In Sen. Ted Cruz’s twisted vision of economic history, Ronald Reagan cured double-digit unemployment by cutting spending and reducing the federal debt, and Jimmy Carter was guilty of “out-of-control regulation.”
In the real world:
- Total federal spending soared during Reagan’s deficit-plagued first term, and the national debt nearly doubled. His budget director later resigned and wrote a book criticizing Reagan’s failure to cut spending.
- And Carter signed landmark bills freeing airline, railroad and trucking rates from federal regulation, easing regulation of natural gas prices and eliminating federal regulation of interest rates paid by banks to small savers.
These are only a few of the disconnects between economic reality and Cruz’s oversimplified, often inaccurate attempt to paint President Obama’s record as the “exact opposite” of Reagan’s. The freshman Texas Republican said during his March 16 keynote address at the Conservative Political Action Conference (starting about 22 minutes and 20 seconds into the recording):
Cruz: [Obama is] one of only two presidents, post-World War II, to face double-digit unemployment. And for the last four years economic growth under President Barack Obama has averaged 0.8 percent, less than 1 percent. There is only one other period post-1950 where we have had four years of less than 1 percent economic growth. That’s from 1979 to 1983. Coming out of Jimmy Carter following the same policies of out of control spending, out of control debt, out of control taxes, out of control regulation. That’s the only other period. President Reagan came in facing that stagnation and he implemented policies the exact opposite of Barack Obama’s.
In fact, it’s interesting: 79 to 83, economic growth was 0.8 percent. Today, it’s 0.8 percent for the exact same period because Obama didn’t learn the lesson from Reagan that if you want to turn the economy around you cut taxes, you reduce spending, you reduce the debt, and you don’t send regulators like locusts to destroy small businesses and jobs.
It’s true that the unemployment rate peaked higher and dropped faster during Reagan’s first term than it did during Obama’s. Under Reagan, it hit a high of 10.8 percent and had come down to 7.3 percent by the time he started his second term. Under Obama, the rate hit 10 percent and only drifted down to 7.9 percent as of his second inauguration.
It’s also true that economic growth was better during Reagan’s first term than it has been under Obama. In the last year of Reagan’s first term (calendar year 1984) the nation’s gross domestic product (adjusted for inflation) was 13 percent higher than it was four years earlier. In 2012, GDP was only 3 percent above where it had been the year before Obama first took office.
But Cruz is simply wrong to claim that the “lesson from Reagan” was that “you reduce spending, you reduce the debt” to turn the economy around. Reagan increased both. Historical budget figures from the Congressional Budget Office show that clearly.
- Federal outlays (total spending) rose by 40 percent under Reagan’s first four budgets (fiscal year 1985 vs. Carter’s last budget for fiscal 1981). That was two-and-a-half times faster than the rate of inflation, which rose 16 percent during the same period, as measured by the Consumer Price Index.
- And far from cutting debt, Reagan borrowed more heavily than previous presidents. In Reagan’s first term, debt owed to the public increased by nearly 91 percent by the end of fiscal year 1985, compared with what it had been at the end of Carter’s fiscal 1981.
Furthermore, as mentioned, Cruz errs badly when he attempts to blame Carter for “out-of-control regulation.” As mentioned, Carter signed numerous deregulation measures. One free-market-oriented commentator chose the occasion of Reagan’s 100th birthday to praise Carter, not Reagan, as “deregulation’s hero.” Thomas A. Firey, senior fellow as the Maryland Public Policy Institute, wrote: “It was the peanut farmer from Georgia who pushed the United States toward a market economy, not the one-time actor from California.”
On spending, ironically, Obama’s record has indeed been the “exact opposite” of Reagan’s in one little-noticed respect. Under Obama, federal spending is actually falling, something that never happened under Reagan. Total federal outlays went down 1.7 percent last fiscal year. And in the current fiscal year, which ends Sept. 30, the CBO projects a scant rise of 0.4 percent — much less than the projected rate of inflation (see Summary Table 2).
To be sure, despite the recent decline in spending, Obama’s deficits are large compared with Reagan’s, in relation to the size of the economy. Reagan’s biggest deficit was 6 percent of GDP. All of Obama’s have been larger than that, and the smallest was 7 percent in fiscal 2012. The CBO projects a deficit of 5.3 percent of GDP for the current fiscal year, but that would still be higher than in all but one of Reagan’s fiscal years.
(One reason for the larger deficits: Reagan — for all his tax-cutting — still enjoyed larger revenues than Obama, relative to the size of the economy. Under Reagan, revenues were 18.4 percent of GDP during his final fiscal year. Obama inherited revenues of only 15.1 percent in fiscal year 2009. They hit 15.8 percent last fiscal year. After his “fiscal cliff” tax deal, raising rates on upper-income households, the CBO projects they will rise to 16.9 percent in the current fiscal year — still lower than in any of Reagan’s eight years.)
Meanwhile, the total debt owed to the public continues to pile up, causing alarm. Measured as a percentage of GDP, it hit 72.5 percent in the last fiscal year and the CBO projects it will rise to over 76 percent this year. During Reagan’s time, it never exceeded 41 percent (in fiscal 1988). So it’s no wonder that leading economists are urging all sides to do more to cut the deficit through “a combination of spending reductions and tax and entitlement reforms.”
If Cruz and his fans want to argue that the current budget mess is entirely Obama’s fault, they are entitled to that opinion. But claiming that Reagan cut spending and debt or that Carter was an “out-of-control” regulator is simply the exact opposite of historical fact.
– Brooks Jackson
Cruz and His Lizard Boots
Cruz and Rand Paul got laughs at the federal government’s expense at the recent Conservative Political Action Conference, but the facts don’t jibe with the jokes.
- Cruz accused the EPA of “trying to use a lizard to shut down oil and gas production” in West Texas to set up a one-liner about lizard boots. But the jab — an old campaign joke — no longer has any basis in fact. The federal government decided against listing the Dunes Sagebrush Lizard as “endangered” in June 2012.
- Paul, meanwhile, monkeyed around with the truth when he claimed the federal government is spending $3 million on research “to discover that monkeys, like humans, act crazy on meth.” Paul mischaracterized research that aims to improve prevention and treatment of drug abuse in humans.
We’re not here to throw a wet blanket on the levity, but facts are facts.
Cruz, a Texas Republican, recycled a joke about lizard boots from last year’s campaign (at the 26:53 mark of the video). But in setting up his punch line, Cruz misstates the facts to fit his narrative about an out-of-control Environmental Protection Agency.
Cruz, March 16: We need to rein in the EPA. You know, in West Texas, the EPA is trying to use a lizard to shut down oil and gas production. You know my view of lizards? They make darn fine boots.
Cruz told that same joke at a Feb. 1, 2012, candidate forum. The American-Statesman (of Austin, Texas) quoted Cruz at that forum as saying: “That’s our lizard, and they make darned fine boots.”
But here’s the problem: It’s simply not accurate anymore to say that a lizard is threatening oil production in West Texas.
The U.S. Fish and Wildlife Service (which is in the Interior Department, by the way, not the EPA) proposed listing the Dunes Sagebrush Lizard early last year as “endangered.” At the time, state officials and oil industry representatives warned that such a decision would hurt oil production in the Permian Basin in West Texas. However, the Fish and Wildlife Service determined on June 13, 2012, that it would not put the lizard on the endangered list.
In announcing the decision, Interior Secretary Ken Salazar praised the “voluntary conservation efforts” of state agencies and the oil industry to help protect the lizard. Salazar said the cooperation proved “we don’t have to choose between energy development and the protection of our land and wildlife — we can do both.”
State Comptroller Susan Combs called the decision a “major victory for Texas jobs and our energy economy.” The Texas Oil and Gas Association said it was “pleased” with the decision.
So, for now, oil production in West Texas is safe from the threat of lizards. However, a new threat lurks. The Fish and Wildlife Service is now considering listing the Lesser Prairie Chicken as a “threatened species.”
Texas Railroad Commissioner David Porter warned in a Dec. 5, 2012, op-ed in the Wall Street Journal that such a designation “would make drilling all but impossible” in the Permian Basin. But he remains hopeful. “Since Texas was able to produce a plan for the lizard that would work for environmentalists and operators alike, there is reason to hope that a similar plan being drafted for the Lesser Prairie Chicken will work,” he wrote.
Perhaps Cruz could have used the Lesser Prairie Chicken as a punch line in a joke about federal government overreach. But we doubt the chicken makes for good boots.
Rand Paul: Monkeys on Meth
In his speech, Paul criticized President Obama for canceling White House tours in response to “sequester” budget cuts and instead offered examples of federal spending that should be cut first. (Obama since had said that he is open to resuming White House tours for student groups.)
Paul, March 14: So what I ask the president, if he wants to let the school children back in the White House, what about the $3 million that we spend studying monkeys on meth? Does it really take $3 million to discover that monkeys, like humans, act crazy on meth?
It’s an example the Kentucky Republican has used before, and it is a reliable laugh line, but he misrepresents the research.
Paul’s press office did not return our calls seeking backup for his claim, but it’s true that the National Institute on Drug Abuse has awarded more than $3.8 million in federal grants since 2000 to a research project that studies the effect of methamphetamines and other illicit drugs on rhesus monkeys. But as you might imagine, there’s a lot more to the research than trying to discover if “monkeys, like humans, act crazy on meth,” as Paul described it.
According to a description of the latest research project, “Primate Model of Drug Abuse: Intervention Strategies,” led by Marilyn E. Carroll at the University of Minnesota, “the main objective of this research is to develop nonhuman primate models (rhesus monkeys) of critical aspects of addiction that will yield useful information for the prevention and treatment of drug abuse.”
Specifically, the most recent experiments seek “to evaluate vulnerability factors in drug abuse, such as sex and phase of the menstrual cycle (hormonal status), that are related to the development and persistence of drug abuse.” As part of the research, rhesus monkeys — used because results are very close to those found in humans — are administered oral drugs such as phencyclidine (PCP) and methamphetamine (meth) and smoked drugs such as cocaine, heroin and meth. Then, “behavioral and pharmacological interventions will be applied as treatment models in males and females and in females during different phases of the menstrual cycle.”
Ultimately, researchers wrote, the research is intended to “further our understanding of addiction-prone vulnerability factors and treatment for drug abuse.”
When we asked about Paul’s comments on the primate research, the National Institute on Drug Abuse released the following statement:
National Institute on Drug Abuse, March 18: Drug abuse and addiction are a major burden to society. In economic costs alone, tobacco, alcohol, and illicit drug abuse are estimated to exceed $600 billion dollars annually in the United States related to health care, crime, and losses in productivity—not to mention immeasurable social costs such as those related to child neglect and family dissolution. Behavior therapy is the cornerstone of drug addiction treatments, particularly for those cases where FDA-approved medications do not exist (e.g., cocaine). Unfortunately, such treatments have been only partially successful, calling for additional research to develop more effective treatments.
The researchers in this study are using a primate model to study aspects of addiction that can yield useful information for preventing and treating drug abuse by recognizing critical gender differences in the response to drugs and to treatment, and in the propensity for relapse. Such differences may pertain to hormonal factors that modify the effects of drugs. For example, drug cravings and withdrawal symptoms have been shown to intensify at specific points in the menstrual cycle. This type of research is needed to identify such critical aspects of drug abuse and addiction that could affect the efficacy of drug addiction treatments and thus improve outcomes for both men and women.
One can argue whether it is worthwhile for the federal government to be studying the effects of addictive drugs on monkeys as a way to combat drug addiction for humans. But Paul misrepresents the study by describing it as simply trying to “discover that monkeys, like humans, act crazy on meth.”
– Eugene Kiely and Robert Farley
Palin’s Constitutional Stretch
At the Conservative Political Action Conference, former Alaska Gov. Sarah Palin said that the Senate was “in violation of Article I, Section 9, Clause 7 of our U.S. Constitution” by failing to “pass a budget.” She’s referring to a budget resolution. But that constitutional clause doesn’t mention a budget or a budget resolution, which was not required of the Senate until the 1974 Congressional Budget Act. The responses to Palin’s interpretation from constitutional scholars ranged from “completely invalid” to “kind of a stretch.”
Palin made her comments in a March 16 speech at the annual conservative conference (10:30 mark):
Palin, March 16: .. while we’re breaking [middle-class Americans'] budget, the Democrat-controlled Senate refuses to pass a budget. That was how many years ago that they did? How many trillions-in-debt ago? All in violation of Article I, Section 9, Clause 7 of our U.S. Constitution. No budget for 4 years. No budget for four years is not just bureaucratic bungling. Refusing to pass a budget is government refusing to declare what it intends to do with the people’s money.
Palin made a similar claim in April 2012, but said it was the president who was in violation of the Constitution, not Congress.
Article I, Section 9, Clause 7 doesn’t say anything about a Senate budget resolution, which isn’t surprising since it didn’t exist until the 1974 Budget Act. Here’s what the brief clause does say:
Article I, Section 9, Clause 7: No Money shall be drawn from the Treasury but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.
What does that mean? The Congressional Research Service, in its lengthy analysis of the U.S. Constitution, says that the clause “is a limitation upon the power of the Executive Department and does not restrict Congress in appropriating moneys in the Treasury.” The CRS goes on to say that the Supreme Court “has also recognized that Congress has a wide discretion with regard to the extent to which it shall prescribe details of expenditures for which it appropriates funds and has approved the frequent practice of making general appropriations of large amounts to be allotted and expended as directed by designated government agencies.”
In other words, Congress doesn’t have to spell out how every penny should be spent — it can leave some details to federal agencies — and the president can’t spend money without Congress appropriating it. And Congress has appropriated money every year through appropriation bills, which can be found going back to 1998 on the Library of Congress website.
As for budget resolutions, the Senate has indeed failed to pass one since 2009 for fiscal 2010. The 1974 Budget Act, which laid out a timetable for the congressional budget process, isn’t strictly enforced — since the act, Congress has met its budget resolution deadline only six times. And Congress failed to complete action on budget resolutions for fiscal years 1999, 2003, 2005 and 2007, as well as in recent years.
Of course, the Constitution can be interpreted in different ways. Could Palin’s claim — that the Senate violated the Constitution by not passing a budget resolution — be valid?
Not according to Laurence H. Tribe, the Carl M. Loeb university professor and professor of constitutional law at Harvard Law School. Tribe told us via email: “Her interpretation is completely invalid.”
Louis Fisher, a constitutional scholar who worked for the Library of Congress for four decades as a specialist in separation of powers and constitutional law, told us Palin’s claim “seems like a big stretch to me.” Fisher noted that “Congress complies with that clause in Article I by appropriating funds each year, even if the Senate does not produce a ‘budget.’ ” He added, as we explained above, that the budget resolution “did not exist until the Budget Act of 1974.”
Douglas O. Linder, professor of law at the University of Missouri-Kansas City Law School, said, “I think it’s kind of a stretch to be honest to say it’s a violation of that section. … I think most constitutional scholars and most courts would disagree with her.” Linder added that that’s “not to say there’s absolutely nothing to her argument.” There are various interpretations to constitutional matters, after all.
Palin also said that “[r]efusing to pass a budget is refusing to declare what [Congress] intends to do with the people’s money.” But as Fisher said, Congress passes annual appropriations bills. Budget resolutions aren’t laws — they’re outlines for spending, which is actually set in appropriations bills. As the Washington Post explained this year, “A budget isn’t necessary.”
The Democratic-controlled Senate Budget Committee argues that the Budget Control Act is indeed the budget for fiscal 2012 and 2013. It says the act “is even more extensive than a traditional budget resolution,” because it’s the law, can be enforced and requires discretionary caps for 10 years.
We’ll leave it to our readers to decide whether the Senate should have passed a budget resolution in recent years. But Palin’s claim that the legislators violated the Constitution doesn’t square with the relatively short history of budget resolutions — and scholars doubt a court would agree with her.
– Lori Robertson