Free Markets, Free People
Throw this on the pile with the many
lies broken promises from Obama about his health care initiative. It’s official now that a Democrat is saying it:
Democrats, having defeated a Republican attempt to block proposed Medicare cuts, now face an even bigger headache: concern among members of their own party over the program’s future funding.
President Barack Obama wants to cut spending on the federal insurance plan for the elderly to help fund his health-care overhaul. Part of that proposal would cut more than $100 billion from Medicare Advantage, through which the government hires private insurers such as Humana Inc. to deliver Medicare benefits to 11 million seniors, including extras like reduced co-payments and even gym memberships.
Should Congress scale back the program, “We’re not going to be able to say ‘if you like what you have, you can keep it,’” said Senator Bob Casey, a Pennsylvania Democrat. “And that basic commitment that a lot of us around here have made will be called into question.”
Casey’s only referring to those who use Medicare Advantage, but that’s not an insignificant number of people. And it would be larger if not for some (ahem) “special provisions” that protect some constituents:
Senators Charles Schumer of New York, Bill Nelson of Florida and Ron Wyden of Oregon are among those who secured special provisions shielding constituents from cuts.
Casey says he wants “very comparable” protections for his state, where more than one-third of Medicare beneficiaries participate in Medicare Advantage. “It’s the kind of thing that will likely be addressed on the floor,” he said.
Well that certainly is “special” now, isn’t it?
Of course, the reason that Medicare Advantage is under attack, particularly in rural areas, is because it costs more than regular Medicare. That’s because when the government tried to get insurers to offer the program in rural areas none would do so because the rates were too low. The government then offered subsidies, and now almost everywhere in the U.S. has Medicare Advantage offered.
Medicare Advantage was created decades ago in hopes that private insurers could deliver Medicare benefits more cheaply. Companies were paid 5 percent less than the traditional program’s costs. Insurers, though, wouldn’t enter many rural markets at those rates, said Biles.
Beginning in 1997, the then-Republican controlled Congress increased subsidies to lure insurers into rural markets. Iowa Senator Charles Grassley said that before the increases, Medicare Advantage was available in only one of his state’s 99 counties. Now it’s in every county.
“To get it in rural America, it took some subsidies,” said Grassley.
Those subsidies made Medicare Advantage more expensive than traditional Medicare. “One of the big reasons Medicare is headed for insolvency is Medicare Advantage, so the notion that it can be left alone is detached from reality,” said Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat. “It’s been a runaway train.”
So, Democrats are faced with a Morton’s Fork: either cut Medicare Advantage, which will likely lead to insurers ceasing to offer it, or continue to fund it and be faced with a budget-busting health care plan. Either way, they end up with a plan that is probably not passable.
Incidentally, Humana, Inc. is one of the largest providers of Medicare Advantage coverage, whose revenues are closely tied to its success. You may recall that a couple of months ago, the government decided to try an shut down communications from Humana to its customers warning them that ObamaCare could mean a loss of their coverage.
Two-thirds of Louisville, Kentucky-based Humana’s earnings and one-fifth of Minnetonka, Minnesota-based UnitedHealth Group Inc.’s profits are tied to the program, according to an Oct. 1 Goldman Sachs Group Inc. research note.
“Significant funding cuts to the MA program would likely make the benefits seniors receive from MA unsustainable at their current levels,” said UnitedHealth spokesman Jon Stone in an e- mail. Humana spokesman Jim Turner said “it’s too early to identify the specific impact MA funding cuts would have on premiums and benefits.”
Humana cautioned seniors in September of possible cuts, urging them to “let your members of Congress know why Medicare Advantage is important to you.” The administration barred insurers from sending what it termed “potentially misleading” mailings. It later retreated after Republicans retaliated by blocking nominees awaiting Senate confirmation.
The White House secured one concession: requiring insurers to make their case only to seniors requesting such information.
I guess Congress wanted to be the first to tell them?
In any case, these are the sorts of problems that will (hopefully) make any health care legislation impossible to get passed. The way things are set up, a whole lot of disparate interest groups are pitted against one another, and in order to satisfy one, another has to lose. If Congress expands coverage to everyone, then those with health care will have to pay for it, either through higher premiums, fewer benefits or increased taxes. There simply isn’t enough tax money to fund the program (especially if that money is only going to be raised from “the rich” or some other disfavored group) and provide all the goodies that are being promised. And if the goodies aren’t delivered, then people start asking why we’re changing anything at all. Those questions will be particularly pointed when, whatever changes are made, voters are still likely to see higher costs and reduced services.
Given all the above, I don’t know what kind of bill can possibly emerge from the Senate. Let’s hope that means that none will. And to be on the safe side, plan on voting for candidates that will ensure that outcome.
To my mind, the biggest indicator of malfeasance in this whole Climaquiddick affair is the fact that researchers have been forced to use freedom of information laws to get to the underlying data that supposedly supports AGW. The leaked emails show that the CRU gang at least contemplated trashing data to keep it from private eyes, and with respect to original temperature data, in fact did trash it. Why, if the evidence is so overwhelming, would anyone want to keep such data from public view? Well, you know why, and it appears that NASA may have a similar problem:
Chris Horner, a senior fellow at the Competitive Enterprise Institute, said NASA has refused for two years to provide information under the Freedom of Information Act that would show how the agency has shaped its climate data and would explain why the agency has repeatedly had to correct its data going as far back as the 1930s.
“I assume that what is there is highly damaging,” Mr. Horner said. “These guys are quite clearly bound and determined not to reveal their internal discussions about this.”
The numbers matter. Under pressure in 2007, NASA recalculated its data and found that 1934, not 1998, was the hottest year in its records for the contiguous 48 states. NASA later changed that data again, and now 1998 and 2006 are tied for first, with 1934 slightly cooler.
Mr. Horner, a noted global warming skeptic and author of The Politically Incorrect Guide to Global Warming and Environmentalism, wants a look at the data and the discussions that went into those changes. He said he’s given the agency until the end of the year to comply or else he’ll sue to compel the information’s release.
My familiarity with FOIA requests stems from legal cases, and I know that there are some fairly systematic, and time-consuming procedures that a government agency must go through before delivering the requested material. Typically, in the legal realm, the biggest time-consumer is filtering the material for privileged and classified material that need to be redacted before responding to the request. However, in the realm of scientific fact (i.e. requesting raw data), I can’t for the life of me think of one reason why any such data would have to be redacted or withheld. Temperature records, in the very least, should be easily producible well within the the 20 day limit for such requests.
To be sure, Horner is also seeking emails (and presumably other documents) that discuss the GISS reasoning underlying decisions to change the warmest dates on record, which could take some extra time:
NASA’s GISS was forced to update its data in 2007 after questions were raised by Steve McIntyre, who runs ClimateAudit.com.
GISS had initially listed the warmest years as 1998, 1934, 2006, 1921 and 1931. After Mr. McIntyre’s questions GISS rejiggered the list and 1934 was warmest, followed by 1998, 1921, 2006 and then 1931. But since then, the list has been rewritten again so it now runs 1998, 2006, 1934, 1921, 1999.
The institute blamed a “minor data processing error” for the changes but says it doesn’t make much difference since the top three years remain in a “statistical tie” either way.
Mr. Horner said he’s seeking the data itself, but he also wants to see the chain of e-mails from scientists discussing the changes.
The Freedom of Information Act requires agencies to respond to requests within 20 days. Mr. Horner says he’s never received an official acknowledgement of his three separate FOIA requests, but has received e-mails showing the agency is aware of them.
He said he has provided NASA with a notice of intent to sue under FOIA, but said he also hopes members of Congress get involved and demand the information be released.
NASA and CRU data are considered the backbone of much of the science that suggests the earth is warming due to manmade greenhouse gas emissions. NASA argues its data suggests this decade has been the warmest on record.
On the other hand, data from the University of Alabama-Huntsville suggests temperatures have been relatively flat for most of this decade.
Obviously the numbers matter, as does the justification for changing them. If everything was done in good faith, then there shouldn’t be anything to worry about. That such stonewalling has been going on for two years (according to Horner) suggests that there is something to hide.
If you’re among the 15 or so in this country that believe this White House job summit will actually end up creating policies that produce jobs, I think Evan Newmark’s WSJ piece might dissuade you from that belief:
Now, I’ve never been to a White House summit, so I can’t say exactly what will happen on Thursday. But as a past Davos World Economic Forum participant, I’m pretty familiar with these kinds of VIP schmooze and snoozefests.
And here’s how it will likely play out. A senior White House official — perhaps the president — will give a welcome pep talk to the 130 gathered “summiteers.” He’ll ply them with thanks and stirring patriotic words.
But then he’ll urge them to not waste the day in conference fuzzy talk. Instead, the summiteers should turn words into actions and actions into jobs. After all, it is a “jobs” summit.
And then the summiteers will shuffle off to one of six working groups — where of course they’ll end up wasting the day in conference fuzzy talk.
It’s inevitable. Prepared remarks, banal anecdotes and empty debates are the stuff of these mushy forums. I can count on one hand the number of memorable moments from the dozens of my Davos sessions on technology super-revolutions, entrepreneurial innovation and world peace.
That’s because the VIPs at these things aren’t there to say or do anything unexpected.
Do you think that FedEx CEO Fred Smith and United Steelworkers President Leo Girard will somehow reach agreement that the best way to create jobs is to kill the union-card check?
Do you think that Randi Weingarten, President of the American Federation of Teachers, will suddenly serve up innovative ideas for trade unions to assist small businesses?
It seems unlikely.
And so the jobs summit will fail for the same reason Obamanomics is failing: The White House mistakenly believes economic growth and new jobs are created by society’s stakeholders — business, labor and government — cooperatively working together.
Like most of these events, this is a political stage show. It is a visual representation meant to convey the idea that a) the government is interested in your problems and, most importantly, b) it is here to help.
But the key to the failure of this summit, even if they were serious about creating jobs, is found in Newmark’s last sentence. The key to economic growth and new jobs aren’t the product of summits among “society’s stakeholders”. They never have been.
In fact, it’s pretty simple as he notes:
But that’s not the way capitalism works. It doesn’t take a village to create a new job. It takes a businessman trying to make another buck.
So why aren’t the businessmen out there trying to “make another buck”? While business is all about risk, the risks they take are rational. Businessmen aren’t at all inclined to take risks that can ruin them, especially in unsettled markets. Right now economy is very unsettled and government has huge tax laden legislative bills pending which will directly effect these businesses in a very negative way. And of course, there’s new and increased financial regulation pending which may effect their ability to get funds to expand their businesses and hire new workers. Thus they’ve concluded it would be entirely irrational to expand their business or hire in such an atmosphere.
Instead, they’ll hold off on hiring or expanding until the economy and markets are much more settled and they’ve had the opportunity to gauge the cost to them of all of this new legislation and regulation.
That said, the simple answer on how ease economic uncertainty and thereby create more jobs is kill health care, kill cap-and-trade and back off the increased regulation. Additionally, a corporate tax cut might help as well. All of that would certainly settle market down and give businesses an incentive to both expand and hire. But this job summit? Newmark nails it. Fuzzy talk aimed at the wrong solution. The best thing the government can do is back off and let the market get back to work. Unfortunately, that won’t be the solution the “summit” proposes nor will it be the policy the White House will adopt.
David Freddoso catches Sen. Max Baucus (D-MT) in an unscripted moment of truth:
“Health care reform, whether you use a ten-year number or when you start in 2010 or start in 2014, wherever you start at, so it is still either $1 trillion or it’s $2.5 Trillion, depending on where you start…”
Of course, regardless of where you start, it won’t cost just the 894 billion that has been claimed. Again, for those who’ve missed it the numerous times I’ve mentioned it, CBO can only score a 10 year window. So, knowing that Democrats used a bit of trickery to make the bill in the Senate seem to cost less than it really does. They front-loaded the taxes (they begin immediately upon passage) and they delayed the major programs (they begin in 2014 – those are the two dates Baucus cites) so that the cost is spread over 10 years (although they only take place in 6) as is the revenue. You figure it out – 10 years of revenue and 6 years of spending – would that drive the supposed 10 year cost down?
Of course it would. Is that the true cost of the program? Of course it isn’t. And, if you look at the second 10 year window, costs explode (into the 2.5 trillion range).
Also, the claim is cuts in Medicare will help pay for this. Yet they’re about to pass the “doc fix” bill which will prevent 250 billion (a quarter of a trillion) in reduced payments to doctors. Does this indicate a willingness to do what is necessary to pay for this health care monstrosity? Of course it doesn’t. It again indicates that Congress enjoys the roll of Santa Claus much more than that of being fiscally responsible.
Anyone who actually believes these numbers from Congress is either naive, purposely blind to the truth, inexperienced with their ways or just doesn’t care. This is a bank breaker and will eventually have to be reckoned with. Don’t forget that those who said Medicare would be a low cost program when it was first implemented (and now has 35 trillion dollars in future obligations) are now making the claim that spending 894 billion (or 1 trillion or 2.5 trillion) will actually save us money. Yes, for those who believe in flying unicorns, it will be the first entitlement ever to turn a profit.
The Honduran Congress voted overwhelmingly yesterday not to reinstate ousted President Manuel Zelaya and allow him to finish his term. The vote saw 111 of the 128 member body reject reinstatement. That includes no votes from Zelaya’s own Liberal party which holds a majority of seats in the Congress. There is apparently a deep divide within that party concerning the swing to the left which they see as being influenced by Hugo Chavez of Venezuela.
This also ends the US brokered deal which would have seen Zelaya return to finish out his term. The vote, as I see it, should put an end to outside attempts to reinstate Zelaya. When only 14 out of a body of 128 vote for such a reinstatementj (3 were absent) – especially when his own party holds a majority- I think it is fair to conclude that such a return is not considered to be in the best interest of the country.