Obama's SOTU and What Government Shouldn't Do
It was not much more than a throwaway line in the midst of the expansive government-led agenda which President Obama laid out in his fourth State of the Union address. "The American people," he said, "don’t expect government to solve every problem." That’s a long way from Bill Clinton’s assertion that "the era of big government is over"—but, nonetheless, Obama, perhaps without really meaning to do so, suggests a key question, both for government and those philanthropically-supported groups which deal with our problems independently of government. If what Obama says is right, then one must ask: What problems should we look to government to solve?
If Obama is truly looking for guidance in this area, he might consider this maxim. The more individualized attention a problem calls for, the less well-suited government is to dealing with it—and the more likely independent, charitably-supported groups are. By that standard, government has been over-reaching—with poor results to show—and would do better to narrow its efforts.
To understand why, some historical context is in order.
President Obama is an heir to the New Deal in any number of ways—from his expansion of federal financial regulation to his Keynesian fiscal views. He can be said, more broadly, to have inherited the political conclusion which the American public came to hold about Herbert Hoover—that his approach to the use of government to help Americans in hard times was too limited. Hoover, as the historian of American philanthropy Oliver Zunz writes in Philanthropy in America, believed that "relief" for the hungry and jobless should be primarily the province of private charity and for government to refrain even from transferring funds to groups like the Red Cross to distribute. Hoover, writes Zunz, "was . . .anxious . . .to avoid direct government support of relief. He feared it would dry up private charity."
In the years since, we’ve clearly come to political consensus that income support for the unemployed and elderly, as well as the working poor, is very much the province of government. Indeed, a good case can be made that it was the experience of that period that cemented the idea that philanthropy and charitable organizations were fundamentally inadequate to deal with the exigencies of American life—and needed either to be replaced or dramatically supplemented by government. In the time since, automatic government-provided "safety net" programs of income support have emerged to buffer those in need from the most serious exigency. These include unemployment compensation (regular replacement income for those who have lost jobs);the Supplemental Nutrition Program (aka "food stamps" to those who qualify on the basis of low income); and the Earned Income Tax Credit (an income supplement for the so-called working poor). Of course, the signature—and most popular program—of this type is Social Security. There’s a good case to be made that, once we’ve decided to redistribute income in this manner, government provides the appropriate means to do so. Put another way, if we decide that we, indeed, want to send out checks to those of low income for one reason or another, government knows well how to do the job.
But we drew another conclusion, both from the New Deal experience and especially the Great Society era which expanded on it, that has proved to be less defensible: that social programs of all types can be managed or funded by government to good effect.
Indeed, when it comes to programs designed to address social problems—whether the lack of preparation of poor children for school or re-training the unemployed, or hundreds of other social programs on which the federal government now spends hundreds of billions annually— there are great risks in adopting a government-led approach. It’s just not clear that government can either provide such services itself or contract for them and still show positive results. For instance, Head Start, the pre-school program for disadvantaged students, is provided at a cost of $8 billion annually in all 50 states through government grants to non-profit groups. Yet a January 2010 Impact Study by the federal Department of Health and Human Services that compared Head Start participants to a control group found that virtually all gains in vocabulary, math, and other skills realized by Head Start children had dissipated by the time the students completed the third grade. A December 2012 follow-up report largely confirmed these results. To Isabel Sawhill of the non-partisan Brookings Institution and Jon Baron of the Coalition for Evidence-Based Policy, the 2010 report demonstrated that the program "had almost no effect on children’s cognitive, social-emotional, or health outcomes at the end of 1st grade." These disappointing results were not an exception, but rather closer to the rule: Sawhill and Baron note more broadly that the Head Start study "is the 10th instance since 1990 in which an entire federal social program has been evaluated using the scientific gold standard’ method of randomly assigning individuals to a program or control group. Nine of those evaluations found weak or no positive effects."
The results are not much more positive when it comes to retraining the unemployed for new jobs. As the former chief economist at the Department of Labor (and my colleague at the Manhattan Institute) has written:
"[Washington] now administers 47 (job training) programs at a cost of $18 billion annually. However well-intentioned these programs, they are costly, many produce mixed results, and there is much overlap within the federal job training programs. Workforce training programs have existed since the 1960s and have generally been unsuccessful: they have been expensive and have not fulfilled their goals. From the Comprehensive Employment and Training Act in the 1970s, to the Job Training Partnership Act in the 1980s, to the multitude of programs today, federal job training programs have disappointed their proponents."
She notes, specifically, that one of the largest job training programs, the Workforce Investment Act Adult Program, which provided services to 7.2 million people in 2011, barely managed to place more than half (56 percent) in jobs, and almost 20 percent of those lost them within six months.
It’s worth comparing such results to those of a private, resolutely independent job preparation program for those of low-income, Cincinnati Works—led by two idealistic founders, retired accountant Dave Phillips and his wife Liane, author of a book-length approach to helping the long-term unemployed (Why Don’t They Just Get a Job? One Couple’s Mission to End Poverty in Their Community) – focuses on instilling the habits and attitudes that lead to success in the workplace. The program reports that some 84 percent of those it’s helped place in jobs since 2005, remain on the job.
The difference between Cincinnati Works and the world of government contractors is the difference between the idealistic and the bureaucratic. As the political scientists Steven Rathgeb Smith and Michael Lipsky observed in their landmark book Nonprofits for Hire: The Welfare State in the Age of Contracting, government "gradually influences the behavior of independent nonprofit contractors to accept its practices and preferred policies" and that "[m]any volunteers, disillusioned with the changes in the organizations, simply leave." This is a recipe for what we so often see provided by government, as with Head Start: services which are extensive—but mediocre. The successful social service group, in contrast, must specialize in personalized, "high touch" attention—the sort of attention that successful businesses understand well in dealing with customers. That would seem to make government an unlikely source of effective funding and leadership for one of the President’s stated priorities: pre-K education.
Indeed, what we’ve learned, especially since the 1960s, is that there are problems from which government should steer clear—leaving them to independent non-profits who must compete for the support of private donors by running an honest and effective organization. This does not mean that good approaches must remain confined to small groups in specific cities. Indeed, Cincinnati Works is not working with groups in 20 other cities to emulate its job readiness program. In much the same way, the Boston-based group Village-to-Village has spread its approach to helping the elderly remain in the own homes to 93 other sites, and the St. Louis- The Mission Continues, now helping veterans in 43 states, "to continue their mission of public service", as a way to adjust successfully to post-military life.
It’s worth noting that, although government now spends some $100 billion on human services, that pales in comparison on what it spends on income support programs (some $1.1 trillion according to the CBO), including unemployment compensation, social security old age assistance and disability payments, food stamps and the earned income tax credit—just to name a few. Government, it might be said, is implicitly making clear what even it thinks it does best. In his State of the Union address, President Obama seemed to endorse a government role that’s wide-ranging—and has not learned from the record of its own work. Far better for the President to take seriously his own, cautionary words about not trying to "solve every problem".
This piece originally appeared in Forbes
This piece originally appeared in Forbes