The Budget-Cutters Who Couldn't Stop Spending

On September 15, 2005, two weeks after Hurricane Katrina had devastated the Gulf Coast, President Bush delivered a live television address from Jackson Square in New Orleans. As the power generators’ eerie light washed over his patch of an otherwise darkened section of the city, Bush pledged to add billions of dollars to an already bloated federal budget—to rebuild the region and, though he didn’t mention it, to deflect the political embarrassment of the government’s inept response to the storm.

Six days later, as dead bodies were still being pulled from the flooded city’s stagnant waters, members of the Republican Study Committee (RSC), a collection of House Republicans who push for lower government spending, announced Operation Offset, a 25-page proposal outlining $800 billion in budget cuts over a 10-year period. The RSC argued that any spending to help Katrina’s victims should be balanced by cuts elsewhere in the budget.

To some, the timing seemed particularly cold-hearted. House Leader Dennis Hastert, already accused of reacting insensitively to the devastation, rejected the proposal. When asked if Congress had any room for the RSC’s proposed budget cutting, then–House Majority Leader Tom DeLay (R-Tex.) told Fox News Sunday, “after 11 years of Republican majority, we’ve pared it down pretty good.”

The result of that paring: a Republican majority that celebrates this year’s $296 billion budget deficit because it is 30 percent less than originally forecast. It’s smaller than the 2005 deficit of $316 billion, but only because people are paying more taxes, not because anyone has reduced spending.

A brutal year for the GOP finds the Democrats poised for a possible takeover of Congress. Last winter Republican leaders promised to cut spending and end corruption, but as spring turned into summer those same leaders opted instead for crass efforts to write bans on gay marriage and flag burning into the U.S. Constitution. The bulk of the RSC’s fiscally conservative agenda isn’t likely to see the light of day, even with a GOP-controlled Congress, unless one of its deficit hawks takes a place in the Republican leadership. As it stands, party leaders are happy to use the committee when the group’s activities advance their agenda and quick to ignore it, or worse, when pursuing costly legislation.

Here’s the strange thing: The RSC has more than 100 members, making it the largest coalition within the House Republican Conference. It has an ambitious and respected leader in Rep. Mike Pence (R-Ind.). And when Republicans recently selected a new majority leader to replace Tom DeLay, RSC stalwart John Shadegg made it a competitive three-way race, with his strongest support coming from the Internet activist community. So how does a group holding a majority of the majority, a group claiming to stand for restrained spending, coexist with record-breaking deficits and a 45 percent increase in federal spending since 2001?

Part of the answer lies in the Republican leadership, for whom federal spending has become a central political tactic. Part lies in the Republican base, where social conservatives have more pull than supporters of fiscal restraint. But part lies within the RSC itself. The committee’s charismatic leaders talk a good game, but at the end of the day even the group’s own members support pork projects and block reform. The RSC includes some genuine believers in fiscal restraint, but they are regularly outmaneuvered when they try to eliminate other members’ pork. It’s like joining a book club dedicated to reading the classics, then spending all your time sipping mojitos and watching Entourage.

Not Afraid to Make Enemies

The original RSC was founded in 1973 by Rep. Philip Crane (R-Ill.), with organizational support from Paul Weyrich, the founder of the conservative Heritage Foundation. For the next 24 years, it existed as a small watchdog funded by the Republican caucus as a legislative service organization—that is, a group supported by money collected from individual Republican congressmen. The group was originally created to counter the Democratic Study Group, which had pushed the House Democratic caucus to the left. It has consistently endorsed lower taxes and lower spending.

Shortly after Newt Gingrich became speaker of the House in early 1995, he disbanded the RSC. On the surface, his decision reflected an effort to curb the occasionally profligate system of legislative service organizations, though many insiders argue it was really about personality and ambition conflicts between Gingrich and DeLay, who was then running the RSC. Either way, the RSC returned the very next year to help organize the party’s fiscal reform agenda. It had a new name (the Conservative Action Team) and fewer members (just 40 as recently as 2000), but it struggled on as a small but dedicated group. In 2000 then-chairman John Shadegg (R-Ariz.) restored the committee’s original name. And then Mike Pence was elected to Congress.

Pence, who describes himself as “a Christian, a conservative, and a Republican, in that order,” had a fairly substantive history in state politics before coming to Washington. He hosted the Indiana-based Mike Pence Show, which he describes as “Rush Limbaugh on decaf,” through most of the 1990s, and he ran a conservative state think tank, the Indiana Policy Review, from 1990 to 1994. After two losses running for Congress in the late ’80s, his radio and think tank experience helped him gain his party’s nomination again in 2000; he won 51 percent of the vote in a three-way race, with a 20 percent Libertarian showing. Pence is generally a strong supporter of free market economic policies, but his libertarian sympathies are weaker in the social sphere: He opposes abortion and gay marriage, and he calls for stronger controls on illegal immigration.

Although Pence came to Washington at the same time as President Bush, he sees himself at heart as a soldier in the 1994 Republican Revolution. “I’m like the minuteman,” he told U.S. News last year, “who showed up 10 years late for the Revolution.” He has made up for lost time. In addition to his bitter fights with the White House and House Republican leaders over the No Child Left Behind Act and the massive Medicare expansion bill, he has led the campaign to eradicate budget earmarks, which anonymously tack federal spending for pet projects onto larger bills. Pence has also gone after the secretive practice of stuffing the budget with pork projects under the pretense of “emergency spending,” most recently put to use in bills funding the Iraq war.

Do You Have to Spend and Spend to Elect and Elect?

Almost nobody actually likes taxes, which makes it relatively easy to cut them. But cutting spending, congressmen fear, risks the wrath of special interest groups. “It’s like the story of the ‘secret word’ that defeated the dragon,” says Grover Norquist, president of Americans for Tax Reform. “Members believe that spending saves them.” That belief drives the apparently contradictory behavior of congressmen who join the RSC and then vote for spending increases.

“I’ve heard the arguments that you have to spend to win elections,” says Pence. “People told me that when I voted against No Child Left Behind. I heard it again when I voted against Medicare expansion. Both times voters brought me back to Washington with a higher margin.” He was re-elected in 2002 with 64 percent of the vote and in 2004 with 67 percent.

While Pence’s anti-spending stance places him in a very small club of lawmakers, there is some evidence to support his belief that it does not hurt his electability. Fellow RSC member Rep. Jeff Flake (R-Ariz.) was also elected to Congress in 2000. Like Pence, Flake voted against No Child Left Behind and Medicare expansion. He also opposed creating the Department of Homeland Security and wants to eliminate the Department of Education. In May he started what supporters call the “Flake Hour”: At the end of spending debates, Flake challenges earmark sponsors to take to the House floor and justify their anonymous expenditures.

Unlike Pence, Flake has libertarian tendencies that extend beyond the realm of taxing and spending. Although he voted for the PATRIOT Act and initially supported the war in Iraq, he now opposes both. He favors increased immigration and wants to end the Cuban trade embargo. Rather than hurting Flake, his numerous “no” votes have only increased his popularity. In 2000 he was elected with 54 percent of the vote. When a more conventional Republican challenged him in their party’s 2004 primary, Flake walked away with 59 percent of the vote. That same year, he received 79 percent in the general election.

Rep. Tom Feeney (R-Fla.) is another rising star in the RSC. Feeney started his political career as a flack for the Bush dynasty: In 1994 he ran as Jeb Bush’s running mate in his unsuccessful first gubernatorial bid, and in 2000, while serving as state House leader, he helped lead the efforts to block the Florida presidential vote recount. But since coming to Congress in 2002, he has developed an independent streak. Not only did he vote against the Medicare expansion, but President Bush reportedly hung up the phone on him after Feeney declared he had come to Washington to oppose entitlements, not to expand them. He voted against spending 88 percent of the time the following year and was re-elected without opposition.

Then there’s Rep. Ron Paul (R-Texas), who isn’t a member of the RSC but outdoes almost all of them when it comes to fiscal restraint. In the last decade, Paul, the Libertarian Party’s 1988 presidential nominee, has not just voted against Medicare and No Child Left Behind but has opposed funding the Iraq war. When he re-entered Republican politics in 1996, Paul was barely elected, with 51 percent of the vote. Yet his vote totals have continued to climb despite his potentially controversial votes.

There’s more than just these anecdotes to support the idea that congressmen don’t have to be big spenders to get re-elected. The political scientist James Payne’s informative but uninfluential 1991 book The Culture of Spending made a compelling case that spending and re-election are not inevitably linked.

Payne argued that a sophisticated consideration of “rational ignorance”—things you don’t know because it doesn’t pay to know them—shows that voters don’t know enough about how their congressmen vote to punish them for failing to bring home the bacon, and that representatives don’t know enough about why voters support them to pursue a spending path that ensures re-election. Payne also analyzed data from a mid-’80s election to show that “voting more in favor of spending has no positive effect on a congressman’s electoral margin,” and that electorally secure congressmen “are just as much in favor of spending as other congressmen.” Payne maintained that it was being in Congress, which entails listening almost constantly to lobbyists’ arguments for more government spending, that persuaded congressmen to spend, not a calculated attempt to buy off votes.

Of course, there are plenty of districts where lust for pork is topmost on the voters’ minds. If every American wanted the government to spend less, there wouldn’t be heated debates about deficits in the first place. Nonetheless, examples like Pence, Flake, Feeney, and Paul show there can be a healthy counterbalance to the incentive to spend freely, but it usually takes a lawmaker willing to sacrifice spending on principle.

RSC leader Pence agrees that politicians can be tighter with the public purse without harming their electoral prospects, particularly in districts where voters are philosophically predisposed to fiscal conservatism. “Voters are drawn to men and women of principle,” he says. As long as you stick by those principles, he argues, “Voters give you the benefit of the doubt.”

If there are walking examples that being profligate with public money isn’t necessary to win, why aren’t there more fiscal conservatives in Congress? One answer is that many Republicans just aren’t opposed to spending. Another is that their party has ascended to power and doesn’t want to give it up, and thus doesn’t want to take even the slightest risk. The insurance industry has acknowledged that there is little evidence installing a car alarm will deter auto theft. Yet car owners continue to buy and install them, fearful of what might happen. For all their political differences, Washington Democrats and Republicans share the calcified belief that staying in power requires ever-rising spending.

“After the 1996 elections there was a backlash to reining in government spending,” says Brian Riedl, the lead budget analyst at the Heritage Foundation. “Because congressional Republicans lost a few seats, they assumed it wasn’t safe to cut spending anymore.”

A case in point: The same night he was ushering through legislation that would cripple the current process for earmarking spending, Pence told me, “We need a Contract With America Renewed.” He and other House conservatives liked the idea so much they proposed a bill by that name. It largely mirrored the original Contract With America’s spending proposals, including a promise to balance the federal budget, elimination of about 150 “useless” federal programs, entitlement reform, and a reduction in foreign aid. Even taking into account increases in military spending, the RSC estimates its budget proposals would reduce the deficit by nearly $400 billion in 2007 alone.

In 1994 just one Republican congressman opposed the Contract With America. This time, 134 of them said no.

Republicans vs. Conservatives

What has changed since 1994? Why were Republicans able to win big with what looked like a radical government-shrinking platform, then spend record amounts?

Republican leaders and activists offer strikingly similar explanations for the failure. “We have a Republican majority, not a conservative majority,” says Norquist. Rep. Jack Kingston (R-Ga.), an RSC member whom National Journal named the most conservative member of Congress in 2004, echoes Norquist’s assessment: “It’s a numerical majority, not a philosophical majority. Even within the RSC, there are moderates who are holding out for more money.” Pence himself says, “We don’t have a conservative majority in Congress. There are 30 to 40 members that have a different philosophy.”

But the real power battles have almost always been with the leaders of the Republican caucus, who could push for more restraint on appropriations if they really wanted to. Kingston acknowledges, “The tension comes when one side isn’t perceived as doing what they said they were going to do.”

Two particular points of contention stand out in the ongoing conflict between the RSC and the House leadership: Medicare and Katrina. The Medicare expansion bill of 2003 was eventually passed with the support of most House Republicans. But Pence and 24 other Republicans refused to support the bill even after nearly unprecedented political pressure from within their own party. Pence acknowledges that he and other RSC members were “taken to the woodshed” by the House leadership after their “no” votes.

Tensions flared again when, just two weeks after Katrina, Hurricane Rita was landing on the Gulf Coast. At the time, many speculated the federal tab for responding to the two hurricanes would top $200 billion. The RSC did not object to the federal government’s role in disaster relief but stood fast in its belief that any extra unexpected spending on that relief should be offset by cuts elsewhere in the federal budget.

Asked about the RSC’s Operation Offset proposals, DeLay replies: “Cutting from essential programs is not the answer. We need to continue to focus on growing the economy. Those who are advocating a rollback of the Medicare bill are the same ones who opposed it in the first place.” The friction between the RSC and House leadership was clear. Some question whether Pence’s influence has made those tensions worse. He once served on DeLay’s whip team, but as the Republican leadership became more comfortable with large spending bills, their personal relationship seemed to deteriorate quickly.

Although he has failed thus far to accomplish his anti-spending agenda, Pence has become a figure of some importance in D.C. circles. Even the White House has taken notice. The same day Josh Bolten was picked to be the president’s new chief of staff, Pence says, “He called me and said he wanted to continue our dynamic relationship.” There have been some grassroots calls for Pence to run for president, and he has hinted that if the GOP loses the House this year, it probably needs new leadership. You don’t have to be an insider to understand that “new leadership” is code for “Pence’s leadership.”

Measuring Progress

It’s possible Pence may not be leading the RSC after this fall’s elections, whether he runs for a leadership post or not. His term as chairman will be ending, and he says he hasn’t decided whether to seek another term. Speaking privately, some RSC members have started calling for “new blood.”

That new blood might be needed if the committee is actually to achieve its aims. The RSC outlined 10 goals for the 2006 legislative session, including passing a balanced budget amendment, matching all emergency spending supplemental bills with spending reductions, eliminating a federal program for each new one created, making the Bush tax cuts permanent, budgeting a “rainy day fund,” instituting a constitutional line-item veto, making budget resolutions legally binding, and one item that doesn’t have anything to do with limited government or fiscal restraint: passing a constitutional ban on gay marriage. It’s hard to imagine Congress passing all or even most of these proposals in just one session. As RSC Executive Director Sheila Cole dryly notes, “There is no real constituency for lobbying and earmark reform. Those who have been affected by it are the ones who have been stung, investigated, or indicted.”

This session the RSC did win approval of a House budget proposal that included earmark reforms and removed emergency spending bills funding the Iraq war. But even those apparent victories are far from complete. “We still have appropriations bills moving through the House that contain earmarks with no names attached to them,” Cole says. “There are things like an unsigned earmark for a science museum in Virginia with an exhibit on jelly beans.” She also notes that while the total number of earmarks in 2006 is lower than in 2005, the total dollar amount spent via earmarks has risen. And now that even the Democrats have given up this year’s “culture of corruption” campaign theme, nobody expects a bill with real teeth to emerge from conference committee. Meanwhile, Cole acknowledges that “there’s not going to be any more big fiscal legislation” coming from the group for the rest of the year, as its members deal with other House business and disperse across the country to focus on their re-election campaigns.

Being in the RSC is sort of like wearing a varsity jacket signifying that a congressman is an athletic budget cutter. There’s not much evidence the RSC as a whole is serious about fiscal issues. Although there are some principled people at its core who are taking a firm stand against pork, they haven’t been able to move their colleagues toward their side of the argument.

If even the self-selected tightwads of the RSC aren’t strong enough to close ranks, it’s unlikely that a true fiscal conservative will ascend to a leadership post anytime soon. And that means Congress’ spending problem isn’t likely to disappear soon either, no matter which party is in power.

Eric Pfeiffer is a national reporter for The Washington Times and the editor of the America’s Future Foundation webzine Brainwash.