Topic: Trade and Immigration

Discouraging Moments in American Political Debate

There’s a spirited debate going on at National Review. Mark Krikorian, NRO’s resident immigrant-basher, supposed yesterday morning that maybe one more reason we should keep immigrants out is because the grandchildren of Hispanic-American Catholics might turn out to less supportive of Israel than their Anglo coreligionists (a condition he calls “anti-Semitism”).

Charging to challenge this thesis is John J. Miller, coauthor of a book calling, umm, France, “America’s oldest enemy.” (Strangely enough, the book was published around the beginning of the Iraq war.) Bernard-Henri Levy “characterized the book this way:

the whole book is a mad charge (whose only equivalent I know is the fascist French literature of the 30’s) against a diabolical nation, the incarnation of evil, bearing in the body and soul of its citizens the stigmata of an ill will the only aim of which throughout the centuries has been the humiliation of America the great.

Good Lord, what’s happened to American conservatism? The debate between these two reminds me a bit of Henry Kissinger’s remark on the Iran-Iraq War.

Shameless, Feckless Cowards

Further to yesterday’s post, rather than have a vote on the U.S.-Colombia Free Trade Agreement within 90 legislative days (as set out by law), House Speaker Nancy Pelosi announced that she will change House rules to avoid having a vote on the agreement before the November elections. It’s not yet clear to me how that can be done, but such action will speak volumes about the rudderless Democratic Party.

Apparently, the leadership hasn’t decided whether supporting the agreement—supporting export opportunities, encouraging and deepening business ties, promoting investment in Colombia, supporting an ally in a hostile region, and preserving the value of U.S. credibility—is worth more votes than union money can buy.

If members of Congress don’t want to be held accountable to the electorate, they shouldn’t seek office in the first place. But as we’ve seen time and again, it’s never about good policy. It’s only about holding onto power. No wonder Americans have such contempt for Congress.

A Defining Moment for Democrats and Trade

Mark Penn thought he could support the U.S.-Colombia Free Trade Agreement out of the right side of his mouth, while he opposed it out of the left. That controversy lost Mark Penn his firm’s contract with the Colombian government and his role with the Clinton campaign. Now it just may be metastasizing and moving up to Capitol Hill.

Congressional Democrats are getting hysterical over President Bush’s decision yesterday to send the U.S.-Colombia Free Trade Agreement up to the Hill for a vote. They claim that the president’s circumvention of protocol (not getting a final blessing from Congress first) now renders passage of the agreement virtually impossible.

The truth is that Congress was never going to give the administration an official green light and the president exercised the only real choice at his disposal.

But since when do Democrats cry for want of a successful trade agreement? I think there’s a little more to the story, which I address in this NRO oped today.

The long and short of it is that by sending the deal to Congress now, legislative intransigence before the November election is no longer an option. Democrats have 90 legislative days (until the end of September) to decide once and for all, in plain view of the electorate, the unions, the business community, and the international community, how they really feel about trade. The vote and the debate leading up to it could expose some deep fissures in the party, and could raise serious questions about America’s credibility and capacity to lead on matters of trade and economics.

The Costs of E-Verify - and the Immigration Laws

In my paper, “Electronic Employment Eligibility Verification: Franz Kafka’s Solution to Illegal Immigration,” I analyzed a number of different factors that would frustrate a national employment eligibility verification system. Most of them had to do with responses that undermine the functioning of the verification system itself. But I also talked about avoidance. Under a national electronic employment eligibility system, I wrote, “[w]ork ‘under the table’ would increase, and, along with it, other forms of illegality.”

Strong validation of that notion came from an interesting source last week: the Congressional Budget Office. CBO and the Joint Committee on Taxation estimate that the SAVE Act (the “Secure America Through Verification and Enforcement Act”), a bill to take E-Verify national, would result in lost federal revenue of $17 billion over 10 years. That is because more undocumented workers would be paid outside the tax system. That’s a lot of work under the table.

Those who have fixated on immigration law enforcement often cite the rule of law, which is certainly an important thing. But the rule of law thrives when the law is at peace with the people, not when it’s a cudgel. As I also wrote:

Proponents of internal enforcement and electronic employment verification surely stand on a sound principle—the rule-of-law ideal that people should enter the country legally. But current immigration law is a greater threat to the rule of law than any of the people crossing the border to come here and work. Our immigration policies have fostered the illegality so common in the employment area.

How States Use Medicaid to Bilk Taxpayers in Other States

Today, the Government Accountability Office (GAO) testified before Congress on the many ways that states use the Medicaid program to defraud (my word) taxpayers in other states.  The following is an excerpt from GAO’s prepared testimony:

GAO has reported for more than a decade on varied financing arrangements that inappropriately increase federal Medicaid matching payments. In reports issued from 1994 through 2005, GAO found that some states had received federal matching funds by paying certain government providers, such as county-operated nursing homes, amounts that greatly exceeded established Medicaid rates. States would then bill CMS for the federal share of the payment. However, these large payments were often temporary, since some states required the providers to return most or all of the amount. States used the federal matching funds obtained in making these payments as they wished…[Such] financing arrangements effectively increase the federal Medicaid share above what is established by law…

Supplemental payments involving government providers have resulted in billions of excess federal dollars for states, yet accountability for these payments—assurances that they are retained by providers of Medicaid services to Medicaid beneficiaries—has been lacking. CMS has taken important steps in recent years to improve its financial management of Medicaid, yet more can be done.

Yes, more should be done.  Congress should reform Medicaid and the State Children’s Health Insurance Program the same way it reformed welfare: eliminate the federal entitlement to benefits, and replace those programs’ matching grants with lump-sum block grants.  That would eliminate many perverse incentives created by those programs, including the incentive to cheat taxpayers in other states.

Those reforms would also be a nice stepping stone toward giving the states full responsibility for maintaining those programs, and getting the federal government out of the business of providing medical care to the poor entirely.