Appropriations Summary

Actual[1]

Recommended

Savings

Interdepartmental Grants/Transfers

$978,800

$978,800

$0

Federal Funds

$2,754,318,050

$2,172,738,038

$581,580,012

General Funds/General Purpose

$1,176,991,300

$831,427,157

$345,564,143

Special Revenue Funds

$142,202,350

$137,587,585

$4,614,765

Gross Appropriation

$4,074,490,500

$3,142,731,580

$931,758,920

The Family Independence Agency (FIA) is charged with three essential tasks: “to help meet the financial, medical, and social needs of individuals and families living in Michigan who are unable to provide for themselves; assist those who are capable of becoming self-sufficient through skill building, opportunity enhancement, and family-focused services; and help protect children and vulnerable adults from abuse, neglect, and exploitation.”[2]

The development of skills, the creation of opportunity and the achievement of family self-sufficiency are vital to Michigan’s economic development. A civil society protects against the abuse, neglect or exploitation of citizens of Michigan who are too young, or too mentally or physically disabled, to protect themselves. The question is not whether people who need help should receive it. They should. The question is: Who can best provide the help, and who bears the most responsibility to do so?

The Family Independence Agency provides womb-to-grave care. The FIA provides food, shelter and clothing. It funds adoptions, childcare, job training, reading programs, credit counseling, and budget counseling. It makes sure children are cared for before school and after school. It seeks to inspire children, prevent their pregnancy and gang involvement, and develop children’s leadership skills, their ability to manage anger, and their sense of self-sufficiency. It monitors the crime, aggression, and academic development of young people as well as their school attendance, drop-out rates, and their cultural and ethnic sensitivity.

The dollars spent are significant. The first $2.75 billion comes from the federal government. Another $1.1 billion comes from the state. Yet another $67 million comes from local governments.[3] All of this money comes from individuals, families, small businesses, and large corporations. All of these entities, banding together as communities, can and do meet enormous human welfare needs. When the state takes money from these groups it means that they have less money to improve their own lives, and those of their own families and neighbors. The resources taken by the state cannot be used by individuals and private institutions to create jobs or provide health insurance or be put to work developing new technology or medicines or be put away for a child’s college fund.

The FIA budget of $4,074,490,500 amounts to almost $410 per citizen[4] or $1,075 for every household in the state.[5] These numbers do not tell the whole story, because the mission of the FIA, as stated above, is not focused on every household in Michigan. The vast majority of citizens in Michigan have no need for the services provided by the FIA because they are providing for their own needs.

The FIA’s focus is primarily the poor, those who live below the poverty level as established by the federal government. With a budget of almost $4.1 billion, the FIA spends nearly $4,000 per man, woman and child below the poverty level[6] or $21,163 per poor household annually.[7]

Despite this spending, many in Michigan remain in poverty. Consider the following statewide statistics:

1 in 6 children are poor now. (poverty level is $17,650 for a family of 4.)

1 in 3 children will be poor at some point in their childhood.

1 in 15 lives at less than half the poverty level.

1 in 7 has no health insurance. [8]

It must be admitted that despite these enormous amounts of money, the system has not significantly alleviated poverty. Individuals and families are not rapidly moving out of poverty. The percentage of people who live under the federal level of poverty has remained stagnant for more than two decades despite ever-increasing amounts of spending. Governments at every level have spent more than $6 trillion fighting poverty with an endless array of government programs, yet U.S. poverty rates have generally remained where they were when President Lyndon Johnson predicted that such programs would ultimately produce “the Great Society” in 1964.

No amount of money can fulfill a community’s responsibility for the well-being of its neighborhoods, a neighborhood’s responsibility for the welfare of its families, a family’s responsibility for the welfare or its members, or each individual’s responsibility for his or her own personal welfare. What $6 trillion in government spending can do is displace the wealth that these and other mediating institutions such as religious and community service groups might otherwise use to help those less fortunate.

A strong economy, one unencumbered by unnecessary regulation and freed from extensive taxation, holds the greatest hope for the poor. Enterprise, initiative, and investment have done vastly more to alleviate human poverty than any poverty program. For much of human history, poverty was the norm. While it is troubling that of 9,938,444[9] citizens in the state, 1,021,605 live below the poverty level, it must be acknowledged that this is remarkable progress when compared even to the history of poverty in the United States.

The source of our progress has not been an extension of the role of the government but the growth of business and enterprise. As Don Mathews, economics professor at Brunswick College in Georgia has written, “By our current definition of poverty, 56 percent of families in the United States were poor in 1900. By 1947, even after the economic shocks of the Great Depression and World War II, the percentage of families in poverty had been reduced by more than one half, to 27 percent. By 1967, the percentage was halved again, to 13 percent. Notably, the decrease in poverty between 1900 and 1967 occurred before the advent of the greatly expanded welfare state. In other words, it was the free market, not government welfare, that caused the poverty rate to fall from 56 percent in 1900 to 13 percent in 1967.”[10] It is interesting that the last 25 years of ever-growing government budgets, greater regulations, and more extensive government involvement in social problems have not significantly dropped the rate of poverty. The level has remained around 10 percent for the past 35 years.

This does not mean that the state should play no role. There will always be some who will slip through the cracks of particular mediating institutions. There are those who require special help or have unique situations who have not yet been helped by families, neighbors, friends, churches and communities. There are some services state government provides because private or non-profit options do not yet exist in the absence of state programs.

The behemoth FIA cannot be brought to its proper proportions overnight and this review makes no claim to accomplish this. Rather, the most glaring examples of FIA overstepping must be addressed first. Over time, as civil society begins again to take its proper place and those who predict all manner of devastation are proved wrong by experience, more levels of bureaucracy can be dismantled and their responsibilities once again shouldered by those best qualified.