One Way Street
Why government programs never die.
12:00 AM, Jun 18, 2009 • By GARY ANDRES
Government programs don't believe in heaven, but many seem to have eternal life. That federal initiatives grow old but never die is particularly significant today. Fueled by ideology and equipped with a large majority in Congress, President Obama and his allies on Capitol Hill are injecting steroids into Washington's normal propensity to expand.
But is there an exit strategy for the new largesse? The deck is normally stacked against government shrinking itself. Washington rarely takes steps to limit its own power. Ensuring outmoded or ineffective programs don't live in perpetuity is a daunting task.
Last week Republican Senator John Thune of South Dakota proposed an idea that might help. He introduced The Government Ownership Exit Plan. It's a bill to unhinge a door that normally swings one way--toward more expansive government. The legislation requires the Treasury sell any ownership stake in private entities by July 1, 2010. Without a deadline like this, government's grip on the economy will continue indefinitely, and economic growth will suffer. Thune's legislation deserves bipartisan support and quick consideration by the Congress. It's an important weapon to fight an array of incentives, momentum, and biases pointing in the other direction.
Examples of one-way government growth abound. Recently, word leaked out that the Obama administration had shifted its plans to streamline the nation's financial regulatory structure. Resistance from the Hill and other stakeholders meant Washington would likely add new powers without getting rid of the previous structures. The Washington Post wrote the president's "proposals have fallen by the wayside . . . instead the administration increasingly is focused on adding new layers of regulation on top of old." [emphasis added].
Political scientist Eric Schickler in his book Disjointed Pluralism observes this same trend in the history of congressional rules and institutional structures. Lawmakers usually don't scrap old programs for new ones--they just add more, leading to bigger, more confusing and overlapping authority. "Congressional development is disjointed in that members incrementally add new institutional mechanisms, without dismantling preexisting institutions and without rationalizing the structure as a whole," Schickler writes.
The National Journal's Jonathan Rausch documents this same propensity toward one-way growth in his 1999 book Government's End. He argues change is always easier in one direction--toward expanding government's reach rather than shrinking it. Not only do the administration and Congress historically heap layer upon layer of government programs and powers on top of each other, but outside stakeholders contribute to this growth as well. Rausch cites economist Mancur Olson, who finds "new interest groups form faster than the old ones go away."
And these interest groups become accomplices in bureaucratic growth. For example, congressional Republicans back in the 1990s sought to slow the rate of growth in the Medicare program. These changes were immediately attacked as "devastating cuts" that would "end Medicare as we know it." Hyperbole sells.
Taken together, all these factors pave a one-way street toward government without end. As Senator Thune wrote at Real Clear Politics last week, "The federal government currently holds various ownership stakes in over 500 private companies." This includes a 60 percent stake in General Motors and a major share of other well-known companies such as Citigroup and Chrysler.
"Once the federal government gets a taste for ownership and control of private industry, it's not likely to give it up easily," Thune told me this week. "So rather than waiting for Washington D.C. to do what does not come naturally -- namely, surrender power -- my bill provides an exit plan for taxpayers and sends a clear message that the government needs to get out of the business of owning American companies."
Who will say, "Enough is enough?" Some, including Senator Thune, have started that chorus. But given the propensity and ideology of the White House, Democrats in Congress, and interest groups to push for more, efforts without bipartisan support are dead.