Archives: 07/2009

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

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.

Topics:

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. 

Reports the Washington Times:

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.