The Era of Small Government Is Over
IT WAS A full quarter-century ago when President Bill Clinton delivered one of the few quotable State of the Union addresses in American history.
“The era of big government is over,” he proclaimed on January 23, 1996. It was more of a political statement than a policy goal—indeed, Clinton proceeded to spend the next hour outlining a long list of things the federal government ought to do. But it wasn’t just a bumper sticker catchphrase. “We know big government does not have all the answers. We know there’s not a program for every problem,” he explained. “And we have to give the American people [a government] that lives within its means.”
That succinct conception of limited government likely would, if expressed today, make any Democrat effectively unelectable—at least on the national stage. For that matter, the idea that Americans would be able to help themselves best if government got out of the way would place Clinton, circa 1996, outside the emerging mainstream consensus of today’s Republican Party. Acknowledging the limits of government power to improve people’s lives and worrying about the cost of a large and growing government is, it seems, so last century.
In 1996, the federal government spent a grand total of $1.56 trillion—about $2.4 trillion in today’s dollars—and ran a deficit of about $106 billion. While tiny by today’s standards, both parties saw that shortfall as unacceptably high. Republicans had won control of Congress for the first time in 40 years in 1994 by promising fiscal restraint and with talk of a balanced budget amendment. Heading into his own reelection in the fall, Clinton was meeting his opponents head-on with his 1996 speech. Both parties could play the deficit-hawk game.
This was not an out-of-the-mainstream position among Democrats at the time. Just two months earlier, during an impassioned speech on the Senate floor, a high-ranking Democratic senator also insisted that his party was not about to cede deficit politics to the other side.
“I am one of those Democrats who voted for the constitutional amendment to balance the budget. I have introduced, on four occasions—four occasions—entire plans to balance the budget,” he recalled. Referring to the Republican takeover of Congress in 1994, the senator made a bold prediction. “I know it did one thing,” he said. “It made sure that there was nobody left in the left of my party who said, ‘In fact, we don’t care about moving the budget toward balance.’”
Twenty-five years later, that senator is now president of the United States. Just weeks after taking office, Joe Biden’s first major legislative achievement was the passage of a $1.9 trillion COVID-19 relief bill, the entire cost of which will be added to a budget deficit that was estimated to be $2.3 trillion the new spending was approved. Although ostensibly a package meant to combat the COVID-19 pandemic, the bill contains a large number of government-expanding measures unrelated to fighting the disease, including an expensive new child subsidy entitlement that is likely to become permanent.
