argument will be made that many of these programs are justified because poorer states don’t have the resources to provide their citizens with the level of services that every American ought to have. Education and welfare will be cited as examples. If this is indeed true (and we should note, for example, that the amount of money spent per student is an uncertain measure of educational quality), and if the need to help the poorest states provide these services can be considered a legitimate national obligation, there is a far better approach to that problem than the creation of federal education, welfare, or whatever programs that are imposed on all the states, rich or poor. My brother William F. Buckley Jr. had the answer to that problem in a book, Four Reforms, that was published in 1973. In it he suggested that the efficient way to meet those objectives would be through a system of block grants limited to the have-not states. The only requirement would be that those funds be used for the broad purposes (education, welfare, etc.) for which the grants were made. Under this approach, Washington would not be telling the recipients how to educate their citizens or how to look after their needy—in short, would not be telling them how to meet their own responsibilities under the Constitution. Nor could it use the presumed needs of the poorer states to impose federal regulations on the wealthier states, which have the resources to meet the needs of their own citizens.
The problem with this proposal is that Congress finds it almost impossible to dispense funds without encumbering them with detailed instructions on how they are to be used. I say “almost” because in 1972 Congress initiated a “revenue sharing” program in which grants with minimal strings attached were made to states and localities, rich and poor alike. But these represented only a tiny portion of federal transfers to the states, and the program has since been discarded. Revenue sharing was a nod to the spirit of federalism, but no more than that.
A return to federalism, of course, won’t guarantee that we will end up with less intrusive, less costly government, because states are quite capable of smothering their citizens (and economies) with expensive care. What it will do is enable the people of each state to determine for themselves whether the benefits of particular programs warrant their cost. In making those judgments, they will have the advantage of being able to compare the results of their state’s initiatives with those of others. And if they make those comparisons, they might ask why the most politically conservative states had the lowest rates of unemployment during the 2008-09 recession, or why the wealthiest, most heavily taxed, and most liberal ones, such as New York, New Jersey, and Connecticut, should have suffered such devastating deficits. They might also compare different approaches to health-care reform, such as Indiana’s health-savings-account option for state employees, Texas’s curbs on tort-litigation recoveries, and Massachusetts’s mandatory insurance requirements, to see which best serves the cause of affordable health care. If they decide that the human and financial costs of their own programs are unacceptable, it will be far easier for them to modify those state programs than to secure a revision of the federal rule book.
But it will take more than a return to federalism to safeguard our individual freedoms. In the first and last analysis, this requires that our people continue to prize their liberties, continue to assume responsibility for their own well-being, continue to understand (as recent polls indicate a majority of them still do) that a more limited, frugal government is in the public interest as well as in their own. Unfortunately, however, the siren song of “entitlement” is having its effects. That Americans believe they have a right to promised Social Security benefits is understandable, because they have been required to pay into the system throughout their working lives. But too many are beginning to believe they have a right to have government provide a buffer against the vicissitudes of life that earlier generations believed it was their own responsibility to cope with.
The rights guaranteed by the Bill of Rights all take the form of limitations on government action: Congress is forbidden to pass any law that will infringe on our rights to express our views, to worship as we please, to enjoy the privacy of our homes. Today, however, there is a tendency to conjure up new rights that add up to a right to pick one’s neighbors’ pockets. I witnessed that mindset on a recent trip in Alaska. During a discussion of health care, a bright young naturalist remarked that he had chosen a low-paying profession, the implication being that because he had elected to earn less than he was capable of doing, he had a right to expect others to help him pay his medical bills.
My healthy young friend’s concern over the cost of his future care is hardly an isolated one. Although most Americans were satisfied with their own medical insurance, the escalating cost of the same and the fact that a significant proportion of our population is uninsured placed the issue at the top of the 2009-10 political agenda. As is all too typical these days, the cures offered by President Obama and enacted by Congress focus on further government interventions in the medical marketplace rather than on getting rid of impediments to the free-market competition that could bring us more effective care at a lower cost. As such, they provide insights into the political class’s approach to a problem.
This one began with a particularly unfortunate unintended consequence of World War II’s wage controls. Industries competing for labor were not allowed to do so by offering higher pay, but they were permitted to sweeten the employment pie with fringe benefits. The cost of these benefits was deductible in computing the employer’s taxes, but, for reasons unfathomable, it was not treated as income in computing the beneficiaries’ taxes. This was the reason American companies began to purchase health insurance for their employees. And so today, 61 percent of working Americans have employer-provided health insurance. But because the users of the policies haven’t purchased them themselves and have no incentive to shop around for the most economical medical services when they need them, the insurers who create health-insurance packages and the professionals who deliver medical services are not subject to the competitive pressures that bring about greater efficiency and lower prices.
To compound the injury, state governments have been in the habit of requiring policies to cover more and more procedures, many of them discretionary, thus adding to the cost of insurance while denying their citizens the right to purchase more reasonably priced policies that may be available in other states. So instead of harnessing the efficiency of the marketplace by converting the cost of employer-provided policies into extra pay and allowing individuals to buy their own medical insurance and deduct the cost in calculating their personal income taxes, instead of allowing them to purchase policies offered in any state, and instead of approaching reform in stages so that we might assess how each worked in practice, the political class’s answer to our medical problems was to extend federal regulation over the entire field—with the horrendous unintended consequences that will inevitably occur when the federal government takes over one-sixth of the economy in a single act of legislative and executive hubris.
Where the marketplace has been allowed to work is in the development of medical devices and pharmaceuticals. As a consequence, and in part because the top individual tax rates have been low enough to provide incentives for the very substantial risks that entrepreneurs must be prepared to take to bring new medical technology and medicines to the market, the United States has been producing the lion’s share of the innovations that have transformed medical care here and around the world. Yet Congress has chosen to help pay for its trillion-dollar health-care bill by imposing higher taxes on the medical industry and on the individuals who help to finance it.
We won’t be able to bring our expanding administrative state under control and avoid national bankruptcy until the American people insist that we do so. This requires that our citizens rediscover that the price of cradle-to-grave security is the ultimate erosion of their freedoms. This is the hard lesson that history has to teach. When I contemplate current trends, I am haunted by Edward Gibbon’s description of democracy’s demise in ancient Athens:
In the end, more than they wanted freedom, they wanted security. They wanted a comfortable life and they lost it all—security, comfort, and freedom. When the Athenians finally wanted not to give to society, but for society to give to them, when the freedom they wished for was freedom from responsibility, then Athens ceased to be free and was never free again.
It was this experience, and that of countless other failed democracies, that the architects of the American Republic took into account in writing their “auxiliary precautions” into the Constitution.