What Good Is Government?
Nobody needs to persuade most Americans that their national government is too big, taxes and regulates too much, and fails to accomplish enough of genuine public value. Much of what emanates from Washington is an uneconomical, uncoordinated, unholy mess, and almost everyone knows it. When President Clinton declared, in his 1996 State of the Union address, that “the era of big government is over,” he was belatedly responding to the political pressures generated by this deep-seated knowledge, which ever since the days of Ronald Reagan has been the motive force behind conservative and Republican victories at the polls. Indeed, Clinton himself won the presidency in 1992 and then won it again in 1996 largely by exploiting conservative themes about relimiting government and restoring civil society.
For conservatives, there would thus seem to be cause for satisfaction at this new coincidence of views between the leadership of both political parties. But of late, conservatives have been doing more fretting than celebrating. Some complain that today’s Republican-led Congress is proving itself incapable of sustaining the “revolution” launched by its immediate predecessor after 1994. Others lament the “loss of political momentum” represented, for example, by the Clinton administration’s slow but steady gutting of the work requirements in the 1996 welfare-reform law. Still others carp that the latest bipartisan budget bill increases social spending by $70 billion in just its first year. The worry, in short, is that the fight against big government has no sooner begun than it is being toned down, qualified, or even abandoned, by Republicans and conservatives themselves no less than by Democrats and liberals.
There is something to this worry. But it also reflects the current state of confusion on both sides of the political aisle over exactly what our national government does, exactly what it can or should do, and what the American people want it to do. We are caught in one of those historic moments of transition, between one model of government, now 60 years old, with whose virtues and (especially) with whose defects we have become intimately familiar, and another model still very much in the making and yet to be adequately defined. In what follows we mean to contribute, however tentatively, to such a definition, in the first place by dispelling some false ideas.
To begin at the beginning: is the era of big government over, and if not, is it likely to be over any time soon? The realistic answer to both questions is no.
Virtually every aspect of our lives is now touched by government. Washington underwrites support for the elderly and the disabled, for medical research, space missions, art museums, farmers, and mass transit. It subsidizes public television and mandates the number of hours that commercial networks must devote to “children’s programs.” It pays people to “volunteer” for national service. It builds prisons and supports public-housing projects and even midnight basketball. It provides food stamps, health care, college scholarships, loans, and grants. It involves itself in university admissions, hiring practices, family-leave policies, civil-rights laws, banking insurance and regulation, professional accrediting, air-traffic control, and parks administration. Among its obligations are protecting our air, water, and food; regulating tobacco and automobiles; constructing interstate highways; keeping out illegal immigrants and drugs; and providing pensions to our veterans.
This is only a partial list—and, needless to say, it all costs a lot. On the basis of the budget that has now become law, Americans will have at least $1.7-trillion-a-year’s worth of national government as far as the fiscal eye can see. By every estimate, annual federal spending will top $2 trillion before the year 2003.
In order to get some earthly perspective on such astronomical figures, consider the humble fiscal facts behind the welfare-reform law, universally and deservedly acknowledged to be the single most far-reaching legislative action of the historic 104th Congress. This act abolished a means-tested federal-state program for low-income households, Aid to Families with Dependent Children (AFDC). But AFDC accounted for only about $22 billion a year in federal spending—much less than two cents of every federal dollar. And the act continued federal cash assistance via block grants to states, at funding levels largely comparable to AFDC.
Again: last June, members of the House commerce committee voted to cut $15 billion over five years from Medicaid, the joint federal-state program that provides health-care insurance to some 35 million low-income, elderly, and disabled Americans. But between 1988 and 1994, Medicaid spending grew by about $100 billion, roughly $77 billion of which were federal dollars, and will likely grow by another $40 billion or more by 2002. And incidentally, the same House panel that voted for the much-publicized $15 billion in cuts also approved a new $16-billion grant to the states to expand health-care coverage for uninsured children.
Where do the other hundreds of billions in federal money go every year? Roughly half goes to the “3 15’s and a nickel”—15 percent each to national defense, grants to states and localities, and net interest payments, and 5 percent to other federal operations. The other half goes to payments to individuals. Of the latter, half again are made via entitlement programs that directly benefit the majority of all Americans, including many with annual incomes of $50,000 or more.
And what can be cut from all this? By the time the 104th Congress arrived in Washington in January 1995, the proportion of “big government” that consisted of nondefense discretionary spending, including such items as Head Start, public housing, and interstate highways, had already been squeezed by almost half in the 1990 Omnibus Budget Reconciliation Act and still further in its 1993 successor. In 1995 and 1996, as we have seen, programs for low-income families and individuals followed suit, absorbing over 90 percent of all cuts to entitlement programs.
The reason the only sizable cuts in the “nanny state” have fallen on programs for the poor rather than on those benefiting the middle class and the affluent is simple. In survey after survey, clear majorities of Americans have said that they would rather prevent cuts to most federal programs than balance the budget or shrink the deficit. As many as 80 percent or more favor maintaining or expanding Social Security and Medicare. For Medicaid the parallel figure is over 70 percent, and over 60 percent favor student loans, veterans’ hospitals, environmental protection, unemployment insurance, and other programs. In a period like the present one, when economic growth has boosted tax revenues and shrunk the deficit, there is likely to be even less pressure for significant cuts to big-ticket entitlements and discretionary spending programs for the nonpoor.
The large majorities in favor of retaining government entitlement programs raise a question about what was in the mind of the American people when in 1994 they gave control of both the House and the Senate to the Republicans. Certainly many of those newly elected Senators and Congressmen read the results as a mandate to downsize government.
But the election results can also be read in other ways. For one thing, the Republican victory, which was in any case not the landslide it is sometimes depicted as being, may have had less to do with ideas than with long-term electoral trends. Thus, in every election from 1968 to 1992, the percentage of the vote going to Republicans in congressional battles had been higher than the percentage of seats actually won by Republicans. What happened in 1994 is that the party finally succeeded in closing the gap. In the words of the political scientist Gary C. Jacobson, “Most of the seats the [GOP] added in 1994 were seats a Republican should have held in the first place.”
For Republicans, the good news is that the factors behind this trend are likely to continue. One such factor is the increasing suburbanization of the electorate. Another is the increasing consolidation of the Republican hold on the South. (In 1996, Republicans added Southern House seats even as they lost seats elsewhere, and the South was also the only region where Bob Dole’s popular vote nosed out Bill Clinton’s.) Finally, gathering Republican strength at the state level is a bellwether of greater strength at the national level.
We hardly mean to suggest that issues and ideas have played no role in all this: nobody who followed the course of Hillary Clinton’s health-care fiasco could contend such a thing. More broadly, as the political analyst Everett Carll Ladd has written, Republicans have indeed benefited from an ongoing “philosophical realignment”: ever larger majorities of voters have become more conservative, “especially in the sense of being far less inclined to accept claims that more government represents progress.” As we noted above, when Bill Clinton won the presidency, he did so in large measure by playing to this growing conservative mood.
Nevertheless, Ladd argues, the continuities in voting behavior “are in many ways more striking than the . . . departures.” So far, the philosophical realignment has produced no decisive party realignment and consolidated no conservative governing majority. In 1996, Ladd concludes,
Voters again elected a President of one party and gave congressional majorities to the other. . . . They again signaled a desire to curb the growth of national government, though not to cut it greatly.
This seems to us to sum up the situation very well. The public may not have the scale of government it prefers, but there is little evidence that it wants government to withdraw from the spheres in which it is now involved, or to downsize simply for the sake of downsizing. This reading of the mood of the electorate was confirmed, moreover, when the Republican majority in Congress did set out to cut government “greatly.” In mid-1995, House Republicans proposed eliminating no less than $1.4 trillion in projected federal spending by the year 2002, while Senate Republicans proposed cuts of $961 billion. In 1996, a House budget-committee resolution called for terminating, turning into block grants, or privatizing 3 cabinet departments, 284 programs, 69 commissions, and 13 agencies.
The effect of these ambitious proposals was that, between December 1994 and June 1996, the 104th Congress’s net approval rating fell like a rock. In the meantime, the President’s steadily improved. In March 1995, according to an ABC News/Washington Post poll, almost twice as many people were worried that Republicans would go too far in cutting needed programs than that Democrats would go too far in defending wasteful ones.
The shift in public sentiment can be explained in part by willful Democratic exaggerations of the size and scope of the proposed Republican cuts. But that is only one element of the story. Another has to do with the inability of the Republican leadership to offer a persuasive defense of their plans against reasonable criticisms and concerns.
Consider Medicare. When this program first became law in 1965, estimated spending for 1990 was projected at $8 billion. By the time 1990 rolled around, actual Medicare spending was nearly $160 billion and rising; by 1995, the system was (as it remains) headed for bankruptcy. In the words of the Wall Street Journal, “Medicare is growing so fast that by 2001 it will overtake all federal spending on defense; by 2005 it will exceed defense by $100 billion.”
What to do? In the 104th Congress, the GOP proposed to cap overall Medicare spending. That proposal is now history. In the 105th Congress, the party has sought to modify the program by giving its beneficiaries financial incentives to economize (mostly by shirting from fee-for-service to so-called medical savings accounts). The elderly, Republicans argue, need more “choice,” while future technologies will inevitably yield better care for all at less cost. But conservative lawmakers have so far failed to explain how we are to reduce the rate of growth in Medicare without causing millions of elderly Americans to receive less financial help from Washington, get worse care, or be thrown back on their own savings or the support of their often resistant or resourceless families.
It clearly will not do to assert that the public has already “voted for” cuts in Medicare or, for that matter, any of the other major entitlement programs. What the public has voted for is more complicated than that, and what it will stand for, it seems, is very little. In the absence of compelling alternatives, most Americans prefer the status quo, far from perfect though they know it to be, to radical retrenchment.
Faced with these apparently intractable facts, some conservatives have persuaded themselves that other means exist to solve the problem of big government. One, which goes by the name of devolution, is to kick things back from Washington to the states. Another is to hand them over to “civil society.” Both these ideas are estimable in and of themselves; but as solutions to the perceived problem, they are partial at best.
Devolution—vesting as much decision- and policy-making power as possible in what Edmund Burke called the “little platoons” of society—is an idea for which a strong case can be made: philosophical, political, and practical. Why indeed should anyone assume that a Secretary of Health and Human Services in Washington knows better than the governor of Michigan what is good for the children of that state, or which welfare approach will work best there? Moreover, popular support for devolution is high, mirroring the popular disapproval of big government and bloated bureaucracy.
Best of all, evidence is accumulating that local initiative works. In the areas of welfare and education, what Governors Tommy Thompson of Wisconsin, John Engler of Michigan, and Arne Carlson of Minnesota have been able to accomplish in a few short years puts Washington to shame, and the same goes, in the area of criminal justice, for Mayor Rudolph Giuliani of New York City.
But for all its virtues, the paradoxical fact is that devolution per se does nothing to contain the size and scope of federal power. Many federal programs are already highly devolved to state and local governments through block grants. The real “Washington bureaucracy” is composed not of the two million nondefense federal bureaucrats—about the same number as in 1960, before the fifteenfold growth in expenditures since the Great Society—but of the millions and millions of people who work indirectly for the national government as employees of state and local agencies, private firms, and nonprofit organizations that are largely if not entirely funded by federal dollars. About 90 percent of federal civilian workers live elsewhere than Washington and its environs, a reality brought home with tragic poignancy by the Oklahoma City bombing.
As the political scientist Donald F. Kettl has documented, today’s national government is “government by proxy.” Only about 4 percent of the federal budget, Kettl estimates, goes to programs or services that the federal government delivers directly. Mainly the tasks are performed by state and local governments, followed by private and nonprofit contractors. Indeed, every national domestic-policy initiative of the past six decades has been a version of government by proxy.
Thus, the interstate highway system was built through grants to state and local governments and contracts with private construction companies. Under the direction of state health and human-services officials, private financial intermediaries manage most of the Medicare and Medicaid programs. Contractors perform the clean-ups at the Super-fund sites of the Environmental Protection Agency (EPA). Universities and other nonprofit organizations devise and direct federally-funded projects in areas ranging from biomedical research to juvenile justice. The federal prison system and the Federal Aviation Administration—two of the relatively few federal agencies that do directly administer federal laws—rely heavily on private contractors to perform many different functions. Even financing and payments under the Social Security Act are administered by the states (subject to review by the U.S. Department of Health and Human Services).
As for the now-defunct AFDC program, it was administered as a joint federal-state program on the basis of a legal commitment by Washington to match state spending; in effect, AFDC was an entitlement to state governments, and was accordingly managed under a mind-boggling array of local eligibility requirements, work provisions, and more. For well over a decade now, Medicaid too has been evolving into a highly decentralized program in which states take the lead in defining eligibility criteria, streamlining payment procedures, and deciding which, if any, costly auxiliary services get provided.
Supporters of devolution tend to speak of block grants not only as if they were something new but as if they were a proven device for cutting spending and/or a sure-fire way of improving performance. They are neither.
Between 1966 and 1993, there were 23 block-grant programs for the states, fifteen of which were still in effect when the 104th Congress was elected. Total federal aid to the states was $127 billion in 1980; in 1994, after the Reagan years with their ostensible commitment to cutting back, it was an estimated $170 billion.
Nor, as John P. Walters has shown, do block grants necessarily guarantee greater efficiency or even a greater degree of control on the part of citizens. Block grants can simply “transfer wealth and authority to state and local bureaucrats who are . . . often less efficient, less responsive, and more prone to corruption than federal bureaucrats.” In addition, “devolving federal power” has often meant reducing the federal government’s capacity to monitor and correct. It has helped produce fraud and record overpayments in Medicare; the flawed Hubble space telescope; some of the worst defense-procurement scandals ever; the illegal diversion of tens of millions of dollars in food stamps; spectacular defaults in the guaranteed student-loan program; excessive costs in the Superfund; the failure of the Internal Revenue Service’s computer-modernization project; and malfeasance of Teapot Dome proportions in the Department of Housing and Urban Development.
In the proper hands, devolution can be a potent weapon in the arsenal of a society attempting to recover the habits of self-government. But it is only one weapon, and its utility is limited. In the wrong hands, moreover, devolution is just as likely to be a recipe for spending money that the federal government does not have, for purposes that no one has clearly specified, with results that cannot be measured or evaluated until it is too late.
This brings us to the other great hope of conservatives: civil society. By this is meant the entire network of churches, charities, community groups, and other voluntary associations and institutions upon which our society has always depended for its successful functioning. According to at least one reading of the evidence, this network has been eviscerated by the growth and self-aggrandizement of government; families, churches, and community groups have been forced to surrender their authority to bureaucratic experts, with disastrous consequences not only for civility but for civilization itself. The retreat of government from the field would thus be a hopeful sign of progress, allowing these institutions to revive and resume their normal functions, which they have anyway always performed with far greater effectiveness.
Here, too, the evidence is in fact somewhat mixed. One thing still unclear, for example, is the degree to which government has indeed “crowded out” familial, communal, corporate, and philanthropic activity. In articles published in 1995 and 1996, the political scientist Robert Putnam contended that fewer and fewer Americans were voting, joining the PTA, going to church, or participating in other civic associations and group activities, while more and more were “bowling alone.” But Putnam’s thesis has come under severe challenge by analysts who assert that, to the contrary, the number of Americans volunteering for groups and causes remains huge and shows no signs of declining. Bowling leagues may be down, but soccer leagues are up.
An even tougher question to answer is whether volunteer programs can operate on a large enough scale to deal effectively with hard-core social problems. A few years ago, Public/Private Ventures, a policy-research organization with which one of us has been affiliated, completed a systematic evaluation of the Big Brothers Big Sisters of America program. The findings were remarkably encouraging: for low-income children, many of them abused or neglected, just a few hours a week with a “Big” yielded a 50-percent average reduction in first-time drug use, a 33-percent reduction in violent behavior, and measurable improvements in school performance. But the number of children who could benefit from this program or one like it remains far in excess of the number of adults who volunteer for it.
Whether such institutions are growing in number is again difficult to say. Most urban black churches, for example, run or participate directly in community-service activities that reach beyond their own membership—staffing day-care facilities, offering drug- and alcohol-abuse prevention programs, administering food banks, building shelters, serving as after-school safe havens, and more. But are such faith-based social programs more or less common today than they were ten, twenty, or thirty years ago?
In any case, the basic issue may be less one of numbers, or even of efficacy, than of sheer capacity. According to Princeton’s Julian Wolpert, about 125,000 organizations in America operate as charities with receipts of at least $25,000 a year. Their combined revenues and expenditures are about $350 billion annually—roughly one-seventh of what is spent by federal, state, and local government. Moreover, a third of those revenues come from government itself. If all of America’s grant-making private foundations gave away all of their income and all of their assets, they could cover only a year’s worth of current government expenditures on social welfare. It is unlikely that Americans will donate much more than their present 2 percent of annual household income, or that corporate giving will take up any significant proportion of the slack in the event of further government reductions.
An energetic civil society is a blessing beyond compare, and government is no substitute for its myriad institutions. But getting government out of our lives would not ipso facto lead to a rebirth of those institutions, particularly ones that may have atrophied, and particularly if they have atrophied for reasons that are as much cultural (think, for instance, of the influence of television and the movies) as political. Nor, in the end, can civil institutions themselves, no matter how energetic, be a substitute for government.
But what sort of government do we need? In 1964, former President Eisenhower said:
We Republicans believe in limited government, but also in effective government. We believe in keeping government as close to the people as possible. . . . But we do not shrink from a recognition that there are national problems that require national solutions.
Thirty-three years later, Eisenhower’s words seem more relevant than ever, encapsulating a truly national view of our situation and suggesting not just a Republican but a republican way forward.
Perhaps the first lesson these words suggest is the need for all Americans, including those most offended by the depredations of big government, to make their peace with the persistent popular majorities whose duly-elected representatives have supported and sustained the national government’s post-New Deal role. That role in itself is not the problem; however they may grumble, Americans want government to perform it, or something like it. Nor is the problem simply one of the size of government. Rather, partly on account of sheer size, but more on account of bad ideas in the hands of executors with arbitrary and unaccountable authority, our national government has fatally lost sight of what James Madison called the “permanent and aggregate interests of the community”—that is, of the public interest.
Only now, thanks to widespread disgust with what those ideas and that arbitrary authority have created, are we beginning to take stock of how badly the public interest has been served across the board: from law enforcement, to education, to family policy, to race relations, to tax law. Most saliently, unelected federal officials—whether bureaucrats or judges—have been permitted to define the public interest as they see fit and, through the reach of national power, to impose their understanding over and against the clearly expressed wishes both of representative institutions and of state and local governments, businesses, civic organizations, neighborhoods, and individuals. If our standard is to keep government “as close to the people as possible,” then one of the most hopeful pieces of legislation passed by the 104th Congress was a little-noticed provision, authored by Senator Spencer Abraham, restricting the ability of federal judges to continue defying persistent public demands for laws prohibiting the arbitrary release of violent criminals. Similar sorts of restorative lawmaking are a prime desideratum.
Here is where the true value of devolution and civil society makes itself felt. For the foreseeable future, it seems, the social-policy “action” in America will be emanating less from Washington than from the states and localities, as well as from the sphere of private enterprise. That is all to the good. The seeds of a new reconstruction are being sown: from welfare reform to the revolution in health care, a whole array of promising initiatives, none of them conceived or directed by Washington (though some are at least partly subsidized by Washington), is beginning to undo the accumulated damage of a quarter-century and thereby to change the underlying relation of government and society. The eventual effect of these initiatives, if they are not impeded by the dead hand of the federal behemoth, will be to alter the definition not only of American politics, but of government itself.
In this period of experimentation, the role of responsible elected representatives in Washington is to monitor, to assess, to criticize, and even to propose—but first and foremost to foster and encourage. And in the meantime, there is plenty of other work to be done at the national level by a political class—in the nature of things, a conservative political class—bent not on dismantling but (to revert to Eisenhower’s language) on limiting government and making it more effective. There may well be some federal agencies we would be better off without—the National Endowment for the Arts is one. On the other hand, calls to eliminate the EPA, for example, are unrealistic and out of touch with the wishes of the electorate; Americans want federal controls on the air they breathe as much as on the meat they consume. Still, someone has to start the decade-long task of bringing the morass of federal environmental regulations and the litigation they have spawned into line with the public interest properly understood. And the EPA is only one instance, if among the most egregious, of a much more pervasive problem.
Improving the performance of government hardly exhausts the matter, however. Perhaps the most pernicious legacy of the era of expanded government has been to engender widespread publie mistrust of, precisely, government itself. This mistrust is founded on larger considerations than federal waste and inefficiency.
It has often been remarked how liberalism, by creating ever new categories of rights, and by relentlessly expanding the sphere of “entitlement,” has devalued the habits of self-reliance and individual responsibility that are critical to economic and social advancement. What is less often remarked is the extent to which these same sturdy habits, the defining marks of a free citizenry, are and must be constitutive of the entire American political order. Should we really be surprised when people inculcated with the thoroughly infantilizing idea that government exists to take care of their “needs” begin to regard that government with increasing petulance and disrespect? During the 1992 presidential debate in Richmond, Virginia, a middle-aged man stood up in the audience and asked the three candidates: “We’re not under oath at this point, but could you make a commitment to the citizens of the United States to meet our needs?—and we have many.” Neither George Bush, nor Ross Perot, nor, assuredly, Bill Clinton dared challenge the premise of the question. Every parent knows the symptoms of this insatiable disease; a wise one takes steps to prevent them from developing.
To this injury has been added still another: the breaking-down—the deconstruction—of our common American culture, of the American idea. Liberalism brought us not only the era of big government, now officially declared to be over, but the era of official, government-sponsored polarization. It was a bureau of the federal government that in the late 1960’s began systematically to infiltrate our way of doing business and educating our young with the insidious practice of counting by race; and it is our national government that through its dogged adherence to these policies and a galaxy of related ones continues daily to go about dividing us by race, gender, and ethnicity, setting us each against the other and then wondering aloud why we cannot “talk.”
No amount of devolution, no revival of civil society, can by themselves recreate this bedrock condition of our political existence: the knowledge that we are one nation, indivisible. To the contrary, the very act of draining authority away from Washington, and of encouraging the spirit of individual and civic initiative, may, in the absence of countervailing forces, tend rather to hasten than to impede the further atomizing of society. But neither is it imaginable that we can simply demand of citizens respect for a national government that has shown itself unworthy of their respect.
There is a trap here to which conservatives in particular may be susceptible. As Gertrude Himmelfarb has written in these pages,1 in their impassioned and wholly understandable rush to decry big government and extol the virtues of civil society, many otherwise sensible conservatives have come perilously close to delegitimating the idea of government itself. Others, of a frankly libertarian stripe, have gone even farther; characterizing 60 years of expanded government programs as a kind of scam perpetrated on a society of native individualists yearning to breathe free, they not only seek to limit government but practically to do away with it.
The task as we see it is instead to limit government; to make it more effective; and to keep it as close to the people as possible. But it is also to conserve, to rebuild, and to restore. The restoration of the American government as a true expression of the American idea cannot be achieved by an act of Congress, or triggered by a provision in a spending bill, or, alas, materialized in an act of will by the American people. It is a task for national leadership, and only national leadership can accomplish it. Ronald Reagan, who paradoxically came to office on a platform for relimiting government, may have come closer than any statesman in living memory both to grasping what is required for the task and, in his person and spirit, to suggesting the elementary grounds for its realization.
It has been a long time since an American President could say with perfect assurance, as our first President did in his Farewell Address:
This government, the offspring of our own choice uninfluenced and unawed, . . . has a just claim to your confidence and your support. Respect for its authority, compliance with its laws, acquiescence in its measures are duties enjoined by the fundamental maxims of true liberty.
Thanks to decades of often mindless expansion, and even more so to policies that have undermined the habits of freedom, respect for the authority of government is at a low point in our country. But in a fundamental sense, that government remains what it was 200 years ago: the “offspring of our own choice.” Without destroying the institution itself, we should study to fashion a better one, of which we can more honestly say that it exercises “a just claim on [our] confidence and [our] support.”
1 “For the Love of Country,” May 1997.