Newt Gingrich's presidential campaign has responded to my post, "Gingrich Adviser Urges States to Implement ObamaCare," in which I responded to David Merritt's Daily Caller op-ed calling on states to create ObamaCare's health insurance Exchanges. According to Gingrich campaign spokesman Joe DeSantis:
Mr. Merritt is still an advisor to Speaker Gingrich, but he was not writing this article as a representative of the campaign. Newt receives advice from a large number of people. That does not mean he always agrees with the advice he is given. In this case of states implementing ObamaCare as a precaution, he explicitly disagrees with Mr. Merritt. He believes states need to resist the implementation of the law because it is a threat to our freedom.
That's welcome news. There's probably nothing that would give a bigger boost to the repeal effort than for states to refuse to create health insurance Exchanges.
Now that we've got the Heritage Foundation and Newt Gingrich on board, perhaps Mitt Romney, Rick Santorum, and Ron Paul could emphasize to state officials the importance of not implementing ObamaCare.
State after state is refusing to implement ObamaCare's health insurance Exchanges. Republican David Merritt hopes they will "grudgingly decide" to change their minds.
Merritt is a health care adviser to Newt Gingrich. He is also a senior adviser at Leavitt Partners. Leavitt Partners is a consulting firm that makes money by helping states implement ObamaCare. In the Daily Caller, Merritt tries to persuade state officials to help implement a law they oppose.
Merritt begins his pro-Exchange argument like so: "Imagine that you’re being required to buy a car." Would you rather choose that car yourself, he then asks, or would you rather the dealer choose the car? Hmm, good question. I choose Option C: wring the neck of whoever is requiring me to buy a car. Not Merritt, though. He counsels states to choose their own "car."
There are so many problems with this analogy that it's hard to list them all. First, as Merritt essentially admits, states would be able to choose from such a narrow range of "cars" that it scarcely makes a difference whether they pick their own or let the feds do it. Second, states would only have to pay for their "car" if they pick it out themselves; otherwise, the feds pay for it. So Merritt is literally urging states to volunteer to pay for a "car" when the feds would otherwise hand them one for free. Finally, he says states should select their own "car" even though "no one knows what a federal [car] would look like." How can Merritt counsel states to choose Option A if he admits he doesn't even know what Option B is? Wouldn't the prudent course be to wait and see? Especially since the Obama administration admits it doesn't have the money to create Exchanges itself?
Merritt's hypotheticals don't make his point, either:
Take, for example, the treatment of high-deductible health plans with health savings accounts. A state exchange could and should include them as an option...But considering that many on the left oppose consumer-directed plans, a federal exchange may very well exclude them.
Perhaps a federal exchange will lard mandate upon mandate on participating plans, driving costs through the roof. Perhaps it will be so restrictive in its plan eligibility that only a few options will be available. Perhaps HHS will offer a public option.
This is nonsense. If the federal government wants to exclude HSAs, etc., it will do so in both federal and state-run Exchanges. States that establish their own Exchanges won't be able to do a darned thing about it.
But here's where Merritt's argument really fails:
Unless and until the law is repealed by Congress or overturned by the Supreme Court, all health care stakeholders — including state policymakers — need to prepare for it as though it will be the law of the land forever. Wishing the law away is not a strategy. Hoping that it is overturned is not a plan.
Wishing? Hoping? Perhaps Merritt hasn't noticed, but countless Americans are pursuing multiple well-considered strategies (and working their fingers to the bone) to ensure that ObamaCare is not "the law of the land forever."
State-run Exchanges undermine all of those repeal strategies. In fact, they completely derail one of the most promising ones. Worse, Exchanges create new constituencies that would be dependent on ObamaCare, and would therefore fight repeal -- constituencies not unlike Leavitt Partners. One of the most important reasons for states not to establish Exchanges is that the federal government does not have the money to establish Exchanges itself. Translation: fewer constituencies for ObamaCare.
For all these reasons, scholars from the Heritage Foundation, the Cato Institute, and countless other groups are advising states to refuse to create ObamaCare Exchanges and to send all related grants back to Washington. Perhaps Newt Gingrich's health care advisers could lend a hand, instead of trying to cement ObamaCare in place.
Update: While it is important to understand the financial interests involved in such issues, I do not believe that financial interest is what’s motivating Merritt. He sincerely believes that creating their own Exchanges will allow states to make the best of a bad situation.
Update #2: Gingrich campaign spokesman Joe DeSantis writes, “Mr. Merritt is still an advisor to Speaker Gingrich, but he was not writing this article as a representative of the campaign. Newt receives advice from a large number of people. That does not mean he always agrees with the advice he is given. In this case of states implementing ObamaCare as a precaution, he explicitly disagrees with Mr. Merritt. He believes states need to resist the implementation of the law because it is a threat to our freedom.”
Republicans at the General Assembly are falling prey to the fallacy of the false alternative...
[H]ere are the real options facing Virginia: (a) federal bureaucrats determine the form of our exchange, or (b) federal bureaucrats determine the form of our exchange. There is no (c)...
Running a health-insurance exchange would cost a lot of money — money Virginia does not have. Since Washington will dictate how it will be run, Washington should pick up the tab.
I'm not a big fan of Senator Schumer of New York. As I've noted before, he's a doctrinaire statist who wants the government to have control over just about every aspect of our lives.
But that describes a lot of people in Washington. I guess what also bothers me is his willingness to say anything, regardless of how divorced it is from reality, to advance his short-run political agenda (sort of a Democrat version of Karl Rove).
For example, here's part of what the Empire State Senator recently had to say about fiscal policy, as reported by a Washington Post columnist.
Schumer said, "...Republicans came in and said, `We can solve your problem by shrinking government'...We tried their theory...The American people resent government paralysis, but most of them would say that government is doing too little to help them, not too much.”
What's remarkable about this statement is that it's so inaccurate that we can't even decipher what he means. I've come up with three possible interpretations of what he might have been trying to say, and they're all wrong.
1. He's referring to GOP actions this year. This interpretation might make partial sense because the House Republicans have made a few semi-serious efforts to shrink government, but how can Schumer say "we tried their theory" when every Republican initiative was blocked by the Senate and Obama?
The Ryan budget died of malign neglect since the Senate didn't even bother to produce a budget, and Republican efforts on the 2011 spending levels and the debt limit also were stymied, resulting at best in kiss-your-sister deals.
2. He's referring to GOP actions during the Bush Administration. This interpretation might make some sense because the GOP did control the House, the Senate, and the Presidency, but does Schumer understand that "shrinking government" was not part of the Republican agenda during those years?
But don't believe me. The numbers from the Historical Tables of the Budget unambiguously show that the federal budget almost doubled during the Bush years because of huge increases in domestic spending.
3. He's referring to GOP actions during the 1990s. This interpretation actually does make sense because the burden of the public sector did shrink as a share of GDP during the Clinton years when Republicans controlled Congress, so it would be accurate to say "we tried their theory."
But what was so bad about the era of spending restraint during the 1990s? The economy expanded and people were better off, in large part because, to quote Schumer, government was "doing too little to help them."
Heck, the Clinton-GOP Congress years were so good that I even offered, during a debate on national TV, to go back to Clinton's higher tax rates if it meant we also could undo all the reckless spending of the Bush-Obama years.
This doesn't mean I've stopped caring about low marginal tax rates. It just means that I understand that the ultimate tax is the burden of the public sector. This video explains more, in case you're wondering why I'd like to go back to the 1990s.
It goes without saying (but I'll say it anyhow) that it would be even better to combine Clinton's spending levels with Reagan's tax rates.
Some people have asked why I'm so agitated about the possibility that Republicans may acquiesce to tax increases as part of the Supercommittee negotiations.
Rather than get into a lengthy discourse about the proper role of the federal government or an analysis of how the Bush-Obama spending binge worsened America's fiscal situation, I think this chart from a previous post says it all.
Republicans are considering a surrender on taxes because they are afraid that a deadlock will lead to a sequester, which would mean automatic budget savings. And the sequester, according to these politicians, would "cut" the budget too severely.
But as the chart illustrates, that is utter nonsense.
There are only budget cuts if you use dishonest Washington budget math, which magically turns spending increases into spending cuts simply because the burden of government isn't expanding even faster.
If we use honest math, we can see what this debate is really about. Should we raise taxes so that government spending can grow by more than $2 trillion over the next 10 years?
Or should we have a sequester so that the burden of federal spending climbs by "only" $2 trillion?
The fact that this is even an issue tells us a lot about whether the GOP has purged itself of the big-government virus of the Bush years.
A few Republicans say that a sellout on tax hikes is necessary to protect the defense budget from being gutted, but this post shows that defense spending will climb by about $100 billion over the next 10 years under a sequester. And that doesn't even count all the supplemental funding bills that doubtlessly will be enacted.
In other words, anyone who says we need to raise taxes instead of taking a sequester is really saying that we need to expand the burden of government spending.
So even though Ronald Reagan and Calvin Coolidge are two of my heroes, now you know why I don't consider myself a Republican.
I have sometimes wondered whether it is accurate to say that Republicans are the "Stupid Party."
We'll soon know the answer to that question. As part of the debt limit agreement, the politicians agreed to set up a "Supercommittee" comprised of six Republicans and six Democrats that was responsible for producing at least $1.2 trillion of supposed deficit reduction.
But the Democrats appointed a group of hardcore leftists to the Supercommittee, which means that it is virtually impossible to get the necessary seven votes for a good agreement. Indeed, the more relevant question is whether one or more of the Republicans surrenders to a big tax hike.
Fortunately, there is an alternative. The law says that there will be automatic spending reductions if the Supercommittee does not reach an agreement. The political establishment in Washington thinks that this outcome—known as sequestration—would be horrible.
They tell as that a sequester would mean "savage" and "draconian" budget cuts. The only "responsible" approach, we are told, is to go along with a tax increase.
This is hogwash. The automatic spending cuts are only "cuts" using Washington's dishonest budget math. Here's a chart showing how much spending will grow over the next 10 years, and the relatively tiny reduction in budgetary growth that will be caused if there is a sequester.
We've actually been down this path before. There was a small sequester back in the mid-1980s, shortly after the Gramm-Rudman-Hollings law was enacted. There was much wailing and gnashing of teeth, but the sequestration helped restrain the growth of spending and helped bring about a record amount of deficit reduction in 1987.
There was a similar (unsuccessful) fight in 1989. Here's what then-Senator Bob Packwood of Oregon wrote in 1989.
...the sequester has become the focus of partisan debate . Each side accuses the other of being responsible for "deep and arbitrary" budget cuts . Some legislators say we should do whatever it takes to cancel the sequester, even if it means higher taxes. While a sequester is certainly not the ideal way to resolve this year's budget dispute, there are reasons to believe that the fiscal discipline of a sequester is the medicine we need to cure the budget process. For all its drawbacks, a sequester is real deficit reduction . Instead of budget gimmicks, accounting tricks, phony cuts, and "revenue enhancements," a sequester would reduce spending levels by a fixed percentage in eligible spending programs . In other words, unlike most deficit reduction packages, sequestration would actually reduce the deficit.
The only argument against a sequester, at least among conservatives, is that a sequester would impose too much of a burden on the defense budget. But I've already explained in this post that the defense budget will climb by about $100 billion under sequestration.
I don't know whether Republicans are the stupid party, but I know they will be very stupid if they don't take the sequester and declare victory.
Back in March of this year, with a May deadline for REAL ID compliance looming, the U.S. Department of Homeland Security quietly kicked the can down the road. It once again changed the date on which states would have to implement federal standards for their drivers' licenses and IDs.
The original deadline was three years after the law's May 2005 passage. It has now been more than five years and there's no REAL ID thanks to resistance from states around the country. Congress has not moved to repeal this failed law. In fact, it still appropriates money to REAL ID in the Homeland Security appropriations bill.
The DHS has now set a new compliance deadline at January 15, 2013. That's five days before the next presidential term begins on January 20, 2013. Indeed, the period between the election and the inauguration is when the question of whether to enforce REAL ID against the states will be decided.
Which puts a question before the Republican candidates vying for the highest political office. Where do you stand on the national ID issue? If your Transportation Security Administration is turning fliers away from airports because their states aren't going along with this federal surveillance mandate, are you going to stand by the feds or stand by the states and people who say no to having a national ID?
The question is a nice bellwether for Republicans on both federalism and essential American liberty.