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What’s Wrong in the Standard

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I’ve written previously about how articles about New York politics in national publications often are inaccurate. This week’s Weekly Standard hit job on Elliot Spitzer is another fine example.

Leaving aside the omission from the article of the fact that Siegel’s son was a top official of Tom Suozzi’s campaign, I assume that the mind-numbing details in the article about Spitzer’s misdeeds in using his father’s money to further his political career are accurate. Though the stuff they get wrong does make me wonder.

Means: Limiting Government to The Less Well Off, At Least In Theory

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Here in the Untied States, people have decided that the elderly are entitled to a modest level of retirement income and health care, and the young to an education, at public expense. Those who want the government to be “smaller” often argue that these services should be delivered in a different way, with the government financing the benefits but the private sector providing them. But they dare not overtly challenge the right to receive these universal entitlements, so universally popular are they with the American people. In other developed societies, those with “bigger” governments, additional human needs are also considered the responsibility of society as a whole, rather than of each individual person or family. In those societies, for example, virtually everyone receives government-funded health care, not just the elderly. One example is Canada, right next door. Government-funded housing is also more common in other places.

While the United States does not provide universal food, clothing, and health care via government programs, however, few Americans are willing to see people in their own communities starve for lack of food, freeze to death for lack of shelter, or die or become crippled by readily preventable diseases and easily treated injuries. The American compromise has been to assume that most non-elderly people will buy food, housing and health care for themselves, but for the government to provide for those who do not have the means to afford them. Means-tested benefits are thus a substitute for universal benefits, and a way to avoid deprivation at, theoretically, a lower public cost.

Age-Restricted Benefits, and the Lifecycle of Need

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Age is the most simple and most common of the criteria used to restrict eligibility. In 1998 about one-third of all public spending was on services that were available exclusively, or primarily, to the young or old, regardless of their income or other circumstances. These include elementary and secondary education (10.9 percent), social security for the retired (11.2 percent), Medicare (6.6 percent), and public higher education (3.9). Public higher education is theoretically available to everyone, but in practice is used primarily by the young. Social Security is only available to those 62 and over, Medicare to those 65 and over, and their share of public spending is going to soar in the next few decades. While the rules vary, one typically becomes ineligible for public elementary and secondary education after a certain age, typically age 21, even if one had not finished high school. There are additional services restricted to the young and old, such as senior citizens centers, and youth day camps and recreation activities, but spending on them is not tabulated separately from other, similar activities. These services may be enough, however, to increase the overall share of public funding allocated to age-restricted services and benefits to one-third of all government funding. Public education for the young and retirement income and health care for the elderly, along with the military and interest on federal, state and local public debts, are the most costly public programs. The age-restricted programs are also the most popular, for four reasons, discussed below.

Equity and Eligibility

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Enough of the preliminary facts; let’s move on to principles. A public sidewalk is the sort of thing that many people think of when they think of the government. It is the common property of everyone in the community, and everyone in the community, regardless of who they are and where they are from, has an equal right to walk down it. On a public sidewalk, everyone is equal. Most public services, however, are not like a public sidewalk. Less than 20 percent of all public spending – federal, state and local — is on services that everyone can experience, or have an equal right to experience, on any given day. Even adding in the military, space research, legislators and other central administrators, categories of government that do not benefit people directly but, one might argue, benefit all people indirectly to an equal extent, “general” services still account for just one third of all public expenditures. Debts and pension payments, for which no public services are received, accounting for about one-sixth. About half of all public spending goes only to those who are eligible to receive services and benefits, based on criteria, rules, regulations, and applications accepted and denied. The next three weeks of posts will be a review of public benefits and services that aren’t available to everyone, and of the fairness of the philosophical foundation and practical criteria that are used to determine who does and does not get them. Read them all, and I personally guarantee you’ll never think about any public policy issue the same way again.

HOW IS GOVERNMENT PAID FOR?

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In the discussion of public expenditures, it was shown that the unit of government that directly provides a public service or benefit isn’t necessarily the unit of government that pays for it. In this section, the overall structure of funding of government revenues will be discussed in detail. One finds nationally that local governments, which are responsible for a very large share of the direct provision of public services, pay for relatively little of this in local taxes. Fees for services, fines for misbehavior, and aid from higher levels of governments account for the majority. And many local government services are not only funded by state governments, or federal aid passing through state governments, but are provided under rules set by state governments. Under our federal system, the federal government collects most of the money, and local governments do most of the work, but it is the state governments that actually make most of the decisions on the margin. Here in New York City, there is an important difference. Local taxes pay for 60 percent of the city’s spending, even though that spending includes services and benefits, particularly public assistance and a Medicaid, that are state functions just about everywhere else. Still, the rest of the state in many ways controls the city’s budget.

Stonewalling in Albany

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For some reason, the NY Post has not reported one word about this Albany figure not releasing information. Isn’t anybody curious about why Joe Bruno won’t release this?

Earlier this week, a Bruno aide turned down a Freedom of Information request from Gannett News Service for copies of the senator's e-mail correspondence with political advisers and for a schedule of all the trips Bruno took to New York City this year.

The information gathered by the Spitzer aides related to Bruno's use of state resources to travel to New York City, where he attended political functions as well as government-related meetings.

WHO PROVIDES PUBLIC SERVICES?

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As the discussion of inducements and requirements shows, not all government-directed activities are, in fact, undertaken by the federal, state, and local governments themselves. Of the $2,819 billion directly spent by all three levels of government in 1995, only $593 billion was spent on public employee wages and salaries, about 21 percent of the total. Another $40 billion was spent on public pension contributions for these employees, perhaps a similar amount was spent on other employee benefits such as health insurance, and more was spent on the buildings these employees occupied and the supplies they used at work. Even so, it is apparent that work done by public employees is just part of the range of government-directed activities. In fact, while total direct government spending equaled $2.8 trillion, more than one-third of the 1995 total GDP of $7.4 trillion, the work actually done by governments accounted for just under $1.0 trillion in the national income accounts, or about 13.3 percent of total GDP. Similarly, public employees accounted for just 21.6 million of the 149 million jobs in the U.S. that year, or about 14.5 percent.

WHAT THE GOVERNMENT DOES: INDUCEMENTS, RESTRICTIONS AND CONTROLS

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Government expenditures, the subject of my prior posts, are not the extent of government activity. Instead of doing something itself, the government often uses inducements, restrictions and controls to influence – or force – private organizations or individuals to do it, or not do it, instead. Such inducements and requirements impose costs, but do not require the collection of taxes (except for enforcement), so they are in that sense “off the books.” That doesn’t mean, however, that the costs aren’t real. The possibility of using inducements and controls as a substitute for public revenues and expenditures is central to the developing health care debate. Rather than having the government collect taxes and fund health care for working age adults, Massachusetts has decided to try to force individuals and businesses to spend more of their own money on health care, a policy that from a budget perspective is “free.”

Report on Petition Challenges

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The New York City Board of Elections has (almost) finished the hearings on petition challenges for this year’s Primaries.

And it looks like a quiet year will be even quieter.

In a previous post I reported that the only Primary contests for public office were for 5 judicial positions.

In the a race for a Brooklyn Countywide Civil Court spot, candidate Fred Arriaga, counsel to the Borough President, successfully challenged the petitions of opponent Pia Wood, who fell short by about 800 signatures.

In Brooklyn’s 6th district, where 3 candidates filed petitions, Sharen Hudson removed one opponent – Daniel McCullough, who is 250 signatures short. Hudson’s only opponent is Katherine Levine.