Obamacare for American Orbanists: How Not to Do Family Policy

Editor's Note: This is part of Civitas Outlook's Family Policy Symposium.

Earlier this year, the Washington Post reported on a draft proposal from the Heritage Foundation for a new “Manhattan Project to restore the nuclear family.” In theory, this is a noble cause: marriage and birth rates are in critical decline. Unfortunately, the centerpiece of this specific proposal was not cultural renewal, but a colossal three-pronged expansion of the entitlement state.

Months later, the draft remains just that, and by all indications, the Heritage Foundation has chosen to mothball the flawed proposal. Whoever killed it internally deserves credit, and it would be sanctimonious to hold the institution responsible for a proposal they never actually proposed. But Heritage has historically served as the flagship conservative institution of the right, so it is still worth appraising the draft proposal seriously as an indication of an emerging trend on the right, one that is being taken increasingly seriously in conservative institutions, even if it was still too radical at this juncture to receive institutional support.

As drafted, the plan would have marked an abandonment of conservatism’s traditional role as the guardian of limited government, federalism, and civil society, in favor of a populist statism more at home in Budapest than in the American heartland. What is even more tragic is that the plan would have created trillions in new spending obligations without addressing the true causes of declining fertility.

Heritage has played a key role in fighting against Obamacare over the years, calling it “a massive alteration of the constitutional balance of power between the federal government and the states” that “strikes at the heart of American federalism.” All the more shocking, then that this shuttered draft proposed creating an entirely new program that would have cost tens of billions more annually than the Obamacare monstrosity.

The decline of the American birthrate is real and troubling. From 3.7 births per woman in 1960, the rate has fallen to 1.6 today – well below replacement level. But understanding the cause of this decline is critical to prescribing the right solutions.

The draft’s implicit assumption is that Americans are having fewer children because they cannot afford them. Yet the evidence points elsewhere. Real median wages today are 16 percent higher than in 1980. Real family incomes have more than doubled since 1960. Meanwhile, abortion rates have fallen by more than half since the 1980s. In other words, families are wealthier, abortions are rarer, and yet fertility has continued to decline.

Blaming the fertility decline on affordability overlooks that birth rates have declined globally as societies have grown more prosperous. Among OECD countries, Israel remains the only one with a fertility rate above 2.0. But Israel’s high fertility is not the result of subsidies – it is rooted in strong religious norms, especially among Orthodox Jews, who often average six or more children per family. Culture, not cash transfers, explains the difference.

If we misdiagnose the cause of the disease, we will surely fail to treat it. Worse, we may even create new problems. Fertility decline in the United States is a cultural phenomenon: a weakening of marriage, faith, and community. No level of federal spending can fix that.

The American right’s fascination with Viktor Orbán’s Hungary illustrates this misdiagnosis. Since 2010, Hungary has spent heavily on pro-natalist policies, devoting nearly 5 percent of GDP to family subsidies. These programs raised fertility from a low of 1.2 to a peak of 1.6, but the gains proved temporary. Today, Hungary’s rate has slipped back to 1.5 – still below America’s 1.6, and far short of replacement. In other words, Hungary has already maxed out on the very same state-welfarist approach that the authors of the Heritage draft would have American conservatives follow.

Worse, under Orban’s increasingly autocratic rule, Hungary’s economic freedom rating has tumbled to the lowest point in more than 20 years, according to Heritage’s own Index of Economic Freedom. Heritage now rates Hungary, once a leader in post-Soviet reforms, as “repressed” in fiscal health and government spending. Per capita income in 2024 was barely $23,300: less than half the OECD average. Even the poorest state, Mississippi, is twice as wealthy.

Hungary’s experience proves that enormous subsidies are both costly and ineffective. Fertility is higher in Israel and the United States than in Hungary, despite far lower spending. Why would American conservatives embrace policies that have failed abroad and contradict our own free-market success?

Why Subsidies Won’t Save Entitlements

Advocates of a ‘pro-natalist’ redistribution scheme to induce procreation argue that higher birthrates would avert America’s entitlement crises. This is wishful thinking. Social Security’s long-term shortfall is not primarily a function of the worker-to-retiree ratio. It stems from decades of over-promising benefits relative to payroll tax contributions. Adding more children today does not solve this imbalance.

Without reform – through privatization, personal accounts, or sustainable benefit adjustments – our entitlement programs will remain insolvent. Subsidizing childbirth will not fix them; it will worsen the fiscal outlook.

The Conservative Alternative

If declining fertility is primarily cultural, not economic, then our solutions must reflect that reality. Conservatives should resist the temptation to federalize family life. Instead, we should remove the obstacles the government has erected to family flourishing and strengthen the institutions of civil society.

This means:

·         Protecting religious liberty and revitalizing faith communities. As David Bahnsen has argued, “healthy procreation in society” depends on strong marriages, vibrant churches, and a culture of virtue – none of which can be legislated from Washington.

·         Expanding educational choice. Parents should be free to direct education dollars to the public, private, religious, or home schools that align with their values.

·         Reforming housing policy. Local governments should end restrictive zoning and excessive regulation that inflate housing costs and discourage young families.

·         Promoting labor flexibility. Washington must resist efforts to restrict the gig economy or impose forced unionization that limit family-friendly work arrangements.

·         Ending distortive subsidies and tariffs. Government interventions in housing finance, student loans, and trade policy make family life more expensive. Eliminating them would provide more relief than any new entitlement.

·         In short, conservatives should not pay people to have children. We should build a society in which families want children because faith, community, and culture make family life meaningful.

Conclusion

The authors of the Heritage draft insisted that “Old orthodoxies must be re-examined and innovative approaches embraced.” Yet its proposal for a trillion-dollar family entitlement is neither innovative nor conservative. It is a recycled form of social democracy that confuses government largesse with cultural renewal.

For generations, conservatives have stood for limited government, fiscal prudence, and civil society as the bedrock of American life. Abandoning that legacy for Orbán-style government giveaways would betray the very principles that built the modern conservative movement and made America the freest, most prosperous nation in the world.

Federal transfer payments will not secure the future of the American family, only a renewal of faith, virtue, and community can achieve that. That is the conservative path – and the only path that will lead to success.

John Shelton is the policy director for Advancing American Freedom.

Joel Griffith is a senior fellow at Advancing American Freedom.