September 7 2010
The well-being of your family shouldn't turn on the political budgeting process. Too bad too-big government often makes this inevitable. Earnest politicians create programs with the hope of helping people, but by fostering a culture of dependency and displacing the private sector, those good intentions often backfire. Good citizens who come to rely on state-provided entitlements suffer when political winds change and services have to be cut or eliminated.
Consider, for example, what's happened in California. The Golden State faces one of the worst budget crises in the country, with a $19 billion shortfall. Budget pressures have led legislators to consider ending some subsidized health programs, such as "Every Woman Counts," which offers free mammograms, pelvic exams, and pap smears, for low income women.
Last year the program served 350,000 women and used $55 million of state tobacco tax revenue. This year the tax only brought in $46 million, so the state implemented cost-cutting measures, including freezing enrollment and raising the age of eligibility for mammograms. Yet these measures are not enough. Given that, technically, 1.2 million Californians are eligible this year for "Every Woman Counts," the program is headed for a crisis. To save the program, legislators must either raise taxes or reallocate funding from some other state service-no easy task given the massive deficits and other urgent programs that need funding.
California is not alone in this predicament. Budget crises plague legislative chambers from Trenton to Sacramento. According to the Center on Budget and Public Policy, at least 31 states made budget cuts that will restrict access to health care services due to a decline in state tax revenue.
Social activists may charge that cuts to care for the needy or poor are heartless or indifferent. Yet the sad reality is that resources are finite and tough choices must be made when facing a financial crisis of this magnitude. And, when examined further, it's arguable that it is the creators of these programs that truly let down the community they sought to serve by failing to consider the initiative's potential unintended consequences.
Twenty years of a program like California's "Every Woman Counts" crowds out the private sector from delivering this needed service. Charities that might have developed to provide access to health services to this community fail to materialize. Individuals have less of an incentive to take action and provide for themselves. Health care providers who might have developed long-term, low-cost alternatives that would be more responsive to peoples' needs don't enter the market when government takes over.
The absence of the private sector doesn't become fully apparent until the state-whether because of financial problems or a simply change of the political winds--ceases to provide the service. Then it's the families who were relying on government's promises who suffer.
This dynamic doesn't just come into play in the health care arena: whether it's welfare and food bank programs or job training and education, when the state steps in to provide a service, the effects ripple through the private sector. Charities that were providing similar services are no longer needed. Individuals who had been donating to nonprofits believe their sacrifice is no longer necessary, and come to believe that it's the job of government-not good neighbors-to take care of those in need.
No one doubts these services need to be provided; the question is whether the government is the best vehicle to do the job. Too often, government programs end up unnecessarily costly, duplicative, or offering poor quality service. And when a budget crisis hits, it's inevitable that policymakers have to make decisions that cause real hardship for those who have come to depend on government.
The small silver-lining to the current budget crises might be that citizens learn an important lesson about the unintended consequences of government programs. State services create real costs, not just in terms of tax dollars, but in crowding out the private sector and leaving citizens dependent on government. Better not to create such programs, to keep government limited to the specific functions for which it was intended, and to protect civil society. It turns out that it's often far more compassionate not to create such a program, than to create one that leaves so many dependent on the whims of politicians.