Way back in 1995, a Republican congress and a Democratic president couldn’t agree on spending priorities. As a result, the federal government was, for a short time, shut down. On an internal computer site, a CNN producer asked fellow employees to share any stories they might have about how the shutdown was affecting people.
But that missed the point. The fact that we needed to go looking for stories should have highlighted the fact that there weren’t a lot of stories to be found. For most people, life went on, government shutdown or not.
Still, the shutdown became a Rorschach tests: people saw in it what they wanted to see. Politicians decided they could never allow this to happen again, and they’ve been willing to reach deals to keep the government running. The most recent example is the deal hammered out to extend the 2001 and 2003 tax cuts (a signature project crafted by President George W. Bush) for two more years. President Obama says he didn’t want to make the deal, but he conceded it wouldn’t make sense to raise taxes in the face of a recession. Meanwhile, Republican lawmakers have agreed to extend subsidies for ethanol and other alternative-energy sources. That’s the closest thing to a “stimulus” package that Obama can hope to get.
Both sides should listen to voters.
On November 2, voters opted for the party that promised to extend the tax cuts and rein in federal spending after a two year “stimulus” binge. Obama himself described the results as “a shellacking” for himself and his party, which has come to represent big spending.
The president seems to understand that Americans want lower taxes, which may be why he explained that these cuts represent, “real money for real people that will make a real difference in the lives of the folks who sent us here. It will make a real difference in the pace of job creation and economic growth. In other words, it’s a good deal for the American people.”
However, when it comes to trimming the size and scope of government, Obama seems lost. “I don’t know how they’re [Republicans] going to be able to argue that extending permanently these high-end tax cuts is going to be good for our economy when, to offset them, we’d end up having to cut vital services for our kids, for our veterans, for our seniors.”
The problem is this assumes that the gusher of federal spending in recent years has led directly to “vital services” for people. In fact, the size of the budget has grown almost beyond belief in recent years. Since the year 2000, federal spending per household has increased by about a third, to $30,000 per family.