[Congressional Record Volume 141, Number 138 (Thursday, September 7, 1995)]
[Extensions of Remarks]
[Page E1733]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                  SOCIAL SERVICES NEED GOVERNMENT HELP

                                 ______


                        HON. WILLIAM (BILL) CLAY

                              of missouri

                    in the house of representatives

                      Thursday, September 7, 1995
  Mr. CLAY. Mr. Speaker, some of our colleagues are promoting the 
privatization of social programs as a way to reduce the deficit. They 
contend that nonprofit organizations like churches have the millions of 
dollars necessary to provide education, housing, and health care 
services, to name a few. I would like to share with those members a 
commentary that thoroughly discusses the infeasibility of their 
proposition. Entitled ``Social Services Need Government Help'', the 
article was written by Mr. Pierre Blaine, a St. Louis television 
producer, and appeared in the August 25, 1995 edition of the St. Louis 
Post-Dispatch.
                  Social Services Need Government Help

                           (By Pierre Blaine)

       As the legislation steeming from the GOP's Contract With 
     America cuts the federal government's ability to provide 
     social services, let us remember that the strength of the 
     U.S. economy is in its mixed-economy features--a private 
     market system with social welfare components. Traditionally, 
     government has been a major partner with nonprofit 
     organizations in delivering social services to Americans. The 
     private sector cannot pick up the slack of government 
     retrenchment in many social areas.
       The government developed partnerships with nonprofit 
     organizations to help it carry out welfare-state functions 
     and deliver social welfare services. In fact, the government 
     has been the major source of nonprofit-independent sector 
     funding. The evolution of voluntary associations has enabled 
     the federal government to use nonprofit organizations to 
     decentralize the carrying out of public functions for the 
     common good. The government has already begun giving 
     subsidies directly to nonprofit organizations to provide 
     services.
       All the talk about vouchers to be given directly to 
     consumers for them to purchase goods and services directly is 
     a result of budget-deficit planning. The budget deficit has 
     already cut the funding available to nonprofit organizations. 
     Reduced support from the federal government has already 
     pushed nonprofit organizations into the commercial market for 
     income.
       The movement toward privatizing some government services 
     began during the presidencies of Ronald Reagan and George 
     Bush. This philosophy advocated the use of vouchers to compel 
     users to seek alternative private-sector markets to 
     traditional government help. But even Reagan's commission, 
     the President's Task Force on Private Sector Initiatives, 
     concluded in 1981 that it would be impossible for the private 
     sector to pick up the slack in government retrenchment.
       furthermore, in 1992, corporations contributed only 6 
     percent of the total amount of charitable giving in the 
     United States. The increases in the demand for social 
     services continue to be out of proportion to the money 
     available to nonprofit organizations. Nonprofit organizations 
     are unlikely to be able to compensate for the current 
     reductions in federal funds.
       Over the past 18 years, the largest percentage of cuts in 
     the federal budget has been in the discretionary grants to 
     states and local governments, but the increase in the demand 
     for social services still compels the nonprofit sector to 
     respond. Likewise, the projected cuts in revenue for 
     nonprofit organizations is disproportionate to the amount of 
     the federal budget it consumes. Ironically, this retrenchment 
     of federal dollars comes when the private sector is 
     downsizing through layoffs, mergers, reorganizations and 
     transfer of work to other countries. If the United States has 
     a recession because of high interest rates, it will cause 
     further demands for services by nonprofit organizations.
       Nonprofit organizations have been increasing fees, 
     donations, user fees and fund-raising. But those alternatives 
     don't replace federal dollars; they have traditionally been 
     effective only in supplementing a declining base from the 
     federal government. The private sector has become more 
     involved, but it is naive to think that the corporate sector 
     is going to continue to increase giving at levels needed to 
     fill the gap caused by government retrenchment.
       Corporate social responsibility depends on the health of 
     the economy as a whole. The business of business is business, 
     and the continued evolution of corporate involvement is tied 
     to the ability to make a profit over long periods. The lack 
     of resources to respond to increased demand leads to doubt 
     about whether private organizations can continue to provide 
     adequate services. Private giving is projected to have to 
     increase by 95 percent between now and 2002 to fill the gap 
     of federal partnership with nonprofit organizations. 
     Voluntary associations are a unique phenomenon in American 
     culture that have had a long affiliation with government in 
     providing social services.
       Nonprofit organizations provide services including health 
     care, food pantries, social welfare, housing, economic 
     development and education. The services they provide are not 
     a statistical aberration; they represent help to real faces. 
     Can we afford a contract with America without them?
     

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