Spend Now While You Have It

How much are you planning to spend for Valentine's Day? $50? $100? Today, President Bush signs a law that will increase your federal debt obligation, and that of every other American, by $500. It's a $160 billion package of individual checks and business investment credits that's supposed to reinvigorate the economy. For a family of four, that's $2,000 in increased debt, far more than they will receive from Uncle Sam.

In an election year, it is always easy to spend other people's money; in a political campaign, it is even easier to promise to spend other people's money. Senators Clinton and Obama are competing to see who can promise to spend more, whereas Senator McCain promises tax and spending cuts. Voters beware! At the Democratic candidates' Web sites, you won't find a spreadsheet with a dollar value for each campaign promise. That would be too simple, candid, and frightening. The public wants compassionate candidates, who ooze compassion for everything — except your bank account. These new programs are not free, but will be paid for through a combination of higher levels of taxes and federal deficits.

Take education, for instance, where documented costs of Mrs. Clinton's new programs are close to $20 billion. Mrs. Clinton is "Ready on Day One" of a child's life with "nurse home visitation programs to help new parents develop parenting skills." Then, she promises quality childcare and Head Start, a preschool program for low-income children, with kindergarten for all four-year olds. She estimates the cost of these programs at $10 billion, but it would probably be more.

In grades K through 12, Mrs. Clinton would hire thousands more outstanding teachers and principals in urban and rural areas (suburbs don't appear to need them), and spend $1 billion to help at-risk youth. One hundred million is slated for public-private internship programs.

Mrs. Clinton's college programs would cost $8 billion a year ($2 billion less than pre-school). The Hope tax credit for college students would increase to $3,500 from $1,650, and Pell grants would be indexed to the rising cost of tuition. She wants to spend $500 million on community college "investment incentives," $250 million on a "graduation fund" to improve college completion rates, and $250 million for on-the-job training funds.

Mrs. Clinton's $20 billion education spending plans are swamped by a $28 billion price tag from Mr. Obama, who would spend $18 billion on pre-school and K-12 and $10 billion on college. His college tax credit would be $4,000, or $500 more than Mrs. Clinton's, and he would give $10 billion to states for Head Start and other preschool projects.

Education comes cheap compared to health care. Mrs. Clinton would spend $110 billion on an "American Choices Plan," a misnomer because Mrs. Clinton's "universal" approach would compel Americans to sign up for comprehensive insurance coverage whether they want it or not. If they do not pay for insurance through their employer, they would be forced to buy either a version of the Federal Employee Health Benefit Program, or a plan similar to Medicare. Employers who did not offer health insurance to their workers would be charged higher taxes.

Mr. Obama's health plan would "only" cost an extra $50 billion to $65 billion. He would also set up a system similar to the Federal Health Benefit Program, open to all, with "affordable" premiums and co-payments. In addition, a National Health Insurance Exchange would regulate — and potentially drive out of business — private insurance underwriters by "creating rules and standards for participating insurance plans to ensure fairness and to make individual coverage more affordable and accessible." Private insurance plans would have to be as generous as the public plan, including mental health parity.

Education and health care are just the beginning for the brave new world of the would-be new Democratic administrations. How much more of your money would President Clinton or President Obama want to spend?

It is hard to say exactly. Elements of each program total more than $200 billion annually, or more than $600 per American. But most promises are amorphous and expansive. For example, what might appear as an innocent promise to deliver broadband services to every "community" could be code words for new federal programs costing tens of billions of dollars annually. When politicians promise to spend others' money, the distinction between billions and trillions of dollars rapidly vanishes.

As you make plans to celebrate Valentine's Day with someone special, don't begrudge spending a little extra this year. There is a good chance that we will all be a little poorer next year. The problem is not so much a looming economic slowdown; rather it is the promised expansion in the federal budget that each of us will pay for in years to come.

Ms. Furchtgott-Roth, dfr@hudson.org, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.