Population Planning Won’t Balance Budgets

As states seek to balance budgets, population planning groups are touting abortion and contraception as money-saving measures. According to their crude calculus, Medicaid-paid births to poor mothers strain the social safety net and must be reduced.

Health and Human Services Secretary Kathleen Sebelius, for example, claimed that money would be saved if fewer babies were born. The Guttmacher Institute insists that “the [contraceptive] services provided at publicly funded centers saved the federal and state government an estimated $4.3 billion” in pregnancy-and infancy-related health care costs.

In its most recent application for federal funds, the Texas Women’s Health Program (TWHP) states clearly its goal “to reduce expenditures for Medicaid-paid births by increasing access to family planning services.”

TWHP boasts that it “averted 16,837 Medicaid-paid births and saved nearly $183 million,” or about $11,000 saved per would-be newborn. (The marginal savings of providing public education to “averted” children is insignificant because, at TWHP’s estimate of averted births, Texas public school classes would only grow 1.5 to 2.0 percent, or by one-third to one-half child per twenty-five-student class.) TWHP explains:

Decreasing Medicaid-funded births translates into cost savings at both the state and federal levels as Medicaid covers not only costs associated with prenatal care, delivery, and postpartum care for the mother, but also covers, in most cases, first year medical costs for infant care and additional years of medical costs for disabled infants. Averted births also lead to cost savings through decreased participation in related assistance programs, such as the Supplemental Nutrition Assistance Program.

One big problem with this calculus is that most people escape poverty in just a few years. For more than two decades, the chronically poor have represented 5 percent or less of the population. Attempts to avert the expenses of poor births shortsightedly deprive our suffering economy of people who will eventually pay taxes and make priceless contributions to society. As the U.S. Census Bureau reports for the years between 2004 and 2006:

Most movements into poverty were short. Almost half of all spells (47.7 percent) lasted 4 months, 19.9 percent of spells lasted between 5 and 8 months, and 9.2 percent of spells lasted between 9 and 12 months. Cumulatively, a little over 75 per­cent of all spells lasted less than 1 year while 12.4 percent of all poverty spells continued more than 2 years . . . almost half of all poverty spells lasted less than 4 months, the median length of a poverty spell for the overall population was 4.5 months.

Although population planners calculate that poor newborns are not worth the $11,000 Medicaid investment, their analysis is incomplete. No investment professional evaluates an investment based only on cost, which brings me back to the dynamics of poverty and economic well-being.

These dynamics are consistent and reliable. Since 1990 and depending on the years measured, poverty spells lasting no more than four months have been the experience for 46 to 51 percent of the poor. The Census reports that only one in four households that started poor in the beginning of 2004 remained poor through the end of 2006. Almost eighty percent of poor households exited poverty in less than three years. Given these facts, there is a demonstrable economic benefit to subsidizing the entry of another poor citizen into the U.S. population, a benefit that far exceeds the $11,000 cost.

Assume that upon exiting poverty, sooner or later these people experience the same average result—an average job with an average income ($46,600), average income taxes (13.8 percent), average property taxes (in Texas, $1,475/year), and average sales taxes (in Texas, $1,684/year). At these levels, an average adult who was born into poverty will pay federal, state, and local governments about $430,000 over a working lifetime of forty-five years (ages twenty-one to sixty-five). That’s thirty-nine times the $11,000 Medicaid-birth investment.

At $430,000 per average person, a few new people would put a real dent in the deficit. In fact, holding all else constant, a five percent addition to the U.S. population would reduce the national debt by almost seven trillion dollars. This brings to mind James Taranto’s caution that “a war on fertility is an act of cultural and economic suicide. Today’s low fertility is tomorrow’s shortage of productive citizens—of the taxpayers who would have to pay for the ever-expanding entitlement state.”

Adding insult to injury, analytically challenged planners further press their case by insisting that poor children are “more likely to go to prison, more likely to suffer from neglect, and have lower levels of school readiness,” not to mention more likely to be plagued with asthma, poor cognitive ability, delayed motor skills, and visual disability.

It turns out that this litany of future distress is unfairly borrowed primarily from studies of “childbearing very early or late in a woman’s productive years.” By data mining observations about early teens and women near menopause, state-funded population planners are meddling with poor women during their most fertile years.

The opposition to “costly” Medicaid births is short on logic and long on ideology in search of justification. Programs require rationale, but cost-saving is no reason to support population planning.

Keith Riler is a financial analyst who has written for the American Thinker, Faith magazine, Texas Right to Life, and LifeNews .

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