If you are in DC tomorrow morning, I recommend going to hear the authors of two new books. William Voegeli is the author of Never Enough: America's Limitless Welfare State, and John Samples is the author of The Struggle to Limit Government: A Modern Political History.
I got to attend a more private lunch at Cato today. Some points that were brought up:
1. There are no new arguments against the principle of the welfare state. However, there is increasing awareness of fiscal problems.
2. Reading either book would tell you that the history of conservative political victories since 1932 is that they have been rare, short-lived, and ineffective at slowing the long-term growth of the welfare state. On a contrarian note, Jonathan Rauch pointed out that the share of Federal spending in GDP has been quite stable at round 20 percent for a long time. However Voegeli replied that this reflects cuts in defense spending, and defense spending is now so low relative to GDP that we are near an arithmetic limit in terms of our ability to raise nondefense spending without raising total spending. Moreover, Jagadeesh Gokhale pointed out that most of our fiscal problems are unfunded liabilities for the future. I read the overall exchange as confirming that conservatives are correct to read the past several decades as expanding the welfare state.
3. Voegeli sees the fiscal strains as an opportunity for conservatives to succeed with policies that limit the welfare state to means-tested programs. Others of us question whether this would succeed politically or, if it did, whether it would be sufficient to limit the harm of Progressive ideology.
4. In addition to the fiscal unsustainability problem, the Left faces a looming threat from the unpopularity of public sector unions, particularly teachers' unions. I call entitlements and public-sector pay the two "weeds" growing in Progressive soil. As I have blogged previously, I am skeptical that dealing with these two weeds would really represent a durable triumph for conservatives.
5. What opportunities are created by the Tea Party Movement? Randy Barnett said that that the TPM might steer in the direction of Constitutional moves in favor of Federalism (in Wall Street terms, I might accuse Randy of talking his book). Participants generally were agnostic on what the TPM means for the more established conservative and libertarian movements.
6. Rauch touted a balanced budget amendment as something that would be simple and easily understood. Gokhale pointed out that it does not address the huge unfunded liabilities that we already have.
In fact, I would worry that a balanced budget amendment would lead to "binge spending," the way that a plan to go on a diet next month leads to binge eating. What I think I would prefer is a fiscal discipline pledge to be signed by politicians. As I see it, a formal constitutional amendment would be an invitation for Congressmen to play games to evade it. On the other hand, if you claim to abide by a fiscal discipline pledge in letter but violate it in spirit, then voters can call you on it.
Another advantage of a fiscal discipline pledge is that you could broaden it to plug loopholes. You could include in it a pledge to put entitlements on a sustainable path. (In fact, for me, that is the key to the pledge--more important than balancing the budget in the short run.) You could include in it a pledge not to balance the budget on the backs of the states through unfunded mandates or to balance the budget on the backs of corporations through regulatory mechanisms.
Ultimately, a fiscal discipline pledge is no stronger than the willingness of voters to enforce it. But in a democracy, we may not be able to do much better. What do you think?