A discretionary spending tale of two parties: James Madison rears his head

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By John Haskell

A close examination of federal discretionary spending totals over the last 25 years reveals an unmistakable trend: under Democratic presidents discretionary spending increases were modest, and there were even decreases in some years; Republican presidents, by contrast, were more likely to preside over large discretionary spending increases usually in both defense and non-defense categories. These trends generally prevailed regardless of party control in Congress.

Counterintuitive?  The numbers don’t lie:

• In absolute terms, discretionary spending during the Clinton years went up just over 20%, with nearly all of the increase in the last three years when the budget was in surplus (FY 1999-2001) – even though statutory caps were in place. Discretionary spending was nearly flat in absolute terms from FY 94-98, irrespective of party control of the Congress. In addition, actual outlays were sometimes about equal to or less than the president requested, even when Democrats controlled the Congress.
• In absolute terms, discretionary spending increased about 60% from FY 2002 to FY 2008 when George W. Bush was president. More was spent than requested by the president every year, regardless of which party had control in Congress.
• The Obama presidency featured an extremely high spending point in FY 2009, affected in significant measure by the Recovery Act enacted by the Democratic Congress and signed by the president, which was followed by an initially steep decline in spending in FY 2010, followed by small decreases until FY 2015. FY 2016 and FY 2017 saw increases but, still, overall discretionary spending was lower in absolute terms in FY 2017 than it had been in FY 2010.
• President Trump signed into law the full year discretionary numbers for FY 2017, which showed a 5% increase, and appropriated FY 2018 spending represents another 6% increase. These increases were greater than in any of the previous seven years when Obama was president and were achieved by exceeding statutory caps.

How can we explain that Republican presidents signed bills with greater discretionary spending increases than Democratic presidents, even when Congress was controlled by Republicans, as it was for four of Bush’s first six years, and for the first two years of Trump?

One part of the explanation is based on specific circumstances affecting budget politics – the post-Cold War peace dividend and austerity politics in the Clinton years, the response to 9/11 in the Bush years, and a return to austerity politics in recent years as deficits ballooned post-recession and Recovery Act.  The austerity politics of the 1990s and 2010s were coupled with statutory discretionary spending caps (although those weren’t adhered to, as we have seen, when the politics changed).

But budget politics doesn’t seem sufficient to account for key aspects of the pattern. The issue we need to explore is that Democratic presidents barely got what they requested (and sometimes got less), even when their party controlled Congress. Furthermore, Republican presidents’ requests were frequently exceeded, even when their party controlled Congress.

A structural factor in our separated system gets us closer to a full explanation.

The modern day “peculiar institution” in this country is the U.S. Senate. By design, the system gives unusual leverage in the legislative process to just one senator, and certainly the minority party. If the minority party sticks together and has at least 41 cohesive members, both sides have to be reasonably satisfied for the bill to pass.

With a Republican president, Democrats in Congress, whether in the majority or not, are able to bargain effectively enough for the final tally of appropriations (usually an omnibus in recent years) to exceed what the GOP president wants. With a Democratic president, Republicans have the leverage, even with a congressional minority. For example, Clinton’s budget requests were barely if at all exceeded throughout his presidency, regardless of party control in Congress, and Obama’s request numbers, even though his requested increases in some years were modest, were not met.

The political climate in each of these situations was, as mentioned above, important. Nonetheless, the Trump years to date seem particularly illustrative – a Republican president who presented a lean budget to a Republican Congress during a time of huge deficits has signed spending bills with significant discretionary spending increases that exceeded existing caps.

With Republican presidents the dynamic seems to be that Democrats insist on more domestic discretionary spending roughly commensurate with the defense spending increases the president and his party want, and they are able to get those domestic increases with minority leverage in the Senate.

On the other side of the coin, Democratic presidents have presented leaner defense budgets to Republican Congresses that demand overall austerity to the point of a willingness to let the government shut down. It is notable that when the government was shut down for extended periods of time in 1995-96 and in 2013, while Republican Congresses didn’t get everything they wanted in the negotiations and ultimately conceded, the final numbers in both years showed actual spending below the president’s requested amount. Shutdown politics may have worked to the benefit of Democrats both times, but the long game was won by Republicans.

What’s the bigger lesson? In the spirit of James Carville: it’s James Madison, stupid. Don’t be fooled by the common focus on “presidential government.” Our separated system is more complicated than that and can lead to counterintuitive policy results, especially if one thinks that presidents are the main policy drivers. When it comes to spending, decision-making involves a complex interaction among both houses of Congress and the president.

One could argue recent history shows that if discretionary spending restraint is the goal, a Democratic president and a Republican Congress seem to provide the best result, with a Democratic president and a Democratic Congress (without 60 senators) second-best. You want to prime the pump? Elect a Republican president, who invariably will propose increased defense spending which, at the end of the day, will come with more domestic dollars thanks to Democratic leverage in the Senate.

John Haskell works at the Library of Congress, where he is the Director of the Kluge Center. All views expressed here are his own.