How Obama Can Stop Runaway Government Spending

Amid the right's hysterical repudiation of everything President Obama has done or wants to do, one legitimate concern stands out: that Washington will grow without limits. The federal government's size and scope have historically taken big leaps in reaction to war and financial crisis. It's not unreasonable to worry that in responding to the biggest economic slump since the Great Depression while fighting two wars, we'll find ourselves with a more expensive, more intrusive public sector and a less free and dynamic private one.

Politically, the backlash against expanding centralized government is hardly a new problem for Democrats. In the 1930s, FDR faced a largely class-based reaction to the New Deal's extension of Washington's role. In the 1960s, Lyndon Johnson was confronted with a racially tinged reaction to his use of federal power to fight poverty and advance civil rights. Distrust of government has long been a primary driver of Republican advantage and a dagger pointed at Democrats.

Our last Democratic president was a reformist, a lean-government liberal who favored federal activism in a context of personal and fiscal responsibility. But because of his initial fumble with health care and a deficit-reduction plan wrongly portrayed as an expansion of government, Bill Clinton was miscast by the right as a conventional tax-and-spend liberal. Only after losing the Congress in 1994 did Clinton declare that "the era of big government is over," sign welfare reform, and explicitly embrace balanced budgets. Once he established his seriousness about self-restraint and limits, he thrived politically—at least until Monica Lewinsky came by his office bearing an extra-large pizza.

Obama says the issue isn't how big government is but whether it works. But how big it is matters, too. A government that constitutes half of a country's economy, like those in Western Europe, produces a very different society over time from one that eats up only a third of the economy. Obama may have assumed that the imperative for a strong response to the financial crisis would suspend suspicion of Washington. If so, he misjudged American political culture. Even now, after fear of excessive public-sector growth has provoked an agenda-stalling backlash, Obama has yet to clarify his vague view of government's role.

How might a Democratic president go about establishing himself as a limited-government liberal? As a younger, more idealistic journalist, I wrote a book trying to square my belief in federal activism with commitment to limited government. In the 15 years since, my advice hasn't much changed (or been taken). New Democrats and Blue Dogs aside, the party's congressional leadership has never really recognized that the problem of government excess and failure is grounded in reality as well as in the other side's distortions and misperceptions.

If they hope to avoid a repeat of Clinton's 1994 fate in 2010, the president and his party might think about setting a long-term upper limit on the size of government. Because of the bank bailouts and stimulus plan, federal spending will exceed 25 percent of GDP this year, and public spending at all levels will exceed 44 percent. If liberals were clear that in normal times federal spending shouldn't be more than 22 percent and that the public sector as a whole shouldn't exceed a third of GDP—the level of Clinton's second term—the fear of Democrats covertly foisting a social-democratic model on America would melt away. This kind of ceiling would mean that government couldn't grow at the expense of the economy.

Beyond endorsing smaller government, Obama could identify himself with wiser government by developing the responsibility theme he sounded in his Inaugural Address. Health-care reform based on an individual mandate is a good example of government linking a private duty to a public benefit, but Obama hasn't emphasized this "values" aspect of his plan. A nicotine-addicted president should also steer clear of paternalistic, class-tinged policies like taxing soft drinks. Letting personal behavior that doesn't harm others slide means recognizing another kind of limit on government.

There's a risk of harming the country by failing to address fundamental threats and problems—which is where current Republican policies would leave us. There's also a risk of Democrats responding in a way that leaves behind more government than we want or need. Obama could help himself by letting people know he's worried about that danger, too.

Jacob Weisberg is chairman of the Slate Group and author of The Bush Tragedy and In an Uncertain World: Tough Choices from Wall Street to Washington.