by Joseph Coletti
Senior Fellow, Fiscal Studies, John Locke Foundation
What is the role of education in America? What is government’s role in providing that education? A new White House government reform plan states that education should provide students with practical skills to prepare them “for success in a globally competitive world through family-sustaining careers.” The federal government’s role is to finance state and local government efforts “to meet the comprehensive needs of their workforce.”
This vision of education led to the proposed merger of the federal departments of education and labor into a single Department of Education and the Workforce. The biggest change would be in combining community college and university initiatives at the federal level with employment training and workforce development programs.
While the merger should make it simpler for state and local governments to find money for workforce programs through centralization and hoped for efficiencies, it leaves other questions unaddressed and adds bureaucracy in other areas. Federal student aid makes higher education more expensive, but student debt continues to grow. Instead of curtailing student aid, the reorganization aims to “make it easier than ever to apply for financial aid from a mobile platform.” By focusing on “high-quality, short-term programs that provide students with a credential, certification, or license in a high-demand field,” the federal government may tip the scales too far in this direction at the expense of traditional education settings.
Surprisingly, the reform makes no mention of school choice or reforms in K-12 education but would simply transfer the current structure at the Department of Education to the new department.
The report makes more than 30 government-wide reorganization proposals. A number of them apply to the U.S. Department of Agriculture (USDA). Rural housing support would move from USDA to the Department of Housing and Urban Development and non-commodity food assistance programs like the Supplemental Nutrition Assistance Program, commonly known as food stamps, would join other welfare programs in the Department of Health and Human Services. Food safety would transfer to USDA from the Food and Drug Administration. Many of these proposals better match the apparent mission of programs to the apparent mission of the agency overseeing them.
Each program was in its current home because it made sense at some point in the past. Food programs for the poor were as much to help farmers as they were to help poor people. When Congress created programs to redevelop urban housing and provide financial assistance for home loans, it created three separate agencies; the focus was on separate places and populations, not a category of assistance called “housing.” Reshuffling departments makes sense given the current view of what these programs do, but that does not mean the new arrangement will produce better results.
In North Carolina, former Gov. Pat McCrory wondered aloud at a January 2014 cabinet meeting in whether the state Department of Health and Human Services (DHHS) was too big to be managed well. Medicaid is the bulk of funding in the agency, which also covers mental health facilities and local agencies, public health, regulation of private health services through Certificates of Need, child welfare and foster care, early childhood and pre-kindergarten finances, coordination with county departments of social services to determine who qualifies for which services, and a host of other programs. At the time, Medicaid was overspending by hundreds of millions of dollars each year, pulling money from the rest of DHHS and all of state government.
As part of the North Carolina Government Efficiency and Reform (NC GEAR) initiative, we looked at how other states organized their Medicaid, health, and human services. We found no single best answer. States merged Medicaid with the health insurance program for state employees and had mixed results. States operated Medicaid with the rest of human service programs like North Carolina and had mixed results. Medicaid in some states operated as a purchaser of services and in other states contracted with privately managed care organizations, again with mixed results. We found no relationship between how the program was structured and how it did financially. Nobody could attest to the health results of their Medicaid program, including North Carolina. The most definitive study on Medicaid, an experiment in Oregon, seemed convincing that Medicaid was an expensive way to reduce anxiety, but even there, critics of the study saw good health outcomes obscured by a lack of data. With a mandate to examine all of state government and a number of outside firms already trying to reform DHHS, we decided to direct our resources elsewhere rather than try to sort out the best option for a program that provided no good options.
The federal reform effort seems to have reached the same conclusion on all entitlement spending. Policy direction should guide organizational structure, or the structure will win. Jonathan Haidt’s analogy of the rider and the elephant is apt. An elephant will go where it will, and the rider has only limited ability to guide it. Appointed and elected agency heads are riders on their elephantine government agencies. The legislature and executive need to shape the policy path for the bureaucratic elephant. Without significant entitlement reform, the federal welfare bureaucracy can improve how it delivers services, but the societal effects and long-term financial sustainability of those services will remain questionable.
The reason for government’s intervention can determine which agency is responsible and how it goes about its work. Reorganizing agencies, improving processes, upgrading technology, and evaluating program outcomes are important to ensure the purpose of a program is being met, but the biggest decision is whether government should do something in the first place. Once government steps in, it can be hard to extract even if the result is worse than what existed without government.