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Friday, July 8, 2011
6:28 PM EDT
Ryan Ellis

David Frum Defends "Read My Lips" Tax Hike

David Frum said that the 1990 budget deal was a success because spending/GDP declined in the 1990s. He wants to give Bush 1 credit for the GOP Congress.

Today on Frum Forum, David Frum makes the argument that the spending cuts promised in the 1990 "read my lips" tax hike budget deal indeed did come to fruition (contra to my argument yesterday).  He argues that, since spending as a percent of the economy declined in the 1990s, the spending cuts must have materialized. 

This is eminently-wrong for several reasons:

  1. CBO data shows that the promise--$274 billion in baseline spending cuts--not only didn't happen, but that baseline spending actually increased by $22 billion.  This is simply what the data show.
     
  2. Spending as a percent of the economy did decline in the 1990s, but not as a result of the balanced budget deal.  In 1990, spending was 21.9 percent of GDP.  By 1992, spending had risen to 22.1 percent of GDP.  It wasn't until the GOP Congress took over in 1995 that things started really turning around.  From 1995 to 2000, spending declined from 20.6 percent of GDP to 18.2 percent of GDP.
     
  3. Just as a logical issue, one has nothing to do with the other.  The promise was baseline spending cuts, not for the GOP to take over Congress and actually start cutting spending five years later.  Those spending cuts didn't happen.  In fact, spending got worse.  It only got better when the GOP abandoned their appeasement ways with tax hikers and got busy chopping away at the federal leviathan.
Posted by Ryan Ellis on Friday, July 8, 2011 6:28 PM EDT
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