Disguised Health Care Costs: The $1.5 Trillion Fraud
If House Democrats hold a vote on their health-care overhaul this weekend, they might as well vote to abolish the Congressional Budget Office too.
It would be no more audacious (and much more honest) than the way they have gamed the CBO’s rules to hide $1.5 trillion of the cost of their legislation — which has to be the biggest fiscal obfuscation in the history of American politics.
C/P Politico
U.S. Cutting Pay for Bailed Out Company Executives
According to reports, executives from bailed out companies Citigroup, Bank of America, GM, Chrysler, GMAC, Chrysler Financial and AIG are going to see major pay cuts this year, which will be enforced by the president’s “pay czar,” Kenneth R. Feinberg. WaPo:
NEW YORK — The Obama administration plans to order companies that have received exceptionally large amounts of bailout money from the government to slash compensation for their highest-paid executives by about half on average, according to people familiar with the long-awaited decision.
The administration will also curtail many corporate perks, including the use of corporate jets for personal travel, chauffeured drivers and country club fee reimbursement, people familiar with the matter have said. Individual perks worth more than $25,000 have received particular scrutiny.
The American people have every right to be upset about generous compensation packages for executives at financial firms that are being kept alive by subsidies and bailouts.
But their ire should be directed at the bailouts, because that is the policy that redistributes money from the average taxpayer and puts it in the pockets of incompetent executives. Unfortunately, rather than deal with the underlying problems of bailouts and intervention, some politicians want to impose controls on salaries. This might be a tolerable second-best (or probably fifth-best) outcome if the compensation limits only applied to companies mooching off the taxpayers, but some politicians want to use the financial crisis as an excuse to regulate compensation at firms that do not have their snouts in the public trough.
This would be a big mistake. So long as rich people make money using non-coercive means, politicians should butt out. It should not matter whether we are talking about Tiger Woods, Brad Pitt, or a corporate CEO. The market should determine compensation, not political deal making. Markets don’t produce perfect outcomes, to be sure, but political intervention invariably produces terrible outcomes.
I debate this further on CNBC:
C/P The Hill
Filed under: Finance, Banking & Monetary Policy; General
Parsing Pelosi: House Health Takeover Would Cost around $2.25 Trillion
Just like the Senate Finance Committee’s government takeover, the House of Representatives’ government takeover hides more than half of its cost by pushing those costs off the government’s budget and onto the private sector.
So when Speaker Pelosi says the House bill would cost under $900 billion, what she actually means is that it would cost around $2.25 trillion.
Filed under: Cato Publications; General; Health, Welfare & Entitlements
What They Aren’t Telling You About the CBO Score
The CBO report that said the health care bill won’t raise deficits makes it clear that the Baucus bill’s reduction in future budget deficits comes not from controlling government spending or reducing health care costs, but because of a rapid escalation in tax revenues.
The bill imposes a 40 percent excise tax on health-insurance plans that offer benefits in excess of $8,000 for an individual plan and $21,000 for a family plan. Insurers would almost certainly pass this tax on to consumers via higher premiums. As inflation pushes insurance premiums higher in coming years, more and more middle-class families would find themselves caught up in the tax.
In fact, overall, the tax increases in the bill are more than double the amount of deficit reduction. This isn’t a health care efficiency bill or a cost containment bill. It is a tax and spend bill, pure and simple.
Congress Boosts Its Budget
Politico reports: ” Congress is on the verge of giving itself a bump in its annual budget — even as local governments, families and businesses across the country are tightening their belts in the worst recession in decades.”
Spending on the legislative branch of the federal government is set to rise 5.8 percent in fiscal 2010, and Politico details some of the dubious activities that will receive increased funding.
One statement in the story particularly caught my eye:
” ‘We have not seen a significant increase in overall legislative branch expenditures since nearly 2001,’ said Jonathan Beeton, a spokesman for Rep. Debbie Wasserman Schultz (D-Fla.).”
Who is he trying to fool? The bill under consideration will provide $4.7 billion in funding for Congress in 2010, which is way up from the $2.7 billion spent in 2001, according to the Congressional Research Service (page 3).
That’s a 74 percent increase in nine years, representing a very robust 6.4 percent annual average growth rate.
And consider that the “customer base” for this spending has not increased–the number of members of Congress has remained fixed at 535. So while supporters of, say, an education program may say that spending needs to rise because the number of students is rising, much of the increased spending on the legislative branch would seem to go directly into fattening the paychecks of politicians and their staffers.
Obama’s Health Care Speech in Plain English
Hell of a speech last night, eh? Here are a few of my favorite gems.
Under this plan, it will be against the law for insurance companies to deny you coverage because of a pre-existing condition.
Translation: I, Barack Obama, ignoring thousands of years of failed price-control schemes, will impose price controls on health insurance. I will force insurers to sell a $50k policies for $10k. What could go wrong?
We were losing an average of 700,000 jobs per month.
True. And your employer mandate would kill hundreds of thousands of low-wage jobs that would never come back.
They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. We will place a limit on how much you can be charged for out-of-pocket expenses…. And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care.
Translation: Boy! Are we going to force you to buy a lot of coverage!
I will make sure that no government bureaucrat or insurance company bureaucrat gets between you and the care that you need.
…except for the bureaucrats I proposed to put between you and your doctor.
Some… supported a budget that would have essentially turned Medicare into a privatized voucher program. That will never happen on my watch. I will protect Medicare.
Translation: I will never let seniors control their own health care dollars. I will never give up Washington’s control over your health care decisions. Mmmmuuuuhahahahahaha!
…there are too many Americans counting on us to succeed.
Translation: There are too many lobbyists counting on me to succeed: drug-industry lobbyists, health-insurance lobbyists, physician-cartel lobbyists, large-employer lobbyists, hospital lobbyists….
It’s a plan that asks everyone to take responsibility for meeting this challenge – not just government and insurance companies, but employers and individuals.
Translation: I’m going to tax the hell out of you, but I don’t want you to notice how much I’m going to tax you. So I’m going to tax employers and insurance companies, and they’re going to pass the taxes on to you. Most of the taxes won’t even show up in the government’s budget. It’s all very clever. No, seriously – just ask my economic advisor Larry Summers.
It’s a plan that incorporates ideas from Senators and Congressmen; from Democrats and Republicans – and yes, from some of my opponents in both the primary and general election.
Translation: I may have savaged your ideas in the past, called them irresponsible…risky…dangerous…whatever. But that wasn’t about principle; I just wanted to become president. Now that I’m president, I need a win. So you’ll help me, won’t you? Hey, where’s Hillary?
Deficits, Spending, and Taxes
The White House and the CBO announced this week that:
The nation’s fiscal outlook is even bleaker than the government forecast earlier this year because the recession turned out to be deeper than widely expected, the budget offices of the White House and Congress agreed in separate updates on Tuesday.
The Obama administration’s Office of Management and Budget raised its 10-year tally of deficits expected through 2019 to $9.05 trillion, nearly $2 trillion more than it projected in February. That would represent 5.1 percent of the economy’s estimated gross domestic product for the decade, a higher level than is generally considered healthy.
What is the right response to these deficits?
One view holds that most current expenditure is desirable — indeed, that expenditure should ideally be much higher — so the United States should raise taxes to balance the budget. Taxes are a drag on economic growth, however, and unpopular with many voters, so this view presents politicians with an unhappy tradeoff.
The alternative view holds that a substantial fraction of current expenditure is undesirable and should be eliminated, even if the revenue to pay for it could be manufactured out of thin air. To be concrete:
- Medicare and Medicaid encourage excessive spending on health care.
- The invasions of Iraq and Afghanistan encourage hostility to the U.S. and thereby increase the risk of terrorism.
- Drug prohibition generates crime and corruption.
- Agricultural subsidies distort decisions about which crops to grow, and where.
- And much, much more.
So, under this view, the United States can have its cake and eat it too: improve the economy and reduce the deficit without the need to raise taxes.
This approach is not, of course, politically trivial, since existing expenditure programs have constituencies that will fight their elimination.
But thinking about these two views of the deficits is nevertheless useful: it shows that discussion should really be about which aspects of government are truly beneficial, not just about the deficits per se.
Federal Pay Continues Rapid Ascent
The Bureau of Economic Analysis has released its annual data on compensation levels by industry (Tables 6.2D, 6.3D, and 6.6D here). The data show that the pay advantage enjoyed by federal civilian workers over private-sector workers continues to expand.
The George W. Bush years were very lucrative for federal workers. In 2000, the average compensation (wages and benefits) of federal workers was 66 percent higher than the average compensation in the U.S. private sector. The new data show that average federal compensation is now more than double the average in the private sector.
Figure 1 looks at average wages. In 2008, the average wage for 1.9 million federal civilian workers was $79,197, which compared to an average $50,028 for the nation’s 108 million private sector workers (measured in full-time equivalents). The figure shows that the federal pay advantage (the gap between the lines) is steadily increasing.
Figure 2 shows that the federal advantage is even more pronounced when worker benefits are included. In 2008, federal worker compensation averaged a remarkable $119,982, which was more than double the private sector average of $59,909.
What is going on here? Members of Congress who have large numbers of federal workers in their districts relentlessly push for expanding federal worker compensation. Also, the Bush administration had little interest in fiscal restraint, and it usually got rolled by the federal unions. The result has been an increasingly overpaid elite of government workers, who are insulated from the economic reality of recessions and from the tough competitive climate of the private sector.
It’s time to put a stop to this. Federal wages should be frozen for a period of years, at least until the private-sector economy has recovered and average workers start seeing some wage gains of their own. At the same time, gold-plated federal benefit packages should be scaled back as unaffordable given today’s massive budget deficits. There are many qualitative benefits of government work—such as extremely high job security—so taxpayers should not have to pay for such lavish government pay packages.
Update: I respond to some criticisms of this post here.
Update 2: Compensation data for federal workers vs. other industries here.
Update 3: In September, the government revised the data for private sector workers. On 9/30/09, Figure 1 and the related text were updated to reflect this change.
Filed under: Government and Politics; Tax and Budget Policy
Will the Blue Dogs Ever Bite?
We’ve written more than once about the Democratic “Blue Dogs” and the lack of any actual evidence for their supposed fiscal conservatism.
Now Merrill Mathews in The Wall Street Journal tells the sad story of the Blue Dogs in the Obama era. They call in the journalists, and they moan and complain about their concerns over the deficit and rising federal spending. And when the rubber meets the road, what happens?
• The State Children’s Health Insurance Program (SCHIP). One of the first things the Democratic leadership wanted the newly inaugurated President Obama to sign was a huge expansion of SCHIP. Democrats have been trying to pass the expansion for over a year, with some bipartisan support. President George W. Bush vetoed the legislation twice, and Congress sustained his veto both times by a hair.
SCHIP was created for low-income uninsured children not eligible for Medicaid. Under the old bill, children whose family incomes were 200% of the federal poverty level were covered. With the new bill, Democrats increased funding to cover children whose family incomes are up to 300% of the federal poverty level—or $66,000 a year for a family of four. The Bush administration and most conservatives thought it should remain at 200%. Did the Blue Dogs agree? Only two voted against the expansion.
• The $787 billion stimulus. The next major spending package was Mr. Obama’s stimulus bill. Not one House Republican voted for the bill. The Blue Dogs? Only 10 of 52 voted against it.
• President Obama’s 2010 federal budget. In April, Congress took a vote on the president’s $3.5 trillion budget for 2010—by far the biggest spending package in history. Again, not one House Republican voted for the bill, but only 14 Blue Dogs joined them in opposition.
Matthews says the health care bill is the Blue Dogs’ last chance to show that they actually do care whether the federal government spends us into bankruptcy.
Our Tax Dollars Are Being Used to Lobby for More Government Handouts
The First Amendment guarantees our freedom to petition the government, which is one of the reasons why the statists who wants to restrict or even ban lobbying hopefully will not succeed. But that does not mean all lobbying is created equal. If a bunch of small business owners get together to lobby against higher taxes, that is a noble endeavor. If the same group of people get together and lobby for special handouts, by contrast, they are being despicable. And if they get a bailout from the government and use that money to mooch for more handouts, they deserve a reserved seat in a very hot place.
This is not just a hypothetical exercise. The Hill reports on the combined $20 million lobbying budget of some of the companies that stuck their snouts in the public trough:
Auto companies and eight of the country’s biggest banks that received tens of billions of dollars in federal bailout money spent more than $20 million on lobbying Washington lawmakers in the first half of this year. General Motors, Chrysler and GMAC, the finance arm of GM, cut back significantly on lobbying expenses in the period, spending about one-third less in total than they had in the first half of 2008. But the eight banks, the earliest recipients of billions of dollars from the federal government, continued to rely heavily on their Washington lobbying arms, spending more than $12.4 million in the first half of 2009. That is slightly more than they spent during the same period a year ago, according to a review of congressional records.
…big banks traditionally are among the most active Washington lobbying interests in the financial industry, and the recession has done little to dent their spending. …Since last fall, companies receiving government funds have argued that none of the taxpayer money they were receiving was being spent on lobbying.
…American International Group, the insurance firm crippled by trades in financial derivatives that received roughly $180 billion in bailout commitments, closed its Washington lobbying shop earlier this year. AIG continues to spend money on counsel to answer requests for information from the federal government, but the firm said it does not lobby on federal legislation.
The most absurd part of the story was the companies claiming that they did not use tax dollar for lobbying. I guess the corporate bureaucrats skipped the classes where their teachers explained that money is fungible.
The best part of the story was learning that AIG closed its lobbying operation, though that does not mean much since AIG basically now exists as a subsidiary of the federal government. The most important message (which is absent from the story, of course) is that the real problem is that government is too big and that it intervenes in private markets. Companies would not need to lobby if government left them alone and/or did not offer them special favors. Indeed, that was the key point of my video entitled, “Want Less Corruption: Shrink the Size of Government.”
Senate Votes to End Production of F-22 Raptor
As I have written previously, President Obama and the members of Congress who voted to kill funding for the F-22 did the right thing.
The Washington Post reports:
The Senate voted Tuesday to kill the nation’s premier fighter-jet program, embracing by a 58 to 40 margin the argument of President Obama and his top military advisers that more F-22s are not needed for the nation’s defense and would be a costly drag on the Pentagon’s budget in an era of small wars and counterinsurgency efforts.
While this vote marks a step in the right direction, the fight isn’t over. The F-22’s supporters in the House inserted additional monies in the defense authorization bill, and the differences will need to be reconciled in conference. But the vote for the Levin-McCain amendment signals that Congress will take seriously President Obama and Secretary Gates’ intent to bring some measure of rationality to defense budgeting.
The Raptor’s whopping price tag— nearly $350 million per aircraft counting costs over the life of the program— and its poor air-to-ground capabilities always undermined the case for building more than the 187 already programmed.
In the past week, Congress has learned more about the F-22’s poor maintenance record, which has driven the operating costs well above those of any comparable fighter. And, of course, the plane hasn’t seen action over either Iraq or Afghanistan, and likely never will.
Beyond the F-22 and the Joint Strike Fighter, we need a renewed emphasis in military procurement on cost containment. This can only occur within an environment of shrinking defense budgets. Defense contractors who are best able to meet stringent cost and quality standards will win the privilege of providing our military with the necessary tools, but at far less expense to the taxpayers. And those who cannot will have to find other business.
Slight Correction to My DC Per Pupil Spending Figure
In my IBD piece today I gave total per pupil spending in DC as $29,000 per pupil. That was based on an official k-12 audited enrollment count of 44,681, which I was told by a district official included the special needs students placed by the district in private schools. It turns out this was not the case, so we have to add in the special needs students to arrive at the total enrollment figure. Unfortunately, I wasn’t able to get that enrollment correction into the IBD in time for publication. Its impact on per pupil spending is not large, however.
The grand total audited enrollment was 48,353 students. From that we have to subtract 997 students in adult education programs and 1,498 students in preschool programs who are not covered by my k-12 budget calculations. That leaves us with a k-12 audited enrollment of 45,858. Dividing that in to the District of Columbia’s $1.3 billion k-12 education budget yields a per pupil spending figure of about $28,000.
The “Washington Monument Syndrome” Backfires in Massachusetts
While politicians and bureaucrats generally are on the same side, there are occasional conflicts. For instance, if politicians want to limit the growth of an agency’s budget (an infrequent impulse, to be sure), the bureaucrats get upset and sometimes they fight back. A common tactic is to try and generate public opposition by leaking to the press that they will have to curtail something that taxpayers actually value. This is known as the Washington Monument Syndrome, which is a reference to the National Park Service’s petulant decision about 40 years ago to close national monuments two days per week because of a very small budget reduction. A very perverse example of the Washington Monument Syndrome just took place in Massachusetts, where officials at the New England Zoo threatened to kill some of the animals if their subsidy was reduced. This was so over the top that even the state’s collectivist governor felt compelled to condemn the bureaucrats for using dishonest scare tactics. The Boston Globe reports:
Governor Deval Patrick yesterday accused Zoo New England officials of creating a false and inflammatory scare with their warning that state budget cuts may force them to close two Greater Boston zoos and euthanize some animals. “As a supporter of the zoo and a parent who has visited often, the governor is disappointed to learn that Zoo New England has responded to this difficult but unavoidable budget cut by spreading inaccurate and incendiary information,’’ Kyle Sullivan, a spokesman for the governor, said in a statement. And a second Patrick aide emphatically ruled out the killing of any animals. …Zoo officials declined to comment on Patrick’s remarks yesterday. They also canceled a public event to welcome two French Poitou donkeys to the Franklin Park facility in honor of Bastille Day tomorrow. John Linehan, Zoo New England chief executive, was scheduled to attend the event. …On Friday zoo officials released a statement saying the funding reduction might require them to shutter both zoos. Then on Saturday, they issued a statement that said state bureaucrats – and not animal-care professionals – would be responsible for deciding whether some animals would have to be killed if the zoos closed. …At least one visitor to the Franklin Park Zoo yesterday suggested the operator solve the budget crisis on its own. “I wonder why the Franklin Park Zoo doesn’t raise their prices so they can support themselves,’’ said Emanuel Achidiev, 28. “They shouldn’t have to rely on the state.’’
Filed under: Government and Politics; Tax and Budget Policy
Even as America’s Troops Leave Iraq, the Waste Goes On
The U.S. government has been providing so-called foreign aid for decades, but the waste never stops. So it is in Iraq.
Provincial reconstruction teams in Iraq are scrambling to submit a large number of multimillion-dollar aid project proposals by July 15, something critics suggest will result in a rash of big construction projects they were never intended to run.
Further, they say, big-budget projects are being put forward too quickly, are too ambitious given the scheduled 2011 withdrawal from Iraq and are crowding out simpler schemes.
“Our goal is not necessarily to help [Iraqis] with building projects,” said Rick Gohde, an engineer with the Diwaniyah provincial reconstruction team, known as PRT. “We are supposed to be beyond that. We are supposed to be training them to sustain themselves as we are getting ready to leave.”
Capt. Doug Weaver, 28, a civil affairs soldier who acts as a liaison between the military and the Diwaniyah PRT, said Monday that close to $600 million of military aid funding was made available to the PRTs last month countrywide through the Commanders Emergency Relief Program, or CERP. The funds, made available by Congress, are only available through September 30 and the deadline for project proposals exceeding $1 million is next Wednesday, officials said.
Weaver, who studied industrial engineering before he deployed, identified numerous big projects in Diwaniyah vying for CERP funds, including new electrical substations ($1 million to $1.5 million), city sewers ($750,000 to $1.25 million), an agricultural school dormitory ($1.2 million), women’s centers to provide job training for divorcees and widows ($2 million), vocational schools ($500,000 each) and upgrades to Iraqi government communications networks.
Iraqi contractors will bid for the construction work, which is expected to employ more than 1,000 local laborers in Diwaniyah alone.
But Gohde said the PRTs are not supposed to be involved in the sort of “bricks and mortar” construction that most of the big budget projects involve.
In southern Afghanistan, construction projects supported by foreign aid, such as schools and medical clinics, stand as empty shells because Taliban militants have frightened students and patients away.
“There’s been some of that in this country,” Gohde said. “I’ve heard of schools being built with no furniture or teachers. There are projects that are constructed with the best of intentions that are not utilized in the original intent or utilized at all,” he said.
Oh, well. It’s only money, as they say. And with Uncle Sam running a roughly $2 trillion deficit this year, what’s a few wasted millions (or even hundreds of millions) among friends? I’m sure next time the government will get it right!
Filed under: Foreign Policy and National Security; International Economics and Development; Tax and Budget Policy
How California’s Schools Brought the State to its Financial Knees
As we watch California struggle with a budget deficit larger than the entire Iranian government’s budget, it’s worth exploring how the state got there. The biggest contributing factor: a staggering collapse in educational productivity.
In 1974-75, California spent $1,373 per pupil on k-12 public schooling. By 2006-07, it was spending $10,937. Adjusting the earlier figure for inflation (to $5,286 in 2007 dollars), that still represents a more than doubling in real spending per pupil.
Of course, if California public schools had doubled student achievement and eliminated dropouts, that might justify their staggering increase in cost. They haven’t. On the most reliable available measure of state academic achievement trends, the NAEP, California public school students have seen their scores go up by about 0.2% per year at the 4th and 8th grades since state-level data became available in 1990. In other words, the state’s scores have barely budged from the low position they have long occupied. As a 2005 RAND paper observes:
California placed 48th out of 50 states on the average NAEP score across all tests, just above Louisiana and Mississippi… California’s low scores cannot be accounted for by the high percentage of minority students. California’s scores for students from families with similar characteristics are the lowest in the nation: It ranks 47th out of 47 states when we compare scores for these students.
California is in budgetary hell because of a massive collapse in the productivity of its public schools. If the public schools had just maintained the productivity level they enjoyed in 1974-75, taxpayers would now be saving $36 billion annually. That’s $10 billion more than the deficit the state is currently facing.
It’s not hard to understand why: public schooling is a monopoly. There is no field within the free enterprise sector of the economy that has had a similarly horrendous productivity collapse over the past 35 years.
California can work its way back to fiscal sanity, and jump-start educational improvement, by encouraging entrepreneurship in education via k-12 education tax credits like this one.
Filed under: Education and Child Policy; Tax and Budget Policy
Obama Adopts the Mikulski Principle
Economists have advanced many theories of taxation. But as usual, the one that seems to explain the policies of the Obama administration best is what I call the Mikulski Principle, the theory most clearly enunciated in 1990 by Sen. Barbara Mikulski (D, Md.):
Let’s go and get it from those who’ve got it.
Just take a look at the myriad taxes proposed or publicly floated by President Obama and his aides and allies:
- Raise the top income tax rates from their current 33 percent and 35 percent rates to 36 percent and 39.6 percent in 2011
- Limit itemized deductions for people paying high rates
- Increase capital gains and dividend taxes by 33 percent for people paying high income tax rates
- Impose a value-added tax (VAT) on all goods and services
- Raise the Social Security tax by lifting the cap
- Raise a variety of business taxes by $353 billion over 10 years, including repeal of LIFO rules, restoring Superfund taxes, seven tax increases on energy companies, and more
- Tax employer-provided health benefits
- Implement a cap-and-trade system for emissions permits, the functional equivalent of a massive new tax
- Tax drivers on their mileage
- Change rules to raise gift taxes
- Restore the estate tax at 45 percent
- Raise cigarette tax by 62 cents a pack
- Raise taxes on beer, wine, liquor, and soda
- Eliminate health savings accounts and flexible savings accounts
- Tax employer-provided cellphones
- Tax AIG employee bonuses
- Raise taxes on overseas corporate earnings
As the links will indicate, not all of these taxes have been formally proposed, and some have already run into sufficient criticism to have become unlikely. But together they illustrate the mindset of an administration and a Congress determined to extract as much money as they can from Americans rather than cut back on expenditures, which have doubled in about eight-and-a-half years.
Indeed, the administration’s programs remind us that today is July 2, the 233rd anniversary of the day on which the Continental Congress voted for American independence, issuing a document that declared, among other things,
He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.
Health Care Priorities
As Washington debates a big increase in federal health care spending, I came across these two articles on what a splendid job the government is doing managing its current health programs.
Harvard professor Malcolm Sparrow recently testified that roughly $100 billion or more of Medicare and Medicaid dollars go down the drain each year due to fraud. It’s easy to rip these programs off because of their vast size and electronic claims processing. Medicare processes more than 1 billion of claims each year.
This Washington Post article last year described one particular example of the fraud. A high-school drop-out managed to bilk Medicare out of $105 million by submitting a 140,000 false claims from her laptop computer.
So we’ve got $100 billion or so of taxpayer’s hard-earned money being stolen each year from our current public health care plans. You would think that with today’s giant budget deficit that the highest priority of policymakers would be to reform these programs to reduce the unbelievable and disgusting amounts of graft. But no, many in Congress and President Obama have decided that current government health care works so well that they want to expand it.
President Obama wants to create a new “public health option” to “keep insurance companies honest.” Hey Mr. President, you should do something about the $100 billion of dishonesty in current public health plans, instead of hitting up taxpayers to fund an even more bloated health care budget.
Education Tax Credits Pass in Indiana
Despite the economy and the dogged opposition of powerful Big Ed, education tax credits are surviving and thriving. The latest state to jump into k-12 tax credits is Indiana. From the Friedman Foundation yesterday:
Indiana lawmakers today approved a $2.5 million scholarship tax credit program in the home state of the Friedman Foundation for Educational Choice. The new scholarship program was inserted into the state’s budget and won approval in the late hours of the special legislative session. The bill, which passed the Senate 34-16 and the House 61-36, now goes to the governor who is anticipated to sign it in the coming days.
Unfortunately, the credit is only 50% for each dollar donated, unlike the more powerful ones in PA, FL, and AZ. But I know Friedman, School Choice Indiana and their allies will be fighting hard in coming years to increase the credit amount and program cap.
Sounds like Governor Mitch Daniels deserves kudos for keeping the bill in his budget and pushing for the program. And the word is that around 27 percent of the House Democrats voted for the budget despite the tax credit and virtual charter school programs that the teachers unions opposed. Big Ed ain’t what he used to be.
The European Union Stops Banning Ugly Veggies
The European Union has helped create a continental European market and knock down protectionist barriers, which is good. But it also has created another opportunity for meddling bureaucrats to interfere with people’s lives.
Now consumer protests have led to at least one victory for liberty. Reports London’s Sun newspaper:
Now the European Commission has finally scrapped the 20-year ban on 26 types of fruit and veg including asparagus, celery and aubergines.
They ruled they can now be sold – as long as they are labelled as “intended for processing”.
Sainbury’s spokeswoman Lucy Maclennan said: “We are delighted to have played a part in winning the wonky veg war against these bonkers EU regulations.”
Tesco spokesman Adam Fisher said: “It’s not before time. We welcome this move.”
And last night it was predicted the change could see some prices fall by 40 PER CENT.
A Commission official said: “Times have changed – now household budgets are tighter and there is the problem of wasting food.”
One bad regulation down. Who knows how many to go?
Filed under: International Economics and Development; Regulatory Studies; Trade and Immigration
I Have to Admit, I Was Wrong
I’ve just discovered that my calculation of DC education spending per pupil was wrong, and I have to publish a correction.
I wrote back in March that total DC k-12 spending, excluding charter schools, was $1,291,815,886 during the 2008-09 school year. That still appears to be correct. But to get the per-pupil number I divided total spending by the then-official enrollment count: 48,646. It now turns out that that number was rubbish. PRI’s Vicki Murray just pointed me to this recent DCPS press release that identifies a new audited enrollment number for the same school year: 44,681 students.
If that number excludes the 2,400 special education students that the District has placed in private schools, then DC’s correct total per pupil spending is $27,400.
If the new audited enrollment number does include the students placed in private schools, then DC’s correct total per pupil spending is $28,900.
Hmm. Let me think. What was that average tuition figure at the private schools serving DC voucher students….? Oh yes: $6,600, according to the federal Department of Education.
In case you don’t know, that’s the program in which, after three years, voucher-receiving kids are reading two grade levels ahead of their public school peers — also according to the Dep’t. of Education (see the linked study, above).
It is also the program that President Obama has doomed to die, because of the, uh…, because, um…, why did he do that again?!?!
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