Archive for February, 2009
Lamar Smith vs. the WSJ
House Judiciary Committee ranking member Lamar Smith (R-TX) wrote a plea for E-Verify, the federal worker background check system, in the Washington Times yesterday. He dedicates the first paragraphs to a broad analogy between immigrant workers and burglars, then says:
E-Verify is the federal government’s system that enables businesses to hire legal workers. It is a sure way to protect jobs for U.S. citizen and legal immigrant workers alike, and ensure their jobs aren’t stolen by illegal immigrants.
Time was when Republicans opposed regulation rather than extolling it.
Smith’s advocacy for increased regulation in the name of a closed society is handily eclipsed by the Wall Street Journal‘s editorial on the topic this morning, reporting on the status of the effort to expand E-Verify through the economic stimulus legislation:
[W]e’re happy to report that negotiators so far have rejected a troublesome amendment that would require any business receiving stimulus funds to enroll in E-Verify, a government program for determining work eligibility. The last thing employers need now is more bureaucratic red tape.
And the Journal is talking about solutions:
Illegal immigration tends to flow and ebb based on the strength of the U.S. economy. Given the recession, it’s likely to decline in the short-run, and Congress might use the lull to enact some substantive policy reforms. Work-site enforcement should be part of a broader immigration debate, not something slipped into a stimulus bill to placate protectionists.
The winner, by a knockout: the Wall Street Journal.
Oh, So That’s The Problem
David Brooks on the Chris Matthews show explaining
I’m willing to forgive a little corruption…I think the biggest problem in Washington is not that we have too many people taking money….The biggest problem is we don’t have–know–have enough people who know how to pass legislation.
Not enough legislation. I knew there was a problem. Now back to the $800 billion stimulus.
Come On! Get a Piece of the Stimulus!
The lobbying frenzy to get each interest group’s agenda into the kitchen-sink stimulus bill continues to accelerate. Veterans groups want subsidies for veterans. The Creative Coalition, an association of people who have made millions by producing profitable art, argues that taxpayer-funded subsidies to unprofitable arts will produce another Orson Welles, Saul Bellow, or Burt Lancaster. One prominent actor, Patrick Swayze, is understandably more concerned that the bill include “maximum funding” for cancer research. Energy billionaire T. Boone Pickens wants energy subsidies in the bill. “The Water & Wastewater Equipment Manufacturers Association is urging congressional leaders to dedicate funding for water and wastewater projects.” Religious liberals are pushing for hikes in welfare spending. Florida congressmen want more spending on space programs. I cited more examples a week ago:
“A Republican [in Ohio] called it a once-in-a-lifetime opportunity.” “Cities, towns ready to vie for stimulus funds.” “Road Builders Compete for Slice of Stimulus.” “West Michigan’s stimulus wish list.” “A State with a Wish List for Stimulus Spending.” “Steel industry lobbyists seem to have persuaded the House to insert a “Buy American” provision in the stimulus bill it passed last week.” “JetBlue Goes to Washington to Discuss Economic Stimulus Plan.”
As with the TARP bailout, the lobbying will only heat up if and when the bill is passed. At that point, instead of trying to get your favorite line item into the bill, the challenge will become finding a member of Congress to pressure the bureaucracy to agree that your project meets the criteria for funding laid out in the bill. Considering that the headline summary of the bill runs 13 pages, it shouldn’t be too hard to find a provision to cover just about anything. And then, instead of productive activity, yet more money and talent will be directed to seeking subsidies from government. That’s no way to stimulate actual economic growth, though it will certainly stimulate the economy of Washington, D.C., and its prosperous suburbs.
Could It Be They’re Listening?
While Friday’s compromise on the bankrupting “stimulus” would just dust snow off a glacier – and who knows what will end up in the final version – there is a small silver lining for those of us at Cato’s Center for Educational Freedom: education saw the biggest reductions.
For months we have been hammering away at the utter waste of cramming yet more bucks into already obese schools, and maybe, just maybe, someone has been listening. They haven’t been listening all that well – there’s still a Toll House factory’s worth of extra dough for everything from Head Start to Pell Grants – but compared to the already passed House version, the compromise bill would eliminate $40 billion from the “State Fiscal Stabilization Fund” (a massive bailout for hugely bloated state education apparatuses) and all of the money for k-12 and higher education facility construction. So, even if the remaining bill still robs children tomorrow to enrich education bureaucrats today, at least there’s a bit of movement in the right direction.
Tom Paxton’s Grammy
Folksinger Tom Paxton received a Grammy Lifetime Achievement Award Sunday night. He’s probably best known for his antiwar and civil-rights songs from the 1960s and 1970s. But on this blog he’s most celebrated for “I Am Changing My Name to Fannie Mae” (originally written in 1979 as “I’m Changing My Name to Chrysler.”) You can hear Paxton sing it here. Those who think Tom Paxton is a better songwriter than singer can hear Arlo Guthrie’s version instead.
If only they’d let him sing “I Am Changing My Name to Stimulus” at the Grammys: “When they hand a trillion grand out, I’ll be standing with my hand out.” Or maybe even “The Ballad of Ron Paul“!
Has President Obama Bitten Off More than He Can Chew?
Beneath all the thrashing over the giant deficit spending bill, President Obama has another thorn in his side: Iraq. Reuters now reports that the military has crafted an analysis of three plans for withdrawing from Iraq: one taking 16 months, one taking 19 months, and another taking 23 months. It’s not clear from the article where the 19- and 23-month proposals came from. It’s a bit strange, though, that the president’s own plan has been put in a position now as being the extremely fast plan for withdrawal, juxtaposed against the two others. Who asked for other plans?
Reuters reports further that Gen. Petraeus (CENTCOM) and Lt. Gen. Odierno (MNF-I) favor the longest of the three plans.
All of this shouldn’t be surprising, though: Tom Ricks’ new book on Iraq (which I’ve not seen) features this little tidbit in the promotional materials:
“For Petraeus, prevailing in Iraq means extending the war. Thomas E. Ricks concludes that the war is likely to last another five to ten years—and that that outcome is a best case scenario. His stunning conclusion, stated in the last line of the book, is that ‘the events for which the Iraq war will be remembered by us and by the world have not yet happened.’”
So in the midst of the partisan scrap over the giant spending package, the Reuters story makes it look like like Obama may have to take on Petraeus and Odierno if he thinks he’s going to get us out of Iraq any time soon.* Who’s optimistic?
* Marc Lynch of GWU and Foreign Policy made essentially this argument previously, and was slapped down by an Odierno spokesman. Let’s see if these Obama vs. Petraeus/Odierno stories (and responses from military spokespeople) keep getting written.
Obama Transparency Update
President Obama may yet mend his first broken campaign promise — to post the legislation Congress sends him online for five days before he signs it.
In a statement to Politifact, White House spokesman Tommy Vietor said, “We will be implementing this policy in full soon; currently we are working through implementation procedures and some initial issues with the congressional calendar.”
(I don’t think the congressional calendar has much to do with it. More likely, White House staff and perhaps President Obama himself didn’t take the promise seriously in the months running up to his inauguration. They could have been ready, but evidently didn’t plan to post bills for five days before signing until they heard about it from the public.)
For a time, it appeared that the administration would weasel out of the promise with a half-measure — posting bills on Whitehouse.gov while they made their way through Congress. But the Sunlight Foundation’s Paul Blumenthal called that out as error. Vietor’s statement puts to rest the concern that the White House will break the promise with such half-measures.
An important question, of course, is “Why?” Aren’t bills sent to the president faits accomplis? No, they’re not. As I said in a post on Tech Liberation Front:
If the White House were to implement the promised practice of leaving bills sitting out there, unsigned, after they pass Congress, that would have significant effects. The practice would threaten to reveal excesses in parochial amendments and earmarks which could bring down otherwise good bills. President Obama’s promised five-day cooling off period would force the House and Senate to act with more circumspection.
James Knight on ‘Does the Doctor Need a Boss?’
Dr. James G. Knight (M.D.) is the CEO of Consumer Directed Health Care, Inc. Below, he shares his thoughts on “Does the Doctor Need a Boss?“, a paper coauthored by Arnold Kling and me that has sparked a debate within the consumer-directed health care movement.
RE: Does the Doctor Need More Bosses?
My brother had a job in big business where he reported to more than one boss. Needless to say, it didn’t work out well for him.
Doctors ought to have just one boss, their patient. Patients must be allowed to work with the advice of physicians of their choosing and must have the right to make their own health care decisions. Patients must also have meaningful financial responsibility for the decisions they make. Everybody else is superfluous, except to the degree they too have a share of the financial responsibility.
If fee-for-service has been corrupted by the average physician performing unnecessary services for monetary gain (a premise I totally reject as a mean physician characteristic), then by converting to salaries or capitation these same “corruptible” physicians will be able to profit more by being lazy, doing less, and avoiding the sickest patients; a combination of both greed and sloth versus greed alone.
Cato believes in individual liberty, limited governments and free markets. In my view, big government and big corporations are very often equal threats to individual liberty. As a nation we need a big military to provide for national defence and a few big corporations that can complete huge projects that individuals couldn’t possibly accomplish, but health care is the application of the intellectual rights of individual professionals delivering care to just one patient at a time.
Does Bipartisanship = Bigger Government?
The Washington Post praises the “attempt to rise above the partisan squabbles that too often have paralyzed Washington” that led to agreement on a massive spending bill. Denouncing “the old ways” and “the customary blame-gamesmanship,” the Post editorializes:
The gang of 20 or so moderate Democrats and Republicans, led by Sen. Ben Nelson (D-Neb.) and Sen. Susan Collins (R-Maine), heeded the president’s call for bipartisanship and hunkered down to produce the bill announced Friday night. Though the details of the package still need to be examined, the senators’ effort was an admirable one.
Being respectful and working together are very nice attributes. But the bottom line must be whether the country is better off with the product of the bipartisanship. And in this case the core of the controversy is whether a government running a $1 trillion deficit should spend another $820 billion (which willl almost certainly be more after it emerges from conference committee) that it doesn’t have. The Post asserts that the bill is “aimed at providing the quick and large injection of funds into the economy experts say is necessary.” But the Post knows very well that many economists disagree with that claim.
The Democratic and Republican senators who have made possible the passage of the largest spending bill in history have done the country no favors. The Post’s editors may disagree with that assessment. But the issue should be freedom, economic recovery, and the morality of piling more debt on our children, not process and politeness.
National Science Foundation Employees Gone Wild
The federal government’s National Science Foundation (NSF) has become the bureaucratic version of Animal House. Last week I blogged on a NSF inspector general discovery that agency employees were viewing pornography, engaging in sexual online chats, and using taxpayer-funded trips to pursue women. Now comes word from a New Zealand newspaper that NSF employees in Antarctica have been jello-wresting and skinny-dipping in frigid waters.
The quotes from defiant NSF employees are priceless, and demonstrate how little regard they have for the taxpayers paying their salaries:
“I will just say that I was terminated for having harmless jello wrestling…”
“Every trip, there are more and more rules, restrictions and guidelines that seem designed to take all the life out of the place and make it more like a unionised auto factory.”
“Yes, I know it is a workplace, but they are sucking all the fun out of the place.”
As I noted last week, “The House version of the ‘stimulus’ plan being developed in Congress would give the government’s National Science Foundation (NSF) an extra $3 billion, in part, to ‘put scientists to work looking for the next great discovery.’ Three billion dollars is a considerable chunk of change given that the NSF spent more than $6 billion in fiscal year 2008.”
I shudder to think what this gang is going to discover with the additional money.
Urban Institute Study on HSAs
Last month, the Urban Institute published a study by Linda J. Blumberg and Lisa Clemans-Cope critical of health savings accounts. I was about to write a point-by-point rebuttal when I realized that I already had, nearly three years ago. So I’ll just summarize.
- HSAs do provide a larger tax break to wealthy people, but that’s not the fault of HSAs themselves so much as the much larger tax exclusion for employer-sponsored insurance that HSAs were designed to emulate. Yet Blumberg and Clemans-Cope do not criticize the exclusion itself. Sooo . . . tax breaks for the wealthy are kosher, unless they let workers control their earnings?
- The presence of that large tax break does not mean that HSAs are “most attractive to the high-income and the healthy.” As the Congressional Research Service writes: Some less healthy people may find HSA plans attractive because they enable them to circumvent the restrictions of managed care plans. Conversely, some healthy people may find them unattractive because they are very risk-averse; they would prefer to pay more for comprehensive insurance with low deductibles. Older people may find HSA plans attractive because of the tax advantages: being in higher tax brackets (since average earnings increase with age until people are in their 50s), their tax savings from contributions would be greater. People who are 55 but not yet 65 years of age would also be attracted by the additional catch-up contributions they may make. By the same token, younger people with low incomes may consider the HSA tax advantages inconsequential.”
- As for the cost-containment potential of HSAs, in my 2006 paper I made a back-of-the-envelope calculation that, under current law, HSAs have the potential to “introduced price sensitivity into more than 60 percent of medical expenditures by all nonelderly fully insured individuals.” That ain’t small potatoes. HSAs could do even more to contain costs if we expand them into Large HSAs that let consumers control all of their health-care dollars — not just the first few thousand.
- There is zero evidence that HSAs will lead to worse health outcomes. In fact, all evidence suggests HSAs will deliver health outcomes comparable to other forms of insurance at a lower cost.
I address other criticisms in my paper, which Blumberg and Clemans-Cope do not cite.
They do lodge one additional criticism against HSAs that has emerged since my paper was published: that HSAs encourage or enable tax evasion. I addressed that criticism last year and found it groundless: HSA critics have produced no evidence of unlawful withdrawals, nor have they offered any reason why HSAs should be subject to greater scrutiny than other methods of not reporting income. Again, Blumberg, Clemans-Cope, and other critics leave the impression that the identified attribute is not the offending attribute.
I’m critical of HSAs too, but this?
Transparency, Accountability, and the Debt Bomb
The NPR article containing the interview with House Appropriations Committee chairman David Obey (D-WI) that my colleague Michael Cannon blogged on earlier today ends with statements by former Government Accountability Office (GAO) head David Walker that are worth highlighting:
As it stands now, says David Walker, a former U.S. comptroller general, the bill appears to have no mechanism for directing spending. It’s left up to those state and local officials, who may or may not have the ideas or the means to spend it appropriately. And that will lead to “a series of disappointments that it’s too late to do anything about,” Walker says.
The bill does make it possible for lawmakers and the public to track the money — but only after it’s spent. And that, he says, will lead to bad surprises.
Take, for example, the giant bank bailout known as TARP. That spending has gone all wrong, Walker says. Though the inspector general and the Government Accountability Office are keeping track of the billions spent there, “they’re basically reporting on what didn’t happen,” he says.
“Well, it’s a little bit late,” he says. “And so the question is, what are you going to do on a prospective basis? I mean, you can’t change history. What are you going to do on a prospective basis to minimize the possibility of being disappointed again?”
What are you going to do? Here’s what you (Congress) should do: Don’t spend the money to begin with.
Like the “good government” crowd, a group that includes voices from the left end of the political spectrum to the right, I’m all for transparency with regard to how politicians spend taxpayer money. It obviously makes my job of pointing out the myriad ways in which legislators and bureaucrats waste our money much easier.
Greater transparency was a major theme of President Obama’s campaign. Although the president has gotten off to a rough start (see my colleague Jim Harper’s comments here), his much ballyhooed intentions are reflected in the “stimulus”/debt bomb heading toward his desk. As NPR reported on Wednesday, “budget watchdogs say Obama’s stimulus package contains spending transparency provisions that are nothing short of revolutionary.”
Cato on Facebook
Cato on Twitter
Cato on Google+
Cato on YouTube
