Bush's Disaster Socialism

How both parties declared the era when big government was over, over

What a difference almost a decade makes. It seems like just yesterday that President Bill Clinton, in a major concession to the principles of his Republican opponents (and almost certainly under electoral duress), declared, "The era of big government is over."

Now Donna Shalala, Clinton's Secretary of Health and Human Services, declares that the federal government must extend Medicaid to all Hurricane Katrina survivors and pick up their full medical tabs wherever they relocate, for as long as it takes them to make full recoveries. Shalala's proposal would do away with any means testing and state matching funds, using the victims of the disaster to launch a prototype of national health insurance.

In 2005, however, it's not just a few disgruntled liberals and Clinton apparatchiks who are shoring fragments of the New Deal against their ruin. The Republicans, led by President George W. Bush, are bringing the era of big government back with a vengeance.

Bush's plans for post-Katrina redevelopment in fact go far beyond what Shalala has proposed. In addition to reconstruction of damaged areas, Bush has ordered that all adults affected by Katrina receive $2,000 bank deposits for food, transportation, gas, or anything else they need; that evacuees get $5,000 Worker Recovery Accounts for job training, education, or child care expenses; that displaced children get education vouchers; that small businesses be given loans and loan guarantees; that companies in areas deemed the "Gulf Opportunity Zone" be granted tax breaks and other incentives—and so on, and on.

Liberals and conservatives have both noted the message in all this munificence, and are fast turning the hurricane-damaged areas into a laboratory for a new round of big government ideas. Congress, seizing the opportunity to pander to voters, has introduced a massive $250 billion Hurricane Katrina aid bill—in addition to the $62 billion in taxpayer funds already allotted to relief efforts.

Bush maintains that the type of direct federal aid to victims he's advocating empowers individuals—not a bureaucracy—and is therefore perfectly consistent with ideals of small government. But there is a world of difference between individualizing existing social programs, as through vouchers, and creating new ones. Shalala's health care proposal, after all, would potentially put federal dollars directly in the pockets of individuals, but few conservatives would regard that as a triumph for small government.

Conservatives care not just about the size of government but about its scope as well. Direct federal aid—aid disaster victims don't even have to justify to a bureaucracy—would inevitably expand Americans' sense of individual entitlement, establishing a dangerous precedent. On Bush's principles, why not have the federal government pay for health insurance, job training, and child care for victims of any calamity? After all, why are people who knowingly live in a hurricane-prone area more worthy of federal largesse than those who meet with random, unpredictable accidents? In short, how can Bush resist any suggestion to launch an all-encompassing national accident insurance program?

The most troubling thing about Bush's post-Katrina programs is that they reverse the trend put in motion by the welfare reform effort of the last decade. And unlike the case nine years ago, when Bill Clinton adopted small government under pressure from a Republican-controlled Congress, this time the Republicans control both the executive and legislative branches. Unable to control their own spending, Republicans are also sending a message of personal irresponsibility to all Americans, who now have less reason to plan for future disasters themselves. Though Bush may be going to great lengths to ensure that Katrina aid does not become a permanent part of the entitlement state, the sheer magnitude of the handout can't help but raise expectations of extravagant aid after future natural disasters.

A few fiscal conservatives are opposing President Bush's plans because of their price tag. But even if the overall spending can be knocked down a few bucks—not likely, considering the beating given to Rep. Mike Pence (R-Ind.) when he suggested doing just that—these plans threaten more than just the federal budget. They threaten more fundamental values conservatives purport to stand for: limited government, individual responsibility, and freedom.

Shikha Dalmia is a senior analyst at Reason Foundation.