Topic: Government and Politics

Large Majorities Support Key Obamacare Provisions, Unless it Costs Something

A new Washington Post/ABC News poll finds that Americans say they support Affordable Care Act regulations that require health insurance companies in all states to cover a particular set of services (62%) and prohibit insurers in all states from charging higher prices to people with pre-existing conditions (70%).

However, the poll did not find out what Americans would be willing to give up to obtain these regulatory benefits.

Fortunately, a recent Cato Institute/YouGov health care survey investigated how Americans make trade-offs when it comes to their health care. In short, support for once popular regulations plummets as soon as voters consider their costs.

At first, and similar to the Washington Post/ABC poll, the Cato survey found by a margin of 63% to 33% Americans support prohibiting insurance companies from charging higher premiums because of pre-existing conditions—also known as “community rating.” But support flips, and majorities come to oppose community rating…

  • if it limited access to medical tests and treatments: 66% oppose, 27% support
  • If it limited access to top rated medical facilities and treatment centers: 62% oppose, 31% support
  • If one had to wait several months before seeing a specialists for necessary care: 65% oppose, 25% support
  • if premiums increased: 55% oppose, 39% favor
  • if taxes increased: 53% oppose, 40% favor

Internet Speech 2016: More Regulation Needed?

Election law expert Nathaniel Persily has written an interesting article about the Internet and the 2016 election. The problems Nate (and others) see in 2016 will inform the debate about free speech now and in future elections.

Persily notes that the 2016 campaign saw an “online explosion of campaign-relevant communication from all corners of cyberspace.” Here’s his description of the Trump campaign’s social media efforts:

Employing traditional web-based communication, event promotions, new apps, native advertising (in which web ads are designed to look like articles in the publication containing them), and new uses of social media, the campaign launched 4,000 different ad campaigns and placed 1.4 billion web impressions (meaning ads and other communications visible to individual users)…the campaign targeted 13.5 million persuadable voters in sixteen battleground states, discovering the hidden Trump voters, especially in the Midwest, whom the polls had ignored.”

Trump himself tweeted a great deal, having 13 million followers by election day. But the mainstream media also picked up the tweets and prompted wide discussion and attention to them. Trump garnered about $4 billion in free media during the primaries and the general election, an astonishing sum. The new media thus drove the agenda for the mainstream media; in the past, the latter shaped the agenda for everyone.

From a First Amendment perspective, 2016 saw more speech by more people than previous elections. The election also showed that you can win the White House without dominating fundraising, an outcome that weakens the case for campaign finance regulation. Both results seem good for free speech.

However, Nate Persily is a learned and sensible analyst, and his concerns about 2016 merit our attention.

4/20, John Oliver, and Marijuana Reform

Since today is 4/20, a day that marijuana users celebrate, it is an appropriate occasion to consider government policy on this subject. All too often, people in the news media try to joke and chuckle about marijuana use. That’s unfortunate because there are very serious issues surrounding the government’s policy of criminalizing possession and use. 

More than 20 million Americans use marijuana regularly. Millions more use it occasionally.  In the eyes of the law, all these people are considered “criminals.”  That is absurd–and not unlike the sad chapter in U.S. history when the government tried to ban alcohol consumption. There is a marijuana arrest in the U.S. every minute of every day all year round. Some go to prison, some spend short periods in jail, others go to drug court. Everyone will get an arrest record. It is a tremendous waste of time and money.

John Oliver is once again on the mark with his critique of marijuana policy. Take a few minutes to listen to his words of wisdom, then blast it to your friends on social media and remind them that the war on marijuana isn’t just about those who choose to use marijuana any more than alcohol prohibition was just about those who liked to drink. The war has many destructive side-effects and should be ended immediately. During his campaign, Trump said marijuana legalization was a matter for the states to decide. If he’s not going to reverse federal law, he should at least allow the states to opt out of the war on marijuana. 

For related Cato scholarship, go herehere, and here.

Price, Sessions Force Trump’s Hand on Cost-Sharing Reduction Payments

In a recent op-ed at The Federalist, I argued Donald Trump has serious leverage over both Republicans and Democrats in Congress when it comes to ObamaCare:

President Trump can force Republicans and Democrats back to the negotiating table, and get a bill that keeps his promises to fully repeal Obamacare and to protect people with preexisting conditions…by simply undoing the illegal actions by his predecessor, which he has also already promised to do.

One of those illegal actions is the illegal exemption from ObamaCare that President Barack Obama granted members of Congress and their staffs.

Another is the illegal “cost-sharing” subsidies President Obama began issuing – and that President Trump is still issuing – to insurers participating in ObamaCare’s Exchanges. In a case where the House of Representatives challenged the payments, a federal judge ruled that issuing those payments “violates the Constitution” and ordered them to stop, pending appeal. The Obama administration was pursuing an appeal, but the Trump administration has not indicated whether it would continue to appeal that ruling or enforce the judge’s order. Trump must do one or the other.

Two of President Trump’s cabinet picks have practically forced his hand on this issue.

When the federal district-court judge issued her ruling striking down the cost-sharing subsidy payments, Health and Human Services Secretary Tom Price was a Republican member of Congress. He issued a statement endorsing the ruling:

Today, Congressman Tom Price, M.D. issued the following statement after a federal judge ruled in favor of House Republicans’ lawsuit against Obamacare, saying that the Administration does not have the power to spend money on “cost sharing reduction payments” to insurers without an appropriation from Congress:

“The ruling proves a momentous victory for the rule of law and against the Obama Administration’s overreach of Constitutional authority,” said Congressman Tom Price, M.D. “This historic decision defies the Obama’s Administration’s ask that the courts disregard the letter of the law and reasserts Congress’s power of the purse as defined by our nation’s founders in Article One of the Constitution.”

“In recent weeks, we’ve seen insurers announce that they will exit the exchange markets in 2017, further deteriorating patients’ access and choice to health care plans that they want. This is yet again proof that Obamacare is on an unsustainable path, and House Republicans must remain committed to repealing and replacing this law. As a member of the Health Care Task Force, I’m honored to be working with my colleagues to advance positive, patient-centered solutions to the challenges in our health care system.”

Price has made clear his view that Congress did not appropriate funding for these payments, and that continuing to make them would constitute executive overreach and violate the rule of law. If President Trump chooses to appeal the lower-court ruling, he would put Price in a situation where he would have to help implement a policy that he considers unconstitutional. Price arguably would have to resign.

Yesterday, Trump’s attorney general Jeff Sessions expressed his view that the payments are unconstitutional and that the lawsuit challenging those payments “has validity to it.” If Trump chooses to appeal the lower-court ruling, Sessions would be the guy who carries out that appeal. It would be…awkward for him to defend a policy he believes to be unconstitutional. If Trump asks him to do so, Sessions too may have to resign.

Continuing President Obama’s illegal cost-sharing reduction payments could cost President Trump two cabinet officials.

Legislative Takings Are Still Takings

The Fifth Amendment’s Takings Clause states that the government may take no property for public use without just compensation. Unfortunately, local governments often see the Takings Clause not as a fundamental safeguard of liberty so much as an inconvenient obstacle getting in the way of preferred policy outcomes.

One way cities have devised to avoid their obligations to provide just compensation is to condition issuance of land-use permits on landowners’ surrendering property rights the government would otherwise have had to pay for (what’s a little extortion between friends). That’s exactly what the City of West Hollywood is attempting to do with a zoning ordinance that requires developers who build multi-unit housing to either (1) sell or rent a percentage of that housing at below-market prices or (2) pay an “in lieu” fee that the city calculates using a formula created by statute.

Shelah and Jonathan Lehrer-Graiwer sought a permit to build an 11-unit development and elected to pay the in-lieu fee under protest, later challenging it as an unconstitutional taking. The trial court, following binding state-court precedent, found in favor of the city, and the California Court of Appeals affirmed. Now the property owners seek U.S. Supreme Court review.

Cato, joined by Reason Foundation and the National Association of Home Builders, and with the assistance of Antonin Scalia Law School’s Supreme Court clinic, has filed a brief supporting that request.

Under the Supreme Court’s decisions in Nollan v. California Coastal Commission (1987) and Dolan v. City of Tigard (1994), the government may not require a property owner to surrender a constitutional right (here, to just compensation for a taking of private property) in exchange for permit approval unless there’s an “essential nexus” between the conditions and an alleged harm that would be caused by the development. The conditions must also be roughly proportional to the expected impact.

Supporters of BATs and VATs are wrong about trade and taxes

My crusade against the border-adjustable tax (BAT) continues.

In a column co-authored with Veronique de Rugy of Mercatus, I explain in today’s Wall Street Journal why Republicans should drop this prospective source of new tax revenue.

…this should be an opportune time for major tax cuts to boost American growth and competitiveness. But much of the reform energy is being dissipated in a counterproductive fight over the “border adjustment” tax proposed by House Republicans. …Republican tax plans normally receive overwhelming support from the business community. But the border-adjustment tax has created deep divisions. Proponents claim border adjustability is not protectionist because it would automatically push up the value of the dollar, neutralizing the effect on trade. Importers don’t have much faith in this theory and oppose the GOP plan.

Much of the column is designed to debunk the absurd notion that a BAT is needed to offset some mythical advantage that other nations supposedly enjoy because of their value-added taxes.

Here’s what supporters claim.

Proponents of the border-adjustment tax also are using a dodgy sales pitch, saying that their plan will get rid of a “Made in America Tax.” The claim is that VATs give foreign companies an advantage. Say a German company exports a product to the U.S. It doesn’t pay the American corporate income tax, and it receives a rebate on its German VAT payments. But an American company exporting to Germany has to pay both—it’s subject to the U.S. corporate income tax and then pays the German VAT on the product when it is sold.

Sounds persuasive, at least until you look at both sides of the equation.

When the German company sells to customers in the U.S., it is subject to the German corporate income tax. The competing American firm selling domestically pays the U.S. corporate income tax. Neither is hit with a VAT. In other words, a level playing field.

Here’s a visual depiction of how the current system works. I include the possibility that that German products sold in America may also get hit by the US corporate income tax (if the German company have a US subsidiary, for instance). What’s most important, though, is that neither American-produced goods and services nor German-produced goods and services are hit by a VAT.

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