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Government
You’ve heard of the “October surprise,” when politicians pull some stunt right before an election to try and salvage it. Well, this year we may see a “Christmas surprise.”
The Wall Street Journal’s John Fund recently explained that Democrats are considering an ambitious lame-duck session when Congress returns after the November elections.
If Democrats lose control of the House and maybe even the Senate, their congressional leaders could return in early December with plans to tax and spend like there’s no tomorrow -- which, for them, there wouldn’t be.
If a number of Democratic incumbents has been defeated, why not “go for the gold” -- your gold, that is -- and ram through their Christmas wish list? New taxes, new spending, maybe “card check” for the unions.
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President Obama and the Democratic leadership, as well as many of the Washington chattering class, seem to agree: Failure to throw even more money at the economy will prove disastrous for Democrats in November.
Politico quotes Howard Gleckman of the Urban Institute as saying, “The question is, can [Democrats] create the perception that they have done all these things to create jobs, or that they tried but the dastardly Republicans prevented them from creating jobs?”
Rather than blaming Republicans, Democrats ought to thank them. Had Republicans been able to stop the Democrats’ uber-spending spree even earlier, the economy might have come back quicker and unemployment might be trending down.
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After President Obama’s election, conservatives were afraid he would drag the U.S. down into European socialism. We underestimated his vision.
A mere 18 months later not even the European socialists want to go where the president wants to lead—ever more government spending. Indeed, most of Europe is headed in the opposite direction.
- The U.K. has announced new austerity measures, including 25 percent budget cuts and a two-year public-sector pay freeze. Even the queen’s allotment will be frozen next year.
- Germany has said it will cut its budget by nearly $100 billion over the next four years.
- And France wants to cut its budget deficit from 8 percent of GDP this year to 3 percent by 2013.
By contrast, Obama tried to convince countries at the G-20 meeting to, lemming like, follow us off the economic cliff. They declined en masse. Read More...
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When a child wastes his allowance on foolish things, wise and prudent parents will be reluctant to hand over more money if that child comes begging. And that’s just how taxpayers should feel about a new effort to bailout labor union pensions.
Pennsylvania Senator Bob Casey has introduced the “Create Jobs and Save Benefits Act,” otherwise known as the “Buy Union Votes and Boost My 2012 Reelection Chances” bill. In essence, the bill would transfer billions of dollars in unfunded pension liabilities from mostly union-managed multi-employer pension plans to the Pension Benefit Guaranty Corporation (PBGC), which is backed by taxpayers.
But even as unions push for taxpayers to fill the gap in their underfunded and mismanaged pension plans, they drop millions of dollars in union dues on political causes.
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It’s not that often we get to praise the Obama administration, so when we get a chance we take it—which is what we’re doing here … sort of.
Anyone who knows Washington knows there is a fundamental flaw in the budget process. If an agency or department doesn’t spend all of its budget, the excess funds go back to the federal government.
Moreover, that agency may see its future budget cut by a similar amount, as the money gets redirected in the next budget cycle to the squeakier wheels. So agencies, reacting to the established economic incentives, routinely find ways to spend their allotments, whether they really need the funds or not.
Back in the 1990s, stories emerged that one of the defense department agencies found it had some $900,000 left at the end of the year and wasted it all on magazine subscriptions. That problem was fixed; the Pentagon can now shift leftover dollars around to other agencies.
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Republicans have kicked off their ObamaCare “repeal and replace” campaign, but there will likely be neither repeal nor replace unless Republicans control both Congress and the White House, and that’s 2012 at best — if then. However, by taking over only one house of Congress opponents can dramatically lower the unsustainable cost of ObamaCare by refusing to fund its worst elements. Here’s a few suggestions.
Reduce Medicaid eligibility. Historically, states have varied widely on Medicaid eligibility, with some setting the threshold significantly below the federal poverty level (FPL). ObamaCare sets a nationwide eligibility threshold at 133 percent, which increases the number of people in the government-run program by an additional estimated 15 million by 2019. Funding Medicaid eligibility only up to 100 percent of FPL would dramatically lower its cost. Read More...
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Even casual observers of the FCC should have noticed by now that the policy actions it has taken in the last year, and the comments made by some of the commissioners, make clear that at least a couple extreme so-called “consumer groups” that routinely visit with FCC staff are leading commissioners in radical policy directions.
Obviously we are supporters of the First Amendment and are cheered when the public speaks up, telling government what they think. It’s all part of our right to petition the government, including regulatory agencies. However, we also think that government agencies need to especially consider data and substantive facts and information, rather than just policy pressure.
We’re concerned that these days the FCC seems to be in the thrall of one or two left-leaning groups and is following ideology rather than working from easily observable business and market reality. Read More...
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So you’re 62 years old and have been downsized, laid off or forced into early retirement because of the struggling economy. And you think to yourself, “I’ll take early retirement under Social Security, which will provide a small but reliable (let’s hope!) income, and get a job that will pay maybe $20,000 or $25,000 a year to make ends meet.”
In a word: fugetaboutit!
That’s because Social Security will withhold one dollar for every two you make above $14,160 this year. It’s called the Social Security earnings limit, and it exists to discourage older Americans from taking early retirement under Social Security.
The original earnings limit was created with the passage of Social Security in 1935 to fulfill social policy, not economic policy. Read More...
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Recently the FCC decided it should examine the current “retransmission consent rules” to determine whether they are working for all parties, including broadcasters, content creators, service providers and customers.
Retransmission rules were adopted in 1992. They allowed US television stations to force video service providers, such as cable or satellite, to carry “local content” provided by the local television station (called “must carry”), or to negotiate with the video service provider for carriage of its broadcast programming.
But today, the rules need an update. Continuing the threat of “must carry” distorts price mechanisms and thus distorts negotiations—a short-sighted government construct rather than a true marketplace negotiation.
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The House Republican leadership has just announced You Cut (http://republicanwhip.house.gov/YouCut/) where, along with a greeting by House Republican Whip Eric Cantor explaining the need to get federal spending under control, the public can “vote” on several potential cuts in the federal budget. Votes can be rendered either on the website or from a cell phone.
This week’s choices include, among other options:
- $260 million for the presidential election fund. After singing the praises of government-financed elections, President Obama refused to take federal money because it would limit what he could raise. Eliminating this program would mean all presidential elections would be funded by private contributions.
- $600 million for taxpayer subsidized union activities. Read More...
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When an 18-year incumbent Senator is defeated in his party nominating process, apart from scandal, that's a shock to the system, and it's no wonder every pundit has an opinion on the matter.
Trouble is, they're almost all wrong.
Typical of the chatter is Juan Williams, who reacted:
"A guy like Bob Bennett, who is a right-wing conservative, is being driven out because he's not sufficiently conservative?"
Juan Williams misses the point, and in the process forgets that "conservative" means more than pro-life and pro-gun. Conservative also means, at least it used to mean, responsible in fiscal matters as well as in sexual and social matters. Limiting government spending, and especially limiting government's role in the economy. And, in the worst case scenario, if a gradual expansi Read More...
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On Fox News Sunday, anchor Chris Wallace asked Florida U.S. Senate candidate Marco Rubio, a Republican, if he still stood behind a statement he had made on the program a month earlier that he would support Social Security benefit cuts for people under the age of 55.
Rubio confirmed that he did, and went on to add that he believed all serious observers agreed that benefits would need to be cut.
We disagree, but more about that in a minute.
If we lived in a “post-partisan” political world, where ideas could be proposed and discussed in an intelligent manner, then we could have a rational discussion about benefits cuts.
But Washington’s political divisiveness has become a national embarrassment, with name calling, and scoldings and massive pieces of legislation being forced through without one single vote from the minority party.
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The phrase “free at last” is associated with spirituals and the emancipation movement. Today, physical slavery isn’t a threat; but economic slavery looms. And the economic shackles are growing heavier and tighter.
The Tax Foundation says that Friday, April 9, will be Tax Freedom Day. The organization defines Tax Freedom Day as “the date on which Americans will have worked long enough to have earned enough money to pay this year’s tax obligations at the federal, state and local levels.”
The Tax Foundation also tracks Tax Freedom Day by state. For Texas it was yesterday, April 5. It could be worse—and in a few years it WILL be a lot worse. It could also be a lot better.
Alaska was the first state to reach the goal this year, March 26. And Connecticut will be dead last, on April 27.
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I predict that one of the most common phrases in the American vocabulary over the next few years will be, “I didn’t know the health care bill would do that.” And Democrats will be saying it most.
Even as the president traveled to Iowa City to let everyone know Armageddon hadn’t happened, several large companies declared they would start health-reform-related write downs--AT&T for $1 billion.
Here’s the back-story. In 2003, Congress passed the Medicare prescription drug benefit. There was a concern among legislators that including that benefit might encourage large employers that provided retiree coverage to phase it out.
Republicans, who controlled Congress, decided to provide those companies with a subsidy, spending about $665 per retiree to subsidize the employer’s plan, but saving $1,209 if the retiree had been dumped into Medicare. Read More...
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Even as they force through massive new tax and spending increases, Democrats are trying to demonstrate their fiscal responsibility by proposing to eliminate congressional earmarks, except for nonprofit organizations (which is the majority of earmarks).
Their efforts would be more believable had they not pushed through, with zero Republican support, a pay-as-you-go, or "paygo," provision last February that requires Congress to pay for any new spending increases. Because just three weeks later they completely ignored their paygo rule to pass a $10 billion jobs bill--without a "payfor."
Actions belie words.
House Republicans have countered by proposing a moratorium on all earmarks.
Then Republican Senator Jim Inhofe of Oklahoma piped up in The Wall Street Journal claiming earmark control was much ado about nothing. Earmarks only amounted to 1.5 percent of discretionary spending.
So who's right?
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| So how did Social Security get tied up in health care reform? It’s kind of complicated so stay with me. The Senate version of the health care reform bill that the House is supposed to vote on this week—um, let me correct. Despite weeks of Democrats calling for an “up or down vote,” the House isn’t actually going to vote on the bill. It’s going to vote on amendments to the bill and, if they pass, the Senate version will be “deemed” to have passed—without an actual vote on the bill. Anyway, in the Senate bill is the “Cadillac tax” that makes employer-provided health insurance subject to taxation above a certain level. That means that employees with high-cost health insurance will, at some point after 2018, start paying more taxes—including Social Security taxes. Read More...
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By any objective measure, the rollout of broadband services to the country is going phenomenally well, and is largely being done with private capital and without involving taxpayer dollars. As you might expect, broadband providers have focused on areas where demand and market forces sufficiently incentivize private network companies. But there obviously remains the problem of areas where, for reasons of geography, population density, or other issues, making a business case for deploying broadband is a challenge.
The Federal Communications Commission (FCC) is about to reveal it’s recommendations to Congress regarding a National Broadband Plan. As part of the FCC’s efforts, they have solicited ideas from the public on what should be the elements of the plan.
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Members of Congress say they are concerned about the exploding budget deficit, though not so concerned, it seems, to stop all the spending that’s actually causing the deficit explosion—up to about 24.7 percent of gross domestic product (GDP).
President Obama’s solution has been to appoint, by executive order—because the Senate wouldn’t pass it—a bipartisan group to explore what the government can do to reign in the spending.
It’s like an alcoholic convening a meeting of other heavy drinkers to discuss how the alcoholic can cut back on his drinking—and having the meeting at a bar at happy hour.
Of course, everyone knows the committee will recommend some minor spending cuts and some major tax increases. The tax increases would pass and the spending cuts would be postponed until later—because spendaholics don’t really want to cut spending, they just want to say that they do.
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Is there a more dynamic industry than wireless communications?
In a relatively short time a cell phone has become a necessity to virtually everyone, and one of the areas of most rapid technological innovation is in wireless handsets. Every few months one company or another introduces a new, feature-rich handset, which consumers eagerly gobble up.
At the same time, service providers compete fiercely for customers, continually upgrading their networks to provide better and faster service and even financing consumers’ purchase of sophisticated handsets.
This is at least one industry that has succeeded in creating high-paying jobs, pleasing consumers, delivering innovation, and funneling tax revenue to virtually every level of government. You’d think government would be pleased, but from San Francisco to Maine, and at many stops in between, mobile phones are under attack by radical opportunists.
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| Senator Jim Bunning could probably use a hug. The retiring Kentucky Republican has been trying to get Congress to live up to its fiscal promises. And for that good deed he’s getting pummeled by Democrats, barraged by reporters and largely ignored by Republicans. This is not a good sign for all that promised future austerity by either party. Congress passed a new version of “pay as you go,” or “paygo,” legislation in February when it increased the government’s borrowing limit to $1.9 trillion. The goal of paygo is to force the government to find ways to offset any new spending. Democrats included the provision to help deflect criticism for their explosion in deficit spending. President Obama showered it with praise: "PAYGO would hold us to a simple but bedrock principle: Congress can only spend a dollar if it saves a dollar elsewhere. Read More...
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One of the challenges of putting out nearly daily content is to find a title for all of the various pieces. Ideally titles should be clever and also provide the reader with some idea of what’s to come.
The Federal Communications Commission (FCC) seems to have a similar challenge—how to “Title” various things, which is why you should be concerned about the recent talk of moving Internet oversight from Title I to Title II.
One might be forgiven for thinking this is just inside-the-Beltway meddling and jamming the iPod earplugs back in. But in fact it is just that freedom to stream music, play a massive multiplayer game, watch video, send messages, and enjoy the future bounty of innovation that could very well be at stake. One could say that the “open Internet” as we know it is at risk.
Communications systems of various sorts get placed under either Title I or Title II of the Communications Act of 1934. Read More...
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World markets have been worried about the financial disaster threatening Greece. And well they should.
The European Union member country recently revealed that it had been hiding its debt. Greece’s total debt is 113 percent of GDP for 2009, and expected to rise to 125 percent by 2010. E.U. rules require that total debt not be higher than 60 percent of GDP, according E.U. Business.
And so the markets stumbled for several days over the prospect of a Greek failure, until other E.U. countries hinted they might help out.
But looking at the mounting debt facing the U.S., we have to wonder if we’ll be the new Greece.
Veronique de Rugy of the Mercatus Center has just put together a chart highlighting our own challenges. It shows gross U.S. federal debt for 2010 at $11.9 trillion. That’s 94.3 percent of GDP. Not quite Greece yet, but heading that way quickly.
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When will the Census Bureau enter the 21st Century—or even the 20th?
It’s time to take the constitutionally mandated census once again. But while the rest of the country gathers and processes information with the speed of light, the Census Bureau still operates at the speed of shoes, where few, if any, technological tools exist to streamline the process. And they seem uninterested in improving their processes.
This is a recurring theme in government: the misapplication of government interest in technology.
The Internal Revenue Service (IRS) pushed for years to create a means for taxpayers to file their taxes online, even though the private market had created Turbotax, a popular and successful tool for individuals to file their taxes. Government plowed ahead and created an ability to file, but only because of an agreement with Intuit. Reneging on the agreement might have run the company out of business.
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Our thanks to FedEx Chairman Fred Smith for dredging up a 2001 IPI study and resurrecting its recommendations in a Wall Street Journal op/ed this past Saturday.
In his op-ed, Mr. Smith rightly touts accelerated depreciation as a powerful tool through which the federal government could stimulate real job creation in the private sector through tax policy.
He’s right—in 2001 IPI found that for every $1 in tax reductions through accelerated depreciation, the economy would reap $9 in increased GDP.
But depreciation fixes are not the only tax tools available to the feds to stimulate economic growth. Read More...
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In the federal government, regulators are not directly accountable to the electorate. While an elected official must account at every election for their actions, typically regulators, such as FCC commissioners, are appointed by elected officials and hence do not answer directly to the people.
This simple fact may explain the FCC’s seeming determination to assert increased government control of the Internet, or at least the belief by pro-government control activists that the FCC deliver their agenda on a silver platter.
Years ago, the FCC determined broadband would be regulated as an “information service” rather than a “telecommunications service.” So, the FCC decided, and later the Supreme Court agreed, that broadband is not to be burdened with antiquated “common carrier” regulations, rules created in 1934 to impose heavy government control of the then monopoly telephone system. Read More...
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President Obama introduced his budget this week amid lots of calls for Republicans to support the president’s laundry list of new and expanded spending programs, along with a minimal spending freeze and some tax cuts.
For example, Politico cites White House Communications Director Dan Pfeiffer saying that Republicans “have a responsibility now to partner with the President, to try to get things done for the American people.”
In short, Pfeiffer wants Republicans to quit being the party of “no.”
But bipartisanship is only good when the proposed legislation is good. And frankly, most of the president’s proposals have been stinkers.
Take the administration’s proposal to try accused 9/11 planner Khalid Sheikh Mohammed in downtown New York City. Republicans opposed the plan, as did most of the public. Read More...
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Would the REAL Obama agenda please stand up!
On Monday morning the White House released a plan for:
- Doubling the Child and Dependant Care Tax Credit for families making under $85,000;
- Limiting student federal loan payments;
- Expanding tax credits to match retirement savings; and
- Expanding assistance to families caring for elderly relatives.
All of which cost money.
But by Monday evening, the New York Times reported that President Obama wants to freeze spending on many domestic programs for three years, then tie future program growth to the inflation rate.
Talk about trying to have it both ways. So which is it?
Is the economy so bad that we need new or expanded spending programs? Or was last year’s spending spree so massive and irresponsible that we have to freeze the budget?
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With insurmountable majorities in both Houses of Congress, Congressional Democrats had the votes to jam through any piece of legislation they liked. They didn’t need the support of Republicans, and they acted as if they didn’t even need the popular support of the American people. They had the votes.
Or so they thought. Massachusetts’ new Senator-elect Scott Brown says the biggest driver behind his remarkable election was the people’s disgust with “the way things are being done.” Voters are unhappy with a ruling majority that seems intent to pass an agenda without regard to the will and concerns of the people.
It’s not too big a stretch to see a parallel situation at the Federal Communications Commission (FCC), where Democrat-appointed commissioners “have the votes” to jam through new federal regulatory control over the Internet through so-called “network neutrality” regulations.
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What Will the President Say in His State of the Union? The Institute for Policy Innovation’s Dr. Merrill Matthews says he has some explaining to do.
Washington is all atwitter over President Obama’s upcoming State of the Union address. And understandably so, because the president has some serious explaining to do, like:
- How he plans to get control of the $1.4 trillion federal deficit, more than three times the deficit Obama was so critical of under George Bush.
- And how he intends to pay for all the Democrats’ new federal spending. Yes, he could raise taxes, but he already has several new taxes in his health care bill.
- And maybe the president can explain why his much-boasted stimulus bill has had little impact on creating new jobs.
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 Fate of the Union |
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Something remarkable is going on in America.
I can’t quite explain it; I’m not sure anyone can. But we can use Democratic Senator Ben Nelson of Nebraska to exemplify the change.
In order to “persuade”—some might say “payoff”—Nelson to vote for Senator Harry Reid’s health care reform bill, Reid agreed that the federal government would pay Nebraska’s portion of the increased Medicaid cost—forever.
Nelson can be forgiven for thinking his so-called “cornhusker kickback” would be hailed back home as a great achievement because, in the past, it would have been. Trying to maximize federal revenue is like a state hobby.
And Reid certainly thought Nebraska would approve. Why, he essentially called the other states a bunch of chumps for not getting their own kickback.
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Immigration—next to imitation—being the sincerest form of flattery, it’s no wonder new Census Bureau figures show Americans moving to Texas as fast as they can. They like what they see here.
The federal nose-counters say new Texans in 2008-09 numbered nearly half a million—18 percent of all the population growth in the country. Only Wyoming and Utah, with smaller populations, drew larger percentages of newcomers.
We’re not talking just about the foreign-born. Domestic migrants to Texas—from New York, California, wherever—outnumbered international border-crossers two to one.
How come? A good climate would be part of it, and we’re talking both weather and the business climate. Whereas the policies of many other states don’t exactly encourage hard work, savings and investment, Texas pours rewards on workers and entrepreneurs.
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[The following is an excerpt from IPI’s comments filed today with the Federal Communications Commission (FCC) in its Notice of Proposed Rulemaking to regulate the practices of Internet service providers (ISPs)]
The intent of Congress to increase competition and innovation in communications through the Telecom Act of 1996 is finally being realized. Congress intended to deregulate and thus invigorate the communications industry through competition and market forces—and it did just that.
The wisdom of this approach is obvious: The United States today has a vigorously competitive communications marketplace, and consumers have access to a tremendous array of products and services, and all of the research and rollout have been paid for through private risk capital at no cost to the taxpayers.
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Can Congress Force You to Buy Health Insurance? Dr. Merrill Matthews of the Institute for Policy Innovation says only by ignoring the Constitution.
The health care reform legislation in Congress requires every American to have health insurance or pay a significant fine. But where does the U.S. Constitution give Congress that power?
Cyber News Service posed the question, and Democrats seemed to fumble for an answer.
Senator Ben Nelson of Nebraska is quoted as saying, “probably the same place that states have the authority to require, mandate if you will, compulsory auto liability insurance.” Claire McCaskill and some other Democrats agree.
Of course, state constitutions are completely independent documents and have no bearing on powers granted by the U.S. Constitution.
That document sets strict limits on federal power. Read More...
Limited Powers |
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Presidential elections are expensive—something liberals never tire of reminding us every four years when they push for some way to nationalize the cost of presidential elections.
Except, of course, in 2008. Liberals were remarkably quiet when then-candidate Barack Obama spent money like there was no tomorrow—$741 million, more than the Bush and Kerry campaigns combined in 2004—a mindset the president seems to have carried over into the presidency.
But as expensive as presidential campaigns can be, that’s only a fraction of the true cost taxpayers must pay after the candidate is elected.
And we are only now beginning to discover just how much the election of Barack H. Obama will cost. For example:
- There’s the president’s $3.5 trillion budget for 2010 that passed last April, by far the largest in history.
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Are You Looking for a Good-Paying Job? The Institute for Policy Innovation’s Dr. Merrill Matthews says you might try the government, it’s hiring and it pays very well.
USA Today reports that the number of federal employees making more than $100,000 a year is exploding. One in five now rakes in six-figure salaries.
In just 18 months:
- Defense Department workers making more than $150,000 grew from nearly 2,000 employees to more than 10,000.
- And the Transportation Department went from one person making $170,000 or more to 1,700 employees.
A government spokesperson says these are highly qualified people, and make less than the private sector. But federal employees also get much better benefits, all at taxpayers’ expense.
President Obama said he wanted to create a lot of high-paying jobs. Problem is, they’re all government jobs. Read More...
Government Jobs |
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Is It Time for Some Congressional New Year’s Resolutions? Dr. Merrill Matthews of the Institute for Policy Innovation says yes, before Congress bankrupts the country.
It’s time once again to encourage Congress to make some New Year’s resolutions.
First, with the national debt limit being pushed up to about $14 trillion and no end in sight, members of Congress must resolve to get federal spending under control.
The second resolution should be a commitment to more bipartisanship. This is the most partisan and polarized administration in recent history, barely able to get one or two Republicans to vote for a bill.
Third, Congress needs to be more transparent. Democrats are ramming through major legislation without letting Republicans or the public even see the bill, much less read it, until they’re ready to pass it.
Folks, this is no way to run a country. Read More...
Resolutions |
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What is the Tenth Amendment of the Constitution? The Institute for Policy Innovation’s Dr. Merrill Matthews says Washington may have forgotten.
The U.S. Constitution’s Tenth Amendment, which is part of the Bill of Rights, says that powers not given to the federal government belong to the states or the people.
So ask yourself, where does the Constitution give the federal government the power to:
- Mandate people have health insurance or pay a fine;
- Own and operate a major car company;
- Tell bank executives they have to take government money or else?
It doesn’t, and yet the federal government has done or wants to do all of that and more.
The Tenth Amendment expressly limits the power of the federal government. If Congress continues to ignore those limitations, then the public needs to impose its own limits—on the terms of those elected to Congress. Read More...
10th Amendment |
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President Obama keeps claiming he’s willing to “make the hard choices.”
But so far his administration has been characterized by a lack of said hard choices—except perhaps for his choice in dog breeds.
Congress finally got around to passing the 2009 fiscal budget in February, which should have been passed in the fall of 2008. The Democratic-led Congress preferred to wait for a Democratic president who would sign the fiscally irresponsible budget. That budget contained some 10,000 earmarks, which Obama campaigned against.
Did President Hard Choices send it back demanding a bill clean of earmarks? No, Obama signed it. And his press secretary defended the decision saying it was “last year’s business.”
How about the $787 billion stimulus bill, which was this year’s business? Did the president make any hard choices? Maybe, but only because he would have liked one even bigger.
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President Obama’s claim that health care costs are growing so fast that “doing nothing is not an option” would be a little more believable if he could point to a country that has been able to “bend the curve” on health care spending.
Health care reform advocates constantly remind us that all the other industrialized nations spend less that the U.S. on health care, both in the aggregate and on a per-person basis. But that’s not because those countries are more efficient. Most simply limit the amount of funds available to the system.
The problem with those arbitrary health care spending caps is that they are usually much lower than the economically desirable level. And so there is constant upward pressure to raise the cap.
Germany—one of the oft cited models for U.S. reform—is experiencing that pressure. Created by Bismarck in 1883, it’s the oldest publicly sponsored model.
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The American Cancer Society, World Health Organization, the Food and Drug Administration and the International Commission on Non-Ionizing Radiation Protection all agree: A survey of the recent scientific literature shows there is no clear evidence of any link between mobile devices and health problems. And yet some special interest groups are advocating for action based on only a couple European research reports while ignoring the overwhelming preponderance of the evidence. In the process those special interests are scaring the public.
Scaring people so much that some states and cities are considering whether they should impose regulations that would require health-related warning labels despite the lack of evidence, and ignoring the fact that government restrictions are already in place.
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Is the Stimulus Money Creating Jobs? Dr. Merrill Matthews of the Institute for Policy Innovation says yes, but for most Americans it’s a long commute.
One goal of President Obama’s stimulus bill was to create environmentally friendly “green jobs.”
And it’s done just that. The Washington Times reports that 11 U.S. wind farms have bought nearly 1,000 electricity-producing wind turbines, creating about 4,500 jobs, uh, oversees.
See, nearly 700 of those turbines were bought from China.
Now a new American-Chinese joint venture just announced it plans to buy nearly 250 Chinese-made turbines. That venture wants 30 percent of its $1.5 billion in funding from the stimulus money.
So if you’ve been looking for work for a while, you need to know that taxpayer-financed stimulus money is creating jobs.
And you might even be able to get one of them. Read More...
China Jobs |
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There’s maybe 15 new taxes in Senator Harry Reid’s health care plan, including new taxes on:
- “Cadillac plans” (that is expensive, not necessarily rich-benefit plans);
- Medical devices and cosmetic surgery (oops, there went the Hollywood vote);
- Drug companies, health insurers and insurance executives;
- New limits on contributions to flexible spending accounts and increased penalties on non-qualified health savings account expenses;
- Individuals who don’t buy and employers who don’t provide health insurance;
- And, of course, high-income earners, and much more.
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Got Your Swine Flu Vaccination Yet? Dr. Merrill Matthews of the Institute for Policy Innovation says it’s a preview for government-run health care.
When fears of a swine flu epidemic emerged last spring, the federal government stepped in to ensure the H1N1 vaccine was available for every American—promising 120 million doses by mid-October.
But with government managing the effort the vaccine makers missed their deadlines.
So now the government is allocating the early doses to those most in need, while millions go without.
There’s a lesson here for those who think the government should take greater control over the health care system.
We’re seeing vaccine shortages, rationing, waiting lines and people dying for lack of medicine. And no one’s taking responsibility.
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Swine Flu |
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It’s time to expose the lie that the Blue Dog Democrats—a coalition of 52 supposedly fiscally conservative House Democrats—are concerned about federal spending and the budget.
So far this year, the House has seen four major spending bills. Here’s how the Blue Dogs voted:
- The $787 billion stimulus package. Ten of the 52 Blue Dogs, about 20 percent, voted with every Republican against the unprecedented spending bill.
- President Obama’s 2010 federal budget. In April Congress took a vote on the president’s $3.5 trillion budget for 2010—by far the biggest spending package in history. Again, not one House Republican voted for the bill, but only 14 Blue Dogs (27 percent) joined them in opposition.
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So this man or this woman on the public payroll wants out; that’s to say, the man wants to become a woman, or the woman wants to become a man. It’s the taxpayers’ duty to pay for it?
Not so as anyone ever thought before. On the other hand, it’s a crazy time, and there’s this big health care debate going on in Washington, D. C. So, yes, Fort Worth is considering adding sex change operations to health coverage for city employees. Which would make Fort Worth a little bit more like San Francisco, where public insurance plans have covered sex change procedures since 2001.
Our bet is, Fort Worth people aren’t going to let Fort Worth city government model local behavior on what passes for normal in California. Read More...
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Is the President’s Stimulus a Success? The Institute for Policy Innovation’s Dr. Merrill Matthews says it depends on what one mean’s by success.
President Obama says his $787 billion stimulus package is a huge success.
Even though the economy’s lost more than 2 million jobs, the administration boasts that federal contractors who received $16 billion in stimulus money have created or saved 30,000 jobs.
As the ProPublica website points out, that’s spending more than $500,000 per job.
Hey, where do I sign up?
The administration also claims that for every direct job, an indirect job has been created or saved. So maybe 60,000 jobs.
Democrats now say the first stimulus was such a success they may want to do another. But if the first one had really created jobs, we wouldn’t need a second. Read More...
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Most politicians would wince at being accused of trying to push the biggest tax increase in U.S. history.
But under President Obama and the Democratic leadership in Congress, the question isn’t whether but which tax increase—the “cap and tax” bill or the health care reform legislation—is the biggest in U.S. history.
At IPI we’ve been trying to decide ourselves, but there are so many variables, moving parts and unknowns it’s hard to know.
The Wall Street Journal said last June: “Americans should know that those Members who vote for this climate bill are voting for what is likely to be the biggest tax in American history.”
To support the claim, the Journal cited the Heritage Foundation’s analysis, which found Waxman-Markey, the House version of the cap and trade bill, “would cost the economy $161 billion in 2020, which is $1,870 for a family of four. Read More...
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Money, money, money—all we need right now is a whole lot more of it. To finance, say, congressional Democratic lust for spending more on health care.
The supposedly “moderate” Senate Finance Committee plan for health insurance overhaul figures on Texas picking up an additional $20 billion in Medicaid spending over the next decade. That’s to pay for another 2.5 million program enrollees, on top of the 2.9 million we have right now.
There are places in the U.S. where Medicaid pays for about half of the births. Yet one of Congress’s top solutions to solving the problem of the uninsured is expanding Medicaid to even more people.
Here’s another fun statistic. Texas taxpayers right now pay about 42 percent—$19 billion—of state Medicaid costs, with the feds picking up the rest. In the 2006-07 fiscal biennium it was $13.1 billion.
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Has Smokey the Bear Moved to Washington? The Institute for Policy innovation’s Dr. Merrill Matthews says only you can prevent wasteful government spending.
The country’s forests are a national treasure. That’s why Congress appropriated millions of dollars in the stimulus bill for forest fire management, including $2.8 million for that much-loved national forest known as … Washington, D.C.
Now, Washington has its problems, but forest fires aren’t one of them
Steve Moore of The Wall Street Journal reports that when Senator John Barrasso of Wyoming discovered the funding, he introduced an amendment to reassign it to the U.S. Forest Service. The motion passed unanimously.
Ironically, Wyoming, which has lots of forests, got no forest fire management money.
Smokey the Bear used to say, “Only you can prevent forest fires.” And, I might add, only you can prevent Congre Read More...
Smokey |
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Has Washington completely abandoned any effort to stay within the parameters established by the U.S. Constitution?
Last week we learned that then Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke gave Bank of America CEO Ken Lewis an ultimatum: Go forward with BoA’s proposed merger with faltering Merrill Lynch or the government would fire BoA’s executives.
Excuse me, but under which article of the Constitution did the American people give any administration that power?
Similarly, is there any constitutional authority for Washington bailing out Chrysler and GM, then taking them over when just a bailout didn’t work, firing the executives and implementing its own hand-picked board and executives?
Is there any constitutional authority for gathering email addresses on those who might disagree with the administration, otherwise known as “fishy emails,” and using them for who knows what?
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With all the political tricks flying around Washington this week you’d think it was Halloween, but we still have more than a week to go.
Last week, Senate Finance Committee Chairman Max Baucus (D-MT) passed, to much fanfare, his health care reform bill. Much of the buzz around the bill is that the Congressional Budget Office (CBO) “scored” it as costing only $829 billion over 10 years. Democrats cheered.
(It goes to show you just how much ”change” the president has brought to Washington when you can preface $829 billion with the word “only” and no one laughs you out of town.)
But then it became clear that the only reason it came in under a trillion dollars is that the legislation didn’t include the “doc fix,” which costs some $240 billion or so. Read More...
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Do You Own a Green Car Yet? Dr. Merrill Matthews of the Institute for Policy Innovation says taxpayers may soon, like it or not.
The U.S. Department of Energy has just granted a $500 million loan to a start-up California car company that has never mass-produced a car.
Fisker Automotive’s first car, which rolls out next year, is a beautiful hybrid sports car. But it sells for $90,000, and is being made in Finland.
Fisker swears that the half-billion dollar taxpayer loan will only be used to produce a more affordable U.S.-made hybrid car—for $40,000. And that the loan will be repaid, with interest.
Of course, that’s only if the company can actually sell those cars.
American taxpayers already own Chrysler and GM. And now we’re investing a half-billion dollars in a start-up.
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The Obama Administration has earned kudos for their vision of using of technology to be a primary part of the solution to policy challenges from improved healthcare to efficient energy usage.
And while considering the application of existing technology to current problems is ahead of typical political thinking, it is still fairly two dimensional. The true promise of an information technology-based health system or of a smart grid for greener energy is the ongoing innovation, the promise of better and better solutions.
The administration and Capitol Hill need to broaden their thinking beyond particular solutions and begin considering ways to foster and empower a solution economy.
What makes up the solution economy?—a society that allows the freedom to innovate and experiment with ideas.
That requires an environment that encourages, or certainly allows, risk by providing reward. Read More...
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Eight months ago, when the Democrats and the administration rammed through the $787 billion stimulus package, the public was lectured that the massive spending bill was needed to “save or create” jobs and stop the rise in unemployment.
Well, unemployment has continued to rise—nearly 2.9 million jobs have been lost since the stimulus bill passed—flummoxing the administration. And unemployment is likely to cross the 10 percent mark soon.
Republicans tried to work with the administration in shaping the legislation. Republican leaders met with the president with a list of tax cuts they thought would leave more money in people’s pockets, encourage investment and economic growth, and would ultimately be more effective in stimulating the economy than a massive spending spree.
President Obama pooh-poohed their proposals. The president pointed out that Democrats won the election and so they got to decide. Read More...
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Somewhere lost in all of the heated rhetoric about whether or not to move the country to a government health insurance plan are the patients—those who are and who will be ailing but who could be helped by advances in technology if that technology were deployed and not hindered.
Lost in all the rhetoric is that all the pieces of health care must work together to work in the interests of patients—not politicians or bureaucrats.
While the healthcare reform debate goes on, other parts of government are acting to the detriment of a better healthcare system and causing near and long term harm to those whose future well-being depends on innovation.
Perhaps the greatest threat is the FCC’s newly suggested heavy regulation of the Internet. As currently proposed the new regulations could hinder network providers from giving priority to healthcare applications. Read More...
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Should Government Support the Arts? The Institute for Policy Innovation’s Dr. Merrill Matthews says not when it asks artists to support the government...
The Washington Times reports that the National Endowment for the Arts recently held a conference call with artists and arts organizations.
An NEA spokesman encouraged the artists to use their artistic skills to promote President Obama’s health care reform and other efforts. Which they did with public statements—within 48 hours.
Not coincidentally, these same artists had already received $2 million in taxpayers’ money.
When asked the NEA denied it orchestrated the call. When shown a copy of the call announcement and statements made on the call, the NEA clamed up, according to the Times.
There was a time when artists saw themselves as part of the counterculture, challenging the powers that be.
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Here’s another casualty of the economic downturn: Social Security.
The Social Security program operates on a pay-as-you-go basis. Money coming in from workers is neither saved nor invested, but rather pays benefits today for current retirees.
Government officials had predicted that Social Security would take in more than it paid out until 2016, whereupon it would start drawing down surpluses from the Social Security trust fund.
But the severe recession has hurt government revenues, which means the future is here. The Congressional Budget Office now says that Social Security is already short: $10 billion this fiscal year and $9 billion next year.
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It would be hard to imagine an industry today that is more “dynamic” than the wireless industry. In a relatively short time a “cell phone” has become a necessity to virtually everyone, and one of the areas of most rapid technological innovation is in wireless handsets. Every few months one company or another introduces a new, feature-rich handset, which consumers eagerly gobble up.
At the same time, service providers compete fiercely for customers, continually upgrading their networks to provide better and faster service and even
financing consumers’ purchase of sophisticated handsets.
It would seem that this is at least one industry that has succeeded in pleasing consumers, delivering innovation, creating high-paying jobs, and funneling tax revenue to virtually every level of government. You’d think government would be pleased, yet every level of government seems to have the wireless industry in its crosshairs.
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Advocates of the national health care overhaul scrambling to raise the taxes to pay for it have floated the idea of imposing federal excise taxes on soda, fruit juice, and similar drinks. The Center for Science in the Public Interest, a left-leaning advocacy group, wants to include energy drinks, sports drinks (e.g., Gatorade) and ready-to-drink teas as well.
But the tax would cover only a small fraction of any national health care bill. The Congressional Budget Office (CBO) estimates that imposing a tax of 3 cents per 12-ounce serving would raise $6 billion a year. One proposal would increase the price of a 20-ounce soft drink by 15 percent to 20 percent.
Such a tax would be regressive, hitting the poor harder than the rich. The tax may not seem like much to Washington policymakers, but it adds up, especially for hard-pressed families in these difficult economic times.
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| Here’s a great idea for health care makeover—one you’ve heard precious little about from the Obama administration, which claims to be so determined about reducing health care costs: Redo the laws on medical liability, counsels Texas Sen. John Cornyn. And then sit back and watch malpractice premiums fall and overall expenses slump as the trial lawyer spiders look for other flies caught in the frivolous-lawsuit net. How would Cornyn know any such thing? By looking around Texas, of course. “We know a thing or two about this subject in Texas,” Cornyn wrote recently on a D.C. blog. It’s kind of an understatement actually. A decade ago, Cornyn related, “frivolous lawsuits and jackpot justice” were pushing up insurance costs and driving physicians out of the state. Fluent trial lawyers talked particular juries in particular localities into sticking it to doctors they portrayed as hardly human. Read More...
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Late last week the new chairman of the Federal Communications Commission shared his view that it was critical for the Federal Government to start regulating the Internet. Hey, we’ve got an idea: Before the Feds start regulating the Internet, why not start using it?
Why not, for instance, try to crack the problem of posting the text of major legislation on-line for 72 hours before debate, so that all Members of Congress and informed Americans can see for themselves what is being considered?
We’re pretty sure that when our country was founded over 200 years ago, our representatives had a copy of the bill in their hands before they had to vote on it. Yet today, in the era of the Internet, mobile broadband and thumb drives, we’re told that this is impossible, unnecessary, or undesirable.
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Did the Summer of 2009 Transform American Politics? Dr. Merrill Matthews of the Institute for Policy Innovation says real change may be coming—next year.
Most Americans pay little attention to politics or public policy; not so last summer.
The public turned out en masse to hear their congressmen talk about the state of the economy, ballooning federal spending and debt, and health care reform.
And they wanted to be heard.
You’d think politicians would welcome this new-found interest in public affairs. But some congressmen shunned the public, even called them names.
Democratic leaders have called these interested voters “un-American” and “evil mongers,” though many were independents, seniors or even Democrats. And President Obama’s Organizing for America called them “Right-Wing Domestic Terrorists.”
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Like all of the Democrats trying to push through health care reform with no way of paying for it, Senate Finance Chairman Max Baucus (D-MT) has been on a quest to find new revenue for his plan.
He was considering imposing a tax on employer health insurance contributions above a certain level, say $20,000 for a family. That means that a worker with dependant coverage whose employer spends $25,000 a year on the policy would have to pay normal income taxes on an additional $5,000. The first $20,000 would still be tax free.
Besides raising revenue to pay for the legislation, there was an expectation that employees would opt for higher deductibles in order to stay under the limit and avoid the additional tax, which would eventually help bend the health care cost curve by lowering utilization.
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Should the Census Count Illegal Aliens? The Institute for Policy Innovation’s Dr. Merrill Matthews says citizens are what really count.
The U.S. Constitution requires the government to conduct an “actual enumeration” of the population every 10 years. A lot depends on that count, including how many congressmen each state will have.
For nearly 200 years the Census tried to determine whether a person was a U.S. citizen. But no more, say a constitutional law professor and a demographic expert in The Wall Street Journal.
A question to determine citizenship status is no longer on the Census.
The authors say that means millions of noncitizens, including illegal aliens, will be counted, making states with large immigrant populations look bigger than they really are. That means they get more congressmen and more power.
And that could make the Census as inaccurate as those Washington budgets. Read More...
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President George W. Bush had been in office a little more than a year when, on March 5, 2002, he decided to impose temporary tariffs on steel. It was clearly a calculated political move to try and curry favor with steel unions in the rustbelt swing states of Pennsylvania and West Virginia.
As if backtracking on its strong commitment to free trade weren’t enough, the administration pushed economist and presidential advisor Larry Lindsey into writing an op-ed for The Wall Street Journal defending the tariffs.
Conservatives around the country groaned for their friend Lindsey and pitied the fact that he was compelled to defend what he knew was bad policy.
Now President Barack Obama has imposed a 35 percent tariff on Chinese-made tires, and some are lamenting this as a reversal of his stated support for free trade. Read More...
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A pond’s a pond, a tank’s a tank. At least until they get to be bona fide federal problems under the Clean Water Restoration Act, a nifty piece of legislation that Wisconsin Sen. Russ Feingold is trying to float through Congress.
Feingold makes it sound easy and obvious. U.S. Supreme Court decisions in 2001 and 2006 held that the federal Clean Water Act of 1972 applies only to “navigable” waters. The senator says the two decisions provide clear sailing to pollution and unregulated development on 60 percent of the nation’s small streams and 20 million acres of its wetlands.
Feingold’s notion is to strike the word “navigable” from the original law, making it cover waters of every kind in a way, and to an extent, no mere judge can dispute. Texas Senator Kay Bailey Hutchison says that word “navigable” is the most important word in the legislation.
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In just a few weeks a tax you pay will increase – by 36%.
Part of some plan to fund health care? No. Another bailout? Wrong again.
Without a vote by Congress or a signature from the President, the unelected members of the Federal Communications Commission (FCC) have determined that despite recession, the highest unemployment in decades and rampant government spending, now is the time to hike a tax that almost every telephone user must pay.The FCC has raised the Universal Service Fund (USF) tax to 12.9%, up from 9.5%.
The federal USF tax, typically listed as an individual line item on phone bills, is levied to subsidize telecommunications services for low income households, schools, libraries, and consumers in rural or high cost areas. However, the federal universal service program is widely regarded as too large, too redistributive, largely unnecessary and with potential for serious problems due to lack of adequate oversight.
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Can Health Insurers Compete with a Government Plan? Dr. Merrill Matthews of the Institute for Policy Innovation says when the government’s accounting is so dishonest, who knows.
The real problem with a government-run health insurance option is the government would hide the costs, making it look more affordable than it actually is. We know, because that’s what Medicare does.
Medicare’s official administrative costs only count what it takes to process claims checks. Rent, salaries, management, even the numerous fraud investigations all appear in other parts of the federal budget.
Now some Democrats want to create a health insurance co-op with $6 billion of taxpayer seed money. If you were a private insurance company, you’d have to borrow the money and pay interest or sell stock.
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President Obama wants to make some changes to the current 401(k) regulations in an effort to make it easier for people to sign up for the plans and thereby save more for the future.
The fact is that many Americans are reluctant to invest (or save for that matter), and most invest very conservatively when they do.
The president wants 401(k)s and especially IRAs to become a voluntary opt-out program, where employees are automatically enrolled unless they choose otherwise. He also wants to make it easier for individuals to put money for unused vacation or sick-leave into their retirement plan, and to receive tax refunds in U.S. Savings Bonds.
These are largely very good ideas—in fact, ideas that were first proposed by conservative-leaning think tanks. But the president should have gone further to create parity among the various individual retirement options.
Workers are currently allowed to invest up to $16,500 this year in the Read More...
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After uncovering yet another troubling aspect of the current health care proposal, IPI recently wrote, “Because HR 3200 (the House of Representatives health care reform legislation) contains the most egregious violations of Americans’ privacy imaginable. Indeed, one way to characterize HR 3200 is as ‘The End of Privacy.’”
HR 3200 would protect your privacy right up to the point that it runs into the most disgruntled, curious or careless government employee.
Bad enough. But wow, did we miss the big story…
As it turns out, privacy is under attack from many new “programs,” creating a virtual pattern of turning a person’s private life into a public exposition. |
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How Do You Get Good Health Care in Great Britain? The Institute for Policy Innovation’s Dr. Merrill Matthews says become a dog.
A British physician writes in The Wall Street Journal that his dog has a better health care system than most Brits.
In the privately funded animal system dogs can:
- Pick their doctor, and change veterinarians if the service is bad.
- Have no waiting line.
- Get treated immediately.
- And the Brits even have a safety net system for dogs with no money.
The British public isn’t so lucky. The government, which runs the health care system, wants to ensure that everyone is treated equally, which means everyone is treated equally bad.
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President Obama says that his health care overhaul plan will reduce costs. But the career estimators at the Congressional Budget Office (CBO) say it will actually increase federal spending by close to $1 trillion. President Obama keeps saying that his health plan will reduce the deficit. But CBO says it will increase the deficit by hundreds of billions.
So now liberals are arguing that the CBO actually has a history of overestimating health costs and underestimating savings. A New York Times op-ed, echoed by the Commonwealth Fund, insists that CBO underestimated the cost savings from reduced reimbursements in the past for hospitals, skilled nursing facilities, and home health services, and from the market competition included in the 2003 Medicare prescription drug plan.
But the government’s official estimators actually have a long history of grossly underestimating the costs of new health programs.
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As most states have watched their coffers dwindle over the last couple years, state revenue authorities have become increasingly creative in finding ways to drain more money from the citizens via fees and taxes.
The healthy way to generate more revenue is to grow the tax base by attracting more businesses or residents to the state.
And attracting more businesses involves having appropriate infrastructure, skilled workers and competitive educational systems, but most of all maintaining a minimal tax and regulatory burden. For some reason, this seems beyond the reach of many state governments these days. Instead, it’s easier to go on a “tax grab,” looking around for easy new sources of cash.
But some sources of new revenue have the downside of also leading to new costs. Read More...
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Is the White House Monitoring Your Political Discussions?
Dr. Merrill Matthews of the Institute for Policy Innovation says the administration is looking for names....
The White House has released a video telling Americans that if they get an email about health insurance reform that seems “fishy” to send it to the White House.
That means the administration would have the email addresses, IP addresses, recipients of the email, and the allegedly fishy comments, which could be used to monitor future conversations or take other actions.
And yet the mainstream media seem oblivious to this potential threat to civil liberties.
Texas Senator John Cornyn has sent the White House a letter saying that he is unaware of any president ever asking Americans to report their fellow citizens for simply exercising their right to engage in political discussion.
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The late Senator Daniel Patrick Moynihan coined the phrase “defining deviancy down” in a 1993 article for the academic journal The American Scholar. His point was that as deviant behavior expands the public begins to redefine and even accepting it by lowering the standard for acceptable behavior.
That’s pretty much were we are with the term “paid for.”
What most people mean when they say something is paid for is that they own it free and clear. Any money borrowed to buy the item has been paid back. No one who had just borrowed thousands of dollars against future earnings to buy a car or home would say it was “paid for.” Yet that is exactly how President Obama is redefining the term.
Last week he cited four things he had to have in the health care reform bill. One of those requirements was that it had to be “paid for.”
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From the Institute for Policy Innovation (IPI)
Privacy advocates who enjoy focusing on issues like browser cookies, behavioral advertising, database privacy and deep packet inspection can just throw in the towel if anything approaching HR 3200, the current draft of the health care bill in the House of Representatives, becomes law.
Because HR 3200 contains the most egregious violations of Americans’ privacy imaginable. Indeed, one way to characterize HR 3200 is as “The End of Privacy.”
The bill creates a “Health Choices Commissioner” (henceforth sarcastically referred to as the Health Choices Commissar), and, of course, the Commissar needs to be able to pry into your finances. HR 3200 gives the Commissar the right to look at your tax return, so as to quickly determine your eligibility for services and for federal health care benefits.
Yes, it’s right there, on pages 195-196 Read More...
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Should ACORN Help the Census Bureau Count Americans? The Institute for Policy Innovation’s Dr. Merrill Matthews says not if accuracy is the goal...
The federal government is partnering with outside organizations to provide some manpower so the Census Bureau can do its 10-year count of Americans.
Much depends on an accurate count, so it’s extremely important the government use upright organizations with unblemished records.
So why’s it turning to the community-organizing group known as ACORN? The organization has already taken millions in taxpayer dollars, with more coming.
According to various news reports, ACORN:
- Is under investigation in at least 14 states;
- Admitted to more than 400,000 fraudulent vote registrations in 2008; and
- Is facing IRS tax liens for nearly $1 million.
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Last week U.S. Transportation Secretary LaHood proposed a summit in September to “address the dangers of text messaging and other distractions behind the wheel.” But revealing his real intent, he went on to say, “If it were up to me, I would ban drivers from texting…”
Secretary LaHood’s intent in this case may very well be good–saving lives—but his proposed solution smacks of political opportunism rather than serious intent.
The problem, of course, is distracted driving, not text messaging per se. Technological mandates and technological discrimination are nothing new in public policy proposals, but the effect of such tech-specific policies is short-lived as whatever technology gets specifically addressed will be passé in a matter of years if not months.
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Should We Pay Doctors More When They Do More?Dr. Merrill Matthews of the Institute for Policy Innovation says it’s a lot better than the alternative.
President Obama claims that one problem in the health care system is that doctors get paid more for doing more, and he wants to change that economic incentive.
Of course, all kinds of professionals can be paid more for doing more, including accountants, therapists and trial lawyers. But we’ve heard precious little from this administration about changing the economic incentives for trial lawyers.
The president seems to have in mind the old HMO model, where doctors were paid a flat monthly fee per patient. If the patient didn’t need much care the doctor profited; if the patient needed lots of care, the doctor bore those costs.
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So Congress ponied up an extra $2 billion last week for the Cash for Clunkers program.
Our elected solons were stunned at how popular the program turned out to be. And they’re apparently eager to placate an increasingly restive public, angered by government overspending, by … spending even more.
There’s a lesson in the Cash for Clunkers program that Congress should learn—but probably won’t—with regard to its massive health care reform effort: When the government hands out free money for something the public wants, it will nearly always underestimate the demand for that money.
Yes, those who have stalked Washington for many years can cite some programs where people didn’t take advantage of free money, but that’s usually because the restrictions and bureaucracy made it difficult to navigate the program. The Cash for Clunkers program wasn’t just free money, it was easy money.
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Is There an Easy Way to Reduce Greenhouse Gases? The Institute for Policy Innovation’s Dr. Merrill Matthews says it’s time for scientists to ask, where’s the beef?
The UN says that cows are responsible for 18 percent of the world’s greenhouse gases. That’s more than trains, planes and cars, combined.
See, a cow’s digestive system produces a lot of methane gas, which causes them to burp. And that methane goes into the atmosphere.
So scientists are working to change cow diets to reduce those gases—and, hopefully, global warming.
If they do, maybe we won’t need those little electric cars the government wants GM to make—but which consumers may not want to buy.
And we certainly won’t need the Democrats’ new “cap and trade” tax that will raise energy costs for every American household.
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Burping Bessie |
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Democrats just can’t seem to get a break on their budget numbers. It seems like every time they try to convince the public that they’re being good stewards of the country’s fiscal future, the Congressional Budget Office (CBO) shoots them down.
First there was the Democratic claim that the various House and Senate health care reform bills would “bend the curve” on health care spending. Not so, said CBO Director Douglas Elmendorf. Health care spending would go up—significantly.
Then, in an effort to get American Medical Association (AMA) buy in for their legislation, Democrats proposed fixing the “sustainable growth rate” (SGR) provision in Medicare that forces doctors’ reimbursement rates down if Medicare spending grows too fast.
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OK, OK, we’re No. 2.
Which is to say, Texas now ranks after Virginia, in a CNBC survey, as the best state in the country in which to do business. Last year we were No. 1.
We’re still tops for overall economy and for transportation and infrastructure. Maybe now is the time to ask what we’re doing right—especially with major governmental turnover in Austin coming our way.
And for the pats on the back, there are areas of needed improvement. Living costs here (7th lowest) are way below rival Virginia’s (27th ); but property taxes, on which state government relies too heavily, especially for education, will drag down our growth rate. Property taxation needs the major overhaul the Legislature should have given it this session.
In addition, Texas ranked 30th for education. Too many Texas high school students, especially in the big cities, never finish school. Read More...
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What Is a Monument to Me? The Institute for Policy Innovation’s Dr. Merrill Matthews says it’s a member of Congress who’s forgotten who he serves....
When members of Congress put pork-barrel funding requests in the federal budget, it’s called an “earmark.”
But when that earmark is to build or support some building or project named after that member, it can be referred to as a “Monument to Me.”
Rep. David Obey, a Wisconsin Democrat who controls the appropriations process in the House, has stopped the Monuments to Me—before Republicans ban them out right.
It looks a little too self-indulgent, he thinks, for congressmen to spend millions of taxpayers’ dollars putting their names on buildings and parks and airports. That honor should be reserved for members who have died or left office.
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Yesterday we learned that, in order to “stimulate the economy,” the federal government spent millions of dollars buying boiled ham. Pushing back against the public outcry, Secretary of Agriculture Vilsack proudly proclaimed that his department had purchased the ham for the needy, and at $1.50 per pound.
It didn’t take long for people to point out that any shopper could purchase that same ham for (drumroll please) about 79 cents per pound.
So the federal government paid twice the market price for ham, right? No, it’s worse than that.
When you’re buying millions of dollars worth of ham, shouldn’t you be able to negotiate the best possible price? A price lower than the full retail price that any consumer pays at the grocery store? Isn’t it more likely that the Feds paid 3 or 4 times what they should have for boiled ham?
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Should the federal government have the power to monitor and control Internet traffic to make sure that our critical cyber-infrastructure is not harmed?
New legislation seems to think so. The “Cybersecurity Act of 2009” would give the president the power to “declare a cybersecurity emergency,” allowing for the shut down or limitation of Internet traffic “in the interest of national security”— though “critical information network” and “cybersecurity emergency” are not defined and left to the president to determine.
There is no doubt that our cyber critical infrastructure is at risk. Every few weeks or so the mainstream press uncovers new reasons for concern—most recently after attacks presumably originating in North Korea on the Pentagon, White House and Department of Treasury among others.
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When Is Congress Like the Film Industry? Dr. Merrill Matthews of the Institute for Policy Innovation says when it releases lousy products and hopes the public won’t notice.
When members of Congress are running for re-election, they want to pass popular legislation shortly before the election so they can campaign on it.
That’s what happened in August of 1996. Both Republicans and Democrats passed a health care reform bill known as HIPAA right before the presidential conventions.
But when congressmen think new legislation will anger voters, they try to pass it as far away from the next election as possible.
That’s why President Obama wants to pass this year both health care reform and the cap and trade energy bill that creates huge new taxes with little effect on global warming.
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Bad Legislation |
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Well, who couldn’t have seen this one coming?
Presidential candidate Barack Obama campaigned on ending Washington’s culture of earmarks, where members of Congress specify how much and for which projects federal money will be spent in their respective states.
But President Obama has embraced earmarks, signing the $787 billion stimulus bill and the federal budget, both of which were chock full of earmarks.
Now comes the health care bill and, guess what, it appears the House and Senate versions will both include earmarks.
The Boston Globe reports, “Tucked within [the bill] is a provision that could provide billions of dollars for walking paths, streetlights, jungle gyms and even farmers’ markets.”
There has been a growing support in Washington for more preventive care and wellness programs. Read More...
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Generally we all love it when the Legislature goes home, leaving citizens to live life by and for themselves. Wouldn’t it have been nice, all the same, if our lawmakers had spent just a little extra time in Austin to work on eminent domain reform—one of the great unaddressed tasks of 2009?
Reform proposals didn’t get to the goal line during the regular session—but then, not many things did. Eminent domain reform didn’t even get on the governor’s call for the quickie special session in early July. It’s urgently needed, though. Here’s why.
Property-owner indignation over the taking of private land for supposedly public uses does restrain cities and counties a bit—just not enough to make owners breathe easily. The U.S. Supreme Court’s Kelo decision of 2005, okaying property seizure for “economic development,” shows that protective walls for property rights should be high and strong.
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Think It’s Expensive to Imprison Terrorists? Dr. Merrill Matthews of the Institute for Policy Information says not imprisoning them costs even more...
President Obama has finally found a way to empty the Guantanamo Bay detention camp of terrorists: paying other countries to take them.
Critics attacked President Bush for sending terrorists to Guantanamo, known as Gitmo. But no country offered to take them voluntarily. And members of Congress don’t want terrorists shipped to their states.
So the U.S. government will give the tiny Pacific island of Palau $200 million to take 17 of the least-dangerous terrorists off our hands. That’s about $11 million per terrorist.
The Wall Street Journal says at that rate we could spend $615 billion emptying Gitmo—if anyone will take the others.
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Terrorists |
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Congress has passed a massive “cap and trade” energy bill designed to raise the price of energy in the U.S. in order to reduce the use of fossil fuels by 17 percent by 2020 and by 83 percent by 2050.
President Barack Obama has called the bill a “jobs bill.” But sentencing the U.S. economy to high-cost energy is not a particularly good strategy for creating jobs. Charles River Associates, a Harvard-based economics consulting firm, estimates a net loss of about 2.5 million jobs each year.
During the campaign, candidate Obama also pledged that he would never raise taxes in any form on Americans making less than $250,000 per year. But his cap and trade tax is estimated to cost American families almost $2,000 a year when it becomes effective—due to higher prices for electricity, oil, gasoline, natural gas, home heating oil, coal, food and transportation costs—to almost $7,000 a year for a family of four by 2035.
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What’s the Best Way to Clean a House? The Institute for Policy Innovation’s Dr. Merrill Matthews says by letting the sunshine in.
Great Britain is reeling since London’s Daily Telegraph started digging into members’ of Parliament reimbursed expenses. While most of them were legal, many were also outrageous.
- About $3,400 was spent to drain a castle moat.
- Members expensed horse manure, changing light bulbs, tennis court repairs and massage chairs.
- And, one member even expensed an $8 charitable donation.
The scandal has led to several resignations. And the Speaker of the House of Commons has been forced out—the first to do that in 300 years.
In a preemptive strike, Speaker of the House Nancy Pelosi has ordered all House members’ expenses be posted online for public viewing. That’s a good start.
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Clean House |
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President Obama has been taking some political licks for backtracking on his campaign opposition to taxing employee health benefits.
Good. He so demagogued a somewhat similar proposal by his opponent, Sen. John McCain, that the president should be taking some heat for—at least potentially—flip-flopping.
That said, capping the employee health insurance tax exclusion is one of those public policy issues that deserves a serious debate—and it’s not getting it.
The money employers spend on employee health coverage is excluded from employee income. Not taxing that employer-provided income “costs” the federal government nearly $150 billion a year, according to the Joint Tax Committee (for 2007). And those with the richest insurance packages get the biggest tax subsidy.
Now, the tax code is often used to encourage certain behavior (whether it should is a question for another day). Read More...
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One could blog every day with instances like this, where Canadians with health emergencies end up having to come to the U.S. for treatment.
A critically ill Hamilton preemie turned away from McMaster Children's Hospital is all alone in a Buffalo intensive care unit because her parents don't have passports to get across the border.
Hamilton's neonatal intensive care unit (NICU) was full when Ava Isabella Stinson was born 14 weeks premature at St. Joseph's Hospital Thursday at 12:24 p.m.
A provincewide search for an open NICU bed came up empty, leaving no choice but to send the two-pound, four-ounce preemie to Buffalo that evening.
Her parents, Natalie Paquette and Richard Stinson, couldn't follow their baby because as of June 1, a passport is required to cross the border into the United States. Read More...
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Once again, the U.S. Congress is going to vote on a massive piece of legislation without even a couple of days to read and consider the details of the bill.
"The fastest speed-readers and the most intelligent minds can't make informed decisions with that much time. How can Congress?" Sunlight Foundation Engagement Director Jake Brewer said today in a statement. "The problem here is the bill wasn't developed in the open in a committee, so no one -- including those members of Congress not on the Energy Committee -- knows how this latest version was created."
The foundation points out that while the bill, formally called the American Clean Energy and Security Act, was 946 pages long last week, it has ballooned to 1,201 pages in recent days with little explanation for how or why. Read More...
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Nobel Prize Alert: Robert Reich has discovered a new economic law:
"Without the government as competition, the private sector has little incentive to improve."
This is truly breathtaking. As it turns out, it's not the private sector that drives innovation, growth and efficiency, it's the government.
In other words, we should credit the U.S. Postal Service for the innovation and efficiencies that have been gained by FedEx and UPS. They don't get the credit--they'd be big, fat, inefficient and wasteful were it not for the competition provided by the U.S. Postal Service.
Give me a break.
I'd like anyone, anywhere, to show me an example of where the government has competed along side of the private sector. Government doesn't compete with the private sector in any ind Read More...
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Are You Ready for a VAT Tax? The Institute for Policy Innovation’s Dr. Merrill Matthews says Congress is looking for more money.
The Washington Post reports that support is growing for a Value Added Tax, or VAT tax, to pay for Congress’s massive spending projects, like health care reform.
A VAT tax is similar to a sales tax, only the tax is charged at each level of production. So a car manufacturer would pay a tax on all of the raw materials and parts it buys to make cars. And then pass those multiple layers of taxes on to consumers in the form of higher car prices.
Politicians love a VAT tax because voters can’t tell how much they’re being taxed, or when the tax is increased. They only see much higher prices.
That let’s politicians criticize those “greedy” businesses for charging too much, while it’s the government that’s raking in the extra bucks. Read More...
VAT Tax |
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I have spent a fascinating several days on Twitter, literally talking to Twitterers in Iran, and in some cases talking directly to young people who were in the protests. I watched as demonstrators warned each other "don't go to the hospitals--the basijis are taking names at the hospitals" and "helicopters are dropping acid on the demonstrators." Amazing.
I had a discussion with one in particular who was pushing back at Twitterers in the U.S. who were excited and supportive of the demonstrations. This particular person was convinced that America (American neocons, to be specific) wanted the regime to stay in place because "America needs an enemy."
But by the end of the weekend I started to feel sorry for Twitter, because now Twitter matters to governments, and that's bad. Read More...
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Biased? Our media? Nobody believes that—except Texans who hoped for an explosion of righteous indignation after Democratic House members “chubbed” 229 bills in order to stop consideration of just one bill they didn’t like.
For five days they talked and walked sooooooo slowly through the Local and Consent Calendar that House business stopped dead. Five state agencies were awaiting reauthorization in order to keep going. Too bad.
The Democrats figured nothing mattered more than blocking a bill that required Texas voters to their ID before voting. So on they talked.
Yet no expressions of outrage from the journalistic big guys, no flaming editorials.
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Notice the gem in the last paragraph of this article from the U.K. Guardian, which otherwise is about the huge bonuses Goldman Sachs is getting ready to pay out to its partners because of a "record year."
Last week, the firm predicted that President Barack Obama's government could issue $3.25tn of debt before September, almost four times last year's sum. Goldman, a prime broker of US government bonds, is expected to make hundreds of millions of dollars in profits from selling and dealing in the bonds.
That's right kids--the more the U.S. government goes into debt, the better it is for Goldman Sachs.
And who supplies most of our Treasury Secretaries? Who had the most influence over the bailout bills?
This is not a disinterested firm, folks. Don't worry about the Carlyle Group. Worry about Goldman Sachs. Read More...
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Can We Rely on Data Saying the Earth Is Getting Warmer? Dr. Merrill Matthews of the Institute for Policy Innovation says a new study raises serious questions.
The U.S. government tracks ground temperatures with more than 1,200 small, climate-monitoring stations placed all around the country. Data from those stations are one reason why some scientists think the earth is warming.
But in a new study from the Chicago-based Heartland Institute, a meteorologist recruited 650 volunteers who took pictures of hundreds of those stations.
The team discovered that 90 percent of them failed to meet government-placement standards. Many were:
• Sitting by air conditioner exhaust fans; or
• Surrounded by hot asphalt roads or parking lots; or
• Next to buildings or on rooftops.
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Hot Air |
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Well, whatever else can be said about health care reform, it now seems clear it won’t be cheap.
Rep. Charlie Rangel (D-NY), who heads the House Ways and Means Committee, says he expects to raise $1 trillion for health care reform (over 10 years) by cutting Medicare and Medicaid spending by $400 billion (ouch!) and raising taxes by $600 billion (double ouch!!)
President Obama is putting a little detail in his proposed Medicare cuts.
- He wants to chop $106 billion from the disproportionate share hospital program. Actually, cutting the “DSH” program is reasonable. It’s federal money that reimburses certain hospitals that treat a “disproportionate” number of uninsured. If nearly everyone has coverage—and that’s a big IF—then reducing DSH payments makes sense.
- The president also wants to cut $110 billion by making “productivity adjustments” to Medicare providers. Read More...
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So you dodge one bullet. What about the next one? The budget bullet that’s going to be squeezed off in the direction of the Texas Legislature in two years, or sooner?
The Legislature wound up its 2009 session in fairly good shape as far as legislative shapes go. No tax increases. No raids on the “rainy day” fund.
Could have been worse—but may be in the future.
The Lone Star Report, an Austin political newsletter, reminds us that this go-round would have been a killer without federal stimulus spending. Seems that $6.8 billion in programs that would have been covered this year by general revenue are in fact being financed with stimulus money. That means a good-sized budgetary shortfall is coming at the next regular session in 2011. Of course, it’s possible that the Obama administration will still be handing out money then, but we can’t depend on it. Read More...
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When a politician argues that something is necessary to protect the children, you can almost always guarantee it’s time to hold onto your freedoms, your wallet or both. And so it goes in Louisiana.
Attorney General Buddy Caldwell is pushing for a first-of-its-kind law, now headed to the Senate, to raise taxes—though the AG calls it a fee—by at least $2.4 million a year on Louisiana taxpayers who simply desire being on the Information Superhighway. His reason? To “finance” a division of his office for investigating more sex crimes against children online.
The irony here is stunning. While the federal government is spending billions of stimulus dollars, including Louisiana citizens’ hard-earned money, to promote Internet usage, the AG is fighting the spirit, if not word, of the Internet Tax Freedom Act, designed to promote Internet usage and facilitate wider-spread adoption of broadband.
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Both Democrats and Republicans are coming together to support increased transparency in how funds are being distributed through the Troubled Asset Relief Program (TARP).
When TARP was passed under the Bush administration, it gave the Treasury Department, then run by Treasury Secretary Hank Paulson, the power to distribute the funds as Treasury saw fit.
Lots of people, IPI included, were concerned at the time that there was insufficient transparency and accountability in the legislation.
Under our system of checks and balances, it is Congress’ rightful responsibility to control expenditures of taxpayer dollars, and to exercise oversight over how and where funds are spent. Although Congress delegated to the administration of TARP funds to the executive branch, Congress should not give the Treasury Department a free pass.
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The Wall Street Journal reports that Senator Edward Kennedy (D-MA), who chairs the Senate Health, Education, Labor and Pension (HELP) Committee, will soon introduce his disability program known as the CLASS Act.
If you were taking some consolation that Congress had spent so much money over the past few months that funding its remaining wish list, like health care reform, was impossible, well then unconsolate yourself. The CLASS Act could siphon out of the economy the estimated $1.2 trillion over 10 years for the Obama health plan, with billions to spare.
The legislation creates a new government-run disability program. All workers would be automatically enrolled. People could opt out—at least that’s what we’re being told now—but sponsors don’t expect many people to do that.
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Congress has this neat little trick. Whenever it wants something done but doesn’t have the cash or credit, it passes the bill on to the states.
The states haven’t got the money either? Well, find it, Congress sweetly replies.
It’s called an “unfunded mandate,” and it’s how a variety of “good deeds,” like free treatment at emergency rooms (the Emergency Medical Treatment and Active Labor Act) and national standards for public schools (the No Child Left Behind Act), get implemented and paid for.
Understandably riled over such treatment, Texas House members voted 3 to 1 for an unfortunately non-binding resolution (HCR 50) telling the U.S. government, in essence, look, we’ve got constitutionally guaranteed rights around here, too, and, among other things, we’re “serving notice to the federal government to cease and desist certain mandates.”
And such a resolution co Read More...
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Can the Government Help You Get Thinner? Dr. Merrill Matthews of the Institute for Policy Innovation says not if it’s getting fatter.
The Obama administration wants to spend billions of dollars pushing us to be healthy.
But the town of Sommerville, Massachusetts, has found an easy and inexpensive way to encourage healthier lifestyles. It changed some of the foods in the public schools, replacing French fries, candy and sodas with fresh fruit, skim milk and other healthy foods.
The city also built some bike and walking paths.
When the program started seven years ago, 44 percent of the elementary school children were either overweight or at risk of becoming so. Within just one year the city noticed significant weight changes among the children. Now other cities are adopting the model.
We don’t need the government monitoring our calories. Read More...
Fat Government |
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Regular readers know that we tend to promote less government spending. But there are a few areas where current spending levels are justified; even an increase might be warranted. One such case: the Labor Department’s Office of Labor-Management Standards (OLMS).
Under the previous administration, Labor Department Secretary Elaine Chao fought for more transparency in labor union accounting practices—and got it.
Labor unions have been heavily engaged in political activities for decades, spending millions of dollars in union members’ dues supporting political candidates and labor-friendly policies.
But when reporting time would roll around, union management would report little or no political activity. The whole process was a complete sham.
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Is Your Social Security Check Safe? Dr. Merrill Matthews of the Institute for Policy Innovation says yes, but for how long?
When some of us raised concerns about Social Security’s financial soundness, liberals always accused us of being fear mongers.
Well, the fear is here. Steve Moore of the Wall Street Journal reports that President Obama’s budget says this year Social Security will pay out $8 billion more than it’s taking in.
It wasn’t supposed to hit this point for 10 years, but the economic downturn has hurt government revenues.
Defenders claim there’s still a Social Security trust fund to draw from. True, but the government has borrowed all of that money and spent it.
So Social Security is broke in fact, if not on paper. Monthly checks will no doubt still be paid, but it’s borrowed money—and borrowed time. Read More...
Social Security |
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Now we’re beginning to see how President Obama plans to “create or save 3 million jobs.” He’s just going to make government employees out of them.
Trying to get an accurate tally of all of the new government hires isn’t easy; in many cases they are simply part of the beefed-up funding for various departments and agencies.
The Partnership for Public Service, a nonprofit group that promotes government employment, thinks the administration needs to add 200,000 new government jobs. Our bet is that the president’s well on his way to reach that goal—and more. The Wall Street Journal reports that:
• The president’s budget creates 33,600 new defense department jobs by 2015, while it envisions cutting many of its current contractors.
• The Department of labor gets 1,000 new jobs.
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Who needs Weight Watchers, 24 Hour Fitness and cardio kickboxing when the Texas Senate is on the job?
State senators want you to eat right, just like they … er, well, like they should.
Prompted by El Paso Sen. Eliot Shapely—oh, sorry, Shapleigh’s the name, but you can understand our confusion on this point—24 good and true dietitians who moonlight as state senators voted last week to ban the use of most trans fats in Texas restaurants by 2011.
It’s good to know that with all the economic problems facing the state, what with unemployment, an explosion in Medicaid applicants, energy, and so, that the senators have the time to deal with the really important stuff—like outlawing trans fats.
Shapleigh’s bill now goes to the House, which is weighing its own version of the ban. Read More...
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Do You Smell a Foul Odor? The Institute for Policy Innovation’s Dr. Merrill Matthews says that smell may be pork-barrel spending.
In these hard economic times, at least the government is being careful with your tax dollars, right?
Well, Citizens Against Government Waste has released its 19th annual “Pig Book,” which identifies all of the pork-barrel spending projects in the federal budget, some 10,000 of them.
- Like spending $1.8 million for swine odor and manure management research in Iowa.
- And $4.5 million for wood utilization research.
While there’s about 1,500 fewer pork-barrel projects in this year’s budget, spending on them is up by 14 percent.
Yes, there are projects the federal government can and should fund.
But before we spend your tax dollars studying swine odor in Iowa, how about we figure out how to stop the stink from Washington Read More...
Pork Barrel |
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President Obama is proposing a radical restructuring of how the federal government taxes money earned and held by U.S. companies overseas.
U.S. multinational companies often leave their earnings in the countries where they’re earned and taxed by those foreign governments as a means of limiting their tax exposure in the United States, which has the second highest corporate tax rate in the world.
Mr. Obama appears to think companies that leave their funds overseas are unpatriotic for not returning that money to the U.S. and doubling down their tax obligations by paying an exorbitant corporate tax on the repatriated funds, after already paying taxes in the country of origin.
While Obama is using rhetoric about attacking the “tax havens” and other countries that don’t want to play the administration’s game, what he’s really attacking are America’s most globally competitive companies.
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When Texas Governor Rick Perry alluded to secession during an April 15 Tea Party tax protest, the media were all over him like a liberal on a tax increase.
Of course, he was joking, as we in Texas occasionally do about the notion of separating from the union. But there are some less radical and far more reasonable ways of severing our ties with the feds. And Senator Kay Bailey Hutchison has one of them.
The senator has this weird notion that what a state pays into the tax system should closely resemble what it receives. Texas sends about $3 billion annually to Washington in motor fuel taxes. For every one of those dollars, Washington thoughtfully remits to Texas about 92 cents. Some deal: pay more, get less! (Though, we have to say “pay more, get more government” doesn’t sound all that appealing either.)
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In 1990, Congress substantially increased the fees associated with obtaining and maintaining patents and trademarks. But what Congress gives it can also take away—which is exactly what it’s been doing.
The fee increase was designed to recover the costs of processing patent and trademark applications. While user fees may cover more than the cost of operating the United States Patent and Trademark Office (USPTO), some of those fees may be siphoned off to a general revenue pool to fund other government programs.
This diversion of user fees to fund unrelated government activities is unfair to those who pay the fees, and it’s damaging to our nation's economic health and progress.
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Can the Government Compare Medical Treatments? The Institute for Policy Innovation’s Dr. Merrill Matthews says the government is better at comparing price than quality...
Congress recently created a 15-member committee whose job is to compare various types of medical treatments to determine which is the most effective.
It’s known as comparative effectiveness research.
Now, there’s nothing wrong with scientists comparing therapies and drugs to see which works best. The government has been doing that for years through the National Institutes of Health and other agencies.
The concern is that this new committee won’t just ask what works best, but also which procedures and treatments cost the least.
And when government budgets are tight, there will be a lot of pressure for the committee to choose the least-expensive therapies.
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CER |
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It appears that Democrats in Congress have decided to use the budget reconciliation process—which allows the Senate to approve legislation with 51 votes rather than the 60 needed to quash a filibuster—in their effort to pass sweeping health care reform legislation.
For two months some Democratic leaders in the Senate, especially Sens. Kent Conrad (D-ND) and Max Baucus (D-MT) have claimed that health care reform legislation is too costly and important to force it through the reconciliation process. Both senators are from relatively conservative states, and Conrad stands for re-election next year, so they don’t want to rile their constituents.
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Does Congress Deserve a Bonus? Dr. Merrill Matthews of the Institute for Policy Innovation says not if the criterion is successfully managing an organization.
Remember how angry Congress and the country got when we learned that insurer AIG used $165 million of taxpayer money to pay bonuses?
The backlash was from a sense that the company had been horribly managed, and the rest of us would have to pay for it. Bad management doesn’t deserve a bonus.
Well, it seems that members of Congress have also handed out millions of dollars in bonuses—to their staffs. Up to $14,000 a person.
Now, many Hill staff are hard workers and may deserve a bonus.
But if bankrupting an organization and leaving taxpayers with billions of dollars in debt is the hallmark of poor management, that should be condemned, not rewarded, And that sounds almost like a perfect description of … Congress. Read More...
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We have been warning that the budget deficit being pushed through by this administration and Democratic-led Congress is unfathomable. But words don’t quite do it justice.
Thankfully, the nonpartisan Congressional Budget Office, which is charged with estimating the economic impact of all budget-related legislation, has given us a picture of future deficits under the Obama administration.
We take the point that the President inherited some of the financial challenges. But it’s how he’s addressing those challenges that’s the problem.
When President Ronald Reagan was first inaugurated in January 1981, he too was handed a weakened economy—weakened by four years of Carter policies.
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Allow us to make some informed observations about the “Tea Party protests” that have apparently escaped the mainstream media and those currently in political power in our nation’s capital.
(“Informed because IPI Resident Fellow Dr. Merrill Matthews spoke at the Dallas Tea Party event, and IPI president Tom Giovanetti spoke at the Denton County event.)
The Obama administration has dismissed the tea parties with feigned confusion. “We don’t understand what all these people are worked up about? After all, we gave 95% of them a tax cut, didn’t we?”
But people aren’t that stupid, and the tea party protesters aren’t just worked up about taxes. Read More...
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“When in the course of human events it becomes necessary for one people to dissolve the political bands that have connected them with another … a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.”
That’s how our Founding Fathers, with special thanks to Thomas Jefferson, began the Declaration of Independence. You can feel the sense of urgency in their voices. It was time for them to make plain and make public why they could no longer abide by the policies and practices of their rulers.
Tomorrow, April 15, Americans around the country, feeling something of the same urgency, will turnout at town halls and other spots around the country. And they will declare their grievances: that the government is getting too big, too intrusive and spending too much.
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Should Governors Refuse Part of the Stimulus Money? The Institute for Policy Innovation’s Dr. Merrill Matthews says four governors are … and it’s costing them.
The governors of Texas, South Carolina, Louisiana and Mississippi claim that part of the money from the stimulus package will force them to spend more in unemployment benefits in the future—after the bailout money’s long gone.
So they’re taking a principled stand and turning down part of the funds.
Steve Moore of The Wall Street Journal reports that their refusal has Democrats hopping mad. The Democratic National Committee is running ads in South Carolina criticizing Governor Mark Sanford for not taking “free” money.
Of course, the money isn’t free. Our children and grandchildren will be handed the bill.
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Governors Bail Outs |
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Camille Paglia continues to delight with her intellectual honesty in her latest Salon column. Here is a particularly rewarding passage, though you should follow the link and read the whole thing.
Yes, something very ugly has surfaced in contemporary American liberalism, as evidenced by the irrational and sometimes infantile abuse directed toward anyone who strays from a strict party line. Liberalism, like second-wave feminism, seems to have become a new religion for those who profess contempt for religion. It has been reduced to an elitist set of rhetorical formulas, which posit the working class as passive, mindless victims in desperate need of salvation by the state. Individual rights and free expression, which used to be liberal values, are being gradually subsumed to worship of government power. Read More...
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I fundamentally believe that, ultimately, government is always about control. Yes, there's plenty of rhetoric about helping people, doing good, creating jobs, protecting people from bad stuff, etc., but ultimately the result of almost everything government does is control.
Accordingly, about a month ago it occurred to me that the feds were going to quickly come to enjoy all the control they had gained over banks and financial institutions as a result of the bailouts, the TARP money, etc., and that they weren't going to want to give it up. It occurred to me that they were going to make it as difficult as possible for financial institutions to pay back the money, because they want to maintain control. They like being able to fire CEOs, replace boards, set salaries and compensation policies, etc. I'm sure they've already got plans about dictating lending practices to an even greater degree than they already do through existing legislation. And so it occurred to me that we we Read More...
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This week the Federal Communications Commission (FCC) asked for input about PEG channels (public, educational and governmental access channels) in the states as PEG activists demanded that:
- Preferential spectrum be preserved for these channels and preferential menu placement of PEG channels be given; and,
- Video service providers be restricted from moving PEG channels from old analog technology to new digital delivery.
These channels often include (if you’re lucky) a school board or county council meeting. But they often carry obscene, offensive or wasteful
programming—such as the channel that shows a bird feeder 24 hours a day.
The short answer to the FCC’s question is "no." PEG content should not be considered sacred or treated preferentially compared to other video content.
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President Barack Obama and the U.S. Congress have gone on a spending and debt spree that the country cannot afford. As a result, a spontaneous grassroots movement is emerging from every corner of the nation with a message for Congress and the president: Stop spending us into an inevitable spiral of debt and higher taxes … now!
To that end, groups of Americans will be meeting in towns and cities across the nation on April 15 for “Tax Day Tea Parties” (think Boston Tea Party, not biscuits and fine English china). These “Ten Tax Facts” are our effort to make sure the American people are well- informed as they gather together to express their concern about the direction Washington is headed.
#1 .Under the Obama budget, the Congressional Budget Office (CBO) projects that the national debt will double over the next five years; and it will triple over the next 10 years to $17.3 trillion.
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“Merger mania is gripping the global pharmaceutical industry” scream the headlines. Pfizer is buying Wyeth, Roche is buying Genentech, Merck is buying Schering-Plough, Gilead is buying CV Therapeutics, and GlaxoSmithKline is rumored to be considering purchasing Allergan.
The best way to understand all these pharmaceutical mega-mergers is to recognize an industry battening down the hatches against the coming tsunami of harmful government policies that are aligning against the innovative pharmaceutical industry.
The first is the Obama administration’s push for health care “reform.” The pharmaceutical industry has long been the scapegoat for high health care costs, despite the fact that drugs are responsible for only about 10 percent of all health care costs, and its growth rate is down to 4.9 percent, the lowest since 1963. Read More...
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So now the Democrat-controlled Congress is pumping money out of Washington in an effort to stem a catastrophe—and lots of bad press. And it turns out this Congress isn’t any better at it than the Republicans were.
When Hurricane Katrina hit New Orleans in 2005, the city’s levees broke and disaster flooded in. President George W. Bush was initially slow to respond.
But once the public outcry rose to a crescendo, the government began churning out so much money so quickly that the normal processes for ensuring the money was spent properly were ignored.
That led to numerous negative news stories about exorbitant spending and shady operators reaping huge profits, making the Bush administration look not only uncaring, but incompetent.
Well, now money is beginning to pour out of Washington to rescue us from the economic downturn.
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Are you excited about handing over your personal information to a clerk who you don’t know and may not even like?
You don’t have to now—but you will if you buy a prepaid cell phone after the state passes state Senator John Carona’s (R-Dallas) legislation.
The Texas Senate will have a hearing to consider Mr. Carona’s bill (SB 1635), which requires purchasers of prepaid cell phones to provide the vendor with a valid drivers license with a photo ID, complete address and date of birth.
The senator sees his bill as a crime deterrent. Since some criminals use prepaid cell phones as a way to avoid detection, the legislation would force them to register. And we are sympathetic with the bill’s intent.
The problem is we aren’t sure the legislation would actually prevent any crimes, and we are dead certain it creates all kinds of privacy and liability concerns.
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Why Is the Stock Market Going Down? The Institute for Policy Innovation says the market knows something the president doesn’t...
There are reasons why the stock market’s been tanking this year. It’s pricing in President Obama’s policies. For example, he wants to:
- Raise the income tax rate on higher-income workers from 35 to 39.6 percent;
- Lower their ability to write off charitable contributions;
- And raise the capital gains tax from 15 to 20 percent. That’s the tax people pay on investments like the stock market.
Higher-income people will have less to invest in the market, and will get to keep less when they do.
Those lower returns mean demand for stocks will fall—and so does their price.
While not everyone invests in the stock market, we all have an interest in it doing well. Read More...
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The New York Times reports that the Obama administration is open to the idea of taxing some employee health insurance benefits.
The Times continues by noting that such a tax might create some political difficulties for the president, since he ran campaign commercials criticizing his Republican opponent John McCain for proposing exactly the same thing.
Of course, there was one teeny, weenie little difference: McCain also proposed a $5,000 per-family refundable tax credit intended to offset the increase in taxable income. The Obama administration apparently would use the increased tax revenue to pay for its health care reform goal of providing universal coverage.
The current tax break for employer-provided coverage is unlimited; every penny the employer spends on coverage is excluded from an employee’s income.
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Some nice ideas are nice only as long as they stay ideas. For instance, Plano Independent School District’s recently disclosed notion of a wireless Internet network for low-income families and students.
Sure, it sounds nice: a community wireless network linking low-income students and their families to the school district’s resources, using an already-existing wireless network.
All Plano needs now is some great stories to tell about where the idea has actually worked. And lots of extra cash—that’s something else that would be nice.
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Officials at the NTIA (the Commerce Department’s National Telecommunications & Information Administration), the FCC and the USDA, (yes, the Department of Agriculture) held a meeting earlier this week to begin to decide how to spend the $7.2 billion in “economic stimulus” funds for the rollout of broadband to un-served and underserved areas as mandated by the recently passed, so-called “stimulus bill.”
These expenditures are rife with controversy and potential to harm rather than enhance broadband deployment, but in at least one area the answer should be pretty clear—reject any plans to expand the costly and failed initiatives of municipal broadband networks.
The NTIA should not support the advancement of taxpayer-funded networks. With all of the bailouts and extensive list of pork projects taxpayers are already shouldering, the last thing they should have to pay for is failed municipal broadband projects.
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“If we want to create jobs and rebuild our economy, then we must address the crushing cost of health care this year, in this administration,” President Barack Obama recently claimed. “By a wide margin, the biggest threat to our nation’s balance sheet is the skyrocketing cost of health care.”
The president’s claim—echoed by his Office of Management and Budget Director Peter Orszag—is ridiculous.
Yes, we do spend more on health care than any other country, about 16 percent of our GDP. But we also spend more on cars than any other country, and the administration is trying to get us to buy even more of them—especially “green” cars.
The president says if we don’t buy more cars people will lose their jobs, and companies—especially the automakers—may close.
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In testimony March 8 before the United States Senate Banking Committee, New York Insurance commissioner Eric Dinallo said he isn’t opposed to federal regulation of insurance; its giving insurance companies the option to choose federal regulation over state regulation that he opposes:
I can have a serious conversation about a federal regulator. My view is it shouldn’t be an optional federal regulator…you shouldn't be able to choose the regulator. I'm not steadfastly against any federal involvement in insurance regulation. I feel very uncomfortable about optionality (sic).
A careful examination of Dinallo’s argument reveals that his opposition to allowing insurance companies the same option banks have to choose which level of government regulates them is really all about protecting states’ current regulatory monopoly over insurance regulation, not about achieving the optimal regulatory arrangement. Read More...
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Here’s the answer to the earmark controversy still raging in Washington, D. C.: good old-fashioned sunshine.
“Earmarks” are those pesky little tags on federal spending. Texas Rep. Ron Paul likes to say that earmarks aren’t new spending. He’s right. When Congress passes a budget, it often includes money for states.
The question is who decides how to divvy up the spoils: members of Congress or state-level elected officials and bureaucrats. Members of Congress say it’s better to let them make those decisions.
Dallas Congresswoman Eddie Bernice Johnson claims, “I’ve never asked for anything that didn’t benefit my district.” Well, ma’am, how do we know? Should we take such affirmations on faith? Don’t believe so: not with Congress and the White House playing around with trillions of our dollars.
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Should We Fear Another Great Depression? Dr. Merrill Matthews of the Institute for Policy Innovation says the real threat comes from government policies...
Economic times are tough, but are things as bad as the Great Depression of the 1930s?
President Obama used the fear of another Great Depression to rally support for his economic stimulus package.
But economist Bradley Schiller, writing in the Wall Street Journal, disagrees.
- While unemployment is at 7.6 percent now, it peaked at 25 percent in 1932.
- The economy may decline about 2 percent this year, but from 1930 to ‘32 it declined between 8 and13 percent each year.
- Finally, auto production declined 25 percent last year, but 90 percent in 1932.
It was government policies that turned the 1929 recession into a decade-long depression. The real fear is that government policies will do it again. Read More...
Great Depression |
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So Tuesday night I'm watching a bit of Kudlow, and Larry is talking with a screen full of people about some of Treasury Secretary Tim Geithner's recent moves and statements. (this is the video)
Kudlow says something like this to Don Luskin (who is a fellow supply-sider but with whom I've had a minor run-in in the past): "I don't understand how this guy [Geithner] thinks. He's a bright guy. He's not stupid, right?"
To which Don Luskin replies "I don't think we can rule out that he's [Geithner] stupid."
Funny line, but tragic if true.
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The election of Barack Obama has sometimes been characterized as a return of John F. Kennedy’s “Camelot.” Both Obama and JFK were young, attractive, articulate senators, with accomplished wives with young children.
Both Kennedy and Obama came to office amidst economic concerns. But when Kennedy became President, higher-income people paid significantly higher rates on their taxes than middle-income workers. Sound familiar? That’s exactly what President Obama wants.
But not President Kennedy. He thought tax rates on high-income earners were too high and stifled investment. And Kennedy’s push for lower tax rates resulted in a burst of economic growth and economic recovery.
Kennedy began a trend moving tax rates in the right direction—down. President Obama is taking tax rates the other direction.
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Nope, no such thing as a free lunch. No such thing as free federal money, either—as Texas and other states are learning.
Under the just-passed $787 billion stimulus law, Texas is due nearly $17 billion—$555 million of it for increased benefits to the unemployed. Hold on, though. It appears that to get the latter sum, the state has to change some eligibility requirements in current law, making benefits available to thousands of temporary and part-time workers. Permanently. Forever.
Of course, when the stimulus money runs out in about two years, the Legislature could, technically, say to these newly covered workers: That’s it; see you around.
We all have a big picture of that happening, don’t we?
No wonder Gov. Rick Perry and several other governors—from Mississippi, Georgia, Louisiana, Idaho, South Carolina and Alaska—grumbled last week that they might steer clear of some of the stimulus money. Read More...
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In a desperate scramble to balance their state budgets, state legislators in many states have seized upon the idea of “increasing revenue” (read: raising taxes) rather than taking actions to live within their means. Whether it’s:
- Expanding communications taxes in California;
- Arguing in New York that a store does not have to be in the state at all to levy taxes; or,
- Florida urging the passage of federal legislation to “enable states to collect Internet sales taxes” before the state does its assigned work.
The goal of all is to get more money to spend—and they want it now.
Let’s take Florida. Years ago the U.S. Supreme Court said that states are able to force merchants to collect and remit sales taxes for goods sold to state residents (as they do today for purchases made in the state). Read More...
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Can’t Figure Out Your Taxes? Dr. Merrill Matthews of the Institute for Policy Innovation says you’re apparently not alone...
Rep. Charlie Rangel, who heads Congress’ tax-writing committee, was recently exposed for not paying $11,000 in taxes on rental income from his Caribbean resort home.
The new Treasury secretary, Timothy Geithner, just paid the payroll taxes on past income that he had ignored for years.
And the former leader of Senate Democrats, Tom Daschle, recently forked over $140,000 in taxes and interest for using a donated car he never claimed as income.
All of these men claim it’s just an innocent oversight or mistake. But even if that’s true, doesn’t it mean it’s time to simplify our tax system? If the people who sit over the rest of us can’t get their taxes right, how can we expect average Americans to? Read More...
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It’s been six years since the Legislature reformed the homeowners (part of the property and casualty, or P&C) insurance market.
As a result of those reforms, rates decreased by 13.5 percent between 2003 and 2006, excluding State Farm, the state’s largest P&C insurer; and they decreased by 2.7 percent including State Farm, according to the Texas Department of Insurance, and cited in the Dallas Morning News.
More companies and policies to choose from and lower prices! That’s a success story.
And yet there’s growling from the “watchdogs” (the media euphemism for organizations that never seem to actually produce anything people want to buy). They want to force insurers to get approval for rate hikes before they take place.
When it comes to insurance premiums, Texas has a price controls-lite system. Read More...
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The growing incidence of calls for government meddling and control of speech is staggering.
- Last week former President Clinton opined on a radio show that government must do something to balance opinions in broadcasting;
- Acting Federal Communications Commission (FCC) Chairman Copps complained a few years ago that he couldn’t find any “quality” on television;
- Liberal Congressman Dennis Kucinich (D-OH) has asserted that media reform needs to now be pushed with a “progressive” agenda;
- And then there’s the reported meetings between the FCC and the chairman of its oversight committee, the liberal Congressman Henry Waxman (D-CA), to discuss ways to enact so-called “Fairness Doctrine” polices.
The concern underlying their arguments? Something called “spectrum scarcity.”
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It is now officially President Barack Obama’s economy.
In his first press conference, the president made it clear that the economic slowdown wasn’t his doing. He inherited it from President Bush. Fair enough.
But Mr. Obama’s $787 billion economic stimulus bill—which received only three Republican votes, all in the Senate—is his doing.
He set up markers to determine whether he would support the bill. For example, it had to save or create 3 million new jobs. And it had to provide an immediate boost to the economy.
And while some in the media have noted that most members of Congress didn’t know what was actually in the bill, the more important issue is that no one knows whether the stimulus package will help, or even hurt, the economy.
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Are CEOs Wasting Their Bailout Money? Dr. Merrill Matthews of the Institute for Policy Innovation says some are, but they’re amateurs when compared to Congress...
Senator Claire McCaskill of Missouri has introduced legislation that would limit CEO pay to $400,000 if that company is getting federal bailout money.
Referring to some of the huge bonuses being paid by bailed-out CEOs, the senator said, “I don’t get it. These people are idiots.”
But CEOs aren’t the only ones wasting taxpayer money. The economic stimulus package is filled with expenditures that do nothing for the economy, like:
$50 million for the National Endowment for the Arts, and
$2.5 billion for the National Science Foundation.
Maybe Senator McCaskill should instead introduce legislation that limits congressional pay every time Congress wastes taxpayers’ money. Read More...
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A study by a coalition of Texas municipalities—the Cities Aggregation Power Project—says the state needs “meaningful reform” of its electric deregulation policies to compensate for what it calls generally higher electricity prices since deregulation began 10 years ago.
The power industry responds that the Texas Electric Choice Act of 1999 is achieving what it was meant to achieve—the replacement of regulation with “fierce competition” that not only enhances investment in new power sources but maintains downward pressure on prices.
Who’s right?
A good way to think about the perpetual problem of energy prices is to recall that price regulation is a game governments play in order to appear protective of voters who also happen to be consumers.
Government just thinks it knows a commodity’s right price. Read More...
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The “stimulus bill” will throw $20 billion dollars at an effort to improve health information technology (IT). The idea is that if patient health data is digitized and formatted in standardized ways so that the data is easily exchanged and is interoperable with different systems, health outcomes should improve and efficiencies can be obtained.
And that’s almost certainly true (although we don’t think for a minute that it ought to be done through a bill claiming to provide short-term economic stimulus).
But when you digitize and standardize data, you don’t simply make it easily accessible, but you also make is EASILY ACCESSIBLE, if you take our meaning.
Health care providers should be able to transfer information efficiently, and that usually means electronically. Read More...
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In 2001 the federal estate tax, more accurately dubbed the “death tax,” assessed a levy of 55 percent on savings left at death over $1 million.
The 2001 Bush tax-cuts phased out this tax, reducing it to zero in 2010. Under the scheduled phase out, the assessment this year declines to 45 percent on savings over $3.5 million for individuals, $7 million for married couples.
Now President Barack Obama and congressional Democrats want to freeze the tax at this year’s levels, and eliminate the complete phase-out scheduled for next year.
But every dollar left behind at death has already been subject to federal taxes at least once, under the income tax, and/or the corporate tax, and/or the capital gains tax, and more. It is unfair, harsh and discriminatory for the government to take another big bite out of those funds at death.
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You Weren’t Planning to Throw That Food Out, Were You? Dr. Merrill Matthews of the Institute for Policy Innovation says the food police are at the door...
Great Britain is cracking down on waste and inefficiency—in the kitchen.
The British government agency known as the Waste and Resources Action Programme says that British households waste an average $800 worth of food each year.
So government employees, called “food champions”—others are calling them “food police”—are going door-to-door to talk about portion size, food expiration dates and point out where the freezer is.
The food champions, whose training lasts all of one day, are part of a larger government effort called “Love Food Hate Waste,” which has already cost British taxpayers $5.5 million.
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In his 1981 inaugural speech Ronald Reagan famously said “In the present crisis, government is not the solution to our problem; government is the problem.”
During the debate over how to get the economy going again, we are witnessing a case study in Reagan’s observation.
Consider that government created the problem in the first place through too loose money (Federal Reserve), and purposely distorting the mortgage markets for social engineering purposes (Fannie Mae, Community Reinvestment Act).
Now to fix their mess, our political leaders propose to borrow enormous sums of money that future generations will have to repay. But is it possible that in this crisis, government is again the problem rather than the solution?
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Can Democrats Make the Health Care System More Efficient? Dr. Merrill Matthews of the Institute for Policy Innovation says they’ve never done it in Medicare, after 40 years...
Democrats say they want to make health care more affordable by reducing inefficiencies in the health care system.
But Medicare, the 40-year-old federal health insurance program for seniors, is riddled with fraud and inefficiency. And Congress has never fixed those problems.
The government estimates there is $60 billion of fraud in Medicare—every year.
- A recent government report found that Medicare paid as much as $92 million since 2000 for equipment supposedly prescribed by dead doctors.
- And a Justice Department strike force recently prosecuted 120 people for trying to bilk Medicare out of $400 million.
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Defenders of the economic stimulus package have shifted from being disingenuous to just plain crazy talk.
President Barack Obama, along with others, claims the stimulus package will boost total gross domestic product (GDP) by $1.50 for every $1.00 the government spends. The justification for the claim is what economists call the “multiplier effect.”
Assume Jones invests $10 million in a new factory. He hires contractors to get his new business ready, and he hires new employees. Those individuals will spend that new income on things they need, and they may put some of it in a bank, which can then loan part of it to others.
These transactions tend to expand the original $10 million, although no one is sure by exactly how much. Most economists think it’s in the range of 1.5 or 2.0 times the original amount. Thus, a $10 million initial investment could ultimately add $15 million to $20 million to the economy.
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The last time an American president dared someone to "make my day," he and the American people lived to regret it. Now, the governor of Florida is reaping the whirlwind, and Floridians are suffering, for his challenging insurance companies two years ago to make his day by pulling out of the Sunshine State. He found it detestable that they might want to flee a state that was forcing them to write actuarially unsound homeowners' insurance policies and face financial ruin if they continued doing business in the state.
Governor Crist blustered: "When these insurance companies threaten us with this "We're going to leave your state stuff,' we say, 'Go ahead.' We don't need that kind of business in Florida."
The governor's bravado rings hollow today. Yesterday, State Farm Insurance Company, Florida's largest writer of homeowners' insurance (933,000 policyholders) announced it is going to discontinue writing homeowners' policies in the state.
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These days it seems that almost every discussion includes the word “stimulus.”
But about all most of the proposals coming out of Washington would stimulate is higher taxes in the future. They aren’t what most economists consider “economic stimulus,” much less have the ability to produce any jobs and grow the economy.
There is, however, at least one available option with a track record of success that so far has been excluded from consideration: allowing companies to bring capital from abroad back to the U.S.
Many U.S. companies, especially those in the pharmaceutical or technology industries, have significant financial assets overseas. Why? Because in our global marketplace companies need to grow and compete in those markets with the greatest opportunities … wherever they are located. Many companies earn more than 50 percent of their revenue, and sometimes as high as 80 percent, outside the U.S.
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In a brand new op/ed featured in National Review Online, IPI’s Peter Ferrara explains why McCain-Feingold and the Fairness Doctrine hurt more than just a speaker when it comes to the constitutional right to listen.
Ferrara writes:
“We usually think of freedom of speech as involving the right of speakers to speak, whether through public addresses, in writing, or over radio and television airwaves. But the courts have recognized an additional dimension to First Amendment free speech rights: the right to listen and watch. This right takes center stage in a current challenge to the McCain-Feingold campaign-finance law and could play a role in the debate about the Fairness Doctrine.
Every circuit appeals court has acknowledged the right to listen and watch. Read More...
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In a brand new op/ed featured today in American Spectator online, IPI’s Peter Ferrara discusses why the “economic recovery bill” is no stimulus bill at all.
Ferrara writes:
“Now what we have is not only a stimulus bill that will not work. What we have is a fraudulent bill that is not even focused on stimulus at all, but on runaway spending for liberal, big government spending programs, meaning more welfare, overgrown bureaucracy, pork, political payoffs, and waste.”
To read the full op/ed, please visit American Spectator online. Read More...
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Out of the $825 billion House version of the proposed economic stimulus package, $157 billion is tagged for health care. But roughly 75 percent of that spending really does nothing for the uninsured. Rather, it goes to projects like:
- $20 billion to improve health information technology (HIT);
- $1 billion for the Agency for Healthcare Research and Quality to create a comparative effectiveness research program that’s supposed to compare different medical devices, prescription drugs and specified medical procedures to see which are the most effective, including the issue of cost;
- $2 billion for renovations at NIH facilities and new agency research grants and $1.5 billion for renovations at university laboratories that conduct research sponsored by the agency;
There is $30 billion to help workers losing their jobs pay their COBRA premiums, but is that a good thing?
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The cost of Obama’s stimulus package is now approaching $1 trillion. The entire budget adopted for fiscal 2008 was $3 trillion, so Obama is proposing a massive increase in Federal spending of one-third in just his first two months in office! In a couple of weeks, Obama’s proposed budget for the next fiscal year will be released. I expect it to show a budget deficit of about $1.5 trillion, which is half as large as the entire federal budget for 2008!
This should have been expected from electing the most liberal member of the U.S. Senate as President, a man with a very left wing intellectual history. But during the campaign, many people bought off on the Obama spin that those old labels don’t matter any more. These people have now been exposed as suckers.
But even after Obama was elected, many commentators soon started saying he was chartering a moderate course. The numbers cited above show he is no moderate.
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Have You Gotten Your Farm Subsidy Yet? The Institute for Policy Innovation’s Dr. Merrill Matthews says just get in line … behind the Saudis.
The great thing about farm subsidies is they help so many people, like millionaires in Saudi Arabia, Hong Kong and the United Kingdom.
The Associated Press reports that a recent government study found that between 2003 and 2006, some 2,700 millionaires got farm-subsidy money, and some of them were Saudis.
Even though they don’t do a lot of farming in the sands of Saudi Arabia, U.S. taxpayers are apparently helping them out.
Back in the U.S., people are eligible for a farm subsidy if their average adjusted gross income doesn’t exceed $2.5 million.
So if you have been unsuccessful in getting a bailout from the federal government, you might try for a farm subsidy. If it’s good enough for a desert sheik, it’s good enough for us. Read More...
Farm Subsidy |
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The new Congress has a housewarming present ready for President Obama—a whopping $825 billion spending package that reflects the majority’s spending priorities and also helps the new president fulfill some of his campaign promises.
At any other time and under any other administration, this would be called the largest pork-barrel spending bill ever to emerge from Congress. But in some sort of Orwellian “newspeak,” the spending package is being referred to as a “stimulus bill.”
Most economists believe there are certain actions the government can take to stimulate the economy in the short term. But this bill includes few of them, instead focusing on enormous increases in spending on education, experimental energy programs, mass transit, airports, lakes and parks, and a number of provisions that would probably embarrass even Keynes.
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Why Is Congress so Upset with Bernie Madoff? Dr. Merrill Matthews of the Institute for Policy Innovation says Congress has its own scam going...
Congress is upset with Wall Street investor Bernard Madoff for scamming thousands of trusting investors out of perhaps $50 billion.
But Congress has been doing the same thing for 70 years. It’s called Social Security.
Ponzi schemes like Madoff’s take money from current investors and hand it out to others. There are no real assets because the money is never invested.
That’s pretty much how Social Security works. The government takes current workers’ 12.4 percent payroll tax and immediately hands it over to current retirees. But Madoff’s $50 billion scam is chump change compared to the $2.2 trillion Social Security is supposed to have, but doesn’t.
Of course, most of those who trusted Madoff will lose their money. Read More...
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The media reports that President-elect Barack Obama plans to propose a whopping $310 billion in tax cuts as part of his overall $775 billion stimulus package. But the “tax cuts” Obama is considering are not going to stimulate anything, much like the rest of his stimulus package.
Tax cuts stimulate the economy when they involve reductions in tax rates. The reduction in rates encourages savings, investment, business creation and expansion, job creation, entrepreneurship, and work by allowing people to keep a greater percentage of the reward produced by these activities.
These types of cuts improve the economy not just by the dollar amount of the tax cut. When they occur at the margin, the improved incentives affect every economic decision and every dollar in the entire economy. Read More...
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If you follow technology issues, you know that 2009 is the year that all of the various “privacy” issues are expected to mature and bloom into new attempts at legislation and regulation.
A basket of issues falls under the rubric of “privacy,” from Internet filtering, packet inspection, behavioral advertising, and data collection and retention policies, and there are legitimate policy problems in each of these areas.
But before getting into the weeds of these various debates, let’s remember some first principles that should govern privacy discussions.
The primary concern of our Founding Fathers, and thus the primary purpose of the Constitution, was to protect private citizens from their government. Read More...
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How many times this past year did you hear some expert make some variation of the following statement: “We’ll never see gas prices below $X again.”
And yet, over the Christmas holidays, prices as low as $1.34 per gallon were spotted, and prices around $1.50 per gallon are typical at the time of this writing.
Ain’t a functioning market wonderful?
Back in August when gas prices were in excess of $4.00 per gallon, the cries were loud for government intervention.
The most popular among these proposals were windfall profits taxes on the oil companies and anti-gouging or caps on the price of retail sales. And it is remarkable how many otherwise intelligent people climbed on board. But whether by good sense, political reality or just plain dumb luck, these price-distorting policies were not enacted.
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Do You Need Some Vitamin C for that Cold? Dr. Merrill Matthews of the Institute for Policy Innovation says then we better not do what India’s doing.
The Times of India reports that the country is facing a growing shortage of vitamin C. The reason? The Indian government imposed price controls on the vitamin in an effort to make it more affordable.
But pharmaceutical companies making vitamin C tablets have seen the cost of the raw ingredients soar by 300 percent or more. That means it’s costing the companies more to make the tablets than they can charge for them. So they’ve quit making them.
While that vitamin C shortage may not affect the U.S., the economic policy behind it could.
Democrats in Congress think price controls will lower the cost of prescription drugs here. But the only thing price controls lower … is your chance of getting a product you need. Read More...
Vitamin C |
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During the presidential campaign Barack Obama claimed that under his tax plan 95 percent of working Americans would get a tax cut.
But given where President-elect Obama’s health care reform initiative is likely heading, it would be more accurate to say that every American will see a tax increase.
Obama was very careful to say during the campaign that he did not want to require every American to buy health insurance—known as an individual mandate—or pay a fine, as his Democratic challenger Hillary Clinton wanted to do.
Rather, he claimed he would only impose a health insurance mandate on children. Of course, that’s a distinction with only a minor difference—since children don’t buy their own health insurance, their parents do.
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We’re bracing ourselves for an effort by a newly-activist federal government to start playing again at central planning for industry—particularly the technology industry.
There is an army of fresh, eager new Obama advisors flocking out of their ivory towers in academia for shiny new positions in the Obama administration, and they have all sorts of pet ideas for running the American economy that they’ve been just dying to try out. And the tech sector is one of their prime targets.
We have a suggestion: Perhaps, instead of trying to run the tech economy from Washington, you should focus on deploying technology to make government better?
Health care reform—instead of undermining the parts of the U.S. healthcare system that are working best, government should be using technology to reap huge savings and better care. Read More...
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Want Your 401(k) to Lose Even More Money? The Institute for Policy Innovation’s Dr. Merrill Matthews says it could … if Congress takes control of it.
Tough economic times can lead to some really dumb proposals.
Take, for example, Democratic Congressman George Miller, who thinks that 401(k) accounts are an “inadequate vehicle” that “has not been terribly successful.”
He’s referring, of course, to the recent stock market decline that has dramatically reduced most accounts’ values.
Miller appears to think that handing your retirement funds to the federal government, as we do our Social Security contributions, would be safer.
One economist even testified before Miller that once the government gets your money, it should invest it globally in risky assets to get high returns, while guaranteeing you 3 percent.
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Many people are bemoaning the current financial crisis facing most states.
We at IPI, on the other hand, tend to view it as an opportunity … for states to get their fiscal house in order.
The Kaiser Foundation recently published a Center on Budget and Policy Priorities assessment of each states’ fiscal plight. As you cans see here, 37 states plus Washington DC, are facing a total 2009 budget gap of $72 billion.
Not that you’d notice from some of the states’ recent fiscal actions. It was just over a year ago that several of the states were demanding that the Bush administration allow them to increase eligibility for the State Children’s Health Insurance Program (SCHIP) up to 400 percent of the federal poverty level.
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Amid all the current concern over our economic downturn, it's important to remember that in the most recent decade the U.S. economy has gone through a productivity revolution. Despite all the news about rapid economic growth in places like China and India, there is still no country that can approach the productivity of the U.S. economy.
And according to Harvard economist Dale Jorgenson, this recent U.S. productivity increase is almost entirely due to the impact of information technology (IT) on business functions throughout the economy.
Indeed, IT has transformed almost every sector of the U.S. economy, with one glaring exception—government, and those sectors dominated by government, such as health care and education.
It's widely understood that government agencies are still using outdated technology as they attempt to do their missions. And government spending on IT has often simply been a waste of taxpayer dollars. Read More...
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While the conventional wisdom among most Democrats and many pundits is that the Big Three auto manufacturers are too big to fail, we wonder if they are too big not to fail.
It’s time to say hello to Chapter 11 and goodbye to those suffocating contracts with labor, dealers and suppliers.
We need to stress here that the U.S. auto industry is not in trouble, just the unionized auto industry.The Big Three have huge legacy costs (including retiree pension and health care benefits). While foreign manufacturers on U.S. soil pay about the same in wages, the U.S. manufacturers have much higher benefits packages. And the companies have been slow to adopt quality and design enhancements.
The result has been declining U.S. sales for years—not just in the past few months, which might be forgivable. Read More...
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“The State Video Tax Fairness Act” was introduced in Congress with underlying goals which are laudable—ending discriminatory tax treatment, creating a competitive level playing field for all video providers, and increasing consumer benefit.
In fact, our friends who support the legislation are exactly right when they argue that consumers should not be taxed differently for video service merely based on how it is provided—whether by satellite, cable, fiber optic wire or wirelessly. Discriminatory tax treatment for the same product leads to market distortions and deprives consumers of the best service at the best price.
But to do so, the Act would strip states of their right to enact revenue policies according to the will of the states’ elected representatives. Federal preemption of the states’ right to enact their own tax policies strikes us as a gross violation of our Federalist system of government.
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On Oct. 21 the leftist government of Argentina announced its plans to nationalize the country’s private pension plans.
In 1994, the then-conservative government set up 10 private pension plans, which currently have about $30 billion in assets, and take in $4 billion to $5 billion annually.
That’s a lot of money, and socialist President Cristina Kirchner—it’s OK to use that term for HER, isn’t it? —needs a lot of money because tax revenues are dropping while government largesse is rising.
But, you say, what does that have to do with you and your 401(k)?
Well, no good money-grab goes unnoticed by a big-spending Congress that also needs new revenue streams. Recently, Rep. George Miller, Democratic chairman of the House Education and Labor Committee, heard testimony from economist Teresa Ghilarducci of the New School for Social Research in New York.
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For years the Institute for Policy Innovation has supported fundamental tax reform, such as the suggested “flat” income tax. There are, of course, other tax reform plans as well that accomplish the goals of a tax code that is low, flat, broad-based, simple, neutral, and rewards investment without trying to manipulate taxpayer behavior.
But we increasingly wonder whether it remains possible for the country to move to such a system, even with favorable political winds. The issue is the growing progressivity of our current income tax system, and the trend toward using the tax code for redistribution.
Notwithstanding all the liberals’ and Barack Obama’s claims to the contrary—that only the rich get the tax breaks—the bottom 40 percent of workers pay no—zero, nada, zilch—income tax. And that 40 percent is trending higher.
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Barack Obama wants to raise taxes on higher-income workers because he thinks they’re getting off too easy.
But according to the Tax Policy Center, in 2008:
- The bottom 40 percent of workers—that’s four out of every 10 workers—will pay only 3 percent of all federal taxes.
- The next 40 percent—that’s the middle class—will pay a little more than 25 percent.
- And those in the top 20 percent of earners will pay nearly 70 percent of all federal taxes.
Thus the top 20 percent of income earners will pay about 22 times in federal taxes what the bottom 40 percent pays.
Folks, the only ones getting off easy here are the politicians making these silly claims. Read More...
Tax Brackets |
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Markets do not fail spontaneously except in the rarest and most extraordinary circumstances; it is bad government policy that makes markets fail. Our current economic distemper is no exception. It is a direct consequence of the worst monetary policy since the Great Depression and a myriad of morally hazardous policies (e.g., Government Sponsored Enterprises such as Fannie Mae and The Community Reinvestment Act) that first sent financial markets soaring on a gale of excessive credit expansion and dollar devaluation and than sucked them into a tailspin with a down draft of credit contraction and abrupt de-leveraging.
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How many times have you been driving along talking on your mobile phone (with a hands free device, of course) and suddenly the call drops? Often enough that perhaps the most ubiquitous advertising phrase today is “Can you hear me now?”
Immediately the mobile phone carrier gets cursed for the problem as we redial. But cursing the carrier would be a bit like blaming the stagecoach company for the actions of a highwayman.
To meet ever-increasing demand for mobile coverage, mobile phone companies must constantly increase capacity by putting up new antennas, sometimes new towers and other times simply attaching an antenna to some already existing tower. To do so they must seek the permission of the local authorities, even to allow them to erect a tower on private property and pay for a lease. Often those local authorities balk, but more often they simply drag their feet, refusing to act on applications for new towers and additions to existing ones. Read More...
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So what do you do if you’re Barack Obama and you’ve just been elected president of the United States and you’ve promised to spend a gazillion dollars to improve education and health care and the infrastructure and to hand out “tax cuts” (many of which will actually be income transfers) to 95 percent of the public?
And you’re fiscally constrained because the government is bailing out or buying out banks left and right?
What you need is some serious new inflows of cash, you need it fast, and, contrary to everything you’ve claimed on the campaign trail, you know you can’t get it all by dinging the people making over $250k.
Fortunately—for a President Obama, that is—Senator Edward Kennedy (D-MA) is pushing legislation that would create that government income stream. And a really BIG stream at that.
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In the Cato Institute’s recent “Fiscal Policy Report Card on America’s Governors: 2008” author Chris Edwards gave Florida Governor Charlie Crist an “A” for his tax and spending proposals and accomplishments. In fact, Governor Crist was at the top of his class, earning Cato’s highest score (84 out of 100) among all the governors. Crist’s score was almost one-fourth higher than the second-ranking governor, Mark Sanford of South Carolina, who also received an “A” but managed to earn only 64 points out of a possible 100. Mr. Edwards clearly graded on a curve. The top ranking “F” student among the governors was Jodi Rell of Connecticut who earned 39 points.
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Before the financial mess, Congress was debating a bill that would establish new rules for an incredibly promising field of medical technology. The Pathway for Biosimilars Act includes new rules for intellectual property protection for "biologics," or pharmaceuticals derived from living organisms.
Most of what you know about traditional prescription drugs doesn't apply to biologics. They usually come in a vial, not a pill. They are as effective as they are complex; indeed they are effective because they are complex. Biologic drugs have proven effective against diseases like cancer, multiple sclerosis and diabetes.
The Act is a step in the right direction. A robust legal framework for the industry will keep investment dollars flowing and preserve incentives for firms to develop treatments.
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Are You Better Off? The Institute for Policy Innovation’s Dr. Merrill Matthews says everyone should be asking that question....
Republicans controlled Congress and the presidency from 2001 to 2007. So they should get the credit—or the blame—for whatever happened in those years.
But in January 2007, the Democrats took control of Congress. In those last two years:
- The Dow has fallen more than 2,000 points.
- Wall Street has collapsed and banks are closing.
- Consumer confidence surveys have been cut in half.
- Gasoline prices have risen from about $2.20 a gallon to over $4.00.
- And the economy has lost hundreds of thousands of jobs.
As political commentator Rich Galen points out, the question every American should be asking is: Are you better off than you were TWO years ago? Read More...
Better Off |
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As best we can tell, the free market had little or nothing to do with the banking crisis that has caused panic throughout the world.
That blame can, to varying degrees, be handed to: the Community Reinvestment Act; the efforts of Congress and several administrations to expand low-income families’ access to home loans; a prolonged period of low interest rates; political protection from several members of Congress who were feeding at the trough of Fannie Mae and Freddie Mac; the mark-to-market accounting requirement; some innovative new credit vehicles; and possibly some corruption among private and perhaps public figures.
How any of that is the fault of the free market is a mystery, especially given the already high levels of regulatory control. As The Economist recently pointed out, “After all, the American mortgage market is one of the most regulated parts of finance anywhere.…”
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So you thought Congress may have learned its lesson about creating huge entities that will need to be bailed out at taxpayer expense? If you did, you were wrong.
From the same folks who brought you a global financial meltdown triggered by the institutions they created in an industry under heavy regulatory control, Congress is considering (as is the Federal Communications Commission) a proposal to hold a restricted auction on spectrum to establish one national wireless provider—a government-fashioned, government-favored firm in the tradition of Fannie Mae and Freddie Mac.
In IPI’s report entitled “Should the U.S. Favor a Free Nationwide Wireless Network Provider?” IPI adjunct fellow and communications policy specialist Solveig Singleton says, “This kind of company would not be allowed to fail and therefore sets up a future bailout at taxpayer expense.”
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Are U.S. High Schools Doing Their Jobs? Dr. Merrill Matthews of the Institute for Policy Innovation says not according to American colleges.
Millions of high school graduates want to go on to college. But an Associated Press story says many of them aren’t ready for college-level work.
Colleges currently spend $2.5 to $3 billion a year teaching recent high school graduates how to read and write at the college level, known as remedial education.
A new study entitled “Diploma to Nowhere” says that 43 percent of community college students need remediation, and nearly 30 percent of students at four-year colleges.
At Long Beach City College in California, 95 percent of new students need remedial coursework.
These aren’t high school dropouts, they’re graduates—some with B averages.
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Because so many members of Congress have drunk deeply from the big-spending troughs of Washington—especially after many of them campaigned as fiscal hawks—we think it’s time for them to step forward, confess their failures and get right with the U.S. Constitution. In an effort to help them mend their big-spending ways, we offer this “12-Step Plan for Congressional Spendaholics.”
- I admit that I have become powerless over spending taxpayers’ money—and so my political promises have become meaningless.
- I have come to believe that only a power greater than myself—the U.S. Constitution, and maybe voter rebellion—can restore me to sanity.
- I have made a decision to turn my life over to the guidance of sound economic and fiscal principles. Read More...
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On September 25 the Senate Commerce, Science, and Transportation Committee held a hearing to learn about current practices by broadband providers to protect a person’s “privacy.”
Gigi Sohn, president and cofounder of Public Knowledge, testified regarding, in her opinion, what level of privacy should be provided and what individuals should expect. During the course of her testimony she was critical of deep-packet inspection (a form of filtering that examines the header and data packet, often to help stop viruses, spam or other intrusions). Ms. Sohn described this as "the Internet equivalent of the post office reading your mail," and went on to express outrage that this filtering could be deployed.
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Who’s the Big Spender: Obama or McCain? The Institute for Policy Innovation’s Dr. Merrill Matthews says just look at their Senate records...
The National Taxpayers Union Foundation recently looked at the spending records of presidential candidates Barack Obama and John McCain.
During the first session of the 110th Congress:
• John McCain sponsored or cosponsored 22 bills, which would have increased federal spending by $8 billion annually.
• Barack Obama, by contrast, sponsored or cosponsored 114 bills, increasing federal spending $75 billion annually. And vice presidential candidate Joe Biden wasn’t far behind.
That’s a little more than $9 of government spending for Obama for every $1 for McCain.
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The U.S. Treasury's bailout of the banking industry has dominated the news for the past month, and will probably be the dominant factor in public policy decisions for at least the next four-year presidential term.
The bailout will affect regulatory policy, tax policy and the funds available for any number of other programs, to say nothing of affecting our ability to deal with any future crisis that might arise.
Americans are rightly concerned not only about the cost of the bailout, but of the precedent of letting actors in the market make enormous profits while having the risk backstopped by taxpayers. And taxpayers are disturbed by the fact that elected officials were repeatedly warned about these risks and problems, but did nothing.
But if you think this one is bad, we've got news for you—this mortgage bailout is only the first, and the smallest, of a series of bailouts that are going to be necessary in the future. Read More...
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When it comes to insurance premiums, Texas has a system of price controls lite. In theory, if insurance companies find it necessary to raise premiums under the Texas “file-and-use system,” the company may raise rates immediately once they have notified the state. While the state regulator may disapprove the rate increase and force the company to roll it back, the burden is upon the insurance department to justify its price fixing. In fact, the situation is much worse than it appears on paper. Although Texas is a “file-and-use” state, it actually operates more like a de facto prior-approval system much of the time.
Even on paper, this system is far from ideal. Read More...
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"If you came here because you believe in limited government and the freedom of the American marketplace, vote in accordance with those convictions. Duty is ours, outcomes belong to God," said Rep. Mike Pence (R-IN) as he implored his fellow members of Congress to place a priority on solving a problem rather than just passing legislation.
Vote in accordance with convictions they did, demonstrating true leadership, and perhaps saved the country from a terrible deal.
Political opportunism led Speaker Nancy Pelosi (D-CA) to bash not only Mr. Pence and others like him for opposing the bail out plan, but also the last decade of pro-growth policies.
But the real reason for the "no" votes is that many recognized a bad deal for the American taxpayer—confirmed by the flood of calls from their constituents who don’t like the deal.
Call it representative democracy.
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Can Increased Prevention Save Health Care Money? The Institute for Policy Innovation’s Dr. Merrill Matthews says it will more likely cost money—and freedom...
Both Barack Obama and John McCain say they will reduce health care costs by focusing on prevention.
That means encouraging vaccinations, mammograms, prostate screening and other tests. And that’s good.
But while catching and treating diseases early is cheaper than waiting until they become a medical crisis, many actuaries say we can spend a lot more testing people than we’ll ever save catching diseases early.
Prevention also means helping people exercise, lose weight and stop smoking.
Of course, getting people to live healthier lifestyles would save money, but do you really want the government scrutinizing and even dictating your eating, drinking and exercising habits?
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IPI director of entitlement and budget policy Peter Ferrara will appear live Thursday morning at 10:33 am ET on ‘The Right Balance’ with Greg Allen
Ferrara will discuss how the current financial crisis on Wall Street is a result of actions from the Federal Reserve, Fannie & Freddie, and not by free market policy and deregulation.
You can read Peter’s new op/ed on this issue in the American Spectator online by clicking here. Read More...
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IPI director of entitlement and budget policy Peter Ferrara will appear live tonight at 7:30 pm ET on The David Boze Show, broadcasting from Seattle-Tacoma talker KTTH, ‘The Truth.’
Ferrara will discuss how the current financial crisis was sparked not by free market policy and deregulation, but by actions from the Federal Reserve, Fannie & Freddie.
Read Ferrara’s new op/ed on this issue in today’s edition of the American Spectator online. Read More...
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In a prior TaxByte, we saw that Obama’s tax plan would increase marginal tax rates for just about every major federal tax. So how is it he claims to be a tax-cutter?
Obama combines these comprehensive tax increases with a slew of refundable tax credits primarily for low- and moderate-income workers, which he calls middle-class tax cuts.
“Refundable” means that if the worker doesn’t have enough tax liability to take advantage of the credit, the government sends the worker a check to cover the full amount of the credit. So if the tax credit is $1,000, but the taxpayer would otherwise only pay $200 in income taxes, the credit covers the $200 tax bill and the government sends the taxpayer a check for the remaining $800.
If the taxpayer pays nothing in federal income taxes, the government would send him a check for the whole $1,000.
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On Friday, July 11, 2008, the White House released a Policy Memorandum objecting to a proposed new rule by the Environmental Protection Agency (EPA) that outlines how different provisions of the Clean Air Act should be applied to address greenhouse gas emissions. The memo takes notice of President Bush’s objection to taking “laws written more than 30 years ago to primarily address local and regional environmental effects and applying them to global climate change.”
The memo goes on:
“The Clean Air Act is one of these laws. If stretched beyond its original intent, it would override legislation just enacted by Congress, requiring the government to regulate far more than merely power plant emissions or cars. Read More...
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When things go wrong, politicians revert to form, not reform. Incumbents claim things are not nearly as bad as they feel and blame people for whining. Challengers claim things are a whole lot worse than they appear and blame incumbents for not doing enough to fix them. Both incumbents and challengers offer up new interventions, redistribution schemes, more government spending, taxing and regulating to make everything better.
Government intervention creates problems worse than those it seeks to correct, and it stimulates heightened political demands, which call forth more government intervention to “fix” the problems and satisfy the political demands the interventions create. The more government fails, the bigger it grows; the bigger it grows, the more it fails. Read More...
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Will Barack Obama Cut Most Americans’ Taxes? Dr. Merrill Matthews of the Institute for Policy Innovation says he’s really just expanding welfare...
Democratic presidential candidate Barack Obama says that under his tax plan, 95 percent of Americans will get a tax cut.
But is it really a tax cut?
Currently, workers in the bottom 40 percent of income pay little or no income taxes. So how does a worker pay less tax than zero? Obama’s answer is a “refundable” tax credit.
For example, if the government gives workers, say, a $1,000 refundable tax credit, those who owe no income taxes will actually get a check for $1,000. Those who owe, say, $600 in taxes won’t pay any tax and will get a check for the $400 difference.
In other words, Obama would take money from some taxpayers and hand it out to others. Folks, that’s not a tax cut; that’s welfare. Read More...
Tax Cuts |
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Last night on The Charlie Rose Show, Maurice (Hank) Greenberg pleaded for a federal bailout of American Internation Group (AIG), of which he is the major stockholder and former CEO. Greenberg said part of the problem that caused the current financial crisis is that "there is no federal regulator of insurance." He didn't say, "There is no option of a federal regulator, as there is with banks;" he said "There is no federal regulator." He went on to say there ought to be a single federal regulator of insurance and recommended that Congress create a single federal regulator of the financial services industry—the Fed—which should include insurance.
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Is This a Do-Nothing Congress? Dr. Merrill Matthews of the Institute for Policy Innovation says yes, and that may be the good news....
The Wall Street Journal says this Democratic-led Congress has passed 294 bills, fewer than any Congress in the last 20 years.
But it’s also passed the largest number of resolutions—1,932.
Resolutions are usually expressions of support for something and don’t do much harm—or good. Taxpayers for Common Sense has identified its top 10 list. They include:
- Designating July as National Watermelon Month;
- Recognizing the 70th anniversary of the Idaho Potato Commission;
- And naming June 30 National Corvette Day.
Democrats want to postpone passing real laws because they think a new President Obama will sign whatever they pass.
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Treasury Secretary Henry Paulson finally got one right.
According to news accounts, the secretary had a looooong weekend.
It started Friday when he and Federal Reserve Bank Chairman Ben Bernanke apparently called in the “sages” of Wall Street to inform them that there would be no more bailout money.
They were told, “There is no political will for a federal bailout,” according to The Wall Street Journal, and that they would need to come back Saturday morning and figure out what they were going to do—with the administration’s assistance, but without the taxpayers’ money.
For our part, we wish Paulson had taken this stand last March with Bear Stearns, or even last month with Fannie Mae and Freddie Mac. But better late than never. Read More...
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Check out IPI senior research fellow Bill Murchison’s new op/ed in the Washington Times discussing a fast-growing trend throughout the nation keeping government accountable of spending taxpayers’ dollars.
Excerpt:
"Well, you know, it is our money - or at least it was, before government helped itself to a sizable portion and called it revenue.
That we've rarely, as taxpayers, had a clear idea just what those guys in government were doing with all that tax money isn't one of the nicer things to be said about democratic governance.
Let's look on the bright side, even so. Light is starting to shine in the recesses where all those billions lie, waiting to be spent. The transparency movement in government finance is spreading fast. There's finally a way to see how government spends our money - just by going online. Read More...
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I know there's a disagreement among limited government folks about whether or not government should be funding "big science," but I've always been a proponent of government spending money on science research, especially the kind of science research that just can't be done any other way.
Like particle accelerators.
As all the news has been coming out lately about CERN's new Large Hadron Collider (LHC) in Geneva, it's made me a little sad. You see, it could have been even better, and it could have been here.
And by here, I mean not only the United States, but literally HERE, in Texas, just a few miles from IPI's offices.
Remember the Superconducting Supercollider? It would have been three times as powerful as the LHC.
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Are You Pumped Up? The Institute for Policy Innovation’s Dr. Merrill Matthews says more drilling means lower taxes.....
The country’s facing a whopping $400 billion budget deficit next year.
That’s prompting Democrats to say we need to raise taxes.
But there’s a better way: in the words of Newt Gingrich, “Drill here, drill now.”
The country makes money from oil production. The Wall Street Journal estimates that drilling for oil offshore and in Alaska could yield about $2 trillion for the government over 30 years.
And U.S. oil companies pay taxes on the money they make. Exxon paid $65 billion in taxes over the past five years—more than it made in profits.
Drilling here reduces the money we give to other oil-producing countries and keeps those royalties, taxes and jobs in the U.S.
In short, we don’t need to pump more taxes, just more oil. Read More...
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Author: Merrill Matthews Jr. || Location: Lewisville, Texas, USA