Tag: cadillac tax

WSJ: ‘Roofer Union Calls for Repeal of Obama Health Law’

Take it, Janet Adamy:

A labor union representing roofers is reversing course and calling for repeal of the federal health law, citing concerns the law will raise its cost for insuring members.

Organized labor was instrumental in getting the Affordable Care Act passed in 2010, but more recently has voiced concerns that the law could lead members to lose their existing health plans. The United Union of Roofers, Waterproofers and Allied Workers is believed to be the first union to initially support the law and later call for its repeal.

“After the law was passed, I had great hope…that maybe the rough spots would be worked out and we’d have a great law,” said Kinsey Robinson, international president of the union, which represents 22,000 commercial and industrial roofers…

Mr. Robinson says the union’s concerns about the law began to pile up in recent months after speaking with employers.

The roofers’ union’s current insurance plan caps lifetime medical bill payouts at $2 million for active members and $50,000 for retirees. Next year, the plan has to remove those caps in order to comply with the health law. Other aspects of the retiree plan must become more generous in order to meet the law’s minimum essential coverage requirements next year. All that will increase the cost of insuring members, Mr. Robinson said, and has prompted the union to weigh eliminating the retiree plan.

Adding to those cost concerns is a new $63-per-enrollee fee on health plans that pays insurers to cover people with pre-existing conditions next year. Looking ahead to 2018, when the law levies an excise tax on high-value insurance plans, Mr. Robinson predicts that at least some of the union’s plans will get hit by it…

Over time, Mr. Robinson says, his optimism that regulators or lawmakers would address the union’s concerns diminished. “I don’t think they are going to get fixed,” he said. On Tuesday, the union called for a repeal of the health law or a complete reform of it.

Will the last ObamaCare supporter please turn off the lights?

How the Term ‘Tax Expenditure’ Leads to Bigger Government

The Center for American Progress has a new weekly feature examining “tax expenditures” in the Internal Revenue Code.  As I’ve written before, there ain’t no such thing as a tax expenditureOr a tax subsidy.  Targeted tax breaks are bad because, on balance, they expand government’s control over the people.  But they are not “expenditures” or “subsidies.”  Using either of those terms implies that the money not collected by the IRS because of a targeted tax break actually belongs to the federal government, rather than the people who earned it.

The Left would love to convince everyone that, as the Center for American Progress writes, “Tax expenditures are really just federal spending programs administered by the Internal Revenue Service.”  If everyone believes that this is really federal spending, then when Congress eliminates those “tax expenditures” maybe no one will notice that Congress is actually extracting resources from the private sector.

That very deception appears to be the aim of the Center for American Progress’ new feature.  Their first “Tax Expenditure of the Week” is the exclusion for employment-based health insurance.  They use the “tax expenditure” concept to argue that ObamaCare’s 40-percent “Cadillac tax” on high-cost health plans is actually a good thing:

The tax exclusion for employer-sponsored health care benefits is the largest tax expenditure and one of the most important. The Patient Protection and Affordable Care Act takes steps to make it more targeted and cost effective in the context of overall health care reform. Other tax expenditures should be similarly evaluated and considered in the context of the policy goals they serve.

See?  ObamaCare doesn’t raise your taxes.  It reallocates a tax expenditure.  George Orwell, call your office.

(To be clear: I favor eliminating all targeted tax breaks, even the personal and dependent exemptions, and having everyone pay the same low, low, low rate.  Eliminating tax breaks for health care is essential for bringing medical care within the reach of low-income people.  But the exclusion for employer-sponsored insurance is a particularly sticky wicket, such that reform will need to happen in two steps.  Here’s the first step.)

By Pulling His Punches, Bernanke Shatters ObamaCare’s Credibility

Federal Reserve Chairman Ben Bernanke gave a speech in Dallas yesterday where he inadvertently discredited claims that ObamaCare would reduce health care costs and the federal deficit.  According to The Washington Post:

Federal Reserve Chairman Ben S. Bernanke warned Wednesday that Americans may have to accept higher taxes or changes in cherished entitlements such as Medicare and Social Security if the nation is to avoid staggering budget deficits that threaten to choke off economic growth…

While the immediate audience for the speech was the Dallas Regional Chamber, his message was intended for Congress and the Obama administration…

Bernanke has urged Congress to address long-term fiscal imbalances in congressional testimony before, but usually only when he is asked about them by lawmakers. His speech Wednesday aimed to reach a broader audience, steering away from technical economic speak and using plain, sometimes wry, language – a rare thing for a Fed chairman.

The non-partisan Congressional Budget Office projects the annual federal deficit will be at least $700 billion in each of the next 10 years.  Deficit spending is a form of taxation without representation, because it increases the tax burden of generations who cannot yet vote (often because they are as yet unborn).  Bernanke wants us to end deficit spending.  Kudos to him.

But consider the timing of his speech.  Why wait until April 7, 2010, to deliver that message directly to the public?  Why not give that speech in January? Or February? Or any time before March 21?

The reason is obvious: Bernanke held back to appease his political masters.

Until three weeks ago, the nation was locked in a debate over whether Congress should enact ObamaCare, the most sweeping piece of social legislation in American history.  That law includes two new health care entitlements – the very type of government spending driving the federal budget further into the red.  Democrats rigged the bill so that the CBO was obliged to score it as deficit-reducing, but 87 percent of the public weren’t buying it.

If Bernanke really wanted to warn the American public about the dangers of rising budget deficits, then a congressional debate over creating two new entitlement programs would be the most important time to deliver that message.  Democrats would have responded that ObamaCare would reduce the deficit.  But since voters believe ObamaCare to be a budget-buster, Bernanke’s warning would have dealt ObamaCare a serious blow.

Had Bernanke delivered his populist warning before January 28, it could have jeopardized his confirmation by the Senate to a second term as Fed chairman.  Had he done so between January 28 and March 21, he would have suffered a storm of criticism from Democrats (and possible retribution when his term came up for renewal in 2013) because his sensible, responsible warning would have made moderate House Democrats more skeptical about ObamaCare’s new entitlements.

So Bernanke pulled his punches.  As Dick Morris would put it, anyone who doesn’t think that political concerns affected Bernanke’s timing is too naive for politics.

Bernanke’s behavior thus reveals why ObamaCare’s cost would exceed projections and would increase the deficit.

Knowledgeable leftists, notably Tom Daschle and Uwe Reinhardt, recognize that Congress is no good at eliminating wasteful health care spending because politics gets in the way.  (Every dollar of wasteful health care spending is a dollar of income to somebody, and that somebody has a lobbyist.)

The Left’s central planners believe they can contain health care costs by creating an independent government bureaucracy that sets prices and otherwise rations care without interference from (read: without being accountable to) Congress.  ObamaCare’s new Independent Payment Advisory Board is a precursor to what Daschle calls a “Health Fed,” so named to convey that this new bureaucracy would have the same vaunted reputation for independence as the Federal Reserve.

Yet Fed scholar Allan Meltzer reports, and Bernanke’s behavior confirms, that not even the hallowed Federal Reserve can escape politics:

In reading the minutes of the Fed and watching what they do, the Fed has always been very much afraid of Congress…The idea of having a really independent agency in Washington, that’s just not going to happen…[The Fed] is very much concerned — always — about what the Congress is doing, and doesn’t want to deviate very far from that.

Politics affects Bernanke’s behavior and the Fed’s behavior.  Politics will defang the Independent Payment Advisory Board, and many of  ObamaCare’s other purported cost-cutting measures.  ObamaCare’s cost will outpace projections. The deficit will rise.

Repeal the bill.