The Ownership Society and Its Discontents

You can't count on George Bush and the GOP Congress to transform the welfare state.

Ryan H. Sager from the November 2006 issue

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In January 2003, a little over a year after President Bush signed the No Child Left Behind Act (NCLB) with a beaming Sen. Ted Kennedy (D.-Mass.) by his side, Harlem mother Eunice Staton filed suit against the New York City public school system. Staton and a group of parents from New York City and Albany were looking to sue for their right, under the new federal law, to transfer their children from the failing public schools they were in to more successful ones. The school district had neglected to notify them that their children’s schools were failing and that they had the right to transfer, but once they found out, they wanted to take control of their kids’ destinies. Staton, who had three boys in two of the city’s 300 failing public schools, told the press she felt “like a prisoner.”

The suit was thrown out, making Staton and her fellow plaintiffs just a few of the millions of parents let down by the promise of a bold, new approach to federal education reform. Barnes calls NCLB “a perfect example” of the president’s redefinition of conservatism “to fit the times and to come to grips with political reality.” If that’s true, Bush’s conservatism is in worse shape than almost anybody could have imagined.

In the 2000 campaign, Bush and his team did away with the old conservative answer to education reform: closing down the federal Department of Education. It’s still not such a bad idea (the money would be better spent at the state level), but it could hardly make for worse politics. As Republican pollster David Winston put it, “Getting rid of the Department of Education doesn’t explain anything to me about how my child’s going to be better educated.” What Bush came up with instead, however, wasn’t a way to devolve power to the states in a more politically acceptable way, nor a way to give parents more control. Rather, the Bush administration came in and said, We can tame the federal behemoth better than the last guys. We can be the ones to finally make it accountable.

The administration’s initial plan was ambitious. Bush’s “blueprint,” released not long after he took office, included two fairly radical proposals. First, kids in failing schools could take their share of federal funds to a more successful school, public or private. (In other words, they could use those funds as a voucher.) Second, states that agreed to strict accountability timetables could get all their federal money as essentially a block grant, instead of being bound by strict federal allocation formulas that tend to steer funds to special interests.

How quickly did Bush abandon real reform in favor of getting a bill, any bill, through Congress? On March 22, 2001, Rep. John Boehner (R-Ohio) introduced the No Child Left Behind Act, which essentially followed the president’s blueprint: vouchers of up to about $1,500 and flexibility for the states. By May 2, the House Education and the Workforce Committee had stripped the voucher provisions from the bill (on a 27-20 committee vote where five Republicans sided with all of the panel’s Democrats) and significantly watered down the flexibility provisions. It was a nice month while it lasted.

Conservatives were crestfallen, but the White House couldn’t care less. National Review recounted a White House education aide explaining that supporters of school choice should have done more to lobby lawmakers instead of expecting the White House to do it. The aide said the issue was “never central to the president.”

What was central to the president was changing the politics of the education issue from favoring the Democrats overwhelmingly to favoring the Republicans at least narrowly. Internal GOP polling in May 1999 showed the Republicans trailing Democrats by a full 21 percentage points on education. When Bush entered the race, however, he changed how Republicans talked about the subject. He talked about closing the “achievement gap.” He talked about ending “the soft bigotry of low expectations.” And, of course, he talked about leaving no child behind. By August 2000, the Republicans had closed their education gap to 10 points. By March 2001, when NCLB was introduced in Congress, Republicans were leading the Democrats by 5 points on the issue.

But having come so far during the 2000 campaign, Bush chose not to spend any of that political capital on a worthwhile bill. “The president wanted a bill,” says Krista Kafer, a former House education committee staffer who also did a stint as an education analyst for the conservative Heritage Foundation. “It didn’t bother him that it was a significantly flawed bill.” The price of getting a bill that could pass 340-81 in the House and 87-10 in the Senate (with Kennedy part of that 87) was high: no vouchers, almost no new flexibility for states, a large across-the-board spending increase, a program combating hate crimes, a program promoting “gender equity,” and a “cultural exchange” for “Alaska Natives, Native Hawaiians, and Their Historical Whaling and Trading Partners in Massachusetts.” All that NCLB amounted to, really, was strengthening certain federal accountability requirements that were already in place, plus the president’s Reading First initiative, which helps states and schools adopt research-based reading programs. The bill’s “choice” provisions were utterly meaningless.

Under NCLB, school districts have done everything they can to avoid granting kids transfers out of failing schools. They don’t inform parents of their rights. They give them extremely small windows of time to act. They even send letters home meant to confuse or mislead parents. A researcher in Colorado found that a district there had sent parents home a letter with the good news that their school had been selected for “School Improvement” under federal law. “We are excited by this opportunity to focus on increasing student achievement,” the letter said, making it sound as if the school had won a grant, not gotten a slap on the wrist. No wonder that in the 2004–05 school year, just 1 percent of students eligible for choice under NCLB actually transferred schools.

The public school choice provisions are the only thing approximating “ownership” in the No Child Left Behind law, and yet they have been an utter failure because of resistance from local bureaucrats—resistance that NCLB does nothing to uproot.

Owning Health Care

If the Ownership Society has been an unmitigated disaster when it comes to education, its record when it comes to health care might be termed a mitigated disaster. Specifically, the disaster of the $1.2 trillion Medicare prescription-drug entitlement is mitigated by the significant expansion of health savings accounts (HSAs) that was included in the same bill, the first major free-market health care reform in a generation.

The question is: Is the trade-off worth it? Is it worth significantly (and permanently) expanding the size and scope of the welfare state so long as the expansion is tied to measures that will give Americans a degree of ownership over benefits previously controlled by the government?

There was a logic to adding a prescription-drug benefit to Medicare—it made little sense to say the government would pay for open-heart surgery, but not for the drugs that might make such surgery unnecessary. But most seniors already had some form of drug coverage. In 2002, the year before the benefit was passed, some 70 percent of seniors spent less than $500 out-of-pocket for prescriptions. A relatively small, targeted drug benefit, aimed at the 22 percent of seniors who didn’t have drug coverage, could have caught those who were falling through the cracks at much less expense.

But why be efficient when you can be popular for only a few hundred billion dollars more? Republican leaders, with their eyes on the 2004 election, were set on creating a universal benefit for more than 40 million elderly and disabled Americans. So they created Medicare Part D, the Medicare prescription-drug benefit.