Tag: Think Progress

ObamaCare Implementation News

Here’s some ObamaCare implementation news from around the interwebs:

  • Minnesota Facing Bigger Bill For State’s Health Insurance Exchange”: Kaiser Health News reports Minnesota has increased its spending projections for operating the state’s ObamaCare Exchange by somewhere between 35-80 percent for 2015. Spending on the Exchange will rise by another 19 percent in the following year.
  • The Wall Street Journal  defends the 25-30 states that aren’t gullible enough to create an Exchange and therefore take the blame for ObamaCare’s higher-than-projected costs.
  • Arizona Gov. Jan Brewer (R) has announced she will not implement an Exchange. That creates another potential state-plaintiff, millions of potential employer-plaintiffs, and (by my count) 430,000 potential individual plaintiffs who could join Oklahoma attorney general Scott Pruitt in challenging the IRS’s illegal ObamaCare taxes. It also means that Arizona can start luring jobs away from tax-happy California. There are four Hostess bakeries in California that might be looking to relocate.
  • I’m enjoying a friendly debate with The New Republic’s Jonathan Cohn and University of Michigan law professor Samuel Bagenstos over whether the those taxes really do violate federal law and congressional intent (spoiler alert: they do). I owe Bagenstos a response.
  • PolitiFact Georgia rated false my claim that operating an ObamaCare Exchange would violate Georgia law. I explain here why it is indeed illegal for Georgia (and 13 other states) to implement an Exchange.
  • ThinkProgress.org reports, “Romney’s Transition Chief Is Encouraging States To Implement Obamacare.” A better headline would have been, “Government Contractor Encourages More Government Contracts.”
  • The Washington Examiner editorializes, “In California…state regulators have warned…insurance premiums will rise by as much as 25 percent once the exchange comes online…That’s the best-case scenario.” And, “In 2014, seven Democratic Senate seats will be up for grabs in states Mitt Romney carried (Alaska, Arkansas, Louisiana, Montana, North Carolina, South Dakota and West Virginia). Unless Obama’s HHS bureaucrats pull off an unprecedented miracle of central planning, Obamacare could well sink Democrats again in 2014, the same way it did in 2010.”

On Federal Education, Think Progress Should Think Harder

Over on the Think Progress blog, Ian Millhiser accuses Sen. Tom Coburn (R-Okla.) of never having read the Constitution. His grounds for the accusation? Coburn, citing Jefferson, doesn’t think that the Constitution gives the federal government authority to provide such things as Pell Grants and student loans.

Writes Millhiser:

Sen. Coburn might want to try actually read the Constitution before he pretends to know what it allows. Article I provides that “[t]he Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States,” a grant of power that unambiguously empowers Congress to raise funds and spend them on programs that are broadly beneficial to American welfare — such as education.

Moreover, while Coburn’s reference to Thomas Jefferson is true in the narrowest sense of the term, it also betrays Coburn’s ignorance of constitutional history. During the Washington Administration, Jefferson and James Madison led a minority coalition which believed that Congress’ constitutional power to spend money was too narrow to support spending programs such as the First Bank of the United States. President Washington, however, rejected their arguments. Moreover, while Coburn is correct that President Jefferson briefly referenced his narrow view of the Constitution in his 1806 State of the Union, Jefferson was an extreme outlier by this point in American history. Even Madison parted ways with Jefferson by the time Madison became president in 1809.

This might be a classic pot-kettle situation. At the very least, it is utterly impossible to say that the general welfare clause “unambiguously” empowers Congress to raise funds and spend them – with massive strings attached, of course – on education. Indeed, that the general welfare clause does anything other than introduce the specific, enumerated powers that follow it was expressly rejected by Madison in Federalist no.  41, in which he wrote:

For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power? Nothing is more natural nor common than first to use a general phrase, and then to explain and qualify it by a recital of particulars.

The general welfare clause, quite simply, confers no power – it just explains why the specific powers that follow it were given.

But didn’t Alexander Hamilton – who had Washington’s ear – reject that notion? Well yes, in his 1791 Report on Manufactures he suggested that the federal government could do almost anything as long as it was done in the interest of the entire nation. But his report was not only shelved by Congress at the time, Hamilton’s argument was quite different from what he wrote in the Federalist Papers. Though speaking  specifically of the taxation and  ”necessary and proper” clauses, in Federalist no. 33  Hamilton wrote that seemingly broad powers were given to Congress only to execute “specified powers:”

[I]t may be affirmed with perfect confidence that the constitutional operation of the intended government would be precisely the same, if the clauses were entirely obliterated, as if they were repeated in every article. They are only declaratory of a truth which would have resulted by necessary and unavoidable implication from the very act of constituting a federal government, and vesting it with certain specified powers [italics added]. This is so clear a proposition, that moderation itself can scarcely listen to the railings which have been so copiously vented against this part of the plan, without emotions that disturb its equanimity.

How about the argument that Jefferson’s quaint small-government beliefs were way out of date by 1806? Well, they sure weren’t on education.

For one thing, it is notable that President Washington probably had a more expansive view of the federal government’s role in education than one might expect. He wanted a national university, after all. But he didn’t get it – that notion was well out of sync with the limited federal government most Americans wanted. 

Next, Coburn was actually quoting Jefferson from Jefferson’s call for federal involvement in education, an idea that went nowhere because it would have constituted more federal intrusion – not less – than most Americans wanted. Indeed, Jefferson was generally on the big-government fringe of his time when it came to education. He only got the University of Virginia after four decades of trying, and never got the rudimentary public schooling system he wanted for Virginia.  Most people at the time simply didn’t think government’s role – especially the federal government’s – was to run education.

One last bit of information demonstrates just how truly mistaken Millhiser is in his attack on education ”tenthers.” In 1943 – when Franklin Delano Roosevelt was president – the United States Constitution Sesquicentennial Commission, under the direction of the president, the vice president, and the Speaker of the House, published The History of the Formation of the Union under the Constitution. It noted in a section titled “Questions and Answers Pertaining to the Constitution:”

 Q. Where, in the Constitution, is there mention of education?

A. There is none; education is a matter reserved for the states.

Even FDR’s people, apparently, didn’t find that the Constitution ”unambiguously” gave Washington authority to involve itself in education – quite the opposite!

In light of all this, it is clearly not Mr. Coburn who can reasonably be accused of having never read the Constitution. Indeed, not only has he almost certainly read it, it seems he has even taken the time to understand it.

On C-SPAN: What’s a Little Promise Among Friends?

My, oh my. Transparency is getting defined down to excuse a breaking campaign promise.

At the Center for American Progress’ “Think Progress Wonk Room” blog (or whatever it’s called), Igor Volsky makes the case against allowing C-SPAN cameras into negotiations about the health care bill. Recall that President Obama promised on the campaign trail to have health care negotiations broadcast on C-SPAN.

“But if one actually considers the tone and tenor of the televised health care debate of 2009,” says Volsky, “filming the conference negotiations seems counterproductive.”

He does have a point. Television causes politicians to grandstand and doesn’t necessarily improve the legislative process.

But President Obama knew that when he made the promise, and he made the promise all the same. The credibility of the legislative process suffers from its overall opacity, and Candidate Obama promised different, starting with health care legislation — to progressives’ cheers as much as any other group.

Yet he appears to be walking away from that promise. And Volsky wants to abet him with a transparency caveat — only if it “improve[s] the underlying bill.”

Improvement is in the eye of the beholder, of course. This is not a welcome gloss. It’s bait and switch. “[T]he reality of politics doesn’t square with the promises of the campaign trail,” says Volsky.

Matt Yglesias’ short post backing his co-blogger is — appropriately, perhaps — opaque: “This is also an example of the concrete harm done to the country by politicians overestimating the impact of campaign tactics on election outcomes.” I don’t understand what that means.

Ezra Klein has the decency to say he’s conflicted. He admits that a transparent health care conference might be “better than nothing,” but he makes the same argument as Volsky: the process will change, but not necessarily for the better. No mention that this was a promise, or that the credibility of the president to marginal voters matters.

The argument that transparency is only useful if it leads to a better bill is reminiscent of Lawrence Lessig’s widely panned essay “Against Transparency.” I wrote of it:

Lessig sets up an interesting premise indeed: What he calls the “naked transparency movement” — unvarnished access to government data — “is not going to inspire change. It will simply push any faith in our political system off the cliff.”

Yes, Lessig has “change” and “pushing faith in our political system off the cliff” in opposition. So, the only thing that qualifies as “change” is improving faith in our political system? This pegged my bs detector.

These commentators have sounder premises, of course. They want transparency to improve legislation.

But transparency is not simply a means to better bills. It’s a means to better politicians — when people see one leader being smart and fair, while others are not. It’s a means to a better organized society — if people decide that politicians aren’t as qualified to apportion society’s resources as they thought. It’s a means to better-run programs — when people compare the dollars going in with the results coming out. Heck, transparency is a civics lesson for high school students! There is a transparency vision that these commentators eschew in favor of the status quo.

Even good John Wonderlich at the Sunlight Foundation, an organization dedicated to transparency, kicks the ground and mumbles about televising conference committees not being a panacea. The promise was to broadcast “negotiations,” of course, not just the formal meeting of any conference committee. And one of the commenters on his post has the better of it. “Open [conference committees] are not a panacea, but they are one tent-pole,” says Sarah Welsh of the New Mexico Foundation for Open Government. Her state mandated open conference committess last year, for the good.

And it was a campaign promise.

“The public should have ample opportunity to review the final product before the vote,” Igor Volsky says. Which brings us to another promise: On the campaign trail, Candidate Obama said, “[W]hen there is a bill that ends up on my desk as a president, you the public will have five days to look online and find out what’s in it before I sign it, so that you know what your government’s doing.”

The president is currently six for 124 on that promise, having shown recent improvement. But one has to wonder how Volsky would caveat away that promise and further define down government transparency.

One to watch: President Obama’s promise to “go line by line” over earmarks, which OMB has said it will implement by collecting and databasing Congressmembers’ earmark requests in the FY 2011 budget cycle.

Putting Private Insurance Out of Business

Over at Think Progress, Matt Yglesias takes me to task for saying that the so-called public option in the House’s health care bill “would all but eliminate private insurance and force millions of Americans into a government-run system.”

Yglesias apparently still buys into the myth that the public option is, well, an option.

For people who receive health insurance through their employers, which is to say the vast majority of the Americans who currently have health insurance, the House bill would change very little. Or, rather, the biggest change would simply be the confidence that if, in the future, you cease to get health insurance from your employer (maybe you’ll lose your job or want to change jobs) that you’ll still be able to get health care. What’s more, of the minority of Americans who would be getting health care through the new “exchange,” the majority will probably sign up for private health insurance and everyone will have the option of doing so. If the government-run public plan is, for whatever reason, vastly more appealing than the private options then it will dominate. But if you believe the government can’t run health care well, there’s no reason to think that will happen. Whatever you think of that, though, the basic fact is that even if the public option does dominate the exchange most people will still have private employer-provided insurance.

That might be true if the new government-run program were going to compete on anything close to a level playing field.  But, because the public option is ultimately supported by the taxpayers, the playing field can never be level.   True, the bill does say that the new program is supposed to be self-sustaining, covering administrative and benefit costs entirely out of premium revenues.  But remember that Medicare Part B was originally supposed to support 50 percent of its costs through premiums.  That has shrunk to the point where premiums pay for less than 25 percent of the program’s cost.

And the government has a myriad of ways to prevent the true cost of the program from showing up in premium prices.  For example, the government-run plan will not have to pay state or federal taxes, and unlike private insurance plans, who can be sued in state courts, the government-run plan could only be sued in federal court.

At the very least, the program carries with it an implicit guarantee against future losses.  Suppose the public option prices its products too low and loses money.  Can you imagine that Congress is simply going to let it go bankrupt, go out of business?  Would a Congress that has bailed out banks and automobile companies because they are “too big to fail” resist subsidizing the government’s insurance plan if it began to lose money?   Even without the actual bailout, such an implicit guarantee has a value. For example, the implicit guarantees behind Fannie Mae and Freddie Mac were estimated to have saved those institutions $6 billion per year.

All of this means that the government-run plan would be significantly cheaper than private insurance, not because it would out-compete private insurance or because it was more efficient, but because it had unfair advantages.  The lower cost means that businesses, in particular, would have every incentive to dump workers from their current health insurance plan into the government plan.  And, if other provisions of the bill make insurance more expensive, as is likely, the incentive for employers to shift workers to the government plan would be even greater.   Estimates suggest that nearly 90 million workers could eventually be forced into the government plan.

As Robert Samuelson, dean of economic columnists, writes in the Washington Post, “a favored public plan would probably doom today’s private insurance.”

Samuelson is right.  There is nothing “optional” about a public option.  And that is just the way the Left wants it.

Response to Matthew Yglesias re: Uncle Sam’s $4 Million Bike Rack

In response to my criticism of the new federally-financed $4 million bike center set to open at Union Station in Washington, DC, Think Progress blogger Matthew Yglesias says:

I look forward to the day when the Cato Institute does a blog post denouncing each and every publicly financed parking lot or garage in the United States of America.

I’ll take that bait…sort of…

I denounce each and every federally financed parking lot or garage in the United States of America on non-federal property.  I’m one of those quaint individuals who recognizes that the Constitution grants the federal government specific enumerated powers.  Using federal tax dollars to finance local parking garages, lots, bike centers and racks is not one of the powers granted to the federal government.  So let me rephrase my statement from yesterday: Look, I harbor no animosity against [car drivers], but under what authority — legal or moral — does the federal government tax me in order to build [parking garages or lots] for parochial, special interests?

By the way, for an excellent study on the problems with federal subsidies to state and local government, please see my colleague Chris Edwards’ “Federal Aid to the States: Historical Cause of Government Growth and Bureaucracy.”

Here are a few additional random thoughts…

I know so-called “progressives” like Yglesias don’t lose sleep over how much money the federal government spends, but $4 million to park a hundred or so bikes?  As Chris Moody noted to me today, if bike security is the major issue, why not pay a guard $12 an hour to stand watch?bike rack

Isn’t it possible, just possible, that a bike center with even more racks could have been built for a lot less?  Isn’t that the question that people like Yglesias, who want more people on bikes and less in cars, should be asking?

I don’t see anything inherently governmental about building and operating parking garages or bike centers.  The absolutely sorriest, most poorly run parking garage system I’ve ever experienced is the one managed by the State of Indiana where I used to work.  I recall an overcrowding situation – exacerbated by lousy management – in which the solution put forward was to just build another garage.  Hey, someone else is going to pay for it so who cares, right?  I often tell people that young libertarians should spend a couple years working in the bowels of government in order to reinforce their belief system with hands-on experience.  I’m starting to think “progressives” and other unwavering fans of all-things-government should do the same.

Matt Yglesias on School Choice in Sweden

Following up on Dana Goldstein’s American Prospect blog post, Matt Yglesias calls the Swedish system and U.S. charter schools better education policy models than education tax credits.

He doesn’t say why, and I’d be interested to hear his reasoning. As I documented on Cato-at-Liberty in response to Goldstein, the econometric evidence shows that the greatest margin of superiority over state-run schooling is enjoyed by truly market-like education systems. By that I mean systems that are minimally regulated with respect to content, staffing, prices, etc., and which are funded at least in part directly by the families they serve.

Yglesias also claims that choice supporters want to “eliminate public education.” On the contrary, choice supporters are fundamentally more committed to public education than anyone who refuses to consider the market alternative.

“Public Education” is a set of ideals. It is not a particular institution. It is the ideal that all children should have access to a good education, regardless of family income; that schools should prepare students not just for success in private life but for participation in public life; and that our schools should foster harmonious relations among the various groups making up our pluralistic society – or at the very least not create unnecessary tensions among them.

School choice advocates are more committed to those ideals than is anyone wedded to the current district-based school system, because that system is inferior in all of the above respects to a universally accessible education marketplace. This is documented in the literature review linked-to above, in my book Market Education: The Unknown History, and in the work of James Tooley, E.G. West, my Cato colleagues, and many others.

The education tax credit programs my colleagues and I have proposed would ensure universal access to the education marketplace, while leaving essentially intact the freedoms and incentives responsible for the market’s success. I know of no other policy capable of achieving this. Certainly charter schools and the Swedish system fail to do it.

Who’s Blogging about Cato

Here’s a round-up of bloggers who are writing about Cato this week:

  • Writing at the Adam Smith Institute blog, Phillip Salter discusses Patrick J. Michaels’s proposal that scientific articles should be available online for public comment.
  • Penning his thoughts on Obama’s plan to raise taxes on oil and gas usage, Wintery Knight cites Jerry Taylor’s research that shows why similar price control programs didn’t work in the 1970s.
  • Reihan Salam quotes William Niskanen on The Atlantic’s Washington blog in a post about the “starve the beast” theory that says lawmakers can slow government’s growth by lowering taxes and running up deficits.
  • Think Progress blogger Matthew Yglesias responds to Michael Cannon’s work on health care reform in a post about Obama’s White House health care summit.
  • Dr. Paul Hsieh of FIRM (Freedom and Individual Rights in Medicine) and Brian Schwartz of Patient Power cite John H. Cochrane’s Cato paper on free market solutions to health care security.