Archive for July, 2009
More Health Care Charts!
The U.S. Chamber of Commerce has two charts showing what health care regulation looks like now…
…and what it would look like under the House Democrats’ health care plan:
CBO: Democrats Bend Health Care Cost Curve — in the Wrong Direction
This is too good. Directly from the ABC News blog post, “CBO Sees No Federal Cost Savings in Dem Health Plans:”
Here’s a blow to President Obama and Democrats pressing health care reform.
One of the main arguments made by the President and others for investing in health reform now is that it will save the federal government money in the long run by containing costs.
Turns out that may not be the case, according to Doug Elmendorf, director of the nonpartisan Congressional Budget Office.
Answering questions from Democrat Kent Conrad of North Dakota at a hearing of the Senate Budget Committee today, Elmendorf said CBO does not see health care cost savings in either of the partisan Democratic bills currently in Congress.
Conrad: Dr. Elmendorf, I am going to really put you on the spot because we are in the middle of this health care debate, but it is critically important that we get this right. Everyone has said, virtually everyone, that bending the cost curve over time is critically important and one of the key goals of this entire effort. From what you have seen from the products of the committees that have reported, do you see a successful effort being mounted to bend the long-term cost curve?
Elmendorf: No, Mr. Chairman. In the legislation that has been reported we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health care costs.
Formatting in original.
Rory Stewart on the Deep Confusion Underpinning Our Afghanistan Strategy
Rory Stewart has a terrific piece in the London Review of Books arguing that Beltway foreign-policy thinkers are “minimising differences between cultures, exaggerating our fears, aggrandising our ambitions, inflating a sense of moral obligations and power, and confusing our goals” when it comes to Afghanistan:
Policymakers perceive Afghanistan through the categories of counter-terrorism, counter-insurgency, state-building and economic development. These categories are so closely linked that you can put them in almost any sequence or combination. You need to defeat the Taliban to build a state and you need to build a state to defeat the Taliban. There cannot be security without development, or development without security. If you have the Taliban you have terrorists, if you don’t have development you have terrorists, and as Obama informed the New Yorker, ‘If you have ungoverned spaces, they become havens for terrorists.’
These connections are global: in Obama’s words, ‘our security and prosperity depend on the security and prosperity of others.’ Or, as a British foreign minister recently rephrased it, ‘our security depends on their development.’ Indeed, at times it seems that all these activities – building a state, defeating the Taliban, defeating al-Qaida and eliminating poverty – are the same activity. The new US army and marine corps counter-insurgency doctrine sounds like a World Bank policy document, replete with commitments to the rule of law, economic development, governance, state-building and human rights. In Obama’s words, ‘security and humanitarian concerns are all part of one project.’
This policy rests on misleading ideas about moral obligation, our capacity, the strength of our adversaries, the threat posed by Afghanistan, the relations between our different objectives, and the value of a state…
Stewart’s prognosis is at once dispiriting and fortifying. On the one hand, “it is unlikely that we will be able to defeat the Taliban.” More sharply, “30 years of investment might allow its army, police, civil service and economy to approach the levels of Pakistan. But Osama bin Laden is in Pakistan, not Afghanistan.” On the other, “the Taliban are very unlikely to take over Afghanistan as a whole.” Why not?
It would require far fewer international troops and planes than we have today to make it very difficult for the Taliban to gather a conventional army as they did in 1996 and drive tanks and artillery up the main road to Kabul.
Even if – as seems most unlikely – the Taliban were to take the capital, it is not clear how much of a threat this would pose to US or European national security. Would they repeat their error of providing a safe haven to al-Qaida? And how safe would this safe haven be? They could give al-Qaida land for a camp but how would they defend it against predators or US special forces? And does al-Qaida still require large terrorist training camps to organise attacks? Could they not plan in Hamburg and train at flight schools in Florida; or meet in Bradford and build morale on an adventure training course in Wales?
So what on earth are we doing? “No politician wants to be perceived to have underestimated, or failed to address, a terrorist threat; or to write off the ‘blood and treasure’ that we have sunk into Afghanistan; or to admit defeat. Americans are particularly unwilling to believe that problems are insoluble; Obama’s motto is not ‘no we can’t;’ soldiers are not trained to admit defeat or to say a mission is impossible.”
A Better Way to Reform Health Care
From my oped in today’s Investor’s Business Daily:
As it turns out, “universal coverage” may not be so inevitable after all. Much to the chagrin (and apparent surprise) of President Obama and congressional Democrats, squabbling has erupted in earnest over who will spring for the exorbitant cost.
Fortunately, Obama has an exit strategy: “If there is a way of getting this done where we’re driving down costs and people are getting health insurance at an affordable rate, and have choice of doctor, have flexibility in terms of their plans, and we could do that entirely through the market, I’d be happy to do it that way.”
Well, there is a way: Let individuals control their health care dollars, and free them to choose from a wide variety of health plans and providers. If Congress takes those steps, innovation and market competition will make health care better, more affordable, and more secure.
In Which I Liken Wal-Mart to Josef Stalin
Well, kinda.
In this oped for Kaiser Health News, I explain how the deals that the Obama administration has struck with (some) drug companies, Wal-Mart, and (some) hospitals are “the same old Washington game of bribes, backroom deals, profiteering and protectionism — and a harbinger of what health care will look like if the president’s reforms succeed.”
Schwartz: CDT Remains True to Principles
Ari Schwartz asked me to post this response to my post from earlier today:
Jim,
Thank you for offering me the opportunity to respond to your post today.
As always, I take your criticism of me and CDT seriously. However, I think that this time, in suggesting that CDT has no principles, you are letting your strong biases get in the way of offering Cato’s blog-reading public some of the facts.
1) CDT does not support a National ID system. Our testimony makes it clear that we believe that PASS ID prevents the creation of a National ID system — which is the opposite of creating one.
2) The fact that CDT and Cato disagree on this issue does not mean that CDT is unprincipled. CDT takes the issue of principles very seriously, as all civil liberties groups must.
Our first concern is always to remain true to these principles. Staying effective in Washington as a consensus-builder and doing so is a constant source of internal and external discussion at CDT. As you know, we are always willing to engage in private or public conversations with individuals who believe that we have not remained true to these principles — as you seem to in this instance. I believe that we can have a better dialog if we begin the discussion there.
Thanks,
Ari
JEC/GOP Chart of House Democrats’ Health Plan
I was on the Glenn Beck Show yesterday…
…talking about this rendering of the House Democrats’ 1,018-page health care plan:
That’s you all the way on the left, and your doctor/hospital all the way on the right.
What could be simpler?
Social Security Administration Bureaucrats Have a Party…and Taxpayers Pick Up a $700,000 Tab
With so much money being squandered in Washington, $700,000 does not even rise to the level of an asterisk. But when that much money is being wasted so that senior bureaucrats from the Social Security Administration can enjoy a party (oops, a training session) at a four-star resort in Arizona, it becomes a symbol of Washington profligacy. Kudos to ABC News for running a story on this travesty. Make sure to watch the embedded video of bureaucrats “reducing stress” at your expense:
. . . nearly 700 executives from the Social Security Administration (SSA) gathered for a lavish three-day conference in Phoenix, AZ last week, costing taxpayers about $700,000. . . . The conference, which included a performance by a motivational dance company that was captured on tape by Phoenix affiliate ABC15, was held at the Arizona Biltmore, a hotel described as the “Jewel of the Desert” with an oasis of 39 acres of lush gardens, swimming pools and a golf course. SSA executives were invited to join in the dancing.
Sotomayor Playing Out the Clock
As she began to do more and more yesterday, the nominee has started today’s hearings with a series of painfully drawn-out non-answers to Senator Kyl’s questions.
Kyl is pointing out the conflict between Sotomayor’s claim that in Ricci she was simply following precedent and the Supreme Court’s finding that there was no precedent on point—and so Sotomayor’s panel summary disposition was improper.
Sotomayor’s responses have ranged from explaining again the procedural posture of the case, to references to irrelevant background cases (not binding precedent), to recounting en banc voting procedures in the Second Circuit. It is clear that, even as the Republicans reload and regroup at every break and recess, Sotomayor has been counseled to talk and talk—again, in an excruciatingly slow rate—without really saying anything.
CP Townhall
Congress Abolishes Health Care Scarcity?
Reading the New York Times‘s coverage of a Senate committee’s recent vote on health care legislation, I was struck by the following statement from Sen. Dodd:
If you don’t have health insurance, this bill is for you,” said Senator Christopher J. Dodd, Democrat of Connecticut, who presided over more than three weeks of grueling committee sessions. “It stops insurance companies from denying coverage based on pre-existing conditions. It guarantees that you’ll be able to find an insurance plan that works for you, including a public health insurance option if you want it.”
The bill would also help people who have insurance, Mr. Dodd said, because “it eliminates annual and lifetime caps on coverage and ensures that your out-of-pocket costs will never exceed your ability to pay.”
A basic understanding of economics should tell you this can’t be right. The federal government and the insurance industry have limited resources; the demand for health care is potentially unlimited. Therefore, no conceivable legislation can ensure that the demand for health care will never exceed the resources available to pay for it. All legislation can do is to shift who controls the allocation of scarce health care dollars—in this case away from patients and insurance companies and toward the federal government. Reasonable people can disagree about whether that’s an improvement, but it’s disingenuous to pretend that any legislation could “eliminate” caps on coverage or “ensure” that health care wants will never outstrip our ability to pay for them.
Back to the Bad Old Days of High Marginal Tax Rates
As Mike Tanner has written, the health care bill means a big tax hike — indeed, a lot of tax hikes. It also means a reversal of one of President Ronald Reagan’s great achievements, bringing down the top marginal income tax rate.
Small-business owners are warning that the economy would suffer under a health care bill proposed by House Democrats, which would drive tax rates for high-income taxpayers to levels not seen since before President Reagan’s tax reform of 1986.
The top federal income tax rate, which Mr. Reagan and a bipartisan Congress lowered from 50 percent to 28 percent, would reach 45 percent in 2011 if Congress and President Obama enact the surtaxes that are part of the health care reform plan that House Democrats announced Tuesday.
Small-business owners, who would take a direct hit from the surtaxes, expressed dismay over the proposal, saying it would force them to curtail hiring and reduce wages amid the worst recession in a generation.
“If they institute a 5 percent surtax on income, it will have a severe impact on small businesses that are already hurting,” said Michael Fredrich, whose Wisconsin company, MCM Composites, molds plastic parts.
“We run maybe three days a week, sometimes four days a week, sometimes zero days,” he said. “I can tell you that at some point, people … running a small business are just going to say, ‘To hell with it.’ “
Individuals tend to focus on their tax burden. After all, our overall tax bill reflects the amount of money we lose as legislators speed about the country allegedly “serving” us while promoting their own political ends.
Marginal tax rates more directly affect decisions on saving, investment, business formation, work effort, job creation, and more. Even politicians not enamored of the “rich,” whatever that term means, should recognize that we all benefit from an economic system which encourages entrepreneurship.
Proponents of big tax hikes might want to recall Aesop’s Fable, The Goose that Laid the Golden Eggs. Wreck the economy, and the health care system will crash too.
We Can No Longer Afford an Education Monopoly
In an IBD op-ed today, I point out that we’re spending twice as much per pupil as we did in 1970, despite no improvement in achievement at the end of high school and a decline in the graduation rate over that same period.
What difference does that make? If public schools had just managed not to get any less efficient over the past 40 years, we’d be saving $300 billion annually.
Our education monopoly is a luxury we can no longer afford. When the economy was booming, it didn’t matter that it cost us more and more every year for the same or even inferior results. These days, it’s becoming imperative that we find ways for our education system to enjoy the same relentless increases in efficiency that we take for granted in every other field.
This, for instance, would be a good start.
Economic urgency isn’t the only good reason to bring education back within the free enterprise system, but when the school monopoly starts bringing entire states to their financial knees, it’s certainly one we should take seriously.
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