Government Reform

Eternal Life

Why government programs won't die.

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Consider two risible objects, Woody Allen and the National Sheep Industry Improvement Center. One is risible because it is mortal. "It's not that I'm afraid to die," Allen once said, "it's just that I don't want to be there when it happens." The other is risible because it is immortal. It is living proof that, four years after Bill Clinton came to office promising a new day and two years after Newt Gingrich did the same thing, Washington is still in deep trouble.

Back in 1954, when wool was a vital strategic commodity (for military uniforms), the government set up a subsidy for wool producers. Then Dacron happened, and by 1960 synthetics had knocked wool from the Pentagon's must-have list. Nonetheless, three decades later the subsidy for wool and mohair (the fleece of Angora goats–don't ask) was still amiably handing out $100 million or more each year to ranchers, 1 percent of whom got almost half the payments. Finally, in 1993, a Democratic Congress, embarrassed by what The New York Times mocked as the "mohair toilet seat," killed the thing. The wool program died that year alongside the equally bizarre honey subsidy, the Advanced Solid Rocket Motor program, and the Superconducting Super Collider. Requiescat.

Well, it looked dead. But killing a program is not the same as killing a lobby. After a decent interval and a switch on Capitol Hill from old-style Democrats to newfangled Republicans, the wool people stuck their head up again, and last April their persistence paid off. Thanks to Sen. Larry Craig–a Republican from Idaho and supposedly a conservative–Newt Gingrich's Congress tossed the wool lobby a new National Sheep Industry Improvement Center, empowered with up to $50 million in federal funds to "enhance production and marketing of sheep or goat products in the United States."

Has nothing changed in Washington, then? On the contrary, practically everything has changed–politically. Congress went from Democratic to Republican, from Hillaryism in 1994 to Gingrichism in 1995. The presidency passed from Bill Clinton I, tribune of Renaissance Weekend activism, to Bill Clinton II, soldier of the center and prime snatcher of Republican real estate. The public gave Clinton a mandate against Bushian do-nothingism, then gave Gingrich a mandate against Clintonian activism, and now seems about to give somebody–Clinton II or Bob Dole, it scarcely matters which–a mandate against Gingrichite activism.

Through it all, the public is as disenchanted as ever with its government. Now, though, it is equally disenchanted with government's would-be reformers, the Gingrichites. So now everybody has a problem. Conservatives and libertarians find that the ramshackle, rolling accumulation of stuff known as the federal government pauses for a moment when faced with an outbreak of anti-government zeal–and then brushes it aside. Liberals and other friends of government find that Washington is still too bogged down in its own past to do anything well.

And government-friendly reformers–people like me, who think government should do less to do it better–have a problem, maybe the biggest problem. I think government needs a thorough housecleaning, not so much to make it smaller (it will never be very small) as to make it more focused and flexible. It needs to stop trying to do everything for everybody at once. A housecleaning, ultimately, would probably please the public. But, presented with such a reform in a political context, the public resolutely blocks it.

So do the people want reform, or don't they? The answer is: yes. The lesson of the Year of Newt is, I think, fairly depressing, and not just for Gingrich's sympathizers. Between comprehensive disaffection with government and comprehensive reform of government lies a vast chasm, and no bridge. The public despises government and it desires reform, at least in principle. Yet there appears, at least at present, to be no path from here to there.

"Nonsense," say grumbling populists, "the problem is that Washington isn't listening to The American People. It's too busy with its partisan bickering to get anything done. It's out of touch and gridlocked–that's the problem."

Actually, that's not the problem. Neither out-of-touchness nor gridlock is anything like the real problem. To think of Washington's mess in those terms, as most of the public does, is to rush straight off in the wrong direction.

American politics has never been more responsive, indeed more capricious, than it is now. Washington has never been more eager to react to every passing electoral mood. Angry this week about immigrants? Wages? Gas prices? Beef prices? A bomb? A recidivist child molester? You can be sure a bill will be on the floor of Congress tomorrow, if not sooner. Those who say Washington doesn't listen have always been wrong, but right now they are spectacularly wrong. American politics in 1996 is hyper-responsive.

The trouble is that American government is inert. Indeed, the more responsive politics becomes, the more inert government grows. The more frantically the one reacts, the less effectively the other adapts. And this counterpoint is no coincidence. Each begets the other.

In a book published in April 1994, I nicknamed this paradoxical syndrome "demosclerosis" and tried to use theory rather than anecdote to explain government's gradual collapse into manic maladaptation. The problem, I argued, is in society, not just in Washington. As the economist Mancur Olson has shown, society inherently generates goody-hunting, demand-making interest groups (lobbies, basically) much faster than it gets rid of them. The lobbies stream to Washington seeking to win and then defend some subsidy, regulation, or tax break. The more eagerly government scrambles to keep everybody happy, the less able it is to pluck these barnacles from its sides. So it succumbs to a kind of living rot.

Whatever else it may be, demosclerosis is not "gridlock." If people really just wanted Washington to "get more done," they should be much happier with government in the 1990s than in the 1950s, since by all relevant measures (spending, new laws, new regulations, workdays) government does far more now than it did then. In fact, however, the reverse is true. Polls show that, over the past 40 years, the level of dissatisfaction with government and the annual page count of new laws have moved in an almost exactly inverse relation to one another. The more government "gets done," the less people like it.

Washington's problem is not that it goes the wrong speed, but that its wheels are out of alignment. To "get things done" is difficult, which is as it should be. The trouble is that to get things undone is an order of magnitude harder. And that, over time, is a crippling infirmity.

Human cells kill themselves so that the body as a whole can live. But old programs virtually never die. Built into both the system and society is a structural imbalance akin to the Olsonian accumulation of interest groups: Each government program and subsidy is begotten by, or begets, an interest group that cares much more about keeping it than anyone else cares about killing it. As a result, to a first approximation the American government is still doing more or less everything it ever did for anyone–all the way back to maritime subsidies from 1789.

The Pentagon, which has its own $6 billion cargo fleet, now says maritime subsidies are unnecessary. But those subsidies have doled out $10 billion since 1936. No wonder maritime shippers and (especially) unions have given $17 million in political donations over the past decade alone. And no wonder, too, that the subsidies never die. Republicans and Democrats may come and go, but the basic imbalance remains: Programs appear much more readily than they disappear. Everything is quasi-permanent.

For conservatives, the problematic result is that government accretes functions, usurping them from actors better able to perform them. But my goal in Demosclerosis was to show that government-friendly liberals should be just as concerned. Government can no more thrive while continuing to do everything it has ever done than General Motors could thrive while producing every car it has ever made (and heaven knows, GM tried). Today's dysfunctional welfare system was designed for widows in the 1930s and has not been fundamentally overhauled since then. Agriculture subsidies were meant to be Depression-relief measures. Stuck with all of its first tries virtually forever, government loses the ability to end unsuccessful programs and try new ones. It fails to adapt and, as maladaptive things do, becomes too clumsy and incoherent to solve real-world problems.

The prescription, I argued, was twofold. First, focus market pressure on entrenched lobbies by exposing them to economic competition, especially through trade and deregulation. Much of this is happening now, thanks to new technology and permeable borders. Second, clean out government's attic by throwing out lots of programs, not only to free up captured resources but also to defund the lobbies that capture them.

However, killing just the odd program or two is a sucker's game. No one cares if maritime subsidies stop tomorrow except the maritime lobby, which will lash out like a rattlesnake. The treatment for demosclerosis requires, instead, rounding up and killing enough subsidies to make a difference that is visible to the voters, whether in the form of a lower deficit, lower taxes, some new programs, or some blend of the three. With a big enough package and a pot of gold at the end of the rainbow, the broad electorate can, in principle, be mobilized against a collection of narrow lobbies. It happened, after all, in the tax reform of 1986.

Here is where Gingrich comes in. Unlike Bill Clinton, he understood the problem. His troops burned with hunger to do something about it. Their Contract with America gave them something they could wave as a mandate. All in all, last year appeared to give the Republicans an opening for reform on a scale that might make a difference. Gingrich, like me, believed that reform would be a hard sell at first but could win friends at the end of the day. He was wrong and he failed. Why?

Most obviously, because President Clinton put up a fight. He controlled enough Democratic votes to sustain his veto, and he began to enjoy using it. The most common interpretation of Republicans' failure–the Republicans' own favorite–points to Clinton and says, "Just give us the presidency. Then you'll see something."

Maybe, but probably not. Two noteworthy facts undermine the notion that the Republicans' failure was mainly the White House's doing. The first is that, as became clearer over the weeks, the president had the public on his side. The Republicans bet everything on their assumption that Clinton's veto would be too unpopular to use more than sparingly. Faced with an electorate clamoring for change, they believed, the president would have to meet Congress at least halfway. The reverse turned out to be true. The more obstructive Clinton became, the more people liked him. Conventional wisdom initially said he could not get away with vetoing both a budget package and a welfare reform. Wrong. He vetoed both, and not only did he look more presidential as a result, but the public expressed relief rather than rage. Reform, yes, but not this welfare reform. Not this budget. What the Republicans ran into was public opposition, not just political opposition.

A second fact is still more damaging to the "Just give us the White House" interpretation: The Republicans themselves abandoned most of their "revolution" well before it reached the president's desk. To be sure, they stood by their laudable determination to make serious strides against the deficit. They also proposed some significant (though hardly huge) reductions in Medicare. And, finally, they held to their genuinely revolutionary plans to cap welfare and Medicaid and turn them into block grants for the states. In the main, however, what they did was nothing like a housecleaning.

That was all the more disappointing because they began promisingly, in May 1994, with a budget proposal that went further than anyone, including President Reagan, had gone. It would have eliminated about 300 programs, some of them fairly big. But six months later, by the time the lobbies had done their work and various members of Congress (of both parties) had ridden to the rescue of various damsels in distress, the list of significant eliminations was more like 30, according to Stephen Moore of the Cato Institute. In the House, a proposed reduction of about $15 billion in direct subsidies to industry ended up as an actual reduction of $1.5 billion, according to The Washington Post.

This is not to say that no reforms were made. Things have improved somewhat. In 1992, when President Bush asked to get rid of 246 mostly small programs, Congress eliminated all of eight, worth a total of $58 million. In 1994, the Congress managed to kill 41 small items, worth a total of $1.3 billion. In the latest budget cycle, Congress got rid of (by my count, from Appropriations Committee data) 184 items, worth $2.9 billion. That was not nothing, and a handful of the dead were worth noticing: the Interstate Commerce Commission, the Bureau of Mines, the U.S. Travel and Tourism Administration, the congressional Office of Technology Assessment. Most, however, were on the order of the Interior Department's $1 million locomotive fuel-cell program–and $2.9 billion, remember, is less than two-tenths of 1 percent of the budget. "If this were a normal year, this wouldn't be a bad first step," Robert J. Shapiro, an economist with the Progressive Policy Institute, told the Post in December. "But this is not a normal year."

Or was not supposed to be. But, with a few exceptions (notably welfare), the Republicans' budget wasn't so different from the Democrats'. As usual, it cut budgets instead of programs. That is, it reduced spending mostly by freezing and squeezing programs across the board instead of by picking and choosing. Government would still be doing practically everything it ever did. And, as usual, change was driven much more by the desire to save money than by any appetite for coherent reform.

For example: The Republicans' single biggest successful reform was their farm bill, which Clinton signed in April. For corn and wheat farmers, the new farm law does something genuinely bold: Instead of propping up prices with supply controls, acreage bases, planting requirements, and other implements of New Deal dirigisme, it just gives farmers cash. Grain farmers will still be wards of the state–their subsidies decline only slightly over the bill's seven years, from $10 billion to $8 billion–but markets, rather than Washington, will decide how much of which crops to grow.

Splendid. But why did the peanut program survive? Begun in 1934 as a temporary measure, this remarkable contrivance requires farmers to own–or rent–a federal license to grow peanuts for the domestic food market. The scheme props up prices by keeping supplies down, and also props up the rentiers who earn six-digit royalties from the peanut licenses they control. The Agriculture Department decides how many peanuts can be grown each year. A government price guarantee and quotas on foreign peanuts complete the baroque picture. In a floor vote this year, the Republican Congress voted, albeit narrowly, to preserve this amazing program virtually unchanged.

The reason is that the peanut program, being based on market-fixing and protectionism rather than direct spending, doesn't cost the treasury much. So Congress could not be bothered with it. Why offend the peanut people if doing so won't reduce the deficit?

Many of Gingrich's followers, notably the Republican freshmen, were serious about reform, or thought they were. But they could not withstand the ubiquitous pressure brought to bear by a thousand persistent lobbies, each of which argued–usually with some justice–that eliminating this or that program would cause hardship for some group while leaving other groups unscathed. Had Clinton given the Republicans everything they sought, the result would have been a different, somewhat tougher budget plan than his, but not (always excepting welfare reform) any big reform of government. Like the Democrats, the Republicans were stretching government thinner and thinner while leaving its sprawl unchecked.

To do better than that, Republican reformers–and non-Republican ones, for that matter–need to do more than win the White House. They need to win the people.

I said in my book, and I still say, that the social disease of demosclerosis must be treated by explaining to the public why reform of government is necessary despite being initially unpleasant–not just painful to "them" (welfare cheats, big business, megatycoons) but to "me," the ordinary voter. But the aftermath of Gingrichism leaves me appreciating, grimly, how daunting this task actually is. In 1995 and '96 the public, although deeply disenchanted with government, conspired with Clinton and the Democrats to block what may have been the decade's best shot at reform. And reform was blocked, not because it was seen as mincing or half-hearted, but precisely because it was viewed as too ambitious or extreme.

No doubt Gingrich was partly to blame, for presenting himself as half Dennis the Menace and half Lenin. (The day the Republicans said they might allow the government to default on its debts, my father, no liberal, looked up from his paper and said of Gingrich, "That man is drunk with power.") But the deeper disappointment is that it was so easy for the lobbies and the Democrats to spook the public by screaming bloody murder. The public wants government to be leaner (though not meaner), but not at the expense of students, farmers, bankers, veterans, retirees, homeowners, artists, train-riders, or cats and dogs; and it cannot abide the ghoulish shrieks and moans that are heard the moment the scalpel comes out.

The African Queen has a scene where the protagonists' boat is hopelessly stuck in a marsh–only a few yards, it turns out, from open water. Today's government is in a similar plight. Dissatisfaction ought, by rights, to open a path to reform. But it does not. The African Queen was lifted out of her quagmire by the high tide. But in the case of the American government, the boat cannot be lifted out. It is, of its nature, inseparable and inalienable from the million commitments that it has made and the million interest groups that form its environment. It cannot simply rise above them.

That is the problem which, by blocking in practice the very reforms which they demand in the abstract, the voters both compound and resent. It leads to a recurrent delusion: the Ross Perot or Colin Powell fantasy. A "can-do leader" or a "healer," a man of integrity from "outside the system," will rise above partisan squabbling and "jumpstart reform," "clean house," lift government out of the mire of a fragmented and group-addled American polity. The fantasy is grounded in a powerful insight: The public senses, without fully understanding, that government's problem is social rather than just political, stemming from a lack of agreement on what government should and should not do. But it is a fantasy nonetheless.

For the viper pit of squabbling interest groups is us. There is no hidden consensus out there waiting to be plucked down by a visionary or a healer. Absent such a consensus, reform efforts such as Gingrich's (or Clinton's, in the 1994 health effort) are inevitably polarizing, and so are swatted down by the public as "extreme." Afraid of causing such a polarization, politicians discuss reform in only the vaguest terms, and so an electoral mandate for concrete change is rarely delivered. If this year's presidential race is like most others, both candidates will embrace the rhetoric of reform, but neither will venture the specifics. And God is in the details.

Another, more understandable mistake is especially common on the anti-government right. It is to believe that, just because the people hate government, they actually want to dock it. The experience of the past year, added to the experience of the past 40 years, has persuaded me otherwise. The people only want to be rid of the supposedly great swaths of government that don't "help" anyone–an evasion which conservatives cheerfully encourage. Ever since Barry Goldwater, conservatives have been promising to tame Washington without actually doing anything very unpleasant. No wonder Gingrich couldn't deliver.

One of the more common criticisms of Demosclerosis said, "Rauch explains all the reasons government can't solve problems–and then, against all his own evidence, he puts his money on reforming it. Why doesn't he just admit it isn't going to work? Forget reform–just slash government back." But I'm not the one being naive here. The public doesn't want to slash, and neither do the countless constituencies that view their programs as property and defend them for a living. If it is wishful to expect a Powell or Perot to simply step around all those forces, then surely it is no less so to expect Newt Gingrich or Phil Gramm to do it. One must try to make government more sensible and effective because, simply, there is nothing else to be done. The vast bulk of it is there permanently.

But maybe I'm being wishful, too. If the prospects of miniaturizing the government are poor, what makes the prospects of thoroughgoing reform any better? Dislike of government is diffuse, but reform is inherently specific; on paper, the two should go together, but in practice the one does not translate into the other any more readily than earthquake energy translates into steam power. I cling to the hope that the public is educable. Certainly there is a growing centrist vote that swings for reformist politicians. On the other hand, I have to admit that the public's recent behavior is like that of the 4-year-old who is much bigger than his teacher and does not like being taught. Though the Gingrich experience has not left me disconsolate, it has certainly left me daunted.

If I had to guess about the future, at the moment I would guess that the living death of government, though arrestable in theory, will not be arrested in practice. Anyway, it will not be arrested by a President Clinton or a President Dole, both of whom are inclined to manage government's problems of overload and incoherence rather than treat them. In that case, government will go on being clumsy and dysfunctional, a giant frozen mass of ossified programs trapped in a perpetual cash crunch. The public will go on being angry and mulish. And the country, of necessity, will look for nongovernmental ways to solve problems. In all of this, what will be hardest to endure will be the voters' righteous griping about a government whose agony they do so much to prolong.

Jonathan Rauch is author of Demosclerosis: The Silent Killer of American Government (Times Books).