March 26, 2004

March 26, 2004 | Commentary on Political Thought

A Taxing Choice

Leadership means doing what's right, not necessarily what's popular. That often means making difficult choices. Still, it's amazing how quickly the right policy can become the popular one, once people understand its importance.

This principle sometimes defies conventional wisdom. For example, politicians at all levels seem to think spending buys votes, while fiscal restraint buys early retirement from elective office. This belief is demonstrated by the fact that, according to the Congressional Research Service, the number of earmarks has soared in recent years. They've increased from 3,023 in 1996 to more than 14,000 this year, for a total of $47.9 billion in earmarked spending.

Even staunch conservatives seem to feel the need to head back to their districts periodically and unveil new bridges or post offices. Without such projects, they think, voters will turn on them in the next election.

But that's simply not true. Because the appropriations process broke down in 2002, lawmakers faced voters that year without any earmarks to brag about. None. Only after Election Day did a lame-duck Congress bring home the bacon.

Still, the House re-election rate that year was 98 percent. That proves voters are willing to return a member of Congress, even if he isn't bringing back federal dollars for specific local projects.
Of course, deficit spending is especially tempting here in Washington. Because there's no requirement that lawmakers balance the budget, there's really no ceiling on spending. Today, Washington spends more than $20,000 per household, but collects less than $17,000 per household in taxes. The remaining $3,500 simply gets added to the budget deficit, to be made good by future taxpayers.

But federal lawmakers should learn a valuable lesson from our nation's state governments: Fiscal restraint is not political suicide - in fact, it's often the key to popularity.

State governments can't run deficits. Virtually every state's constitution contains a balanced-budget provision. That certainly helps keep governors and lawmakers alike focused on the difficult spending choices.

Consider Tennessee. Last year, the state faced a serious budget shortfall. But instead of raising taxes, newly elected Democratic Gov. Phil Bredesen urged lawmakers to figure out how much money they had coming in and spend just that much - no more.

"We made some painful decisions," he recently reminded lawmakers. "We embraced the middle ground of shared sacrifice." And they balanced the budget, with no tax increases. That did mean some popular programs were trimmed back. For example, tuition increased at all state universities.

But were voters angered by the budget cutbacks? No. In fact, according to a recent Mason-Dixon poll, Mr. Bredesen has an amazing 72 percent approval rating. Clearly, voters are responding to Mr. Bredesen's leadership.

Meanwhile, the nation's most populous state also faces the biggest budget problems. When Gov. Arnold Schwarzenegger took office last year, he inherited a $15 billion shortfall. Instead of pumping up taxes, he slashed them. Indeed, one of his first actions was to repeal the unpopular car tax.

Mr. Schwarzenegger also has proposed genuine spending cuts. He plans to cut transportation funding by about $800 million and wants to pare about $200 million from the state's health insurance program, Medi-Cal. That means Californians will have to pay more in fees to enjoy state-supplied medical services like podiatry, chiropractic care and acupuncture. But most Californians seem willing to make that sacrifice.

According to a recent poll from the nonpartisan Public Policy Institute of California, after his first 100 days, Mr. Schwarzenegger's approval rating was a solid 61 percent. Only about 22 percent disapproved. Pretty good for a man who is telling constituents they'll have to swallow some harsh medicine, instead of continuing to feast on pork.

This approach could work on the federal level as well. And we don't need a balanced-budget amendment - just a group of lawmakers willing to make the tough choices and to explain those choices to the people.

We all understand instinctively there's no free lunch and all government spending must be paid for eventually. By explaining what we're spending on, and by finding ways to trim federal spending, lawmakers could easily build a consensus to balance the budget and reduce the deficit.

Americans understand we're living through difficult times. We're willing to do whatever it will take to defeat terrorism and create a sound financial future for our children and grandchildren.
We're looking to Washington for leadership. Congress should provide it.

About the Author

Edwin J. Feulner, Ph.D. Founder, Chairman of the Asian Studies Center, and Chung Ju-yung Fellow
Founder's Office

First appeared in the Washington Times