The Growth of Executive Power and Government Debt
While growth of government debt and expansion of executive branch powers are both problematic to many people, they are often treated as separate issues. This need not be the case according to Christopher DeMuth in his essay, “The Bucks Start Here,” in the Summer 2013 issue of the Claremont Review of Books. (Read the full essay here)
He makes a compelling case that both types of growth are features of contemporary democracy. They arise from institutional breakdown in the dual separation of powers that succeeded in controlling government growth for nearly 200 years.
This modern phase began in the early 1970s when the United States saw expansions of agencies that make laws through executive, not legislative, means. DeMuth states, “(Modern government) employs regulation as a substitute for overt taxing and as a means of achieving policies that could not survive legislative roll calls.”
DeMuth brings up some troubling statistics. In the 1960s, annual deficits averaged 4 percent of federal spending and public debt was 28 percent of GDP at the end of the decade. In the fiscal year 2012, the deficit was 35 percent of spending and debt was 77 percent of GDP.
In response to the financial crisis, the Bush Administration and the supposedly independent Federal Reserve Board merged policy making. This caused the Federal Reserve to act far beyond its established authority, and to do so without the involvement of Congress. Congress rewarded the Federal Reserve by granting it further sovereign powers through Dodd-Frank.
Obamacare additionally empowers the executive branch. For proof, look no further than the President’s autonomous suspension of employers’ health insurance mandate, limits on out-of-pocket healthcare costs, and verification of income before purchasing insurance on the exchanges, but not the law itself.
DeMuth sees the Budget Impoundment and Control Act of 1974, rising affluence, and internet innovation as causes of expanded executive powers and excessive government debt. These changes are not blameworthy in themselves; they simply play into strengths of the executive branch.
The three requirements of effective political action are discretionary time, easy communication of information, and effective persuasion skills—all of which are widely shared among today’s population.
Executive agencies are particularly well-suited to capitalize on society’s recent advances. As DeMuth makes clear, they are better than Congress at, “gathering, analyzing, and deploying information; at managing specialized constituencies; and at making high-volume policy decisions and fine-tuning them over time.”
The President sits at the head of all executive organizations and can synthesize their work and popular appeal to fit his political agenda. He can act swiftly and clearly in response to developments, which only increases his power.
Unfortunately, “the unbounded executive has proven to be an instrument of unbounded debt.” This is because of such ambitious presidential projects as foreign interventions, expanded entitlement programs, financial bailouts, energy subsidies, universal healthcare coverage, and other utopian ideals that never fail to entice Oval Office occupants.
Pursuing enticing, but unrealistic, ideals is easier when executive branch has outright taxing authority. The power of the purse was meant to be the lynchpin of Congress’ constitutional power. Instead, there are now several regulatory agencies entirely funded by their own discretionary taxes, not congressional appropriations. On top of this, “the fusion of executive politics and central banking has made it even easier to undertake expansive new projects without commensurately expansive immediate taxation.”
Growths in executive power and government debt have been accompanied by a shift in the focus of regulatory agencies from production to consumption. In the 1930s, industries such as railroads, airlines, banking, and broadcasting were cartelized by executive agencies for the benefit of producers. Starting in the 1970s these cartels were unseated by health, safety, environmental, and other consumption-based executive programs.
In the same way that regulatory agencies shifted their focus from production to consumption, federal spending followed suit. This is appealing to politicians because, as DeMuth points out, “spending on production is limited by available opportunities, while spending on consumption is open-ended.”
DeMuth advocates institutional reform that concentrates on legal oversight, separation of federal powers, return to the principles of federalism, and renewed hierarchical structure in Congress. All of these actions, if taken correctly, lead to a future in which the executive is counterbalanced by a strengthened legislature and judiciary.
The executive, elected by the whole nation, has an important role to play by seeing policy nationally or globally. However, when this viewpoint becomes unfettered, it creates a policy of, “make good things universal and bad things extinct.” A representative’s concerns—pragmatic needs of his or her constituents—serve to ground executive ambition. Again, separation of power between branches and levels of government is necessary.
While changing people’s beliefs is important, it must be accompanied by a focus on institutional redesign. Times have changed. Well-made machines still need maintenance. It is time for America to begin looking for the ground-level changes necessary to preserve its great experiment. Christopher DeMuth has provided an excellent starting point with “The Bucks Start Here.”
Christopher DeMuth is a Distinguished Fellow at the Hudson Institute in Washington, D.C. He was president of the American Enterprise Institute for Public Policy Research from 1986–2008 and D.C. Searle Senior Fellow at AEI from 2008–2011.
Jared Meyer is a research associate at the Manhattan Institute for Public Policy.