Topic: Government and Politics

King v. Burwell: In 2013, Nelson Admitted He Didn’t Know if the ACA Offered Subsidies in Federal Exchanges

The plaintiffs in King v. Burwell claim the Patient Protection and Affordable Care Act only offers premium subsidies, as the statute says, “through an Exchange established by the State.” Members of Congress who voted for the PPACA – most recently Sen. Bob Casey (D-PA) and former Sen. Ben Nelson (D-NE) – now swear it was never their intent to condition Exchange subsidies on state cooperation.

Ironically, Casey’s and Nelson’s decision to wade into the King debate demonstrates why, when a statute is clear, courts traditionally assign no weight to what members of Congress claim they intended a law to say – especially if, as here, those claims come after a clear provision has proven problematic. While he claims he never intended to condition subsidies on states establishing Exchanges, Casey repeatedly voted to condition Exchange subsidies on state cooperation, has misrepresented what Congress intended the PPACA to do, and continues to misrepresent the PPACA on his Senate web site. Nelson’s claims about what Congress intended should likewise be taken with a grain of salt. In an unguarded moment in 2013, Nelson admitted that in 2009 he paid no attention to “details” such as whether the PPACA authorized subsidies in federal Exchanges.

All Sides Agree: Casey Supported Conditional Exchange Subsidies

Casey and Nelson exchanged correspondence exactly one day before amicus briefs supporting the government were due to be filed with the Supreme Court. Casey asked for Nelson’s recollection of whether, in 2009, Nelson or anyone else suggested the PPACA’s subsidies would only be available in states that established Exchanges. Perhaps more than anyone, Nelson was a pivotal figure in the debate over the PPACA. Not only did he insist on state-based Exchanges rather than a national Exchange run by the federal government, his was the deciding vote that enabled the bill to pass the Senate and become law – and he withheld his vote until his demands were met.

The Parasite Economy and The Libertarian Mind

In The Libertarian Mind, which is officially published today, I have a chapter titled “What Big Government Is All About” that aspires to be applied Public Choice analysis. Much of it relates to what I think Jonathan Rauch first called “the parasite economy,” the part of the economy that involves getting through government what you can’t get through voluntary market processes. Reason.com has just published an excerpt from that chapter, with a few recent examples added, such as these all-too-typical stories:

Lobbying never stops. One week in December, the Kaiser Health News reported that “growth opportunities from the federal government have increasingly come not from war but from healing.” That is, “business purchases by the Department of Health and Human Services have doubled to $21 billion annually in the past decade.” And who showed up to collect some of the largesse? Well, General Dynamics was having trouble making ends meet with defense contracting, so suddenly it managed to become the largest contractor to Medicare and Medicaid. “For traditional defense contractors,” wrote Kaiser Health, “health care isn’t the new oil. It’s the new F-35 fighter.”

Of course, the old F-35, despite a decade or more of running behind schedule and over budget, is still doing pretty well. That same week Congress passed the $1.1 trillion “Cromnibus” spending bill, including $479 million for four F-35 fighters from Lockheed that even the Pentagon didn’t want. The Wall Street Journal reported that the bill “sparked a lobbying frenzy from individual companies, industries and other special interests”—pretty much the same language you could have read in earlier stories about Porkulus and Obamacare. Every provision in the bill—from the $94 billion in Pentagon contracting to $120 million for the Chicago subway to an Obamacare exemption for Blue Cross and Blue Shield—has a lobbyist or several shepherding it through the secretive process.

And I also talked about the parasite economy on John Stossel’s television show last Friday night:

For more on the parasite economy, and everything else you wanted to know about libertarianism, read The Libertarian Mind.

Serving the Public or “Whooping Ass”?

Are federal government employees “public servants,” who faithfully execute the laws and aim at the broad public good? Do they match the Progressive-era ideal of neutral and selfless experts free of political bias?

Perhaps many federal workers do. But a story in GovExec suggests that other motivations are also in play:

Lawmakers from both parties addressing unionized federal employees at a conference Monday pledged more support and respect for the civil service, but the union itself promised to “whoop [the] ass” of Congress if it stood in the group’s way.

At its annual legislative gathering, the American Federation of Government Employees vowed to combat any congressional efforts to shrink the federal workforce, cut pay and benefits or weaken unions. While Congress has succeeded in slashing agency rolls and freezing pay, union leaders said, those actions have better positioned the union to prevent similar efforts in the future.

Every time the “fools” in Congress try to hurt the federal workforce, said AFGE National President J. David Cox in a passionate address to his members, “We get bigger. We get stronger and we fight harder.”

He added: “We are a force to be reckoned with and we are a force that will open up the biggest can of whoop ass on anyone” who votes against the union’s interests…

The union chief called on each of those [AFGE] members to help push its agenda. “I’m begging you,” he said, “I’m pleading with you: Get in the fight.”

Maybe it is no surprise that federal workers and their unions fight for themselves. But can we count on federal legislators to stand up for taxpayers and citizens and check union power? Maybe not:

Lawmakers who addressed the attendees emphasized they would not be alone in that struggle; the lawmakers promised to bring the message of the positive and essential work feds do back to their colleagues and into the public sphere.

Freshman Congressman Don Beyer, D-Va., promised to be a “champion” for federal employees, adding the “critical question” for the workforce is how to change the perception of civil servants. He pledged to mention the positive work feds do in every speech he gives, suggested creating public service announcements highlighting federal employees and even proposed someone write a movie in which an “anonymous civil servant” is the hero.

“We have a great, great story to tell,” Beyer said of the federal workforce. “We just have to find every possible way to tell it.”

Beyer and his fellow Virginian, Republican Rep. Rob Wittman, agreed one crucial step to demonstrating that support is to repeal the across-the-board budget cuts known as sequestration.

I think we can see who is the real boss in Washington today. Beyer and Wittman have figured it out, and they are standing firmly in line. AFGE chief, David Cox, barked the orders: “If I meet one more politician who tells me we need to tighten our belts, I’m going to take my belt off and I’m going to whoop his ass.”

The Libertarian Mind — Now Available

The Libertarian Mind cover

I’m delighted to announce that my new book, The Libertarian Mind: A Manifesto for Freedom, goes on sale today. Published by Simon & Schuster, it should be available at all fine bookstores and online book services.

I’ve tried to write a book for several audiences: for libertarians who want to deepen their understanding of libertarian ideas; for people who want to give friends and family a comprehensive but readable introduction; and for the millions of Americans who hold fiscally responsible, socially tolerant views and are looking for a political perspective that makes sense. 

The Libertarian Mind covers the intellectual history of classical liberal and libertarian ideas, along with such key themes as individualism, individual rights, pluralism, spontaneous order, law, civil society, and the market process. There’s a chapter of applied public choice (“What Big Government Is All About”), and a chapter on contemporary policy issues. I write about restoring economic growth, inequality, poverty, health care, entitlements, education, the environment, foreign policy, and civil liberties, along with such current hot topics as libertarian views of Bush and Obama; America’s libertarian heritage as described by leading political scientists; American distrust of government; overcriminalization; and cronyism, lobbying, the parasite economy, and the wealth of Washington.

Jeb Bush and Rand Paul on a Broader GOP

Both Jeb Bush and Rand Paul are talking about broadening the appeal of the Republican Party as they move toward presidential candidacies. Both say Republicans must be able to compete with younger voters and people of all racial backgrounds. Both have talked about the failure of welfare-state programs to eliminate urban poverty. But they don’t always agree. Bush sticks with the aggressive foreign policy that came to be associated with his brother’s presidency, while Paul wants a less interventionist approach. Bush calls for “smarter, effective government” rather than smaller government, while Paul believes that smaller government would be smarter. Perhaps most notoriously, Bush strongly endorses the Common Core educational standards, building on George W. Bush’s policy of greater federal control of schooling.

Meanwhile, Paul promises to bring in new audiences by talking about foreign policy and civil liberties. As Robert Costa reported from an Iowa rally this weekend:

Turning to civil liberties, where he has quarreled with hawkish Republicans, Paul chastised the National Security Agency for its surveillance tactics. “It’s none of their damn business what you do on your phone,” he said. 

“Got to love it,” said Joey Gallagher, 22, a community organizer with stud earrings, as he nursed a honey-pilsner beer. “It’s a breath of fresh air.”

But the rest of Paul’s nascent stump speech signaled that as much as he wants to target his father’s lingering network, he is eager to be more than a long-shot ideologue.

Paul cited two liberals, Sen. Bernard Sanders (I-Vt.) and Rep. Alan Grayson (D-Fla.), during his Friday remarks and said he agrees with outgoing Attorney General Eric H. Holder Jr. on curbing federal property seizures and softening sentencing laws for nonviolent drug offenders — all a nod to his efforts to cast himself as a viable national candidate who can build bipartisan relationships and expand his party’s political reach.

“Putting a kid in jail for 55 years for selling marijuana is obscene,” Paul said.

Alan Grayson and Eric Holder? That’s pushing the Republican comfort zone. And what was the reception?

“Just look at who’s here,” said David Fischer, a former Iowa GOP official, as he surveyed the crowd at Paul’s gathering Friday at a Des Moines winery. “He is actually bringing women, college students and people who are not white into the Republican Party.”

That’s his plan. It’s a real departure from the unsuccessful candidacies of old, hawkish John McCain and old, stuffy Mitt Romney. It just might create the kind of excitement that Kennedy, Reagan, and Obama once brought to presidential politics. The question is whether those new audiences will show up for Republican caucuses and primaries to join the small-government Republicans likely to be Paul’s base.

Could Rand Paul Spark a Libertarian Political Surge?

At TIME I write about the rise of libertarianism, Rand Paul, and my forthcoming book (Tuesday!) The Libertarian Mind:

Tens of millions of Americans are fiscally conservative, socially tolerant, and skeptical of American military intervention….

Whether or not Rand Paul wins the presidency, one result of his campaign will be to help those tens of millions of libertarian-leaning Americans to discover that their political attitudes have a name, which will make for a stronger and more influential political faction.

In my book The Libertarian Mind I argue that the simple, timeless principles of the American Revolution—individual liberty, limited government, and free markets—are even more important in this world of instant communication, global markets, and unprecedented access to information than Jefferson or Madison could have imagined. Libertarianism is the framework for a future of freedom, growth, and progress, and it may be on the verge of a political breakout.

Read the whole thing. Buy the book.

When Mean-Tested Benefits Rose, Labor Force Participation Fell

The U.S. job market has tightened by many measures – more advertised job openings, fewer claims for initial unemployment insurance, substantial reduction in long-term unemployment and the number of discouraged workers.  Yet the percentage of working-age population that is either working or looking for work (the labor force participation rate) remains extremely low.  This is a big problem, since projections of future economic growth are constructed by adding expected growth of productivity to growth of the labor force.

Why have so many people dropped out of the labor force?  Since they’re not working (at least in the formal economy), how do they pay for things like food, rent and health care?

One explanation answers both questions: More people are relying on a variety of means-tested cash and in-kind benefits that are made available only on the condition that recipients report little or no earned income.   Since qualification for one benefit often results in qualification for others, the effect can be equivalent to a high marginal tax rate on extra work (such as switching from a 20 to 40 hour workweek, or a spouse taking a job).  Added labor income can often result in loss of multiple benefits, such as disability benefits, supplemental security income, the earned income tax credit, food stamps and Medicaid. 

This graph compares annual labor force participation rates with Congressional Budget Office data on means-tested federal benefits as a percent of GDP.  The data appear consistent with work disincentives in federal transfer payments, labor tax rates and refundable tax credits.