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Spending powers -- part 2

This was my response to his “sources”:

“Perf, I’m sorry that you wasted your Saturday night doing Wiki research on the arcane features of spending impoundments instead of the presidential veto, but it’s not my fault you keep missing the point. I’ll try to make this real simple for you:

“This discussion is about government debt. The gov’t has debt only when it spends more than it takes in. We have these things called laws. Laws set the tax rates for revenue (what comes in) and appropriations for spending (what goes out). The gov’t can’t spend a single penny unless it has been authorized and appropriated by BOTH houses of Congress (we have a bi-cameral Congress; refer back to Chapter 6 in your textbook).

“As SexyTension aptly noted, even then the President must approve of the spending (unless Congress overrides his veto by a super-majority).

“You keep insisting that because the Repubs had control of Congress for only 12 years out of 67, the Dems must get the blame or credit for everything else. I thought you were smarter than that.

“Look at Reagan’s term, which was mostly with a Repub Senate and a Dem house. He asked for, and got, huge reductions in tax rates and similarly huge increases in discretionary spending, mainly for defense. In eight short years the federal debt (200 years in the making) almost tripled in raw dollars, and mushroomed from 32% of GDP to over 53%. Who really owns that? According to you, it’s the Dems, because it wasn’t one of those 12 years in which Repubs controlled Congress.

“Yeah, the Congress (both the Dems in the House and Reagan's fellow Repubs in the Senate) didn’t give him every reduction he wanted in discretionary domestic spending. He vetoed anything and everything he didn’t like, and only two of his appropriations vetoes were overridden (with huge bi-partisan support). He even vetoed one defense appropriation because it was too small, and made Congress bring him a bigger one.

“Reagan would be the first person to own the results of his administration; you are the one who says otherwise, because the Dems controlled 1/2 of one branch. “Look at your silly argument the other way around. From 1980 through 2008 there were only two fiscal years that Democrats controlled both houses of Congress without a Republican President to reign in their excesses. The spending increases in each of those years was a paltry 3.7%, amounting to only $106 billion. Using your approach, I suppose Repubs are responsible for the rest of the debt.”

Belle Chasse LA
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Perf keeps chiding me in numerous threads for supposedly not responding to his “sources” on the spending power of the President. I’ve gone back and found most of my many responses and am copying them below. I really don’t expect him to understand any of this, but at least they are now in one place.

We had been discussing the restraint of excessive spending. In response to Perf’s insistence that Congress has total control over spending, I pointed out that Presidents can, and do, restrain any spending they deem excessive. I said: “Overridden vetoes of appropriations bills are exceedingly rare. Reagan had 2-3 overrides, and the Repubs overrode Clinton's line-item veto of some pork-barrel military base projects, but that's about it.”

Another of his fellow conservatives agreed with me, and corrected Perf, with the following: “Congress does NOT totally control spending as long as the President has veto power.” Perf ignored the reference to the veto power constitutionally vested in the President, and began arguing that the President has no power over excessive spending. This is what he said:


Maybe you can explain the Presidential Spending Powers. You might want to read "Harvard Law School Federal Budget Policy Seminar Briefing Paper No. 8”

“I believe you stated that the debt to GDP started going wild around 1980...........Just 6 years after The 1974 Impoundment Control Act, which greatly attenuated the size of the club the executive branch could yield when opposing congressional budget appropriations.”

Perf followed that up with copy-and-paste excerpts from two sources discussing the (relatively obscure) power of spending rescissions and impoundments, which had been restricted in the 1970’s (as a response to Nixon’s “Imperial Presidency”). Impoundments are nothing more than a request by the President to cancel spending of funds, after they were already appropriated and signed into law. The total of such requests over the last 30 years has been negligible in the scheme of things ($23 billion under Reagan, the last president who really attempted to invoke it much) . Perf also quoted a summary blurb by a Yale law professor named Stith, which was little more than academic mental masturbation about such things as whether the President was required to obtain congressional approval for using private gifts and donations made to the treasury, and whether the GAO is sufficiently independent to oversee the Executive). He demanded a response from me to these “sources” which, he claimed, supposedly proved his point that the President is insignificant in forming fiscal policy.

In essence, Perf was arguing that his sources “proved” the president has no power to control spending, because the power to impound appropriated funds had been diminished.

Belle Chasse LA
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We are slowly recovering from the recession, and the annual deficits are coming down. =======================

Lost you there.

White Hse Sta NJ
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Part 2

I also posted links to two charts that depict these trendlines graphically.

factcheck. org/Images/image/FederalDeficit%281%29.jpg shows deficits for the GHW Bush, Clinton, and GW Bush administrations. It clearly shows a trend toward smaller deficits and then to actual surpluses, beginning the first year after Clinton’s Deficit Reduction Act of 1993. It also shows the reversal of that trend, back to deficits, during the GWB administration. The chart only covered the first five years of the GW Bush term; otherwise the deficits would have been almost literally off the chart.

The chart at supportingevidence. Com/Government/fed_debt_as_percent_GDP_over_time.html shows the debt relative to GDP for a much longer period. That debt decreased steadily from after WWII until the beginning of Reagan’s term in 1981, at which time debt turned sharply upward. Not until Clinton’s term did that trend reverse. Then under GWB it reversed again, and debt to GDP grew substantially. When the recession hit, debt escalated to levels not seen since WWII.

My interest isn’t really so much in pointing blame at one party or the other, although I don’t mind doing that either; it’s in understanding which policy approaches are best at reducing deficits.

It seems to me that the debt problem started in 1981 when we first started experimenting in a big way with supply side economics: the idea that cutting tax rates would produce such an economic boom that tax revenues would more than pay for increases in spending. Clearly, that didn’t work, as debt almost tripled during Reagan’s term.

Then we tried Clinton’s approach, which was to increase tax rates (primarily on high earners), dedicate all of the increased revenue to deficit reduction, and restrain the growth in spending. That seemed to work pretty well, almost immediately reversing the growth of deficits, and presaging more employment and economic growth than any time in history.

Then we reverted to the supply side approach again, cutting taxes substantially in 2001 and 2003, not restraining spending, and following the famous Dick Chaney statement that “deficits don’t matter” as long as tax rates were lowered. Debt grew faster than at any time since WWII.

The recession has only escalated that growth in debt, by causing substantial reductions in tax revenue and increased outflows for such things as unemployment benefits and other income support programs for those with diminished incomes.

We are slowly recovering from the recession, and the annual deficits are coming down. But due to all the accumulated debt, our options are limited. This country needs to start paying attention to deficits, what causes them, and which policy approaches work best at reducing deficits. Personally, I’m not thrilled with either Presidential candidate’s ability to handle this mess. But I’m particularly concerned that Romney and Ryan seem intent on returning to the supply side policies that were in place while debt escalated.

Belle Chasse LA
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Over the past couple of months Perf and I have had an ongoing discussion, across several threads, about debts and deficits since 1980, which party’s policies have contributed more to them, and which party’s policies have been more fiscally responsible. I thought it better to consolidate those discussions into a single thread.

My definition of “fiscally responsible” is the prudent expenditure and investment of public funds for purposes that improve the economy and the general well-being of the country, while raising sufficient revenue to fund that spending without running extensive or extended deficits that pile up debt.

It’s not really debatable that the economy under Democratic administrations has outperformed Republican administrations, over any significant time period during the last century. This is true by any measure: rates of GDP growth, employment growth, aggregate wealth accumulation, stock market performance, etc. None of that is even debatable, unless you cherry-pick a few years here and there. But this has not been the focus of our discussions.

Instead, our debate has focused on deficits and debt, primarily the period since 1980 when the debt suddenly started to climb much faster than economic growth can reasonably sustain over time. On this, it also is not subject to reasonable debate that the aggregate debt added under Republican administrations has far exceeded that under Democratic ones.

I made this very point in a thread discussing the impact of the debt on dealing with the recession, and provided the following numbers by presidential administration:

Debt accumulated in years leading into recession:

Less than $1.0 trillion-- All 192 years before Reagan combined 1.73 trillion -- Reagan administration 1.14 trillion -- GHW Bush administration (4 years) 1.12 trillion -- Clinton administration 5.67 trillion -- GW Bush administration

Perf didn’t dispute the numbers, other than to call them “spin.” He did suggest that they should be adjusted for inflation (which, actually, would make the deficits under Reagan and GHW Bush larger). To that I responded with this:

“The OMB historical tables give composite deflators for conversion of revenue and outlays into constant 2005 dollars from 1940 to the present. You are welcome to crunch those numbers if you want to, but none of the OMB or CBO reports do so on the debt.

“Instead, economists put historical debt into context by referencing it as a percent of GDP. Here are those numbers:

32.5% Debt/GDP when Reagan took office. Up 20.6 percent points to 53.1 under Reagan. Up 13.0 points to 66.1 under GWH Bush. Down 9.5 points to 56.4 under Clinton. Up 28.8 points to 85.2 under GW Bush. Up 13.5 points to 98.7 under Obama (through FY 2011; probably another 5 points at end of 2012). “

Belle Chasse LA
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TOPIC: Debt and Deficits -- Presidents and Congress
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