 | Deficit Politics in the United States: Taxes, Spending and Fiscal Disconnect Subjects: Economics Finance Business & Industry; Politics & International Relations; Economics; U.S. Politics; Economic Theory & Philosophy; Political Economy; American Political Economy; Presidency; From the clashes between Federalists and Republicans in the 1790s until today, partisan battles over taxing, spending, and public debt have shaped American political development. These battles were formerly constrained by fiscal norms that mandated balanced budgets and low debt. In his Farewell Address, President George Washington counseled the nation to "cherish public credit" by using "it as sparingly as possible". In the 1980s, however, tax cuts and spending increases created large structural deficits and much higher debt levels. With only a brief interruption in the late 1990s, deficit politics has been a mainstay ever since. Over this period, the Republican Party has passed large tax cuts but failed to retrench the large entitlement programs that continue to raise spending. Likewise, the Democratic Party has expanded the domestic role of government but has abandoned the broad-based taxation it supported in the 1990s. Funding their domestic agenda with matching revenues is now as unappealing for Democrats as entitlement cutbacks are for Republicans, contributing to the current stalemate of Republican tax policy, Democratic spending policy, and soaring deficits and debt. The economic risks this entails are serious, yet an end to the era of deficit politics is nowhere in sight. Dennis S. Ippolito is the Eugene McElvaney Professor of Political Science at Southern Methodist University. His most recent book on budget policy was a revised edition of Why Budgets Matter: Budget Policy and American Politics (Pennsylvania State University Press, 2015), the first edition of which was published in 2003. His other books on budget policy include: Deficits, Debt, and the New Politics of Tax Policy (Cambridge University Press, 2012); Budget Policy and the Future of Defense (National Defense University Press/Institute for National Strategic Studies, 1994); Uncertain Legacies: Federal Budget Policy from Roosevelt through Reagan (University Press of Virginia, 1990); Hidden Spending: The Politics of Federal Credit Programs (University of North Carolina Press, 1984); Congressional Spending (Cornell University Press, 1981); and The Budget and National Politics (W.H. Freeman, 1978). In 2010, he received the Aaron B. Wildavsky Award for Lifetime Scholarly Achievement in Public Budgeting and Finance from the Association for Budgeting and Financial Management of the American Society for Public Administration. |
