Low Budget

Feeling blue and seeing red over a free-spending administration


If Mitch Daniels, recently departed director of the Office of Management and Budget and the putative fiscal conservative on President Bush's economic team, succeeds in his ambition to become governor of Indiana, grateful Hoosiers might want to send thanks to the people who made it all possible—the taxpayers of New Jersey.

No, New Jerseyans haven't been canvassing Muncie on Daniels' behalf. They've shown their support with Yankee greenbacks. If not for the Garden State's winning combination of generous giving to and modest expectations from Washington, D.C., Daniels couldn't have enjoyed his brief, troubled tenure in the nation's capital.

New Jersey, as fans of the Tax Foundation's annual report "Federal Tax Burdens and Expenditures by State" know, is the nation's most charitable donor. The report details federal taxes paid by each individual state, weighing that against the amount of money each state gets back—in procurements, salaries, services, and walking around money—from Washington. For every buck New Jersey throws into Uncle Sam's hat, it gets back a mere 67 cents. If that makes the Garden State a loser in the tax-and-spend sweepstakes, it's good news for New Mexico, which takes in $2.08 for every dollar it pays, making it the overall winner. Of course, in an empire, all roads lead to Rome: The District of Columbia outdoes all the states, paying itself a whopping $5.73 on the dollar.

How does Daniels figure in? By helping to up federal spending more than 30 percent in the first two years of the Bush administration. The war on terrorism had something to do with this increase, but it doesn't account for all of it. According to the Heritage Foundation, Bush's first two budgets took nondefense discretionary spending from $320 billion to $421 billion—$22 billion of that in the form of pure pork attachments to spending bills. Who can forget 2002's farm bill, which will raise and disburse $180 billion over 10 years?

Nor has war-related spending been fully war-related on Daniels' watch. To give just one example: $117 million from this spring's $80 billion emergency spending package for the war on Iraq went to help the National Oceanic and Atmospheric Administration build the Polar-Orbiting Operational Environmental Satellite System. Indiana voters might even want to grill their gubernatorial hopeful on why he didn't do more for them during his D.C. tenure. According to the Tax Foundation, the Crossroads of America doesn't break even in federal spending, getting back just 99 cents on the dollar.

It's hard not to notice how closely the Tax Foundation's map of tax-and-spend losers and winners tracks the celebrated map of "blue" and "red" America—which shows, on a county by county basis, the voting for, respectively, candidates Gore and Bush in 2000. I am not claiming President Bush is rewarding his own voters (an implausible claim, since the patterns of federal receipts and largess have been established for decades). If anything, the preponderance of blue in coastal areas, along the Mississippi, and on stretches of the Ohio River leads me to suspect the real division in America is that Bush voters don't like water. Nor am I a supporter of the Democratic Party; in fact, I'd gladly make Bush President-for-Life in gratitude for that $300 check he sent me a few years back. But I am a lifelong blue stater (and a born-and-bred New Jerseyan), and I can't help fuming that heartland Americans—everywhere praised for their rural common sense, strong work ethic, and skepticism of big government—are picking my pocket.

Having compared states, parties, and regions, let me now compare decades. The 1990s saw a vast creation of wealth in the United States, some of it chimerical, but most of it real, and almost all of it centered in urban areas. What we're seeing in the '00s is a garden-variety spending spree. But it's also a Mugabe-esque redistribution of wealth, from hardworking achievers to underperforming layabouts. And this time, it's coming to you courtesy of the party of fiscal responsibility.