Democratic House Limits Government Spending For The Next Two Years (At Least)

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Some people believe that the least government is the best government, and over the next two years that theory may be put to the test as the United States is sure to enter into a period of Congressional stalemate between the Democratic-controlled House of Representatives and the Republican-controlled Senate, according to the Chicago Tribune.

The GOP has enjoyed a two-year run of power in which they controlled all three branches of the federal government, with Republican President Donald Trump, a conservative majority in the Supreme Court, and a Republican majority in both houses of Congress. With a Democratic majority taking over the House of Representatives after the 2018 midterm elections, the House will likely obstruct almost all Republican legislative priorities, while any Democratic attempts to assert their platform will likely die in the Senate.

The current iteration of the Affordable Care Act will likely remain intact, though Democrats will not be able to restore many of its protections that were stripped over the past two years. Likewise, immigration legislation is now highly unlikely and President Trump’s renegotiated NAFTA agreement will likely remain in limbo without Congressional approval.

An interesting battle will likely now ensue over the federal budget. According to the Balance, the Trump administration has added over $1.9 trillion to the national debt in only two years, and 2019 budget projections feature a nearly $4.8 trillion increase to the national debt through the four years of President Trump’s term. The Democrats will be unlikely to push for cuts to entitlement programs such as Medicare, but will also be unable to repeal the Republican tax cuts. The political bickering and maneuvering that will occur during the next budget meeting may lead to another government shutdown.

Thus, some measure of fiscal responsibility may renew within Congress, following the historical precedent for previously divided legislatures. The last time the U.S. government enjoyed a surplus was during the Clinton administration, when a Republican Congress forced spending cuts — at the cost of a pair of government shutdowns.

Since World War II, there have only been two periods of fiscal restraint by the U.S. government, which included “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” according to the late William Niskanen, who led the Council of Economic Advisers under President Reagan.

This pattern held true under the Obama administration, in which government spending was rampant under a Democrat-controlled Congress during the period of the Economic Stimulus Act, but was curtailed when Republicans took control of the House after the 2010 elections, and later the Senate, creating an atmosphere of opposition.

While it is unlikely that the government will do anything to improve the fiscal situation, given the challenges the nation faces and the lack of political cooperation between the parties, at least for a couple of years it will not become (much) worse.