Topic: Government and Politics

House Republican Health Plan Might Provide Even Worse Coverage For The Sick Than ObamaCare

WASHINGTON, DC - JUNE 22: House Speaker Paul Ryan (R-WI) discusses the release of the House Republican plank on health care reform at The American Enterprise Institute for Public Policy Research on June 22, 2016 in Washington, DC. (Photo by Allison Shelley/Getty Images)

After six-plus years, congressional Republicans have finally offered an ObamaCare-replacement plan. They should have taken longer. Perhaps we should not be surprised that House Republican leaders* who have thrown their support behind a presidential candidate who praises single-payer and ObamaCare’s individual mandate would not even realize that the plan cobbled together is just ObamaCare-lite. Don’t get me wrong. The plan is not all bad. Where it matters most, however, House Republicans would repeal ObamaCare only to replace it with slightly modified versions of that law’s worst provisions.

Here are some of ObamaCare’s core private-health insurance provisions that the House Republicans’ plan would retain or mimic.

  1. ObamaCare offers refundable health-insurance tax credits to low- and middle-income taxpayers who don’t have access to qualified coverage from an employer, don’t qualify for Medicare or Medicaid, and who purchase health insurance through an Exchange. House Republicans would retain these tax credits. They would still only be available to people ineligible for qualified employer coverage, Medicare, or Medicaid. But Republicans would offer them to everyone, regardless of income or where they purchase coverage.
  2. These expanded tax credits would therefore preserve much of ObamaCare’s new spending. The refundable part of “refundable tax credits” means that if you’re eligible for a tax credit that exceeds your income-tax liability, the government cuts you a check. That’s spending, not tax reduction. ObamaCare’s so-called “tax credits” spend $4 for every $1 of tax cuts. House Republicans know they are creating (preserving?) entitlement spending because they say things like, “this new payment would not be allowed to pay for abortion coverage or services,” and “Robust verification methods would be put in place to protect taxpayer dollars and quickly resolve any inconsistencies that occur,” and that their subsidies don’t grow as rapidly as the Democrats’ subsidies do. Maybe not, but they do something that Democrats’ subsidies don’t: give a bipartisan imprimatur to ObamaCare’s redistribution of income.
  3. As I have tried to warn Republicans before, these and all health-insurance tax credits are indistinguishable from an individual mandate.  Under either a tax credit or a mandate, the government requires you to buy health insurance or to pay more money to the IRS. John Goodman, the dean of conservative health policy wonks, supports health-insurance tax credits and calls them “a financial mandate.” Supporters protest that a mandate is a tax increase while credits—or at least, the non-refundable portion—are a tax cut. But that’s illusory. True, the credit may reduce the recipient’s tax liability. But it does nothing to reduce the overall tax burden imposed by the federal government, which is determined by how much the government spends. And wouldn’t you know, the refundable portion of the credit increases the overall tax burden because it increases government spending, which Congress ultimately must finance with additional taxes. So refundable tax credits do increase taxes, just like a mandate.

Junk Food: Penalties and Subsidies

The welfare state is so vast and complex that it often works against itself. Regulations and taxes kill jobs and work incentives, but EITC subsidies are supposed to boost incentives. The government tells women to breastfeed, but the federal WIC program subsidizes baby formula.

The food stamp program provides billions of dollars for people to buy junk food, but liberals are pressing governments to penalize junk food with special taxes. Philadelphia just passed the first special tax on soda.

May I suggest that health do-gooders wanting people to eat less junk food focus on cutting subsidies rather than imposing taxes?

At the same time as Philly is imposing this new tax, Maine Governor Paul LePage is fighting the federal government to cut junk food out of the food stamp program. He is not getting much help from the Obama administration.

The federal government won’t reveal what share of $78 billion a year in food stamps are spent on junk food, but one estimate put soda alone at $4 billion of the total.

The Feds: Drink soda! Philly: Don’t drink soda! Me: Drink whatever you want, but not on my dime!

Food subsidies should be ended altogether, and we should have a simple and neutral tax code. Imposing special taxes on things that liberal elites dislike is a dangerous trend. Much better if those elites rallied around LePage, and focused on cutting junk food subsidies.

Jesse Ventura and Gary Johnson

 

[Note:  Normally I have the good sense to keep my writing focused on trade policy topics.  This blogpost is an exception.  It would not be wise to place much confidence in my abilities as a political analyst.  However, I lived in Minnesota and was politically active during the 1998 gubernatorial election.  That experience left me with impressions that are shared below.]

Jesse Ventura is an intriguing individual.  In 1998 he was nominated by the Reform Party of Minnesota as their candidate for governor.  Among his several prior careers were:  Navy special-forces diver; professional wrestler; screen actor; radio and TV personality; and mayor of Brooklyn Park, a suburb of Minneapolis. He has a disdain for “politics as usual,” especially when wrangling between Democrats and Republicans results in poor use of taxpayer funds.  He has an outsized personality, a robust and brash sense humor, and enjoys the limelight. He also looks great in a feather boa.

Ventura described himself as “fiscally conservative and socially liberal,” a straightforward expression of his libertarian philosophy.  He had considerable interest in policy issues, more than is the case for some candidates in the 2016 presidential campaign.  His fiscal priorities included reforms in sales, property, and income taxes.  On social issues, he supported the right for gays to serve in the military and to marry.  He was quite open about not having all the answers, readily admitting that he hadn’t formed opinions on every aspect of state policy.

In sharp contrast to the likely Democratic and Republican nominees in the 2016 presidential race, Ventura ran against solid, mainstream nominees from both those parties.  Hubert H. “Skip” Humphrey III, Minnesota’s attorney general and son of the former U.S. senator and vice president, was the Democratic-Farmer-Labor (DFL) choice.  Norm Coleman, well regarded for his service as mayor of St. Paul, was selected by the Republicans.  Neither of them had particularly high negative ratings.  A poll conducted in late October 1998 showed 33 percent with an unfavorable view of Humphrey, and 26 percent taking a dim view of Coleman.  Ventura’s unfavorable rating was 21 percent.  (Such ratings would be envied by today’s major-party presidential candidates, both of whom are viewed negatively by some 50-60 percent of recent poll respondents.)

A June 1998 poll commissioned by Minnesota Public Radio (MPR), KARE 11 TV, and the Pioneer Press asked respondents for whom they likely would vote.  The results:

  • Humphrey       46 %
  • Coleman          30 %
  • Ventura             7 %
  • Undecided       17 %

In contrast to Ventura’s 7 percent number from June 1998, recent polling shows Libertarian Party nominee Gary Johnson receiving support of 11-12 percent for his 2016 presidential bid.  So Johnson’s candidacy as of June is doing relatively better than Ventura’s did.

A similar MPR/KARE/Pioneer Press poll conducted in late October, shortly before the election, showed:

  • Humphrey       34 %
  • Coleman          33 %
  • Ventura           23 %
  • Undecided       10 %

Ventura had increased his support by 16 percentage points, mostly coming at the expense of Humphrey (decline of 12 points).  Coleman gained 3 points.

The final results on Election Day, Nov. 3, 1998, were:

  • Ventura           37 %
  • Coleman          34 %
  • Humphrey       28 % 

Ventura gained 14 percentage points of support during the final ten days of the campaign to win election as the 38th governor of Minnesota.  This swing was aided by his performance in the debate on Oct. 24, along with creative advertising that featured a Jesse Ventura action figure and Ventura singing a campaign song to the theme from “Shaft.”

Ventura’s victory was remarkable.  As a keen observer of Minnesota politics that summer and fall, I confess to having been dumbfounded.  If I had been asked in June 1998 whether there was any chance Ventura actually would win the race, I simply would have said it was impossible.  The real question was how much support his unconventional – albeit enjoyable – campaign would draw from Humphrey and Coleman.  But Ventura did win, and he earned it.  He presented ideas and attitude that were more engaging than those being offered by two other credible candidates.

Fast forward to 2016.  Gary Johnson definitely is not a clone of Jesse Ventura.  Johnson was a successful businessman who served two terms as a Republican governor of New Mexico.  He is notably less flamboyant than Ventura, but probably more accustomed to explaining libertarian concepts to a broad audience.  It’s clear that the odds are against an outright win by Johnson.  Having lived through an “impossible” victory, though, I’d rate Johnson’s prospects as better than that – perhaps “highly improbable” would be the right term. 

Of course, the electoral college may make it feasible for Johnson to have a very meaningful effect on the outcome of the election, even if he doesn’t garner the most votes nationwide.  Consider the hypothetical situation in which he wins his home state of New Mexico, which has five electoral votes.  If the major party candidates split the remaining electors evenly, no one would receive the 270 votes needed for election.  In that scenario, the outcome would be decided by state delegations in the House of Representatives. 

Ventura and Johnson know each other.  Ventura endorsed Johnson’s candidacy when he ran for the White House as the Libertarian nominee in 2012, and has encouraged people to vote for him again this year.  Ventura has a substantial following across the country, so may be in a position to take other steps on behalf of the Johnson campaign.  Who knows?  Perhaps that might include coaching him on proper use of a feather boa.

It should be an interesting campaign.

Daniel R. Pearson is a senior fellow in the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies.

How Terrorism Has Hijacked American Foreign Policy

Terrorism has hijacked American foreign policy. First Al Qaeda and now the Islamic State have come to dominate thinking about international affairs so completely that there is hardly any issue that has not been “terrorized.” Issues that once had significance because they were important in their own right now only matter insofar as they affect the fight against terrorism. Russia? Now discussed primarily with respect to whether their air campaign affects ISIS in Syria. Syria? Important only because of ISIS and other jihadists who want to rule. Iraq? The birthplace of ISIS. Iran? A regional power broker who supports terrorism as whose support for Assad in Syria matters because of…ISIS. Libya, the latest concern du jour? You guessed it: concern for Libya is in fact concern for the growth of ISIS in the country.

The figures below illustrate just how deeply ISIS has infiltrated American foreign policy news. In the first figure, you can see that over the past three years almost every foreign policy topic has taken on a distinct ISIS flavor. As the second figure shows, after reaching a historical high after September 11, news coverage of terrorism dropped steadily in the following years until rebounding in 2013. Attention to ISIS only really took off after June 2014 when ISIS started calling itself ISIS and simultaneously announced the establishment of a global caliphate.

(News data from Factiva’s Top US newspaper file)

Special Favors for IEX Will Not Fix Bad Regulation

It isn’t often that an SEC decision involves the star of a best seller, a “magic shoe box,” and fundamental questions about the meaning of words like “immediate” and “fair.”  The SEC made such a decision on Friday. 

Last fall, the trading system IEX applied for designation as a stock exchange.  IEX, and its CEO Brad Katsuyama, rose to fame several years ago with the publication of Michael Lewis’s popular book Flash Boys.  Lewis, ever the artful storyteller, cast Katsuyama as the likeable underdog, exposing and undermining high-frequency traders (HFTs) through the development of IEX.  IEX, an alternative trading system, or in the more colorful industry jargon, a “dark pool,” has allowed investors to trade away from market scrutiny and the HFTs that populate “lit” exchanges.  But there are advantages to being an exchange, and IEX wants in.

At issue in determining whether to approve the application was the meaning of the word “immediate” in an SEC regulation known as Regulation NMS.  Regulation NMS, approved by the SEC in 2005, was intended to increase competition among trading exchanges, resulting in better execution of trades and better prices for investors.  In furtherance of that goal, a part of the regulation requires that trades be made at the best price listed on any exchange and that exchanges make their quotations “immediately” and automatically available.  In the past “immediate” has been defined as “immediately and automatically executable, without any programmed delay.”  Seems clear enough, right?

When Staying Home on Election Day Is Against the Law

Imagine living in a country in which the two major parties had nominated a couple of candidates not to be trusted on the town council. Imagine deciding to stay home on Election Day.

But then imagine government officials showing up at your door, demanding that you accompany them to the polling place to vote for one of the candidates who you can’t stand even to listen speak. That is the world which some high-minded “civic activists” desire.

Every election can be expected to unleash ponderous commentaries bemoaning low voter turnout. Many Americans don’t register, let alone cast ballots. Why, oh why, won’t they get out and participate?

It is so unfair, we are told. The wealthy, elderly, and well-educated disproportionately participate, which “skews policymaking,” complained the Economist. Just think of all the government programs the underrepresented could vote for themselves if only they showed up on Election Day.

Guns, Gay Persons, and Security, Before and After Orlando

Some work by Catoites responding to the lethal rampage by an Islamic State devotee at closing time last Sunday morning in Orlando’s LGBT-oriented Pulse nightclub: 

Writes Michael Tanner in his piece: “As Representative Justin Amash (R., Mich.) noted, he has heard ‘Democrats and Republicans endorse violating the 1st, 2nd, 4th, 5th, 6th, and 8th Amendments’ in response to the attack. About the only thing we are missing is a call to quarter troops in our homes.”  

And more: “Without self-defense, there are no gay rights.” Dave Kopel has a post today at the Volokh Conspiracy, “The history of LGBT gun-rights litigation,” citing the pioneering work of several scholars and activists whose name will be familiar to Cato readers, including Cato University director Tom Palmer, leading up to and following the landmark D.C. v. Heller individual rights case.