Echoes of the 89th Congress

By Charles Lane

In the history of the American welfare state, no event was more consequential than the convening of the 89th Congress on Jan. 3, 1965, in which Democrats enjoyed huge majorities in both houses.

Followed 17 days later by the swearing-in of another Democrat as president, Lyndon B. Johnson, the seating of these lawmakers heralded one of the most productive legislative sessions in U.S. history, whose major acts continue to set the terms of federal health care, education and labor force policy today: Medicare, Medicaid, the Higher Education Act, the Elementary and Secondary Education Act, and, less famously but no less consequentially, expanded eligibility for Social Security disability insurance (SSDI).

So there may be some cosmic historical cyclicality revealed in the fact that, half a century later, almost to the day, a Republican-dominated 114th Congress, led by Mitch McConnell and John Boehner, has taken over on Capitol Hill - facing a national agenda defined in large part by the legacy of the 89th.

Transformative and beneficial though they were, and still are, the Great Society programs minted 50 years ago have mutated into sources of new and intractable problems, the most important of which is their unanticipated, enormous cost - which not only increases the national debt but also crowds out spending on other critical public needs, from national defense to research.

Spending on Medicare, Medicaid, the two education laws, and SSDI hit nearly $1 trillion in fiscal 2013, according to the Congressional Budget Office, or roughly 3 out of every 10 dollars Washington spent after interest payments. Future health-care costs, slated to grow in part due to Medicaid's expansion under Obamacare, drive projected future federal deficits; SSDI's trust fund is on course to run out of cash by fiscal 2017.

Meanwhile, evidence mounts that the great acts of 1965 now yield diminishing returns or, in some cases, have actually turned counterproductive.

Medicare and Medicaid have helped countless elderly and poor Americans and subsidized medical infrastructure and innovation. Yet U.S. health indicators are no better than those of societies that spend far less. SSDI may reduce incentives to work.

Higher-ed tuition costs keep going up despite federal aid - or perhaps because of it, given universities' ability to capture the subsidies. Federal K-12 legislation has not eliminated racial achievement gaps. Reauthorization of the measure remains bogged down in bitter policy fights, fueled partly by interest groups that depend on existing funding priorities.

In 1965, huge unmet needs festered across America, and the notion of addressing them via Big Government still retained both a certain novelty and wide public acceptance. It made sense to assume that social progress could result from the sheer application of federal resources.

Even in those optimistic early years, though, skeptics worried about unrealistic goals and unintended consequences. In 1970, Daniel Patrick Moynihan wrote that the true "test of a program ... is not input but output. It is interesting, and at times important, to know how much money is spent on schools in a particular neighborhood or city. But the crucial question is how much do the children learn."

Moynihan's admonition remains pertinent today. Notwithstanding tea-party rhetoric, the task before Congress is not to oust the federal government from health, education, and social policy. That would neither be bureaucratically feasible nor desirable in substantive terms.

Nor is it politically realistic. Most Americans do not want such a radical change, as they have made abundantly clear many times since electing the 89th Congress in 1964, as part of a landslide repudiation of Barry Goldwater's ultra-small government vision.

There's a reason President Obama got reelected and that the people have given the GOP nothing like the 1965 Democrats' veto- and filibuster-proof majority.

Thoroughgoing reform of our 1965-vintage government is both necessary and desirable, however. The goal should be a modern, efficient, sustainable American welfare state, with resources left over for other pressing needs. The relevant programmatic reforms are well understood from repeated explication in CBO documents.

When, or if, reform comes, it won't be through 1965-style one-party domination, but through bipartisan compromise, which means, of course, that it remains hostage to the demands of the GOP's right wing and those of the Democratic left, which tends to demonize even modest tweaks to the Great Society.

Most Americans, though, aren't beholden ideologically to either party's extreme, and they aren't stupid. Who knows? One day, the majority might even back a party that treats them that way.

They understand, or can be led to understand, what Moynihan expressed so elegantly back in 1970: "Programs are for people," he wrote, "not for bureaucracies."