Obamacare unravels; Republicans shudder

August 2, 2013

Republicans should have the upper hand with regard to Obamacare. Almost everything they predicted during the debate has proved true.

The Class Act provision was not viable and had to be stricken from the law.  Premiums did not go down as promised, but in fact increased dramatically.  A few major insurers have indicated their intention to withdraw from the medical insurance market, most notably in California. The medical device tax has been a lightning rod, drawing opposition from both sides of the aisle. 

The restriction (and near elimination) of high-deductible major medical plans has encouraged employers to cut employees to part-time status, limit workforces to avoid the mandates that kick in at 50 employees and opt to pay the penalties rather than offer insurance. The 1099 reporting requirement for businesses proved overly burdensome and had to be repealed. Time and time again, the opponents of Obamacare have been proved correct.

Most of this was forseeable. Still, Democrats continued to advocate positions that they knew would ultimately be proved wrong. Even now, with the whole program teetering on the verge of destruction, they remain remarkably stoic. Why? The answer: They never cared that the bill was impractical or unsustainable. They needed a political victory more than a viable reform..

This is perhaps the one and only time that the conspiracy theorists were proved right. The Democrats promoted and passed a predictable catastrophe. It now falls to Congress to fix it. And the only plausible fix for a catastrophe of this scope is single payer.

Republicans have launched a number of purely symbolic efforts to repeal Obamacare. Why doesn’t the repeal effort gain traction? Setting aside the obvious (Democrats control the Senate), my question is “If public sentiment is truly against Obamacare, what does the public want Republicans to do? They are clearly not hungering for the 40th or 44th version of a repeal that can’t pass.

Obamacare is the law now. It has beneficiaries and the Republicans need to replace Obamacare with something. Repeal alone is insufficient, Let me suggest the following: Republicans should propose a suspension of Obamacare, pending the consideration of a more thoughtful, less complex and fiscally responsible alternative. Eighteen months would be a reasonable time frame sufficient to fashion a truly bipartisan reform.  If that proves impossible, Republicans can head into 2016 with an actual Republican proposal on the table.

You can’t repeal or defund Obamacare leaving nothing in its place. We are past that point. The following reform, however, would resolve the issue of who is really in charge of an individual’s healthcare and would provide the market an incentive to provide the widest possible array of products, from long term care to major medical as well as comprehensive care.

The tax code should be immediately amended to allow every taxpayer to deduct all out-of-pocket medical expenditures directly from their gross income*, reducing the individual’s tax burden even for those claiming the standard deduction. This would return tax dollars to him/her that could be applied toward the purchase of insurance, medications, medical devices as well as hospital and physician’s services. This would encourage people to purchase the insurance coverage appropriate to their age, risk profile and financial capability.  Those, who choose to remain uninsured, will be able to reduce their gross income by the amount of their non-insurance related medical expenditures. All medical expenses will be paid for with pre-tax income.

Some provision will be necessary to address shortfalls in Medicaid spending and provide high risk pools. There are several options here as there are funding sources for Obamacare bureaucracies that might be diverted for this purpose.

If the Republicans want to repeal or defund the Affordable Care Act, they need to own the fix. The sign above the bar still reads Obamacare but the Republicans will own it now. So far , there’s precious little evidence that’s what they really want. 




* as adjustments to income rather than itemizable deductions*

Republicans don't know whether to **** or wind their watch

Republicans have cited three reasons for not supporting the strategy outlined in Senator Lee’s letter; 1) the war is already over, Obama won and the ACA is the law of the land, 2) the timing is bad because Obamacare will eventually fall of its own weight, and 3) we’re only going to get one crack at this and this particular strategy is destined to fail.

Point one: Wars typically end when one side surrenders. This capitulation is a little early, even for Republicans. The debt ceiling fight gives Republicans some leverage .While it will not result in a repeal of Obamacare, it will provide Republicans some leverage to extract cuts in ACA appropriations. There are parts of this bill that even Democrats would like to torpedo or defer until after the mid-terms.

Point two: No government entitlement program has ever fallen of its’ own weight. In the real world, the opposite happens; entitlements survive. The rosy fiscal projections are proved wrong and the only remaining fight is over funding the shortfall.

The third argument has a tiny bit of merit. This is the Karl Rove position. Unfortunately, Mr. Rove’s solution is to wait for a better opportunity to happen by. Come January 1, 2014 Obamacare will have beneficiaries. Any chance to overturn or curtail Obamacare spending ends the day that the subsidies go into effect. If Obamacare then implodes, it will saved by single payer. Single payer was the ‘failsafe’ position all along (or perhaps the intended outcome).

The Lee strategy would play better if it was accompanied by a serious proposal to change the tax code. We should make all individual medical expenditures payable with pre-tax income. This would guarantee the continued availability of high deductible, major medical policies.  In addition, the tax benefit would free up dollars that could be used for current healthcare needs

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A fictional character once observed that “when her mother was faced with a decision, she didn’t know whether to shit or wind her watch.” One way or another, time is running out. Republicans need a better strategy than fold and hope.

Deconstructing immigration reform

Deconstructing immigration reform

My politics are more aligned with Alan Keyes than Alan Colmes. Still, I'm not reflexively opposed to immigration reform. My only ‘non-negotiable’ is that any proposed reform is one that I could defend to someone pursuing legal immigration. The current Senate bill doesn’t pass that test; not even close.

The legal path to citizenship has four components; temporary legal authority, residency, permanent legal authority and naturalization. Legal immigrants endure lengthy waits to secure temporary legal authority in order to gain residency and hopefully pursue permanent authority and naturalization. The ‘undocumented’ acquire their residency through illegal acts and leverage the same to procure temporary authority and the resulting path to citizenship. The penalties for their transgressions involve a fine and a somewhat slower and more burdensome path to citizenship.

This is like telling the criminal who burglarized your house that he will be fined and put on probation for his crime but will be allowed to keep everything he stole while he was there. When this reform is implemented, the illegal will keep what he stole, residency in the United States.
 
Those who pursue immigration by legal means will no doubt get our admiration for waiting patiently for the past four (or six or ten) years. They will also get the back of our hand as we tell them to get back in line for however long it takes. It is the law, after all. All prospective immigrants await temporary legal authority. Unfortunately, the law-abiding wait back in Canada and Portugal while the law breakers are waiting in Arizona, Texas and South Dakota.

Any serious reform must first remove the obstacles to legal immigration that exist for some simply because they obey the current law. In addition, we must make certain that any temporary or provisional authority is conditioned on strict adherence to the law. Those who are 'in the shadows' will receive consideration for past violations of the law (amnesty if you will), but will not receive a free pass from this point forward. The legislation should require them to self identify in a timely manner. Failure to do so should preclude them from earning legal residency and should subject them to deportation.
  
“Mercy for the guilty is cruelty to the innocent.” It is a quote that is usually pulled out for unserious arguments. Not in this case. There are innocent victims here. People were skipped over. To ask those people to wait patiently and continue to abide by the rules while we assimilate and legalize the 'undocumented' is both indefensible and hypocritical.

This is a bad bill. They should scrap it and start from scratch. Democrats, naturally, portray this bill as compassionate. It is, but the compassion is directed toward the wrong people. Republicans should oppose this bill, but they are unable to defend  the high ground even when they own it. The media has displayed their usual deplorable lack of curiosity about the ethical ramifications of political acts.

This isn’t even a close call. Prospective legal immigrants are the harmed parties and any reform should consider them first. The sheer numbers of illegal immigrants may someday require us to make accommodations and perhaps embrace some broad-based legalization. The sensible response, however, should reflect the interests of the country at large, not the parochial interests of the lawbreakers. But… first things first. No amount of tinkering can fix this bill. The House shouldn’t act. If the Senate is serious about immigration reform, they should start over.

Open letter to Reince Priebus

Mr.Priebus:

The late folk singer Mimi Farina founded Bread and Roses, an organization dedicated to bringing live entertainment to those residing in hospitals, nursing homes, prisons, residential treatment facilities and hospices.

When Farina passed away in 2001, Pete Seeger paid tribute to her and her legacy saying “Bread and Roses fills an important need. It gives people hope in hard times.”  If Republicans want to broaden their appeal, they need to provide ‘hope in hard times.’

Consider the message Democrats take to prospective voters. The message is this: The game is fixed. The society is hopelessly corrupt and you are powerless to achieve and provide for your own safety and security. Your only chance is to permit the government to intervene on your behalf.

You need the government to protect you from employers, mortgage lenders, health care providers, law enforcement and gun owners as well as prejudice, discrimination, pollution, inflation, prices, market fluctuations and offensive speech.

Their low opinion of America and Americans is a campaign strategy. They sell grievance (America is corrupt and the citizens are helpless children) and they present themselves as the cure. The message is not hope; it is resignation. The best possible outcome some tolerable level of misery.
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So, what is the Republican message? Yes, it’s a rhetorical question; but were we to have one, let me suggest the following. America is not a perfect place, but it is a good one.  The game is not fixed, but life is still unfair. Republican government will know its place. It will be humble and limited as the founders intended. Republicans will trust citizens to run their own lives. We will not tell citizens whether to buy health insurance or enroll in graduate school. Republican government will neither mandate charity nor impede it. We will return control of your life back to its’ rightful owner.

What do Republicans believe and why? Republicans believe in private wealth. It is not a problem to be solved. Rather, it is an ambition to be cultivated.  Private wealth is a net benefit to society, whether in your hands or those of Mitt Romney, Bill Gates or even George Soros
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We support voter ID. It is a reasonable means of guaranteeing the integrity of legally cast votes. To do so, we inconvenience legal voters a bit. The ID requirement is no more burdensome than what is required to negotiate a check and it protects your vote from being nullified by someone who has forfeited or never possessed voting privileges.

Republicans endorse a practical resolution to the illegal immigration problem. We do not support reforms that give illegal immigrants preference over those actively engaged in the legal immigration process. The legal applicant awaits temporary legal status to gain residency. The illegal resident uses unlawful entry as leverage to gain legal status. Any accommodation made to illegal aliens is a kindness bestowed by other Americans. We support that kindness, but will not penalize those who are following the current law to achieve that end.

The minimum wage was never intended to provide life-sustaining income. Low wages provide an avenue into the workforce for those with marginal skills, minimal education or experience and problematic backgrounds. We do not support an increase in the minimum wage because it will close the door even tighter on entry-level workers. A worker who is not employable at $7.25 per hour does not have his prospects enhanced by raising the wage to $9.00 an hour.

The role of government is to maximize opportunities for those seeking to enter the job market. 98 percent of all full-time workers make more than the minimum wage. Once the door to the job market is open, the problem usually takes care of itself. The door is propped open at $7.25. It is locked tight at $9.00 an hour.

Every American is endangered by those who obtain guns illegally. Very few are threatened by those who acquire guns legally. Republicans will support reasonable gun restrictions at the state level, while recognizing that the proper emphasis should be on law breakers not on the law-abiding majority.  

Republicans understand that natural rights are not a dispensation of government (Ronald Reagan 1964). If entrusted with power, Republicans promise to meet our constitutional obligations and respect your constitutional rights. We will manage the government with a fiscal sanity that has long been lacking. The Republican Party acknowledges our past failings in that regard. We promise to do better.

Despite the pessimistic nature of their message, Democrats close well. The outlook may be dismal, but they portray themselves as the only way out.  Ronald Reagan and Jack Kemp were optimistic about America, had confidence in Americans and offered hope in hard times. It is really that simple.. You don't need an electoral autopsy. Win the hope argument and the elections will take care of themselves.  






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Obamacare/ Year in Review

At year’s end, the media revisit the preceding twelve months ; the deaths, the dramas and the politics
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Notably absent from most reviews of 2012 was any mention of Obamacare. The media didn’t discuss it and more curiously, neither did the Democrats. But Obamacare was newsworthy in 2012 and I want to give it the attention it deserves

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The president campaigned for Obamacare while claiming (repeatedly) it would cut family health insurance premiums by up to $2500 by the end of his first term. This would certainly be welcome relief and Kaiser released a study in September that measured our progress toward that goal. It indicated that annual premiums increased, on average, $3065 between Obama’s election in November 2008 and summer 2012. Every state expects to see rate increases of similar scale in 2013 and 2014. Some states, like California project far higher increases. Nowhere will premiums fall.

Proponents of Obamacare usually treat challenges to their economic projections as akin to treason. But the numbers came into question on other occasions in 2012. No item on the Obamacare agenda was questioned more persistently than the financial viability of the Class Act. The Class Act was designed to provide $50-100 per diem payments to disabled and elderly. These dollars would purchase home-based personal care services.

The president’s own debt commission recommended that it be repealed. On October 7, 2011, Secretary of HHS, Kathleen Sebelius acknowledged that design flaws made the program unsustainable,  ultimately  leading to repeal in February 2012. Sally Pipes wrote about this program extensively and predicted this outcome.

As the year ended, eighteen Democratic senators appealed to Senator Reid for a rescission or postponement of the of the 2.3 percent medical device tax. It is important to note that this is a tax applied to gross revenue, not net profit. It resembles a sales tax. It gets collected without regard to profit profit. Opponents of Obamacare in 2009 noted that the tax would harm competitiveness and impede research and development, the very position Democrats now take. Yet it is only now, after passage and before implementation, that Democrats have developed such reservations.

No one believed that Obamacare was going to result in lower premiums or that the Class program was financially sustainable. No one truly believed that the medical device tax would be a windfall for manufacturers. The tortured logic that supports this conclusion is we have created 30 million new customers through Obamacare and the resulting revenue increases will make the tax easy to absorb.

Politicians profess to believe things fhat they know to be untrue to advance legislation. Later they back away without an ounce of shame. The fight over Obamacare only ends if the Republicans phone it  in.