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12/21/09 – Two crises and a partridge in a pear tree
Crisis I: After posting last week’s entry, an update on the battle over GovCare, SAFE wrote the Delaware members of Congress. Our message: it was time to push the reset button on healthcare, scrap the energy bill (cap and trade, etc.), and adjourn for the holidays.
http://www.s-a-f-e.org/contacting_legislators_2.htm#December_14,_2009
Good advice, but action in the Senate continued to grind along, and as of this writing it appears that some sort of a healthcare bill will be passed before Christmas setting up a reconciliation conference between the House and Senate bills next year.
All 40 Senate Republicans are opposing the bill, which means cloture cannot be invoked without the support of each and every member of the Democratic caucus. The efforts to bring all 60 on board were not pretty.
Senator Joe Lieberman (I-CT) was won over by an agreement to drop all vestiges of a public option from the bill including a proposal for increased access to Medicare. Dems recraft health[care] bill to win passage, Jennifer Haberkorn, Washington Times, 12/17/09.
Recent moves to strip the bill of its public insurance plan and Medicare expansion moved Sens. Joe Lieberman, Connecticut independent, and Mary L. Landrieu, Louisiana Democrat, to support the bill, unless major changes are made.
Senator Ben Nelson (D-NE) held out for additional restrictions on the use of government funds for abortions, but he was under heavy pressure. Whether the threat was credible or not, the linkage of a Strategic Air Command base in Nebraska to the healthcare vote was undoubtedly intimidating. White House threatens Sen. Nelson with military base closures in Neb., Michael Goldfarb, Washington Examiner, 12/15/09.
Offutt Air Force Base employs some 10,000 military and federal employees in Southeastern Nebraska. As our source put it, this is a "naked effort by Rahm Emanuel and the White House to extort Nelson's vote." They are "threatening to close a base vital to national security for what?" asked the Senate staffer.
It was subsequently announced that Nelson would vote for cloture, apparently putting the Senate bill on track for a final vote by Christmas. Sen. Ben Nelson to announce support for healthcare bill, Shailagh Murray and Lori Montgomery, Washington Post, 12/19/09.
Democratic leaders spent days trying to hammer out a deal with Nelson, and worked late Friday night with Nelson on abortion coverage language that had proved the major stumbling block. But Nelson also secured other favors [an air base?] for his home state. Asked if he was prepared to support the bill, Nelson said, "Yeah."
http://www.washingtonpost.com/wp-dyn/content/article/2009/12/19/AR2009121900797_pf.html
Might the Senate bill yet be derailed? It seems unlikely, but public opinion has swung strongly against the GovCare proposal and some of those who vote “aye” may lose their jobs as a result. Democrats on Healthcare Precipice, Kimberly Strassel, Wall Street Journal, 12/17/09.
Public opinion on ObamaCare is at a low ebb. This week's NBC-WSJ poll: A mere 32% of Americans think it a "good" idea. The Washington Post: Only 35% of independents support it—down 10 points in a month. Resurgent Republic recently queried Americans over the age of 55, aka Those Most Likely to Vote In a Midterm Election. Sixty-one percent believe ObamaCare will increase their health costs; 68% believe it will increase the deficit; 76% believe it will raise their taxes.
http://online.wsj.com/article/SB10001424052748704238104574602232786471914.html
On the merits, we believe tbe GovCare plan is poorly conceived, has been dishonestly presented, and could have seriously adverse consequences. Perhaps there will a way to undo some of the damage in the future.
Despite the president’s warning that if his healthcare plans fail the nation will go “bankrupt,” for example, the shoe is actually on the other foot. It is also untrue that one can “talk to every healthcare economist out there and they will tell you that ... whatever ideas exist in terms of bending the cost curve and starting to reduce costs for families, businesses and government, those elements are in this bill." All the President’s Mendacity, David Harsanyi, Townhall.com, 12/18/09.
What about balancing tax codes so that those with employee-provided health insurance and those with individual health insurance can benefit from the same benefits? Does that idea exist? You don't even need a staff of researchers to find economists who say it does.
What about opening up health insurance markets beyond state lines to create competition and more access? What about tort reform to end frivolous lawsuits? What about expanding health savings and flex accounts instead of killing them?
http://townhall.com/columnists/DavidHarsanyi/2009/12/18/all_the_presidents_mendacity
Crisis II: The House did adjourn last week, but there was no rest for 20 members. House Speaker Nancy Pelosi (D-CA) and the others, including six Republicans, flew to Copenhagen and joined the UN climate summit. Why are Republicans in Copenhagen, Byron York, Washington Examiner, 12/17/09.
Let’s start with some basics to put this event in context.
NAME: 15th Session of the Conference of the Parties to the UN Framework on Climate Change (COP 15)
PLACE: Bella Center, Copenhagen, Denmark
DATES: December 7-18 [11 days!]
PARTICIPANTS: 15,000 delegates and invitees from some 193 countries, including numerous heads of state for the final two days. Many would-be attendees were turned away. COP15 Observation: So these are the people we’re going to let run the world economy. NCPPR (National Center of Public Policy Research), 12/14/09.
It seems the geniuses at the United Nations selected a building site for the conference that holds 15,000 people, and then gave credentials to 45,000 people. So, naturally, at any given time, two-thirds of the people (almost all of whom used carbon-intensive energy to travel to Copenhagen) are unable to participate.
http://www.nationalcenter.org/2009/12/cop-15-observation-so-these-are-people.html
OBJECTIVE: In theory, the goal was an international agreement to combat the threat of manmade global warming (aka climate change). All that was actually expected, however, was a formula to keep the conversation going. The Haze of Copenhagen, Michael Reagan, Townhall.com, 12/17/09.
Thousands are now gathered in Copenhagen to embark on an aggressive plan to reach a framework for reducing carbon emissions, with the goal of instituting a more formalized, binding agreement within six months.
http://townhall.com/columnists/MichaelReagan/2009/12/17/the_haze_of_copenhagen
OTHER ISSUES: Air grievances, demand money, and embarrass “rich” developed countries (especially the United States). For some participants, including leaders from Bolivia, Iran, Venezuela and Zimbabwe, these issues seemed more important than the official objective. Consider the warm reception for Venezuelan President Hugo Chavez. Putting our economy in the hands of Chavez fans, Andrew Bolt, HeraldSun, 12/17/09.
But then he wound up to his grand conclusion – 20 minutes after his 5 minute speaking time was supposed to have ended and after quoting everyone from Karl Marx to Jesus Christ - “our revolution seeks to help all people…socialism, the other ghost that is probably wandering around this room, that’s the way to save the planet, capitalism is the road to hell....let’s fight against capitalism and make it obey us.” He won a standing ovation.
A sampling of the conference action follows – including items big and small. Clippings with red headers are from SAFE founder Bill Morris’s microblog tracking coverage of global warming and energy issues in the [Wilmington] News Journal.
http://www.s-a-f-e.org/global_warming.htm
12/7/09, A1, Climate treaty in reach, U.N. says [AP] - Hopes are rising for a CO2 deal at Copenhagen. However, China and India are not prepared to accept legally binding targets. Also, Congress has not approved emissions cut (17% from 2005 level) the U.S. president is expected to offer. Overall, based on all pledges for carbon dioxide reduction offered to date, "emissions will total some 46 billion tons annually in 2020. Emissions today are about 47 billion tons." U.N. Environment Program Achim Steiner is quoted that “we are within a few gigatons of having a deal.”
12/8/09, Copenhagen Climate Scam Conference, Washington Examiner – The conference began with a propaganda film about the perils of manmade global warming.
The planet will be ravaged and millions of people will die horrifying deaths as increasing temperatures in the Earth's atmosphere result in a monumentally devastating deluge of man-made floods, droughts, storms, and rising seas. At the end of the terrifying film, a sweet little girl plaintively begs the conference attendees to "please help save the world."
12/9/09, A6, Rich, poor nations argue over climate economics: Weather officials report evidence this may be the hottest decade ever recorded (AP) –Data were presented at Copenhagen by the World Meteorological Organization (aka the U.N.’s weather agency) “showing this decade is on track to be the hottest since records began in 1850, with 2009 [despite ‘cooler than average conditions in the U.S. and Canada’] the fifth warmest year ever.” WMO Secretary-General Michel Michel Jarraud characterized the data as evidence that “this is indeed globally the warmest period for more than 2,000 years.”
[Highly accurate measurements from orbiting satellites show that global warming has stalled in recent years. See, e.g., What happened to global warming? BBC News, 10/8/09, which reports 1998 (not 2007 or 2008) is the warmest year globally and “for the last 11 years we have not observed any increase in global temperatures.” As for the “more than 2,000 years” claim, it is based on an analysis that has been thoroughly discredited.]
12/10/09, A10, Tuvalu says without an aggressive climate pact, it’s sunk (AP) –
Tuvalu, consisting of mid-Pacific low-lying islands, and others requested even more drastic limitation of CO2 emissions. Saudi Arabia, China and India were opposed. Per the article, the IPCC predicts a sea level rise of one foot per century (two feet in its worst case scenario), a change that could seemingly be coped with over a period of three generations. [Tuvalu’s situation was discussed in Singer & Avery's book, "Unstoppable global warming". Authors said Tuvaluans may be looking for cash "reparations" for global warming.]
12/10/09, Copenhagen: George Soros says leaders are mining the wrong places for climate cash, Rowena Mason, UK Telegraph – Concerned that an impasse was developing over where the money demanded by the developing countries would come from, Soros hopped on a jet for Copenhagen to suggest some financial sleight of hand to raise it without apparent sacrifice by anyone. [Watch your wallets, everyone!]
12/12/09, A2, “At climate talks, the tough part just started” (AP) –The article refers to a draft proposal that would provide, among other things, that "all countries together should reduce emissions by a range of 50% to 95% by 2050, and rich countries should cut emissions by 25% to 40% by 2020, in both cases using 1990 as the baseline year."
[This is not to be taken seriously. If these people were serious, they would be pushing hard for installation of nuclear power. They might also demand evaluation of Edward Teller's suggestion for reflecting heat away from the Earth by injection of appropriate particles into the stratosphere - Wall Street Journal, 10/17/97.]
12/12/09, Naked Copenhagen, Richard Muller, Wall Street Journal, 12/12/09 –
Realistically, says Muller, carbon emissions will continue rising rapidly due to increases by the developing countries. Cuts by developed countries could have only a marginal effect on the situation.
China's carbon intensity is now five times that of the U.S.; it is extremely carbon inefficient. By the time the Chinese cut emissions intensity by 45%, its yearly total will be over twice that of the U.S. And in the proposed Copenhagen dream scenario, by 2025 China's emissions will actually surpass those of the U.S. per capita.
http://online.wsj.com/article/SB10001424052748703514404574588673072577680.html
12/13/09, A3, Protestors descend on summit (AP) – Tens of thousands marched in Copenhagen yesterday for “an ambitious global climate pact.” A picture shows protestors carrying signs such as "climate justice, now" and “_____ politics, not the climate.” The police moved in when some protestors began throwing cobblestones through windows. [Evidently, there are plenty of "true believers" willing to spend on a trip to Copenhagen.]
12/13/09, F6, "China casts big shadow over U.S. in solar race" [USA Today] – China leads the world in making solar cells, many of which are exported to the U.S. [There go those “green jobs” U.S. politicians have been talking about.] In addition, China reportedly plans to invest in solar power domestically as it "attempts to battle its greenhouse gas emissions, electrify its nation of 1.3 billion people and curb its massive pollution problem." The government is aiming for renewable energy “to account for 15 percent of its fuel by 2020.”[Whether or not the Chinese are concerned about global warming, they will play along with emission reduction measures to the extent compatible with their economic interests. Thus, coal power plants will continue to be built.]
12/15/09, A5, Developing countries stall climate talks for hours (AP) reports on a walkout that was started by African countries and joined by China and India. The apparent intent was to focus attention on the alleged obligations of developed countries vs. binding requirements for developing countries [which account for most of the projected growth in CO2 emissions], continuing the precedent set by the 1997 Kyoto Protocol [which was rejected by the United States].
12/16/09, The Copenhagen Shakedown, Wall Street Journal – The temporary walkout of the developing countries was ascribed to a demand for more money.
More than anything else, Monday's walkout [of the so-called G-77] revealed the real reason that the developing world is in Copenhagen in the first place: They see climate change as a potential foreign-aid bonanza, and they are at the table to leverage the West's environmental angst into massive transfers of wealth. *** The G-77 scoffed at a European offer of €7.2 billion ($10 billion) over three years. Instead, the Sudanese chairman of the group, Lumumba Stanislaus Di-Aping, suggested in an interview with Mother Jones magazine that something on the order of a trillion dollars, or more, would be appropriate.
http://online.wsj.com/article/SB10001424052748704398304574597900307712862.html
12/16/09, A3, “Verifying Chinese cuts a sticking point (AP) reports continued jockeying between the delegates as they await the arrival of world leaders later in the week. The crucial point is said to be “whether Beijing will allow the world to check its books and verity promised cuts in greenhouse gas emissions.” [China has not committed to emission “cuts,” but only to a reduction in “carbon intensity.”]
12/16/09, America Wins Climate Award Three Days Straight, NCPPR – Video (4:58) taken by David Ridenour [bless him and his colleagues for their tenacity] shows the U.S. being honored with the “fossil award” by environmentalist critics.
Forget Climategate; all you need to know to be skeptical of the global warming theory is that the people starring in this ghastly Climate Action Network production believe in it.
They even have an anthem, which you can hear on the video if you can stand to watch it to the end
http://www.nationalcenter.org/2009/12/usa-usa-america-wins-climate-award.html
12/17/09, Blizzard dumps snow on Copenhagen as leaders battle warming, Christian Wienberg, Blomberg.com – We get it that a snowstorm is weather, not climate, but the timing was ironic nevertheless.
http://www.bloomberg.com/apps/news?pid=20601130&sid=a5wStc0K6jhY
12/17/09, A11, "Obama won't take new offer to Copenhagen" (AP) predicts the president will not “cave in to pressure and deepen U.S. efforts to curb greenhouse gases” because he is “constrained by tough politics at home.” U.S. officials said he would stick to the previously announced goal of 17% reduction of greenhouse gases in 2020 from the 2005 level, although developing countries are reportedly seeking a 34% reduction. The planned commitment is said to mirror “legislation already before Congress, calling for 17 percent reduction in pollution by 2020 and 80 percent by mid-century.”
A recent AP-Stanford University poll indicates three-quarters of respondents “support action to address climate change.” However, “opinion polls have shown people have limits on how much they want to pay to solve the problem,” e.g., 59 percent “wouldn’t support any action if it meant electricity [on their monthly bills] would cost $10 more.” [The proposed energy bill would increase energy costs MUCH MORE than that.]
12/17/09, Copenhagen climate conference: Hillary Clinton backs idea for $100bn global fund, Louise Gray, UK Telegraph – Calling the manmade global warming theory “undeniable,” the U.S. secretary of state announced that this country would be willing to pay (along with other countries) into a global fund of $100 billion per year – a concept suggested in June by UK Prime Minister Gordon Brown – to be established by 2020 to help the “most vulnerable” of the developing countries. However, “transparent” actions on cutting emissions would be expected from China, India, et al. and there were no details as to where exactly the $100B per year would come from. [Perhaps the Soros plan would come into play?]
12/18/09, “Hypocrisy Offsets” offered to carbon-spewing climate conference attendees, NCPPR – Continuing its pattern of mockery, the NCPPR offered conscience-clearing “hypocrisy offsets to attendees, many of whom had “used substantial amounts of carbon-emitting jet fuel just to get to the conference.”
http://www.nationalcenter.org/PR-HypocrisyOffsets121809.html
12/19/09, A1, "Summit falls far short of goals" –The U.S. president helped broker a deal with China, India et al. that "provides for monitoring emission cuts, but sets no overall global target for cutting greenhouse gases and no deadline for reaching a formal international treaty." [No deadline - we love it. The farther into the future, the greater the odds that skeptics will prevail and end this whole bizarre episode before the government does something really stupid.]
12/19/09, D.C. area hit by massive winter storm: most regions to see more than a foot of snow, Washington Times – More inclement weather awaited the president and others on their return to Washington, another reminder that the manmade global warming theory may be somewhat exaggerated.
A partridge – Policies and politics are not everything, especially this time of year, as we rather think some folks in Washington should realize. It is time to renew ties of family and friends, enjoy a bit of holiday cheer, and reflect on the finer things in life.
Tune in on January 4, 2010, when the next entry to this blog will be posted. In the meantime, happy holidays to all of you!
12/14/09 – Healthcare: down to the wire.
The last four entries were devoted to a review of the U.S. political system, ending with a discussion of the pros and cons of calling for a Constitutional convention. There were several thoughtful comments on this subject (see “read replies” to 12/7 entry), and it appears that the nays have it.
Turning to matters of more immediate concern, this entry will focus on the healthcare plan now being considered in Washington, which would expand government control of the healthcare system.
House: When we last wrote about GovCare (11/9 entry), the House of Representatives had just passed a 1,990-page bill (HR-3962) entitled the Affordable Health Care for America Act.
Shortly before midnight on Saturday, November 7, the House bill passed by a 220-215 vote. This underscores the need to take a hard look at GovCare now, lest it become the law of the land before the public fully appreciates the consequences.
Senate: Currently, the Senate is debating a 2,074-page bill (HR-3590) entitled the Patient Protection and Affordable Care Act. The Senate bill was taken up on the floor following a 60-40 vote (just enough!) to clear the way.
The 60th vote was paid for with a special break on Medicaid cost sharing for Louisiana (Senator Mary Landrieu, D-LA, said it was worth $300M), aka “the Louisiana Purchase.” After the motion carried, some observers felt the Senate bill was headed for inevitable passage. Deep into Saturday Night’s Healthcare Vote, Jillian Bandes, 11/21/09.
Several weeks have since been consumed in considering amendments to the Senate bill, most of which do not go to the basic substance of the bill. Here are some of them.
• Could federal funds be used to cover the expenses of abortions? Such a use of funds was blocked in the House bill by the Stupak amendment, but this contentious issue could resurface in conference unless a comparable provision is added to the Senate bill.
An amendment to restrict abortion funding was narrowly rejected, but Senator Ben Nelson (D-NE) has threatened to withhold support of the bill unless this result is reversed. Senate rejects Nelson amendment on abortion, Shailagh Murray, Washington Post, 12/8/09.
• The Republicans lack the votes to force any unwanted changes, but have offered various amendments. One was a proposal to reverse cuts in Medicare funding (whether or not these cuts would actually be made, they make the fiscal numbers look better). Senate Votes to Keep Medicare Cuts, Lori Montgomery, Washington Post, 12/3/09.
On a vote of 58 to 42, the Senate rejected a proposal by Sen. John McCain (R-Ariz.) to send the bill back to committee with orders to strip out the cuts, a move that would effectively have killed the measure. Two Democrats -- Ben Nelson of Nebraska and Jim Webb of Virginia -- voted with all 40 Republicans on the amendment.
• There have been amendments assuring coverage of various medical procedures, e.g., mammograms for women under 50 (cast into question by recent recommendations of a government panel appointed during the prior administration). Senate votes to safeguard mammograms, Ricardo Alson-Zaldivan, Washington Times, 12/3/09.
http://washingtontimes.com/news/2009/dec/03/senate-votes-safeguard-mammograms/?feat=home_headlines
End game – To stop the seemingly endless flow of proposed amendments and force a vote on the Senate bill, the Democrats may seek to invoke cloture (requires 60 votes). Their leaders apparently want to act soon.
The president came to the Senate on Sunday, December 6. He addressed the 60 Democrat and independent members in a closed-door session (45 minutes, no questions taken), reportedly urging them to resolve smoldering disagreements and get the job done. Not everyone was persuaded by his “pep talk,” but they definitely heard it. Obama to Senate Dems: After fixing Bush “disasters,” healthcare is next step, Susan Ferrechio, Washington Examiner, 12/6/09.
"It would be very hard to listen to the president's speech and not be persuaded of the historic importance of what is being done here," Senate Budget Committee Chairman Kent Conrad, D-N.D., said. "It was a powerful speech."
On December 7, Senate Majority Leader Harry Reid (D-NV) decried the delaying tactics of Republican members of the Senate, comparing them to senators of yore who stalled action on slavery before the Civil War, female suffrage, and civil rights legislation.
Republican senators expressed shock and anger at these comments, and Saxby Chambliss (R-GA) suggested that Reid was starting to “crack” under the pressure of the healthcare debate. Reid Compares Opponents of Healthcare Reform to Supporters of Slavery, FoxNews.com, 12/7/09.
http://www.foxnews.com/politics/2009/12/07/reid-compares-health-care-reform-foes-slavery-supporters/
On the evening of December 8, a deal was announced to replace the controversial “public option” in the Senate bill with some new provisions (details to be provided after they have been “scored” by the Congressional Budget Office). Democrats choose alternatives to “public option,” Jennifer Haberkorn, Washington Times, 12/9/09.
• Americans lacking healthcare insurance (HCI) would be permitted to obtain it through a program administered by the Office of Personnel Management, which currently runs the federal employees healthcare program. Some see the OPM’s involvement as inconsistent with the professed intent of offering a “private option.” Through a looking glass on the Hill, Washington Examiner, 12/10/09.
Only in the nation's capitol could people pushing Obamacare keep a straight face while claiming that a new health insurance operation to be run by the same government agency that manages the federal bureaucracy is actually a private program.
• Some people in the 55-64 age bracket would be allowed to “buy into” Medicare. Given that Americans are living longer and may need to start retiring later in order to help put Social Security and Medicare on a sustainable fiscal basis, this strikes us as a move in the wrong direction or, to be blunt about it, a dumb idea.
It seems likely that the Democrats will try to force action on the Senate bill this week. If they cannot line up 60 votes, however, the matter may be held over until after the holidays.
Either way, the time has come for a decision. Consider the circumstances: two long and complex healthcare bills – same general thrust but with many differences in specifics – major changes could be made in conference if the Senate bill passes – little time likely to study the bill that would emerge from conference. In effect, people know about as much about GovCare as they ever will. That goes for the members of Congress, by the way, as well as John & Jane Q. Public.
Assessment – How to frame the issue without getting bogged down in the details? Our approach will be to focus on the major effects of GovCare, one plus and several minuses, and then make an overall judgment.
Congressional Budget Office (CBO) estimates cited are from: (a) 11/20/09 letter (revising 11/6/09 estimates) from CBO Director Douglas Elmendorf to Representative John Dingell (D-MI) for the House bill; and (b) 11/18/09 letter from Mr. Elmendorf to Senator Harry Reid (D-NV) for the Senate bill.
(a) http://www.cbo.gov/doc.cfm?index=10741&zzz=39806
(b) http://www.cbo.gov/doc.cfm?index=10731&zzz=39778
THE PLUS
• Fewer Americans without healthcare insurance (HCI) - According to CBO estimates, the House and Senate bills would have the following effects on HCI coverage of nonelderly people:
|
HCI coverage (in millions) |
2010 |
2019 |
||
|
Current Law |
House Bill |
Senate Bill |
||
|
Medicaid & CHIP |
40 |
35 |
50 |
50 |
|
Employer plans |
150 |
162 |
168 |
157 |
|
Nongroup & other |
27 |
30 |
25 |
27 |
|
Exchanges |
0 |
0 |
21 |
25 |
|
Uninsured |
50 |
54 |
18 |
23 |
|
TOTAL |
267 |
282 |
282 |
282 |
Under either bill, the number of Americans without HCI would be reduced by over 30 million. About half of this gain would represent expanded enrollment in Medicaid and CHIP, with the remainder accounted for by gains in insurance issued through exchanges, i.e., the “public option” (or whatever might wind up replacing it in the Senate bill?).
The number of people with private sector HCI is projected as holding steady with the House bill or declining marginally with the Senate bill. Employer-provided HCI coverage might be lower than projected, however, with a corresponding increase in government-sponsored coverage. See Déjà vu: Scoring a healthcare bill [the Baucus bill], 10/12/09.
THE MINUSES
• Spending increases for new programs – According to CBO estimates, either the House or Senate bill would have a gross cost of roundly $1 trillion over the 10-year projection period. This understates the long-term impact of spending increases, however, because the new outlays would not begin for several years.
|
GROSS OUTLAYS - $B |
House Bill |
Senate Bill |
||
|
2010-19 |
2019 x 10 |
2010-19 |
2019 x 10 |
|
|
Medicaid & Chip |
425 |
850 |
374 |
870 |
|
Exchange Subsidies & Related |
602 |
1,200 |
447 |
1,060 |
|
Small employer tax credits |
25 |
20 |
27 |
30 |
|
Total |
1,052 |
2,070 |
848 |
1,960 |
• Tax increases – On a net basis, both bills are scored as modestly reducing projected government deficits. It is projected that government spending increases would be outweighed by tax increases and spending cuts (see next heading).
Thus, the Senate bill provides an excise tax on high-premium (aka Cadillac) HCI plans, fees on various healthcare providers and insurers, and penalty payments for employers and individuals that opt out of applicable HCI mandates.
• Spending cuts for existing programs – In the main, projected spending cuts are not based on verifiable opportunities for efficiency gains – which could be considered a plus – but rather are arbitrary and perhaps illusory.
Under the House bill, for example, $396B is projected as being cut from Medicare, CHIP and Medicaid outlays over the 10-year period, primarily by reducing annual updates to fee for service rates applicable for Medicare ($228B) and Medicare Advantage ($170B).
The Medicare cuts are not seriously intended, apparently, but they would be reversed in separate legislation to avoid impacting the healthcare bill numbers. Dem’s slick fix: $210 billion of fiscal restraint, Byron York, Washington Examiner, 11/13/09.
As for Medicare Advantage, the indicated cuts would compromise the level of service currently being provided to seniors who participate in these plans – quite possibly resulting in higher overall costs to the government. Baucus Bludgeons Humana, Wall Street Journal, 9/23/09.
A new study from America's Health Insurance Plans, the industry trade group, finds that seniors on Advantage in California spent 30% fewer days in hospitals over fee-for-service patients, based on federal data. Democrats say that insurers are "overpaid," but the cuts—as Humana correctly noted—mean that seniors may lose this coverage.
http://online.wsj.com/article/SB10001424052970204488304574427200839672342.html
• Skyrocketing healthcare costs – This prediction is based on several considerations, which we will cover briefly with references.
# Since the 1960s when Medicare and Medicaid were launched, healthcare spending has grown substantially faster than the economy as a whole. The healthcare sector now represents about 1/6 of the total U.S. economy, and the trend is projected to continue.
Some observers have inferred a cause and effect between government intervention in the healthcare sector and rising consumption/ prices, and we believe they are quite right.
In a nutshell, government policies have created the perception that healthcare (with the exception of HCI premiums and co-pays) is something that someone else pays for. Consumers are not price conscious, as a result, and some healthcare providers have taken advantage of the situation. A substantial amount of overconsumption in the healthcare system results. A “ready, aim, fire” approach to healthcare reform, 3/30/09.
# Healthcare costs on a per capita basis are considerably lower in other countries, yet average life expectancies are equivalent or higher. This suggests that the amount of money Americans spend on healthcare may be excessive, and that we would do well to adopt more healthy lifestyles. It might also be thought to bolster the case for a government-run system (which is what most of the comparison countries have).
With regard to the latter point, however, the cost of government-run healthcare is typically contained by limiting access to healthcare system, aka rationing. For 100 real life examples, taken from the UK, Canada, and elsewhere, see Shattered Lives, Amy Ridenour and Ryan Balis, The National Center for Public Policy Research, 2009 (PDF downloadable for free).
There’s no such thing as a free lunch, but the government keeps trying to sell us one anyway. And so it is with government-run health care. Sold to the public in the guise of “free,” it is in fact more costly than any private alternative, for its price tag is more than financial. Those who chose to rely on government health care frequently pay not just in taxes, but in a more costly currency: pain, fear, suffering and death.
http://www.nationalcenter.org/ShatteredLives.html
# To make the U.S. healthcare system more cost efficient, experts suggest eliminating barriers to innovation, encouraging more competition, and giving patients more meaningful choices. See the following books, both written by professors of the Harvard Business School.
The Innovator’s Prescription: A Disruptive Solution for Health Care, Clayton Christensen et al., McGraw Hill (2008).
http://www.s-a-f-e.org/innovators_prescription.htm
Who Killed Health Care? Regina Herzlinger, McGraw-Hill (2007).
http://www.s-a-f-e.org/who_killed_healthcare.htm
The authors see government as part of the problem rather than the solution, and they single out the fee for service reimbursement model administered by Medicare/Medicaid for criticism. Indeed, Christensen suggests (p. 398) “we need to initiate changes in portions of the industry that are beyond Medicare’s reach rather than trying to change Medicare directly.”
Would GovCare further the recommendations of either author? To the contrary, GovCare would impose rigid standards for HCI coverage, require people to obtain HCI, expand Medicaid, and possibly even lower the eligibility age for Medicare. All of which would diminish the possibility for (a) disruptive change of the type Christensen advocates, or (b) the patient-driven healthcare system Herzlinger envisions.
• Undue complexity – Finally, there is plenty of room for error in attempting to ram through a once in a generation fix like this. Why not forget about GovCare and start on discrete healthcare issues, perhaps starting with an obvious problem like tort reform? Kill the bills, Charles Krauthammer, Townhall.com, 11/27/09.
The bill is irredeemable. It should not only be defeated. It should be immolated, its ashes scattered over the Senate swimming pool. Then do healthcare the right way -- one reform at a time, each simple and simplifying, aimed at reducing complexity, arbitrariness and inefficiency.
* * * *
It is hard to know how this national debate on healthcare will end, but the outcome is not preordained.
We are not saying read the bills, who has time for that, but give some thought to the GovCare proposal. Then let your family, friends, and representatives in Congress know what you think.
If all of us do this, the odds of making the right decision will improve a lot.
12/7/09 – RX, part two – a Constitutional convention? Read Replies
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Symptoms: crucial issues ignored, bad ideas entertained,
proposals presented deceptively, dissent dismissed |
How can the GRA disease be cured? We reviewed some ideas for reining in Congress last week, e.g., term limits and a balanced budget amendment. They seem promising, but would require Constitutional amendments – via one of the routes specified by Article V.
The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as Part of this Constitution, when ratified by the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof, as the one or the other Mode of Ratification may be proposed by the Congress; Provided that . . . no State, without its Consent, shall be deprived of its equal Suffrage in the Senate.
http://www.constitutioncenter.org/ncc_edu_Text_of_the_Constitution.aspx
“Good luck with that,” wrote one reader, but it is not in our intellectual DNA to assume that the American people are incapable of demanding action that is needed to save the country. Also, for all the approvals required, a dozen amendments have been proposed and ratified in the past 100 years – including the Twenty-Second Amendment (1952) that established term limits for presidents.
http://en.wikipedia.org/wiki/List_of_amendments_to_the_United_States_Constitution
All of these amendments were proposed by Congress and ratified by the states, but, as discussed last week, the members of Congress would predictably be unenthusiastic about curbing their own powers and prerogatives. To get balanced budget and term limits amendments, therefore, it might be necessary to convene (or at least threaten to convene) a Constitutional convention. Here are the steps prescribed by Article V:
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2/3 of states ask Congress to “call a convention to propose amendments” |
Congress (by 2/3 vote of both houses) calls a convention |
The convention proposes amendments |
The amendments are ratified by 3/4 of the states |
By one account, there are standing calls from 29 states (including Delaware and Pennsylvania) for a Constitutional convention. It would supposedly take only 5 more states (or 2 if the rescission of prior calls by Alabama, Florida and Louisiana were challenged in court) to reach the 2/3 level and start the ball rolling.
http://www.sweetliberty.org/standing_calls.htm
The forgoing is stale news, it turns out. There have been two campaigns in living memory that fell short, the first seeking to overturn controversial Supreme Court decisions on voting districts and apportionment (1960s) and the second seeking a balanced budget amendment (late 1970s and 1980s). Although the state calls may not have been formally rescinded, they probably do not have continuing vitality.
http://en.wikipedia.org/wiki/Convention_to_propose_amendments_to_the_United_States_Constitution
Still, the idea of an Article V convention worries many conservatives. They suggest that Congress would pick the delegates (by who knows what process), and that the delegates could do whatever they wanted at the convention. The Battle to Stop the Constitutional Convention, Tom DeWeese, American Policy Center, 1/16/09.
The fact is, once 34 states petition Congress to convene a Constitutional Convention, the matter is completely out of the States' hands. There is absolutely no ability to control what the delegates do in the convention..
http://www.americanpolicy.org/more/battle.htm
These points carry some weight, but on balance the fear of a runaway convention seems overblown. Suppose the convention decided to gut the Bill of Rights, for example, as foreseen by the American Policy Center. Bob Unruh, WorldNetDaily, 12/12/08.
Don't for one second doubt that delegates to a Con Con wouldn't revise the First Amendment into a government-controlled privilege, replace the 2nd Amendment with a “collective” right to self-defense, and abolish the 4th, 5th, and 10th Amendments, and the rest of the Bill of Rights. Additions could include the non-existent separation of church and state, the “right” to abortion and euthanasia, and much, much more.
http://www.wnd.com/index.php?fa=PAGE.view&pageId=83364
We suspect the public reaction would be quite negative if such things happened, and that few state legislatures would ratify the convention’s handiwork.
Most Americans are currently satisfied with the Constitution, or at least do not favor tampering with it. The most common criticism of the Constitution is that it does not place enough limits on government power. 59% of voters say Constitution is just fine; 39% say it doesn’t restrict government enough, Rasmussen Reports, 7/3/08.
In the latest survey, only 14% of voters think the Constitution places too many restrictions on what government can do, while 39% say it is not restrictive enough and 38% say it’s about right as is.
If an Article V convention would involve risks for conservatives, moreover, it might also create opportunities. The Case for a Federalism Amendment: How the Tea Partiers can make Washington pay attention, Randy Barnett (professor of Constitutional law at Georgetown University), Wall Street Journal, 4/23/09.
http://online.wsj.com/article_email/SB124044199838345461-lMyQjAxMDI5NDIwMzQyNDMxWj.html
As Professor Barnett notes, conservatives are not the only ones who would fear an Article V convention. If a growing number of states were calling for a convention, Congress might be stampeded into acting preemptively – as it has done before.
It was the looming threat of state petitions calling for a convention to provide for the direct election of U.S. senators that induced a reluctant Congress to propose the 17th Amendment [ratified in 1913], which did just that.
As for Barnett’s “federalism amendment,” it smacks too much of attempting to turn back the clock. Considering all that has changed since 1789, we doubt it would be feasible (or perhaps even desirable) to restore the original line of demarcation between federal and state powers.
The founders visualized that the activities of the federal government would be carried out pursuant to the powers given to Congress and the president by the Constitution, e.g., raising armies and fighting wars, regulation of commerce among the several states and with foreign nations, making treaties, coining money, borrowing money, raising taxes, etc., with all other functions of government reserved to the states. See Federalist Paper 45 on centralization or decentralization, authored by James Madison.
The powers delegated by the proposed constitution to the federal government, are few and defined. Those which are to remain in the state governments, are numerous and indefinite. The former will be exercised primarily on external objects, as war, peace, negotiation, and foreign commerce, with which last the power of taxation will, for the most part, be connected. The powers reserved to the several states will extend to all the objects, which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the state.
http://www.s-a-f-e.org/federalist_papers.htm
Then came the Tenth Amendment. “The powers not delegated to the United States by the Constitution, nor prohibited to it by the States, are reserved to the States respectively, or to the people.”
Years later, President Madison vetoed a bill providing for a federal public works program on grounds that – irrespective of the economic merits – “such a power is not expressly given by the Constitution.” His conclusion is elegantly expressed, and the logic seems impeccable. Veto message to the House of Representatives, March 3, 1817.
http://www.constitution.org/jm/18170303_veto.htm
Fast-forward to today, when the federal government is involved in a great many public works and social programs that have little if anything to do with its enumerated powers (the Constitution does not mention social security, healthcare, agriculture, education, etc.). Under the Constitution as it is now interpreted, any legislation by Congress will be upheld unless a specific prohibition can be pointed to in the Constitution.
There are a few dissenters, such as Representative John Shadegg (R-AZ) and Senator Tom Coburn (R-OK), but they make their case as a matter of principle and do not expect to undo what has been done. Enumerated Powers Act Brings Constitution to Capitol Hill, Andrew Grossman, Heritage Foundation, 7/30/08.
http://www.heritage.org/Research/LegalIssues/lm29.cfm
In short, the enumerated powers doctrine is dead. Instead of trying to bring it back to life, fiscal visionaries should focus on opposing wasteful or ill-conceived programs at either the federal or state level using arguments such as does more harm than good, costs exceeds benefits, overlaps with programs of other agencies or governmental units, or could be better addressed by the private sector. See the Budget Discipline page of this Website, “where to cut” section, for some examples.
http://www.s-a-f-e.org/budget_discipline.htm
Another consideration that may point to an Article V convention is that the U.S. political system has been operating for 220 years with only modest changes (at least formally) to its governing document (the Constitution). Now, like an aging motor vehicle, the system may require a general overhaul as opposed to routine maintenance.
We have already talked about Congressional term limits and balanced budget amendments, which we favor, and a “federalism” amendment that seems dubious. Here are some other ideas that might be considered at an Article V convention?
• Repeal of the Sixteenth Amendment (authorizing a federal income tax) – Although Professor Barnett presented this proposal as part of his federalism amendment, it stands on a somewhat different footing. The idea would not be eliminating federal tax revenues, but collecting them in a different way. The Case for a Federalism Amendment, Randy Barnett, Wall Street Journal, 4/23/09.
Congress could then replace the income tax with a "uniform" national sales or "excise" tax (as stated in Article I, section 8) that would be paid by everyone residing in the country as they consumed, and would automatically render savings and capital appreciation free of tax.
As readers may recognize, such a switch would be consistent with the FairTax, which is a proposal to replace all federal income and payroll taxes with a national sales tax. An essential step in implementing the FairTax is said to be repealing the Sixteenth Amendment, so as to preclude any backtracking on elimination of the income tax.
SAFE believes the federal income tax system is inequitable and unduly complex. We view the FairTax as one of three ways to fix the system, the others being a flat tax or radical overhaul. See the Taxes page of this Website for discussion. Accordingly, the repeal of the Sixteenth Amendment seems like an appropriate agenda item for an Article V convention, but its approval does not seem essential.
http://www.s-a-f-e.org/taxes.htm
• Reining in the executive branch – Many of our examples of Government Run Amok disease relate to the executive branch. Is this any way to govern a country? 11/16/09. Ergo, action may be required beyond shaping up Congress.
If the U.S. system of government was likened to a motor vehicle, Congress might be seen as the brakes. It can block proposed programs by declining to provide the required funding. It can also kill established programs by withdrawing funding, although this power has been exercised all too infrequently.
When it comes to new undertakings or changes in policy, on the other hand, Congress is not equipped to provide effective leadership. With 500+ principals and an unwieldy structure, it has great difficulty making and implementing decisions. No wonder cynics say there are two things one should never watch, making sausage and making legislation.
The executive branch can act as the motor of government because its members all report to the president. Thus, when David Walker (CEO of the Peterson Foundation, formerly U.S. Comptroller General) talks of the need for “committed and inspired leadership” to address the government’s long-term fiscal problems, he says such leadership could only come from the president. If you want good answers on healthcare, ask good questions! 2/11/08.
Fine, except that presidents do not invariably provide good leadership – as has been demonstrated time and again – and someone needs to hold them accountable. As we said in last week’s entry, after reviewing what happened after the Republican Party electoral comeback in 1994, “never place too much trust in any leader, group of leaders, or political party.”
We appreciate the advice of Alexander Hamilton in Federalist Paper 70 that “energy in the executive” is a hallmark of good government, and also that it is better to vest the executive power in one person (the president) than in a council. As Hamilton also says, however, the legislature plays a key role in setting as opposed to executing policy.
In the legislature, promptitude of decision is oftener an evil than a benefit. The differences of opinion, and the jarrings of parties in that department of the government, though they may sometimes obstruct salutary plans, yet often promote deliberation and circumspection; and serve to check excesses in the majority.
Who is in a better position to hold the president accountable on a regular basis than the members of Congress? True, the ultimate arbiters are the American people, but they only get to decide who will be president every four years.
Yet the current relationship between Congress and the president is not conducive to such a role for Congress, perhaps because of undue emphasis on the separation of powers.
# Presidential appearances before Congress are infrequent (State of the Union address, budget message, other subjects at the president’s initiative) and one-way (the president speaks, members of Congress listen).
In a September 9 address to Congress, for example, the president offered a litany of arguments in support of his healthcare plan. Most of the points had been made before, and some may not have been 100% accurate – including a statement that illegal immigrants could not get coverage under the plan. Obama’s speech was full of chronic deceptions, David Freddoso, Washington Examiner, 9/10/09.
http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/No-cure-58480702.html
As usual, the members of Congress had no opportunity to comment or ask questions. We have no wish to condone the outburst by Representative Joe Wilson (R-SC), who has quite properly apologized for the incident, but can appreciate the sense of frustration that may have triggered it. Here is how things went according to the transcript.
[President Obama] Now, there are also those who claim that our reform efforts would insure illegal immigrants. This, too, is false. The reforms -- the reforms I'm proposing would not apply to those who are here illegally.
[Mr. Wilson]: That's a lie. [Elsewhere reported as “you lie,” we do not know which was actually said.]
(AUDIENCE BOOING)
[President Obama] That's not true.
And one more misunderstanding I want to clear up: under our plan, no federal dollars will be used to fund abortions, and federal conscience laws will remain in place.
http://www.cnn.com/2009/POLITICS/09/09/obama.health.care.transcript/
# Presidents and key advisers can claim “executive privilege” to withhold information from Congress or other bodies on many matters, including policy discussions and state secrets. While the privilege is not absolute, the courts have generally upheld it. Background on Executive Privilege, Aziz Huq, NYU School of Law, 3/23/07.
http://www.brennancenter.org/content/resource/background_on_executive_privilege/
# Presidents retain advisers (aka “czars”) who not only provide advice but also perform administrative functions. Most of them are not approved with the advice and consent of the Senate. This approach sometimes creates confusion about who is in charge of a given functions, and it also undermines the effectiveness of Congressional oversight. Examining the History and Legality of Executive Branch Czars, Matthew Spaulding, Senate Judiciary Committee testimony, 10/6/09.
As the number of czars expands, and the President's policy staff grows, and there are more and more individuals acting more and more as administrative heads rather than advisors, Congress should raise questions as to whether those individuals should be subject to executive privilege or can be compelled to testify before Congress. The President cannot have it both ways.
http://www.heritage.org/Research/Thought/tst100809a.cfm
Now granted, Congress and the president communicate in many ways. The president and/or advisers go to Capitol Hill for discussions, or stay in touch by telephone or electronic devices with legislators, and Congressional leaders may be invited to the White House. But the president can set the ground rules and limit participation as desired, so such communications are of limited help in testing the president’s thinking or holding him/her accountable.
One way to publicly test the president’s thinking – which is certainly not accomplished by the screened, if not scripted, questions at town hall meetings and press conferences – would be to adopt a parliamentary system of government like the one used in the United Kingdom.
But a parliamentary system has problems too; perhaps a less sweeping change should be considered. How about a Constitutional amendment providing for monthly sessions in Congress at which the president would respond to questions from members? Such sessions would be informative, and they might result in better decision-making as well. Bipartisanship or Groupthink? David Stokes, Townhall.com, 2/1/09.
I think we would have better leaders, if they had to actual[ly] debate their stuff directly with Congress – at least on occasion. Photo-ops and handshakes aside, I wonder how much better a good, heated, executive-legislative argument might be for our national political health.
Consideration might also be given to a Constitutional amendment limiting “executive privilege” to state secrets. So long as national security is not jeopardized, why shouldn’t the president et al. have to explain how policy decisions were arrived at, who was involved, and any issues that arose in implementation?
* * * *
An Article V convention would entail risks as well as opportunities. It is not clear that one should be called for, nor what the results would be.
Nevertheless, as discussed in the four-part series that concludes with this entry, (a) there are serious problems with the U.S. system of government, (b) it is hard to see them being addressed without Constitutional amendments, and (c) the amendments would be hard to get via the Congress proposes/state legislatures ratify route.
Sometimes it is necessary to take chances in life, e.g., to break a completed side of a Rubik’s Cube in order to solve the overall puzzle.
We would love to know your views on calling for an Article V convention. Please respond to ww3@atlanticbb.net.
* * * This Blog's Replies * * *
I'm not in favor of having a Constitutional Convention. My biggest concern is that it would afford the opportunity for mischief to those who wish to turn the Constitution into a wish list. The "Writers" provided a wherewithal for amending the Constitution that has served us well these many years. – Alex F. Wysocki, Conservative Caucus of Delaware
I fully support the idea of Congressional term limits, but can see no hope for making it happen unless the members voluntarily limit themselves or the voters limit them. A Cons. Conv. with the present Congressional make-up could be a real disaster! - SAFE director
Given who holds the reins of the power structure at the moment, we could be in a lot of trouble calling a Constitutional convention. It could be re-written in a manner that we would not like. - SAFE director
Let the revolution begin, again...no more taxation, without representation...throw the bums out. - SAFE member, Arizona
OK, OK, it was just a thought. But remember the adage, “nothing ventured, nothing gained.” Publius
11/30/09 – RX, part one – Reform Congress
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Symptoms: crucial issues ignored, bad ideas entertained,
proposals presented deceptively, dissent dismissed Diagnosis: Government Run Amok (GRA) |
Lest SAFE be viewed as a bunch of alarmists, here is one more analysis suggesting the disease could be life threatening. The general theme: opportunities to avert or minimize problems in the pipeline, such as surging energy prices, sharply higher interest rates, and massive tax hikes, are being ignored in favor of secondary issues – and it will not be pretty when the problems hit in full force. We ain’t seen nothing yet, Victor Hanson [Hoover Institution], Washington Times, 11/28/09.
As these storm clouds gather, Congress bickers on Saturday nights about borrowing even more money for health care reform, yet another federal entitlement.
http://www.washingtontimes.com/news/2009/nov/28/we-aint-seen-nothing-yet/
Now on to this week’s topic, suggesting a cure for GRA. We will begin with Congress.
Throw the rascals out – A mid-term election is coming up next November, and the voters can send some new legislators to Washington if they have a mind to do so.
Judging from a recent Rasmussen poll, there could be some big changes. Indeed, the poll indicated that 57% of the voters would be disposed to fire all the members of Congress and start over. A 2008 poll (taken at the time of the financial bailout bill, aka TARP) yielded similar results, as shown in the following table.
|
|
Replace |
Keep |
Not sure |
|
August 2009 |
57% |
25% |
24% |
|
October 2008 |
59% |
17% |
24% |
But these results are fanciful, because voters do not vote for Congress as a body – they vote for the representative from their Congressional district and the senators from their state. Regardless of what people around the country may think of House Speaker Nancy Pelosi, for example, voters of the ultraliberal 8th District of California (most of San Francisco) have kept her in office since 1987 and will likely continue to do so. Many other members of Congress will not be at risk in 2010 due to occupying safe seats or, in the case of 2/3 of the senators, not having to run at all.
Still, the stakes will be high in 2010, with the parties fighting to maintain or improve their position. The Republicans, in particular, will be hoping to replicate their mid-term victory in 1994 when their House candidates subscribed to a Contract with America that was supposed to bring about “the end of government that is too big, too intrusive, and too easy with the public's money.”
http://www.house.gov/house/Contract/CONTRACT.html
The Contract with American commitments were clearly and fully expressed, and if all of them had been implemented the impact could have been tremendous. Take the proposed Fiscal Responsibility Act:
A balanced budget/tax limitation [3/5 vote in each house for a tax increase] amendment and a legislative line-item veto to restore fiscal responsibility to an out- of-control Congress, requiring them to live under the same budget constraints as families and businesses. (Bill Text) (Description)
The House of Representatives passed the balanced budget/tax limitation amendment after the 1994 election, but it fell one vote short of the 2/3 vote required in the Senate.
http://www.civilrights.org/monitor/vol8_no1/art8.html
A legislative line-item veto (exercisable by the president, subject to override by both houses of Congress) was enacted later, but to no avail because the U.S. Supreme Court held it violated the Separation of Powers doctrine. High Court Strikes Down Line-Item Veto, Richard Carelli, Washington Post, 6/25/98.
http://www.washingtonpost.com/wp-srv/national/longterm/supcourt/stories/ap062598.htm
Not that this effort was unproductive, because with all the talk about balancing the budget – plus the dynamic of competition between the parties and a booming economy – the job actually got done during the closing years of the Clinton Administration.
Without structural support for a balanced budget, however, the tide of red ink soon resumed. Some people blame the tax cuts after the Republicans regained the White House in 2001; others (including us) would place more stress on the failure to control spending. Either way, it is hard to square the Republicans’ approach during these years with their traditional advocacy of limited government and fiscal discipline. Could it be the “Grand Old Party” was seduced by the lure of using big government for its own purposes? Leviathan on the Right, Michael Tanner, Cato Institute (2007), p. vii.
. . . no factor has been bigger than the rise of a new brand of conservatism – one that believes big government can be used for conservative ends. It is a conservatism that ridicules F. A. Hayek and Barry Goldwater while embracing Teddy and even Franklin Roosevelt. It has more in common with Ted Kennedy than with Ronald Reagan.
http://www.s-a-f-e.org/leviathan.htm
Will there be a Contract with America 2.0 in 2010? Former House Speaker Newt Gingrich has been discussing the subject with Michael Steele, Director of the Republican National Committee, and he shared some of their thinking at C-SPAN’s Cable Center Class, 11/13/09. Video (3:32)
Whatever the name (Steele favors a First Principles label), there would be a series of proposals on jobs, energy, healthcare, education, etc. intended to help the Republicans make the transition from opposition party to alternative party.
The actual “contract” would be announced around September 2010, close enough to the election to reflect the circumstances then applicable, but with enough time for voters to reflect on the Republican commitments and make a reasoned decision.
http://www.youtube.com/watch?v=jDWggzMOWlA
Maybe Contract with America 2.0 (or First Principles) is a great idea, maybe not, time will tell. It would help to know what circumstances will exist next September, e.g., will GovCare have gone through or been turned back, what will the jobless rate be, etc. Also, one would want to study the specific Republican proposals (and any Democrat responses).
But one point was amply demonstrated after the Republican comeback in 1994. Never place too much trust in any leader, group of leaders, or political party.
Gains achieved through a spirited campaign and purging of some of the less effective/reliable/honest incumbents in 2010 and 2012 (when the presidency will also be at stake) could prove temporary. Durable progress requires structural changes.
Term limits – The longer politicians stay in Washington, the more likely they are to fall under the spell of promoters of this, that or the other government program. Campaign cash is one inducement; another is the delight of being courted and praised. The only requirement is a willingness to spend other people’s money for arguably good causes. Potomac Fever, Chris Edwards, Cato Institute, 12/12/05.
The spending impulse of [legislators] is reinforced at every turn in Washington. Congressmen are bombarded with funding requests during visits from constituents, at receptions, in phone calls to campaign contributors, in meetings with lobbyists, in discussions with other members, and in news articles.
Congressional hearings add to the pro-spending climate. Rather than being like court proceedings, where a balance of views is heard, hearings are dominated by witnesses who favor more spending. Witnesses skillfully flatter members for their wise support of supposedly vital programs.
http://www.cato.org/pub_display.php?pub_id=5333
OK, ban the lobbyists, some people may say, but we doubt this is feasible. The United States is a free country, after all, and the First Amendment guarantees the right to “petition the government.”
A more practical answer might be to limit the time that members of Congress can spend in office, with the hope that they will leave before Potomac Fever sets in. To this end, a Citizen Legislature Act (limiting senators to two terms, and limiting representatives to either three or six terms) was included in the Contract with America.
Packaged as a Constitutional amendment, the CLA did not receive the required 2/3 vote in the House and lacked sufficient support in the Senate as well. Term Limits: The Fight Dies Hard, Time, 6/5/95.
To win the two-thirds of both Houses needed to send a constitutional amendment to the states for approval, backers would have to replace or win over 63 House members and, at last count, at least 24 Senators.
http://www.time.com/time/magazine/article/0,9171,983018,00.html
Having taken office expecting the Contract with America promises to be taken seriously, freshman Congressman Joe Scarborough (R-Florida) became disillusioned when GOP leaders developed “collective political amnesia” about the promises that had been made. Rome Wasn’t Burnt in a Day, Joe Scarborough, HarperCollins (2004), page 21.
Weeks after his stunning ascension to majority leader in November 1994, Dick Armey suggested that since Republicans were now running Congress, term limits were no longer necessary. As columnist Bob Novak noted, “The House roll call votes on term limits were rigged so that every Republican had a change to vote for one version of term limits while no version actually received enough votes to pass. Hypocrisy was the watchword.”
http://www.s-a-f-e.org/rome.htm
Would another run at term limits make sense now? The scourge of Potomac Fever remains alive and well, and other arguments carry weight as well. Here are several from Cato Institute’s Handbook for Policymakers, 7th edition.
• In a June 2008 poll by Gallup, only 12% of respondents expressed confidence in Congress. [This was unusually low; the current approval rating is in the mid twenties.]
• Nearly half of the states have term limits for their legislatures, and attempts to eliminate such limits (e.g., a California ballot initiative in 2002) have generally been rebuffed.
• National polls have shown strong national support for term limits, e.g., 67% per an NBC/Wall Street Journal poll in 2003.
• Term limits might encourage leaders from the private sector to take time out from their careers to serve as citizen legislators, especially if (as Cato advocates) a three-term limit was set for members of the House.
http://www.cato.org/pubs/handbook/hb111/index.html (section 8)
Term limits would also have some potential drawbacks, in our opinion, which should be taken into account.
• Some Congressional functions are complex and require specialized knowledge, e.g., oversight over national intelligence or tax policy. And while many “old timers” in Congress deserve to be retired, there are some whose leadership and expertise would be missed.
To appreciate the potential impact of term limits, check out the House and Senate seniority lists on Wikipedia.com. They show that (1) many members of the current Congress have served far longer than would be possible with the proposed term limits, and (2) a mass retirement would result unless current officeholders were exempted (defeating the purpose of the exercise).
House of Representatives: With a 6-term limit, over half the membership would be barred from seeking reelection in 2010 – including 60+ members with 20 years in office or more. Anyone elected in 2004 or earlier would be excluded with a 3-term limit, raising the attrition rate to over 70%.
Senate: Nearly two-thirds of the members would be ineligible to seek reelection when their current terms expire.
http://en.wikipedia.org/wiki/List_of_current_United_States_Senators_by_seniority
• By reducing the level of Congressional experience (and in some cases competence), term limits would tend to weaken the influence of Congress vis-à-vis the executive branch. Other changes in the system might be needed to preserve a proper balance.
• Term limits would not necessarily upset the cozy way in which business is done inside the Beltway. Many members of Congress remain active after leaving office, often continuing to participate in the legislative process as high-paid lobbyists. National Suicide, Martin Gross, Berkley Books (2009), pp. 198 et seq.
In all, there are now 68 former members of the House who, from 1998 to 2005, moved just a mile away to K Street in Washington as lobbyists, with a raise in pay from $165,000 to upwards of $500,000 or even a million a year. A study by Public Citizen of the swift movement from Congress to Lobby-land shows that 43% of the eligible Congressmen who left Congress have become registered lobbyists. The percentage in the Senate was even higher, some 50%, or 18 out of 36 senators, a statistic that should shock sleepy citizens.
http://www.s-a-f-e.org/national_suicide.htm
On balance, we believe term limits would be a good thing. But they would not be an unmixed blessing, and we would be inclined to favor a six-term (not three-term) limit for the House. It is also unclear how such limits would be imposed.
• Obtaining 2/3 approval of both houses of Congress for a Constitutional amendment could prove difficult. Indeed, the Cato Handbook (page 92) flatly states that “a Congress controlled by career politicians will never pass a term limits amendment.”
• Establishing Congressional term limits under state law has been tried. No dice; such an approach was disapproved by a 1997 decision of the U.S. Supreme Court.
http://www.washingtonpost.com/wp-srv/politics/special/termlimits/stories/ar022597.htm
• Another approach would be asking Congressional candidates to pledge they will not run for more than a specified number of terms. No Constitutional amendment or even legislation would be required, and the Cato Handbook (page 93) says “self-limiters” have served their constituents well and felt free to vote in a fiscally responsible manner.
Maybe, but the voluntary pledge approach seems perversely selective. Why should citizen legislators limit their time in office, e.g., Joe Scarborough who chose to resign and return to private life in September 2001, while political hacks serve term after term? If term limits are to be, we think they should apply to all members.
* * * *
There is one approach left that might serve to get term limits, and perhaps a balanced budget amendment and other constructive changes as well, namely a Constitutional convention. But no such a convention has taken place since 1787, and convening one now would entail risks as well as opportunities.
Tune in next week as the discussion continues.
11/23/09 – What is causing GRA? Read Replies
It was previously suggested that the U.S. political system is faltering due to crucial issues ignored, bad ideas entertained, proposals presented deceptively, and dissent dismissed. Is this any way to govern a country? 11/16/09.
Now we will review some possible causes of the disease, call it “government run amok,” which in our view threatens this country’s prosperity and standing in the world.
Partisan gridlock – One explanation that has been offered for the mediocre results of the political system is a lack of bipartisan cooperation, which more often than not is blamed on the opposition party.
Thus, Democratic leaders had some suggestions to offer after the party switch of Senator Arlen Specter (now D-PA) in April. Pelosi’s advice to Republicans, San Francisco Chronicle, 4/30/09.
"I say to Republicans in America, take back your party," said House Speaker Nancy Pelosi, D-San Francisco. "The party of protecting the environment, the party of individual rights, the party of fairness."
Picking up the refrain, former Secretary of State Colin Powell opined that Republicans should stop “repeating mantras of the far right” and develop a more positive message. Powell Says Shrinking GOP Should Return to the Center, Chris Strohm, National Journal.com, 5/5/09.
As for what the general public thinks, the growing number of Americans who identify themselves as “independents” or “unaffiliated” may indicate a desire for politicians to take a middle of the road approach.
According to a Pew Research poll, independents represented 39% of the electorate in April versus 33% Democrats and 22% Republicans (“the lowest level of professed affiliation with the GOP in at least a quarter century”). [These numbers leave 6% of respondents unaccounted for.] Independents Take Center Stage in Obama Era, 5/21/09.
http://people-press.org/report/517/political-values-and-core-attitudes
Other polls report somewhat more support for the established parties, especially on the Republican side, but confirm a surge in independents. Thus, Rasmussen reported the following split in October: Democrats 38%; Republicans 32%; unaffiliated 30%. Democrats Inch Up in Partisan ID in October, GOP Slips, 11/2/09.
It is commonly perceived that the parties are not working together on key issues (e.g. healthcare), and understandably so. After all, Democrats have stoutly resisted inputs on such issues, while Republicans have voted overwhelmingly against the Democrats’ proposals. Few Perceive Sincere Bipartisan Efforts in Congress, Gallup, 9/18/09.
http://www.gallup.com/video/123029/Small-Number-Perceive-Sincere-Bipartisan-Efforts-Congress.aspx
Nevertheless, we are not prepared to attribute the malfunctions of the political system to excessive partisanship.
For one thing, partisan rivalry has existed from the start of this nation. For an insightful analysis of “factions,” see Federalist Paper No. 10 by James Madison:
• Factions are inevitable
As long as the reason of man continues fallible, and he is at liberty to exercise it, different opinions will be formed. As long as the connection subsists between his reason and his self-love, his opinions and his passions will have a reciprocal influence on each other, and the former will be objects to which the latter will attach themselves.
• the most important reason for factions is “the various and unequal distribution of property”
Those who hold, and those who are without property, have ever formed distinct interests in society. Those who are creditors, and those who are debtors, fall under a like discrimination. A landed interest, a manufacturing interest, a mercantilist interest, with many lesser interest, grow up of necessity in civilized nations, and divide them into different classes actuated by different sentiments and views.
• and instead of trying to brush the existence of factions under the rug, an enlightened government should strive to mitigate their effects.
The regulation of these various and interfering interests forms the principal task of modern [as of 1787] legislation, and involves the necessary and ordinary operations of government.
http://www.s-a-f-e.org/federalist_papers.htm
Moreover, bipartisan cooperation can morph into the blind acceptance of ideas that deserve to be vigorously debated. Notice how quick the advocates of an ever-expanding role for government are to class dissenting views as of no consequence. Hey, they might even be talking about us!
Thus in September, a White House official characterized participants in the March on Washington as a “fringe element” that did not understand the president’s healthcare proposal. “Tea Party” protestors “wrong,” Sean Lengell, Washington Times, 9/13/09.
"I don't think it's indicative of the nation's mood," David Axelrod, the president's top adviser, said on CBS' "Face the Nation." "My message to them is, they're wrong."
http://www.washingtontimes.com/news/2009/sep/13/wh-aide-tea-party-protesters-wrong/
True, the president lauded political free speech during a talk to a student group in China, but he has exhibited a rather different view in other contexts. Obama’s Doubletalk on Political Dissent, Michelle Malkin, Townhall.com, 11/18/09.
While [his] press shop feeds paeans to free speech into Obama's globetrotting teleprompter, the White House is still waging war on vocal foes at home. Obama has lectured his critics in Washington to stop talking and "get out of the way." He has stacked his carefully staged town halls with partisan stooges and campaign plants throughout the year. The president recently derided limited-government activists ***
So while there is much to be said for decorum and civility, we see no reason why the parties should be of the same mind on everything – or pretend to agree if they don’t. If anything, it seems to us, the causes of the government run amok disease lie at the other end of the spectrum.
Groupthink – David Stokes, an educator and talk show host, observes that complaints about partisanship tend to be in the eye of the beholder. “It’s bipartisan if you agree with me. It’s partisan if you don’t.” And in the long run, he suggests, vigorous political debate is healthy, while artificial subordination of differences of opinion (or groupthink) can have unfortunate, sometimes even catastrophic consequences.
What causes groupthink? Watch out for illusions of invulnerability, the presumed morality or superiority of certain segments of society, and the devaluation of dissenting opinions. Also, remember that no one is immune. Bipartisanship or Groupthink? David Stokes, Townhall.com, 2/1/09.
Groupthink is an equal opportunity problem. It is not reserved solely for democrats, republicans, or independents. It rears its ugly head any time a group takes over, or gets comfortable in power, and loses the capacity for objectivity. And when there is a “we won/it’s our turn” mindset, groupthink is usually in the air. It is a most subtle and self-deceptive toxin.
The nation’s founders seem to have been well aware of such problems, for the Constitution was painstakingly crafted to balance political power.
• The federal government was given certain enumerated powers, notably national defense, international diplomacy, and the regulation of interstate commerce, but it was visualized that the state governments would continue to call the shots in all other areas. Overall, Madison predicted in Federalist Paper No. 45, the states would hold their own.
The powers delegated by the proposed constitution to the federal government are few and defined. Those which are to remain in the state governments, are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several states will extend to all the objects, which, in the ordinary course of affairs, concern the life, liberties and properties of the people; and the internal order, improvement, and prosperity of the state.
• The power of the federal government was vested in three co-equal branches, with built-in “checks and balances.” Moreover, the legislative branch, which alone had access to “the pockets of the people,” was comprised of two houses, one elected based on population and the other on the basis of giving each state an equal say.
Sounds like an effective design to discourage groupthink, but modern day observers note that there have been concerted efforts to reinterpret the Constitution. The objective, or at least result, has been expansion of the federal government’s power.
Thus, Thomas Sowell of the Hoover Institute deplores the appointment of judges on the basis of their political leanings. “Empathy” versus Law: Part IV, Townhall.com, 5/8/09.
For more than a century, believers in bigger government have also been believers in having judges "interpret" the restraints of the Constitution out of existence. They called this "a living Constitution." But it has in fact been a dying Constitution, as its restraining provisions have been interpreted to mean less and less, so that the federal government can do more and more.
To which, U.S. Supreme Court Justice Clarence Thomas adds that there are basically two ways to interpret the Constitution – “try to discern as best we can what the framers intended or make it up.” How to Read the Constitution, Wall Street Journal, 10/20/08.
http://online.wsj.com/article/SB122445985683948619.html
On the legislative side, Chris Edwards of the Cato Institute criticizes the members of Congress for assuming that the federal government has carte blanche to expand into any area it chooses. Downsizing the Federal Government, 2005, p. 25.
Members of Congress should start taking seriously their oaths to uphold the Constitution. Too often Congress ignores the Constitution or inserts boilerplate language into legislation to claim authority. Instead, when a questionable program comes before them, members of Congress should ask whether there is Constitutional authority for it and vote against it if they believe it violates the fundamental law of the land.
http://www.s-a-f-e.org/downsizing_government.htm
To use a current example, consider the proposal that people be required to obtain government-approved healthcare insurance [HCI]. Would such a mandate be Constitutional? Beware the health[care] insurance police, Donald Lambro, Washington Times, 11/2/09.
Congress has never before required Americans to buy a product or service under penalty of law. Yet that's precisely what the healthcare bills pending in the House and Senate would do in the age of Obama, despite compelling arguments that the Constitution gives lawmakers no power to do so.
http://www.washingtontimes.com/news/2009/nov/02/beware-the-health-insurance-police/
House Speaker Nancy Pelosi’s “not a serious question” response was noted last week.
Senator Jack Reed (D-RI) suggests that requiring HCI would be akin to imposing a draft as an incident to raising an army. Fine, except the Constitution empowers Congress “to raise and support armies,” while saying nothing about healthcare. History.com, 11/12/09.
http://boards.history.com/topic/Current-Events/The-Latest-Washington/520079240
Others cite mandatory auto insurance as a precedent for an HCI mandate, overlooking the fact that it is the states, not the federal government, which mandates auto insurance. Is Obamacare Like Mandatory Auto Insurance? Andrew Tallman, Townhall.com, 11/17/09.
Now, obviously, if we were debating whether individual states could mandate health coverage, at least the levels of government being analogized would be the same. But the leap from what states do to what Congress can do betrays vistas of ignorance concerning our system of government. A college freshman would be embarrassed to make such a weak argument, yet members of Congress have said precisely this.
All things considered, the phenomenon of groupthink seems rather descriptive of the problems with the U.S. system of governance with which we began. Furthermore, there is much evidence of the Constitution being reinterpreted in a manner that expands the ambit of the federal government.
So perhaps we have found the cause of the problem, or at least one of them, but there is another point that needs to be considered.
Limited attention span – Remember Pogo’s quip that “We have met the enemy and he is us.” Before placing the blame for a malfunctioning political system on conniving politicians, activist judges who have misinterpreted the Constitution or whoever, perhaps everyone should look in the mirror.
Many Americans are poorly informed about policy issues, proposed legislation, and the like, and this is surely not due to a lack of information.
There was a time when the printing press was a revolutionary development, leveling the playfield between the upper classes and ordinary people. Then came telegraph, the telephone, radio and television. Now we are in the Internet age, with Web pages, e-mails, blogs, micro blogs (e.g., Twitter), and social networking sites, all increasingly accessed by cell phones and other handheld devices.
The following video (4 minutes) provides a hard-hitting series of observations about the revolution that is in process, including these. By 2010, Gen Y [aka Millennials] will outnumber Baby Boomers. There are over 200 million blogs on the Internet. It took 38 years for radio to build an audience of 50 million people; Facebook acquired 100 million users in 9 months. And we no longer search for the news, it finds us.
http://www.youtube.com/watch?v=sIFYPQjYhv8&feature=player_embedded#
But with so much content available, people quickly reach the overload point. Most videos that are over 2 minutes long will not be watched. A message must be boiled down to 140 keystrokes or less for posting on Twitter. If viewers do not like what someone is saying on television, they will simply change the channel.
Perhaps an analogue of Gresham’s Law (cheap money drives dear money out of circulation) is at work, whereby breaking news and trivia trump important information. Or to paraphrase an old joke, people may wind up knowing more and more about less and less until they know everything about nothing.
We get it that the public is hungry for political leadership, but there is a dismaying lack of clarity about the specifics. The Permanent Tea Party, Daniel Heninger, Wall Street Journal, 11/5/09.
Independent voters across the U.S. have become like the massive cattle herd John Wayne drove from Texas to Kansas in "Red River." These voters are spooked and on the run, a political stampede that veered left in November 2008 and now right a mere year later. They will keep running—crushing incumbents, candidates and political models of the left and right—through November 2010 and onto 2012 until they find a person or party capable of leadership appropriate to our unsettled times. And yes, Virginia, the possibility of a man on a white horse in 2012 is not out of the question.
http://online.wsj.com/article/SB10001424052748704013004574515453039975302.html
But wait a second, didn’t these same voters elect the leaders who are currently in office? Seems to us that they should accept some of the blame. Also, why in the world should the country be looking for a “man on a white horse” (or dictator)?
So let’s chalk up a short public attention span as another source of the government run amok disease.
Next week – We know the U.S. political system is malfunctioning, and at least some of the causes. The final entry in this series will evaluate some potential solutions.
* * * This Blog's Replies * * *
Concerning Gen. Powell's comment about "repeating mantras of the far right," it should be pointed out that Conservatism IS the center. As I told some of the leadership at the Republican State convention in May, to the right there are the libertarians and the anarchists. To the left are the liberals, socialists, fascists and communists. And liberal & socialist are probably synonymous. Conservatives ARE in the center. Too many have bought into the myth that conservatives are the far right. – SAFE director
I think one of the biggest problems is payoffs like we saw to Sen. Landrieu [D-LA] on Saturday. You should not be able to put, for example, highway money in a defense appropriations bill or defense funding in a health care bill. I don't know how to phrase this, but I'm sure you get my meaning. – Donna Gordon, Delaware Tea Party
I rarely get time to review everything that comes in but I did read this entry and have to say you have put a lot of ideas on the table and most are very informative. Also good to see you are on top of my favorite think tank, Cato. – SAFE member, Maryland
11/16/09 – Is this any way to govern a country?
Underlying the disputes in Washington about healthcare “reform” and other proposed initiatives, one senses that something is amiss with the body politic. However the malady may be perceived (e.g., government run amok), it has fueled the Tea Party movement and the surging popularity of conservative commentators like Rush Limbaugh and Glenn Beck. Tea Party leaders are wasting chance to replace Congress, Mark Tapscott, Washington Examiner, 9/3/09.
Most Americans are fed up with business-as-usual in Washington and they want real change, not more of the Democrats' power-grabbing slogans, or the "Me-Too" timidity of Republicans who talk the reform talk, but love the perks of power too much to actually walk it.
This week’s entry will illustrate four aspects of the current political landscape with examples drawn from various policy areas.
1. Crucial issues ignored – Like an ostrich that sticks its head in the sand, a country that fails to address its most pressing problems is asking for trouble – particularly when these problems reflect the failings of its governing institutions.
• Consider the federal government’s chronic budget deficit, which after decades of poor fiscal management is spiraling out of control. In past entries, this issue has been much discussed. See, e.g., Two cheers for the Fiscal Wake-Up Tour, 11/5/07; State of the budget: a 40-year slump, 1/28/08; Plot thickens, as the Peterson Foundation cranks up, 7/14/08; Fiscal Wake-Up Tour message goes nationwide [release of I.O.U.S.A.], 8/25/08; First things first: time to clean up the fiscal mess, 11/24/08; A tale of two summits [on fiscal responsibility and healthcare, respectively], 3/16/09.
Yet for all the efforts of fiscal visionaries, there has been no corrective action. And although the president may be considering a bipartisan commission to review the situation, look for lots of bickering about the shape of the conference table. Democrats Push for Plan to Cut Deficit, Jackie Calmes and Carl Hulse, New York Times, 10/31/09.
But even the idea of a panel to bridge the partisan divide has run into partisan objections. Many Democrats, including in the White House, are loath to cede such far-reaching decisions to a commission and doubt Republicans’ willingness to compromise. And most Republicans remain adamantly opposed to tax increases, leaving the prospects for any bipartisan approach limited at best.
http://www.nytimes.com/2009/11/01/us/politics/01deficit.html?_r=1&partner=rss&emc=rss
• Government restrictions on the development of U.S. petroleum reserves have been tolerated for too long, resulting in higher than necessary fuel prices and a dangerous degree of dependency on imported oil. To drill or not to drill; that is the question, 7/7/08.
No one is about to tell American motorists that they should stop driving their vehicles, gasoline will be the predominant motor fuel for the next 20 years or so, and that gasoline will be refined from oil produced somewhere around the globe. ***The real issue is not drilling vs. not drilling; it is who will do the drilling and how much the resulting oil will cost. Clearly, there is no reason for the United States to pay any more money to import oil than it has to, particularly when much of the money goes to regimes that are disposed to create problems for us.
The bans on drilling in vast offshore areas were rescinded or allowed to lapse in 2008 due to public angst about a $4+ per gallon price for gasoline, but the new Administration has ordered further studies. Bush-era offshore drilling plan is set aside, MSNBC, 2/10/09.
Jack Gerard, president of the American Petroleum Institute, which represents the large oil companies, said [Energy Secretary Ken] Salazar's announcement "means that development of our offshore resources could be stalled indefinitely."
http://www.msnbc.msn.com/id/29119940/
Subsequent steps can be expected to delay and burden domestic petroleum production. Five Things Congress and the President Are Doing to Bring Back Sky-High Gas Prices, Ben Lieberman, Heritage Foundation, 8/13/09.
Discouraging domestic oil supplies with access restrictions, regulations, fees, and taxes will add to the future price at the pump, while streamlining these impediments to increased production will do the opposite. Congress and the President should be enacting measures that allow oil and gasoline to be as plentiful and affordable as possible to meet the nation's energy needs. Instead, they are doing the opposite.
http://www.heritage.org/Research/EnergyandEnvironment/wm2587.cfm
• Other long neglected problems include illegal immigration, a gold-plated school system that achieves mediocre results, a failed “war on drugs,” overlapping programs (e.g., 160 job training programs costing a total of some $20 billion per year), inefficient government operations (attributable among other things to the great difficulty in discharging poor employees), and pork barrel spending (aka earmarks).
For discussion, see National Suicide: How Washington Is Destroying the American Dream from A to Z, Martin Gross, Berkley Books (2009).
2. Bad ideas entertained – There is no such thing as a perfect defense. If enough bad ideas are proposed, some will survive the screening process and get implemented. And although many of the bad ideas are not new, we cannot remember ever seeing so many in play at the same time. They fall into two basic categories.
• One type of bad idea is a poor solution to a real problem, such as the theory popularized by economist John Maynard Keynes in the 1930s that deficit spending can be helpful in combating an economic recession.
Deficit spending did not get America out of the Great Depression, and this technique for stimulating the economy has failed in other countries as well. Nevertheless, it was a key element of the economic stimulus bill pushed through in February. Steve Forbes, 2/2/09, Forbes Magazine.
The blunt truth is that government spending is a poor substitute for private business and consumer investing and spending. Were it otherwise, the Soviet Union would have won the Cold War, and Japan, which had numerous Obamaesque stimulus packages in the 1990s, would have boomed instead of remaining dead in the water in what was a 12-year recession.
http://www.forbes.com/forbes/2009/0202/013.html
Given the rise in unemployment since February and a sluggish uptick in private sector demand, it would be a stretch to consider the stimulus bill a success. The only thing this legislation clearly accomplished was to run up the deficit. Washington and the Job Market, Wall Street Journal, 11/7/09.
It's hard to imagine a more complete repudiation of Keynesian stimulus than the evidence of the last year's job market. We've now had two examples of such stimulus—President Bush's $160 billion effort in February 2008 and President Obama's mega-version [$787 billion] a year later—and neither has made even the smallest dent in employment. As the nearby chart shows, Mr. Obama's economic advisers sold the stimulus by saying it would keep the jobless rate below 8%. Actual results may differ [jobless rate hit 10.2% in October], as they say.
http://online.wsj.com/article/SB10001424052748704795604574519602476681352.html
• Equally bad is a proposed solution for a problem that does not exist or has been greatly exaggerated. Take the manmade global warming scare. It is uncertain that a warming trend will continue (it has been in remission for the last 10 years), the contribution of human activities to global temperatures has not been clearly established, and an abrupt switch to renewable energy sources would be immensely expensive and disruptive. See the Energy page of this Website and the blog entries listed thereon.
http://www.s-a-f-e.org/energy.htm
Global warming alarmists have traditionally advocated reducing the volume of carbon emissions (CO2, etc.) so that CO2 would stop building up in the Earth’s atmosphere (it is currently some 390 parts per million, versus 280 parts per million in 1800).
Now some environmentalists have upped the ante, saying the level of atmospheric CO2 must be reduced to no more than 350 parts per million. Cost and/or technical feasibility are beside the point in their view.
Two years ago, after leading climatologists observed rapid ice melt in the Arctic and other frightening signs of climate change, they issued a series of studies showing that the planet faced both human and natural disaster if atmospheric concentrations of CO2 remained above 350 parts per million.
Everyone from Al Gore to the U.N.’s top climate scientist has now embraced this goal as necessary for stabilizing the planet and preventing complete disaster. Now the trick is getting our leaders to pay attention and craft policies that will put the world on track to get to 350.
3. Proposals presented deceptively – In selling a product or service, there is a natural tendency to emphasize the expected benefits while saying as little as possible about uncertainties, cost, etc. Not for nothing does the law require “truth in advertising” from business firms.
There are no comparable safeguards, however, when it comes to government policies or programs. Consider the deceptive sales pitches for the economic stimulus bill, the president’s healthcare plan, and proposed energy legislation (cap and trade plus). “Happytalk” blossoms in the nation’s capital, 7/6/09.
There has been a willingness to shade the truth at the highest levels, as for example when the president suggests that his healthcare proposal could be implemented without adding to the government’s fiscal woes or raising costs/degrading coverage for people who currently have healthcare insurance. Providing HCI coverage for, say, 30 million more people would be costly, and it is unclear how offsetting savings could be achieved without government-imposed rationing (which has not been talked about). Trick or treating with healthcare reform, Kristine Iverson, Washington Examiner, 11/8/09.
The President asserts that we spend so much money on healthcare "that doesn't make us any healthier" that he can finance most of the reform plan with the savings, but he never says what he believes is wasteful. People going to the doctor too much? Doctors doing too many tests? The only way his health reform proposal can achieve these savings is by telling people when they can go to the doctor and telling doctors how to treat patients.
Surrogates and advocacy groups also contribute to the confusion. Consider the claim of the International Energy Administration that global energy prices will double unless a deal to limit carbon emissions is reached at the December meeting in Copenhagen. IEA says no emissions deal will double bills, Rowena Mason, UK Telegraph, 11/10/09.
The independent body said the huge price of tackling climate change will eventually be overtaken by the cost of remaining dependent on fossil fuels, which are becoming more difficult and expensive to extract. It estimates that Europe's annual energy bill will more than double to $500bn (£300bn) by 2030, as the oil price is likely to reach $100 per barrel by 2015 and $190 by 2030.
http://www.telegraph.co.uk/finance/6539831/IEA-says-no-emissions-deal-will-double-bills.html
Actually, as this article seems to acknowledge, government-dictated constraints on the use of fossil fuels would drive up energy prices versus the status quo.
As for the world being fated to run out of petroleum reserves fairly soon, this view is belied by, among other things, new techniques for extracting natural gas from shale deposits. Interestingly, the shale gas breakthroughs occurred in this country, and they represent a triumph for the private sector. America’s Natural Gas Revolution, Daniel Yergin and Robert Ineson, Wall Street Journal, 11/2/09.
Preliminary estimates suggest that shale gas resources around the world could be equivalent to or even greater than current proven natural gas reserves. Perhaps much greater. But here in the U.S., our independent oil and gas sector, open markets and private ownership of mineral rights facilitated development.
http://online.wsj.com/article/SB10001424052748703399204574507440795971268.html
4. Dissent dismissed – The purposeful avoidance of meaningful discussion is not conducive to developing the best government policies. It is also infuriating to the people who feel they are being ignored. Here are some recent examples.
The opposition party has had a very limited opportunity to influence important legislation this year, starting with the economic stimulus bill. Although the president invited Congressional leaders of both parties to the White House in January, he was reportedly unreceptive to suggestions about the size or makeup of the stimulus package. Obama to GOP: “I won,” Jonathan Martin and Carol Lee, politico.com, 1/24/09.
President Obama listened to Republican gripes about his stimulus package during a meeting with congressional leaders Friday morning - but he also left no doubt about who's in charge of these negotiations. "I won," Obama noted matter-of-factly, according to sources familiar with the conversation.
http://www.politico.com/news/stories/0109/17862.html
We do not recall reading of participation by opposition party leaders in subsequent White House meetings of this nature, i.e., the president typically confers with the Congressional leadership of his own party only.
In Congress, opposition party members have been excluded from bill drafting sessions and asked to vote on major bills without adequate time to read them. To be complete, their party is said to have used similar tactics when the shoe was on the other foot. The Death of Deliberative Democracy, Michelle Malkin, Townhall.com, 11/6/09.
In June, Pelosi's Imperial Congress severely curtailed debate on the House cap-and-tax bill and rammed a 309-page manager's amendment through the legislative grinder at 3 a.m., which no one read before the vote just hours later. As GOP Rep. Mike Pence pointed out on the House floor, the "debate" was a "travesty." So much for procedural fairness: 224 GOP amendments were denied by the majority.
At the same time and somewhat inconsistently, the opposition party has been accused of lacking ideas and failing to offer alternatives. See, e.g., GOP takes “targeted” healthcare approach, Jennifer Haberkorn, Washington Times, 9/29/09.
"All the amendments today are not [a] health reform plan, but rather they're attacking this, attacking that, something here, something there," said Finance Chairman Max Baucus, Montana Democrat, during the committee's markup session last week. "I don't know what the Republican alternative is. ... I don't see a massive or a big, large proposal on the other side for an alternative. I don't see one."
Actually, the opposition party has offered its own healthcare reform bill. They even got it scored by the Congressional Budget Office. But no matter, as the party in power was not of a mind to discuss it. CBO: Republican health[care] plan would reduce premiums, cut deficit, Susan Ferrechio, Washington Examiner, 11/5/09.
"Here's the Bottom line - Americans lose and Insurance companies win under the Republican plan," Pelosi spokesman Nadeam Elshami said.
Criticism or questions have not been welcomed from sources outside the political establishment either. For example:
• Tea party participants have been dismissed as an angry mob, organized by the opposition party. Check out this video, which was sponsored by the Democratic National Committee in August.
http://www.youtube.com/watch?v=PtTBkxvBq88&feature=player_embedded
The charge was well wide of the mark. Apparently, roughly 60% of the country is part of an “extremist mob,” Mary Katharine Ham, Washington Examiner, 8/5/09.
It's utterly probable that some—even many— of the concerned folks showing up at health-care town halls are the kind of older, white, Middle America Democrats Obama went to great pains to woo. The rows of VFW ballcaps and suspiciously well-dressed protesters bespeak a contingent of Hillary Democrats and even the ballyhooed Obamacans, convinced by Obama's moderate shtick and now left wondering what they got themselves into. And, if such folks are not in those crowds, they are in the 60 percent of voters who identify with them, as are the all-important Independents.
• Unfavorable media coverage has been dismissed as obstructionist rant and/or attributed to the opposition party. White House Escalates War of Words With Fox News, FoxNews.com, 10/12/09.
"What I think is fair to say about Fox -- and certainly it's the way we view it -- is that it really is more a wing of the Republican Party," said Anita Dunn, White House communications director [since departed], on CNN. "They take their talking points, put them on the air; take their opposition research, put them on the air. And that's fine. But let's not pretend they're a news network the way CNN is."
http://www.foxnews.com/politics/2009/10/12/white-house-escalates-war-words-fox-news/
• Industry groups expressing contrary opinions have been dismissed as motivated by self-interest. W.H. makes “enemies” of Bush allies, Jon Ward, 10/22/09.
"When you're on their side, it's all OK, but if you're not, they rain hell down on you," said R. Bruce Josten, executive vice president of the U.S. Chamber of Commerce, bemoaning the administration's bellicose response to differing opinions on health care and financial regulatory reform proposals.
http://www.washingtontimes.com/news/2009/oct/22/obama-whs-moves-raise-specter-of-enemies-list/
• Meanwhile, there has been little apparent willingness to engage in substantive discussion. Consider the Speaker of the House’s response to a question that seems entirely legitimate to us (in fact, we asked it rhetorically in last week’s entry): What provision of the Constitution empowers Congress to require people to buy healthcare insurance? A Minority View: Constitutional Contempt, Walter E. Williams, Townhall.com, 11/11/09.
At Speaker Nancy Pelosi's Oct. 29th press conference, a CNS News reporter asked, "Madam Speaker, where specifically does the Constitution grant Congress the authority to enact an individual health[care] insurance mandate?" Speaker Pelosi responded, "Are you serious? Are you serious?" The reporter said, "Yes, yes, I am." Not responding further, Pelosi shook her head and took a question from another reporter. Later on, Pelosi's press spokesman Nadeam Elshami told CNSNews.com . . . "You can put this on the record. That is not a serious question. That is not a serious question."
http://townhall.com/columnists/WalterEWilliams/2009/11/11/a_minority_view_constitutional_contempt
Really? Don’t try telling that to veteran newspaperman Seth Lipsky, who has studied the Constitution over the years and is fond of asking “Where does the Congress get the power to do that?” or the equivalent. Our “Constitutional” Moment, James Taranto, Wall Street Journal, 11/14/09.
http://online.wsj.com/article/SB10001424052748704402404574528440210923978.html
* * * *
Crucial issues ignored, bad ideas entertained, proposals presented deceptively, dissent dismissed. Somehow, this does not sound like the way to arrive at good answers.
As we said at the beginning, “is this any way to run a country?”
If not, what needs to be done about it? Tune in next week for further discussion.
11/9/09 – GovCare: good intentions are not enough. Read Replies
Before trying to fix a machine, one needs to understand how it works. The same goes for complex systems like healthcare, and it behooves all of us to look into the “reforms” being proposed rather than accepting them at face value.
The facts are complicated, but the basic difference of opinion between the supporters and opponents of government-run healthcare (GovCare) turns out to be simple.
Some observers see healthcare as an economic commodity, with prices and availability determined by supply and demand. We would call them realists.
Others see healthcare as a human right, which can be provided without regard to ability to pay because everyone wants to help. Call them idealists.
And then there is Regina Herzlinger of the Harvard Business School, who seems to want to have it both ways. The resulting tension is palpable in her book, Who Killed Health Care, McGraw-Hill (2007), which demonstrates that government-run healthcare will not work but does not necessarily identify a viable alternative.
http://www.s-a-f-e.org/who_killed_healthcare.htm
Present top-down system – Many observers of the healthcare system use a story to express their conclusions in human terms; Professor Herzlinger is no exception. She tells of Jack Morgan’s premature death from kidney disease, which is a composite based on elements from various actual situations. And when it happened, that “was the day I knew our healthcare system had died along with him.”
Jack Morgan was a self-employed restaurateur, middle-aged, with healthcare insurance (HCI) of the managed care type. He developed kidney disease and underwent years of dialysis. A transplant became necessary, and a daughter wanted to provide a healthy kidney, but Jack did not get the surgery in time. He contracted an infection and died, a victim of “an inept, malfunctioning, costly healthcare system.” Herzlinger, pp. 17-26.
Everyone involved was to blame, as the author tells the story, other than doctors and the patient.
• The HCI provider’s approval procedures for a kidney transplant were bureaucratic and slow – reflecting a bias against covering major expenditures.
Such a situation is far from unique. California-based healthcare insurer/provider Kaiser Permanente (a pioneer in providing integrated healthcare on a long-term basis) had more than 100 people die while waiting for kidney transplants in 2005. The problem developed after Kaiser decided to treat kidney transplant patients in its own hospitals rather than referring them out, without providing the staffing necessary to make the program function properly. Kaiser was forced to shut down the in-house transplant program. Herzlinger, pp. 32-36.
• Hospitals had become so inefficient and expensive that Jack Morgan did not have the option of giving up on the HCI provider and paying for the transplant operation himself. Herzlinger, p. 88.
U.S. hospitals hide their prices, so Jack was not sure how much it would cost; but he knew it would be a hundred thousand dollars or more. Jack also knew that if he went to the hospital as a self-paying uninsured patient, they would likely charge him their very highest price, and if he could not pay, they would hound him, taking everything he had worked so hard to acquire and bankrupting him in the process. It did not matter if the hospital was nonprofit or carried a religious name.
• Although Jack Morgan was self-employed, U.S. employers fostered a mindset that contributed to his death by providing HCI coverage for their employees and turning the plans over to human resources to manage. Herzlinger, pp. 111-112.
Faced with rising healthcare costs and with federal requirements and subsidies, encouraged by the academics about Kaiser, and influenced by the HR crowd, companies began to restrict those policies to ones that managed care. But the new version of managed care that they selected bore scant resemblance to the early incarnation of Kaiser. Those new versions were managed by tough businesspeople who understood that a good way to make a buck was to tightly manage the use of healthcare services for the sick and disabled.
• Congress passed 1972 legislation providing public funding for the victims of kidney disease, which was accompanied by rigid rules as to how the money should be spent. As a result, Jack Morgan underwent a course of treatment that was far from ideal for his case. Herzlinger, pp. 115-129.
. . . many experts disagree with the Congressional remedy. A number of nephrologists believe the victims of kidney disease need more dialysis, perhaps daily. Nevertheless, Congress, with its relentless eye on the Epogen meter [ a gold mine for Amgen], instead chose to continuously increase those expenditures, despite mounting evidence that the higher doses of epo are bad for your health. *** Suppose Jack Morgan [had been] given the $65,000 or so [per year] that Congress spent on his dialysis. Do you think that some entrepreneurs would have offered him kidney care bundled into one package of doctors, dialysis, and drugs? Do you think he might have opted for less epo and more dialysis? Less epo and more physician visits? Less epo and more preventive care?
• Academics contributed by pushing for government-run healthcare, or failing that managed care or pay for performance (anything but patient choice and competition), thus providing intellectual cover for the mistakes others have made. Herzlinger, pp. 131-137.
Motive: “Academics favor the single-payer solution for many reasons; but surely one of them, acknowledged or not, is that it puts them, as advisors to the government, in charge of spending $2 trillion.”
Mistakes: (1) Excessive reliance on statistical analysis, which “can cause a smart person to believe that she can detect things that the experienced practitioner in the field misses.
(2) Unjustified stress on “the shortcomings of business as opposed to nonprofits, governments, and nongovernment organizations (NGOs).”
Lack of vision: Dr. Joe Murray and associates performed the first successful kidney transplant, an accomplishment for which he received a Nobel prize in 1990, but this procedure was much criticized initially and took decades to be widely replicated. Will others emulate Murray’s example “in today’s environment, in which an Ivory Tower academic establishment continually denigrates the professional judgment and economic ethics of the doctors who actually practice medicine”?
Proposed consumer-driven system – Herzlinger recommends that the healthcare system be reorganized to place the resources currently spent on group coverage at the disposal of patients acting on the advice of their doctors. Then HCI providers, hospitals, clinics, drug companies, etc. should be freed to compete for the available business.
The prospective payoff: innovative new services, greater efficiency, lower prices, and greater consumer satisfaction. Maybe it would no longer be necessary to go to Thailand for a hospital that looks like a Four Seasons hotel, has an efficient and attentive staff, and provides first class medical care at a fraction of the U.S. price.
Absent such adjustments, more and more consumers may decide to go abroad for major medical procedures. Herzlinger, pp. 85-88.
If U.S. hospitals are not radically restructured, future Jack Morgans may simply hop a jet to avoid the expense, the wait, and the horrible possibility that their illnesses may kill them before they obtain the care they need. Already, insurers like the brilliantly managed Blue Cross Blue Shield of South Carolina are investigating this option for their members. Our big, greedy hospitals and their overpaid, politically manipulative executives may find themselves with big empty waiting rooms and depleted bank accounts.
Albeit market-based, the new healthcare system would hardly be government-lite. Here is the basic framework (Herzlinger, pp. 247-258):
• Individuals required to obtain individual/family HCI. Employers who currently provide HCI coverage turn over the cash to their employees; the cash is tax-free so long as it is used to buy HCI. Self-employed individuals receive a tax deduction for money used to buy HCI. The government subsidizes HCI coverage or provides a government plan for individuals who otherwise could not afford HCI. (The Massachusetts healthcare system, which was being implemented as the book was being written, is cited with approval.)
• Sick people pay the same price for HCI as healthy people, with coverage quoted on a risk-adjusted basis. This means that insurers with relatively healthy clients (on average) must divert a portion of their revenues to insurers that have taken on more health risk. (The Swiss healthcare system uses such a procedure.)
• Healthcare providers bundle care as they see fit and quote their own prices, thereby facilitating market-based pricing. The government requires publication of accurate data on the prices and performance of all healthcare providers so the market will function efficiently.
Discussion – Consider the case being made for GovCare. Nearly everyone will get HCI – only way to bring healthcare costs under control – waste and abuse will be curbed – more money invested in preventive care – if you like your HCI, you can keep it – crack down on insurance company abuses – a public option (if included) will compete with the private insurers and keep them honest.
According to Herzlinger, however, healthcare providers (including doctors, in our opinion, although she exempts them from scrutiny) operate inefficiently and provide unnecessary services due to economic incentives spawned, to a large extent, by government policies. Piling rules on top of the existing rules and increasing the size of government spending programs (e.g., Medicaid) would be more likely to inflate costs than to lower them. Real cost reduction can only be achieved by putting consumers in charge. Herzlinger, p. 1.
A system controlled by the insurance companies or hospitals or government will kill us financially and medically – it will ruin our economy, deny us the healthcare services we need, and undermine the important genomic research that can fundamentally improve the practice of medicine and control its costs.
We agree. People should be empowered to make their own healthcare decisions – with input from doctors and family members – rather than viewing these matters as mysteries that only managed care administrators (whether employed by insurance companies or the government) should address. And experience with Medicare and Medicaid over the past 40+ years has amply demonstrated that government-run healthcare does not work well.
But if one believes in a free market, there is no good reason to provide a tax incentive for the consumption of healthcare. Accordingly, SAFE would cure the current inequity in the tax law by taxing employer-provided healthcare benefits, not by creating a tax benefit for those who buy HCI on an individual basis.
Requiring people to obtain HCI raises questions as well? What provision of the Constitution justifies such an infringement of personal liberty? Wouldn’t this necessarily get the government involved in defining “acceptable” HCI coverage? Kiss Your Money and Freedom Goodbye, Mark Hillman, Townhall.com, 10/16/09.
From a practical standpoint, the requirement to purchase health insurance will start badly and grow even worse. That's because the choice of what kind of insurance to purchase will no longer belong to consumers but to politicians and bureaucrats, relentlessly pressured by lobbyists to add to every conceivable screening or procedure in the nanny-state's wish list to your mandatory policy.
http://townhall.com/columnists/MarkHillman/2009/10/16/kiss_your_money_and_freedom_goodbye
Also, some people might flout the HCI mandate. What would happen to them? In Massachusetts, a couple is being fined $1,000 per year because, for perfectly rational reasons, they prefer a higher deductible policy than the state wants them to have. Paying the Health[care] Tax in Massachusetts, Wendy Williams, Wall Street Journal, 10/15/09.
The state requires that health plans cap out-of-pocket expenses for individuals (not including monthly premiums) at $2,000 a year. Our plan's cap is $2,500. Today, we pay about $300 a month for catastrophic care. If we went with the next step up in plans offered to us by IBM (a former employer), our monthly premium would increase to $800. We simply don't need to pay that kind of money for the amount of health care we actually consume.
http://online.wsj.com/article/SB10001424052748703298004574459101022338232.html
Under the House bill, it is said, someone who refused to get the required HCI coverage or pay the prescribed fine might be sent to prison. Pelosi: Buy a $15,000 Policy or Go to Jail, Press release: Representative Dave Camp (R-MI), 11/6/09.
http://republicans.waysandmeans.house.gov/News/DocumentSingle.aspx?DocumentID=153583
While it is easy to agree in principle that the government has some degree of responsibility to ensure healthcare for the poor, there are obvious problems in deciding where to draw the lines. Who should be considered poor, what is the minimum acceptable level of healthcare, and how much should the government spend in total?
Tough questions, and there is little reason to think that mandated HCI coverage would help to answer them. The Price of RomneyCare, Wall Street Journal, 7/29/08.
. . . only about 18,000 people -- or 5% of the newly insured -- have taken advantage of the "connector," which was supposed to be the plan's free-market innovation linking individuals to private insurers. Most of [the] growth in coverage has instead come via a new state entitlement called Commonwealth Care. This provides subsidized insurance to those under 300% of the poverty level, or about $63,000 for a family of four.
http://online.wsj.com/article/SB121728669884991317.html?mod=opinion_main_review_and_outlooks
In summary, SAFE believes GovCare would represent a step in the wrong direction, and we are far from alone. Several conservative publications have made the point admirably in their editorial columns. See, e.g., The Worst Bill Ever, Wall Street Journal, 11/1/09.
In a rational political world, this 1,990-page runaway train would have been derailed months ago. With spending and debt already at record peacetime levels, the bill creates a new and probably unrepealable middle-class entitlement that is designed to expand over time. Taxes will need to rise precipitously, even as ObamaCare so dramatically expands government control of health care that eventually all medicine will be rationed via politics.
http://online.wsj.com/article/SB10001424052748703399204574505423751140690.html
Even the [Wilmington] News Journal rejected the House bill in an 11/7/09 editorial.
It will bring health insurance to more people, and that is a good thing. But the bill, as it is written, will not reform how healthcare is done in the country and it most certainly will not lower the system's costs. In fact, many of the savings the bill supposedly will bring are chimerical.
With unemployment now standing at over 10% and still headed up, it would be hard to imagine a less appropriate time to try and ram through a new government entitlement program that would add to the economic pressures on employers that must decide whether to start rehiring on not.
Moreover, the case that has been made for GovCare is exceedingly thin. At bottom, the proposal is based on faux logic and wishful thinking – not reasoned analysis about how the healthcare system actually works and can be made to function better.
If you do not believe us, read “Who Killed Healthcare” or one or more of the other excellent books that are available on this topic.
• The Innovator’s Prescription: A Disruptive Solution for Health Care, Christensen, Grossman and Hwang, Harper-Collins (2008) – Innovator’s Prescription
• Who Killed Health Care? Regina Herzlinger, McGraw-Hill (2007). – Who Killed Healthcare
• The Cure: How Capitalism Can Save American Health Care, David Gratzer, M.D., Encounter Books (2006) – http://tiny.cc/ZhHs1
• The End of Medicine: How Silicon Valley (and Naked Mice) Will Reboot Your Doctor, Andy Kessler, Harper-Collins (2006) - http://tiny.cc/4gvFE
• The Last Well Person: How To Stay Well Despite the Health-Care System, Nortin M. Hadler, M.D., McGill-Queen’s University Press (2004) – Last Well Person
In closing, remember this. Just as war is said to be too important to leave to the generals, healthcare is too important to be left to the politicians!
* * * This Blog's Replies * * *
Machiavelli in his own inimitable way said it best: "When it is absolutely a question of the safety of one's own country, there must be no consideration of what is just or unjust, of merciful or cruel, of praiseworthy or disgraceful." We should not prefer being humbled to being pertinacious when our country's honor is at stake. - Alex Wysocki, The Conservative Caucus of Delaware
Sorry, I got totally lost on this one. – SAFE member
I am speechless! Every “I” is “dotted” and every “T” crossed. I had never heard about Jack Morgan. I am praying believe me. This is the death or life of our Republic. – Steel supply firm executive, Texas
11/2/09 – Healthcare insurers: imperfect yes, demons no.
As previously reported (10/26/09 entry), one of the primary arguments for creating a government-backed entity to offer healthcare insurance has been the alleged shortcomings of private HCI providers – callous behavior to maximize profits, inefficiency, and limited competition.
This week, we will review some of these claims. But first, a quick update on Congressional maneuvering over whether there should be a “public option.”
Update – Support for a public option is strong in the House of Representatives, ostensibly in order to foster competition in the HCI market and provide consumers with more choice. Indeed, why not call it a “consumer option” or “competitive option”? “Public Option” Needs New Name, Pelosi Says, cb5.com, 10/26/09.
http://cbs5.com/local/pelosi.public.option.2.1272154.html
Sure enough, there was a public option in the House bill unveiled on October 29 – but it had been toned down to defuse criticism about paying healthcare providers based on the niggardly Medicare reimbursement rate schedule. Battles over cost, taxes, Medicare loom for House health[care] plan, Jennifer Haberkorn and Kara Rowland, Washington Times, 10/30/09.
The final House draft -- a merging of three committees' work over the past months -- does not have the so-called robust public option, which was favored by liberal Democrats and would have reimbursed doctors based on Medicare rates plus a 5 percent premium. The more moderate version would allow the Department of Health and Human Services to negotiate rates with providers, as private insurers do.
http://www.washingtontimes.com/news/2009/oct/30/house-unveils-894-billion-health-program/
According to a preliminary analysis of the Congressional Budget Office, utilization of the public plan would not drive out private HCI coverage. Of the 30 million people enrolled in insurance exchange plans (21M on an individual basis, 9M through employer plans) by 2019, only about 20% (or 6M) would be in the public plan.
Maybe, but the underlying assumptions sound rather speculative, and they could easily be invalidated by adjusting the details of the proposal. CBO letter to Representative Charles Rangel et al., 10/29/09, page 6. (Letter is accessible through the CBO blog link below.)
That estimate of enrollment reflects CBO’s assessment that a public plan paying negotiated rates would attract a broad network of providers but would typically have premiums that are somewhat higher than the average premiums for the private plans in the exchanges. The rates the public plan pays to providers would, on average, probably be comparable to the rates paid by private insurers participating in the exchanges. The public plan would have lower administrative costs than those private plans but would probably engage in less management of utilization by its enrollees and attract a less healthy pool of enrollees. (The effects of that “adverse selection” on the public plan’s premiums would be only partially offset by the “risk adjustment” procedures that would apply to all plans operating in the exchanges.)
Meanwhile, Senate Majority Leader Harry Reid (D-NV) has announced that the healthcare bill to be introduced on the Senate floor will, unlike the bill cleared by the Finance Committee, contain a public option – albeit one states could “opt out” of.
Details are yet to be provided, but the opt-out provision would apparently only apply to the benefits involved and not to the duty of paying for them. I’ll Pass on “Opting Out,” Ann Coulter, Townhall.com, 10/28/09.
It's like a movie theater offering a "money back guarantee" and then explaining, you don't get your money back, but you don't have to stay and watch the movie if you don't like it.
http://townhall.com/columnists/AnnCoulter/2009/10/28/ill_pass_on_opting_out
Several senators who oppose a public option are underwhelmed, and 60 votes may not be available. If the Senate bill stalls, adjustments will be considered – including an approach favored by the senior senator from Delaware. No momentum in Senate for Reid’s public option plan, Susan Ferrechio, Washington Examiner, 10/28/09.
Sen. Tom Carper, D-Del., is waiting in the wings with a plan that would create a national insurance program, operated by a nonprofit board, that would be put in place with a trigger but would also allow states to both opt in and opt out under certain circumstances. * * * "I call this the 60-vote option," he said.
The controversy about the public option seems overdone, perhaps by design. As political strategist Dick Morris notes, an extended debate about this feature of the Senate bill could divert attention from other issues. Reid’s Bait and Switch Tactics, Dick Morris and Eileen McGann, Townhall.com, 10/28/09.
By making such a fuss over the public option, with the connivance of the liberals, [Senator Reid] keeps the spotlight away from the Medicare cuts, the end of Medicare Advantage, the inevitable rationing of health care, the taxes on the uninsured and the sick, and the cuts in medical reimbursement. A bill with all these provisions -- even without a public option -- is pernicious enough!
http://townhall.com/columnists/DickMorrisandEileenMcGann/2009/10/28/reids_bait_and_switch_tactics
And even if a public option was stripped out of the Senate bill, it could readily be reinstated in the conference to reconcile differences with the House bill.
Greedy insurers – There are many stories of HCI providers denying healthcare to patients who desperately needed it, thereby causing serious harm or death. Here is one that former trial lawyer John Edwards used on the campaign trail.
Just 17 years old, afflicted with leukemia, [Nataline Sarkisyan] needed a liver transplant, but the insurance company Cigna refused to cover the surgery. After being picketed by nurses and the family, the insurer relented, but too late: She died that same day.
It is implied that Cigna’s decision to deny a liver transplant was made simply to safeguard its bottom line, but the situation was more complicated.
Dr. Goran Klintmalm, head of the Baylor Regional Transplant Institute in Dallas, told The Los Angeles Times the surgery was "very high-risk" and "on the margins." Even on the best prognosis, [Nataline] stood a one-in-three chance of dying -- after undergoing a very expensive operation and taking a liver that might otherwise have gone to someone with a better chance of survival.
Perhaps Cigna erred in this case, but the same decision might well have been made in a government-run healthcare system. Consider that Americans currently get far more liver transplants per capita than residents of Canada, France and the UK. Creators Healthcare Delusions, Left and Right, Steve Chapman, Townhall.com, 10/25/09.
To bolster the impression that HCI providers are miserly, it has been claimed that their profits have skyrocketed, they earn “obscene profits” while “the bodies pile up,” etc. Actually, their profits are pedestrian in comparison to those earned in other industries. Health[care] insurer profits not so fat, Calvin Woodward, myway.com, 10/25/09.
Health insurers posted a 2.2 percent profit margin last year, placing them 35th on the Fortune 500 list of top industries. As is typical, other health sectors did much better - drugs and medical products and services were both in the top 10.
http://apnews.myway.com/article/20091025/D9BI4D6O1.html
HCI providers do seek to earn a profit, however, and young, relatively healthy individuals are cheaper to cover than people who are older or have serious health problems. To the extent that HCI coverage is provided on the basis of individual health risk, it will invariably be more expensive for people in the latter category – just as automobile insurance costs a lot for young, male drivers.
Inefficiency – Some observers claim HCI companies have excessive overhead, e.g., 30% versus 3% for Medicare. The reasons are said to include a “practice of encouraging their employees to revoke sick people’s health[care] coverage.” Real people for real health[care] reform, JoAnne Cabry [Democracy for America], News Journal, 10/17/09.
http://www.delawareonline.com/apps/pbcs.dll/article?AID=2009910170308
Were this 10:1 overhead ratio valid, it would be hard to oppose a public option, but the claim seems dubious for reasons on both sides of the equation.
• The 30% overhead factor for private HCI providers is overstated. Thus, Selling, General and Administrative Expense is running about 15% of revenues at WellPoint, one of the industry leaders.
http://media.corporate-ir.net/media_files/irol/13/130104/wellpoint/index.html
Some HCI provider CEO’s may be overcompensated, but not to an extent that would have a material impact on overall costs. Thus, Ronald Williams of Aetna had a $24 million compensation package in 2008 per the company’s proxy statement, versus total selling, general and administrative expense of $5.8 billion.
• The 3% overhead factor for Medicare is understated. Medicare’s Hidden Administrative Costs: A Comparison of Medicare and the Private Sector, Council for Affordable Health[care] Insurance, Merrill Matthews, 1/10/06.
. . . private sector insurers must track and divulge their administrative costs, while most of Medicare’s administrative costs are hidden or completely ignored by the complex and bureaucratic reporting and tracking systems used by the government. This study, based in part on a technical paper by Mark Litow of Milliman, Inc., finds that Medicare’s actual administrative costs are 5.2 percent, when the hidden costs are included.
http://www.cahi.org/cahi_contents/resources/pdf/CAHI_Medicare_Admin_Final_Publication.pdf
Furthermore, the government is reportedly paying some $60 billion per year in bogus Medicare claims, apparently due to lax review and verification of claims. Fraud plagues government healthcare, Washington Examiner, 10/27/09.
One of the criminals explained [in a 60 Minutes broadcast] that Medicare management was so lax that he got $150,000 by claiming reimbursement 10 times for a "gas-powered prosthetic arm." The same criminal said there are "thousands" of companies in the Miami area being paid for such fraudulent claims every day. A lawyer with extensive experience defending those accused of Medicare scams told "60 Minutes" that Medicare fraud is bigger than the drug trade in South Florida.
What could be done to make things better? Perhaps more checking is needed.
Attorney General Eric Holder told "60 Minutes" the government needs a bigger budget and more employees before it can stop the fraud. But HHS has worked for more than two decades to clean up Medicare fraud and currently has more than 63,000 employees. If, after working all those years -- with the Justice Department, FBI and state authorities -- HHS still can't stop Medicare fraud, why is hiring more people and fattening up the department's budget going to do the trick?
http://www.washingtonexaminer.com/opinion/Fraud-plagues-government-health-care-8442214.html
Lack of competition – It is said that HCI providers are not subject to enough competition in the state markets they serve. Here is the situation in Delaware, for example, according to the “Real people for real health[care] reform” column.
We reminded Sen. Carper that insurance companies are not subject to federal anti-trust laws, and consequently 47 of our states have three or fewer insurance companies. We used Dover as an illustration, showing that Blue Cross has 55 percent of the market and Coventry has 25 percent. When we asked the senator to explain how any entity other than a publicly managed insurance plan could compete in Dover when 80 percent of the market is controlled by two companies, he had no answer.
http://www.delawareonline.com/apps/pbcs.dll/article?AID=2009910170308
The long-standing exemption of insurance companies from the federal anti-trust laws is based on their activities being subject to state regulation. Notwithstanding recent statements to the contrary, said exemption has had little effect on the competitiveness of the HCI markets. Competition and Health[care] Insurance, Wall Street Journal, 10/21/09.
http://online.wsj.com/article/SB10001424052748704500604574485160248832466.html
Also, the quoted statistics are inconsistent with information (2006 data) posted by the Delaware Insurance Commissioner, which indicate that three (not two) companies dominate the HCI market in this state.
|
5 largest HCI providers |
Premiums (millions) |
Market share |
|
Blue Cross Blue Shield of Delaware Inc. |
$423 |
55% |
|
United Healthcare |
171 |
22% |
|
Coventry Healthcare of Delaware |
130 |
17% |
|
Aetna* |
31 |
4% |
|
Amerihealth HMO |
18 |
2% |
|
Total for the 5 companies |
$773 |
100% |
*Apparently does not include revenues from administering the DuPont Company healthcare plans for thousands of employees and retirees who live in Delaware, else Aetna’s market share would be higher than 4%.
http://delawareinsurance.gov/health/default.shtml
All things considered, it is not apparent to us that the HCI market in Delaware is excessively concentrated. Perhaps the lack of competition in other states is also less serious than has been claimed.
But there is inadequate competition in another sense, namely products offered versus the number of competitors. To foster lower prices and innovation in the healthcare industry, HCI providers need to diverge from the traditional HCI model. The reason is simple – and has been borne out repeatedly in other industries. Who Killed Health Care, Regina Herzlinger, McGraw-Hill (2007), p. 53.
Productivity gains arise primarily from innovations driven by entrepreneurs. Productivity arises organically, not technocratically. We celebrate Thomas Edison, Henry Ford, and Sam Walton because they transformed how energy was used, cars were manufactured, and goods were sold. We do not celebrate them because they muscled down their suppliers’ prices and barred consumers from needed goods. Entrepreneurs, not bureaucrats, create the innovations that increase productivity.
http://www.s-a-f-e.org/who_killed_healthcare.htm
Traditional HCI covers essentially all healthcare outlays (subject to a low deductible and modest co-pays), giving consumers little incentive to control demand while putting pressure on HCI providers to do so for them. The predictable result: soaring HCI premiums and continuous friction between HCI providers and their clients.
Dominance of the traditional model has resulted from several factors, including the tax subsidy for employer-provided HCI plans, state-imposed requirements as to what healthcare services must be covered by an “acceptable” HCI plan, and barriers to buying HCI from out of state. But still, there have been some success stories, such as this one. Who Killed Health Care, p. 217.
Definity Health, a venture-capital-backed business, designed a new policy that offered insurance only for catastrophically expensive healthcare, usually coupled with tax-supported health savings or reimbursement accounts whose funds can be used to pay for uninsured medical needs and 100 percent of preventive care. The policy was up to 40 percent cheaper than traditional ones. The results? Only a few years after the policies were first offered, by Definity and others, more than 9 million Americans had enrolled. As for Definity, it did well while it did good – the firm was purchased a few years after its founding by United Health Group for approximately $340 million in 2004.
The healthcare system desperately needs more such innovation. Do not expect it to be facilitated, however, by the provisions of the monstrous healthcare bill (House version reportedly runs 1,990 pages) that is in the making.
Also, if HCI providers are not single-handedly to blame for the shortcomings of the current healthcare system, who else may be contributing to the problem? Tune in next week for a review of some of the other suspects.
10/26/09 – Crunch time in the healthcare debate.
As of two months ago, we concluded that none of the healthcare “reform” plans under active consideration were worthy of support – including a Senate Finance bill without a “public option.” Healthcare: deal or no deal? 8/24/09. Subsequent events have confirmed our opinion, as will be discussed in this entry.
To set the stage – Here is a brief recap of the proposed healthcare plan (referred to for convenience as “GovCare”).
• GovCare focuses on the wrong problem, namely reducing the number of people without healthcare insurance (HCI) versus reining in the soaring cost of healthcare (roundly 50% of which is paid for by the federal and state governments, or ultimately by taxpayers). A “ready, aim, fire” approach to healthcare reform, 3/30/09.
• The details are poorly defined, with several alternative bills in play and much uncertainty about several key provisions. Look for continued delays in publishing the text of draft bills down the GovCare home stretch. No, you can’t read the legislation: Democrats try to sneak through unexamined health bills, Washington Times, 9/25/09.
When major legislation is completed, it is the result of negotiations that can be years in the making, with many last-minute changes. Hundreds of pages can get jammed into bills in the middle of the night with only a few staffers knowing what's in them.
http://www.washingtontimes.com/news/2009/sep/25/no-you-cant-read-the-legislation/
Even if the “legislative language” was made available on a timely basis, who would read and understand it? Not many, suggests one senator, who finds it more practical to work with the “plain English” version of major bills. Finance Committee Democrat Won’t Read Text of Health Bill, Nicholas Ballasy, CNSNews.com, 10/2/09.
Sen. Thomas Carper (D.-Del.), a member of the Senate Finance Committee, told CNSNews.com that he does not “expect” to read the actual legislative language of the committee’s health care bill because it is “confusing” and that anyone who claims they are going to read it and understand it is fooling people.
http://www.cnsnews.com/news/article/54930
• GovCare would be expensive, and the cost would predictably be imposed on taxpayers and healthcare consumers. No Free Lunch: The True Cost of ObamaCare, Matt Patterson, National Center for Public Policy Research, October 2009.
. . . the main health care proposals working their way through Congress would in fact come at a painful price - higher insurance premiums, more and higher taxes, fewer jobs, lower wages, a reduced standard of living and an erosion of privacy and individual liberty.
http://www.nationalcenter.org/NPA590.html
Congressional Budget Office cost estimates for the various versions of GovCare are on the order of a trillion dollars over the next 10 years, and – despite the yeoman efforts of the CBO – these estimates are probably underestimated. Déjà vu: Scoring a healthcare bill, 10/12/09.
As an example of the budgetary games being played, consider the “Doctor Fix” – a moratorium on the “sustainable growth rate” (SGR) formula that could otherwise result in mandated cuts in Medicare payments to doctors. Congress has waived the application of the SGR provision on an annual basis, and will no doubt continue to do so, but the Senate Finance Committee (Baucus) bill numbers were sweetened by assuming a Doctor Fix only in the first year of the 10-year projection period.
When the American Medical Association lobbied for a permanent Doctor Fix, it was packaged in a separate bill to avoid raising the apparent cost of the Baucus bill. Defecting Democrats derailed the separate bill, but this outcome is not necessarily final. Temporary Beltway Sanity, Wall Street Journal, 10/22/09.
Yesterday saw some rare good news on the health-care front, with the stealth Democratic plan to move $247 billion in ObamaCare costs off the books collapsing in the Senate on a procedural vote of 47 to 53. Maybe there's more anxiety among Democrats about a huge permanent increase in government health spending than the White House is willing to let on.
http://online.wsj.com/article/SB10001424052748704597704574487622368301370.html
• GovCare would be unaffordable. The government is already in a huge fiscal hole. While an additional $1 trillion in spending over the next 10 years could be covered by additional taxes, this would reduce the resources available to cover the deficits that are already projected. We reminded the member of Congress of this point in July.
Forget about raising taxes to pay for new spending programs, e.g., the healthcare bill. There is just so much people are willing to pay in taxes, and whatever tax increases may wind up being imposed will be needed to balance the budget. Instead, try eliminating wasteful government spending and government regulations that serve no useful purpose; there are many opportunities.
http://www.s-a-f-e.org/letter_to_congress_071309.htm
For the foregoing reasons, Congress should acknowledge error and hit the reset button on healthcare.
We are not alone, but . . . In a Rasmussen poll taken in August, 54% of voters preferred “no healthcare reform passed by Congress this year” to “passage of the bill currently working its way through Congress,” while 35% said the opposite.
The percentage of voters preferring GovCare to nothing has reportedly risen to 42% since August, with corresponding shrinkage in the undecided. The percentage of voters in opposition remains at 54%, which would hardly suggest that GovCare has gained general acceptance.
If the president and his party want to force GovCare through, however, they have the votes to do so. Presumably factoring in this political reality, 65% of voters “expect the healthcare plan that emerges from Congress to be mostly what Democrats want.” Most Voters Say They Know Healthcare Bill Much Better Than Congress, Rasmussen Reports, 10/20/09.
The cost of dissent – Most people want to be on the “winning side” rather than taking a lonely stand on principle – even though everyone may lose as a result. Or as economist John Maynard Keynes famously said, “it is better to fail conventionally than to succeed unconventionally.”
Those who oppose GovCare risk being seen as obstructionists. Thus, per the aforesaid Rasmussen poll, 42% of voters “attribute nearly unilateral Republican opposition to partisan politics rather than questions about the details of the plan.”
The sentiment is understandable, as healthcare is a highly politicized topic. But why single out only one party, when both parties are motivated by partisan considerations?
Furthermore, the opposition party has offered a good deal of feedback on GovCare that parallels SAFE’s strictly nonpartisan views. Consider a 7/15/09 press release by Senator Mitch McConnell (R-KY), which includes statements such as the following.
As Republicans and Democrats debate the best way to reform health care, Americans are increasingly concerned about the price tag, and about who gets stuck with the bill. The federal deficit suddenly stands at more than a trillion dollars for the time in history, and so far this year we’re spending about $500 million a day in interest alone on the national debt. *** And now the advocates of a government takeover of health care are talking about spending trillions more.
http://mcconnell.senate.gov/record.cfm?id=315778&start=1
No emerging consensus – Some people may believe that the battle over healthcare will end in a compromise that represents the best practicable outcome, but count us as skeptical.
Currently, the president’s party seems to be moving in the direction of imposing the most extreme version of GovCare that they think the American people will stand for – namely a public option that would pave the way for a “single payer” system within a few years. “The Public Option Comeback, Wall Street Journal, 10/22/09.
The public option's renewed momentum is mostly the product of the raw ideological willfulness of the progressive left. Led by Speaker Nancy Pelosi, they're not about to let a once-in-a-generation opportunity pass without a fight, and they view the public option as a down payment on single-payer health care.
http://online.wsj.com/article/SB10001424052748704500604574485452637584852.html
The idea of a public option is said to be gaining traction with voters – and indeed to be supported by a healthy majority. Public option gains support, Dan Balz and Jon Cohen, Washington Post, 10/20/09.
On the issue that has been perhaps the most pronounced flash point in the national debate, 57 percent of all Americans now favor a public insurance option, while 40 percent oppose it. Support has risen since mid-August, when a bare majority, 52 percent, said they favored it.
http://www.washingtonpost.com/wp-dyn/content/article/2009/10/19/AR2009101902451.html
If 54% of voters would prefer no action on healthcare to GovCare, how could 57% favor GovCare with a public option (which moderates of both parties have professed to be troubled by)? We can see two possible explanations.
• Some voters may visualize a government-run entity offering HCI in competition with private insurers as simply giving consumers an additional choice. Literally, that is what “public option” suggests, which is probably why the term was selected. But as Michael Tanner of the Cato Institute observes, that is not how a subsidized public option would actually work. Cognitive Dissonance on Healthcare Reform, Townhall.com, 10/20/09.
http://townhall.com/columnists/MichaelTanner/2009/10/20/cognitive_dissonance_on_health_care_reform
By way of evidence., consider how government intervention has led to domination of the market for housing loans. Between Fannie Mae, Freddie Mac and the Federal Housing Administration, over 90% of all U.S. mortgages are now federally guaranteed. Fannie’s Next Big Adventure, Wall Street Journal, 10/10/09.
Fannie and Freddie's guarantees and subsidies helped to create the housing disaster, which has led the Fed directly to purchase mortgage-backed securities and mess up the market for small mortgage lenders, which in turn is leading Fan and Fred to guarantee the debt of those small lenders. Market distortion is piled on market distortion until we have a mortgage industry that can't function without taxpayers being on the hook for every transaction.
http://online.wsj.com/article/SB10001424052748703746604574460903449028672.html
• The private entities that provide HCI are none too popular either, so GovCare supporters have found insurance companies a convenient target. Their attacks may not prove much about the desirability of a public option, but they help to wear down the opposition.
The attack starts at the top. Thus, the president made 18 references to “insurance companies” in his 9/9/09 address to Congress, castigating them for tough business practices and bemoaning the lack of competition.
. . . in 34 states, 75 percent of the insurance market is controlled by five or fewer companies. In Alabama, almost 90 percent is controlled by just one company.
And without competition, the price of insurance goes up and quality goes down. And it makes it easier for insurance companies to treat their customers badly -- by cherry-picking the healthiest individuals and trying to drop the sickest; by overcharging small businesses who have no leverage; and by jacking up rates.
Insurance executives don't do this because they're bad people. They do it because it's profitable. As one former insurance executive testified before Congress, insurance companies are not only encouraged to find reasons to drop the seriously ill, they are rewarded for it.
http://www.cnn.com/2009/POLITICS/09/09/obama.health.care.transcript/
Even worse was the president subsequent claim that insurance companies have been using bogus studies (e.g., a report by Price Waterhouse & Co.) to demonstrate that GovCare would drive up cost and insurance premiums. We are unaware of any “bogus” studies, and the indicated conclusions are valid in our opinion. Unhealthy smoke and mirrors, Donald Lambro, Washington Times, 10/22/09.
http://www.washingtontimes.com/news/2009/oct/22/unhealthy-smoke-and-mirrors/
There have been many attacks on insurance companies from lower level GovCare supporters, as exemplified by a column published in Delaware. Real people for real health[care] reform, JoAnne Cabry [Democracy for America], News Journal, 10/17/09.
http://www.delawareonline.com/apps/pbcs.dll/article?AID=2009910170308
The “real people” column reported that Ms. Cabry and allies had enjoyed a one-hour private audience with Senator Tom Carper (D-DE), in the course of which they had presented “overwhelming evidence” that a “strong federal insurance plan must be part of any genuine reform.” No sale, however, as Senator Carper was apparently sticking up for the insurance industry.
Rather than complaining that Senator Carper did not agree with them, it seems to us, the writer et al. should consider themselves fortunate to have been granted a one-hour private meeting. Few Delawareans enjoyed such access, certainly not SAFE.
We are also not persuaded by most of the substantive points in the column. Limited competition in the HCI market is probably due to state-by-state regulation versus exemption from the federal anti-trust laws, a public option would destroy private HCI (for reasons noted above), and it is hard to credit the overhead rates cited for private insurers vs. Medicare.
The insurance companies are hardly above reproach, however, as is well explained in “Who Killed Healthcare,” Regina Herzlinger (Harvard Business School), McGraw-Hill (2007). And to be fair, neither are most of the other groups vying for control of the healthcare industry, including hospitals, employers, the U.S. Congress, and academics.
To be continued – Time is short and we need to win this battle. The discussion will continue next week. Please stay tuned!
10/19/09 – For better schools: get the right people, put them in charge, and stand back Read Replies
HANOVER, MD – What drew SAFE directors Jerry Martin, Steve McClain and Bill Whipple to the Chesapeake Science Point Public Charter School (CSP)? Perhaps this trip will seem a bit out of character, as we generally focus on policy issues at a macro level rather than getting into the details of specific operations.
One factor was the infectious enthusiasm of Spear Lancaster, a fellow SAFE member, who has played a key role in getting CSP up and running over the past five years – he is a strategist, cheerleader, and lobbyist par excellence. McClain and Whipple had heard part of the story at the National Taxpayer’s Conference in June, and wanted to hear more.
Also, Martin (our resident expert on Delaware government) and McClain (formerly a Delaware teacher and administrator) have considerable background in the educational field. The opportunity to compare notes and share experiences was naturally appealing.
So here we are, sitting at a table in Principal Fatih Kandil’s office as Kandil and Lancaster paint the picture for us.
CSP occupies a fine new building in a office park area. Certificates and good wishes were received from a number of public officials for the ribbon cutting on August 18, including the governor of Maryland, the county executive of Anne Arundel County, and several state legislators. Such accolades do not come automatically, and one gathers that CSP and its backers have done some good “public relations” work.
http://www.mycsp.org/index.php
Currently, CSP is a middle school (grades 6-8), using one of the two corridor areas in the building. The other corridor area will be for the high school, which is to be phased in starting with grades 9 and 10 next year. The physical facilities are first rate, a tangible sign of a success story in the making; we will do a walk through a bit later.
Then there are the test scores, second highest in the state – some of the 7th grade students studying algebra – voluntary (and very popular) tutoring sessions on Saturday, not just for students who need help but also for those who want to progress faster – house calls to talk with parents – a science fair that has achieved state-wide recognition and is welcomed at the main University of Maryland campus in College Park. Wow!
Could it be that CSP is “cherry picking,” i.e., outperforming other schools because it attracts elite students? That seems unlikely for several reasons. For one, the school has at least a proportionate number of minority students and an excellent special education program. For another, students are selected from among the applicants through a lottery.
The only factor that might bias the selection process, it seems to us, is that the parents involved are sufficiently concerned about their children to submit applications to CSP in the first place. But if there is one thing that most parents have in common, it is a desire to see their children get a good start in life. And children naturally want to learn, once their interest is kindled. It only remains for the schools to help achieve these goals instead of permitting them to be stifled by uninspiring instruction and bureaucracy.
So does CSP get more money than other schools? That is not the secret either; we are told that CSP costs 20% less per student than the public schools with which it competes. It is true that CSP spends money smarter, e.g., picked up a lot of the furniture for the new school through donations rather than buying it, operates the Saturday coaching programs with volunteer tutors, etc., but there is no inherent reason that other schools could not follow similar strategies.
CSP is a part of the county school district and subject to all of its requirements, including the employment of union teachers. There has been suspicion about CSP’s objectives and jealousy of its success from time to time, however, leading to administrative attacks on key personnel and intense auditing of the school’s operations to ensure compliance with all applicable legal requirements. The ground rules in Delaware give charter schools a somewhat freer hand so long as they meet state testing standards, which might suggest some desirable changes in Maryland law.
Still, success begets success. Nine new charter schools opened in Maryland this year, bringing the total to 42 (serving 11,500 students) in five counties and Baltimore City. Maryland Charter School Network press release, 9/1/09, accessible from this link.
http://www.mycsp.org/index.php
Following the very interesting visit, our host, Spear Lancaster, takes us to Timbuktu! This nearby restaurant features an inviting décor, attentive service, and superb crab-cake (voted #1 in all of Maryland according to the Washington Post).
http://www.timbukturestaurant.com/maryland_restaurants/crab_cakes_baltimore.php
Over lunch, Whipple asks a question. What would it take, in terms of policy changes, to replicate the successes being achieved at CSP?
If 20% of patients at a hospital died, says Lancaster, it would be closed down. Ditto for an airline if 5% of its planes crashed every year. So why is there acceptance of a school system in which many students do not learn much (algebra in 7th grade, are you kidding?) and a significant percentage drop out without graduating?
The basic problem is not the curriculum or the testing, but the absence of anyone who is in charge and can be held accountable. To improve results, there must be site-based management. What this means, basically, is that the principal and teachers in a school should run it – focusing on the needs of the students, with the active support of the parents, following the dictates of common sense. An effective school system cannot be run by rote, following rules and regulations set on high, with compliance monitored by bureaucrats at other locations.
Charter schools may be a good vehicle to put site-based management into practice, witness what is happening at CSP, but the concept could benefit the public schools as well and it should apply across the board.
Great point, site-based management will definitely be reflected in the Education page of this Website (currently “under construction”) that SAFE is working on.
Thanking our host, we set out on the return drive to Delaware – and talked about education much of the way.
* * * This Blog's Replies * * *
For better schools, get the corrupt Washington politicians out of the picture, & return education to states & localities, where it belongs per the U. S. Constitution. - SAFE member, Arizona
When I read the first sentence [defining site-based management], I kind of bristled. Accountability is an over-used term and usually only refers to the accountability of the teachers and administration. With that being said, there are a few important points that you make that really appeal to me. First, that the principal and teachers at a school generally know what’s going to work best for their students. They are with them all day; they know their needs pretty well. Also, I like that the focus is on the students. Obviously, 7th grade algebra isn’t for all students, but some are just waiting to soar. It’s important to meet students where ever they are at and help them advance from there, otherwise they’ll get overwhelmed and shut down. I especially liked that you mentioned the ACTIVE SUPPORT OF PARENTS. I can’t stress how important this is. Too many parents feel like they shouldn’t have to watch over their kids in middle school when that’s one of the most crucial times. Unfortunately, I experienced many parents who weren’t involved, wouldn’t return calls, wouldn’t come in for conferences, and one that even gave a false phone number to the school. There is no accountability for these parents. If a child is suspended, they may stay home alone anyway- not much of a punishment. Finally, I get sick and tired of all these bureaucrats try to tell teachers how to do their jobs. Let them try to teach kids after making the children sit through 3-4 hours of testing every day for a week. Somehow, I don’t think they would be too productive. The bureaucrats show up for a few hours and think they know what a school is like, but it’s not until they’re in the “trenches” so to speak, that they can really make decisions that are best for all concerned. Anyway, it sounds like this is a great school. Good luck to them. – Delaware teacher
10/12/09 – Déjà vu: Scoring a healthcare bill Read a Reply
When Medicare and Medicaid were launched in 1965, the costs of these programs were wildly underestimated. This was apparently no accident. Top Liberal [Former Labor Secretary Robert Reich] Agrees: Cost of [Healthcare] Reform Could Wreck Economy, Michael Medved, 9/30/09.
In a taped conversation with Senator Ted Kennedy, [President Lyndon Johnson] attacked his own economic advisors because the fools had to go to projecting those costs down the road five or six years. LBJ deliberately misled the public by lowballing the amount of money that taxpayers would need to spend to secure [healthcare] coverage for senior citizens, contradicting the official economic estimates and intentionally distorting the truth. [I’ll] spend the goddamned money, he indignantly (though privately) declared.
Although some may view LBJ’s role with admiration (leave it to the “bean counters” and nothing gets done), Medicare and Medicaid have contributed greatly to the deterioration in the government’s fiscal situation. One would hope for a more accurate assessment of the healthcare bills now under consideration – but don’t count on it.
This entry will discuss some of the problems, using the Congressional Budget Office (CBO) analysis of the healthcare bill that has been taking shape within the Senate Finance Committee as an example.
Background: The president has said he will only sign a healthcare bill that is deficit neutral, meaning that costs over the 10-year budget projection period would be fully covered by cost savings and/or tax increases. In other words, this is a commitment to balance the bill, not to balance the budget (which in our opinion is what is really needed).
Some members of Congress agree that the healthcare bill should be deficit neutral, notably Chairman Max Baucus (D-Montana) et al. on the Senate Finance Committee. And the healthcare bill taking shape within that committee has been described as a watered-down, less-expensive healthcare plan that should appeal to moderates and might gain some degree of bipartisan support. Granny Pulls the Plug on Obama, Chris Stirewalt, Washington Examiner, 8/13/09.
The nonpartisan Congressional Budget Office (CBO) bears primary responsibility for assessing the budget effects of proposed legislation – including the various healthcare bills currently being worked on in Congress.
Douglas Elmendorf has headed the CBO since January 2009. He has a reputation for being low key, apolitical, and yet not afraid to take a stand on controversial issues. An economist armed with a grenade, James Gerstenzang, Washington Examiner, 9/20/09.
Scorekeepers determine outcomes, even in the amorphous game of politics, as official Washington was reminded on July 16 at a Senate Budget Committee hearing. Chairman Kent Conrad, D-N.D., asked Elmendorf if bills coming out of the House would curb federal health care costs.
"On the contrary," Elmendorf said, "the legislation significantly expands the federal responsibility for health care costs." With that verdict, the mild-mannered director of the Congressional Budget Office set off a storm that helped fuel the cross-country uprising against the health plan.
http://www.washingtonexaminer.com/politics/An-economist-8259219-59752972.html
Analysis: There was considerable interest last week when the CBO scored (costed out) the Baucus healthcare bill. 13-page letter (plus attachments) to Senator Baucus, 10/7/09 (best accessed from the director’s blog).
The preliminary results (to be revisited when the “legislative language” becomes available) indicate deficit neutrality, to the delight of supporters of healthcare “reform.” Here is a recap for 2010-2019 (dollars in billions), which will be fleshed out in the discussion that follows.
|
Gross cost of added healthcare coverage |
(829) |
|
Tax effects (principally excise tax on high premium insurance plans) |
284 |
|
Penalties |
27 |
|
Other cost savings (principally Medicare cuts) |
404 |
|
Tax effects from certain Medicare & Medicaid provisions |
16 |
|
Other tax effects (per Joint Committee of Taxation) |
180 |
|
Net Decrease in Deficit |
81 |
By 2019, estimates the CBO, the number of Americans without healthcare insurance would be 29 million lower with the Baucus bill than under existing law.
|
Nonelderly U.S. people (millions) |
Existing law |
Baucus bill |
|
|
Year |
2010 |
2019 |
2019 |
|
Employer coverage |
150 |
162 |
159 |
|
Nongroup (traditional private coverage) |
13 |
15 |
10 |
|
Other, e.g., Medicare |
14 |
16 |
16 |
|
Medicaid/CHIP |
40 |
35 |
49 |
|
Exchanges |
0 |
0 |
23 |
|
Uninsured (incl. “unauthorized immigrants”) |
50 |
54 |
25 |
|
Total nonelderly people |
267 |
282 |
282 |
The indicated reduction in the number of uninsured people would result from several provisions:
• Starting in July 2013, legal U.S. residents would be required to obtain healthcare insurance (HCI). In many cases, financial penalties would be imposed for failure to do so. And new insurance exchanges would be established that would subsidize the purchase of HCI for individuals and families with income between 100% and 400% of the federal poverty level (FPL).
New rules would apply for insurers providing HCI: no exclusion of coverage for preexisting medical conditions or variation in premiums based on the individual’s health. Start-up funds would be provided to encourage the formation of cooperative insurance plans (co-ops) that could be offered through the exchange; existing insurers could not be approved as co-ops.
Firms with more than 50 workers that did not offer HCI to employees would pay a fine for full-time workers who obtained subsidized coverage through insurance exchanges.
In general, full-time workers offered HCI coverage by their employer would not be eligible for subsidies via the exchanges – unless they had to pay more than a specified percentage (10% in 2013) of their income for their employer’s insurance, in which case the employer could also be penalized.
Insurance policies with relatively high total premiums (generally $8,000 for individual and $21,000 for family coverage in 2013, to be indexed for inflation thereafter) would be subject to a 40% excise tax on premiums in excess of the threshold.
• Starting in 2014, nonelderly people with income below 133% of the FPL would generally become eligible for Medicaid. States would be responsible for paying a portion (averaging about 10% of the costs of covering newly eligible enrollees). However, the states would receive higher federal reimbursement for Children’s Health Insurance Program (CHIP) enrollees.
The cost (wrapped numbers, dollars in billions) of the foregoing provisions is projected as shown below for the 10-year period, both gross and net of tax effects & penalties.
|
|
Medicaid/Chip |
Exchanges |
Tax Credits |
Total |
|
Gross cost of providing HCI |
(365) |
(461) |
(23) |
(829) |
|
Net cost of providing HCI |
NA |
NA |
NA |
(518) |
Cost savings of $404B over ten years reflect Medicare “market basket cuts and productivity adjustments” ($207B), reduced subsidies for Medicare Advantage plans ($117B), improved payment accuracy ($58B), reduced Medicaid outlays ($41B), and a net spending increase of $19B for numerous other items.
Other tax effects, adding up to a $196B fiscal benefit over the 10-year period, principally consist of an $180B estimate from the Joint Committee of Taxation that is cited without supporting detail. Said amount may represent payments to be collected from drug and medical device firms, which we could not identify in the OMB schedules. The Greatest Show on Earth, Wall Street Journal, 10/9/09.
Another $180 billion will hit the likes of drug and device makers, including $29 billion because companies won’t be allowed to deduct these “fees” from their corporate income taxes.
http://online.wsj.com/article/SB10001424052748703746604574461121881407350.html
The real bill or a decoy? – Is it likely that those who feel everyone should have HCI will be satisfied with the indicated result – 25 million people (including perhaps 8 million illegal immigrants) still uninsured in 2019? No way, and the president’s party has the votes. So whatever its fiscal merits, we doubt the Baucus bill will be the template for the final healthcare bill.
One strategy for obtaining a more sweeping bill after the Senate Finance Committee approves the Baucus bill, as it is poised to do this week, would be to introduce a “public option” amendment on the floor of the Senate – potentially circumventing the 60-vote requirement for cloture. New plan might allow Dems to slip public option through Senate, Susan Ferrechio, Washington Examiner, 10/7/09.
Majority Leader Harry Reid, D-Nev., is weighing a plan to bring the final health care bill to the floor without a public option -- making it much easier to get the 60 votes needed to prevent a Republican filibuster -- and then adding the provision later as an amendment. The public option amendment would be there waiting, but the 60-vote test would technically be on a bill without the government plan. Then moderate Democrats could drop out for the vote on the public option, which requires just 51 votes for passage.
With such a game plan, the fiscal cost of the healthcare bill might increase drastically rendering the CBO’s scoring of the Baucus bill irrelevant.
A pricey plan – It stands to reason, we think, that the gross cost of added HCI coverage should be looked at, not the “net cost” (gross cost less tax effects and fines) that is identified in the CBO analysis let alone the net decrease in the deficit.
In addition, the fiscal impact of the Baucus bill would vary substantially by year:
|
|
2010-13 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
10 years |
|
Insurance coverage cost (gross) |
14 |
56 |
115 |
143 |
155 |
166 |
180 |
829 |
|
Insurance coverage cost (net) |
1 |
30 |
78 |
96 |
101 |
104 |
107 |
518 |
|
Cost savings |
(24) |
(42) |
(47) |
(55) |
(66) |
(78) |
(93) |
(404) |
|
Other tax effects |
(58) |
(20) |
(21) |
(22) |
(23) |
(25) |
(26) |
(196) |
|
Net increase (decrease) in deficit |
(81) |
(32) |
10 |
20 |
13 |
1 |
(12) |
(81) |
Do not assume, therefore, that the annual cost for extending HCI to more people would be $83B ($829B divided by 10). The annual cost would hit $180B by 2019, representing $6,200 per person for the net 29 million increase in people with HCI.
What about the long-term fiscal burden of the Baucus bill? As shown in the previous table, the CBO projects that the net fiscal effect would turn positive in 2019. It is further suggested that “the proposal, if enacted, would reduce federal budget deficits over the ensuing decade relative to those projected under current law.”
But these conclusions may be overly optimistic, for reasons to be discussed.
Employer-provided coverage – The CBO projects the number of people with employer-provided HCI as increasing from 150 million in 2010 to 162 million in 2019 under existing law (or 159 million with the Baucus bill).
Many employers are disenchanted with their HCI plans, however, which have become increasingly costly and represent an administrative headache as well. And the prevalence of these plans seems to be on the decline. Thus, the percentage of people under 65 with employer-provided HCI fell from 66.4% in 1997 to 61.6% in 2007. National Health Statistics Report, U.S. Center for Disease Control and Prevention, 7/1/09.
http://www.cdc.gov/nchs/health_policy/healthcare_coverage_Table1.htm
http://www.cdc.gov/nchs/health_policy/healthcare_coverage_Table2.htm
In the CBO analysis, 56% of people under 65 are shown as having employer-provided HCI in 2010. The sharp drop from 61.6% in 2007 may be due to the current depression, or perhaps the CBO and CDC data are on different statistical wavelengths. In any case, we suspect that the CBO’s base projection of 162 million (57%) people with employer-provided HCI in 2019 errs on the high side.
Even more questionable is the assumption that only 3 million people would shift out of employer-provided HCI plans under the Baucus bill. Bear in mind that this proposal would impose stringent new limitations on private HCI insurers (predictably driving up average cost for employers) and provide government-subsidized options (giving employees an incentive to defect from their employers’ plans).
It seems likely to us that there would be a major decline in employer-provided plans and more HCI purchased through exchanges than has been projected. If so, the CBO cost estimates could prove to be significantly understated.
See “Why Business Fears the Public Option,” Jane Sasseen and Catherine Arnst, Business Week, 10/1/09. The basic concern is said to be cost shifting from government-run or government-subsidized HCI plans that reimburse at less than market rates to private HCI coverage.
Business lobbyists don't buy the White House line that reform plans will reduce the explosive growth in health-care costs. Instead they see Obamacare shifting much of the cost of extending coverage to 45 million uninsured Americans onto the backs of major companies and private insurers.
http://www.businessweek.com/magazine/content/09_41/b4150026723556.htm
Note also that the basic techniques for increasing the number of people with HCI in the Baucus bill, a combination of mandates and subsidies, have been tried at the state level. None of the state plans have done much to hold down healthcare costs, quite the contrary, as illustrated by the experience in Massachusetts. The Lesson of State Healthcare Reforms, Peter Suderman (Reason Magazine), Wall Street Journal, 10/6/09.
Health-insurance premiums in the Bay State have risen significantly faster than the national average, according to the Commonwealth Fund, a nonprofit health foundation. At an average of $13,788, the state's family plans are now the nation's most expensive. Meanwhile, insurance companies are planning additional double-digit hikes, "prompting many employers to reduce benefits and shift additional costs to workers" according to the Boston Globe.
http://online.wsj.com/article/SB10001424052748703298004574455560453947646.html
Assumed cost savings – What about the $404 billion in cost savings that are projected, principally for Medicare outlays? Surely that should represent an offset to the cost of providing increased HCI coverage. Well maybe not, for several reasons.
First, Medicare is in a huge fiscal hole – so any opportunities to reduce costs without unacceptably impairing healthcare services should be implemented. This does not mean the savings should be plowed back into new healthcare programs, however, because they are urgently needed to reduce the government’s deficits.
The same logic applies to new taxes that could be imposed on high premium HCI plans or whatever else Congress might decide to tax.
Second, Congress has a track record of legislating Medicare cost cuts and waiving them later so the indicated cuts may be bogus. The Greatest Show on Earth, Wall Street Journal, 10/9/09.
Mr. Baucus spends $10.9 billion to eliminate the scheduled Medicare cuts to physician payments—but only for next year. In 2011, he assumes they'll be reduced by 25%, with even deeper cuts later. Congress has overridden this "sustainable growth rate" every year since 2003 and will continue to do so because deeper cuts in Medicare's price controls will cause many doctors to quit the program. *** The only Medicare cut that isn't made merely on paper is $117 billion in Medicare Advantage, which Democrats hate because it gives one of five seniors private insurance options.
http://online.wsj.com/article/SB10001424052748703746604574461121881407350.html
The CBO knows about this, of course, as demonstrated by the following excerpt from their report (p. 12), but no matter because their task is to score the bill presented.
These projections assume that the proposals are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation. For example, the sustainable growth rate (SGR) mechanism governing Medicare’s payments to physicians has frequently been modified (either through legislation or administrative action) to avoid reductions in those payments.
Third, if all of the Medicare cuts embedded in the Baucus bill were implemented, e.g., establishment of a Medicare Commission charged with recommending changes to limit the rate of growth in spending, the results might be regrettable. Ultimately, when the government runs out of ways to shift healthcare costs to others, e.g., private employers and patients, it will impose and enforce cost controls instead of imposing tax increases that would be politically unacceptable or shutting all of its other operations. Medicare for Dummies, Wall Street Journal, 9/11/09.
As ever-more health costs are financed by taxpayers, something will eventually have to give on care the way it has in every other state-run system.
http://online.wsj.com/article/SB10001424052970203440104574404893691325078.html
Opportunity cost – Last but not least, the Baucus bill would squander an opportunity to improve the operation of the healthcare system by enhancing competition and individual choice instead of empowering the government to effectively ration healthcare.
With SAFE’s proposals for real healthcare reform, we believe it would be possible to put Medicare and Medicaid on a fiscally sustainable basis. But none of these proposals have been incorporated in the Baucus bill, or any of the other major healthcare bills being worked on in Congress.
http://www.s-a-f-e.org/healthcare.htm
The Cato Institute has offered a free market approach to healthcare reform, which we could also support. Take at look at their plan too, which has been similarly ignored, we do not have all the good ideas.
http://healthcare.cato.org/free-market-approach-health-care-reform
If the losses from failing to take better ideas into account could be reflected in scoring the Baucus bill, the cost of this proposal would be astronomical.
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While the Administration mounts a big push for its version of healthcare “reform,” never mind what it would cost, the U.S. dollar is sinking and gold is soaring due to a national debt that is already high (and headed much higher).
If matters are allowed to continue on the present track, look for the cost of imports to soar. The only way to raise fresh capital will be to print it, with the well-known consequences of spiraling inflation and interest rates.
It is time for the government to start paying attention to the real problems, such as balancing the budget and keeping it that way. - SAFE member
10/5/09 – Carbon showdown on multiple fronts. Read a Reply
In last week’s entry, we recapped energy policy failures dating back to the 1970s and suggested that enactment of the Waxman-Markey (WM) energy bill (which passed the House in June) would compound the damage.
WM is based on an unproven theory of manmade global warming. It would impose a heavy burden on the U.S. economy, with a negligible effect on global temperatures. Here is one observer’s take on the situation: Dear Senator: Why you should vote against cap-and-trade, James Manzi (Manhattan Institute), Washington Examiner, 9/30/09.
If the law works precisely as intended, in about 100 years we should expect surface temperatures to be [about] one-tenth of one degree Celsius lower than they otherwise would be. The expected costs are at least 10 times the expected benefits, even using the EPA's cost estimates and assuming achievement of the primary goal of the legislation.
Senator Barbara Boxer (D-CA) has now introduced an energy bill in the Senate. Like WM, the Senate bill would impose a cap and trade system to cut carbon emissions; it would allegedly cut emissions more deeply while costing less (how?). Senators Ready a Bill on Greenhouse Gases, Juliet Elperin, Washington Post, 9/30/09.
Many details remain outstanding, such as how emission credits would be distributed – the better to negotiate with the special interests. For present purposes, let’s assume the Senate bill is functionally equivalent to WM.
We doubt that WM (or the Senate bill) will pass this year, but believe its supporters will continue working to expand the government’s partial control of the energy sector by whatever means may be available. Here, as promised last week, is their Plan B:
International negotiations: The Earth’s atmosphere is one. So even if fears about carbon emissions were fully justified, it would be futile for the United States to address global warming unilaterally. As U.S. emissions were cut and manufacturing moved elsewhere, additional power plants would be built in China, etc. Net results: an impoverished U.S. and no overall reduction in emissions.
Much effort is being devoted to developing an international consensus to reduce carbon emissions, together with verifiable national commitments. But the developing countries have shown limited interest in hobbling their respective economies to fight global warming unless the developed countries agree to cover the cost. Consider the views reported in “India attacks British and Western ‘hypocrites’ over cutting emissions,” Dean Nelson, UK Telegraph, 8/5/09.
The Indian prime minister, Manmohan Singh, has been under pressure to curb his country's carbon emissions as its economy grows but he blamed the West for creating the climate crisis through 150 years of "dirty" industrial development and demanded a $250 billion per year fund to help developing countries.
The U.N. Secretary General and U.S. president were quoted last week about the catastrophic consequences if action is not taken to reduce carbon emissions, ideally at the December climate summit in Copenhagen. By way of support, check out this 2-minute video – complete with gee whiz graphics and a sound track by global warming guru Al Gore. Google Earth 3D map unveiled, Asher Moses, Sydney Morning Herald, 9/28/09.
The events depicted in the video are no more reliable than the IPCC projections on which they are based, and we have considerably more faith in the alternative findings of the NIPCC (discussed last week). One must admit that the video is slick, however, and uninformed viewers might assume it is factual.
How do global warming activists respond to cessation of the warming trend over the past decade? Far from rethinking their conclusions, many of them see only a temporary deviation. On Climate, Bad News Will Resume, George Will, Townhall.com, 10/1/09.
By asserting that the absence of significant warming since 1998 is a mere "plateau," not warming's apogee, the [New York] Times assures readers who are alarmed about climate change that the paper knows the future and that warming will continue: Do not despair, bad news will resume.
http://townhall.com/columnists/GeorgeWill/2009/10/01/on_climate,_bad_news_will_resume
Assume an international agreement was struck, which required country-by-country reduction in carbon emissions and developed country contributions to a global green energy fund. It would predictably be argued that the U.S. had no choice but to go along, lest it be held responsible, in the eyes of the world, not just for U.S. carbon emissions but also for coal power plants built in China, rain forest destruction in South America, etc.
Such an agreement appears unlikely, however, because “jobs trump environment and emission restrictions might stifle economic growth.” Stubborn facts block green campaigns, Irwin Stelzer, Washington Examiner, 10/2/09.
The likelihood now is that when the world's leaders gather in Copenhagen in December -- Obama has not yet decided to attend -- they will not sign on to a legally binding international agreement. Obama will tout the steps he is taking to subsidize green energy, while China will promise only to keep the increase in its emissions below the rate of increase in its national output -- which means lots more emissions.
Voodoo economics: Claims about the scarcity of U.S. oil and inherent advantages of renewable energy sources should sound familiar; they have been used to justify the failed energy policies of the past four decades. But such arguments are convenient in talking to people who feel U.S. energy policy should be established by Congress (not the U.N.) and/or have grown weary of hearing about global warming, so they will continue to be made. Some recent examples follow.
• Secretary of Interior Ken Salazar stated in April that the U.S. has 3% of the world’s oil reserves while consuming 25% of its oil. He views U.S. dependence on foreign oil as “a national security problem, an environmental security problem and an economic security problem.” Never mind that U.S. reserves could be increased (to the benefit of the U.S. Treasury) simply by allowing oil companies to look for oil and gas in heretofore-unexplored areas. Flawed intelligence guides the Obama energy plan, Daniel Kish, Washington Examiner, 9/23/09.
Based on his department’s own estimates, Salazar could quadruple those reserves from the OCS [Outer Continental Shelf], and increase them by 50% from the Arctic National Wildlife Refuge (ANWR) alone. Salazar is landlord for almost 2.5 billion acres of onshore and offshore lands, but his department currently has only leased about 3% of them for energy production.
Ironically, the U.S. government will provide at least $2 billion in financing (loan or loan guarantee) to the Brazilian national oil company for the development of an offshore oil find in their backyard. Obama Underwrites Offshore Drilling: Too bad it’s not in U.S. waters, Wall Street Journal, 8/18/09.
http://online.wsj.com/article/SB10001424052970203863204574346610120524166.html
• Praising the marvels of clean, inexhaustible, and (supposedly) inexpensive wind and solar power, political leaders continue to back them with mandates and subsidies. Consider what the California governor had to say, for instance, about his order requiring utilities to get a third of their power from renewable sources by 2020. Schwarzenegger signs order boosting clean power, Samantha Young, Washington Times, 9/16/09.
"This is really a great day today because we are creating major action to create more green jobs and more green energy," Schwarzenegger said while signing the order [at a field of solar panels] in the Sacramento suburb of Rancho Cordova.
http://www.washingtontimes.com/news/2009/sep/16/schwarzenegger-signs-order-boosting-clean-power/
We have nothing against the development of wind and solar power. So long as they are economically competitive, let the market decide. But this condition will not be met in the foreseeable future, and we do object to mandates and subsidies.
One problem with wind and solar power is intermittency, i.e., neither sunlight nor wind is constant and the power that is generated cannot readily be stored until needed. Getting real on wind and solar, former Secretary of Energy James Schlesinger and Robert Hirsch, Washington Post, 4/24/09.
Because of this need for full fossil fuel backup, the public will pay a large premium for solar and wind -- paying once for the solar and wind system (made financially feasible through substantial subsidies) and again for the fossil fuel system, which must be kept running at a low level at all times to be able to quickly ramp up in cases of sudden declines in sunshine and wind. Thus, the total cost of such a system includes the cost of the solar and wind machines, their subsidies, and the cost of the full backup power system running in "spinning reserve."
http://www.washingtonpost.com/wp-dyn/content/article/2009/04/23/AR2009042303809.html
Environmentalists almost invariably support wind and solar power in principle, but they will fight projects perceived as introducing construction and power lines in pristine areas (energy sprawl), interfering with wildlife, etc. Activists’ Failure to Agree on Energy Sources Jeopardizes Economy, Heartland Institute, 8/1/09.
We all have heard the horror stories about Cape Wind, the Nantucket Bay offshore wind project capable of powering 420,000 homes, which has been embroiled in eight years of permitting delay. But you may not have heard about the Cascade Wind Project killed in Oregon, or the Tallahassee Renewable Energy Center biomass plant killed in Florida, or even small projects such as Akeena Solar in California, which was sued for trying to install solar panels on its own roof.
And nuclear power represents a lower cost, more reliable substitute for coal power plants than wind and solar power. So if the U.S. did commit to reducing carbon emissions, building more nuclear power plants would be the most effective way to go about it.
Just ask the U.S. Energy Information Administration (EIA). [WM] bill requires doubling nuke use, Stephen Dinan, Washington Times, 8/12/09.
Under the basic scenario EIA ran, consumer energy prices would rise about 15 percent by 2030. But under a scenario with less reliance on nuclear energy, international offsets and other alternatives, consumer prices could rise by more than 60 percent, and the hit to the U.S. economy would be three times as deep as the basic scenario, EIA said.
Many environmentalists dislike nuclear power, however, so it is impolitic to push it. Far from doing that, the Administration recently moved to kill a proposed national depository for nuclear waste at Yucca Mountain, Nevada, after two decades of study and $11 billion of expenditures. The decision was reportedly made at the urging of Senate Majority Leader Harry Reid (D-NV), a long-time opponent of the facility. US’s Yucca Mountain nuclear project in meltdown, Garry White, UK Telegraph, 8/22/09.
It is unclear how, or indeed whether, the nuclear waste issue will be resolved – and until it is, a new wave of nuclear power plants appears highly improbable. Nuclear power: walk first, then run, 8/11/08.
Regulatory action – Although WM may be long and involved, suggests one observer, the basic thrust of the bill is simple: “make energy so expensive to consume that Americans use less of it, and ‘greenhouse gas’ emissions are thereby curtailed.”
And given a U.S. Supreme Court decision that the Environmental Protection Agency (EPA) has authority to classify CO2, etc. as pollutants under the Clean Air Act, which the agency has since proposed to do (5/11/09 entry), the EPA could – and will if the president wishes – restrict carbon emissions by regulation. Cap-and-Trade is Dead. Long Live Cap-and-Trade. Patrick J. Michaels, Townhall.com, 9/18/09.
Now that cap-and-trade has so spectacularly failed in the legislature, it is a sure bet that Obama will direct (or has directed) EPA Administrator Lisa Jackson to issue her own cap-and-trade protocols. Look for something concrete out of EPA before the U.N.’s climate change confab in Copenhagen in early December. (That “something” may even include a new fuel economy standard of 35.5 miles-per-gallon—though it would be lower, of course, for the inefficient cars produced by government-owned General Motors.)
Actually, the EPA has already proposed new fuel economy standards under its “greenhouse gas emission program.” It acted in concert with the Department of Transportation, which is accelerating the timetable for tightening of the Corporate Average Fuel Efficiency (CAFE) standards that was enacted in 2007. Director Lisa Jackson lauded the proposed standards as “the nation’s first ever greenhouse gas emissions standards for vehicles.” EPA press release dated 9/15/09.
Unlike the members of Congress, employees of government agencies are appointed. With the exception of the top echelon, they are unknown to the general public. If they are entrusted with policy decisions, it is difficult to hold them accountable. There is no way to vote them out of office, as is sometimes done in the case of elected officials.
Accordingly, we believe that the EPA (or any other government agency) should not be entrusted with a basic policy decision like this one; Congress should deal with the matter instead. EPA regulation of CO2: a bad idea from any angle, 5/11/09.
The EPA is part of the administrative branch, of course, and as such accountable to the president. But Congress could readily take charge of the situation by removing the regulation of carbon emissions (as opposed to genuine pollutants) from the EPA’s statutory purview.
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SAFE’s campaign for global warming common sense was described in the last entry. A new phase began on September 29, when SAFE founder Bill Morris made a 2-minute video to explain why “nature, not manmade activity, controls the climate.”
Do not expect polished slickness, nor gee whiz graphics like the aforementioned Google Earth 3D map. SAFE does not have the money for that sort of thing, and a model that did not show a clear-cut, inexorable trend would not seem very dramatic anyway.
Morris’s sincerity is obvious, however, and he makes some telling points within the time allotted. Watch the video, and if you agree forward the link.
http://www.youtube.com/watch?v=PXb7EqvyciI
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Good writin' there. Has anyone yet answered the basic question whether the pre-plateau global warming trend was caused more by nature than by humans? I haven't seen a definitive answer on that. – Virginia attorney
SAFE response: We would say “mostly nature,” as the fluctuation of global temperatures began long before the Industrial Revolution and nothing observed since then seems out of line with past patterns. See “A Global Warming Primer,” National Center for Policy Analysis, e.g., p. 14.
http://www.s-a-f-e.org/GlobalWarmingPrimer.pdf9/28/09 – Energy policy: time for some common sense
U.S. energy policy has been in a muddle since the oil price shocks of the 1970s, as the government promoted one far-fetched solution after another. Key results have included steadily rising oil imports (energy independence was never in the cards, but the failure to tap domestic petroleum reserves is incomprehensible), decline of the U.S.-owned auto companies (recently resulting in the forced sale of Chrysler to Fiat and government takeover of General Motors), stalled development of nuclear power (the radioactive waste issue must be addressed), and unjustifiable mandates and subsidies for alternative energy (mixing ethanol in motor fuel; generating electricity with windmills and solar cells).
The government’s basic mistake has been to single-mindedly focus on energy conservation and environmental concerns (often overstated) while blocking timely and cost-effective expansion of energy supplies. See the Energy page of this Website and the prior blog entries that are referenced.
http://www.s-a-f-e.org/energy.htm
Far from learning from experience, many political leaders seem determined to double down on past mistakes by enacting the Waxman-Markey (WM) energy bill (passed by the House in late June). This entry will provide an update on this proposed legislation, starting with the manmade global warming theory that undergirds it.
Global warming – The starting point is two facts: (1) there has been a modest warming trend in global temperatures over most of the last two centuries, and (2) the burning of fossil fuels has contributed to a rising level of CO2 in the atmosphere (now up to 380+ parts per million). By assuming a cause and effect relationship, alarmists predict catastrophic climate changes unless action is taken to cut CO2 emissions.
SAFE has attempted to stay informed about the debate over global warming (there is not an overwhelming scientific consensus about its causation or severity) and play an educational role.
• Founder Bill Morris gives talks about global warming and energy policy to civic groups, e.g., Rotary Clubs and the Retired Men’s Luncheon Club. He finds that the audiences are generally receptive to a thoughtful and balanced review of these subjects.
• In June, SAFE commented to the Environmental Protection Agency (EPA) on its proposed finding that CO2 et al. are pollutants within the meaning of the Clean Air Act. No chance the EPA will listen to us, but their finding was based on a unrepresentative sampling of the scientific literature and we suggested they should start from scratch.
http://www.s-a-f-e.org/epa_letter.htm
• SAFE’s views on energy policy have been periodically shared with the three members of Congress from Delaware, although without any apparent benefits to date.
• We have also written letters and columns for the general public. Note the recent letters on energy policy by Harry Kenton (9/8/09) and Bill Morris (9/18/09).
• A common sense view of global warming was promoted on Newark Community Day (University of Delaware campus, 9/21/09). Morris was in the thick of the action, which he summarizes as follows.
Ten global warming skeptics took turns covering our spot with the "Climate Common Sense" banner for 8 hours. We handed out over 300 "Global Warming in a Nutshell" 8.5 X 3.7 inches papers [see below]. Most accepted politely with a "thank you". A few declined with apparent opposition, but more showed interest and support, [also] taking a larger handout. Even though we had issued a news release, nobody from the media showed. We didn't see a media rep anywhere. We'll have to go to them if they don't come to us.
- Talking points (front): http://www.s-a-f-e.org/nutshell.htm
- Cartoon (back): http://www.s-a-f-e.org/puppy_cartoon.htm
All of which is not to deny that global warming could occur, scientists do not know whether average temperatures will rise or fall in the future, nor to rule out human activity as a contributing factor. But we know of no solid evidence that the buildup of CO2 and other greenhouse gases in the atmosphere from the combustion of fossil fuels will necessarily result in global warming.
The real driver for climate change is probably the level of solar activity, as expressed by sunspots, which has diminished in recent years (coinciding with a lull in the warming trend) and during cool periods in the past, e.g., the Little Ice Age (which peaked about 500 years ago). Yet global warming activists seem slow to acknowledge this connection. Global Warming and the Sun, Jonah Goldberg, Townhall.com, 9/2/09.
. . . we are told, nay lectured and harangued, that if we use the wrong toilet paper or eat the wrong cereal, we are frying the planet. But the sun? Well, that's a distraction. Don't you dare forget your reusable shopping bags, but pay no attention to that burning ball of gas in the sky -- it's just the only thing that prevents the planet from being a lifeless ball of ice engulfed in darkness. Never mind that sunspot activity doubled during the 20th century, when the bulk of global warming has taken place.
http://townhall.com/columnists/JonahGoldberg/2009/09/02/global_warming_and_the_sun
For much, much more, see Climate Change Reconsidered, Fred Singer and Craig Idso, Nongovernmental International Panel of Climate Change (NIPCC), Heartland Institute, 2009. At 800+ pages, this book is hardly a light read, but all 11 of the customer reviewers on Amazon.com have awarded it a “five star” rating.
http://www.heartland.org/ (PDF file may be downloaded).
http://tinyurl.com/yel2ufd (review by William Mellberg, an amateur astronomer)
Granted, many people have other ideas – including some in high positions. Consider what UN Secretary-General Ban Ki-moon had to say, for example, when he spoke to the Global Environment Forum on August 11, 2009.
If we fail to act, climate change will intensify droughts, floods and other natural disasters. Water shortages will affect hundreds of millions of people. Malnutrition will engulf large parts of the developing world. Tensions will worsen. Social unrest – even violence – could follow. The damage to national economies will be enormous. The human suffering will be incalculable. *** We must seal the deal in Copenhagen [global warming summit in December] for the future of humanity.
http://www.un.org/apps/news/infocus/sgspeeches/statments_full.asp?statID=557
The U.S. president spoke in similarly sweeping terms at a 9/22/09 meeting on global warming. Obama makes U.N. debut on global warming, LA Times, 9/22/09.
It is true that for too many years, mankind has been slow to respond or even recognize the magnitude of the climate threat. It is true of my own country, as well. We recognize that. But this is a new day. It is a new era. And I am proud to say that the United States has done more to promote clean energy and reduce carbon pollution in the last eight months than at any other time in our history.
The scientific evidence does not clearly support such pronouncements, however, and some of the studies suggesting otherwise may have been tainted by institutional bias. Climate Change Reconsidered, preface, pp. iii-vi.
Although the [United Nations–sponsored Intergovernmental Panel on Climate Change] claims to have based AR4 [a summary report issued in 2007] on the best available science, such is not the case. In many instances conclusions have been seriously exaggerated, relevant facts have been distorted, and key scientific studies have been omitted or ignored.
Proposed response - In broad outline, the WM bill would impose a “cap and trade” regime designed to raise the cost of energy (via prices and/or taxes) and thereby force progressive reduction of CO2, etc. emissions over the next several decades. An array of other provisions would foster energy conservation and subsidize renewable energy (wind and solar) power projects. The high cost of “green” energy, 5/25/09.
If the threat of manmade global warming has been grossly exaggerated, as we believe, it follows that the environmental benefits of the bill would be inconsequential. First, a warming trend is not inevitable, nor is it likely to be sudden. Second, the effects would not necessarily be adverse, e.g., warmer temperatures would offer pluses as well as minuses.
Even if the concerns about global warming were fully justified, moreover there is plenty of room to question whether reducing CO2 emissions would be the most effective way to prevent it. Technology Can Fight Global Warming, Bjorn Lomborg, Wall Street Journal, 8/28/09.
Research for the Copenhagen Consensus Center by Claudia Kemfert of German Institute for Economic Research in Berlin shows that in terms of reducing climate damage, reducing methane emissions is cheaper than reducing CO2 emissions, and—because methane is a much shorter-living gas—its mitigation could do a lot to prevent some of the worst of short-term warming. Other research papers highlight the advantages of planting more trees and protecting the forests we have to absorb CO2 and cut greenhouse gases.
http://online.wsj.com/article/SB10001424052970203706604574376442559564788.html
On the other hand, it is crystal clear that WM would boost energy prices, thereby imposing a major, long-term burden on the U.S. economy. The Economic Consequences of Waxman-Markey, David Kreutzer et al., Heritage Foundation, 8/6/09. In summary, the Heritage study projects the following effects (in 2009 dollars):
Cumulative gross domestic product (GDP) losses are $9.4 trillion between 2012 and 2035;
Single-year GDP losses reach $400 billion by 2025 and will ultimately exceed $700 billion;
Net job losses approach 1.9 million in 2012 and could approach 2.5 million by 2035.
Manufacturing loses 1.4 million jobs in 2035;
The annual cost of emissions permits to energy users will be at least $100 billion by 2012 and could exceed $390 billion by 2035;
A typical family of four will pay, on average, an additional $829 each year for energy-based utility costs; and
Gasoline prices will rise by 58 percent ($1.38 more per gallon) and average household electric rates will increase by 90 percent.
http://www.heritage.org/Research/EnergyandEnvironment/cda0904.cfm
Public support for WM has been lukewarm, especially in Midwestern states that are heavily dependent on coal-burning power plants, and it is unclear that the president’s party will have the 60 votes needed to cut off debate and force a vote in the Senate. Cap and Tax Delay, Wall Street Journal, 9/2/09.
Middle-American Senators aren't about to rush through a huge new tax on carbon energy—e.g., their constituents—that will largely flow to the wealthier coasts, even if it is done in the name of saving the planet while the here-and-now economy is still sputtering.
http://online.wsj.com/article/SB10001424052970204731804574387104063612052.html
Which is not to say the Administration will throw in the towel. To the contrary, the so-called “green cabinet” has been working hard to line up support. White House quietly lobbies Senate as climate bill stalls, Christina Bellantoni, Washington Times, 9/20/09.
President Obama has dispatched Energy Secretary Steven Chu, Interior Secretary Ken Salazar and Environmental Protection Agency Administrator Lisa P. Jackson to Capitol Hill. White House aides said that they and other executive branch staffers, such as climate-change czar Carol Browner, have met with "dozens" of senators.
No doubt, concessions will be considered as necessary to buy support. For instance, ten senators have asked for carbon tariffs against countries that do not impose comparable restrictions on CO2 emissions. This is a terrible idea, which could spark retaliation by our global trading partners, but do not be too sure the Administration would rule it out. More Cap-and-Trade War, Wall Street Journal, 8/12/09.
http://online.wsj.com/article/SB10001424052970204908604574336844278574578.html
What will the outcome be? All things considered, we continue to believe that WM will be defeated this year, but here is the bad news. If the bill falls short, its supporters have a Plan B that could be even trickier to defend against. Tune in next week for the details.
9/21/09 – The march that was, and what it may mean Read Replies
This week we bring you a first hand report on the 9/12 “March on Washington,” plus some observations about its significance. Here goes.
7:15 a.m. - SAFE directors Barry Dorsch, Steve McClain, and Bill Whipple + grandson James Wiest meet at People’s Plaza in Glasgow, Delaware. After being checked against the passenger list, we board a bus that will take us and kindred spirits to the D.C. area. We are carrying smallish signs (prepared by Bill Morris) expressing some plain vanilla ideas to restore fiscal responsibility. Easy on the regulations, no more debt, cut spending instead of raising taxes, and “hands off the national piggy bank.”
7:30 – The people on board appear to be predominantly middle-aged, with a gender mix of roughly 50/50. We make them for conservatives, like us, but hardly wild-eyed extremists.
7:41 – Let’s roll. Four other buses leave about the same time.
9:25 – Our bus pulls into the parking lot at the Metro station in Greenbelt, where it and the other buses will spend the day.
9:35 – The fare is $4.70 per person, round trip. A crowd queues up at the ticket machines to buy fare cards. No human attendants are in sight, and it turns out that the machines only take one dollar and five dollar bills, coins, and maybe credit cards (at some of the machines). Confusion reigns for a while. Is this what healthcare will be like if GovCare goes through?
10:03 – Our train arrives and everyone boards, packing it, for the ride downtown.
10:30 – There had been talk about the group on the bus sticking together, but this idea evaporates after we emerge from the Archives – Navy Memorial Penn Station. There is a steady stream of people, perhaps 20 abreast, marching down Pennsylvania Avenue towards the U.S. Capitol from an assembly point at Freedom Plaza (near the White House). Team SAFE edges into the flow, four drops in a 3-hour stream of humanity.
The marchers had arrived from many starting points. Thus, Joe Hilliard reports that the Lehigh Valley (of Pennsylvania) contingent was boarding buses at 4:43 a.m. On arrival at Freedom Plaza in D.C., shortly before 10:00, they got the word to move out - never mind the notion of marching by states - so as relieve congestion in the assembly area.
About that time, the president departed by helicopter, en route to a healthcare rally in Minnesota that was scheduled to begin at 1:00 p.m. CST.
Heard a police officer repeat into his radio, "I need to speak with an official. I need an official." Marine Corps 1 does an overfly and circles. Found out later the President was on it. 10:07 a.m.
http://lvpoliblog.blogspot.com/2009/09/limited-government-movement-is-real.html
10:45 - Like the folks on our bus, the marchers appear to be sensible people in a determined but non-threatening mood – even the ones wearing “Missouri Mob” shirts and the like. A cross-section of America is on display, including young people and minorities. Everyone seems cheerful and orderly; we will not see any angry or disruptive behavior all day. And very little trash will be left on the streets when the crowd disperses at the end of the day.
Most of the marchers are carrying signs, generally larger and more elaborate than ours (and more of a chore to carry around). Fiscal responsibility is a common theme; ditto for opposition to government-run healthcare, “cap and tax,” and assaults on liberty.
Many of the signs are politically pointed; the thrust seems to be that you folks serve at our pleasure and watch out in 2010 & 2012. A few signs are over the top (more on this later), but not many in our opinion. Check these pictures (best viewed in slide show mode) and see what you think.
http://www.flickr.com/photos/bobcoffey/sets/72157622266826931/
11:15 – Our cohort in the march nears the Capitol. Where to now? There are several options; who knows which one will work best. After a bit of indecision, Team SAFE turns right, edges its way over to the low fence around the Capitol grounds, and eventually turns in on a walkway and finds a vacant spot on the lawn. From this location we will be able to hear the speeches, albeit imperfectly, but not observe the action at the speaker’s stand.
Midday – Standing in place is more tiring than walking, and the pre-rally activity is hard to follow, but what a thrill to be here with thousands of demonstrators on the Capitol grounds. We join in periodic choruses of “USA-USA-USA” and yell when a speaker asks “Can you [the politicians] hear us now?”
Looking west, we can see huge throngs of people in the National Mall area that lies between the Capitol grounds and the Washington Monument over a mile away. There are also big crowds on Pennsylvania and Independence Avenues, which bracket the area.
How many demonstrators? Hard to say, but it is announced on the public address system that ABC News is reporting some 1.2 million. A bit later the number is upped to 1.5 million. Perhaps these estimates are overstated, how could 1.5 million people (the equivalent of 15+ Rose Bowls, filled to capacity) participate in this event anyway. Still, it seems far more people have shown up than were expected.
The weather is overcast, but no rain thank goodness. The sun breaks through at one point, only to be covered by clouds again a few minutes later.
1:00 p.m. – A female singer belts out the Star Spangled Banner, kicking off the formal program. Many short speeches and presentations will follow, with no clearly defined theme or leader.
Here is the speaker list, gleaned from the footage posted on C-Span.com after the event, plus a few lines that strike us as particularly memorable. Note that you can fast forward to selected segments of the video instead of watching the whole thing (nearly three hours).
1:07 – Film
1:11 – Jenny Beth Martin, Tea Party Patriots
1:16 – Brendan Steinhauser, Freedom Works
1:19 – Dick Armey, Freedom Works
1:29 – James Anderer, lost a Chrysler dealership in Lindenhurst, New York
The process became corrupted, I was cheated, and the only way to get the country back is to vote “them” out.
1:41 – Robert Levy, Cato Institute
1:47 – Film
1:48 – Andrew Moylan, National Taxpayers Union
Hell hath no fury like a taxpayer scorned.
1:50 – Kellen Guida – New York City Tea Party & Pushback blog
Modern pop culture has been boosting the liberal cause for the past 30+ years; it is time to turn that around!
1:58 – Hi-Caliber (conservative hip hop)
Sample line: Patriotic people, make some noise please.
[Team SAFE makes its way out of the Capitol grounds and walks west on Independence Avenue until we locate a street vendor selling food and refreshment.]
2:07 – Deneen Borelli, national black leadership network Project 21
2:13 – Bruce Webster, information technology analyst
2:17 – Matt Kibbe – Freedom Works (president and ceo)
I’ve got two points. (1) Freedom works. (2) Government goes to those who show up – and you guys showed up!
2:20 – Russ Walker, Freedom Works (Oregon director)
2:22 – Senator Jim DeMint (R-SC)
I’m not here to speak to you, but to stand with you.
[Team SAFE finds a new location on the far side of the Capitol Reflecting Pool, where we can actually see the speaker’s stand, and sits down on the low stone steps. Ah!]
2:29 – Greg Harrell, Ohio coal miner
The president said electricity rates would skyrocket with cap and trade, and he was right. There would go the rest of U.S. manufacturing jobs to China.
2:34 – Betsy McCaughey, a former lt. governor of New York who chairs the Committee to Reduce Infectious Deaths (see our 8/10/09 entry)
This healthcare bill is like asking someone to sign for a loan on the understanding that the interest rate and repayment term will be filled in later. No deal! Give us 20 pages in plan English, not 1,000+ pages of gobbledygook.
2:40 – Mason Weaver, author and motivational speaker
I’m a black man without a teleprompter, so I’ll keep it simple. We don’t need hope; we’ve got freedom. And what you folks need to do is decide today what you are going to be. Then you can rest tomorrow.
2:42 – Introductions for Representatives Ron Paul (L-TX) and Louie Gohmert (R-TX)
2:43 – Representative Mike Pence (R-IN), the GOP conference chairman
About healthcare, they say silence is consent, and I’m here to tell you that We the People do not consent. What we want is not another speech, Mr. President, it is another plan.
2:49 – John Tate, Campaign for Liberty
2:52 – Press guy at Freedom Works, with instructions on how to text My USA
2:53 – Doc Thompson, talk show host from Richmond, Virginia
2:56 – Video
2:58 – Amy Kreamer, Tea Party organizer
The Tea Party Express (bus tour) covered 7,000 miles as it made its way across the country, and people kept showing up. We have to stay energized. This is not about a person or an organization – it will take a grass roots army.
3:02 – Deborah Jones, Tea Party organizer
3:05 – Representative Marsha Blackburn (R-TN)
There has been some talk about “tough choices,” but spending more and more money is not a tough choice in Washington, D.C. Stand together, fight for liberty.
3:07 – Andrew Langley, Institute for Liberty
3:10 – Yaron Brooks, Ayn Rand Institute (president)
3:12 – Lloyd Marcus, entertainer
3:16 – Vinny Forras, a fireman who responded to the World Trade Towers on 9/11 from Westchester, New York, heard one tower collapse above him and saw the other fall later.
3:18 – Tom Graves, a state representative in Georgia
3:21 – Mario Lopez – National Heritage Leadership Fund
3:24 – Kelly Hoag, USMC (retired)
Hello, America! “United we stand” was not just a bumper sticker on 9/12/01, and three years later I joined the Marine Corps and went on to serve two tours in Iraq. We can come together again.
3:27 - Hector Barretto, Latino Coalition (chairman)
3:30 – Darla Dawald, Patriotic Resistance Network
Trust me, Congress knows we are here.
3:36 – Bruce Bellotti, Singer
3:40 – William Greene, Right March blog
3:42 – Julian Kulski, World War II freedom fighter (he was 10 in 1939, when the Nazis marched into Poland)
3:49 – Rob Jordan, Freedom Works
This doesn’t end today!
3:50 – Darla Dawald, Tea Party Patriots
Get out there and get involved. Today is the start, not the end.
3:51 – Brendan Steinhauser, Freedom Works
3:52 – Jenny Beth Martin, Tea Party Patriots
Can you hear us now? Can you hear us now? CAN YOU HEAR US NOW?
3:53 – The crowd sings God Bless America
4:45 – Back at the Greenbelt, MD metro station, Team SAFE and others relax and regroup.
5:50 – All passengers accounted for, our bus heads for home.
* * * *
Conservatives generally viewed the March on Washington as a resounding success, albeit one that would need to be followed up with more action (there are very few final victories in politics, or life itself for that matter). In a celebratory vein, see “Conservative Woodstock Rocks the Capital, lookingattheleft.com, 9/12/09.
The conservative movement, which developed in the post-WWII, Cold War environment has now fully matured into the most significant political movement of the 21st century. I believe that this day could be referred to in the not too distant future as the day that changed America. This was the day the great silent conservative majority finally found its voice.
http://www.lookingattheleft.com/2009/09/conservative-woodstock-rocks-the-capital/
Another historical parallel was suggested, namely the civil rights March on Washington of 1963. What next for the Middle America Rebellion of 2009, Mark Tapscott, Washington Examiner, 9/17/09.
Whatever the number of attendees, this was possibly the most significant Washington protest since the civil rights movement's epic March on Washington for Jobs and Freedom in 1963. Indeed, about all that was lacking was a charismatic leader like Dr. Martin Luther King to deliver an "I have a dream" address for the ages.
Surprise, surprise, liberals had a jaundiced view of the March on Washington, and they did their best to pick it apart afterwards.
• Numbers – It was claimed that the turnout was exaggerated, amounting to mere “tens of thousands” versus up to 2 million. Debate rages over “tea party” crowd size, Washington Times, 9/17/09.
FreedomWorks, the Washington-based conservative advocacy group that was the chief organizer of the rally's arrangements, corrected an earlier estimate of 1 million to 1.5 million that it attributed to ABC News and put the figure between 600,000 and 700,000. ABC News denied it had reported a crowd that large and said its reports put the size of the demonstration in the "tens of thousands" range.
There is no objective way to settle this question, but we think the revised Freedom Works estimate is probably sound. And as Chairman Dick Arney observed, “[whatever] the actual number, the 9/12 March on Washington was far and away the largest gathering of limited-government conservative activists in history."
Note also that the participants came on their own volition, often at considerable cost and personal inconvenience. There is no comparison to the staged rallies being organized to promote the president’s healthcare plan. Thus, according to Townhall columnist Jillian Bandes, the crowd (some 15 thousand, comfortably seated in an inside venue) at a 9/17 University of Maryland rally consisted primarily of students who had not been offered an alternative event and bused-in union members who had been given paid time off to attend.
• Awareness – It was suggested that the protestors were a fringe element, people who are resisting change because they do not understand the president’s plans for the country. WH aide: “Tea party” protestors wrong, Washington Times, 9/13/09.
"I don't think it's indicative of the nation's mood," David Axelrod, the president's top adviser, said on CBS' "Face the Nation." "My message to them is, they're wrong." *** He also denied that Mr. Obama has any intention of a government takeover of the health care system.
http://www.washingtontimes.com/news/2009/sep/13/wh-aide-tea-party-protesters-wrong/
It seems doubtful that this kind of rhetoric will impress anyone. But for the record, we believe the 9/12 demonstrators et al. may be better informed than the president and his advisers would like. See, e.g., “Happytalk” blossoms in the nation’s capital, 7/6/09.
It is nothing new for politicians to promise more than they can deliver, especially on the campaign trail, but the practice seems to be growing worse. One reason may be the blurring of the traditional distinction between campaigning and governing, with some politicians operating in nonstop campaign mode. In any case, people had better start paying attention to what is happening, or they may be shocked by the results. *** We are not buying the Happytalk about economic stimulus, healthcare, or energy policy. Shame on the proponents; they should present their proposals honestly and be open to other viewpoints – including the dictates of fiscal responsibility. Help us hold them to a higher standard!
• Motivation – The 9/12 demonstrators have been painted in some quarters as angry people energized by racial bias, simply because they oppose the policies of a black president. Such a charge would be devastating if it could be made to stick.
The starting point is to focus on a few of the more extreme signs, or perhaps an incident, participant interview, or speech. Here is how Campbell Brown did it on CNN.
The segment begins with selective footage from the 9/12 event, including an incident in which a taunting counter-protestor’s sign is torn up, taped interviews with several participants who could perhaps have been more guarded in what they said, and an angry excerpt from an unidentified man’s speech. An interview follows with Joe Wierzbicki, Coordinator of the Tea Party Express (bus tour across the country) and two guests with a different perspective.
Joe is grilled about a sign that depicts the president as an African witchdoctor and spells “Obama Care” with a hammer and sickle instead of a C. The implication is that this sign must reflect the mindset of all the protestors, since no one apparently asked that it be put away. There are fringe elements in any broad-based and spontaneous political event, Joe maintains, but he is out-talked by the other three participants. Is the Tea Party Racism Going Too Far? MoxNews.com, 9/14/09 (8:31 video).
http://www.youtube.com/watch?v=FgdesC2UKu4
Moral: It is always safer to stick to the issues than attack personalities, and if protestors do a bit of the latter they should be careful not to go too far. There is nothing that politicians pushing a questionable policy like better than an excuse to change the subject and put their opponents on the defensive – do not give them this chance!
* * * *
We end with some personal reflections by Team Safe:
Dorsch – It was good to be there. We saw with our own eyes what was going on, and if the media try to underplay the attendance or mischaracterize what happened we will be able to counter them with the truth.
McClain –The president and his advisers are not going to listen, but I hope this protest will send a message to Congress.
Whipple – People need to come out of their comfort zones and get involved. Watching this event on television might have been efficient, but there is nothing like being there to build commitment. In the end, we are what we do.
Wiest – There were too many speeches; a big speech was needed. But the good thing is there were so many demonstrators, and they seemed to realize what is happening to our country.
No doubt some readers were also in Washington on 9/12, and it would be great to post your comments as well. Please send them to ww3@atlanticbb.net.
* * * This Blog's Replies * * *
Please send this 9/12 March on Washington video to everyone you know. It is genuine. I was there and that was the woman singing the National Anthem and it was the actual crowd. The only people not participating in this march were the people at the very back near the Washington monument underneath the tents; they were there for another function. -- Donna, Delaware Tea Party
http://www.youtube.com/watch?v=X2saa2rtvs8&feature=player_embedded
* * * * * *
Great description of the 9/12 events...hope it goes again next year. -- SAFE member, Arizona
I would have loved to go to Washington for the march, as I have often done with the pro-life group. Keep up your good work---lets hope the fervor continues! -- Retired dental hygienist, Delaware
9/14/09 – Nothing ventured, nothing gained
As a general rule, asking for things is more effective than keeping quiet and hoping for the best. Framing requests helps people to focus on what they want and get organized to go after it. Also, how can others help if there is no request in play?
Which is not to say that people who speak up necessarily get what they want. It pays to ask for things that are reasonable under the circumstances, and to offer logical, factually supported arguments that fair-minded people will recognize as such. Even then, there is likely to be opposition from those with a different vision – which it may not be possible to overcome.
Consider SAFE’S advocacy of smaller, more focused, less costly government. This agenda is not based on self-interest, and we believe there are strong reasons to support it – such as consistency with the framework of the U.S. Constitution, demonstrated efficacy of free market mechanisms, and experience that government programs often make economic and social problems worse instead of solving them.
But people who look to the government for the solution to every problem (recession, healthcare, dependence on foreign oil, global warming, you name it) or their ticket on the gravy train (e.g., profits or employment from providing government-mandated services) are not shy about demanding new programs and the perpetuation of existing ones.
Just because the tide is running against fiscal visionaries at the moment does not mean the time has come to give up. Indeed, this might be a good time to redouble our efforts.
We were struck by a comment that David Walker (formerly the U.S. Comptroller General, now CEO of the Peterson Foundation) made in a recent interview with John Fund of the Wall Street Journal.
By way of background, Walker spoke at the National Taxpayer’s Conference in June. He struck a somber note (see 6/29/09 entry), saying (1) smaller government is not in the cards, and (2) taxes must go up in order to close the government’s fiscal gap.
Fund (who also spoke at the NTU event) probed Walker’s reasoning on taxes in the interview, which produced the following exchange (emphasis added). Warning: The Deficits Are Coming, Wall Street Journal, 9/4/09.
Wouldn't any "grand bargain" [to close the fiscal gap] involve significant tax increases that would only hurt the ability of the economy to grow? "Taxes are going up, for reasons of math, demographics and the fact that elements of the population that want more government are more politically active," [Walker] insists. "The key will be to have tax reform that simplifies the system and keeps marginal rates as low as possible. The longer people resist addressing both sides of the fiscal equation the deeper the hole will get."
http://online.wsj.com/article/SB10001424052970203585004574392620693542630.html
Interesting point! Maybe if fiscal visionaries want smaller government instead of tax increases, they should make their views known (which is what being politically active amounts to) instead of knuckling under to their ideological opponents. Consider what SAFE has been doing this year:
#Sent an unprecedented number of letters to the Delaware members of Congress, and testified at Senator Tom Carper’s listening session on healthcare.
http://www.s-a-f-e.org/contacting_legislators.htm
#Continued cranking out letters and columns. Take a look at this gem from SAFE member Harry Kenton on the “cap and tax” bill.
http://www.s-a-f-e.org/letter_090809.htm
#Participated in the Delaware tea parties on April 15 and July 2, and will join in the “March on Washington” on September 12. (For a report, see next week’s entry.)
One of the major issues for the protest will be GovCare. Three days after the president delivered a prime time address to Congress, which was intended to rally flagging support for his healthcare proposal, participants will communicate that it is time to hit the reset button. (Other issues: bailouts, economic stimulus, irrational energy policies, soaring deficits, and higher taxes on the way.) A march on Washington: Protest set on Democratic healthcare plan, Washington Times, 9/10/09.
http://www.washingtontimes.com/news/2009/sep/10/a-march-on-washington/
But remember that SAFE is a small organization, and much of its activity is attributable to a handful of people. To gain traction, we will need lots of help.
Why don’t some of you folks (especially younger people) pick up the phone and call the office of a member of Congress, or send them an e-mail or letter? Here is the contact information for the Delaware members, and comparable information is posted on the Websites of the members from elsewhere.
http://www.s-a-f-e.org/de_congress_contacts.htm
Other options might include attending a public meeting (SAFE and the Delaware Tea Party were outnumbered 2:1 at the healthcare listening session that we attended, even though polls suggest that opinion on the GovCare proposal is close to a dead heat), writing a letter to the editor, or giving a talk.
And if you approve of the things SAFE is doing, there is always the option of becoming a member. We would be delighted