After ‘the end of big government liberalism’

January 18, 2013

For all the bitterness in Washington these days, it’s easy to miss the broad consensus that undergirds our contentious politics. Republicans swear to protect Medicare and Social Security, and most recognize they can no longer hope to repeal Barack Obama’s Affordable Care Act. Democrats voted to make the George W. Bush tax rates permanent for almost all Americans.


What comes next? (Carolyn Kaster/AP)

This is not a stable peace. The Democrats have mostly won the debate over what the government should do, while the Republicans have mostly won the debate over how much the government should tax. Sadly, the two sides of that equation don’t come anywhere near to adding up. The war currently raging from cliff to cliff is about bringing taxation and commitments closer to alignment.

Still, it seems probable that the conflict will, eventually, resolve largely in the Democrats’ favor. Paul Ryan’s budget and Mitt Romney’s presidential campaign both proved the difficulty Republicans have in advocating fewer government benefits. For all the sound, fury and impassioned promises of huge deficit reduction, in the end both Republican leaders swore that everyone would get their benefits. The savings, we were told, would come from painless mechanisms such as competition or more flexibility for the states. It is difficult to imagine such rhetoric uprooting treasured programs -- all the more so after the Republicans lost the election.

Democrats aren’t much better on taxes, but they don’t need to be. Historically, it is much easier to raise taxes by a half percentage point of gross domestic product than to kick tens of millions off public health insurance.

As Slate columnist Matthew Yglesias has written, we are experiencing an epochal change in our politics, which he calls the “end of big government liberalism.” The progressive project of building a decent welfare state is giving way to the more technocratic work of financing and managing it. How government is run, more than what exactly it does, seems set to be the main battleground of American politics in coming years.

Recently, that debate has been dominated by budget politics. It won’t always be. If the basic services provided by the federal government are unlikely to change significantly in coming years, their delivery and design promise to be more contested turfs. The Republican dream of transitioning Medicare to a “premium support” voucher system is one example of the new battleground. The Democratic desire to add a public option to Obamacare is another.

Some of the best thinking on these issues is being done at Washington’s New America Foundation, which has produced three recent papers that deserve attention. In “Kludgeocracy: The American Way of Policy,” Steven Teles, a political scientist at Johns Hopkins University, takes aim at the political system’s tendency to address problems with “the most gerry-rigged, opaque and complicated response.” Think clunky Obamacare versus streamlined single-payer health care, or government’s tendency to deliver benefits via the tax code, through deductions, credits and exclusions, rather than by direct payments.

Our drift toward kludgeocracy has many causes, Teles argues. They range from the irresolvable tension between the public’s desire for a small, inexpensive government and generous, expansive public services, to the realization by special interests that they can commandeer more of the public purse through programs that are too opaque for the public to notice and too complex for even members of Congress to understand. The result is an inefficient state that citizens find unaccountable, expensive, untrustworthy and impervious to reform efforts.

The paper “No Discount: Comparing the Public Option to the Coupon Welfare State,” by Roosevelt Institute fellow Mike Konczal, is a useful companion to Teles’ tale of kludgeocracy. While Teles surveys a broad trend in governance, Konczal drills deep into a single policy dilemma that we confront repeatedly: Whether to provision public services directly, through government-run programs, or to use government as “a giant coupon machine, whose primary responsibility is passing out coupons to discount and subsidize private education, health-care, old-age pensions and a wide variety of other primary goods.”

In recent years, the “coupon machine” theory of American governance -- exemplified by vouchers and tax subsidies -- has been ascendant. That’s how most of Obamacare works. It’s also the foundation of Republican efforts to reform Medicare and education.

As Konczal argues, “The advantages associated with vouchers are ones of choice, efficiency, competition, budget control and incentive management.” But there are disadvantages, too. For instance, because a privatized welfare state is more opaque and complex than a public one, it creates “new coalitions of business interests, providers, middlemen” who profit from it. The result is not only less democratic control and accountability, but also less efficiency. Understanding when to choose a direct public provision and when to opt for coupons is a crucial task. Konczal’s paper provides an excellent basis for devising a general theory.

The third paper is “Congress’ Wicked Problem: Seeking Knowledge Inside the Information Tsunami.” Author Lorelei Kelly argues that “Congress is not so much venal and corrupt as it is incapacitated and obsolete.” Kelly’s argument -- that Congress simply lacks the informational and staff resources to make wise judgments on a vast range of issues -- is convincing. In the absence of staff members to whom members of Congress can confidently turn for expert advice, they end up seeking, and following, the advice of party organizations, lobbyists and other special interests.

To build a better government, Kelly suggests, we first need a better Congress. Yet Congress is trapped in a negative feedback loop in which congressional failure leads to public dissatisfaction, which leads to smaller congressional budgets and a diminished talent pool of staff members (and maybe representatives, too) seeking positions in the Capitol. That leads, in turn, to an even worse Congress, producing still more dissatisfaction. Arguably, the most cost-effective investment we could make in government would be spending more on congressional staff and institutional resources such as the Congressional Research Service, enabling Congress to make smarter decisions that cost less.

The broad lesson of all three papers is that the complexity of the problems government faces, and of the solutions it devises, is a growing problem. So while the debate over the size of the welfare state is mostly concluded, the debate over its increasing sprawl is more necessary than ever. If we’re going to do so much -- and we are -- we should learn to do it well. At the very least, we should have confidence that the people in charge of governing have the resources to understand their options, and to justify their actions.

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