Tuesday, April 12, 2011

Government Funding, Fungibility and Taint

By Mike Dorf

In my last post, I noted that the social conservative opposition to funding Planned Parenthood during the budget showdown (and more generally) was not directly about opposition to funding abortion, because federal law already bars federal funding of abortions.  Rather, I said, this was an effort to cut off funding to an organization that uses other funds to pay for abortions.  One reader emailed to ask me whether the conservatives didn't have a point, given the fungibility of money: Federal funding for, say, cancer screenings by PP doctors enables PP to re-direct funds that would have otherwise gone to fund the cancer screenings to pay for abortions, so people who object to funding abortion have legitimate grounds to object to funding any organization that performs abortions.

I wrote back to this reader that he may be right but that conservatives do not consistently apply this principle.  (Liberals don't either.)  After all, in recent years, conservatives have pushed hard for distributing funds for social services through faith-based organizations, even though paying for the soup in a church-run soup kitchen enables the church to divert money that otherwise would have gone for soup to pay for Bibles, proselytization, and other things that the government cannot fund directly without violating the Establishment Clause.  What most social conservatives (and others, including many mainstream Democrats) who support government support of faith-based social services say in response is closely analogous to what I said to my reader: The government is paying for the innocuous services (soup and cancer screenings, respectively) rather than the controversial ones (Bibles and abortions).

It's tempting to think that therefore one should draw a consistent line: Either the fungibility of money should be ignored and we should only ever focus on what the government funds directly pay for, or the fungibility of money is crucial and we should always acknowledge that funding anything an organization does means indirectly funding everything it does.  But that need not be true.  Much would depend on the other sources of funds available to the organization in question.

Suppose that Church X runs a daily soup kitchen for the local poor.  Parishioners volunteer to prepare and serve the food, which is purchased from funds taken in via the collection plate at Sunday services.  Let's say that total weekly contributions average $1000, of which $500 are used for the soup kitchen, with the balance going to fund other church activities.  Now the government begins an initiative of funding soup kitchens, including those affiliated with religious organizations.  Church X applies for and receives an annual grant of $26,000, just enough to budget $500 per week for its soup kitchen.  Does Church X now have an extra $500 available for Bibles, proselytization, and other clearly religious products and activities?  It does if donations hold steady, but let's assume that this is the sort of close community in which church affairs quickly become known.  A parishioner who previously put $10 in the plate each week, thinking that roughly half of it would go to fund the soup kitchen now might reduce her contribution to $5.  Some parishioners might stop giving entirely, so that Church X's net revenues, even after taking account of the government grant, could actually decline.  And the same thing is true of Planned Parenthood, which also relies on donations.  Contributions from other sources could remain steady, decline, or increase when the government adds funds.  We can't say in advance and in the abstract that giving the organization a sum of government money necessarily will free up exactly that amount in other money.  The effect is an empirical question the answer to which will vary depending on many circumstances.  Nonetheless, it's probably fair to say that in most cases the addition of government funding will increase the total funding available to an organization, even if not by exactly the amount of such government funding.

There are at least two other sorts of reasons why government might not want to fund an innocuous activity by an organization that also engages in activities that government (or some crucial voting bloc in government) finds objectionable, even assuming that the funding does not indirectly pay for the objectionable activity.  First, denying funding could be an effort to induce the putative recipient to refrain from engaging in the objectionable activity.  There is a large and mostly unsatisfying body of case law and academic commentary addressing the question of when an otherwise permissible refusal to subsidize an organization or person becomes an impermissible effort to coerce behavior by that organization or person.  I don't intend to engage that problem here.

I do want to say a few words about a second rationale for refusing to subsidize: one might think that the objectionable activity taints the unobjectionable activity.  From time to time, street gangs, the Ku Klux Klan, and other obnoxious entities apply for government funding to engage in activity that would be considered worthwhile if undertaken by others.  In some contexts, the First Amendment may prevent the government from invoking an organization's ideology as grounds for denying such funding, but not always, and at least where the objection is based on the organization's non-expressive conduct rather than its message, there will be room for government officials to decide that they don't want to fund the organization, even for worthwhile projects like running a basketball league or cleaning up highways.  Those are both real examples, and they are drawn from cases in which the issue may go beyond funding to include government refusing valuable assistance from obnoxious organizations.

I haven't thought through all the possible permutations, but it does strike me as legitimate--absent First Amendment constraints--for the government (like private parties) to decide that it simply won't do business with organizations that are tainted in other respects.  For example, the government (like a private party) can reasonably decide not to purchase widgets from the Acme corporation on the ground that Acme also produces gizmos using poorly-paid child labor in dangerous overseas sweatshops, even though the widgets are produced domestically by fairly-paid adults working in safe factories.

That's not the only rational position to take, of course.  One might alternatively think that the government should go out of its way to buy Acme's widgets while boycotting its gizmos, so as to reward desirable practices.  But as the disapproved practice becomes increasingly repugnant, this approach becomes increasingly unattractive.  If instead of employing underpaid children in the developing world to make its gizmos, Acme were literally making its gizmos out of children it murdered in the developing world, it is hard to imagine a government in the U.S. knowingly purchasing Acme's widgets.

And that brings us back to the funding of Planned Parenthood.  The social conservatives who didn't want to fund any aspect of PP regard abortion as so far beyond the pale as to taint all of PP's activities.  They regard abortion much like the hypothetical Acme's murder of children.  Given that, it's a little surprising that President Obama and the Democrats won a concession on this particular item.  Perhaps that simply reflects the fact that the Republican leadership is less intensely anti-abortion than the party's ideological core.