Clipped Wings

How much government do people want? 

With the presidential election approaching, answers to that question could shed light not only on prospects for the candidates, but also on their ability to reshape the public sector if elected.

Historians would note the nation was founded in revolution against oppressive government. And still today, many would agree with Ronald Reagan’s view that “government is not the solution to our problem; government is the problem.” 

But we have seen an inexorable march toward bigness. Federal, state and local governments now consume about 35 percent of our gross domestic product. The public sector arguably is as big as in European nations when one counts “tax expenditures” promoting home ownership, employer-provided health care and other purposes. Beyond spending, public agencies at all levels have woven a complex and extensive network of regulation.

The question is timely not only because of this year’s elections, but also because big government is being put to the test—in Washington to be sure, but even more starkly in state capitals, city halls and county seats. Washington can borrow profusely to fund its spending desires, but that’s not true beyond the Beltway, where real choices about public services are being made to satisfy requirements for budget balance.

More than 600,000 public sector jobs have been eliminated, so public schools have larger classes; state university systems are cutting staff and raising tuition; and communities are losing police, fire, library and other public services. 

Do people care? Are they ready and willing to make do with smaller government? If the states are laboratories of democracy, the answers may hold lessons for our leaders in the nation’s capital.

The 2010 congressional elections that brought many Republicans to power were the last significant test of the popular mood about federal government. But then, this spring, another test of political philosophy emerged in Wisconsin, long a bastion of liberalism. Public sector unions, deprived of collective bargaining rights by a GOP-controlled government led by Gov. Scott Walker, mounted a recall effort that served as a magnet for the fundraising and organizing powers of both parties. When Walker beat back the recall, some saw another sign of fatigue with activist government.

This fall’s contest between President Obama and his Republican challenger, Mitt Romney, is stacking up as a historic test that will set the course of government for years to come. On issues like taxation, spending, regulation of banking and the environment, incentives for energy production, the structure of Social Security and Medicare, and more, the choice is more consequential than any in recent times.

MIXED MESSAGE

Presidential elections are fought on a broad stage. Even if candidates offer detailed prescriptions—for example Mitt Romney’s 53-point plan for jobs and economic growth—few voters study them, and most make up their minds based on broad impressions of the candidates’ credentials and governing philosophy.

But public opinion survey specialists have become adept at teasing out Americans’ views on the size and proper roles of government. In particular, the Pew Research Center for the People and the Press has conducted detailed longitudinal studies bearing on these questions.

In April, Michael Dimock, associate director of research at Pew, made a presentation to a panel of the National Academy of Public Administration on the topic of “How Much Government Do People Want?” For decades, he noted, surveyors have asked: “If you had to choose, would you rather have a smaller government providing fewer services, or a bigger government providing more services?” Majorities generally have supported smaller government—by as large a margin as 68-23 in 1996 (when Bill Clinton famously said, “the era of big government is over”). The two lines met in 2008, but in the wake of Obama’s more activist approach, have swung again toward smaller government, by a 52-39 margin in the latest poll. That sentiment echoed a different Pew poll at the time of the 2010 elections: 48 percent of adults believed that “government is doing too many things,” while 43 percent said, “government should do more to solve problems.” Among people who voted that year, the divergence was even greater: 56 percent to 38 percent.

Pew surveys in 2011 found the public evenly divided when given the choice between reducing the budget deficit and spending to help the economy recover. When asked about cutting spending for specific functions ranging from health care to Social Security to education and veterans benefits, few respondents voted for less, some voted for the same and many voted for more. Still, the polling found growing minorities in favor of cutting agriculture subsidies, defense spending and unemployment insurance.

Support for the government social safety net is declining: only 59 percent told Pew they agreed that it’s the responsibility of government to take care of people who can’t take care of themselves, down from 69 percent in 2007. Similarly, a National Journal Congressional Connections poll in February found that 53 percent of respondents’ top concern was “the government taxes workers too much to fund programs for people who could get by without help,” while only 38 percent took the view that “federal programs . . . don’t provide enough of a safety net for people who need help to get by.” More Americans, of course, are receiving safety net assistance: The Census Bureau reported that nearly 49 percent of American households included at least one person receiving direct benefits from a government program as of late 2010.

With the public tiring of wars abroad, 83 percent said, “we should pay less attention to problems overseas and concentrate on problems here at home,” the highest percentage since 1994. The number agreeing that “it’s best for the future of our country to be active in world affairs” has fallen from 90 percent to 83 percent since 2009. Meantime, Republicans continue to strongly believe that peace is best ensured through military strength, while most Democrats disagree, according to Pew surveys. 

On regulation, the public is of two minds. While 57 percent told Pew “government regulation of business does more harm than good,” 63 percent believed the “free market economy needs regulation to serve the public interest.” When asked about specific regulatory targets, such as environmental protection and food and auto and workplace safety, only small minorities favored reduced federal regulation. Neither Obama nor Romney has made regulation a centerpiece of his campaign.

All governments are not created equal in the public’s mind. In 2011, Pew found that only 38 percent of the people rated the federal government favorably in contrast to 53 percent and 63 percent for state and local governments, respectively. In June, a new Pew survey found the public’s view of government increasingly jaundiced: 62 percent now say, “the federal government controls too much of our daily lives,” up from 55 percent in 2009. 

BEYOND THE BELTWAY

The woes of state and local governments— their cutbacks, the consequences for public employees and the reaction of citizens—may offer leading indicators of what’s in store at the federal level. 

In Wisconsin, protests in Madison, the state capital, accompanied enactment of policies promoted by Walker, who was elected, along with a solidly Republican legislature, in 2010. He moved quickly to cut spending, and signed into law Act 10, which reduced public sector unions’ bargaining powers and required public employees to contribute substantially to their pension and health insurance programs. Unions then launched an effort to recall him. Walker won that battle comfortably in June, beating his challenger by a 53-47 percent margin. 

Exit polls indicated many voters didn’t think a mid-term recall was fair. And many liked Walker’s vision of smaller government. Analysts have said the collective bargaining changes have helped struggling school districts and property taxes in some areas have actually declined. In Madison, school district superintendent Dan Nerad said staff concessions—increased pension contributions and health insurance payments among them—accounted for three quarters of the funding needed to fill a $20 million budget hole. Walker took a victory tour in Washington and was quickly hailed as a conservative icon, perhaps even a candidate for the vice presidency on Romney’s ticket.

In California in early June, San Diego and San Jose voters overwhelmingly supported ballot measures to cut pension benefits for city employees—those already working as well as future hires. San Jose hadn’t been able to open four new libraries due to lack of staffing funds, and also laid off police officers. San Diego was forced to close firehouses on a rotating basis each day. Service reductions may have contributed to the voters’ verdict. But resentment of retirement packages viewed as lavish probably was more important, say such observers as
Donald Borut, executive director of the National League of Cities, and Peter Harkness, former editor of Governing magazine, which focuses on states and localities.

Western jurisdictions are offering tests of whether voters are willing to pay higher taxes to maintain government services. This spring, 63 percent of voters in Ferndale, Wash., backed a proposal to increase the local sales tax. But in November 2011, Colorado voters emphatically rejected a statewide sales and income tax hike to help fund schools, with 64 percent voting against the measure. Opponents argued that more money hasn’t produced better educational results.

Meantime in Republican-led states like Kansas and Ohio, steep tax and spending cuts have been enacted but haven’t yet taken full effect. The public’s reaction won’t be apparent for another couple of years. 

This November, California will offer the largest test so far of voters’ willingness to pay more for government. As part of a deal to close a $16 billion budget gap, the state legislature and Gov. Jerry Brown agreed to curtail welfare and other services and to submit a sales and upper-income tax to voters to avoid more cuts. If the ballot measure fails, some $6 billion in reductions will come principally from the state’s primary schools and higher education system. 

Many other jurisdictions already have seen steep cuts. In San Francisco, it takes a long time to get a divorce because of huge reductions in court budgets. Jefferson County, Ala., went bankrupt last fall and services of every kind have been cut to the bone or eliminated. Many states have been reducing aid to higher education, with higher tuition rates as one consequence. Students on a few campuses have demonstrated. But such incidents of organized resistance to lower services have been rare. In fact, Scott D. Pattison, executive director of the National Association of State Budget Officers, says he’s “amazed” at how little protest there has been.  

“People by and large want somewhat smaller government and are willing to give up services, at least at the state level,” says Ray Scheppach, a professor at the University of Virginia’s Frank Batten School of Leadership and Public Policy. “People have the sense that going forward we are going to be in a tough spot for some time. Their real income hasn’t increased for 10 or 15 years. They’re not willing to give up more to government.”

THE COMING TEST

Most beneficiaries of federal largesse haven’t yet confronted deep cuts of the kind already inflicted by state and local governments. With no requirement for balancing its budget, and continuing access to cheap money, Washington has kicked up spending to a modern record of about 25 percent of gross domestic product. Deficits are running more than $1 trillion a year, and interest on the national debt is projected at $225 billion in 2012 and $565 billion five years from now. 

Trends in Medicare and Social Security promise ever larger deficits, so there’s bipartisan agreement that something must be done, lest our debt go the way of Greece or Spain. The Republican-controlled House has proposed deep spending cuts, while Obama has sought to balance future spending restraint with higher taxes.

A standoff between the two sides put the nation on the brink of default last year. For the first time, U.S. debt was downgraded by a credit rating agency. Then, after the congressional “super committee” failed to agree on a long-range solution, Congress enacted a plan for a sequester of funds that is scheduled to take effect on Jan. 2, 2013, which would cut spending by $1.2 trillion over several years.  

Polls show the public has little appetite for higher taxes: more than 95 percent of Americans think they’re already either taxed enough or overtaxed. (But majorities do support taxing the wealthy more heavily, as President Obama has proposed.) As for spending cuts, there seems to be support for reining in Washington. But that’s an abstract idea—as is, so far, most of the sequester, since no one has released any details on exactly what would be cut if it takes effect as scheduled. Details surely will bring resistance—even in their absence, pre-emptive protests are on the rise.

With half the sequester aimed at defense spending, Defense Secretary Leon Panetta and senior military leaders have voiced deep concern. The defense industry is at the ramparts too. The Aerospace Industries Association has predicted that a million jobs would be lost if the sequester goes into effect. Lockheed Martin Corp. Chief Executive Officer Bob Stevens said in June the jobs of 123,000 Lockheed Martin employees and 40,000 workers at its suppliers are at risk. Northrop Grumman Corp. executives have reportedly threatened to close a plant in Norwalk, Conn. Industry leaders have pointedly observed that the 1989 Worker Adjustment and Retraining Notification Act requires employers to notify employees 60 to 90 days before layoffs or closings—shortly before the Nov. 6 elections. 

There’s also resistance to cuts already on the table. After the House Appropriations Committee in May voted to cut the State Department’s foreign operations budget by more than 10 percent, department spokeswoman Victoria Nuland said the reduced funding would “damage our national security and force America to face higher costs over the long term from unresolved conflicts, transnational crime, poverty and other cross-border threats.”

Domestic programs have their staunch defenders too. Texas goat herders, for instance, are working to build on their long record of preserving the mohair subsidy program. The American Political Science Association, seeking to fend off elimination of National Science Foundation grants to its members, has told Congress that “political science [is] a critical part of our national science agenda.” 

A serious effort to shrink the size of government will have to overcome thousands of these parochial interests—which have long demonstrated their power to maintain the status quo. On spending cuts, sentiments are much the same as those the late Sen. Russell Long, D-La., described as people’s reactions to tax-hike proposals: “Don’t tax you, don’t tax me, tax that fellow behind the tree.” 

So, on the question of how much government people want at the federal level, the answer would seem to be: as much as they have now. But a new test—of making do with less and paying more—is on the way.