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The Conservative Reformation: Washington’s Roles

July 30th, 2008
By PETE ABEL, Managing Editor

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Yesterday, we paused on the doorstep of defining Washington’s key roles in the process of fostering DNS or dispersed, networked solutions. Once again, those key roles include: standard setter, catalyst, and backstop.

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As standard setter, Washington would establish the basic rules of the road; the fundamental requirements, assumptions, or framework under which the other dispersed nodes of the network (the states and their sub-governments) would operate, as they consider, trial, and implement solutions.

In doing so, Washington would not attempt to prescribe the details of every solution or build mammoth, one-size fits all programs. We don’t need more inside-the-Beltway departments, agencies, and offices that require hundreds of staffers and billions of dollars to implement heavy-handed programs and enforce volumes of meticulous rules. Philip Howard has ably demonstrated the limits of such centralized approaches, which consistently fall short of their aspirations for a number of reasons: they stifle “common sense”; they are a step or two removed from the “real world”; they gloss over (fail to recognize) legitimate exceptions to the rules they establish. Instead, we need outlines, which would generally indicate where the states can go and where they can’t, leaving most of the rest of the process to them.

For instance: On the subject of universal health care, several possible, broad standards come to mind:

* All citizens should be offered a commonly defined “base-level” of coverage.

* This “base-level” of coverage should be offered at rates commensurate with the insured’s ability to pay.

* It should also (importantly) be portable (or replicable) if individuals move from one state/jurisdiction to the next.

* No one should be barred from coverage for pre-existing conditions.

* Those who require treatments that exceed the defined base-level should be offered additional coverage, again commensurate with ability to pay and considerate of options that help “finance” (pay over time) the premiums for the necessary coverage.

* Barring a finite list of uncontrollable circumstances, state insurance solutions should be sustainable, with cost-control and abuse-prevention mechanisms.

I realize some readers will label these sample standards as “unrealistic” or “overly idealistic.” Others will demand refinements to them — e.g., to prevent mission creep, which is no stranger to ambitious programs, here or elsewhere. I accept those criticisms, recognizing that I’m not a policy expert, nor am I trying to play one on TV. Instead, I’m only attempting to illustrate the type of broad, brush-stroke guidelines that might be issued by a federal government that acted as standard setter rather than bureaucracy creator.

Next, within this sample framework of standards, the states would be free to trial-and-error different programs, including mixes of free-market, not-for-profit, and state-sponsored solutions. And that’s where Washington’s second primary role — as catalyst — would come into play.

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As states experiment with different approaches, measure/report results, and iterate their way to improvements, Washington could catalyze the process through a mix of incentives (for vetted experiments) and rewards (for programs that prove efficient, effective, and sustainable). Federal funds may not be the only form of said incentives and rewards, but they would probably be the most logical and powerful form, as we’ve seen before; e.g., Reagan’s use of highway-funding threats and promises to establish a nationally consistent drinking age. (Granted, that may not be the perfect illustration — it borders on the type of minutiae the Feds may want to avoid — but, for now, I can’t think of a better example to illustrate the point.)

The ultimate extension of the catalyst role would be for the Feds to gradually move away from their position as a collector and (re-)distributor of funds. Sticking with our health-care hypothetical, a state that proves its universal-coverage capabilities might be allowed to raise its tax rates in proportion to a lowering of the federal tax rates for its citizens. This move would help correct the gross imbalance we see today. Using my state, Missouri, as an example: The Feds (on average) collect and spend nearly four times more per U.S. citizen than Missouri does per Missouri citizen. [These calculations are based on (i) the most recent federal budget for which figures were available online, divided by the estimated population of the U.S.; and (ii) the most recent Missouri budget for which figures were available online, divided by its estimated population.]

One of the more powerful points Barry Goldwater made in Conscience of a Conservative was perhaps his most intuitive point. Toward the end of the book’s third chapter, he wrote: “The people of my own State … have long since seen through the spurious suggestion that federal aid comes ‘free.’ They know that the money comes out of their own pockets, and that it is returned to them minus a broker’s fee taken by the federal bureaucracy.” Translation: If we reduced the administrative charges required by centralized solutions, there would be more money available to help those in need through the governments that operate closest to their needs.

Granted, our citizenry is remarkably mobile, moving from one state to the next, and some states are poorer than others; hence, the worthwhile goal of “equal opportunity” may continue to require some re-distribution of funds, as will the scale of monies required for national infrastructure and defense projects. Net: We may never get to a 1:1 ratio — where the Feds collect and spend a dollar per U.S. citizen for every dollar collected and spent by the individual states on their respective citizens — but I do think today’s 4:1 ratio (or worse) is inefficient and can be improved or re-balanced.

Another reason why the state:fed balance may never be 1:1 is the need for Washington’s third role in a dispersed, networked paradigm; namely, its role as a backstop.

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One the more common arguments I hear against a states-driven approach to universal health care is the barrier presented by cycles of economic malaise. In those times, state budgets naturally contract and safety-net projects are often the first to be curtailed.

Thus, as backstop, Washington might act in these situations like it does after natural disasters strike, providing incremental funding and other resources to help state and local governments bridge the gaps and restore their situation to BAU (business-as-usual) status.

Such backstop or bridge funding would not be distributed without conditions. Priority funding might be reserved for the states that present the most realistic plans for budget re-alignment, for managing their way through the budget crisis, including estimates on the level of bridge-funding required and (perhaps) a post-downturn re-payment plan.

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Several logical questions arise from this outline of dispersed, networked solutions and Washington’s roles in fostering those solutions; questions like:

* Doesn’t Washington already (largely) act in this manner today?

* Wouldn’t the DNS approach be too slow and haphazard to be accepted by an impatient American electorate?

* Don’t certain issues require a centralized rather than dispersed approach?

We’ll consider these and related questions tomorrow, in the final chapter of this series.



This entry was posted on Wednesday, July 30th, 2008 at 6:23 am and is filed under TCR, Conservatives, Politics. You can leave a response, or trackback from your own site.

Viewing 29 Comments

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    Pete,

    As always, I will take the governmental minimalist/free market approach.

    I agree that the government should set standards, but only in the broadest of terms. If we were discussing restaurants, I believe the government should set a standard of safety/cleanliness/proper labeling. If the mindset of the healthcare debate was applied, they would be mandating the menu and portions for each meal.

    Let the market decide.

    As with restaurants, some people believe they need steak and lobster, while others choose hot dogs. No one denies the hot dog eaters access to higher priced food, it remains their choice. Alternately, the lobster eaters often go to the hot dog stand, just because they are frugal. Healthcare needs to follow this model.

    It’s their life, let them do what they want.

    Hillary struggled with trying to make healthcare fair. She advocated severely limiting specialties, using “gatekeepers” and outlawing individuals paying for services. Of course, this was doomed to failure from the concept stage.

    By staying to the most basic standards, the government will insure that healthcare can be delivered with dignity. Any attempt to mandate (and thus institute controls) eliminates the ultimate decision making of the individual and thus eliminates human dignity from the process.

    There is an answer, but the steps are to define the problem, outline the best result (actually taking the time to think about how you would like your healthcare experience to work) and then devising a plan that achieves that result.

    Once a plan is made, we can move to how the government acts as a catalyst for implementation.
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    jwest, you make a good point, but your hotdog and steak analogy doesn't quite work. Sometimes the people who need steak & lobster healthcare can't afford it. How does the market address that?
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    Very good Amanda. How does this nation afford steak and lobster health care with a 10 trilion dollar debt and a 600 billion dollar budget deficit next year
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    The federal government should be _minimalist_ (that is true for all of our governments, but especially for the federal government) and should set _minimal_ standards, without any aim at engineering something more than minimal in the name of desireability, or with the intent of future incrementalism or "ratcheting" (we know which direction the ratchet normally moves).

    The scope of federal interventionism should, again, be _minimal_. Air pollution is a legitimate object of federal interventionism, for example (because pollution does not honor state boundaries). Air traffic control, yes. But for something that is a local or state issue, even involving corporations (producers) that are multi-state and multi-national (auto makers, appliance makers), there shouldn't be federal interventionism. The federal government should have no involvement whatsoever in my going to a nearby barber shop for a hair cut, for example -- though it currently is involved (such as with federal minimum wage laws). More insidious and sinister is the practice of effective income (tax revenue) redistribution (something Amanda begins to scratch above), minus a substantial "reprocessing and central bureaucratic inefficiency fee" collected by Washington for the privilege, of revenues to states to meet "needs" or to achieve better equity. All too often, unnecessary and harmful requirements go along with the money. "If you take their money, they'll tell you how wide to make your doors." Worse, the states get dependent on this money (some even wrongly come to expect or demand it) and are rendered susceptible to federal intrusion as a result.

    First and foremost comes the need for minimalism -- the classic libertarian principle that is our English-American heritage remains in effect. The burden of proof always lies upon advocates of government interventionsm to justify it. The record of interventionism is a poor one and all too often it's tempting for "the central node" in Pete's network to become a master node with all others mere slaves. And the federal government's standards should be _minimum_, not any kind of "driver" for "progress" as "progressives" or idealists would like to see have happen. (They also like federal interentionism because it means the majority cannot vote with their feet to reject what would otherwise be sought, say, in Vermont or Massachusetts. As Bork wrote so ludidly, "enlarge the scope of jurisdiction to make escape impractical." This is petty when not truly sinister.)

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    " a catalyst"

    This concept is fully correct, and is so powerful its danger should be obvious.

    "Let the market decide. [...] It’s their life, let them do what they want."

    That remains the American as well as the truly liberal (free) way. Burden of proof always lies on those who want interventionism. Universality of government health care may be appealing for a number of reasons (though Cadillac "insurance" will be astronomically expensive; some states have made this mistake rather than have true insurance only, i.e., catastrophic care); our destruction of time and distance and our mobility (including, yes, Evil Automobility, so libertarian in nature itself compared to reliance on collective transport) and the logic of single standards or a common currency are appealing. But we must not draw the illogical and harmful conclusion that if some is good, much more is much better.
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    "ludidly"

    No, Bork is not a Luddite, though in his later years he's become a curmudgeon.

    I meant "lucidly." Sorry.

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    "How does this nation afford steak and lobster health care with a 10 trilion dollar debt and a 600 billion dollar budget deficit next year"

    You find some of the money by redirecting it from military spending, you find some of the money by levying new taxes (stock and bond transactions and new progressive income taxes in Conyers-Kucinich, for example); you spread the cost among everyone in the restaurant by making everyone pay a per capita share (or if you're dishonest and want progressive taxes, "their fair share") of the steak and lobster. The caviar can be added as an additional "human right" in the future.

    In the real world, you make everyone in the restaurant (especially those who are less likely normally to vote for you) pay while you begin with smaller, less expensive portions of the steak and lobster or even provide a substitute that isn't quite up to that standard but which beats mere hot dogs.

    In fact, this merits mentioning, at risk of being somewhat digressive or oblique or tangential (so I'll keep it short) but Medicare is not a miracle; even very liberal NPR has broadcast at least one story about one of its shortcomings (something known long before "HillaryCare"). And we don't have "Medigap" insurance for nothing. I have said that one thing Obama can do rather than extend Medicare coverage to more people (the classic age-related "pincer" being adding children in addition to the elderly), is first to consider reforms to Medicare itself and get it into better or best shape before extending coverage to others.

    (The mainline strategy is to extend it to others such as children or the poor, i.e., taking over Medicaid, likely welcomed by the states; the objective is to build support for universality among others than just the egalitarian activists by making them pay for more and more beneficiaries until they demand that they, who are paying for the program, and who deserve to be beneficiaries most of all, be also included.)
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    Goldwater said:
    "If we reduced the administrative charges required by centralized solutions, there would be more money available to help those in need through the governments that operate closest to their needs."

    This is a sound argument in theory, but it assumes something that is often just not so in practice: that all states would, indeed, use the funds to address need.
    Through the very regressive tax systems (and other local laws) some states have, it is the relatively poor who fill the cofffers of the state, and the benefits go to those absolutely not in need.

    Acceptance of inequity and injustice is most likely at the local level, and to address inequity and injustice has to be handled at the federal level. Wasn't that demonstrated clearly enough by how segregation was finally ended?

    Treating the federal government as the enemy makes no more sense than treating it as the dispenser of all solutions. After all, we are all citizens of the US before we are citizens of a state. If not, the whole concept of being one nation crumbles and may as well be dissolved. If we are still one nation, then at a basic level, the citizens of Indiana must be concerned about the citizens of Alabama and vice-versa, and that requires a broker, the feds, along with broker fees (the dreaded and maligned taxes)

    On the other hand, I do see a very clear, beneficial role for states as laboratories, where situation specific solutions can be tried out. National guidelines and requirements must be informed by the evidence of applied practices .

    Trim away the initial 'governement is bad' starting point, and there is much in Pete's plan to admire. I recognize, also, that the starting point does not define the plan and is greatly adjusted, augmented and fine-tuned to address my concerns.

    This brings me back to my initial quibble. Too many of our debates start out at one or the other extreme and then work towards a central, accomodating position. I would jump with relief and joy, if ever I read a position paper that recognizes both extremes equally and then works toward balance, accomodation and pragmatic solutions.
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    We seem to be jumping to the plan before even defining the problem.

    Once we know where we are going, we can devise a plan to get there and in doing so define the role of government in catalyzing and backstopping it.

    If healthcare is the topic, here is where the dollars go:

    http://bp0.blogger.com/_yxY2_QzkVJU/SGFgKO15GRI...



    This shows overall expenditures, not the breakdown of administrative, waste, abuse and the like.
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