Which Government Services Are Essential?
FEBRUARY 01, 1996 by DOUG BANDOW
Filed Under : Subsidies, Taxation
Mr. Bandow, this month’s guest editor, is a Senior Fellow at the Cato Institute and the author of The Politics of Envy: Statism as Theology (Transaction).
You might not have noticed, but the federal government closed down a while back. The sky didn’t fall. The world didn’t end. People didn’t die in the streets. In fact, it was difficult to detect any difference outside the Washington Beltway before and during the two shutdowns.
Unfortunately, nothing has changed since then. The same number of Cabinet departments exist. Only a half dozen programs, such as the 18-person Administrative Conference, have been killed. And virtually every federal employee who was laboring before the so-called train wreck is back at work, issuing checks, drafting regulations, and otherwise limiting Americans’ freedoms.
What is amazing—actually, it wasn’t amazing, given how Washington works, but what should be amazing—is the failure of anyone to use the bureaucratic closure as an opportunity to initiate a serious debate over the role of government. What, pray tell, do three million federal employees do? Why do we need to ship $1.6 trillion, roughly 22 percent of the GNP, to Washington? How does the public benefit from subsidizing everything from beekeepers to big corporations to small liquor stores to foreign dictators to performance artists? Are the elderly really served by medical and retirement programs that are hurtling toward insolvency, threatening to take the rest of the budget down with them?
These questions would have been particularly timely since 800,000 government employees were deemed “nonessential” during the first shutdown. A sizable 42 percent of the personnel of affected agencies—the Agriculture and Energy Departments had been previously funded, while the Post Office relies on postal revenues, for instance—were sent home. The number deemed nonessential ran 99 percent at Housing and Urban Development, 89 percent at the Department of Education and White House, 83 percent at Treasury, 81 percent at State, 75 percent at the Labor Department, 72 percent at Interior, 67 percent at Commerce, 59 percent at the Small Business Administration, and 58 percent at the Department of Health and Human Services. If America could get along just fine without the bulk of the employees at all of these bureaucracies, then why bring them back?
Yes, yes, in the long term a few of these workers are really necessary—to process passports, for example. But the job of many Commerce Department employees is to hand cash to well-connected businesses. The Small Business Administration does the same thing, only to smaller ones. The Labor Department is little more than a political pay-off to unions. Housing and Urban Development helps enrich developers. And on and on. Not only are most of these jobs nonessential: they are downright harmful. Why, then, are these people still employed?
The Purpose of Government
If politicos in Washington won’t start the debate, people outside the Beltway should. The first question voters should ask candidates is, what is government for? This matters, though no one in Washington thinks in those terms. In Congress the first question usually is, what do my constituents/favored interest groups/contributors want? That’s why liberal doves like weapons constructed in their districts and fiscal conservatives support social spending in their districts.
The more sophisticated answer from the “anything goes” crowd is that government is to help people, provide opportunity for the disadvantaged, ensure equality, protect health and safety, etc., etc. All of these have the advantage of sounding desirable while being ambiguous enough to justify subsidizing almost anything.
The right answer should be to provide the framework of a free society, to perform those tasks that are necessary and can only be handled both collectively and coercively by government. That’s all. These duties are important, indeed critical, but quite limited. No National Endowment for the Arts. No Commerce Department. No Energy Department. Obviously we can argue at the margin, but we should be able to agree: No endless soup line for the well-connected.
The second question might be: why the federal government? One need not have a fairy-tale view of states and localities to believe that where government is necessary, a decentralized system that allows experimentation is generally better. It is certainly preferable to a uniform and rigid policy emanating from Washington and binding 260 million Americans around a diverse nation. Consider education. It really should be a family responsibility in a private marketplace. But if government is going to get involved, why Washington? States and localities have little incentive to carefully spend “free” money from Uncle Sam; Washington usually ties lots of strings to its checks. The result has not been pretty.
Third, people could query their supposed representatives—what justifies taking a taxpayer’s money? There are lots of theoretically good things that government, including the federal government, can do. Admittedly, there are some tasks that only it can, or at least will, do. But are such activities more important than what taxpayers would do with their own money?
This is a concept that some federal employees have difficulty understanding. During the shutdown a couple of Washington radio announcers were commiserating with furloughed federal employees when one bureaucrat called up and said: “people tend to forget that we’re taxpayers, too.” It is easy to forget, since federal employees remain tax consumers, even though they have to surrender a bit of their ill-gotten gains through “taxes.” The people with the highest claim to the money remain those who actually earned it in the first place.
Last should come a practical query: can the government really do a better job providing whatever the product or service? Denizens of Washington hate to ask this question almost as much as they hate to deal with philosophical issues. It confuses them, rather like Soviet apparatchiks who must have wondered during Communism’s collapse: “If the government stops making shoes, how will the people cover their feet? Whatever will people do?”
The same attitude pervades the nation’s capital. Only the Food and Drug Administration protects us from another Thalidomide. (Actually, the FDA has killed literally hundreds of thousands of people preventing the sale of life-saving drugs and devices; a private concern like Underwriters Laboratory could serve as a more efficient tester.) Only Social Security stands between the elderly and poverty. (Alas, the system is rolling towards demographic and fiscal disaster. Relying on private IRAs would provide a much greater return to retirees without bankrupting workers.) And so on.
None of these would seem to be terribly difficult questions to ask. But during the prolonged budget “crisis” no one did—not the contending political leaders, not the mainstream media commentators. Instead, everyone assumed that what was must always be, with a few minor variations; even the “toughest” budget proposal envisioned a $300 billion increase in federal outlays over the seven years to balance the budget. And not even that plan did more than drop a handful of programs. For the most part, the issue was not whether a function was appropriate for Washington, but how quickly outlays should increase.
Unfortunately, government shutdowns don’t occur very often. The only way we are likely to ever have a serious debate over what is really “essential” for government is if the American people demand one.