Budget Battle a Signpost on GOP’s Path to Smaller Central Government

In the battle over the federal budget that is still paralyzing Washington as the election year begins are the sounds of one political era ending and a new one beginning.

From one angle, the debate marks the end of the century-long trend toward more central authority and power in Washington. By agreeing to balance the budget in seven years, and by proposing nearly $250 billion in reductions in discretionary spending, President Clinton has conceded that in the years ahead Washington will play a smaller role in the nation’s life. However reluctantly, most congressional Democrats (especially in the Senate) have accepted that conclusion as well.

That may be nothing more than acceding to the inevitable. During Clinton’s first two years in office, his inability to win approval for his health care plan or anything approaching the level of “public investment” that he promised during the 1992 campaign demonstrated the erosion of public support for expanding the federal government’s responsibilities.

As Clinton found, even promises of “reinventing government” were not enough to overcome a loss of faith in Washington that stretched back to the 1960s. Republicans marshaled that swirling antipathy with Washington to achieve their historic electoral breakthrough in 1994, and to shift the debate from Clinton’s effort to reform and reinvigorate government toward their own aims of reducing and retrenching it.

But if this budget struggle marks the end, at least for the time being, of the Democrats’ hopes of expanding government, it sounds only the opening notes in the debate over Republicans’ plans to shrink it. The sagging approval ratings for the GOP Congress and the rising numbers for President Clinton make clear that conservatives have not yet sold a majority of Americans on their vision of a minimalist central government.

Those cautionary poll numbers point toward the real challenge confronting the Republican congressional majority as the new year begins. For most Republicans, the central issue is how much change the revolutionary forces in the GOP can push past their own moderates and President Clinton in the next 12 months.

But the more important question may be whether the Republicans can win the public support they need to progress further along the path that they cleared in 1995. Only by winning more elections, particularly the White House in 1996, can House Speaker Newt Gingrich of Georgia and his allies even come close to fulfilling their ambitions to dismantle the social welfare and regulatory state that Democrats nurtured and enlarged for decades.

For all the turmoil that the Republican ascent has generated in Washington over the last year, the agenda now under debate in Congress constitutes only a modest first step toward the changes that many conservatives ultimately envision.

Even the seven-year plan for balancing the federal budget that Democrats denounce as draconian, many right-leaning thinkers consider only a down payment toward “right-sizing” Washington. “The budget is not really a very big deal,” insists Stephen Moore, director of fiscal policy studies at the libertarian Cato Institute and an advisor to House Republicans. “You can make a case that either way big government wins.”

Today, federal spending equals about 21% of the gross national product. If Clinton were to accept the Republican budget plan as written, that figure would drop to 18.5% by 2002, the Congressional Budget Office estimates. That’s a measurable decline but still more than double the level of national output that government consumed before the New Deal.

Shrinking the federal government to some 18% of the economy would be a major achievement for the GOP. But many conservatives would be dissatisfied if the tide turned no further. In his recent book, “The Freedom Revolution,” House Majority Leader Dick Armey of Texas says that the GOP should set as its goal reducing the federal government to 11% of GNP, about half its current size. “We should do it soon, before our children become of age.”

In the budget showdown, some of the sharpest disagreements have centered on Republican efforts to replace federal entitlement programs for the poor with state-administered block grants that would be subject to annual appropriations. So far, the conservatives have not made much progress: Senate moderates forced them to abandon plans to convert the federal school lunch program into a block grant, and President Clinton is adamantly resisting their proposal to end the entitlement to Medicaid. Clinton has accepted the notion of ending the entitlement to welfare, but he has promised to veto the welfare reform bill that makes the change because he objects to other provisions within it.

Yet even if congressional Republicans could convert these programs to block grants, that would still be only a “transitional” step, as Moore puts it. Many conservatives consider it irrational for the federal government to raise money and simply turn it over to the states to spend as they wish.

After some interim period of block-granting programs such as welfare to the states, some conservatives already talk about simply withdrawing federal funding, using the savings to reduce federal taxes and then allowing the states to raise their own taxes, if they wish to continue providing the services. Another school of Republican thinkers led by social theorist Marvin Olasky envisions devolving authority for the poor beyond state governments directly to private charities.

Ideas of similar ambition now cascade over each other in conservative circles. With a flat tax that would eliminate the progressive income tax, legislation to roll back affirmative action, new restrictions on government regulation of business and severe reductions in programs that benefit the poor, the activist core in the GOP would reduce from almost every angle the authority that Washington has accumulated since the Progressive era to challenge the distribution of income, opportunity or power produced by the private economy.

Change of this magnitude is obviously far beyond the GOP’s political reach today. That should not be surprising. The Great Society was built on the broad back of the New Deal. Even the New Deal was constructed on the foundation laid down by Woodrow Wilson and the Progressives.

In the growth of Washington’s authority throughout this century, Franklin D. Roosevelt was the pivotal figure, for he provided not only a policy direction but a political structure to sustain it. For an entire generation, from 1932 through 1968, Roosevelt’s sturdy New Deal coalition of union workers, blacks, Northern Catholics and Southern Protestants allowed Democrats to dominate the White House and Congress, and entrench their vision of a powerful central government endlessly matching problems with new programs.

In the first year of their resurgence, Republicans made great gains in seizing control of Washington’s intellectual debate. No longer does anyone discuss whether to start new programs; the only question is which ones to cut and by how much. But only political success can validate that intellectual victory.

Most Republicans still believe that the party should hold to a hard line in its showdown over the budget with President Clinton, despite polls showing an increasing number of Americans concerned that the GOP plan moves too far, too fast. The risk for Republicans is that, even if they win the policy argument, they may lose the political war--and with it their chances of regaining the White House in November, perhaps even their hold on the House.

A longer view must push the GOP further toward the conciliatory course hinted at in its weekend offer to reopen the government. Measured against the scale of their own ambitions, the real imperative for Republicans this year is not to force their version of a balanced budget past Clinton at any price; it is to enlarge their political base and win the unfettered control of the White House and Congress they need to more radically reduce the federal government’s reach.

As the new year begins, the GOP leadership still seems to be betting that ideological purity on the terms of the budget deal offers them a better chance than compromise of expanding their political coalition. If they’re wrong, Republicans may have to wait years for another chance to mount a serious assault on Roosevelt’s legacy.

The Washington Outlook column appears here every other Monday.