Chasing Fiscal Responsibility Through Balanced Budgets: The Collision of Ideology with Political Realities

Abstract

For decades, a central element of the Republican Party brand has been to call for fiscal responsibility through balanced budgets. We ask if the Republican Party has ever lived up to these ideological principles. Medicare Part D and paying for the recent Afghanistan and Iraq wars are striking examples of major increases in deficit spending enacted under Republican Party control, but how typical are they? In order to answer this question we study macro-level trends in the federal budget across multiple dimensions, and exploit CBO reports to study legislative behavior on specific bills. Evidence of Republican politicians behaving in ways that would suggest a systematic commitment to balanced budgets is mixed at best, with some evidence of decline across time.

JEL Classification: H5, H6