“Divided We Stand”. Reason Online. February 2007 – Our federal government serves us better (or maybe less badly) when at least one house of Congress is controlled by a different party than the party of the president. Under divided government, the rate of increase of real per capita federal spending has been significantly lower, a war is most unlikely, and so is a major increase in entitlements.
Surprisingly, this pattern is independent of the president’s party. During the last 50 years, for example, the highest rates of increase in federal spending, a war, and a major increase in entitlements occurred under the administrations of Democrat Lyndon Johnson and Republican George W. Bush, whose parties also controlled both houses of Congress. And the lowest rates of increase in federal spending, no war, and no increase in entitlements occurred under the administrations of Republican Dwight Eisenhower and Democrat Bill Clinton, who both faced legislatures controlled by opposing parties for most of their presidencies.
Divided government has this effect because each party has the opportunity to block the spending proposals and controversial measures proposed by the other party. But divided government has not foreclosed the opportunity for major reforms, as evidenced by the tax reform of 1986 and the welfare reform of 1996. American voters, in their unarticulated wisdom, have chosen a divided government in most years since World War II.
William A. Niskanen, the chairman of the libertarian Cato Institute and formerly the acting chairman of Reagan’s Council of Economic Advisers, argued that divided government restrains government spending.
William A. Niskanen. “A Case for Divided Government”. CATO. 7 May 2003 – Point One. The rate of growth of real (inflation-adjusted) federal spending is usually lower with divided government.
The table below presents the annual percentage increase in real federal spending by administration, in each case with the percentage increase in the first year of a new administration attributed to fiscal decisions made in the prior administration.
The only two long periods of fiscal restraint were the Eisenhower administration and the Clinton administration, during both of which the opposition party controlled Congress. Conversely, the only long period of unusual fiscal expansion was the Kennedy/Johnson administration, which brought us both the Great Society and the Vietnam War with the support of the same party in Congress. The annual increase in real federal spending during the current Bush administration, by the way, has been 4.4 percent — not a happy state of affairs, given the war and a renewed majority of the president’s party in both chambers of Congress.
William A. Niskanen. “Give divided government a chance”. Washington Monthly. October 2006 – Let’s look at some statistics. From the dawn of the Cold War until today, we’ve had only two periods of what could be called fiscal restraint: 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. Under Clinton, the average annual increase in spending was at about 1 percent, while, under Ike, it was negative. By contrast, our unified governments have gone on fiscal benders. Harry Truman, with the help of a Democratic Congress, sent the money flying, with spending increases of as high as 10 percent a year. Lyndon Johnson was almost as profligate. And today, unfortunately, George W. Bush, with a GOP majority, is the heir to their legacies. To put this in plain numbers, government spending has increased an average of only 1.73 percent annually during periods of divided government. This number more than triples, to 5.26 percent, for periods of unified government. That’s a hefty premium to pay for a bit of unity.