GWB vs. LBJ Redux

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GWB and LBJLast week, Justin covered the David Lightman McClatchy Newspaper column comparing the spending record of the current Bush administration to the acknowledged gold standard of big government spending – LBJ. The statistics quoted in the column crown George W. Bush as the U.S. discretionary spending champion of the modern era.

It received a lot of attention in the blogosphere and MSM across the political spectrum. In addition to Donklephant, it was also picked up by: Washington Post, James Joyner at Outside The Beltway, Steven Reynolds at the All Spin Zone, 6SpeedTA95 at The Liberty Lounge, The, Gray Matter, Ed Morrissey at Captain’s Quarters, Investor’s Business Daily, Taylor Marsh, USA Today, Houston Chronicle, MVDG Gazette, and many more.

The most interesting aspect of the research in the story was completely ignored in all this coverage as well as in the story itself. To see it, we have to peel back the onion and look at Lightman’s source. The story was based on research done by Stephen Slivinski, Director of Budget Studies at the Cato Institute and author of Buck Wild. As Stephen himself explains:

“The story is mostly old news — I’ve been making the same point for years. But, because it is based on updated data that I provided to the reporter, I’m happy to see the message ripple through the news cycle.”

This is also old news to DWSUWF readers, as we have been covering Slivinski’s research and analysis since May, 2006. So what is the real story? It is not about whether GWB or LBJ is the biggest spender. It is not about whether Republicans or Democrats are bigger spenders. It is not about whether GWB is hypocritically claiming to be an advocate of limited government and fiscal responsibility. The real story is about what happens to spending under divided vs. single party control of the federal government. Once more, lets go to the source – Stephen Slivinski from September, 2006:

“…government grows slower when at least one house of Congress is controlled by a political party different than the president’s—a condition known to political scientists as “divided government,” or popularly known as “gridlock. Since 1965, government has grown slower in periods of divided government than in periods of united government. On average, united government tends to lead to a 3.4% annual increase in federal spending in real per capita terms—over double the growth under divided government: 1.5%. When you look at the data in terms of how fast government grew in relation to the economy, the results still favor divided government. The average yearly increase in government above and beyond GDP growth is 25 times faster when one party has a monopoly over both the legislative and executive branches than it does when gridlock is present… During the years of divided government under Clinton, a sort of gridlock ensued. The Republican Congress managed to cut Clinton’s domestic spending requests by an average of $9 billion each year between fiscal 1996 and 2001. Contrast that with the budget outcomes under President Bush—specifically the years in which Congress was held entirely by Republicans. Between fiscal years 2003 and 2006, Congress passed, and Bush refused to veto, non-defense budgets that were an average of $16 billion more than the president proposed each year.”

To my knowledge, William Niskanen, former chariman of President Reagan’s Council of Economic Advisers, was the first to document this effect. Slivisnski’s research has built on and amplified Niskanen’s work. It is beyond dispute that the two biggest spending Presidents of the last 50+ years are GWB and LBJ. Depending on which metrics are used, one can quibble about who is the single biggest spender, but by any measure, they are the top two. LBJ led a unified Democratic government during his tenure. GWB led a unified Republican government for the first six years of his administration. During the time this administration enjoyed majority control in the legislature, discretionary spending was increasing at 7%+ per year, blowing away LBJ’s record. Still, GWB may finish second because, unlike LBJ, GWB faces a divided government for the last two years of his administration. As a consequence, this year, the annual spending increase has dropped to a 3% rate:

The surprise is that federal spending will only grow about 3% in the current fiscal year that ends this October. That’s a big improvement over the annual average 7% growth we’ve seen since the first day of the George W. Bush presidency. How did that happen? Those familiar with my previous research will probably not be surprised to hear that the new political reality – divided government – has something to do with it… – Slivinski

I won’t try to explain the mechanism of why it works. It just does. Every time, without exception. If the objective of limiting the growth of federal spending is important to you, there is one sure way to get there – keep this government divided.

Let’s not kid ourselves. A single party Democratic government in 2009 will be every bit as bad as the single party Republican government of the last six years. The only difference will be which special interests and lobbyists will be the beneficiary of the increased spending of our tax dollars. The logical vote in 2006 was to vote for a straight Democratic ticket to divide our government. The logical vote in 2008 is to vote for a Republican president to keep it divided and avoid LBJ Redux in 2009.

X-posted and x-cerpted from Divided We Stand United We Fall