Norquist Says Battle Over Taxes Won, Spending Is Next

By Jeff Johnson | July 7, 2008 | 8:29 PM EDT

Capitol Hill ( - A half-dozen conservative organizations gathered in the Rayburn House Office Building Friday to mark "Cost of Government Day." Grover Norquist, president of Americans for Tax Reform (ATR), said one of the major conservative versus liberal battles in Washington has been decided, but a new cause needs to be championed by the right.

"The center-right coalition, the taxpayer movement, the conservative movement has won the argument, in Washington. We're not raising taxes," he said. "President Bush has gone beyond that, to not only not raising taxes, we're going to cut taxes every year."

But Norquist said conservatives cannot afford to rest on their laurels.

"There is now another challenge in front of us as activists," he explained, "and that is to create the conditions that make it possible for elected officials to say, not only, 'no' to tax increases, but [also] 'no' to the spending interests."

"Cost of Government Day" marks the date to which Americans must work to cover the tab for all federal, state and local spending, and the cost of complying with government regulations.

ATR's chief economist, Daniel Clifton, said those costs now account for nearly 53 percent of the nation's income and require the average employee to spend 193 days a year working to meet the costs imposed on them by various levels of government.

"This is an increase of four and a half days from last year," he said. "It is now 17 additional days in just the past three years. That is a ten percent increase in the cost of government in three years."

Clifton called the increase "alarming," not just because of increased spending at the state and local levels, but also because of the increasing costs of non-federal regulations.

"State and local spending has increased for five years in a row and is now at its highest level ever in American history," Clifton explained. "Regulatory costs, after this year's numbers, are now at their highest levels since 1983."

The Cato Institute's director of fiscal policy, Chris Edwards, said the states that are now complaining that they don't have enough money have only themselves to blame.

"The governors are blaming anything but their own reckless spending during the 1990s for their budget woes," he said.

Edwards also disputed claims that most state budgets are facing "draconian cuts." But even if governors do have less money to spend, he said they should learn to live within their means just like individuals and businesses.

"It is true that some states are trimming spending, but why shouldn't they after years of rapid increases?" he asked. "Why shouldn't states be cutting when businesses and households have had to cut back themselves because wages and profits have stagnated?

"Americans have less money for their own needs," he added, "let alone having extra to hand over to even bigger governments."

Interest on the national debt and 'pork' projects are also problems

Tom Schatz, president of Citizens Against Government Waste, noted that U.S. taxpayers face a $400 billion deficit and are paying $328 billion just for interest on the national debt.

"Over the next five years, the subsequent five years after this year, we're going to be paying $2.1 trillion just for interest on the national debt," Schatz warned. "It doesn't matter what your priorities are here in Washington, when you're using that much money just to pay interest on the debt, you are heading down the road to bankruptcy."

Another seemingly invisible cost of government, Schatz said, is "pork," individual state or district-specific spending that members of Congress add to general appropriations each year.

"As everything else has this year, spending on pork has also increased to record levels: $22.5 billion [listed in] our Congressional Pig Book," Schatz recalled, "9,362 individual projects this year, which is a 48 percent increase over just two years."

The government must learn to set priorities now in order to avoid a financial disaster in the near future, said Brian Riedl, a federal budget affairs analyst with the Heritage Foundation.

"If we throw money at every program under the sun, we're going to have to raise taxes through the roof," he warned.

"If government cannot say no to any programs, then most of the families - who are going to be faced with a $5,000-per-household tax increase - are going to be forced to say no to making their mortgage payments, to saving for retirement, saving for their children's education and buying health insurance," Riedl added.

Riedl noted that, when times get tough in Washington, pundits often ask, "What happens when the government runs out of money?

"I think the better question that we should be asking over the next couple of years is, " he said, "'What happens when the taxpayers run out of money?'"

Costs of compliance with government regulations increasing

The tax cuts pushed through Congress by the Bush administration have had a positive effect on the overall cost of government to taxpayers, said Scott Hodge, executive director of the Tax Foundation. The "compliance tax burden," however, is on the rise, according to Hodge.

"Americans this year will spend nearly six billion hours to comply with just the federal income tax code alone, for both businesses and individuals," he explained. "That's six billion hours just to fill out the paperwork, just to keep the records."

Hodge said the monetary cost of that time equals slightly more than $200 billion a year in lost productivity. For comparison, he added, that amount is greater than the total 2002 income of Exxon-Mobile, America's second largest corporation. The amount is equal to 2.2 percent of the country's Gross National Product.

"We can all applaud Congress' efforts and the White House's efforts to cut our tax bill, but it's time to cut our 'compliance tax,'" Hodge concluded. "Because that is beginning to swamp our economy and our productivity and it's becoming lost energy that's going to slow this economy down."

To control government spending, take away the incentives to spend

Norquist believes one of the best ways to rein in spending would be to keep members of Congress from becoming entrenched on appropriations committees.

"I think we may want to look in Washington, at term limiting the appropriators, the people who sit on those committees that spend money," he said. "The goal isn't to seize power, the goal is to reduce the power that anyone has over other people's lives."

He noted that, when the House imposed six-year term limits on committee chairmen in 1995, which took effect in 2001, the power the former "chairmen for life" had previously held was eliminated.

"And my hope is that, in term limiting appropriators, we would see not that power floated here or there or the leadership or the caucus or some other entity," he said, "but that it would disappear and, therefore, there would be less ability and interest in spending."

Norquist admitted that the concept does need further examination before it is introduced as a formal proposal, but he believes it is a viable option to achieve the ultimate goal.

"We need to come up with a change in the incentives for elected officials," he concluded, "because right now, the incentives are to spend."

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