Topic: Health Care & Welfare

George F. Will Weighs in on the Halbig Cases

Last year, along with Jonathan Adler, I published this law-review article that explains how the IRS has now begun to tax, borrow, and spend hundreds of billions of dollars ultra vires – that is, without any statutory authorization from Congress. Today, George F. Will writes about our research, and the lawsuits that have sprang from it, in his syndicated column: 

Someone you probably are not familiar with has filed a suit you probably have not heard about concerning a four-word phrase you should know about. The suit could blow to smithereens something everyone has heard altogether too much about, the Patient Protection and Affordable Care Act (hereafter, ACA).

Scott Pruitt and some kindred spirits might accelerate the ACA’s collapse by blocking another of the Obama administration’s lawless uses of the Internal Revenue Service. Pruitt was elected Oklahoma’s attorney general by promising to defend states’ prerogatives against federal encroachment, and today he and some properly litigious people elsewhere are defending a state prerogative that the ACA explicitly created. If they succeed, the ACA’s disintegration will accelerate.

Pruitt is the plaintiff in, well, Pruitt v. Sebelius. I call these “the Halbig cases,” because even though Pruitt was first out of the gate, Halbig v. Sebelius is the farthest along of the four lawsuits that have been filed so far. 

Over at DarwinsFool.com, I tweak a couple of things Will writes about these cases, and give a little more context. For example, it’s not just four little words that prevent the IRS from taxing, borrowing, and spending those billions of dollars. It is a tightly worded set of eligibility rules that unequivocally precludes what the IRS is trying to do. Also, it is not accurate to say that these lawsuits would blow ObamaCare to smithereens. For more, including a classic Ferris Bueller clip, see here.

And click here for a comprehensive list of reference materials and commentary about the Halbig cases. 

The More We Learn about ObamaCare, the Less the President Wants to Discuss It

Remember how the more we learned about ObamaCare, the more we would like it? Well, it seems the more we learn about this law, the less President Obama wants to talk about it. He relegated it to just a few paragraphs, tucked away near the end of his latest State of the Union political rally speech. And while he defended the law, he closed his health care remarks by begging Congress not to repeal it, and asking the American people to nag each other into buying his health plans.

My full response to the president’s health care remarks are over at my Forbes blog, Darwin’s Fool. Here’s an excerpt:

Note what the president did not say: he did not say that [Amanda] Shelley would not have gotten the care she needed. That was already guaranteed pre-ObamaCare. If ObamaCare saved Shelley from something, it was health care bills that she couldn’t pay. It’s impossible to know from this brief account just how much that might have been. But we can say this: making health care more affordable for Shelley should not have cost anyone else their job. It may be that ObamaCare doesn’t reduce bankruptcies at all, but merely shifts them from medical bankruptcies to other types of bankruptcies because more people cannot find work.

Read the whole thing.

Actually, I should amend that. Making health care more affordable will cost some people their jobs, and that’s okay. Progress on affordability comes when less-trained people (e.g., nurse practitioners) can provide services that could previously be provided only by highly trained people (e.g., doctors). When that happens, whether enabled by technology or removing regulatory barriers, prices fall – and high-cost providers could lose their jobs. The same thing has happened in agriculture, allowing food prices to drop and making it easier to reduce hunger. My point was that we should not be making health care more affordable for Ms. Shelley by taxing her neighbor out of a job.

Cato Scholars Respond to the 2014 State of the Union

Cato Institute scholars Alex Nowrasteh, Aaron Ross Powell, Trevor Burrus, Benjamin H. Friedman, Simon Lester, Neal McCluskey, Mark Calabria, Dan Mitchell, Justin Logan, Patrick J. Michaels, Walter Olson and Jim Harper respond to President Obama’s 2014 State of the Union Address.

Video produced by Caleb O. Brown, Austin Bragg and Lester Romero.

Defending Religious Liberty Against Obamacare

Obamacare violates civil rights in so many ways. The latest example has arrived at the Supreme Court by way of the “contraceptives-mandate” cases, which will be argued March 25. Cato is proud to have filed a brief in Sebelius v. Hobby Lobby arguing that the government can’t force people to pick and choose among their constitutionally protected individual liberties. 
 
In 1970, David Green founded a picture-frame company in his Oklahoma City garage. Since then, Hobby Lobby has grown into a leader in the arts-and-crafts retail industry, with 588 stores and around 13,000 employees across the United States. 
 
Ever since the company’s founding, the Green family—David, his wife Barbara, and their three children—has managed the company in accordance with their Christian principles. For example, Hobby Lobby is closed on Sunday and often purchases newspaper advertisements suggesting that readers seek Jesus. 
 
Following in his father’s footsteps, Mart Green also founded a business, a chain of Christian bookstores called Mardel, of which he remains CEO. In the Green family tradition, Mardel is also managed in accordance with religious principles. 
 
Thanks to the Affordable Care Act, however, the Greens are being forced to choose between operating their businesses in direct contravention of their deeply held religious principles or running them into the ground. Among Obamacare’s thousands of pages is a requirement that corporations with more than 50 employees provide coverage in their group health plans for certain medical services or else face severe additional “taxes.” 

Food Stamp Growth Continues, Despite Economic Recovery

As food stamp utilization escalated over the last several years, the program’s advocates assured us that there was nothing to worry about. Yes, more people than ever before were on food stamps, but that was just because of the recession. Once the recovery began and the unemployment rate declined, fewer people would need food stamps.

Yet, newly released data from the U.S. Department of Agriculture now tells us that in 2013, years after the recession officially ended, 20 percent of U.S. households were on food stamps, an all-time high. According to the USDA, 23.05 million households received food stamps in FY2013. While no doubt some increase in food stamps was a countercyclical response to the recession, this cannot adequately explain why the number of households in the program has increased by 4.43 million since 2010—a period of consistent, albeit low, job growth and a decreasing unemployment rate.

This continued increase in food stamp participation runs counter to the projections put out by the Congressional Budget Office, which in 2011 projected that SNAP participation would decline from 2012 levels to 45.9 million individual participants in 2013. Instead, average monthly enrollment for 2013 was 47.6 million. The continued growth in food stamp participation raises the question of when, if ever, the program will return to pre-recession levels as promised.

In fact, as I pointed out in this policy analysis last year, much of the growth in the program was not due to the recession, but rather to deliberate policy choices that loosened eligibility and work requirements.

Downsize the Department of Health and Human Services

The Department of Health and Human Service (HHS) spends more than $908 billion each year (nearly a third of the federal budget) in various redistribution programs, the most important ones being Medicaid and Medicare.

Medicaid helps low-income citizens getting healthcare. It matches state spending, encouraging them to spend more than they otherwise would – their spending increased from $ 118 billion in 2000 to $ 275 billion in 2010, and is projected to double in the next decade. Ten to twenty percent of Medicaid funds ($ 180 billion) are wasted in various frauds.

Medicare, which helps seniors over 65 getting healthcare, is the third largest expenditure for the federal government. It is estimated that its unfunded liabilities could reach $30 trillion (in other words, $30,000 billion) in the next 75 years.

In order to stop hemorrhaging so much money, serious reforms need to be enacted. For Medicare, freedom of choice in coverage should be given back to citizens, along with private competition and personal savings. And for Medicaid, states should ultimately be the only ones spending money of the program, keeping them from overspending. In the end, this would save hundreds on billions of dollars each year. To that end we’ve created a short video which makes these and other points, which you can watch below:

Emergency UI Benefits: Reasons Against

The Senate is considering legislation to revive the emergency unemployment insurance program. These federally funded benefits were in place from mid-2008 to the end of 2013.

Federal policymakers like to spend money helping people in need, but there are large and less visible costs to such welfare legislation. Here are some reasons why new UI spending is not a good idea:

  • The U.S. economy has been out of recession and growing for more than four years. The unemployment rate is down to 7 percent and jobs are being created. The time for “emergency” UI benefits has passed and it’s time for us to go back to the regular benefit structure of 26 weeks. We all want the economy to grow faster and create more jobs, but the way to do that is to enact free market policies, not more welfare spending.
  • There is no free lunch. Extending UI benefits for another year would cost approximately $25 billion, which is money the federal government does not have. It would have to borrow every cent of the added spending, and thus impose those costs (plus interest) on working Americans in the future. Proponents of more UI spending point to sad stories of individuals out of work, but there will be far more pain inflicted on millions of Americans in coming years unless we get federal spending and debt under control.
  • Large UI benefits are counterproductive because they push up unemployment, as discussed here. Long-term unemployment has been particularly high in recent years. Meanwhile, employers may have a bias against hiring people who have been unemployed a long time. The upshot is that if generous UI benefits discourage people from taking less-than-optimal job offers early on, it ends up hurting them later when it is harder to find any job. Government “help” often backfires.
  • States can fund their own benefits. Nevada Sen. Dean Heller wants to “shrink the size” of the federal government, yet he is co-sponsoring legislation to revive emergency federal UI benefits because his state has high unemployment. But there is nothing stopping Nevada from funding its own extra UI benefits, and thus no need for Heller to try to impose the cost of his state’s problems on the other 49 states.
  • From a political perspective, it would be a big mistake for Republican leaders to go along with the push to spend more on UI. GOP leaders already caved in with more spending on the recent Ryan-Murray budget deal. If they cave in on UI, cave in on the costly farm bill, and cave in on upcoming debt-limit legislation, there would be no reason for fiscal conservatives to show up and vote Republican in November.    

Our current UI system is economically damaging, hugely complex, and fraud-ridden. Rather than adding to the system’s problems with higher benefits, policymakers should consider moving to a pro-growth savings-based UI system, as Chile has done.