Tag: Democrats

The Coburn-Burr-Ryan-Nunes Mandate-Price-Control Bill

Today, Senators Tom Coburn (R-OK) and Richard Burr (R-NC), along with Reps. Paul Ryan (R-WI) and Devin Nunes (R-CA) announced that they will introduce a health care reform bill. If my reading of the bill summary is correct, their bill would:

  • Mandate that states create a new regulatory bureaucracy called a “State Health Insurance Exchange,”
  • Mandate that all plans offered through those exchanges meet federal regulatory standards,
  • Mandate “guaranteed issue” in those exchanges,
  • Mandate “uniform and reliable measures by which to report quality and price information,”
  • Impose price controls on those plans by prohibiting risk-rating,
  • Launch a government takeover of the “insurance” part of health insurance, by means of a “risk-adjustment” program intended to cope with the problems created by price controls, and
  • Fall just short of an individual mandate by setting up (mandating?) automatic enrollment in exchange plans at “places of employment, emergency rooms, the DMV, etc.” – essentially, trying to achieve universal coverage by nagging Americans to death.

Needless to say, I am troubled.

The bill summary is self-contradictory. On the one hand, it lists “No Tax Increases” as a core concept. Do its authors not know that imposing price controls on health insurance premiums imposes a tax on healthier-than-average consumers? And where do they think the money for “risk-adjustment” payments will come from? Heaven?

The bill sponsors seem to want to cement in place the monopoly regulation that currently exists at the state level – when they’re not encouraging Congress to take over that function. Have they abandoned their colleague Rep. John Shadegg’s (R-AZ) proposal to allow for competitive regulation of health insurance?

And if Massachusetts created an “exchange” on its own, why do other states need federal legislation?

The bill includes some ideas for which I have more sympathy, like its tax-credit proposal and expanding health savings accounts.

But the above provisions would sow the seeds of a government takeover of health care – so much so that The Washington Post’s Ezra Klein is salivating:

The word of the day is “convergence.” That – and that alone – is the definitive message of the conservative health reform alternative developed by Sens. Tom Coburn (Okla.) and Richard Burr (N.C.), as well as Rep. Paul Ryan (Wisc.). For now, some of the key provisions are about as clear as mud. The plan’s changes to the tax code, in particular, are impossible to discern. So I’ll do another post when I can get some clarity on those issues. The politics, however, are perfectly straightforward.

A superficial read of the Patients’ Choice Act – which I’ve uploaded here – would make you think you’re digging into a liberal bill. A fair chunk of the rhetoric is lifted straight from Sen. Ted Kennedy’s office. “It is time to publicly admit that the health care system in America is broken,” begins the document. “Health care is not a commodity in the traditional sense,” it continues. “States should provide direct oversight of health insurers to make sure they are playing by fair rules,” it demands. The way we pay private insurers in Medicare “wastes taxpayer dollars and lines the pockets of insurance executives,” it says. Elsewhere, it praises solutions that have worked in several European countries.”

And though it’s still too early to say how the policy fits together, it’s clear that many traditionally Democratic concepts have been embraced. To put it simply, the plan wants to encourage a version of the Massachusetts reforms – which it calls a “well-known, bi-partisan achievement of universal health care” – in every state. There are some differences, of course. The plan doesn’t have an individual mandate. It doesn’t have an obvious tax on employers. But it strongly endorses State Health Insurance Exchanges. And that, for Republicans, is a radical change in policy.

This idea – present in every Democratic proposal but absent in Arizona Sen.John McCain’s plan – would empower states to create heavily regulated marketplaces of insurers. The plans offered would have to “meet the same statutory standard used for the health benefits given to Members of Congress.” Cherrypicking would be discouraged through risk adjustment, which the PCA calls “a model that works in several European countries.” The government would automatically enroll individuals in plans whenever they interacted with a government agency and states would be able to join into regional cooperatives to increase the size of their risk pool.

In essence, Coburn, Burr, and Ryan are abandoning the individual market entirely. Like Democrats, they’re arguing that individuals cannot successfully navigate the insurance market, and they need the protection of government regulation and the bargaining power that comes from a large risk pool. This is literally the opposite approach from McCain, who attempted to unwind the employer-based insurance and encourage families to purchase health coverage on the individual market. The core elements of this plan, in other words, make it the same type of plan Democrats are offering. A plan that enlarges consumer buying pools rather than shrinks them. It’s pretty much exactly what I’d expect a Blue Dog Democrat to propose. And it’s further evidence that the argument over health reform is narrowing, rather than widening. And it’s narrowing in a direction that favors the Democrats.

UPDATE: After discussions with Sen. Coburn’s staff, I happily issued a few corrections. Still, concerns remain.

On Taxing Employer Health Benefits

Democrats in Congress are reportedly considering taxing employer-provided health insurance benefits as a way to pay for their health care reform plan.  And, even though he brutally attacked John McCain for something similar (see below) during the campaign, President Obama may now go along with the idea.

Much of the media coverage around the idea has equated this tax hike with the McCain plan and other proposals by advocates of market-based health reform over the years that would shift the tax break from employer-provided insurance to individual insurance.  However, there is an important distinction.  The market-based proposals would have taxed employer-provided health benefits (treating them as taxable compensation), but would have provided workers with a deduction or credit for purchasing insurance regardless of whether they receive it through work or pay it on their own.  The result, for all but a handful of workers with the most expensive gold-plated employer plans, would have been tax neutral.  In fact, many workers would receive a net tax cut.   The shift in tax treatment was simply part of a larger strategy to move from a system of employer-provided insurance to one where health insurance was personal, portable, and owned by workers.

The plan being discussed by Congress, on the hand, is simply a tax hike.  It is not revenue neutral—it is a $1 trillion tax increase that will fall heavily on the middle-class.  It is designed not to change the system, but simply to raise revenue. 

That’s a very different thing!

School Choice Going, Going, Gone Bipartisan (In Some States)

The USA Today takes note of the fact that support for school choice is growing among Democratic, often black, politicians:

While vouchers will likely never be the clarion call of Democrats, they’re beginning to make inroads among a group of young black lawmakers, mayors and school officials who have split with party and teachers union orthodoxy on school reform. The group includes Sacramento Mayor Kevin Johnson, Newark Mayor Cory Booker and former Washington, D.C., mayor Anthony Williams.

I’d only add that this broadening support is hardly limited to black Democrats, and that support for education tax credits is spreading even more quickly among Democrats. And while choice might never become a Democratic “clarion call,” it just might become the new consensus among serious education reformers in both parties.

For instance, a Democrat-controlled and, I assume, mostly white legislature in Rhode Island passed a donation tax credit. And Democratic governor and legislature in Iowa raised their tax credit dollar cap by 50 percent in 2007. The paper mentions black mayor Corey Booker’s support for school choice in New Jersey, but the white, former Democratic state party chair, and current state Senator Ray Lesniak is also pushing for a donation tax credit bill.

The model case is Florida. When the Florida legislature passed its education tax credit program to fund private school choice in 2001, only one Democrat supported the measure. Last year, the state legislature expanded the program with the votes of one third of statehouse Democrats, half the black caucus and the entire Hispanic caucus.

In the past few weeks, nearly a third of Senate Democrats and half of House Democrats voted to significantly expand the program’s revenue base. Virtually all Republicans did the same, and Republican Governor Crist is expected to sign the bill soon. In all, 43 percent of state Democratic legislators in Florida voted in favor of education tax credits.

The toothpaste is out, and the teachers unions can’t put it back in with all the dues money in the world.

Republicans Tell America: Trust Us with Your National Security Again

The Republican Party hasn’t been doing well as of late.  A botched governing majority, a lost reputation, two lost legislative elections, two lost congressional majorities, a lost presidential election, a lost Pennsylvania senator, and no relief in sight.  So what does the GOP congressional leadership do?  Play the national security card.

Reports the New York Times:

Stymied in so many of their efforts to put President Obama and Democrats on the defensive, Republicans are returning to national security, an issue that has served the purpose well for them in the past.

Trying to raise doubts about Mr. Obama’s ability to protect the nation, they have raised the specter of terror suspects transferred from the detention facility at Guantánamo Bay, Cuba, to prisons in American communities, issued warnings that the release of memorandums detailing secret interrogation methods has put Americans at risk, and presented a video montage ending with the Pentagon in flames on Sept. 11, 2001, and the question, “Do you feel safer?”

“I think what I’m trying to do here,” Representative John A. Boehner of Ohio, the Republican leader, said in defending the video he and fellow Republicans have been circulating, “is push the administration to tell us, What is the overarching strategy to take on the terrorists and defeat them and to help keep America safe?”

I have a lot of bad things to say about both parties on foreign as well as domestic policy.  But it’s hard for me to imagine the previous eight years of Republican governance as a golden era for national security.  First there was 9/11.  Perhaps it is too much to expect the Bush administration to have prevented the terrorist atrocity, but the administration did nothing over the Clinton administration to improve American defenses to prevent such attacks.

Then there was diverting troops and attention from Afghanistan before that war was finished, to invade Iraq.  The Iraq debacle occupies a category all its own.  Policy towards North Korea was spectacularly misguided and incompetent:  refusing to talk to the North for years as it generated nuclear materials, before rushing to embrace Pyongyang while offering few immediate benefits to entice the North to change its behavior.  The results of this strategy were, unsurprisingly, negligible.

Refusing to talk to Iran had similar consequences.  Washington refused to engage Syria, even though Israel was willing to talk to Damascus.  The Bush administration further tightened the embargo against Cuba, again achieving nothing.  The administration also continued the Clinton administration’s policy of estranging Russia by expanding NATO ever closer to Moscow, incorporating countries that are security black holes, offering geopolitical conflicts with no corresponding military benefits.

In the midst of all this, the GOP in both the executive and legislative branches led a sustained assault on civil liberties and limited, constitutional government even when doing so did nothing to forestall another terrorist attack.

Given all this, is should surprise no one that the Republicans are no longer in control of government.

The Democrats may prove to be worse on all counts. I’ve long learned not to assume that things could not get worse.  Still, it is hard to take seriously Republican demands that the American people trust them with the nation’s security.  After all, look at what the Republicans did when they actually held power.

Vetting the Future Supreme Court Justice

In choosing a Supreme Court nominee to replace Justice Souter, President Obama will have an opportunity to avoid the partisanship he promised to reduce on the campaign trail, which his legislative agenda has thus far only exacerbated.

But given the way Bush nominees were treated by Senate Democrats, it won’t be easy. After the stormy confirmation hearings for Judges Bork and Thomas, President Clinton’s nominations of Judges Ginsburg and Breyer sailed through the confirmation process with little opposition and even less acrimony. With the return of Republican nominees after the election of George W. Bush, however, Senate Democrats resumed their scorched earth practices, starting with appellate court nominees and continuing to the nominations of Judges Roberts and Alito to the High Court.

Hearings were never held, filibusters were threatened and reputations were tarnished.

The question now for Senate Republicans will be, is turnabout fair-play?

The answer may turn on just who President Obama selects. At the least, given this recent history, there is no reason Senate Republicans need to be unduly deferential to the president’s nominee. We will need to know both the judicial philosophy and the constitutional philosophy of the nominee.

That will require respectful but sharp questioning by members of the loyal opposition. Their duty under the Constitution requires nothing less.

Bipartisan Support for Choice Grows Every Year

When the Florida Legislature passed its education tax credit program in 2001, only one Democrat supported the measure.

Last year, the legislature expanded the program with votes from one third of statehouse Democrats, half the black caucus and the entire Hispanic caucus.

Last week, nearly half of House Democrats —47 percent—voted to significantly expand the revenue base for the state’s business donation tax credit program. House Republicans voted 100 percent in favor.

And yesterday, nearly a third of Senate Democrats—31 percent—voted to expand the tax credit program. And 92 percent of their Republican colleagues voted for the bill.

In all, 43 percent of state Democratic legislators voted in favor of education tax credits. Governor Crist is expected to sign the bill shortly.

They are not alone.

In 2006, Democratic governors in Arizona, Iowa and Pennsylvania signed new or expanded tax-credit initiatives. That same year, a Democrat-controlled legislature in Rhode Island passed a donation tax credit. A Democratic governor and legislature in Iowa raised their tax credit dollar cap by 50 percent in 2007.

Partisanship on choice is fading away because many politicians have come to realize that school choice saves money and children. The truth is beginning to spread; school choice is the most proven and effective systemic reform available.

The future of education reform is looking bright in the Sunshine State and across the nation.

Cato Unbound Update

This month’s issue of Cato Unbound has drawn an extraordinarily hostile response from a couple of mainstream online publications. Writing at Salon, Michael Lind inferred, mistakenly, that our interest in Seasteading and other radical libertarian projects was due to our disappointment that Republicans lost in the 2008 election. Because this issue was my idea, I feel I can speak effectively to the charge.

As I see things, it was basically impossible to cast either John McCain or Barack Obama as a libertarian. Neither of them shared the policy goals of the Cato Institute to any appreciable degree. Speaking as a private individual, I didn’t vote for either of them, and I don’t regret my choice. I found both Democrats and Republicans profoundly unappealing this election cycle.

This issue of Cato Unbound was motivated solely by my desire to see one particularly radical branch of libertarianism publicly confront its critics. I wanted to see how well it could hold up. Whether it stood or fell, the issue would have served its purpose. Electoral politics had nothing to do with it.

As our disclaimer makes clear, Cato Unbound doesn’t necessarily reflect the opinions of the Cato Institute. No endorsement is implied. Instead, we strive to present ideas and arguments that will be interesting to libertarians and also, if possible, to the general public.

Sometimes this means soliciting opinions that are very, very far from the American mainstream, and also far from our own views. It was a proud day for me when a prominent climate change blog suggested that Hell had frozen over – because the Cato Institute had published a piece by Joseph Romm. But that’s just the kind of place that Cato Unbound has always tried to be. We court controversy.

Some of Lind’s harshest barbs were reserved for contributor Peter Thiel, and for his suggestion that, demographically speaking, women have tended to oppose libertarian policies:

According to Thiel, one problem with democracy is that women have the right to vote:

Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women – two constituencies that are notoriously tough for libertarians – have rendered the notion of ‘capitalist democracy’ into an oxymoron.

What could more beautifully illustrate the pubescent male nerd mentality of the libertarian than Thiel’s combination of misogyny with the denial of aging and death? We had a nice John Galt libertarian paradise in this country, until girls came along and messed it up!

Thiel continues:

In our time, the great task for libertarians is to find an escape from politics in all its forms – from the totalitarian and fundamentalist catastrophes to the unthinking demos that guides so-called ‘social democracy.’

After considering the possible mass migration (if that is not a contradiction in terms) of libertarians to cyberspace and outer space, he opts for Fantasy Island:

The fate of our world may depend on the effort of a single person who builds or propagates the machinery of freedom that makes the world safe for capitalism. For this reason, all of us must wish Patri Friedman the very best in his extraordinary experiment.

Here’s an idea. Thiel could use his leverage as a donor to combine the Seasteading Institute with the Methuselah Foundation and create a make-believe island where girls aren’t allowed to vote and where nobody ever has to grow up. Call it Neverland. It would be easy for libertarian refugees from the United States and the occasional neo-Confederate to find it. Second star to the right, and straight on till morning.

Emphasis added. Owen Thomas at Gawker jumped to about the same conclusion, but with even more ad hominem.

Yet Thiel’s claim is not that women should be denied the vote. He writes only that women have tended to favor policies and candidates he opposes, and which he thinks are bad for the country. This seems – to my mind at least – regrettable, but also generally true. Thiel might have chosen his words more carefully, but it’s still quite a logical leap from what he actually wrote to demanding the end of women’s suffrage. Of course women should be able to vote. It’s ridiculous to suggest otherwise. We libertarians just need to do a better job of convincing them that voting in favor of individual liberty and free markets are the best choices they can make.

Consider that a Democrat might complain that white evangelical Christians don’t support enough Democrats, and that this works out badly for the country. No one would ever conclude that Democrats want to take away the votes of white evangelical Christians. We would all figure that they are just confronting a failure of practical politics, and perhaps trying to do better at realizing their particular vision of the world. That’s what Thiel was doing too, albeit not via electoral politics. Something about libertarians, however, seems to demand that some people read us as uncharitably as possible.

Seasteading proposes to create a demonstration of how a libertarian society might work. Its proponents believe that if it works, everyone will be drawn to it, including women. Will they succeed? I have some serious doubts, to be honest.

That’s why I set up this issue of Cato Unbound, and why I think the discussion has been valuable.