Budget Cuts, Public Health, and the Role of Government

Author: Matt Stanford, Towson University

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It’s impossible to escape the media coverage of and public worry over Ebola nowadays. Ebola is all anyone can talk about, and politicians are no exception. Now that Ebola has surfaced in New York, there is bound to be even more partisan sparring over appropriate government responses and the medical qualifications of President Obama’s Ebola czar (who won’t be treating any patients).

I miss the good old days when we used to fight our political battles about important things – like the proper role of government in our society. Back then, the Republican mantra was simple: downsize the government. Get the government off the backs of private individuals and allow them to individually make the important choices that would create jobs and help the economy grow by making the market more efficient. Their plan called for cutting taxes, dismantling regulations, and reducing spending because government was the problem, not the solution. To be honest, it sounds nice. If I thought it could work, I would have signed on to their campaign. However, there are key weaknesses that Republicans failed to mention in their flowery speeches, and these weaknesses are more evident than ever due to the growing panic over Ebola.

In 2011, Congressman Paul Ryan (R-WI) introduced his “Path to Prosperity,” also known as the Ryan Budget. He proposed that the federal government cap its current spending levels and then gradually decrease real spending levels in the future. Ryan’s plan called for dramatic reductions in public health, infrastructure, and social programs. Future Ryan initiatives proposed privatizing Medicare and capping healthcare subsidies at a measly $15,000 per year.[1] Ryan and the Republicans quickly passed the budget in the GOP-controlled House of Representatives and lobbied heavily for it on the campaign trail in 2012. Ryan was chosen as Republican nominee Mitt Romney’s running mate partially because he had strong credentials as a “fiscal conservative,” a slasher of important programs.

In his 2012 State of the Union address, President Obama rebuffed the GOP’s plan to dismantle social programs. His counterplan called for new education and infrastructure initiatives to make sure that all people had a fair shot at the American Dream. He called for reducing the deficit responsibly through raising new revenues, reducing military spending, and, most importantly, through investing in new science and technologies that would create the jobs of the future.[2] The debate over the government’s role in the economy became the deciding issue of the 2012 presidential race. Flash forward to 2014 and the headlines are focusing on what they bill as a public health emergency. Unfortunately, the Ebola coverage frequently glances over the most important aspect of the debate: the role that government should play in maintaining public health.

Health (which includes public health) is actually an economic marketplace. In a free marketplace, consumers exchange money for goods and services because they see whatever they are getting as more valuable than the money they are relinquishing for it. Conversely, the store who sells the good or service sees the money they are charging for it as more valuable than whatever they are selling. In doing so, both sides gain from the exchange. This is the fundamental postulate behind why markets work to create wealth. However, in order for it to be true, both sides engaged in the exchange have to know exactly what they are getting from the other. In other words, they have to see the benefit of giving up their money or time.

In the public health sector, such clear-cut exchanges rarely exist because individuals do not have the adequate information required to make real, rational healthcare decisions. It is difficult for any individual to see exactly what finding a cure for cancer means to them. If I have cancer, I am probably willing to pay anything I have for a cure; if I do not have cancer, I am inclined to play the odds that the horrible disease will never affect me. What is even worse is that I have a vested interest in curing my fellow man that I am unable to calculate. If the person with cancer dies, he is not going to spend money at my business, pay my kids to mow his lawn, or be able to invent the next thing that can improve my life. These are detriments which are external to the initial transaction (finding a cure and using it to make cancer patients better), also known as externalities. The government’s job is to take those externalities and make me pay for the benefits that I am actually getting. In healthcare, the government should force everyone to pay for research and development because they all have something to gain from a healthier population – but they do not always have the ability to see it.

That is what Paul Ryan and the GOP do not seem to understand – instead, they want to dismantle America’s healthcare delivery system. His 2011 budget would have reduced public funding for the National Institutes of Health by approximately 5% by the end of 2012, and that was just the beginning.[3] If we reduce our spending on public health, there will be less of a chance that we find the cures for deadly diseases like Ebola, cancer, and other threats to both the public health and the economy. The GOP believes that government should act in a hands-off way towards public health and other social issues, but that approach just leaves more people vulnerable to the unpredictable whims of disease.

Incidentally, Ryan himself may realize that the government has some role to play in public health. When asked by a Fox News reporter about President Obama’s response to Ebola in the US, he was quick to criticize the government for actually not doing enough. Ryan noted that we need to be “looking at things like travel restrictions [and] necessary quarantines so we use every possible precaution we can think of” to address the Ebola threat.[4] My response to that argument is simple: Those actions require two things: money and government. How can you, Congressman, claim that government is incompetent, yet also say that we must use it address this important issue? Even more, how could the federal government possibly respond in this way if it had been restricted to your proposed budget?

 

[1] http://online.wsj.com/news/articles/SB10001424052748703806304576240751124518520?mod=WSJ_hp_LEFTTopStories&mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052748703806304576240751124518520.html%3Fmod%3DWSJ_hp_LEFTTopStories

[2] http://www.whitehouse.gov/the-press-office/2012/01/24/remarks-president-state-union-address

[3] http://www.bloomberg.com/news/2011-02-20/republican-science-cuts-imperil-u-s-prominence-commentary-by-albert-hunt.html

[4] http://www.foxnews.com/transcript/2014/10/20/rep-ryan-talks-midterms-job-creation-and-government-ebola-response/

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