Re­ex­am­ine wel­fare pro­grams

JoongAng Daily - - Views -

The blame-game over bal­loon­ing pub­lic fi­nanc­ing for free-for-all wel­fare pro­grams among cen­tral and lo­cal gov­ern­ments and ed­u­ca­tion dis­trict of­fices is get­ting dirt­ier. If both sides stick to their ex­treme ap­proach, free school meals and day care pro­grams could cease to ex­ist from the be­gin­ning of next year be­cause no one will fund them. The pro­grams born out of an in­tense wel­fare contest dur­ing the 2011 may­oral and gu­ber­na­to­rial and 2012 gen­eral and pres­i­den­tial elec­tions could be­come in­sol­vent after just three years. It is a dis­as­trous fall­out from pop­ulist pol­icy-mak­ing with­out a fund­ing plan.

The end of the two univer­sal wel­fare pro­grams was fore­see­able. It does not take a ge­nius to fig­ure out that free school meals and day care pro­grams that leave a big hole in the bud­get can’t last long. In the be­gin­ning, there was lee­way in the bud­get and tax rev­enue for ex­tra spend­ing. But it be­came im­pos­si­ble last year due to a tax rev­enue short­age and slow­ing eco­nomic growth.

Lo­cal gov­ern­ments de­clared last year that they could not con­tinue sub­si­diz­ing day care for in­fants. Mu­nic­i­pal ed­u­ca­tion of­fices that had been put in charge of fi­nanc­ing free day care pro­grams for preschool-aged chil­dren re­fused to do so. In re­turn, lo­cal gov­ern­ments threat­ened to deny sub­si­dies to dis­trict ed­u­ca­tion of­fices to pro­vide free school meals. With­out a last­ing fund­ing so­lu­tion, univer­sal wel­fare pro­grams will shut down. The univer­sal wel­fare trial has proved a com­plete fail­ure.

Po­lit­i­cal par­ties, lo­cal gov­ern­ments and ed­u­ca­tion of­fices should stop fight­ing and blam­ing one another. They must ad­mit to the fun­da­men­tal down­sides of the pro­grams and come up with a work­able al­ter­na­tive. The re­spon­si­bil­ity should col­lec­tively fall on the pres­i­dent, po­lit­i­cal par­ties and ed­u­ca­tion chiefs. They were the ones who made rosy prom­ises in the first place. Vot­ers also have learned that there is no free lunch.

In or­der to make wel­fare pro­grams fi­nan­cially sus­tain­able for lo­cal gov­ern­ments and ed­u­ca­tion of­fices, the fund­ing sys­tem must be re­struc­tured. Pri­or­i­ties in spend­ing and ben­e­fi­cia­ries must be re­aligned and ef­fi­cacy in bud­getary ap­pro­pri­a­tion must be em­pha­sized.

We could change the univer­sal pro­grams to se­lec­tive ones and ad­just sub­si­dies. The gov­ern­ment read­justed the ba­sic pen­sion for se­nior cit­i­zens from univer­sal to se­lec­tive pay­outs for peo­ple with no in­come or other pen­sion pay­outs to make the pro­gram work­able within the cur­rent bud­get. School meals and day care also should be ad­justed. There is no need to stick to an all-or-noth­ing wel­fare sys­tem.

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