Tag: Democrats

Lessons from the Brown Victory in Massachusetts

In this new video, Cato’s David Boaz and John Samples evaluate what Scott Brown’s victory in Massachusetts means for Democrats and Republicans in the near and far term. Samples and Boaz contend that Tuesday’s election sent a message to Democrats that they have clearly overreached, but Republicans need to be careful and realize that they’re still not very popular either.

Watch:

John Samples is the author of the forthcoming book, The Struggle to Limit Government, available soon at the Cato store.

Reforming the Insane Tax Code

We’ve got an IRS Commissioner who doesn’t even do his own taxes, and is not embarrassed about it. We’ve got complex deductions that nobody understands, including the government, as the Maryland nurse with the MBA found out. We’ve got a Treasury Secretary and other high appointees who apparently cheated on their taxes. And we’ve got the Democrats hell-bent on greatly increasing the power and responsibilities of the overwhelmed IRS with their health care bill.

Now, more than ever, it’s time to scrap the current income tax and put in a flat tax. Or at least we could take a big jump in that direction with a “Simplified Tax,” as discussed in a new National Academies report. Get rid of all almost all deductions, exemptions, and credits and drop individual rates to 10 and 25 percent. While we’re at it, let’s drop the federal corporate rate to 25 percent or less.

For more on the two-rate tax idea, see my Options for Tax Reform and Rep. Paul Ryan’s American Roadmap.

Tuesday Links

  • Afghanistan: A war we cannot afford. “Democrats say raise taxes. Republicans say no worries. The best policy would be to scale back America’s international commitments.”

Health Reform: Blame Mitt

If – and it is still a big “if – Democrats pass a health bill, that bill will owe as much to former Massachusetts governor Mitt Romney as to Nancy Pelosi and Harry Reid. In fact, with the so-called “public option” out of the Senate health bill, the final product increasingly looks like the failed Massachusetts experiment.  Consider that the final bill will likely include:

  • An individual mandate
  • A weak employer-mandate
  • An Exchange (Connector)
  • Middle-class subsidies
  • Insurance regulation (already in place in Massachusetts before Romney’s reforms)

As to why this will be a disaster for American taxpayers, workers, and patients, I’ve written about it here, and my colleague Michael Cannon has covered it here and here.

Gee, thanks, Mitt.

Disappointing Start for Immigration Reform

The good news is that a bill has been introduced in the House this week under the broad heading of immigration reform. Even during a recession, Congress should be working to change our immigration system to reflect the longer-term needs of our economy for foreign-born workers.

The bad news is that the actual bill put in the hopper by Rep. Luis Gutierrez, D-IL, on Tuesday would do nothing to solve the related problems of illegal immigration and the long-term needs of our economy.

As I argued in a recent blog post and a Washington Times op-ed, immigration reform must include expanded opportunities for legal immigration in the future through a temporary worker visa.

Any so-called reform that is missing this third leg will be doomed to fail. We will simply be repeating the mistakes of the 1986 Immigration Reform and Control Act, which granted amnesty to 2.7 million illegal workers and ramped up enforcement, but made no provision for future workers. Rep. Jeff Flake, R-AZ, agrees.

Red Team, Blue Team

In a report on Attorney General Eric Holder’s approach to seeking the death penalty, NPR reports:

A few months after Holder made that statement, he authorized a capital prosecution in Vermont, a state that does not have the death penalty. When Ashcroft brought a federal death penalty case in Vermont seven years ago, the mayor of Burlington called it “an affront to states’ rights” and “not consistent with the values of a majority of Vermonters.” But this time, there was hardly any outcry.

So the former antiwar movement doesn’t complain about President Obama’s expansion of the wars in Iraq and Afghanistan. And opponents of capital punishment don’t protest the Obama administration’s seeking the death penalty in liberal Vermont. It’s beginning to look a lot like the Bush years, when conservatives put up with a great deal from a Republican administration that would have sent them into apoplexy if it had been done by Democrats.

FEHBP Plan Is No ‘Moderate Compromise’

Senate Majority Leader Harry Reid (D-NV) has announced that he has reached a super secret compromise on how to deal with the so-called public option for health reform.  While Reid said the agreement was too important to actually tell anyone what is in it, most of the details have been leaked to the press.

Rather than set-up a completely government-run insurance plan to compete with private insurance, Congress would establish a program similar to the Federal Employees Health Benefit Program (FEHBP), which currently covers government workers, including Members of Congress.  The FEHBP offers a variety of private insurance plans under a program managed by the US Office of Personnel Management (OPM).  Each year OPM uses the Federal procurement process to solicit bids from insurance companies to be one of the plans offered.  Premiums can vary, but participating plans operate under stringent rules.   As a model, the FEHBP is apparently acceptable to moderate Democrats because the insurance plans are private rather than government entities, while liberals like it because it is government regulated and managed.

In addition, the compromise plan would expand Medicare, allowing workers ages 55 to 65 to “buy in” to the program, and may also expand Medicaid.

A few reasons to believe this is yet another truly bad idea:

  1. In choosing the FEHBP for a model, Democrats have actually chosen an insurance plan whose costs are rising faster than average.   FEHBP premiums are expected to rise 7.9 percent this year and 8.8 percent in 2010.  By comparison, the Congressional Budget Office predicts that on average, premiums will increase by 5.5 to 6.2 percent annually over the next few years.  In fact, FEHBP premiums are rising so fast that nearly 100,000 federal employees have opted out of the program.
  2. FEHBP members are also finding their choices cut back.  Next year, 32 insurance plans will either drop out of the program or reduce their participation.  Some 61,000 workers will lose their current coverage.
  3. But former OPM director Linda Springer doubts that the agency has the “capacity, the staff, or the mission,” to be able to manage the new program.  Taking on management of the new program could overburden OPM.  “Ultimate, it would break the system.”
  4. Medicare is currently $50-100 trillion in debt, depending on which accounting measure you use.  Allowing younger workers to join the program is the equivalent of crowding a few more passengers onto the Titanic.
  5. At the same time, Medicare under reimburses physicians, especially in rural areas.  Expanding Medicare enrollment will both threaten the continued viability of rural hospitals and other providers, and also result in increased cost-shifting, driving up premiums for private insurance.
  6. Medicaid is equally a budget-buster. The program now costs more than $330 billion per year, a cost that grew at a rate of roughly 10.7 percent annually.  The program spends money by the bushel, yet under-reimburses providers even worse than Medicare.
  7. Ultimately this so-called compromise would expand government health care programs and further squeeze private insurance, resulting in increased costs and higher insurance premiums, and provide a lower-quality of care.

No wonder Senator Reid wants to keep it a secret.