Divided Government Means More Fiscal Discipline
In the next two years, Congress will probably do next to nothing. That's a good thing.
Are you ready for some stalemate? Over the next two years, Washington deliberations will resemble one of those 1960s-era football games in which moving the ball was hard and touchdowns were rare. This will not be the irresistible force meeting the immovable object. It will be two immovable objects.
The old maxim says the best government is the least government. Whether that's true or not, I no longer harbor innocent dreams of best government. I will settle for least bad government, and that generally means divided government.
In the next two years, Congress is not likely to do much right, but it's also not likely to do much wrong. It will probably do next to nothing, which—considering the occupant of the Oval Office—is preferable to the alternative.
Republicans no longer enjoy a monopoly on power. On Election Day, they kept control of the Senate but lost the House—inviting Democrats to obstruct, delay, and frustrate Donald Trump's legislative priorities, assuming he has any.
Gridlock will grow more pronounced. But what's the downside? It's not as though much got done when the GOP was in complete charge.
Republicans failed to repeal the Affordable Care Act as they had long promised. They did nothing on immigration. Trump's border wall still exists only in the giddy dreams of his more naive rallygoers.
The president proclaimed a couple of "infrastructure weeks," which fell so flat that they became a synonym for irrelevancy. His renegotiated NAFTA has not been approved by Congress and may never be.
About his only real legislative accomplishment was the package of tax cuts enacted last year. It won passage because it united Republicans in a familiar and beloved Washington pastime: abandoning fiscal discipline and piling up debt for future generations to carry.
The Republicans' dominance allowed them to pass the tax bill entirely on their own. No Democrat in either house voted for it.
From a fiscal standpoint, it amounted to a raucous party that will produce a brutal hangover. Thanks in part to this bacchanal, the Congressional Budget Office predicts that federal debt will grow by $13 trillion by 2028.
The good news about our newly divided government is that this sort of reckless extravagance will now be harder to engineer. Democrats are not about to go along with any tax cuts that Republicans would want. So a measure of fiscal responsibility could make a comeback.
That's the historical pattern when power is split between the two parties. It was during a period of divided government in the 1990s that our elected officials took the steps needed to produce actual surpluses in the federal budget. For a few years there, believe it or not, the government spent less money than it took in.
The late William Niskanen, who headed Ronald Reagan's Council of Economic Advisers, detected a pattern. In the years since World War II, he noted in 2006, the only periods of fiscal restraint were "the last six years of the Eisenhower administration and the last six years of the Clinton administration, both intervals in which the opposition controlled Congress." Spending grew three times faster under unified government, he found, than under divided government.
This formula held under Barack Obama. "Virtually all net spending increases during the Obama administration were enacted during 2009-10, when Democrats controlled Congress," writes Brian Riedl, a budget analyst for the conservative Manhattan Institute. After the GOP took over the House in 2011 (and the Senate in 2015), it curbed his plans.
In Obama's final six years, nearly $900 billion in spending cuts were signed into law. "The fiscal restraint from 2011 through 2016 resulted from gridlock," Riedl concludes—and the gridlock came from you-know-what. But Republicans are better at forcing budget restraint on Democratic presidents than on Republican ones.
Over the decade ahead of us, the deficit will keep growing regardless, thanks to past tax cuts, rising interest payments, increases in defense spending, and the growing costs of Social Security, Medicare, and Medicaid. Attacking those causes, granted, will be even harder with the split in Congress. But let's not kid ourselves. Congress has ignored them over the past two years, and odds are it would have kept doing so even with a Republican House.
Our leaders have shown little inclination to take the steps needed to make the fiscal situation (or much else) any better. Now, at least, it won't be so easy for them to make it worse.