History will remember President Barack Obama for many things. One of them will be his campaign to increase dependence on government—a goal he has pursued with missionary zeal.
Everyone needs a helping hand to get through life at some point. Some people, through no fault of their own, need a helping hand for the entire journey. Government has a role to play in providing it, as even apostles of market economics, such as Milton Friedman and Friedrich Hayek, recognized. But for many decades, the general (and correct) sense was that depending on government should be a last resort: People should support themselves if they are able to, lean on friends and family when they aren’t, and rely on the coerced assistance of others only so long as absolutely necessary.
The president does not share that view. This has become abundantly clear to most people, thanks (inter much alia) to Obamacare. And yet the president keeps trying to remove every last shred of doubt. Hence some of the proposals in his State of the Union address.
These include an $80 billion expansion of a federal program that provides state grants to help low- and middle-income families purchase child care, as well as an extension of Head Start (despite two studies by his own Department of Health and Human Services finding the program doesn’t work). At the same time, the president wants to eliminate dependent-care flexible spending accounts.
Those FSAs are similar to medical savings accounts, in that they let workers squirrel away pre-tax dollars to pay for child care. The combined effect of the two policy changes would be to discourage people from saving for child care and encourage them to seek the government-funded kind instead. There is no good reason to do that, except to drive more people into government’s dubious embrace.
Likewise, President Obama also planned to end the tax exemption on earnings from 529 college-savings plans until public outrage forced a retreat. Those plans allow people to save their after-tax dollars in certain investment portfolios and then draw out that money, plus earnings, tax-free to pay for tuition and other college expenses. Twelve million families have 529 plans; the majority of them earn incomes of less than $100,000. Yet the president tried to paint 529 plans as a special favor to the rich.
Revoking the tax benefit for 529 plans would have discouraged middle-class people from saving for college. Meanwhile, the Obama administration has expanded a program to forgive the debt on student loans, many of which already are provided by or subsidized by the federal government. Thanks to a stroke of the president’s pen, individuals who go into government work (big surprise) or certain nonprofit work will be able to write off tens of thousands of dollars in debt.
As The Wall Street Journal noted, the combined effect of those two policy changes would be “to punish private savings in favor of politically controlled subsidies and grants.” The paper could have added that through his debt-forgiveness program, the president apparently also wants to discourage people from working in the one part of the economy—the for-profit private sector—that actually pays for everything else.
The number of Americans on food stamps has skyrocketed since the president took office. Some of that
The president also eviscerated the work requirement in the welfare reform of 1996. He did so by offering waivers to states that substituted a “universal engagement system in lieu of” the work requirement, so long as governors promised (cross their hearts!) that doing so would move more people off the rolls. This is like eliminating EPA sulfur-emission limits for states that promise on a stack of Bibles they will lower sulfur emissions some other way. (What’s more, the administration had to ignore the plain language of the 1996 law, which allowed waivers for various things but specifically forbade waivers of the work requirement.)
In 2012, the Obama campaign unrolled a supposedly uplifting vision of life in Obama’s America. The “Life of Julia” slideshow depicted a woman’s passage from childhood to dotage. At nearly every point, Julia relies on government to get her through. Reliance upon family, friends, church, charitable groups, and other social institutions is nonexistent. And Julia certainly doesn’t get credit for doing anything herself, such as studying hard in college or taking a second job to get ahead. Even when she starts her own business, it’s thanks only to a government loan.
The American people are not yet that dependent upon the providence of their sovereign for the continuation of their existence. But don’t blame the president for lack of trying.