Despite Democrats' effort to control government spending through pay-as-you-go rules, federal outlays are expanding to unprecedented levels. Recent budget data from the CBO not only show a spending increase by 8.3 percent over the last year, but also leaves little hope for future surpluses. This pessimistic fiscal outlook, coupled with voters' sensitivity to the economy's performance, may have important implications for the Democrat-led congress in this year's election.

Senior Fellow Kevin A. Hassett

When Nancy Pelosi and the Democrats took control of the U.S. Congress last year, they rode a wave of voter revulsion toward big-spending, pork-hungry Republicans.

Their rhetoric could hardly have been clearer. In the 2006 election cycle, the Democrats produced a document, "A New Direction For America," where they wrote: "Democrats are committed to ending years of irresponsible budget policies that have produced historic deficits. Instead of piling trillions of dollars of debt onto our children and grandchildren, we will restore 'Pay As You Go' budget discipline."

Tough new pay-as-you-go rules, and a crackdown on unpopular earmarks excited voters, especially disaffected, small-government independents. One can hardly blame them for siding with the Democrats.

For one thing, President George W. Bush and the Republicans increased the size of government more than at any time in history. Moreover, the Democratic record, or, at least, what President Bill Clinton accomplished while working with a Republican Congress, was exemplary.

Democrats also invited accountability on this key issue. When Pelosi spoke after being chosen speaker, she said, "The three biggest differences in how I would lead are integrity, civility and fiscal discipline."

Looking back over the past 20 months, it seems clear she failed to deliver on the first two. Charles Rangel, the chairman of the House Ways and Means Committee, is embroiled in a tax-avoidance scandal, and the civility meter seems at an all-time low.

Did She Deliver?

Did she at least deliver on the third promised difference?

Now is a good time to check. The government operates under a fiscal calendar that ends Sept. 30. When the Democrats took power in January 2007, much of the budget for the 2007 fiscal year was already set.

The 2008 fiscal year is just about to end, providing the first data with which one can evaluate whether the Democrats delivered on their promises.

First, let's look at the setting. From 2001 through 2007, total government spending increased a whopping 47 percent, from $1.86 to $2.73 trillion. It didn't do that all at once, but rather, grew each year an average of 6.2 percent.

The worst year during that time period for government growth was 2002, when it increased 7.9 percent. The best was, perhaps surprisingly, 2007, the last year that was mostly baked by the Republicans. Government spending only advanced 2.8 percent that year. Republicans tried to reform themselves, but did too little too late.

Astronomical Growth

How did the Democrats do? Spending has advanced this year an astronomical 8.3 percent, to $2.96 trillion, exceeding even the worst of the Bush years. Total spending this year was more than a trillion dollars higher than it was when Bush took office in January 2001, and more than $200 billion of that increase was accomplished in just the last year.

To be fair, this has been an unusual year. Military spending rose to support the surge of U.S. troops in Iraq, a policy that was hardly popular with Democrats. And government bailouts and higher unemployment-insurance payments have accompanied the weak economy.

But a fiscal hawk will cut nonessential items when necessity dictates increases elsewhere. Back in the early 1980s, Ronald Reagan cut non-defense discretionary spending drastically to help provide funds for his military buildup.

Bleak Future

The Congressional Budget Office looked ahead in a report last week, and it was fairly pessimistic about the future, predicting that total outlays would grow 6.9 percent in 2009, and 4.5 percent thereafter. Letting those growth rates expand over a decade will lead to startling increases.

The CBO baseline calls for total spending to increase to $4.68 trillion by 2018.

One can't help but look at these numbers and conclude, as the CBO appears to have, that the election of 2006 had little real effect on Washington. Before the Democrats took over, Republicans disrespectfully wasted voters' money and spending skyrocketed. After the Democrats won, they disrespectfully wasted voters' money with added gusto and spending skyrocketed.

Voters seem to sense this. While Bush is unpopular, his approval rating in most polls, little more than 30 percent, is still almost double that of the Democratic-led Congress.

The scary thought is that the Democrats might well have been constrained in 2008 by the president, who would have vetoed, for example, a health bill as ambitious as that offered by Barack Obama.

Constrained by Rhetoric

University of Minnesota economist Roger Feldman recently estimated that the first-year cost of Obama's health-care plan would be $450 billion.

Democrats might also have been constrained by their own rhetoric, which was far more hawkish on the deficit in the last election cycle. Perhaps sensing what is to come, fiscal discipline is hardly ever mentioned now.

After all, Pelosi has seen Obama's spending plans.

Kevin A. Hassett is a senior fellow and director of economic policy studies at AEI.