AP: Obama Misleads Voters about ObamaCare’s Effects on Premiums
Buyers, beware: President Barack Obama says his health care overhaul will lower premiums by double digits, but check the fine print…
The [Congressional Budget Office] concluded that premiums for people buying their own coverage would go up by an average of 10 percent to 13 percent, compared with the levels they’d reach without the legislation…
“People are likely to not buy the same low-value policies they are buying now,” said health economist Len Nichols of George Mason University. “If they did buy the same value plans … the premium would be lower than it is now. This makes the White House statement true. But is it possibly misleading for some people? Sure.”
Nichols’ comments are also misleading — which makes the president’s statement not just misleading but untrue.
Under ObamaCare, people would not have the option to buy the same low-cost plans they do today. That’s the whole problem: under an individual mandate, everybody must purchase the minimum level of coverage specified by the government. That minimum benefits package would be more expensive than the coverage chosen by most people in the individual market. Their premiums would rise because ObamaCare would take away their right to choose a more economical policy.
Note also that the CBO predicts premiums would rise by an average of 10-13 percent in the individual market. Consumers who currently purchase the most economic policies would see larger premium increases.
Finally, the Obama plan would also force millions of uninsured Americans to purchase health insurance at premiums higher than current-law premium levels, which they have already rejected as being too high. Their premium expenditures would rise from $0 to thousands of dollars. Yet the CBO counts that implicit tax as reducing average premiums, because those consumers are generally healthier-than-average. Only in Washington is a tax counted as a savings.
Filed under: Cato Publications; General; Health, Welfare & Entitlements
Keynesian Economics and the Wizard of Oz
When Dorothy and her friends finally reach Oz, they present themselves to the almighty Wizard, only to eventually discover that he is just an illusion maintained by a charlatan hiding behind a curtain. This seems eerily akin to to the state of Keynesian economics. It does not matter that Keynesianism isn’t working for Obama. It does not matter that it didn’t work for Bush, or for Japan in the 1990s, or for Hoover and Roosevelt in the 1930s. In the ultimate triumph of theory over reality, the Keynesians say all that matters is the macroeconomic model behind the curtain showing that more government spending leads to more jobs and growth. Consider the recent report from the Congressional Budget Office (CBO), which claimed that Obama’s stimulus created at least one million jobs. As Brian Riedl of the Heritage Foundation noted:
CBO’s calculations are not based on actually observing the economy’s recent performance. Rather, they used an economic model that was programmed to assume that stimulus spending automatically creates jobs — thus guaranteeing their result. …The problem here is obvious. Once CBO decided to assume that every dollar of government spending increased GDP…, its conclusion that the stimulus saved jobs was pre-ordained.
But surely this can’t be true, you may be thinking. Our public servants in Washington would not make important policy decisions based on a model that automatically produces a certain result, would they? Peter Suderman of Reason pulls aside the curtain:
[T]hose reports rely on assumption-packed models that effectively predetermine their outcomes; what they say, in essence, is that the stimulus worked because we assume it did. …That’s especially true when estimating government spending’s productive effects, which is accomplished by plugging numbers into a formula that assumes that government spending produces a multiplier—an increased return for every government dollar spent. In other words, it extrapolates from how much money is put in rather than from what has actually come out. And it does so using a formula that dictates that if money is put in, even more money will come out. According to the CBO’s estimates, depending on how the money is spent, one dollar of government spending can produce total economic activity of up to $2.50. What a deal! …[F]or all practical purposes, the same multipliers that were used to predict how many jobs would be created are being used to estimate how many jobs have been created.
Interestingly, CBO’s analysis is completely schizophrenic. Its short-run budget numbers are based on free-lunch Keynesianism that assumes deficit-financed government spending boosts growth, while its long-run numbers are driven by an assumption that government borrowing is terrible for growth (which is why CBO actually claims higher taxes boost economic output — see, for example, Figure 3 of this CBO analysis). It is impossible to know whether the people at CBO actually believe their own work, or whether they are simply trying to please their political paymasters by producing results that (conveniently) match up with political preferences for more spending today and higher taxes tomorrow. You can draw your own conclusions, but keep in mind that CBO is now making the absurd claim that a giant new healthcare entitlement will reduce budget deficits.
Filed under: Government and Politics; Political Philosophy; Tax and Budget Policy
For ObamaCare to Become Law, House Must Approve Senate Bill Unchanged
According to Roll Call:
The Senate Parliamentarian has ruled that President Barack Obama must sign Congress’ original health care reform bill before the Senate can act on a companion reconciliation package, senior GOP sources said Thursday.
So…before you can amend a law, it has to be a law? What a concept.
A Campaign Finance Lesson
The Washington Post offers an instructive campaign finance story this morning. The essence of the story: employees of banks and brokerage houses contributed more to candidate Barack Obama in 2008 than to his rival John McCain. A lot more in fact: such employees gave almost twice as much to the current president at they did to the Arizona senator.
Now, however, President Obama is attacking the banks and Wall Street for greed and selfishness, not to mention for ruining the economy. Moreover, Obama is proposing curbs on Wall Street pay and heavy regulation of banks. It would appear, in other words, that contributions don’t buy many favors with this administration.
But the story goes deeper. Wall Street is now shifting its contributions to the GOP. That’s not surprising. In fact, being an intelligent man, President Obama must have known his attacks on Wall Street might deprive his party of contributions. Yet, he went forward with the attacks and proposed laws.
Why? In the coming election, contributions will matter a lot less than votes. Obama thinks his attacks on Wall Street will cast the Democrats as the party of “us” against the detested “them.” The votes gained will greatly outweigh the donations lost. The currency of politics is votes in the market for election.
The next time someone tells you that donations are “legalized bribery,” ask them why Obama took $18 million from Wall Street and gave them in return endless abuse and hostile legislation.
Quid pro quo, indeed.
Doubling Down on Failed Policies
Today in Las Vegas, President Obama will take another $1.5 billion in taxpayer money and let it ride another spin on the roulette wheel otherwise known as foreclosure assistance. This time, however, he’s not even bothering to send the money to homeowners; its all going to state governments.
That’s correct, he’s sending a huge check to select state governments to use in almost any manner they choose, as long as it offers some pretense at propping up the housing market.
The assistance will be targeted at those states that have seen at least a 20% decline in home prices. Subsidizing states because their housing markets are getting more affordable almost makes one yearn for the days when we subsidized states because their housing markets were too expensive. What we are really subsidizing is those states whose destructive land-use policies contributed to the magnitude of the housing bubble. Basic economics tells us that as supply becomes more inelastic (think growth boundaries), prices become more volatile. It’s bad enough that most of our housing subsidies, both homeowner and renter, have ended up going to states that have crippled their housing markets, but now we are sending them a big check to reward such behavior.
Washington needs to end its constant attempts to prop up the housing market. The only viable solution to an over-supply of housing is a further decline in prices. Most of the worst-hit areas, such as California, do not lack for families wanting to buy homes. They lack a supply of homes at affordable prices, which would be solved by letting prices fall.
Hotel Afghanistan: We Can Check Out but Never Leave
The U.S. remains stuck in Iraq, as the country moves toward a potentially messy and not so democratic (lots of disqualified parliamentary candidates, etc.) election. Iran’s refusal to back away from its nuclear program has intensified calls for an American military strike — which, Sarah Palin assures, would even help the president politically. North Korea unsurprisingly is showing reluctance to rejoin international talks over its nuclear program: renewed proposals for a U.S. military build-up in South Korea and even war against the North are likely to follow. And then there is Afghanistan.
Even though President Barack Obama talks about deadlines and drawdowns, there is little in present policy to suggest that the U.S. will be able to leave Afghanistan in even the mid-term. Afghan President Hamid Karzai certainly doesn’t think so. He figures on U.S. military support for at least another decade, with continuing international financial support for years after that.
Afghan President Hamid Karzai warned Thursday that foreign troops must stay in his country for another decade, as world powers agreed on an exit map including a plan to persuade Taliban fighters to disarm in exchange for jobs and homes.Divisions emerged between the U.S. and its partners over Kabul’s willingness to offer peace to Taliban leaders who once harbored al-Qaida, instead of the more limited deal for lower-ranking fighters emphasized by the Americans.
All agree that reconciliation means bringing on board what Mark Sedwill, NATO’s newly appointed civilian chief in Afghanistan, called “some pretty unsavory characters.”
The conference was called to help the U.S. and its allies find a way out of the grinding Afghan war amid rising U.S. and NATO casualties and falling public support. NATO has agreed to accelerate the training of Afghan security forces and gradually transfer more combat responsibility to them.
“With regard to training and equipping the Afghan security forces, five to 10 years will be enough,” Karzai told the BBC. “With regard to sustaining them until Afghanistan is financially able to provide for our forces, the time will be extended to 10 to 15 years.”
It sounds a bit like the Afghan equivalent of the Eagles’ Hotel California. Defeat or bribe the Taliban and keep Karzai in power, and we will have “won” — but we still won’t be able to leave. And the Afghan government, assuming it achieves a modicum of honest competence, will still have little incentive to meet even President Karzai’s distant check-out date. Who in Kabul will want to do without abundent Western cash 10 or 15 years from now?
In 2001 the U.S. had a simple, important, and achievable mission in Afghanistan: disrupt al-Qaeda and oust the Taliban. American military forces succeeded. Alas, we’ve spent the succeeding eight years attempting to build a nation state where none exists. It’s time to draw down our forces and again focus on combatting terrorists.
Jay Greene on Barack Obama on Education
In the current City Journal, political scientist Jay Greene observes that “the test that seems to guide the Obama administration’s education priorities is not whether a policy works, but whether it serves a political constituency.”
The president’s actions have forced me to conclude the same thing.
This Week in Government Failure
Over at Downsizing Government, we focused on the following issues this week:
- Will Obama’s deficits turn out to be as low-balled as Bush’s?
- Obama blames Bush for his problems, but his new budget is worse.
- Obama’s budget would kill the Constellation program, but his budget still goes to the moon.
- The Federal Housing Administration bailout watch continues.
- There’s nothing “fiscally responsible” about Sen. Kent Conrad.
- The government is creating jobs — federal government jobs.
Is Obama Failing? The Rebuttals
At the Economist’s online debate, Elaine Kamarck and I have posted rebuttals to the opening statements. I say, among other things:
One question here is how do you measure a politician’s failure. Is it, for instance, a failure to get his policies enacted, or his success in enacting bad policies? Surveys of historians always give high marks to presidents who expanded government or fought wars. Washington’s most-quoted political scientist, Norman Ornstein, recently defended the productivity of the current Congress; his article illustrated that to the Washington establishment the very definition of a productive Congress is the spending of more taxpayers’ money, the creation of new agencies and bureaucracies, and the concentration of more power in the hands of federal regulators. Citizens might prefer a government that kept us out of war, let the economy grow, and left us alone…
Some analysts note that Ronald Reagan had low ratings at this point in his term, and a bad midterm election, but came back strong. As it turns out, tax cuts, spending restraint, deregulation and sound money tend to create strong economic recoveries. Threats of tax hikes, unprecedented levels of deficits, a wave of new regulations and fears about Fed monetisation may not.
Has Mr Obama failed, a year into his term? Of course not. But that’s the direction he’s headed.
The vote is now 53 percent against the proposition that Obama is failing. If you agree with the proposition “This house believes that Barack Obama is failing,” I encourage you to cast your vote.
Obama Budget Still Goes to the Moon
The president’s new budget proposes to end NASA’s Constellation program, a Bush initiative intended to put humans back on the moon by 2020. But Obama’s $3.8 trillion budget still goes to the moon figuratively — if you stacked 3.8 trillion $1 bills, the pile would reach the moon with 20,000 miles to spare!
The president’s proposal to end the Constellation isn’t sitting well with those members of Congress who enjoy large NASA spending in their districts. From the Washington Post:
“The president’s proposed NASA budget begins the death march for the future of U.S. human spaceflight,” Sen. Richard C. Shelby (R-Ala.) said Monday. “If this budget is enacted, NASA will no longer be an agency of innovation and hard science. It will be the agency of pipe dreams and fairy tales.”
Rep. Pete Olson (R-Tex.) said, “This is a crippling blow to America’s human spaceflight program.”
Senator Shelby and Rep. Olson exaggerate –- the proposal would only end government human spaceflight to the moon. Private entrepreneurs are likely to continue pushing into space, especially if we reduce the regulatory and tax burdens.
Obama Admits CBO Cost Estimates of ObamaCare Are Incomplete
Yesterday — day #224 of the ObamaCare Cost-Estimate Watch — President Obama told House Republicans:
You can’t structure a bill where suddenly 30 million people have coverage and it costs nothing.
And just like that, the president admitted that the official Congressional Budget Office estimates of his health care plan do not reflect its full costs.
Both the House and Senate versions of ObamaCare would cover millions of uninsured Americans by requiring them to purchase private health insurance. As President Obama notes, even if you force people to spend their own money on health insurance, it still costs something to cover them. And if the government partly subsidizes those premiums, the remaining mandatory premium is still part of the cost of covering them.
Yet Democrats have systematically blocked the CBO from including those costs in its official cost projections. The Senate bill’s estimated price tag of $940 billion, for example, includes only the costs that bill would impose on the federal government. By my count, that’s only 40 percent of total costs. By Mr. Obama’s admission, that’s not the full cost of the bill.
Now that the President of the United States has acknowledged that the CBO’s cost estimates are incomplete, could we maybe get a complete cost estimate? Maybe just for the Senate bill?
Filed under: Cato Publications; Health, Welfare & Entitlements
The Presidential Scold
Today, Politico Arena asks for comments on:
Duking it out in Baltimore
My response:
It’s all well and good that President Obama wants to meet with Republicans — giving the appearance of reaching out — but when it’s mainly to “chastise” them for opposing his programs, as the AP is reporting after his session at the House Republicans’ retreat in Baltimore today, it’s little but a continuation of the lecture he gave to Congress, the Supreme Court, and even the American people on Wednesday evening. “I am not an ideologue,” he’s reported to have said. Yet it appears that he rejected the Republicans’ proposals for a different approach to health care, a line-item veto for spending bills, and across-the-board tax cuts.
But why should that surprise? Ideologues aren’t open to new or different ideas, because they have the truth. Yet the deeper truth that’s been apparent all along is that we have here a president who, along with so many on his staff, has little grasp of economic reality, because he has no experience in the business world — indeed, appears often to be hostile to that world. Just today, for example, the White House unveiled its plan for a new tax break to spur job creation. As reported by CNN, Obama “wants to give businesses a $5,000 tax credit for each net new employee they hire this year.” The CNN headline captures it all: “Here’s $5,000. Go hire someone.” That’s not the way the world works. Temporary tax gimmicks like that, which the White House estimates will cost $33 billion, are hardly what’s needed. If businesses are to start hiring on a regular basis, they need assurance of a regular climate that will enable them to plan rationally. This administration has given them anything but that kind of assurance. And today’s meeting in Baltimore, like Wednesday night’s lecture, hasn’t helped.
George Will on Obama
In the Washington Post and many other papers today, in re the State of the Union:
Obama’s leitmotif is: Washington is disappointing, Washington is annoying, Washington is dysfunctional, Washington is corrupt, verily Washington is toxic — yet Washington should conscript a substantially larger share of GDP, and Washington should exercise vast new controls over health care, energy, K-12 education, etc.
Mark your calendar for May 13, when George Will keynotes the biennial Milton Friedman Prize for Advancing Liberty Dinner here in Washington. I anticipate similarly acerbic analysis.
Pinocchio Rove Strikes Again
George Bush ranks as one of America’s most fiscally irresponsible presidents. He increased overall spending from $1.8 trillion to $3.5 trillion and most of that new spending was used to create or expand domestic programs (no-bureaucrat-left-behind education spending, pork-filled highway bills, sleazy Wall Street bailouts, corrupt farm spending, new Medicare entitlements, etc.) that are not legitimate functions of the federal government. So it is galling to see his former senior adviser writing columns complaining about Barack Obama being a big spender. Many of the criticisms about the Obama Administration in his latest WSJ column are correct, to be sure, but Karl Rove has zero moral authority to make those arguments. Moreover, Rove once again engages in sloppy or dishonest (you choose) analysis by blaming Obama for some of Bush’s mistakes. In the excerpt below, he blames Obama for any of the Fiscal Year 2009 debt that was incurred after January 20 of last year. But as I’ve already explained, 96 percent of the spending in FY2009 is the result of Bush’s policies:
Consider that from Jan. 20, 2001, to Jan. 20, 2009, the debt held by the public grew $3 trillion under Mr. Bush—to $6.3 trillion from $3.3 trillion at a time when the national economy grew as well. By comparison, from the day Mr. Obama took office last year to the end of the current fiscal year, according to the Office of Management and Budget, the debt held by the public will grow by $3.3 trillion. In 20 months, Mr. Obama will add as much debt as Mr. Bush ran up in eight years. …Mr. Bush’s deficits ran an average of 3.2% of GDP, slightly above the post World War II average of 2.7%. Mr. Obama’s plan calls for deficits that will average 4.2% over the next decade. Team Obama has been on history’s biggest spending spree, which has included a $787 billion stimulus, a $30 billion expansion of a child health-care program, and a $410 billion federal spending bill that increased nondefense discretionary spending 10% for the last half of fiscal year 2009. Mr. Obama also hiked nondefense discretionary spending another 12% for fiscal year 2010.
Correction: In an earlier post on one of Rove’s columns, I incorrectly claimed that Bush never vetoed a bill because it spent too much.That was wrong. He did veto a handful of bills once Democrats took control of Congress.
Filed under: Government and Politics; Health, Welfare & Entitlements; Tax and Budget Policy
Reforming Previous Reforms, ad Infinitum
In the forthcoming issue of Cato Policy Report, Jeffrey Friedman describes the cumulative effects of regulations that led to the 2008 financial collapse:
So deposit insurance begat bank-capital regulations. Initially these were blunderbuss rules that required banks to spend the same levels of capital on all their investments and loans, regardless of risk. In 1988 the Basel accords took a more discriminating approach, distinguishing among different categories of asset according to their riskiness — riskiness as perceived by the regulators. The American regulators decided in 2001 that mortgage-backed bonds were among the least risky assets, so they required much lower levels of capital for these securities than for every alternative investment but Treasurys. And in 2006, Basel II applied that erroneous judgment to the capital regulations governing most of the rest of the world’s banks. The whole sequence leading to the financial crisis began, in 1933, with deposit insurance…
Deposit insurance, hence capital minima, hence the Basel rules, might all have been a mistake founded on the New Deal legislators’ and regulators’ ignorance of the fact that panics like the ones that had just gripped America were the unintended effects of previous regulations.
Friedman is talking about financial and housing regulation. But I was reminded of them when I heard President Obama tell congressional Democrats, “Today we are on the doorstep of accomplishing something that Washington has been talking about since Teddy Roosevelt was President, and that is reforming health care and health insurance here in America.” And his formal speech to Congress in September: “I am not the first President to take up this cause, but I am determined to be the last.”
But of course we’ve been “reforming” health care ever since Teddy Roosevelt, and those reforms have brought us to our present difficulties. The Flexner Report 100 years ago reduced the supply of doctors and drove up the price. Wage and price controls during another Roosevelt era led to the system of employer-provided insurance, again driving up costs. Medicare and Medicaid poured more third-party payments into the system and added layers of government bureaucracy. HMOs and other cost-containment measures were a response to a problem created by the absence of normal consumer pressure. Then we got HIPAA, Kennedy-Kassebaum, the Mental Health Parity Act, state mandated-coverage laws, and the Medicare Prescription Drug Benefit.
And here we are today, with a health care system that everyone agrees needs reform. Maybe it’s time to recognize that we’re just piling new regulations on top of old regulations, like some compulsory Rube Goldberg device, and to try instead free markets, in which consumers pay for what they want from providers, insurance companies, managed care organizations, and other entities that compete for their business by seeking to provide better care at lower prices. Otherwise, we can be sure that Barack Obama won’t be the last president to stand before Congress and declare that our health insurance system needs reform. Indeed, we can bet that if he signs the current bill, he himself will be back before Congress in a year or two asking for reforms to reform the reforms that were intended to reform the previous reforms.
Filed under: Finance, Banking & Monetary Policy; Government and Politics; Health, Welfare & Entitlements; Regulatory Studies
Health Care Bill to be Online for 72 Hours Before Final House Vote — Pelosi Is the Transparency Leader?
The Sunlight Foundation cites this tweet, and newspapers confirm, that the House leadership has promised to put the final health care bill online for 72 hours before a final vote.
“The move came after Rep. Scott Murphy, D-N.Y., urged colleagues to join him in asking House Speaker Nancy Pelosi, D-Calif., and House Democratic Leader Steny Hoyer, D-Md., for a three-day time-out before any floor vote,” reports the St. Louis Post-Dispatch.
Kudos to Representative Murphy for bringing this up. Congratulations to the Sunlight Foundation for organizing the closely related Read the Bill campaign, which is pressuring Congress to post bills online for 72 hours before debate begins.
Meanwhile, the Obama administration’s unfulfilled transparency promises are beginning to draw derision not only from political partisans but from the mainstream media. For example, the L.A. Times “Top of the Ticket” blog mocked the administration yesterday in a post called, “Joe Biden Update: He Meets on Transparency Today. But the Meeting is Closed.”
[T]oday’s Biden schedule highlight is a meeting with the chief of transparency for economic recovery. But, unfortunately, the transparency meeting is non-transparent, closed to the press… Which makes it — what? — secret openness? Open secrecy?
That post cites this one at a site called Media-ite, where columnist Tommy Christopher bemoans the president’s failure to see through his promise to put health care negotiations on C-SPAN.
Secret negotiations like the one between the pharmaceutical lobby, the White House, and the Senate Finance Committee are the Obama pledge’s raison d’etre. Hours of debate and information are nice, but the real value of transparency is in keeping everyone honest. By meeting with insurance and pharmaceutical industry leaders in private, the administration has shielded the parties most in need of being kept honest, the ones most likely to poison the process.
If you had asked people a year ago whether President Obama or Speaker Pelosi would be the leader in legislative transparency, I don’t think many would have bet on the latter. This is not to say that the process has been transparent enough — the production of the health care bill has been quite opaque compared to what’s possible and desirable. But Pelosi is the current leader on transparency, if only by substantial default.
Filed under: Health, Welfare & Entitlements; Telecom, Internet & Information Policy
Thursday Links
- Nat Hentoff: If you’re looking for reform in Cuba, don’t rest your hopes on Raul Castro.
- Tim Carney, author of Obamanomics: How Barack Obama Is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses gives the inside scoop on why big government is good for big business.
- The Patriot Act: What should go, and what should stay?
- Dear Poor People- “Please remain poor.” Sincerely, Obamacare.
- Podcast: “Obamanomics in Health Care” featuring Tim Carney.
Why Do You Want to Tax ‘Cadillac’ Health Care Plans?
The battle is intensifying between Democratic leaders and their labor supporters over a proposal to tax higher premium employer-provided health care plans. The proposal, which is contained in the Senate Democrats’ health care bill and supported by President Obama, would add a 40% excise tax to any amount above $8,500 paid for an individual worker’s coverage, or above $23,000 for a worker’s family. Labor leaders claim that a quarter of unionized workers would be subject to the tax, and government analysts estimate that 22 percent of all workers would be subject to it in 10 years.
A reasonable policy argument can be made for taxing employer-provided health coverage (more on this anon). That argument is not the one that the media (uncritically) reports is the chief motivation for President Obama and Senate Democrats. According to the press, the president and Senate Democrats want the tax so as to disincentivize employers from buying more comprehensive and elaborate coverage for their workers, which would mean that insurers would pay less for workers’ care and thus “lower the cost curve.” That thinking does not make for good public policy.
To be sure, the public worries about the rising cost of health care. But that doesn’t mean that we should embrace any policy that lowers that cost; otherwise, we would simply outlaw surgery and cancer treatments. Instead, what people want is to pay no more than they have to for the health care they want. Put more carefully, people want greater efficiency in health care (that is, more bang for their buck), not a cap or threshold tax on the care they receive.
Higher-premium health coverage does not violate this demand for efficiency. A so-called “Cadillac” plan can be broadly comprehensive and elaborate, and still be efficient, while a “Yugo” plan can be horribly inefficient. Just as important, the purchaser of that coverage (the employer, acting in place of the worker) has plenty of motivation and opportunity to consider different levels of coverage at different prices from different providers that compete on efficiency (and other dimensions). If the employer selects an expensive plan as part of its workers’ compensation, what’s the policy issue?
Sharp readers will point out that there is a policy issue in that employer-provided health care is an untaxed benefit, whereas most other forms of compensation — especially wages — are taxed. This brings us to the “anon” from above: The different tax treatments distort worker compensation, resulting in workers receiving more health care benefits and less wages than they would if all forms of compensation were treated equally. But notice that this distortion occurs when any amount of employer-provided health care is untaxed, not just the amount over $8,500 per worker or $23,000 per family.
The distortion problem is seldom mentioned in press coverage of the “Cadillac” tax proposal, and when it is discussed, it’s portrayed as a minor justification for the tax, behind the chief justification of “bending the cost curve.” And it is the latter, bogus justification that President Obama, Senate Democrats, and the press seem to be focused on.
The Buck Stops with Obama
Today Politico Arena asks:
Do you feel safer from terrorism today than you did the day before? Assess Obama’s response.
My response:
Thursday Links
- The populists have it wrong. Why free trade and globalization are great blessings to Americans and poor families around the world.
- How Obama’s plan for health care will affect medical innovation in America: “Imposing price controls on drugs and treatments–or indirectly forcing their prices down by means of a ‘public option’ or expanded public insurance programs–would reduce the incentive for innovators to develop new treatments.”
- Register now for the upcoming Cato forum featuring author Tim Carney and his new book, Obamanomics: How Barack Obama Is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses. Buy the book, here.
- Podcast: “Shoes, Undies and Airplane Security” featuring Jim Harper.
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