The generational change of which Clinton spoke in his Inaugural Address could well be this transformation of government. In 1955, when Clinton was 9, defense spending accounted for 62 percent of federal outlays and “human resource” spending for only 22 percent. Of that, veterans benefits were a third and social security an additional third. By 1992, the proportions had almost reversed: 56 percent for human resources, 22 percent for defense. In the intervening years, we created Medicare, Medicaid, food stamps, federal college loans and much more.
No president has successfully grappled with the political consequences of this upheaval. Becoming responsible for the welfare of the many, government also incurs the wrath of the many. Consider how government has become central to our lives. In 1990, 34 million of us qualified for Medicare 1.7 million got farm subsidies and 22 million received food stamps. Millions benefit from tax breaks: interest deductions on home mortgages, the tax-exempt status of health insurance and other fringe benefits.
But while government earns our gratitude, it also stirs our resentment. Dependency creates a backlash. We detest the limitations, the conditions, the paperwork, the hassles and the occasional humiliations that accompany our benefits. We fear that benefits may be cut or modified. Even when they seem safe, we resist higher taxes to pay for other people’s “unworthy” benefits. Paradoxically, government’s very generosity helps make it unpopular. Government does so much for so many that anyone can find something that seems wrong or unneeded. My benefit is a public-spirited necessity; yours is ill-conceived waste.
What makes these conflicts so unmanageable is that we have no public philosophy by which to judge government. By public philosophy, I mean widely shared beliefs about what government should-and should not-do. This crippling deficiency dates to the Great Depression, when economic collapse gave rise to a new concept of government. The general idea was (and is) that government should act to protect people against the defects, instabilities and hardships of private markets. The trouble was that this new concept of government is utterly open-ended.
To justify government support only requires a showing-strong enough to convince Congress-that a “problem” exists that government might ameliorate. We gradually moved from an era when people were loath to use government for almost anything to an era (today) when people use government for almost everything. In 1929, federal spending was only 2.8 percent of the economy’s output. Now, it is 24 percent. Our welfare state aids the old, supports scientific research, subsidizes art and runs a railroad. We undertook these commitments in part, because we assumed, in the 1960s and 1970s, that they could be easily financed with the taxes generated by rapid economic growth.
In an arithmetic sense, the budget deficits result from our overoptimistic economic assumptions and a loose concept of government. We simply borrowed to pay for bigger government, because the tax burden has actually remained stable. (In 1968, federal taxes equaled 18.1 percent of the economy’s output; in 1992, the ratio was 18.6 percent.) But in a larger sense, the deficits stem from an inadequate public philosophy. We lack the popular consensus that would enable the political process to cut some spending programs-because they’re not deemed worthy of government support-and raise taxes to cover the rest.
There is a huge dilemma here. To close the deficits risks public anger and cynicism, because the president and Congress would break past commitments. But to let the deficits languish also arouses public cynicism, because government seems incapable of governing. We do not want the status quo disturbed, even though we find the status quo disturbing. Whether Clinton can overcome this dilemma will measure his political skills. By words or deeds, he needs to create clearer boundaries between governmental and private responsibilities. The problems of the health-care system, incidentally, involve the same basic questions.
As yet, Clinton has no workable public philosophy. He talks of “change,” “sacrifice” and “responsibility,” but the details that would give these words meaning are missing. Inconsistencies abound. He pledges to cut budget deficits but plugs new programs that seem unrelated to critical national needs. His plan for “national service” (allowing students to repay college loans with two years of community service) could cost, if fully funded, at least $13 billion annually, Bruce Chapman, former Census Bureau director, recently wrote in The Washing-ton Post.
If Clinton persists, he will perpetuate a tradition of bipartisan timidity. Ronald Reagan attacked Big Government in the abstract without actively campaigning to curb programs he thought unneeded. George Bush believed the issues so sensitive that they could be handled only in quiet bargaining between the White House and Congress-which meant that not much got done. The deadlock is not between Democrats and Republicans so much as between politicians and the public. Easy escapes don’t exist. In fiscal 1993, the projected deficit ($327 billion) exceeds all defense spending ($289 billion). Any tax increase that raises major money must hit the broad middle class.
Sooner or later, we need to come to terms with the welfare state. We need more rigorous standards for judging whose welfare is being advanced, and why. As it is now, the welfare state is too big and intertwined in our social fabric for conservatives to dismantle. But it is too expensive and unpopular for liberals to expand endlessly. The irony is that the welfare state arose in the 1930s as an antidote to the insecurities of free markets. More than 50 years later, it has itself become a wellspring of anxiety and contention.
