Americans Helping Americans Abroad

An AARO Event on 21 January 2018

by Dr. Patricia Woods, President, Woods Institute, Washington DC

Speaking to a packed room, Patricia Woods stressed the political, economic and social trends characterizing the US Congress and Senate from the 1930s to the present. She demonstrated that the influences on politicians often depend on what was happening in the country and world-wide when they “came of age in their careers.” Such context, she showed, provides a rationale for the positions politicians take. Thus, the different influences on each generation helps explain their perspectives and what they wind up supporting. For example, Millennials, according to survey results, are likely to buck current trends, should they start voting in larger numbers than they do now.

Woods illustrated the ebb and flow of policy and events under each President and Congress, from the 1930s up to the current Administration, concentrating on the role of government in the economy, the appropriate size of the government and budget, while pointing out the growth in the deficit from 1BN under Reagan to 21BN today.  

For example, she noted how FDR and his Administration tackled the Depression with government programs to help provide jobs, a more regulated economy and hope. Following WWII, the USA’s economic and military might grew, incomes rose for employers and for many employees. In the 60s, the Vietnam War is highly divisive, while economic opportunity (the Great Society), racial equality and other goals are pursued through almost 200 major bills in Congress, in such areas as civil and voting rights, Medicare and Medicaid, and college aid. Many of these, however, have become the part of today’s political vitriol.

With Nixon, Ford and Carter, environmental legislation took off, inflation soared, and unemployment rose, while global relations in many areas changed for better or worse. Transport and telecomm deregulation escalated during Carter’s Administration. Reagan cut government programs and taxes, though he touched neither Social Security nor Medicare. Global competition intensified, Baby-Boomers became a major part of the workforce, and their taxes help pay for entitlements.

Under George H. W. Bush and Bill Clinton, the government budget and deficits move into surplus, respectively; unemployment fell, aided by an end to the Cold War and the tech boom.  Under George W. Bush, lower taxes, especially for the wealthy, smaller government, less regulation, and two wars result in the disappearance of all surpluses and increasing debt. By 2008, the recession resulted in lost jobs, homes, and savings.

To deal with recession, a financial sector “too big to fail,” and growing economic inequality, Obama increased regulation (e.g. Dodd-Frank, carbon control at EPA) and developed the ACA. Political, economic and social animosities, and resentments exploded, with such trends as the rise of the Tea Party, the birther question, and resentment against the ACA.

Trump came into office, Woods stated, with a current debt of 20 trillion. Thus far, the revoked regulations, 67 of them this past year, will save 8.1 BN over the planned lifetime of the rules or $570MN/yr. There were 635 regulations planned for withdrawal at the time of her talk, 244 cited as inactive and 700 delayed. Targets include environmental rules, FCC, and Public Lands. Other accomplishments of the Trump administration include the appointment of Neil Gorsuch to the Supreme Court, and the 2017 tax bill, which because it was done as a “reconciliation” didn’t need the normal 60 votes.

At the time of the talk, the federal budget was under discussion and a government shut-down threatened. Woods said that only 30% of the budget was up for discussion. Sources of funding are the American tax payer (80%), of which 50.6% are income taxes in 2018, corporate taxes (10%) and excise taxes (2.9%). Where the money goes comprises:  14.6% to Homeland Security and Defense (14.6%) Non-Security Discretionary (15.0%), Social Security (24.4%), Medicare (14.1%), Medicaid (9.9%), Interest (7.7%) and other mandatory expenditures, i.e. Vets (14.3%).

Woods touched on other issues, such as States’ rights vs. the Federal Government, immigration, abortion, and unfilled federal posts. The outcome of pending issues may depend on changes in who is elected to the Senate and Congress. She made several predictions regarding upcoming elections, given current trends, who is up for election, and the numbers of contested seats. Much will depend in these elections on who is running, of course, and whether Millenials step up to take their responsibility to vote.