This commissioned working paper was prepared solely to aid discussion
and does not represent the official views of the Council or of the
United States Government.
The Meaning of Federal Funding
By Peter Berkowitz 1
Preliminary Draft — Not for Quotation or Attribution
Commissioned Working Paper
How should the government approach the question of public funding
of activities that are deemed controversial by the American people?
Is it appropriate to make such decisions on moral grounds? Can moral
grounds for such decisions be avoided? Whose moral views, and of
which sort, should govern, and with what consequences for those
in the minority?
Questions of this sort have been frequently discussed in the wake
of President Bush’s 2001 decision regarding federal funding
of embryonic stem cell research. In that decision, the President
permitted federal funds to be used, for the first time, to support
research on embryonic stem cells, but only those already in existence.
At the same time, he made it clear that there would be no federal
support for any research that involved or depended on any future
destruction of human embryos. In so doing, he was upholding a Congressional
enactment, the Dickey amendment, which prohibits the creation of
embryos for use in experiments, or the use of embryos in research
that leads to their destruction.
President Bush’s decision has generated a great deal of controversy.
Most scientists and patient advocacy groups believe that he made
the wrong decision, and that the Dickey amendment is itself a terrible
mistake. Among the objections one commonly hears to the President’s
policy are these:
(1) By withholding federal funding for research that involves the
creation of new embryos, the President has effectively banned embryonic
stem cell research.
(2) The decision was wrong because the President allowed his personal
moral views to govern federal policy. Or, along the same lines,
the congressional ban is wrong because it represents the imposition
of moral views — religiously based moral views at that — to
frustrate sound and beneficial public policy.
(3) The decision is morally incoherent, for if an act is so immoral
as to deserve the governmental disapproval implicit in withholding
funding, it should be accompanied by efforts to prohibit the activity
Whatever the merits of the current law, or the President’s
2001 stem cell decision, these objections, once closely examined,
cannot pass muster. The first confuses a refusal to fund with
the imposition of a ban or prohibition. The second wrongly supposes
that legislating morals through federal budget decisions is very
unusual or always wrong. And the third incorrectly assumes that
government has an obligation to bring an end to all conduct it
believes immoral. Explaining these errors requires an exploration
of the meaning of all government funding decisions.
1. Federal Funding
A. Basic Considerations
The common objections to the President’s policy fail to
come to grips with what government funding in a liberal democracy
really means. Several fundamental features of our constitutional
system need to be emphasized.
First, no one and no activity has a constitutional right to federal
funding. There is no governmental obligation to fund most activities,
not even the most worthy, save for such matters as the Constitution
explicitly proclaims to be the responsibility of government, such
as national defense, the maintenance of federal courts, the holding
of elections, and so on. And even concerning these constitutional
essentials, it is an open question of how government will choose
to allocate taxpayer dollars.
Second, no individual or cause has a right to a seat at the government
trough. Resources are scarce, and insufficient to support all worthy
activities. People with different causes and interests compete to
obtain them, and in order to succeed they are forced to bring their
case to members of Congress. Funds are distributed only through
the political process, within limits set by the Constitution, as
the result of deliberation, lobbying, deal-making, and the like.
Third, in a democracy people will always have disagreements about
what activities should receive government funding. Sometimes the
disagreements are intense, and sometimes not. Sometimes the disagreements
include moral disagreements, and sometimes not. Sometimes the political
process generates a compromise on the issue, and sometimes one side
or the other prevails.
Fourth, people who lose in efforts to obtain federal funding will
always feel that they did not get what they need or want, but in
the absence of a clear legal entitlement to such funding, they cannot
properly complain that the government has thereby denied their rights
or interfered with their liberty to exercise them.
Fifth, those who lose have several alternatives built into the
democratic process. They can try to persuade their congressmen to
reconsider, they can elect others more sympathetic to their cause,
they can seek to influence public opinion, or they can seek non-government
funding for their activities.
All of this suggests that the President’s policy is an almost
routine example of a federal funding decision, and that might be
regarded as the end of the story. But this issue is in fact not
quite that simple.
B. A Special Case?
Although the framework laid out above may correctly describe the
situation for most funding decisions, there are social and psychological
reasons why people might regard, for example, withholding of support
for selected aspects of biomedical research as a special case, an
exception that demands a different approach.
The nation strongly and overwhelmingly backs biomedical research.
And we generally leave the mapping of research strategies to scientists
and those who administer the institutions in which they work. The
entire biomedical enterprise in the US, including also the training
of the next generation of scientific researchers, has come to depend
heavily on government support. The public generally favors this
arrangement, and has come to rely on government-funded research
for the treatment and for the cure of all still untreatable diseases,
such as cancer and Alzheimer disease.
Consequently, the decision to withhold public funds from any particular
piece of the biomedical research portfolio looks, both to scientists
and to the public, like an exception to an otherwise popular rule,
and it prompts harsh accusations that government is engaging in
censorship or even outright prohibition of medically necessary scientific
research. To be sure, the FDA regularly imposes restrictions on
research, but mainly on grounds of safety. When, however, government’s
objection to research is moral in nature, it strikes scientists
as a deprivation: a restriction of freedom to inquire, a thwarting
of worthy community goals, an imposition of morals. And it looks
to those members of the public who disagree with the decision as
a failure by the government to abide by its putative moral obligation
to use its resources to explore all fruitful areas of research
in search of cures for dread diseases.
Moreover, there is reason to single out for special attention
those decisions about federal funding where powerful moral principles
are at loggerheads, and the nation is deeply and passionately divided.
This is the case with stem cell research. It involves a confrontation
between respect for nascent human life, and our commitment to unfettered
scientific inquiry and to the fight against disabling and deadly
disease. And it presents a clash between those who hold that the
moral status of the embryo is no different from that of a fully
developed human being, and those who believe that the embryo is
a mere clump of cells, as well as all those in between.
For these reasons, the case of funding embryonic stem cells appears
to many like an exception to the usual rule of federal funding.
But in its fundamental legal and political character, this issue
is not all that exceptional. To see why, we have to examine more
fully the moral meaning of federal funding.
2. Morals, Federal Funding, and Legislation
A. Federal Funding
In the first place, federal funding is about resource distribution — who
and what will get how much of the nation’s scarce taxpayer
dollars. It is usually not about protecting or restricting basic
rights. For example, there is no constitutional right to the funding
of biomedical research.
But often the question of whether government will or will not
fund an activity is about more than mere distribution. It is about
shaping choices among various and competing goods or undertakings.
It is a statement of approval and encouragement, a declaration by
the nation that an activity or undertaking is meritorious and has
priority. Or, in the decision to withhold funds, it is a statement
of disapproval and discouragement, a declaration by the nation that
a permitted activity or undertaking lacks merit or has low priority.
In fact, government routinely influences the choices individuals
make. Policy decisions about taxing and funding create incentives
and disincentives by making activities more or less costly or attractive.
At the same time, taxing and funding decision also contribute to
the legitimation or delegitimation of activities by sending messages
of governmental approval and disapproval. The child tax credit,
for example, reduces the financial cost of child rearing. In so
doing, it strengthens families in two ways: it enables families
to save money, and it conveys a powerful judgment about the political
importance of the well-being of the family. Similarly, government
funding of research into disease and its prevention and treatment
increases the supply of research, and reflects our nation’s
considered judgment that the relief of physical suffering is a high
All law requires, forbids, or permits. But, as reflection on the
meaning of funding suggests, government may adopt a range of attitudes
toward that which it permits. It strongly endorses charity and higher
education. It looks favorably on national service and the arts.
It prefers marriage to cohabitation. It frowns upon smoking. The
question of federal funding routinely implicates questions about
the nation’s moral priorities among permissible activities.
One consequence of this is that in sorting out funding decisions
it is not a matter of one side introducing moral considerations.
Most of the time, both sides in disputes over policy are of necessity
engaged in making moral arguments.
This is true, and to an extraordinary degree, in the stem cell
controversy. Both sides are defending moral principles, and to make
matters more difficult, both sides are tending to defend those principles
in their absolute form. Because moral principles are frequently
at stake in the fight for federal taxpayer dollars, funding disputes
can be bitter. This is truer still when the moral principles are
wielded in their absolute form. If funding is withheld, those who
believe the activity is worthy can claim that their tax dollars,
which they contribute in the hope that they will serve the good
of the country, are being held back from what they deem a deserving
or even overriding moral purpose. If funding is provided, those
who believe the activity is immoral can claim that their tax dollars
are being used to advance a cause they believe is unworthy, or even
abhorrent. Both sides make moral claims, and members of one or another
party to the dispute will have to live with the fact that their
moral principles are rejected (if not assaulted) by the government,
in their own name and with their own tax dollars.
Why should those who lose the political struggle put up with this?
For the simple reason that living in a democracy means sometimes
being in the minority, even on questions of the utmost importance,
and so long as the laws which one opposes are consistent with the
Constitution and enacted according to legally appropriate procedures,
one has an obligation to obey them.
But is it really a legitimate aim of a liberal democracy to adopt
laws and take actions to shape the moral beliefs of its citizens?
Perhaps federal funding is the exception, and to the extent possible
the moral dimension should be eliminated from policy formation.
Doesn’t government in a liberal democracy have an obligation
to remain neutral toward competing conceptions of a good life, and
so refrain from enacting morals into law? Otherwise, doesn’t
it impermissibly infringe on people’s right to choose how
to live their lives?
According to a common and sound criticism of this common view
of the liberal state, such neutrality is a chimera: it is impossible
for any government to remain neutral about morality and the nature
of a well-lived life, since public policy — for what purposes
is the state permitted to classify citizens by race? what is the
meaning of marriage? what medical procedures and what biomedical
research should government fund? — always draws upon, reinforces,
or suppresses a view about what is deserving, proper and good. It
is possible, as a matter of policy to tolerate a wide variety of
choices and forms of life, but toleration itself is a moral principle
based on a certain interpretation of how to secure human freedom
and respect the dignity of the individual.
Moreover, because of its very foundational commitments, our liberal
democracy, it is said, privileges the autonomous or freely choosing
life. And so in a sense it does. But it need not and should not
do this unwittingly or surreptitiously. The mistake is to think
that liberalism stands or falls with the commitment to neutrality.
It doesn’t. It stands or falls with the commitment to creating
the conditions under which individuals can exercise political freedom.
Law and public policy in a liberal democracy rightly seek to create
conditions in which citizens can make informed and responsible choices.
They do this in a variety of ways. The first and most taken for
granted is through the establishment of public order. Others include
establishing a system of public schools, promoting research in the
sciences and humanities, supporting the arts, and enacting a wide
variety of social and economic legislation, all with a view to forming
a citizenry that is at home in, and capable of taking advantage
of, freedom. Laws designed to respect, and encourage respect, for
nascent human life can reasonably be seen as contributing to the
conditions under which individuals learn to respect humanity in
themselves and in others.
To be sure, even within the limits provided by law, government’s
encouragement of informed and responsible choice can easily become
a tool for the ill-conceived circumscribing of choice. Even well-meaning
government efforts to prepare citizens for liberty and toleration
can undermine both. Government funded education can be dogmatic
and ideological; government funded research may be biased and unaccountable;
government supported arts may disseminate tawdry or jingoistic sentiments
and images; government funded programs directed at the family may
fail to adapt to changing times. Of course, these familiar abuses
are not arguments against government promoting the conditions that
enable citizens to take advantage of freedom. Rather, they are reasons
for proceeding with care, and with an appreciation of the complexities
of contemporary moral and political life.
3. American Dilemmas
The President’s policy on stem cells is not the only funding
decision in contemporary American politics that has generated controversy.
A brief review of some others sheds light on what is common to all
and what is distinctive to the stem cell debate.
Consider first the battle over abortion, which involves a long-standing
struggle over the question of government funding for lawful conduct.
Shortly after entering office, President Bush ordered the withholding
of funding from international organizations that performed abortions,
a decision that was neither required of him nor forbidden to him
but within his discretion. The principle behind this policy is common
to his position on stem cell research: government funds should not
be used to destroy nascent human life.
At home, a line of Supreme Court decisions stretching from 1977
to 1991 dealing with abortion and government funding established
the principle that the constitution does not require government
to fund activities that the Constitution protects. These cases look
closely analogous to the stem cell controversy, but they differ
in a crucial respect. Although some of the same forces are politically
engaged, and although the moral issue concerns the question of the
inviolability of nascent human life, the abortion cases would have
been unlikely to come to the Court for adjudication had the Court
not declared in Roe v. Wade a constitutional right to an
abortion. For the argument made by those who seek federally funded
abortions is that by withholding funding, the government is seeking
to frustrate the exercise of a constitutionally protected right.
Absent such a right, there could be no valid legal claim. Indeed,
absent an entitlement to government sponsored health care benefits,
there is no valid legal claim that Medicare must pay for cosmetic
surgery, sex-change operations, contraceptive benefits, heart transplants,
or any other procedure one wants for oneself and can find a doctor
to do. Only if there were a constitutionally protected right not
to be poor, not to be without resources to fully take advantage
of all the things that we are legally entitled to pursue, could
such a claim prevail. While there is no such right, this is just
the kind of claim that dissenters in the Court’s cases concerning
federal funding and abortion are defending.
In Maher v. Roe 432 U.S.464 (1977), the Court held 6-3
that Connecticut could provide Medicaid benefits for childbirth
while withholding benefits from women who wished to have non-medically
necessary abortions. Justice Powell, writing for the majority, maintained
that the right to abortion announced in Roe v. Wade, “protects
the woman from unduly burdensome interference with her freedom to
decide whether to terminate her pregnancy. It implies no limitation
on the authority of a State to make a value judgment favoring childbirth
over abortion, and to implement that judgment by the allocation
of public funds.” Powell’s analysis emphasized the “basic
difference between state interference with a protected activity
and state encouragement of an alternative.” In dissent, Justice
Brennan disagreed vociferously. He argued that the denial of funds
unconstitutionally interfered with the right of women to choose
an abortion. Also in dissent, Justice Marshall argued that Connecticut
was seeking “to impose a moral viewpoint that no State may
In Harris v. McRae 448 U.S. 297 (1980), by a 5-4, margin
the Court upheld the Hyde Amendment, which banned federal funding
of medically necessary abortions. The majority’s argument
was much the same as in Maher: “although government
may not place obstacles in the path of a woman’s exercise
of her freedom of choice, it need not remove those not of its own
creation.” The government, the majority reasoned, does not
have an obligation to provide taxpayer dollars so that individuals
can exercise their individual rights to the maximum. To this, Justice
Brennan replied in dissent that the Hyde Amendment actually left
poor women in a worse off position. By refusing to provide poor
women with funding for even medically necessary abortions while
subsidizing childbirth, the government demonstrated profound disapproval
for abortion and thereby burdened the exercise of the right to privacy
In Rust v. Sullivan 500 U.S. 173 (1991), again by 5-4
margin, the Court upheld federal regulations that barred health
care professionals who received federal funding from offering counseling
about abortion. Chief Justice Rehnquist, writing for the majority,
reiterated the Maher and Harris principle: “The
Government has no constitutional duty to subsidize an activity merely
because the activity is constitutionally protected.” In dissent,
Justice Blackmun, joined by Justices Stevens and Marshall, insisted
that by conditioning federal funding on the withholding of counseling
about abortion, the government was actually placing “formidable
obstacles” in the path of women’s exercise of their
Two points should be emphasized about the dissents in these cases.
First, by 1991 most justices had come to accept the majority’s
proposition — “the government has no constitutional duty
to subsidize an activity merely because the activity is constitutionally
protected” — while disagreeing over whether a specific
government funding decision constituted a government created obstacle.
And second, because the Constitution provides no special protection
to biomedical research, the argument for legal entitlement to funding
of stem cell research proceeds on dramatically weaker grounds than
even the rejected arguments in the abortion funding cases.
Title VI of the Civil Rights Act of 1964 furnishes another example
of how government withholds funds from practices it does not outlaw.
It provides that, “No person in the United States shall, on
the ground of race, color, or national origin, be excluded from
participation in, be denied the benefits of, or be subjected to
discrimination under any program or activity receiving Federal financial
assistance.” It is this provision that requires private universities
to avoid those racial classification in admissions and hiring that
would violate the prohibitions imposed on state action by the equal
protection clause of the 14th Amendment. Title VI is far reaching,
because most private universities rely heavily on government funding
for the support of basic research. And it provides a way for the
federal government to shape the moral contours of what is largely
private conduct, and bring it in line with fundamental constitutional
principles. Of course private institutions are free to continue
to practice activities that disqualify them from federal funding.
All they have to do is refuse to take federal funds.
Close in form to federal policy on stem cell research are social
security regulations regarding marriage and survivor benefits. For
example, although cohabitation without matrimony is not illegal,
indeed it is quite common, the federal government refuses to pay
social security survivor benefits to all but legal spouses. This
is a way for government to provide financial incentives for marriage.
And for government to take sides on the good of marriage, proclaiming
the union marked by it as good for individuals and good for the
polity. It must be acknowledged that the withholding of a reward
could, under imaginable circumstances, stigmatize those who choose
to live together as a loving couple but not to marry. But just as
it can not plausibly be claimed today that the child tax credit
confers social disapprobation on married couples without children,
so too it cannot be plausibly claimed that unmarried couples suffer
social disapprobation because of government policy that restricts
the paying of social security survivor benefits to legal spouses.
As these examples illustrate, the controversy over stem cells
should be seen as one among many political battles over the allocation
of limited federal funds. The controversy is distinguished not by
the presence of moral principles, or the presence of moral principles
on both sides, but by the particular moral principles at stake and
the intensity of the passions their defense provokes.
When the question of federal funding is placed in perspective,
it can be seen that the common objections to the President’s
policy on embryonic stem cell research are misplaced.
First, by withholding federal funding for research that involved
the destruction of new embryos, the President did not effectively
ban embryonic stem cell research. The decision permitted private
individuals and companies to pursue it. Furthermore, his August
2001 decision for the first time provided federal funding for stem
Second, by basing his policy in part on moral considerations,
the President did not violate an obligation to keep morals out of
politics, because funding decisions, whichever way they go, typically
contain a moral component. Indeed, the moral component often lies
at the heart of the dispute and at the heart of the decision.
Third, by refusing to seek a blanket prohibition on an activity
from which he withheld funding on moral grounds, the President did
not make an incoherent decision. The complexities of a free society
frequently create situations in which it makes sense for government
to express doubt, anxiety or disapproval for a permitted activity.
None of this is to deny that the president’s policy on stem
cell research is open to criticism on the merits. It is only to
claim that his policy reflects a perfectly appropriate exercise
of governmental powers.
1. Peter Berkowitz is an
Associate Professor of Law at George Mason University School of
Law, and a Research Fellow at the Hoover Institution. He serves
as a Senior Consultant to the President's Council on Bioethics.