Tag: Washington Post

KFF/HRET Survey, Part III: Employers Can’t Shift to Workers a Cost that Workers Already Bear

In a previous post, I promised to address the negative spin that the Kaiser Family Foundation put on its annual Employer Health Benefits Survey, released this month.  I do so in an op-ed that ran today at the Daily Caller.  An excerpt:

The Kaiser Family Foundation recently issued its annual survey of employer-sponsored health benefitsdeclaring: “Family Health Premiums Rise 3 Percent to $13,770 in 2010, But Workers’ Share Jumps 14 Percent as Firms Shift Cost Burden.” That’s half-right — but the other half perpetuates a myth about employee health benefits that stands in the way of real health care reform….

[Y]ou pay the full cost of your health benefits: partly through an explicit $4,000 premium and partly because your wages are $9,770 lower than they otherwise would be.

Kaiser therefore claims the impossible when it says that firms are shifting costs to workers.  Employers cannot shift to workers a cost that workers already bear. Yet this year, as in past years, the Associated PressBloombergCNNKaiser Health NewsThe Los Angeles TimesThe New York TimesNPRThe Wall Street Journal, and The Washington Post uncritically repeated the cost-shifting myth.

The bolded sentence is Cannon’s Second Rule of Economic Literacy.  (Click here for the first rule.)

I have also collected a series of excerpts from past Kaiser Family Foundation surveys showing this is a persistent issue.  Here are a few:

1998: “Workers in small firms bear a much larger share of the financial burden for health benefits than employees of larger firms.”

2005: “The average worker paid $2,713 toward premiums for family coverage in 2005 or 26% of the total health premium.”

2007: “Annual Premiums for Family Coverage Now Average $12,106, With Workers Paying $3,281”

The folks at the Kaiser Family Foundation were exceedingly gracious when I approached them to discuss this issue.

Avoiding the ‘U’ Word

I grow increasingly amused at how some people carefully avoid saying that ObamaCare is unpopular.

When Pollster.com aggregates all the various polls on ObamaCare’s popularity, it reveals that a plurality or majority of the public has consistently opposed the law since before the angry town-hall meetings of August 2009:

It’s no surprise when HHS Secretary Kathleen Sebelius avoids the U-word by saying stuff like, “We have a lot of reeducation to do.”  (To be clear, she’s talking about reeducating you, not herself.)

But it’s odd when a Washington Post news item describes the public as “profoundly ambivalent” toward the law. (According to Merriam-Webster, ambivalence means holding “simultaneous and contradictory attitudes or feelings,” “continual fluctuation,” or “uncertainty as to which approach to follow.”)  Or when Kaiser Family Foundation president and CEO Drew Altman tells NPR: “The public is split, has been split, and continues to be split.”

I guess those descriptions are true (though “continual fluctuation” and “uncertainty” seem like a stretch).  But they’re not very informative.  “Ambivalent” doesn’t tell you if one side dominates.  “Split” could accurately describe anything shy of unanimity.  “Opposed” or “unpopular” or “consensus” would convey so much more information. Why convey less?

What Was That Ronald Reagan Line Again?

The Washington Post editorializes this morning on the “Google-Verizon” proposal for government regulation of the Internet:

For more than a decade, “net neutrality” — a commitment not to discriminate in the transmission of Internet content — has been a rule tacitly understood by Internet users and providers alike.

But in April, a court ruled that the Federal Communications Commission has no regulatory authority over Internet service providers. For many, this put the status quo in jeopardy. Without the threat of enforcement, might service providers start shaping the flow of traffic in ways that threaten the online meritocracy, in which new and established Web sites are equally accessible and sites rise or fall on the basis of their ability to attract viewers?

What a Washington-centric view of the world, to think that net neutrality has been maintained all this time by the fear of an FCC clubbing. Deviations from net neutrality haven’t happened because neutrality is the best, most durable engineering principle for the Internet, and because neutral is the way consumers want their Internet service.

Should it be cast in stone by regulation, locking in the pro-Google-and-Verizon status quo? No. The way the Internet works should continue to evolve, experiments with non-neutrality failing one after another … until perhaps one comes along that serves consumers better! The FCC would be nothing but a drag on innovation and a bulwark protecting Google and Verizon’s currently happy competitive circumstances.

I’ll give the Post one thing: It represents Washington, D.C. eminently well. The Internet should be regulated because it’s not regulated.

“If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

More on Phony Defense Spending Cuts

On Saturday the Washington Post published a letter I wrote chastising their editorialists for inventing defense budget cuts:

The Aug. 12 editorial “Mr. Gates’s rough cuts” and David S. Broder’s Aug. 12 column, “Gates’s budget warning shot,” applauded the defense secretary for his plans to cut spending even though the plans will do no such thing. As Mr. Broder wrote, Mr. Gates proposed closing the U.S. Joint Forces Command and shedding contractors and generals in the Pentagon’s employ. But neither piece noted that these proposals are part of a plan to shift some Pentagon spending from administration to force structure – not to cut total spending.

The impetus for the cost-shifting plan is the White House’s reluctance to increase Pentagon spending by more than 1 percent above inflation for the next few years. Rapid growth in procurement and personnel spending makes that increase insufficient to cover the military’s programmatic costs.

Bloated administrative overhead is a good place to find funds for that end. But taxpayers gain nothing.

Mr. Gates has requested substantial increases in defense spending every year that he has been secretary. He opposes spending cuts, even after the wars end, even though the United States now spends more on defense than at any time during the Cold War, adjusting for inflation. He openly hopes that these proposals to heighten administrative efficiency deflect pressure to cut spending. By pretending that these changes do so, The Post helps shield Pentagon spending from scrutiny.

The point is straightforward: Stop confusing reforms explicitly intended to prevent spending cuts with real spending cuts.

The Post, however, repeated the error that my letter complained about in the title they gave it both online (“Will the defense cuts do what Robert Gates says they will?”) and in the actual newspaper (“Scrutinizing Mr. Gates’s Defense Budget Cuts”). The editor has yet to respond to my email noting the irony.

I wrote more on the media’s failure to portray these reforms accurately for the National Interest’s new Skeptics blog. (Chris Preble and I have already discussed this topic here.)

The Post’s editorial page typifies the fawning coverage that the Washington commentariat gives Gates.  He has a knack for getting even otherwise discerning analysts to portray him as a pragmatist/ realist/ conservative even as he asks Congress to increase a defense budget that is already larger than at any point during the Cold War and advocates endless nation-building warfare in Afghanistan. The keys to his success, I say, are (a) appearing moderate in contrast to the rest of the foreign policy elites in his party, which is easy, (b) skillful management that distracts people from his embrace of policies that are not realistic, pragmatic, or conservative, and (c) eloquently saying things that contradict his actions.

Fareed Zakaria’s latest column, for example, asserts that the only two conservatives in Washington are Gates and the portrait of Eisenhower hanging in his office. Like many, Zakaria is taken with Gates’ recent speech at the Eisenhower library, which praised Ike for restraining defense spending and avoiding intervention in Vietnam. It was such a good speech that you can almost forgive those that fail to note the irony of Gates’ sounding like someone proposing defense cuts and exiting Afghanistan.

Why Should Politicians and Bureaucrats Decide Whether Breast-Cancer Patients Can Take Avastin?

Today’s Washington Post contains an article titled, “FDA Considers Revoking Approval of Avastin for Advanced Breast Cancer.”  An excerpt:

The debate over Avastin, prescribed to about 17,500 women with breast cancer a year, has become entangled in the politically explosive struggle over medical spending and effectiveness that flared during the battle over health-care reform: How should the government balance protecting patients and controlling costs without restricting access to cutting-edge, and often costly, treatments?

A better question is: why should the government be the one to strike that balance?  Why shouldn’t some women be able to sign up for a health plan that covers Avastin, while others are free to make a different choice?

The Washington Post Misleads Readers about Medicare & Social Security Funding

Here’s a poor, unsuccessful letter I submitted to the editor of The Washington Post:

The Post’s economic reporters need to convey to readers that the Medicare and Social Security “trust funds” contain zero funds [“Medicare Funds to Last 12 Years Longer than Earlier Forecast, Report Says,” August 6].

This is not up for dispute.  When those programs’ revenues exceed outlays, Congress puts the excess in general revenues and spends it.  Congress marks the event by leaving an IOU to itself in these “trust funds.”  Those IOUs are not “funds,” any more than an IOU that you write to yourself is money.  These so-called “trust funds” therefore have no bearing on the (in)solvency of Medicare and Social Security.

Yet every year, the trustees for these programs claim that they do, making the Medicare and Social Security trustees reports an annual, ritualized lie that the U.S. government broadcasts to the American people.

Properly educating reporters, editors, and politicians about the Medicare and Social Security “trust funds” is a decades-long project.

The Social Security and Medicare ‘Trust Funds’ Are a … What’s the Word?

Yesterday’s New York Times editorialized:

It’s the time of year when the trustees of Medicare and Social Security release their annual reports on the programs’ financial health. And that means Americans are likely to be bathed in a fog of political rhetoric that makes it hard to sort out fact from fiction.

Here’s the bottom line…

The Times then proceeded to bathe its readers in fog:

According to the reports, the date of insolvency for Medicare’s hospital fund was pushed back, from 2017 to 2029, because of cost-saving measures in health reform. As for Social Security, without any changes, it will be able to pay full benefits until 2037 and partial benefits after that, the same estimate as in last year’s report, despite temporary setbacks from the recession…

A lot of attention will be paid to the finding in the Social Security report that payouts will exceed revenues in 2010 and 2011…That doesn’t endanger benefits, because any shortfall can be covered by the trust fund.

No.  It.  Can’t.  Because there are no funds in the Social Security “trust fund.”  There are no funds in the Medicare “trust fund.”  As Fortune magazine’s senior editor-at-large Allan Sloan explains in today’s Washington Post, those “trust funds” contain nothing but “funny money.”

In a 2006 blog post titled, “Sometimes, Governments Lie,” I offered the following proposition:

If the government knows that there are no assets in the Social Security and Medicare “trust funds,” and yet projects the interest earned on those non-assets and the date on which those non-assets will be exhausted, then the government is lying.

That still seems correct to me: the whole idea of the Social Security and Medicare “trust funds” is a lie.  An institutionalized, ritualized lie that the U.S. government tells the American people. Perpetuated by both political parties, and others with an interest in hiding the reality of these programs’ unfunded liabilities from voters.  One that many journalists uncritically repeat.