To Cut Government Purse Strings, Just Say No

February 9, 2009 • Commentary
This article appeared in Investor’s Business Daily on February 9, 2009

President Obama has imposed a $500,000 cap on compensation for executives of companies receiving federal bailout funding.

He’s pressing the bailed‐​out auto companies to make “greener” cars that Americans don’t show much interest in buying, and some of his supporters want to forbid the companies and their executives from raising questions about global warming and stricter emissions standards.

He’s also ordering that religious groups which get government funding not discriminate on the basis of religion in hiring.

In each case, the government is using its money to impose rules on private organizations, whether businesses or churches or charities.

For decades, opponents of big government have warned that government funding would mean government control. That insight, of course, is part of our folk wisdom: “He who pays the piper calls the tune.”

The laws sounded reasonable enough: Any college, or business, or hospital, or nonprofit agency that is a recipient of federal funds must abide by certain federal regulations. After all, it was reasoned, the federal government has a responsibility to monitor how taxpayers’ money is being spent.

So firms that did business with the government became subject to affirmative‐​action regulations, health and safety regulations, medical cost‐​containment rules and drug‐​free workplace requirements.

Colleges that eagerly took the carrot of federal funding soon faced myriad reporting requirements, especially to document compliance with anti‐​discrimination rules. Members of Congress who had a good idea about how colleges should be run added amendments to appropriations bills: Any college receiving federal funds shall do thus and so.

But soon it came to pass that almost every company in America was doing some business with the feds and every college was receiving federal aid. It became almost impossible to escape the tentacles of Leviathan.

Conservatives used to complain about such big‐​government intrusions, and liberals brushed the complaints aside. Government funding of everything under the sun was not only a way of redistributing wealth, the liberals thought, it was a way of bringing everyone under the control of progressive, fair‐​minded bureaucrats in Washington.

But then the conservatives started winning elections – in 1980, and 1994, and 2000 – and they started attaching their own strings to the federal money.

The government forbade arts agencies funded by the National Endowment for the Arts to present any “obscene” art. Under pressure from the federal drug czar, Stanford University fired an instructor who said he carried drugs in his backpack on campus.

The Supreme Court ruled that the federal government could prohibit federally funded family‐​planning clinics from giving their clients advice about abortion.

Then liberals started to worry about big government. They fretted that the federal government was censoring, stifling, restricting – as indeed it was, and had been for decades. Only now it was conservatives doing the censoring and restricting.

Duke University law professor Walter Dellinger warned that such rules were “especially alarming in light of the growing role of government as subsidizer, landlord, employer and patron of the arts.”

Dellinger is right. But the way to solve the problem he raises is to reduce the government’s role in society. Surely we can’t expect taxpayers just to hand over $3 trillion a year to various agencies and interests without regulating how the money is spent.

Their representatives in Congress and the administration think that those who are subsidizing the businesses or the museums or the clinics have a right to say just what they will and will not pay for.

Now the liberals are back in charge, and using federal money to impose their own rules. They’ve repealed rules limiting access to abortion and imposed rules limiting executive compensation and restricting the freedom of religious organizations to make hiring decisions on the basis of religion.

Red or blue, liberal or conservative, it’s still the case that government money comes with strings attached. He who pays the piper calls the tune.

Freedom and diversity would be better protected if private organizations were allowed to set their own rules, even if they get government funding. Religious organizations should be able to actually practice their faith. Businesses should be able to make their own decisions about salaries, product development and other concerns.

But the Supreme Court has ruled that the federal government has the power to impose conditions on those who accept its funds. So churches, charities, colleges and businesses that want to follow their own conscience or judgment will have to refuse government money, which always comes with strings attached.

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