Archive for Freedomworks

ObamaCare Enrollment Delays Hide Insurance Cost Hikes Till After Elections

On October 1st of last year, ObamaCare’s inaugural enrollment period launched with all of the grace of a rocket exploding on its launch pad. Double-digit premium hikes, cancelled plans, and non-functioning websites caused misery for millions, leaving even supporters of the law lacking for words at times. This October there is silence, with few outside of the beltway focused on anything to do with ObamaCare.

Has the system been fixed – is ObamaCare working? Not at all. People in many states can still expect to be met with premium increases for their health insurance – well into the double digits for some states – and some of those who enrolled in the exchanges last year will be in for a hassle as their plans come up for renewal. Only, those problems will not be apparent to many until this year’s new enrollment period, which begins on November 15th. By stunning coincidence, that’s after the midterm elections.

Naturally, the White House earnestly insists, the decision to move the enrollment period back a month was not political.

As Valerie Richardson noted in the Washington Times, this delay will prove particularly fortuitous to embattled Democratic Senate candidates Mark Begich (Alaska), Mary Landrieu (Louisiana), and Bruce Braley (Iowa), as many of the insurance plans in their respective states are likely to increase in cost by double-digit percentages. All three candidates are already having to defend their ObamaCare votes, and one would assume that another major fault with the law would further threaten their popularity with voters.

The problems that are likely to (re)surface in November are more than just higher premiums (made more painful by the higher deductibles of the most affordable plans offered on the exchanges). Those who obtained a plan through the exchanges last year will have only a narrow timeline to make changes in their plan, and many may find out that their current plan is cancelled because it no longer fits the exchange’s bronze-silver-gold conditions, which are changed every year. Of course, they can switch to another plan, but as Mercatus’ Bob Graboyes notes, under the exchanges new plans will often mean new doctors. Those who already have a plan through the exchanges may also find out that due to a change of residence, income, or family status they are no longer eligible for the same level of premium subsidies, further raising their costs.

Plus, $2 billion and a year later, the federal exchange at healthcare.gov still hasn’t fixed its glaring security errors, meaning everyone using it is exposing their personal data to hackers.

The folks who experience all of these unpleasant side-effects of ObamaCare’s “affordable care” may find that they are less than pleased with the law and those who voted for it. But they’ll have a couple of years to stew about it before they can make their displeasure known at the ballot box.

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ObamaCare's outrageous deductibles are making life miserable for many Americans

Just last week the Associated Press released a survey finding that 25 percent of Americans are “not confident” that they’ll be able to afford medical care in the event of a major health problem. The results underscore one of the central problems with ObamaCare, that is the high deductibles that often come with health plans on the Exchanges.

The New York Times came out with a story ahead of the weekend telling the stories of a few different Americans who are still struggling to pay for healthcare because of ObamaCare’s outrageous deductibles.

Patricia Wanderlich, a Chicago-area resident, experienced a life-threatening brain hemorrhage three years ago and has an aneurysm. Her health plan, however, comes with a hefty $6,000 deductible. Rather than pay for a much-needed yearly brain scan to monitor her condition, Wanderlich is going without. “To spend thousands of dollars just making sure it hasn’t grown?” she told The Times. “I don’t have that money.”

Dr. Rebecca Lowe, who suffers from degenerative arthritis among other conditions, also has a $6,000 deductible that she has to meet before her health plan, for which she pays $422 per month, kicks in. But, thanks to ObamaCare’s limited provider networks, she’s been forced to seek medical care out of network to visit doctors more than 100 miles away. Though Lowe spent more than $6,000 on medical care for the year, none of it counts toward her deductible because she’s gone out of network.

Though ObamaCare supporters like to focus on the subsidies that artificially lower premiums by passing the costs onto taxpayers, ObamaCare’s higher deductibles are making it difficult for many Americans to afford the healthcare they need, or pricing them out of seeking care, entirely.

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Transparency fail: U.S. Department of Agriculture is running interference for Kay Hagan

The Obama administration is the most open and transparent administration in history…..said no serious person, EVER. Though the line is still repeated ad nauseam by White House and administration officials, it has been thoroughly debunked time and time again. But it seems that the administration isn’t just trying to provide cover for itself anymore. They’re also now trying to run interference for North Carolina Democrat Kay Hagan.

Under fire for her family benefitting from the wasteful 2009 stimulus bill, Hagan got an assist this week from the Department of Agriculture. The Carolina Journal is investigating a $50,000 grant to a company owned by Hagan’s husband and his brothers, but the paper isn’t getting much in the way of transparency from the USDA:

On Tuesday, CJ spoke by telephone with Delane Johnson, North Carolina’s rural development public information coordinator, who said she would treat CJ’s request for documents about the $50,000 renewable energy grant as a Freedom of Information Act request. By email, she said agency policy requires USDA to contact the grant recipient, JDC Manufacturing, before complying with the document request. She also indicated that she would have a response to CJ within 10 days.

By Wednesday, however, Johnson was much less cooperative. CJ went to the Raleigh office to meet Johnson and ask her additional questions about the process of reviewing the grant file. Upon arrival, CJ was told to take a seat outside Johnson’s office. Another employee went into the office, closed the door, and a few minutes later, informed CJ that Johnson would not be able to speak with him and that the matter was being handled in Washington.

The USDA Rural Development office in Raleigh is headed by Randall Gore, who was recommended for the position in 2009 by newly elected Sen. Hagan, a Democrat. Both Gore and Hagan live in Greensboro. President Barack Obama later nominated Gore to the post and the Senate confirmed him.

Earlier this week, CJ reported on the $50,000 grant from the USDA’s Rural Energy for America Program. The grant paid for the second phase of a solar energy installation at a building in Reidsville owned by JDC Manufacturing, a company co-owned by Kay Hagan’s husband Charles “Chip” Hagan and Chip’s brothers John and David. Another Hagan family-owned company, Plastic Revolutions, leases space at the JDC building.

Not only is this a textbook example of cronyism, and possibly nepotism, there’s also the new angle of the USDA getting involved to run interference for Hagan. Because that’s what transparent administrations do, right? They protect the politicians from their own party who, like Hagan, vote with them 96 percent of the time.

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Conservatives and Liberals Should Agree to End the Export Import Bank

It’s no secret that Washington desperately needs to cut spending. Nearly everyone agrees that national debt levels are unsustainable. The Congressional Budget Office has warned that the nation’s debt is set to jump to 106 percent of gross domestic product (GDP) in 2039. Clearly, we cannot continue down this path.

Both Republicans are Democrats are to blame for the $17.8 trillion national debt. Unfortunately, both parties have their sacred cows in the budget that they are unwilling to cut. Many Democrats say they are willing to cut military spending but won’t cut a dime of “social spending.” Many Republicans say that we need to slash the welfare state but won’t cut a dime of military spending. As a result, zero spending actually gets cut.

There should be no sacred cows when it comes to slashing government spending. There is waste in every single department that needs to go—yes, that includes the Pentagon. It’s past time to get serious about dealing with the nation’s fiscal woes.

One area where conservatives and liberals should agree to cut is corporate welfare. Often also called crony capitalism, this includes any government bailout or taxpayer funded subsidy to any corporation. Republicans tend to talk a good game against government handouts and Democrats tend to be skeptical about giving corporations more power.

Therefore, slashing corporate welfare should be a no-brainer.

A good place to start should be axing the Export-Import (Ex-Im) Bank.

Obama has even publicly criticized the bank on the campaign trial.

“We just need to cut back!” said Obama, as a presidential candidate. He pledged to end “waste at the Economic Development Agency and the Export-Import Bank that’s become little more than a fund for corporate welfare.”

The Ex-Im was originally started by FDR during the Great Depression. Nowadays, it’s used to fund big politically connected companies like Boeing, General Electric, and Caterpillar with taxpayer funds. By doing so, it’s an example of the government choosing winners and losers in the marketplace.

Some proponents of the Ex-Im Bank claim that it cost taxpayers no money. Don’t be fooled by these government accounting gimmicks. When the correct accounting is used, it’s been shown that the Ex-Im Bank will cost taxpayers $2 billion over the next decade.

Taxpayers shouldn’t be on the hook to subsidize exports by big corporations. Some supporters of the Ex-Im Bank often equate it with free trade. This isn’t the case because it makes it so bureaucrats and politicians dictate trade flows. A better option would be to reduce taxes and regulations to make it easier for U.S. corporations to compete internationally—without any government handouts.

This is an issue that should unite both liberals and conservative. There is no good reason that the Ex-Im Bank still exists.

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Has eminent domain abuse has backfired?

In June 2005, the Supreme Court effectively gutted the Takings Clause of the Fifth Amendment, ruling in Kelo v. New London that governments could take private property not just for public use but also for private purposes. This case involved Susette Kelo and other homeowners who resided in New London, Connecticut’s Fort Trumbull neighborhood who were fighting the local government for its use of eminent domain for economic development purposes — the theft of property from private owners to another.

Property rights are the very foundation of economic liberty and have a special protection carved out in the Fifth Amendment, which states: “[N]or shall private property be taken for public use, without just compensation.” The term “public use” had been viewed to mean something very specific. It allowed, for example, the use of eminent domain for the construction of a road or a school.

Though there are endless examples of eminent domain abuse, it isn’t a widely discussed issue. Perhaps one of the most well-known instances of the issue receiving much attention happened in the 1991 conformation of Clarence Thomas to the Supreme Court. During a hearing before the Senate Judiciary Committee, then-Sen. Joe Biden (D-DE) held up a copy of Richard Epstein’s 1985 book Takings: Private Property and the Power of Eminent Domain, denounced it, and declared that anyone who believed in the protection of private property wasn’t fit to serve of the Supreme Court.

At issue in Kelo was New London’s use of eminent domain to take private property from Kelo and her neighbors for economic development. The New London Development Corporation, an entity comprised of unelected officials, wanted to capitalize on a new Pfizer research facility and designed a plan to use the tracts of land on which Kelo and her neighbors home sat as part of a complex with office space, a conference center, and hotel to compliment the drug maker’s facility.

In the majority opinion, written by Justice John Paul Stevens, the Supreme Court redefined “public use” to include the taking of private property for economic development, relying in part on past cases, Berman v. Parker (1954) and Hawaii Housing Authority v. Midkiff (1984). “Promoting economic development is a traditional and long accepted governmental function,” Stevens wrote, “and there is no principled way of distinguishing it from the other public purposes the Court has recognized.”

The dissents in the cases, one authored by Justice Sandra Day O’Connor and the other by Justice Thomas, offer brilliant defenses of private property rights. O’Connor likened the decision to Robin Hood in reverse — robbing from the poor to give to the rich. “Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random,” she explained. “The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.”

Thomas, however, not only rejected the majority opinion, but also criticized the heart of the decision, writing, “This deferential shift in phraseology enables the Court to hold, against all common sense, that a costly urban-renewal project whose stated purpose is a vague promise of new jobs and increased tax revenue, but which is also suspiciously agreeable to the Pfizer Corporation, is for a ‘public use.’”

Thomas’ skepticism over the supposed economic benefits turned out to be prophetic. The land on which Kelo and her neighbors’ homes sat is still vacant and undeveloped. And, in an instance of beautiful irony, Pfizer left New London for greener pastures, taking with it 1,400 jobs.

Kelo is, of course, one example of promises of economic development and an enhanced tax base not quite panning out. But does it work in other places? The Mercatus Center at George Mason University has the answer. Mercatus has released a report that looks at the use of eminent domain for economic development purposes and its impact on tax revenue.

Building on previous academic studies, the authors, Carrie B. Kerekes and Dean Stansel, find that Kelo-style takings haven’t translated into a larger tax bases for state and local governments.

“When we expand further on the work of Turnbull and Salvino by examining subsequent revenue growth, we fail to find evidence that supports the hypothesis that eminent domain is positively associated with future revenue growth,” Kerekes and Stansel write. “To the contrary, using our more precise measure of eminent domain activity, we find limited evidence of a negative relationship between eminent domain and revenue growth.”

Even if tax bases were enhanced through eminent domain, it’s not worth the cost of undermining private property rights. Thankfully, a majority of states have enacted laws — either constitutional amendments or statutory changes — that protect private property against Kelo-style abuses.

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Supreme Court Spotlight: Want a Non-Dentist to Whiten Your Teeth? Not So Fast!

If the North Carolina Board of Dental Examiners had it their way, it would be illegal for you to see a non-dentist for teeth whitening services.

Like most ideas conceived by proponents of big government, occupational licensure laws claim to protect consumers. In reality, these regulations protect those already working in an industry by creating a barrier to entry to provide a given service, resulting in limited market choices and higher prices for consumers.

In this case heard by the Supreme Court this week, actions of the state-sanctioned licensing board, the NC Board of Dental Examiners are under review. After dentists complained to the board that non-dentists have been offering teeth whitening services, the board ordered that non-dentists are not allowed to whiten teeth. The FTC claims this Board action violates the Sherman Act; after the lower courts found in favor of the FTC, the Supreme Court decided to review the arguments.

Even the NC Board of Dental Examiners admits their actions are anticompetitive in nature. However, the question here is whether a state may create a licensing board and effectively set it loose, or if it must actively supervise board actions. The Board claims that as a bona fide state agency, its actions constitute a “state action,” and thus do not require any review from the state. The Sherman Act does not expressly aim to restrain state actions that regulate the economy, so certain state actions are granted antitrust immunity (Parker v. Brown, 1943).

In a 1985 case, the Court left open this relevant question: “In cases in which the actor is a state agency, it is likely that active state supervision would also not be required, although we do not here decide that issue. Where state or municipal regulation by a private party is involved, however, active state supervision must be shown, even where a clearly articulated state policy exists.”

Indeed, this is the danger with allowing occupational licensure to tyrannize the marketplace. With express permission of the state, professional licensing boards can use the power of government to keep out competition and protect their private interests and profits. As Eric M. Fraser at the Supreme Court blog points out, “a private cartel would almost surely violate the Sherman Act if it took the same actions as a state licensing board.”

It is clear to see self-interest seep out of this regulation from the NC Board of Dental Examiners. Keep in mind that consumers can find at-home teeth whitening kits at their local grocery stores. The argument that teeth whitening should legally be practiced by a state approved, licensed dental professional only is weak, except for the fact that the regulation strengthens the bargaining power of already licensed dental professionals, resulting in higher costs to consumers and higher profits for dentists.

But at this point, should it come as a surprise to see an agency granted state power used that authority to protect its own interests? The best thing to come from this case is a picturesque example of how government authority can be abused and must be kept in check.

Sources:

http://www.scotusblog.com/2014/10/argument-analysis-court-wary-of-immunity-for-licensing-boards-but-what-about-doctors/

http://www.scotusblog.com/2014/10/argument-preview-do-state-licensing-boards-have-immunity-from-antitrust-laws/

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Why Is The CDC Funding Healthy Teen Dating

Despite the scaremongering and whining from the Left, the inability for the Centers for Disease Control (CDC) to deal with Ebola has nothing to do with money.

The real question is not about the total budget but how the CDC spends it. It’s all about priorities.

As my FreedomWorks colleagues recently noted the CDC is not suffering from Republican budget cuts. Instead, the agency is a portrait of bureaucratic mission creep.

The CDC is the only agency whose goal is to combat infectious disease but over time the agency was transformed to an organization to mitigate all causes of disease and death including violence.

Obviously, violence in our society is a major problem but it’s a social matter not an infectious disease. But don’t tell that to the CDC or Congress that provides the funds to the agency.

The 2015 CDC budget request for $6.6 billion includes $194 million for injury prevention and control.

The goal of the CDC’s National Center for Injury and Control “is to prevent violence and injuries and reduce their consequences.”

The CDC’s Division of Violence Prevention addresses a wide range of topics from domestic abuse, sexual violence and elder abuse just to name some of the issue areas.

Regarding teen dating violence, CDC has a program called Dating Matters that is focused on stopping teen dating violence. The program targets middle school age children in at risk urban areas.

Let’s all agree we need to address violence in our society but we must have an adult conversation on how and where this should be addressed.

It’s easy and appropriate to criticize the CDC for its incompetence but let’s not forget that the bigger problem is Congress for seeking a federal appropriation for every problem we face.

Given the emerging threats from Ebola to enterovirus to antibiotic resistance bacteria as well as bioterrorism, I’d rather have the CDC solely dedicated to combating infectious disease.

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Surprise, taxpayers! ObamaCare will increase the budget deficit by $131 billion

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When ObamaCare passed Congress in March 2010, the Congressional Budget Office (CBO) estimated that the law would reduce the deficit by $124 billion over the next decade. The purported deficit reduction was, well, a rather rosy assumption because of all the budgetary gimmicks in the law, including Medicare cuts that are almost certainly never going to happen and backloaded costs.

The CBO has since released two more cost estimates, one in February 2011 and the other in July 2012, the most recent of which showed ObamaCare lowering the deficit by $109 billion. In a report released on Tuesday, Republicans on the Senate Budget Committee note, however, that because of lower than expected enrollments, unilateral changes to the employer mandate, and reduced economic output due to the law’s negative impact on the labor market, ObamaCare will actually increase the budget deficit by $131 billion over the next ten years.

“This estimate is arrived at by taking the $180 billion in projected deficit reduction from the CBO 2012 extrapolation and then accounting for the lower net cost of the coverage provisions ($83 billion), the lower estimated federal health care savings under the plan ($132 billion), as well as the lower projected revenue levels when including the labor market effects of the legislation ($262 billion),” the report says. “The difference between the 2012 extrapolation and the current estimate of the cost of the Democrats’ health law amounts to a $311 billion change in its net deficit impact.”

Here’s a breakdown of the projections from the report:

SBC GOP ObamaCare Report
President Obama and congressional Democrats can keep talking about the “deficit reduction” that ObamaCare will supposedly bring, but it’s, as expected, proving to be an epic fairytale.

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The United States gets a failing grade in tax competitiveness

The economy is trying to pull itself out of a deep rut, and many voices are asking the same question: what can the government do to help? For real, sustainable growth, the answer is that the government needs to loosen its grip on the economy.

The Tax Foundation has recently published a report that analyzes the tax policy of the thirty-four Organisation for Economic Development (OECD) member countries, which are more or less all of the advanced economies in the world. The results are jarring. The United States ranks 32 out of 34 in terms of the competitiveness of our taxation – only Portugal and the Socialist-led France rank lower than we do. The main factor in in this embarrassment is our bush league corporate tax rate. The Tax Foundation makes it clear: “The United States provides a good example of an uncompetitive tax code… The largest factors behind the United States’ score are that the U.S. has the highest corporate tax rate in the developed world and that it is one of the six remaining countries in the OECD with a worldwide system of taxation.”

While the rest of the world has been reforming its tax codes, the United States has been left in the dust. The last major change in the US occurred in 1986, and since then, OECD average corporate tax rate has practically been cut in half. Corporations are leaving our shores, as Logan Albright pointed out, and our uncompetitive policies makes investment a bad idea in the first place.

Not only is the corporate tax rate astronomical, but the United States suffers from double taxation. A corporation’s earnings are taxed, and then the payments to its shareholders are taxed again in the form of capital gains. Other uncompetitive factors are our inefficient property tax system and our income tax rates, which rank at 31 and 26 respectively.

Competition leads to better results, and this extends to nation-states competing for the most efficient and economically friendly tax policy. When the agile tax reforms of other nations made New Zealand’s rates seem lackluster by comparison, they quickly took action. The government enacted tax cuts and now New Zealand occupies the number two position in the Tax Foundation’s rankings. Unfortunately, American politicians don’t seem to make these things a priority.

When a majority of European welfare states are outclassing the United States in free-market tax policy, it’s clear that we have a lot of room for improvement. Taxation penalizes the productive behavior of market participants and gets in the way of growth. Even with one of the world’s most inefficient tax codes dragging it down, the United States is the wealthiest country in the world. If our government took real action to make our tax system less burdensome, our prosperity would be unprecedented.

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The Costs of Common Core Testing

Endless testing doesn't make education better.

Common Core educational standards, like all recent attempts to expand federal control of the education system, rely heavily on standardized testing in their efforts to improve the competitiveness of American students. It seems that bureaucrats on educational boards are capable of no more creative idea than that repeatedly drilling facts into children’s heads and then testing them to within an inch of their life is the only way to improve educational outcomes.

The theory itself is grossly flawed and ignores entirely the myriad ways in which children learn and succeed, but the federal fixation on testing persists, and now we’re all going to have to pay a price for it. I speak not only of the price to the students’ sanity, to the teachers’ flexibility, and to parents’ peace of mind, all of which have been written about extensively, but the purely fiscal cost to state governments as well.

In Montana, a new analysis reveals that Common Core tests are going to cost $27 per student, which adds up to $2 million for the state budget. In New York, the cost is $25 per test, totaling a $129 million bill for the state.

“But we’re investing in our children’s futures!” I can already hear you crying. “How can you put a price on that?” This point would have more weight if the money was actually going to teach children more, to reduce class size, to improve school choice, or to acquire better teachers. It’s not. This is money that is spent solely on testing.

Why are states willing to shoulder this financial burden in order to implement standards that are confusing, infuriating, and ineffective? Well, increasingly, they aren’t. More and more states are adopting legislation to withdraw from Common Core in favor of state based standards or a rethinking of the entire system. Louisiana, Missouri, Oklahoma, South Carolina, and Utah have withdrawn, with many other states considering legislation to follow.

But the states that remain committed to the standards do so because of federal threats to withdraw funding from Race to the Top grants to any state that doesn’t comply with Common Core. These grants can amount to hundreds of millions of dollars per state, outstripping the testing cost associated with adoption of the standards.

Testing is not the same thing as education, and extracting taxpayer money to implement more standardization and centralization without addressing the root problems with the school system is irresponsible and wrongheaded.

Of course, testing is not the only cost associated with Common Core. In total, the standards are expected to cost between $3 billion and $12.1 billion nationwide. It’s just another example of Washington throwing good money after bad, the latest in a series of failed education policies that stress the “common” in everything but sense.

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