Tag: governor mitt romney

Would Romney Be Good for American Education?

Without picking a winner in last night’s debate, it’s fair to say that Mitt Romney avoided the sort of conspicuous gaffs that can sink a campaign. He may well become the next president of the United States. Would that be a good thing for American schoolchildren?

Yesterday, I faulted an op-ed the Governor wrote for consisting chiefly of vagaries—but perhaps that’s not such a bad thing. Given that the federal government has spent roughly $2 trillion on k-12 education since 1965 and achieved none of its objectives, a president who talks much but does less would be a decided improvement.

But there are a few specifics in Romney’s education white paper… and some of them are deeply disconcerting. Immediately after stressing that “states and localities are best-positioned to reform their education systems” the document reverses course and declares that “the federal government cannot ignore the troubled state of American K-12 education,” and “is uniquely positioned to provide financial support for the education of our neediest students and to require states and districts to tell the truth about how their schools and students are performing.”

Certainly the federal government should not ignore America’s educational woes, having contributed to many of them for over half a century. But the subsequent claims are untrue and do not follow from the first. It is simply false that federal government funding is “uniquely positioned” to improve the education of the neediest students. In fact, one of the flagship federal programs for helping these students, Head Start, has been proven to have no lasting benefits by the federal government’s own research. More broadly, there appears to be no link between federal K-12 spending patterns and the student achievement gaps by socio-economic status or race. Nor is there any evidence that the federal oversight introduced by the No Child Left Behind law (the “telling the truth” referred to above) improved achievement overall or narrowed the gaps.

To be fair, the document acknowledges the ineffectiveness of past and current federal programs, and so the claim that federal funding is “uniquely positioned” to help disadvantaged students could be read to apply only to the Romney campaign proposal of “attaching federal funding to the students it is intended to support rather than dispersing it to districts.” The idea is essentially to voucherize federal funds, allowing them to be used even at private schools, where permitted by state law.

The benefits of increasing parental choice and competition between schools are well supported by the evidence, but here again, the federal “uniqueness” claim is simply false. Federal funding is not unique or necessary to ensuring universal school choice. The states are fully capable of doing this themselves because private schooling is, on average, about two thirds the per-pupil cost of public schooling, and so even without the roughly ten percent of education funding that comes from the federal government, state-level private choice programs could serve everyone.

Even though federal involvement in state school choice programs is not necessary it could still be a good idea. But it isn’t. As I argued when a similar idea was floated by President G. W. Bush, federal regulations would almost certainly follow federal funding of the nation’s private schools, homogenizing them from coast to coast and thereby eliminating the educational diversity upon which any choice program must rely. Since writing that piece, I have conducted a statistical study of the regulations imposed by state-level private school choice programs and found that vouchers already impose a large and highly statistically significant extra burden of regulation on participating schools. This is a grave enough problem when the regulations affect just the private schools in a single state, but that pales in comparison to the damage that would be done by such regulations at the national level.

Universal private school choice can also be achieved via personal and “scholarship donation” tax credits, and these programs do not seem to carry with them the same regulatory pall. But there is no reason to run the risk of enacting such a program at the federal level. On the contrary, the growing diversity of school choice programs at the state level is an asset, allowing us to see which state policies do the most to expand educational freedom and improve quality and efficiency. The best can then be replicated and the worst reformed.

Governor Romney says that he understands the free enterprise system, and knows that trickle-down government doesn’t work. He says that he wants to uphold our nation’s founding principles. Well, the evidence is clear that there is no need for or benefit to federal government intervention in state education policy and that there are in fact very grave risks to such intervention. And though it is unfashionable to draw attention to this fact, neither the word education nor the word school is mentioned in the U.S. Constitution. So if Governor Romney becomes President Romney, American schoolchildren will be very lucky if he remembers these facts, and uses the presidential bully pulpit to promote more and better state-level school choice programs rather than opening the Pandora’s Box of federal funding and regulation of private schools.

The Economic Case for Health Care Reform

There’s an old Yiddish saying that, “If my bubba had wheels she’d be a trolley.” So goes the logic of the Obama administration in their paper released yesterday, “The Economic Case for Health Care Reform.” Their claim is that reducing health care costs would help the economy. Yes, if health care costs were reduced it would likely help the economy, though we should remember that the health care industry is part of the economy.

There is nothing in Obamacare, however, that will reduce costs. In fact, expanding coverage may cause costs to rise. One study by MIT’s Amy Finkelstein suggests that the prevalence of insurance itself has roughly doubled the cost of health care. So, if Obama succeeds in expanding insurance coverage, it’s very likely to increase the cost of care.

Take Massachusetts for example. Three years ago, Massachusetts governor Mitt Romney signed into law one of the most far-reaching experiments in health care reform since President Bill Clinton’s ill-fated attempt at national health care. Proponents promised the reforms would reduce health care costs, suggesting the price of individual insurance policies would be reduced by 25-40 percent. In reality, however, insurance premiums rose by 7.4 percent in 2007, 8-12 percent in 2008, and are expected to rise 9 percent this year. This is compared to a nationwide average increase of 5.7 percent over the same three years. Nationally, on average, health insurance for a family of four costs $12,700; in Massachusetts, coverage for the same family costs an average of $16,897.

In fact, since the bill was signed, health care spending in the state has increased by 23 percent. Thus, despite individual and employer mandates, the creation of an insurance connector and other measures that increase insurance regulations, Massachusetts has failed to bring costs down.

President Obama and Congressional leaders have endorsed expanding coverage in similar ways to Massachusetts. The proposals would undoubtedly make it easier for some people to get coverage, but would also raise insurance costs for the young and healthy, making it more likely they would go without coverage. This leaves two choices: revert to the individual mandate (President Obama opposed the mandate as a candidate) or increase subsidies to try to cut costs to young and healthy individuals, thereby adding to the already substantial cost of the proposed plans.

Ultimately, controlling costs requires someone to say “no,” whether the government (as in single-payer systems with global budgets), insurers (managed care) or health care consumers themselves (by desire or ability to pay). In reality, any health care reform will have to confront the fact that the biggest single reason costs keep rising is that the American people keep buying more and more health care.

A Not So Happy Anniversary for the “Massachusetts Model”

Three years ago yesterday, then-Governor Mitt Romney signed into law the most far reaching state health care reform plan to date.  At the time, we warned that the plan, with its individual and employer mandates, new regulatory bureaucracy (the Connector), and middle-class subsidies would result in “a slow but steady spiral downward toward a government-run health care system.” Sadly, three years later, those predictions appear to be coming true.

  • While the state has reduced the number of residents without health insurance, some 200,000 people remain uninsured. Moreover, the increase in the number of insured is primarily due to the state’s generous subsidies, not the celebrated individual mandate.
  • Health care costs continue to rise much faster than the nationally. Since the program became law, total state health care spending has increased by 23 percent. Insurance premiums have been increasing by 10-12 percent per year, nearly double the national average.
  • New regulation and bureaucracy is limiting consumer choice and adding to costs.
  • Program costs have skyrocketed. Despite tax increases, the program faces huge deficits in the future. As a result, the state is considering caps on insurance premiums, cuts in reimbursements to providers, and even the possibility of a “global budget” on health care spending.
  • A shortage of providers, combined with increased demand, is increasing waiting times to see a physician, especially primary care providers.

With the “Massachusetts model” being frequently cited as a blueprint for state or national health care reform, it is important to recognize that giving the government greater control over our health care system will have grave consequences for taxpayers, providers, and health care consumers. That is the lesson of the Massachusetts model.