The Free Market Argument For Defunding Planned Parenthood

Set aside your moral evaluations of abortion and views on the true purpose of Planned Parenthood Federation of America (PPFA). Instead, let’s take a step back for a moment and take on this social issue from a different perspective.

You don’t have to be a social conservative to support defunding Planned Parenthood. You just need to be a free market advocate.

It’s no secret that the government continues to love private sector subsidies despite plenty of evidence that the market is better at making these decisions than bureaucratic administrators (e.g., Solyndra and last year’s Fisker debacle). PPFA is another example of the government picking winners and losers — the company and its affiliates receive roughly $66 million a year via Title X funding according to PPFA’s Washington office. Back in fiscal year 2012, PPFA received a record number of $542 million in taxpayer support, which includes Medicaid. That was up 11% from 2011 and a whopping 34% from 2010.

Those numbers aren’t something to scoff at and taxpayers are footing the bill for another company that has a chance to sit back rather than compete.

“But,” the skeptic interjects, “why are you talking about PPFA like a private sector organization?”

Yes, PPFA is a non-profit organization unlike the two subsidy recipients cited in this piece. But when 82% of PPFA’s revenue comes from donations (refer to p. 18 of PPFA’s 2012-2013 report), that $66 million a year starts to look pretty paltry. While many states have very strict regulations on opening abortion clinics, there are no laws truly stopping anyone from providing abortions. An independent clinic can open, OBGYNs can offer the same services as PPFA (including offices that accept Medicaid), and so on.

“But what about their low-cost services for those of lesser means?” one may protest. “If one cuts PPFA’s federal subsidy, they’ll be left in the dust!”

Let’s look at this way:

  • Note that Medicaid isn’t factored in to that $66 million subsidy.
  • PPFA has name recognition that puts millions of private companies and NPOs to shame. That will keep the donations flowing.
  • In a free market setting, PPFA will need to keep those low prices for consumers in order to attract the same level of business. The demand for birth control, STD treatments, and abortions isn’t going away — and if PPFA is offering the lowest prices, they’ll keep their business.
  • And, heck, if you’re worried about access to abortion, making PPFA compete in the same manner as any other private or NPO clinic will force the organizations in question to up the quality and lower the prices as best they can. Eventually this leads to more accessibility across the board.

When the Susan G. Komen for the Cure Foundation cut off their PPFA funding, supporters responded with $650,000 in 24 hours. That number is equal to the entirety of Komen’s 2011 funding. All it takes a little pushback against PPFA to get donors to empty their pockets for them. If PPFA becomes at all concerned about losing that $66 million a year, all they need to do is make people set their hair on fire with some announcements and/or literature implying impending “doom.” Imagine the money bomb if the federal government ends that subsidy.

Defunding PPFA won’t necessarily destroy them. PPFA will have to sink or swim like any other organization — in this case, by hitting up people for donations. If the market keeps PPFA in business, then they’ll continue to operate accordingly. If not, social conservatives will get their way without abortion-specific legislation.

This should be an easy call for any fiscal conservative, whatever your opinion of abortion may be.

If you’re looking for more bits and pieces to cut from our budget, Planned Parenthood’s federal funding should be a no-brainer.