Once upon a time Democrats were big spenders and Republicans were fiscal conservatives. That was a while ago. Ronald Reagan's defense buildup and tax cuts caused deficits to soar in the 1980s, and it was Bill Clinton who brought the budget back into surplus in the 1990s, partly by curbing spending. But those fiscal role reversals were timid by today's standards. Since 2000 the Democratic Party has been left in the dust when it comes to spending.
The Republican Party is the new, undisputed champion of big government. The Bush administration has presided over an explosion of public borrowing, fueled partly by tax cuts but also by huge new outlays. Both sides of the public accounts were out of control even before the enormous increases in spending to cope with Hurricane Katrina and the persistently dire situation in Iraq (see "Disasters and the Deficit," next page). The administration's incompetent handling of the hurricane will exact its own price over and above disaster relief, as the White House tries to buy its way back up in the polls. The Republican Party's former reputation for prudent fiscal management is no longer merely compromised; it is ruined, perhaps for good.
Among Republicans in Congress squeaks of complaint are heard here and there. But the White House has drowned them out. Before Katrina, at any rate, the administration was still insisting that the budget deficit would fall over the next few years. That prediction might have been right if Katrina and Rita had not happened and if Iraq had come good—at least if one further assumed that no other emergencies would arise, that most of the administration's tax cuts would be reversed by the end of the decade (which the administration itself, of course, is determined to block), and that demographic pressures (which are causing the government to pile up vast liabilities for Social Security, Medicare, and Medicaid) would magically abate. On this side of the looking glass the deficit will not shrink unless something bold is done.