-19 relief bill, the entire cost of which will be added to a budget deficit that was estimated to be $2.3 trillion before the new spending was approved. Although ostensibly a package meant to combat the COVID-19 pandemic, the bill contains a large number of government-expanding measures unrelated to fighting the disease, including an expensive new child subsidy entitlement that is likely to become permanent.

Clearly, the prevailing view in Washington of deficit spending and the role of government has changed over the past quarter century. In fact, there has been a near-complete reversal. Where talk of reducing budgets and ensuring the government lives within its means used to be a bipartisan affair, now the opposite is largely true. Republicans still make occasional noises about the deficit—as they did during the passage of Biden’s stimulus bill, which received no GOP votes—but they effectively traded away any serious claim to being fiscal conservatives after overseeing deficit-hiking spending increases and tax cuts that were supposed to pay for themselves but didn’t under President Donald Trump.

Now, the new right-wing is agitating for more government subsidies for families and workers, deficits be damned. Democrats, meanwhile, view low-interest rates as an invitation to turn the printing press up to 11. Beyond the budget ledger, the ballooning deficit has coincided with a massive expansion of government programs.

Being a deficit hawk can be a thankless task, one that requires the fortitude to say “no” while others promise free goodies. Increasingly, it is a lonely job too. Those who worry about record-high deficits and an unsustainable mountain of debt may not have many friends in Washington, but hawks used to be able to count on a political failsafe: Both major parties thought they could gain an electoral edge by highlighting the other party’s profligate ways. Now, however, deficit politics have all but vanished on both the right and the left.

Politics are antecedent to policy. In 1996, Biden and other Democrats talked a big game about fiscal responsibility because they feared retribution from voters if they did not. That threat from the ballot box seems to have vanished, and with it any sense of modesty about spending. Until voters demand otherwise, the debt will continue to grow.

BIDEN’S EVOLUTION

AS WITH THE party that he now leads, Joe Biden’s evolution from deficit hawk to spendthrift didn’t happen overnight. But if you had to pick one day that illustrates the transformation, it might be April 9, 2020.

That was the day after Sen. Bernie Sanders (I–Vt.) suspended his bid for the Democratic presidential nomination, effectively anointing Biden as the party’s standard-bearer. Biden’s campaign posted a long statement committing to support a number of Sanders’ policy proposals, including student loan forgiveness and lowering the Medicare eligibility age to 60. “Senator Sanders and his supporters can take pride in their work in laying the groundwork for these ideas, and I’m proud to adopt them as part of my campaign,” Biden said.

It was a significant and even startling shift. Biden had won the Democratic nomination by stubbornly sticking to the center even as most of the other top candidates chased one another toward the party’s left flank. Often, that had left him as the only candidate willing to ask practical questions about his opponents’ plans to spend huge amounts of money on single-payer health care and other progressive priorities. “How are we going to pay for it?” Biden asked during a memorable September 2019 debate in which he took both Sanders and Sen. Elizabeth Warren (D–Mass.) to task for their pie-in-the-sky promises. “I want to hear that tonight.”

That strategy didn’t always look certain to succeed. Although he consistently led in the polls, the former vice president never looked unbeatable. During 2019, his campaign sometimes struggled to raise money. Ugly losses in the first two nominating contests, in Iowa and New Hampshire, threw the race wide open. But then Biden rallied to win South Carolina at the end of February 2020 and a majority of the Super Tuesday states in early March. A month later, as the country was shutting down in the face of the COVID-19 pandemic, the competition came to an end. The stubborn moderate had prevailed.

Traditionally, the end of a contested presidential primary sees the winning candidate tack away from the extreme edges of his or her political coalition and toward the center. What happened between Biden and Sanders was more of a meeting in the middle. “Joe, he’s not going to adopt my platform. I got that,” Sanders told CBS late night host Stephen Colbert a few days after dropping out of the race. “But if he can move in that direction, I think people will say this is a guy we should support.”

It’s true that Biden didn’t embrace Sanders’ full platform, but he went into the general election with the most progressive and expensive presidential agenda in decades. The nonpartisan Committee for a Responsible Federal Budget estimated that Biden’s budget plans, if enacted, would add more than $5.6 trillion to the deficit over 10 years. And that didn’t include emergency pandemic spending, like the $1.9 trillion bill he signed in March.

Biden has long been an avatar of the Democratic Party’s center of gravity. When the party was getting “tough on crime” and fretting about the deficit in the 1990s, he was part of those efforts. He was there, literally standing behind President Barack Obama, for the signing of the Affordable Care Act in 2010. By the end of the 2020 primaries, it was clear that the median view among Democrats had moved to the left, and Biden was adjusting his views to keep in step.

The change had happened gradually. While campaigning for the presidency in 2008, then–Sen. Barack Obama (D–Ill.) routinely called out then–President George W. Bush for adding to the national debt. “We now have over $9 trillion of debt that we are going to have to pay back,” Obama said during a July 2008 campaign stop in Fargo, North Dakota. “That’s $30,000 for every man, woman, and child. That’s irresponsible. That’s unpatriotic.”

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