Archives: 09/2014

More Headaches in Obamacare Open Enrollment

Open enrollment for Obamacare’s second year begins in two months. Recent reports suggest that this year’s enrollment period will not be a smooth process.

According to Ricardo Alonso-Zaldivar of the Associated Press, individuals face many hurdles in signing up for or renewing coverage:

  • For the roughly 8 million people who signed up this year, the administration has set up automatic renewal. But consumers who go that route may regret it. They risk sticker shock by missing out on lower-premium options. And they could get stuck with an outdated and possibly incorrect government subsidy. Automatic renewal should be a last resort, consumer advocates say.
  • An additional 5 million people or so will be signing up for the first time on HealthCare.gov and state exchange websites. But the Nov. 15-Feb. 15 open enrollment season will be half as long the 2013-2014 sign-up period, and it overlaps with the holiday season.
  • Of those enrolled this year, the overwhelming majority received tax credits to help pay their premiums. Because those subsidies are tied to income, those 6.7 million consumers will have to file new forms with their 2014 tax returns to prove they got the right amount. Too much subsidy and their tax refunds will be reduced. Too little, and the government owes them.
  • Tens of millions of people who remained uninsured this year face tax penalties for the first time, unless they can secure an exemption.

These won’t be the only issues. In July, the Government Accountability Office told Congress that the HealthCare.gov website is still not complete. The back-end system that links the website to insurers and distributes the subsidies is not operational. Additionally, thousands, possibly millions, of insurance policies will be cancelled over the next several months for not including all of Obamacare’s mandates which will increase the confusion for individuals.

The Obama administration says that this year’s open enrollment period will be better than the last, but the complexity and short enrollment period will still create lots of headaches for consumers. Shockingly, overhauling a large swath of the United States economy is not easy work.

War Powers in the Bush-Obama Era

Over at the National Interest, I have a piece examining President Obama’s claim, in his nationally televised address Wednesday night, that “I have the authority to address the threat from ISI[S].” 

Just where he’s supposed to get that authority isn’t clear—even to the Obama administration itself. In the last week, Obama officials have invoked (1) the War Powers Resolution, (2) the 2002 Authorization of Military Force (AUMF) against Iraq, and (3) the AUMF that Congress passed three days after 9/11. Any AUMF in a storm, it seems. 

As I explain in the article, not one of those claims survives a good-faith reading of the relevant legislative text. The WPR specifically forecloses any interpretation that it grants the president a “free pass” for elective bombing. And invoking the 2001 or 2002 AUMF for a new war against a new enemy over a decade later is the sort of statute-stretching that makes using TARP to bail out car companies look timid by comparison. 

You could describe the president’s approach as “three bad arguments in search of a theme.” Near as I can discern it, that theme is, “I’m not George W. Bush.” 

Apparently, it’s very important to Barack Obama to make clear that he doesn’t subscribe to the Congress-be-damned, I’m the “Decider” approach of his predecessor. Justifying war on a pure presidential power theory is for bad people like Dick Cheney and John Yoo, the legal architect of the Bush-Cheney “Terror Presidency.” (Though, of course, Bush went to Congress for authorization in Iraq and Afghanistan, even while denying he needed it).

Obama’s nothing like that, he’ll have you know. He’s the guy who told us on the campaign trail that “The separation of powers works. Our Constitution works. We will again set an example for the world that the law is not subject to the whims of stubborn rulers,” and affirmed that the president lacks the power to launch military attacks absent an “actual or imminent threat to the nation.”  (His eventual veep, Joe Biden, went further, promising to “impeach [Bush] if he takes the nation to war against Iran without congressional approval.”)

And yet, it’s hard to escape the echoes of Obama’s predecessor in Wednesday night’s speech, from his case for preventive war against an enemy that “if left unchecked… could pose a growing threat beyond that region—including to the United States,” to his promise to “support Iraq’s efforts to stand up National Guard Units” (When they stand up, we will stand down). As John Yoo himself said last week: “Obama has adopted the same view of war powers as the Bush administration.”

Tortured, bad-faith constructions of authorization passed by past Congresses for different wars can’t hide that underlying reality. Obama may not be George W. Bush, but he’s doing a pretty decent imitation.

Should Scotland Reclaim Its Independence?

At USA Today, I write about Scottish independence, which the Scottish people will vote on this coming Thursday. I note that the late Nobel laureate Gary Becker wrote in 2005, like Simon Lester today, that the disadvantages of small nations are much reduced in a world of free trade:

My conclusion is that developments in the global economy during the past 50 years have greatly reduced the economic disadvantages of small nations enumerated for his time by Hamilton. In fact, being small now may even have efficiency advantages…. [As trade barriers have come down over the past half-century,] small countries can now gain the advantages of large markets through trading with other nations.

I go over arguments on currency, tax rates, and the likelihood that an independent Scotland could be as socialist as some of its political leaders would like if it has to create its own prosperity. In the end, I write:

In any case, the economic arguments will go on till the vote on September 18. Scotland certainly has the elements necessary to be a successful European country. The real question is whether the Scots themselves desire, to borrow an Irish anthem, “that Scotland long a province be/A nation once again.” As a descendant of Scots who helped America secure its independence, I hope so.

I wrote previously about Scottish independence here

Scottish Independence: Not That Big a Deal in Today’s World

Yesterday, my colleague Doug Bandow blogged about Scottish independence, concluding with the following: “Whatever the Scots choose on September 18, Americans should wish them well.” I just wanted to add a quick point here, drawing on something law professor Eric Posner said on this issue: “the benefits of a large country—mainly, security and a large internal market—are of diminishing significance in a world of free trade and relative peace.”

To me, this is a very important consideration. If Scottish independence meant an increased chance of war or high tariffs designed to separate the Scottish market from the rest of the world, it would be worrying. But those seem unlikely. In terms of war and peace, there have been no Mel Gibson sightings that I’m aware of. On trade, there may be some bureaucratic challenges, but it seems clear the goal is for Scotland to join the EU and be part of its large, single market. As for trade with the rest of the world, Scotland will take on the EU’s trade policy–which is not perfect of course–but has followed the trend toward liberalization that the rest of the world has pursued over the past few decades. In all likelihood, Scotland will continue to search for export markets for its whisky and allow the free flow of imports.

If Scottish independence meant it would become like North Korea, I’d be concerned. But it doesn’t seem like that’s the path it is on. With the exception of a few regions, we live in a highly integrated, peaceful world. Scottish independence would not change that.

Argentina: Down The Tubes, Again

President Christina Fernández de Kirchner has turned up her left-wing rhetoric as the economy goes down the tubes. Indeed, GDP has contracted for the past two quarters; inflation is galloping at 56%, not the official 15.01%; and the country has defaulted on its debt, again. Never mind. The President claims Argentina’s financial system is “one of the most solid in the world.” She asserts that Argentina’s woes can be laid squarely at the feet of foreign “vulture funds” and greedy capitalists who have speculated against the peso. Yes, the peso has lost 42.6% of its value against the U.S. dollar on the black market since the first of the year, and for very legitimate reasons.

But, for realists like me, a fact check is always worth a peso. Recently, Bloomberg’s Charlie Devreux and Pablo Gonzales penned some most edifying reportage on one thing that’s booming in Argentina: criminality. Bandits have put cargos of grain headed for the port of Rosario in their crosshairs. And why not – grain is traded in greenbacks, not pesos.

Property’s worst enemy is theft: theft makes property insecure. And unless property is secure, it can’t be accumulated and it is wasted. The increasing incidence of heists on grain, Argentina’s most valuable export, indicates that property rights are becoming more insecure and that the economy only has one way to go: down the tubes.

Indonesia Reform, Please

The Indonesian stock market has just hit a record high on the hope that the incoming President, Joko Widodo, will push through economic reforms. But, what path should he follow? My advice to President Widodo is the same as that I gave President Suharto, when I was his advisor in 1998: follow Singapore and Lee Kuan Yew.

When Singapore gained independence in 1965, Lee Kuan Yew developed a set of sound principles, which proved to be highly successful. Indeed, their implementation propelled Singapore to the top of the world’s competitiveness rankings. I have dubbed these principles the “Singapore Strategy.” It contains the following five elements:

  • First and foremost, stabilize the currency. Singapore achieved stability with a currency board system – a simple, transparent, rule-driven monetary regime.
  • Second, don’t pass the begging bowl. Singapore refused to accept foreign aid of any kind.
  • Third, foster first-world, competitive, private enterprises. Singapore accomplished this via light taxation, light regulation, and completely open and free trade.
  • Fourth, emphasize personal security, public order, and the protection of private property.
  • The final key to Lee Kuan Yew’s “Singapore Strategy” is the means to accomplish the previous four goals: a small, transparent government that avoids complexity and red tape. And one that is directed by first-class civil servants who are paid first-class wages.

Bennett Piece Exemplifies Core Problems

This morning, former Reagan administration education secretary Bill Bennett took to the pages of the Wall Street Journal to make the “conservative” case for the Common Core. In that effort, he actually made a great case for Core opponents, illustrating the contradictions of the Core while furnishing several examples of all-too-frequent Core spin. And he did it, ironically, while implying that Core opponents have “badly and sometimes mischievously muddled” the Core story.

To lay all of this out I’ll provide some quotes, then either respond to them with my own information, or with another, largely contradictory, quote from Bennett’s piece. Let’s begin:

First, we can all agree that there is a need for common standards of assessment in K-12 education.

We can? What’s the evidence for that? Bennett offers none, and even loaded polling questions find that only about two-thirds of Americans support generic standards “that are the same across states.” And I, for one, think there need to be competing standards in order to see what works, what works better, and what works for different subsets of the unique individuals we call “children.”

When I was chairman of the National Endowment for the Humanities in the 1980s, I asked 250 people across the political spectrum what 10 books every student should be familiar with by the time they finish high school. Almost every person agreed on five vital sources: the Bible, Shakespeare, America’s founding documents, the great American novel “Huckleberry Finn” and classical works of mythology and poetry, like the Iliad and the Odyssey….That’s the fundamental idea behind a core curriculum: preserving and emphasizing what’s essential, in fields like literature and math, to a worthwhile education.

Presumably, the Core includes these readings that almost everyone Bennett polled agreed students should tackle. Right? Um, no:

Why then is Common Core drawing such heavy fire? Some of the criticism is legitimate, but much of it is based on myths. For example, a myth persists that Common Core involves a required reading list. Not so.

Here we see a basic problem for Core supporters: they want the public to believe either that the Core is rich and rigorous, or that it is empty and just a floor, depending, is seems, on whom they are trying to convince to support it. So in one breath they’ll talk about the obvious need for core content, and in the next they’ll protest if anyone says the standards have, well, core content. This may be because there actually is no unanimous agreement on what students should read.

Governors, state education administrators and teachers used these principles as a guide when they developed a set of common standards that were later presented to the country as Common Core. Forty-five states signed up originally.

Let’s be clear: States adopted the Core, in the vast majority of cases, only after the federal government all but said they had to in order to compete for $4 billion in Race to the Top money. Federal force was further applied by the No Child Left Behind waiver program. And all this occurred in the context of federally driven standards and testing since at least 1994. So, would most states have adopted the Core on their own? We don’t know for sure, but the evidence is heavily stacked against it.

Critics accused President Obama and Education Secretary Arne Duncan of dangling federal money to encourage states to adopt the Common Core. The administration never should have done this. It made a voluntary agreement among states look like a top-down directive from the federal government. But remember: The original Common Core standards were separate from the federal government, and they can be separated once again.