Trying to analyze polling results is indeed a tricky business. To be worth anything a poll must be carefully crafted to remove obvious and hidden biases from questions. And, for the most part, a single poll really demonstrates only a “snap shot” of opinion for that moment.
Where polls have some value is in the trends they track. And, with the number of polls out there, similar findings from other polls lend credibility to the trend being tracked. History also make is clear whether or polling trends have any credibility. Poll watchers take all of that in when they consider a poll’s worth. A small number of polls have emerged as doing a good job of credibly tracking how various issues are trending. They’re certainly not fool-proof indicators, but taken with other polls one can begin to build an emerging picture.
Take this recent Gallup poll on party identification. Political junkies know that self-identification with a party indicates the strength of that party electorally. Self-identification ebbs and flows with the fortunes of the party and history proves that for us. In mid 2004, identification with a party was tied between Democrats and the GOP. But in 2006, for the mid-term elections, a 5 point gap opened favoring Democrats. And, Democrats benefited by picking up seats in Congress (and a majority in the House). In 2008, that gap had gone to double digits, and the Democrats swept the Republicans out of power.
Well, the double digit advantage for the Democrats has disappeared according to Gallup. Democrats hold a slight 1 point lead in those who identify with or lean toward one of the two parties.
Two points to be made – one, Democrats are hemorrhaging independents much more than the GOP is doing things right to bring these numbers together. There’s a lot of “buyer’s remorse” in the ranks of independents than any flocking to the Republicans because of what they stand for. As Gallup points out, only 28% of the country identifies themselves as “Republican”. That hasn’t changed a single percentage point since the beginning of 2009. What has shrunk is the number of self-identified Democrats. The percentage has dropped 3 points from 35% to 32%. So on party identification alone, Democrats still hold a 4 point lead on those who identify themselves as Republicans. What closes that gap to 1 point in favor of Democrats are the independents now leaning toward the GOP. From 13 point lead in 2008 to a 1 point lead in 2010 points to some pretty disillusioned indies.
Two – Republicans still have a lot of selling (and proving themselves) to do. What isn’t apparent with this trend is how solid the independent leaners are for the GOP. The fact that self-identified Republicans haven’t increased a single percentage point in over a year says a lot about how the voting public still perceives Republicans. The fact that a large number of independents have declared they “lean” toward Republicans now doesn’t really mean a hill of beans. Unfortunately in the system with which we’re stuck, you have to pick a side or stay home. I think the only reason that indies tend to lean more Republican than Democrat is they don’t like what they see going on with Democrats in power and figure they may have to hold their nose and vote GOP just to change the mix and stop, or at least slow down the runaway train of government.
Two other polls help firm up that conclusion – one in which the President’s approval rating keeps trending down (an indicator the public isn’t seeing its priorities acted upon) and the second which shows generic Congressional Republicans holding a 4 point lead over the generic Congressional Democrat, which history tells us spells trouble for Democrats.
Can all of this change? Sure – but it is unlikely. Why? Because Democrats are caught in a very difficult spot. All the political stars aligned for them last November except one – the economy. It went tango uniform. And, as it turns out, it didn’t just hit a bump in the road, it went over the proverbial cliff. They were able to get away with blaming the previous administration for a while, but that excuse has pretty much been used up. So here they sit, with the legislative and executive power they’ve sought for decades in order to pass an agenda they’ve wanted to pass for centuries, and the top priorities for the voters are the economy, jobs and the ballooning deficit. What’s an activist to do?
Well they’ve chosen – spending a year dithering, scheming and manipulating the process with health care reform while the economy tanked further, proposed trillion dollar budget deficits were forecast for years to come and unemployment briefly hit double digits. Now they’re trying to force a financial regulation regime through while arguing over introducing cap-and-trade or immigration as their next priorities in Congress.
It seems the Democrats have chosen – the window is closing on their agenda and, throwing the priorities of the voters under the bus, they’re going with the agenda.
It is that, I think, as much as anything, which has driven the independents to lean Republican. That sort of “party before people” attitude isn’t very popular nor is it usually rewarded. Right now the polls indicate that voters are ready to give the GOP another chance, but the support for doing so isn’t particularly solid nor will it grant them much slack should they too decide not address the public’s priorities.
There’s a lesson to be learned here -whether or not either party will heed it- and that is that those in Congress are there to do the people’s business, not their party’s business. Of course having said that, it is obvious that undoing what this bunch has done is no easy matter, and, in the end, may be less popular than the GOP thinks it might be right now. However, if Republicans run on a particular plan and that plan ends up being endorsed by voters putting them in power (House and Senate), if I were them I’d interpret that as the people’s priority and, as Larry the Cable Guy would say “get ‘er done” (sponsor and pass legislation and make the President veto it). Anything short of that will find the GOP back at a double digit disadvantage again when we hit the 2012.
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And, it’s actually worse than first imagined. First the background:
Uncle Sam gave GM $49.5 billion last summer in aid to finance its bankruptcy. (If it hadn’t, the company, which couldn’t raise this kind of money from private lenders, would have been forced into liquidation, its assets sold for scrap.) So when Mr. Whitacre publishes a column with the headline, “The GM Bailout: Paid Back in Full,” most ordinary mortals unfamiliar with bailout minutia would assume that he is alluding to the entire $49.5 billion. That, however, is far from the case.
Because a loan of such a huge amount would have been politically controversial, the Obama administration handed GM only $6.7 billion as a pure loan. (It asked for only a 7% interest rate–a very sweet deal considering that GM bonds at that time were trading below junk level.) The vast bulk of the bailout money was transferred to GM through the purchase of 60.8% equity stake in the company–arguably an even worse deal for taxpayers than the loan, given that the equity position requires them to bear the risk of the investment without any guaranteed return. (The Canadian government likewise gave GM $1.4 billion as a pure loan, and another $8.1 billion for an 11.7% equity stake. The U.S. and Canadian government together own 72.5% of the company.)
So GM “paid back” only the $6.7 billion it got in the “pure loan”, not the full $49.5 billion it is on the hook for to taxpayers, or the $1.4 billion it got in a “pure loan” from Canada’s government.
When this story was first reported, it was claimed that TARP money was used to pay the loan. That’s true, but not exactly how you might have imagined it. Remember, GM reported a $3.4 billion fourth quarter, and a loss for the year. Where did it get $6.7 billion to pay off the loan? Here’s where:
As it turns out, the Obama administration put $13.4 billion of the aid money as “working capital” in an escrow account when the company was in bankruptcy. The company is using this escrow money–government money–to pay back the government loan.
Yes, that’s right, they used a taxpayer funded escrow account to pay off the loan. And, as Forbes points out, the GM claim that being able to do so shows progress, it’s hardly worth the hype it received – except that’s not the whole story. In fact, it’s not a show of progress at all. GM did it for a very specific reason:
Sean McAlinden, chief economist at the Ann Arbor-based Center for Automotive Research, points out that the company has applied to the Department of Energy for $10 billion in low (5%) interest loan to retool its plants to meet the government’s tougher new CAFÉ (Corporate Average Fuel Economy) standards. However, giving GM more taxpayer money on top of the existing bailout would have been a political disaster for the Obama administration and a PR debacle for the company. Paying back the small bailout loan makes the new–and bigger–DOE loan much more feasible.
Or, as Forbes sums it up:
In short, GM is using government money to pay back government money to get more government money. And at a 2% lower interest rate at that. This is a nifty scheme to refinance GM’s government debt–not pay it back!
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In this podcast, Bruce, Michael, Bryan, and Dale discuss the controversial Arizona immigration law, and the squeeze public employee unions are putting on state budgets. The direct link to the podcast can be found here.
The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.
As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2009, they can be accessed through the RSS Archive Feed.
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Call in number: (718) 664-9614
Yes, friends, it is a call-in show, so do call in.
Immigration: Arizona is tired of the federal government’s foot-dragging and has passed its own law addressing illegal immigrants. The administration is not amused. What is the answer to the problem? Is there one?
State budgets: New Jersey and Illinois are both faced with budget deficits and both states are addressing them in different ways. In NJ the governor is taking on the public service unions and cutting spending. In IL the governor is backing the demands of the public service unions and calling for an income tax hike.
GM’s “payback” of their loan: The real deal? Or smoke and mirrors? If you’re guessing the latter, give yourself a cigar. We’ll explain.
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Let’s run through the main problems associated with illegal immigrants: state welfare costs, crime (or is it?), lack of assimilation (particularly if they’re allowed to vote), and suppressing wages for poor natives.
I think we can mitigate a lot of these problems with solutions far more realistic (in the short-to-medium term) than mass deportation, amnesty or ridding ourselves of the welfare state.
First, let’s recognize that the security threat becomes more complicated when you place wishful restrictions on immigration. When there’s a flood of mostly non-threatening people crossing the border outside of any official process, it’s a lot harder to pick out the few really malicious ones. And it’s really hard/expensive to stop that flood along such a long border.
We should be striving to funnel as many of them through official processes as possible, so we know who’s here, we know their backgrounds and we can separate the villains from those who just want to observe a basic civic peace and take advantage of opportunities in a freer country. That means offering carrots and sticks to both prospective immigrants as well as those who are already here, and I’ll get to those incentives below.
Second, minimize how much the welfare state serves and controls non-citizens.
- Uncompensated care makes up only 2.2% of medical costs in this country, and a good chunk of that doesn’t come from illegals, so the fact that many illegals wait until they need to use the emergency room, while irritating to some, isn’t a political hill to die on. As long as it’s mostly limited to taking care of communicable diseases and real emergencies, which can be enacted into law, it’s tolerable.
- Education is a much bigger problem. I recall reading that there are 1.6 million illegal immigrants under age 18 in the States, and being from Southern California, where the largest budget item by far is education, I know that they (and natural born citizens born to noncitizens) represent a big cost. Here we can do a bit of political jiu-jitsu: target guest worker families with a school voucher program.
- They’re already in public schools, so it’s a win if they instead form the basis for a larger private school market. The larger the market, the more the market can work its magic.
- It can come with strings attached, like a requirement that any school accepting vouchers be able to show an improvement in English language skills at least as good as nearby public schools.
- It’s not like Democrats have a good argument against it: it’s nearly the opposite of cream-skimming. And when guests get this, naturally other groups are going to want it too.
- Transfer payments (Social Security, unemployment, welfare, etc.), obviously, should be off the table for non-citizens. I have no problem with people who want to take risks in a freer market; a host country owes them nothing more than securing their rights.
The idea here is to weed out those who aren’t seeking opportunity so much as handouts. Those seeking opportunity are naturally more eager to assimilate.
Third, take the prospect of adding tons of dependent immigrants to the voter rolls off the table. Instead, we can get most of what we want by creating a liberal guest worker program that virtually all prospective immigrants and current illegal residents can join simply by identifying themselves to authorities, as long as it’s clear that they’re going to generally be paying their own way, so that people with a dependent mindset are weeded out by attrition.
So what are the carrots and sticks here? Without doing anything that would turn stomachs (and thus make reform politically impossible), we can get rid of the bad apples while not incurring the large costs associated with trying to throw 12 million people out of the country.
- A program allowing people to easily enter the country without being harassed should increase suspicion of anyone who’s still trying to immigrate the hard way — and that would increase public support for border security.
- Deport illegals who fail to register under the guest program and then commit serious crimes — violent crimes or big property crimes like auto theft. Those who commit petty crimes and can’t prove their status can either apply for guest status and take their punishment here or accept deportation.
- No sweeps or “asking for papers” for those who are just here peacefully. Only those charged with another crime can be asked to prove their status within a reasonable time frame.
- Come to an agreement to build cheaper-run prisons in Mexico to hold illegals during their sentences — no sense in keeping them in expensive American prisons if we’re planning on deporting them anyway.
- Illegals can’t access the school voucher program, but guest worker families can.
- Perhaps also allow vouchers for English-language and Civics education for adults.
I’m open to any other ideas, but that seems like a good foundation, accepting (in the neolibertarian fashion) that the welfare state won’t disappear tomorrow, but offering a positive agenda that tends to increase liberty.
So why would libertarians not be “open borders guys” as Dale admits in his post about Arizona’s new illegal immigration law? Well, for one, for the same reason Milton Friedman understood when he said “you can’t have free immigration and a welfare state.”
I’d love to have free immigration or “open borders”. I’d like to see free people who want to work and better their lives be able to freely wander to where such opportunities exist. In an ideal world, what I would call my moon pony and unicorn world, that’s the way it would work.
I’d also prefer not to have a welfare state. Welfare states are, in my opinion, destructive states that kill human productivity and builds the power of the state to a degree that “citizens” eventually become vassals. Additionally, I’m not keen on my hard earned dollars going to support such a state. But they do.
If you eliminate the welfare state, the “open borders” argument has more credibility. But borders aren’t going away anytime soon. Unilaterally eliminating ours or, for the sake of argument not monitoring who comes in the country, isn’t going to change anything as regards the welfare state. Unless those coming in are required to immediately contribute to the state welfare apparatus (an anathema any open border theory) before taking advantage of it, the desire to keep illegals out and away from state welfare that the citizenry has paid for will remain high. That’s a practical concern that drives much of the anger and desire of the citizenry to keep illegals out.
Since the welfare state doesn’t appear to be going away any time soon (if ever) either, again it seems rather silly to argue that “open borders” is a viable solution. Yes, it’s an ideologically pure libertarian solution, but it denies reality. That doesn’t mean it’s not a good goal, but it does mean that in the current situation, no one is going to listen to it seriously or give it any credence.
And then, to compound the argument against open borders, there’s a second problem. There are a whole bunch of people out there who are trying to kill us. Not random criminals, who are bad enough, but an entire movement dedicated to the demise of those who live in this country. “Open immigration” or open borders would only grant full and unimpeded access to those who want to do us harm. It is something they’d welcome. Imagine, if you will, not monitoring anyone who comes in or what they might bring. How long would it take for our enemies to establish themselves and strike?
Now the natural inclination of my libertarian kin at this point in a discussion like this is to say, “yeah, but if we hadn’t gotten entangled in those foreign alliances and remained isolationist, we could have …”. Could have what? Sold our products to ourselves? Avoided a religiously driven zealotry that targets nations like ours just because they’re” infidels?” Pretended Nazism and Japanese imperialism weren’t a threat to us and our way of life?
Even if that’s shrugged off, we still need to trade to live. And trade requires interaction. International trade requires international interaction. You can’t do that as an isolationist (and “open borders” seems contradictory – at least to me – to being an isolationist. How does one “isolate” themselves except behind their borders?). Those you interact and trade with have certain demands that come with trade you either negotiate or they refuse the trade. While it is wonderful to think that we could have survived quite nicely by being internally self-sufficient and trading only within our borders, it’s probably nothing more than a pipe-dream. We could no more keep the world out of here than the Japanese were able to keep us out of Tokyo bay. Simple demand of the citizenry for products from other nations would have forced that.
Open borders have only existed in times when there was no welfare state and no existential threat – and, in fact, no real government in place. Think the settling of the west and the borders of both Canada and Mexico. People passed through them pretty much at will seeking a better opportunity or a better life. That is an era which has passed. Even as we were warned by our founders to avoid foreign entanglements, we were becoming aware of their necessity – self-protection or mutual protection among them. And even as we wished for the ability to open our borders to all free people, we became aware of those who would use such an advantage to harm us. Or, as the welfare state developed, to take advantage of that to which they’re not entitled.
Like many laudable desires, that of “open borders” doesn’t survive reality of a changing (and smaller) world. All things being equal, I’d prefer open borders for free people. But that’s not how this world works and the disadvantages – partly our own doing, partly that of our enemies – argues pretty strongly against “open borders” – at least in the present.
All of that said, we have a problem to deal with. The welfare state isn’t going away nor are our enemies. The border situation is intolerable, we have an antiquated and essentially broken immigration system and we a very large number of illegals already here. What are we going to do about that?
Whether or not you agree with Arizona’s recent law, it points out the frustration that many of the border states are undergoing as the problem continues and grows. I’ve mentioned any number of times that while the solution won’t be simple, the general outline isn’t rocket science:
- Streamline the legal immigration system so people can more easily access it, apply, receive visas, green cards, etc. It shouldn’t take us half a lifetime or cost multi-thousands of dollars to immigrate here, prove their worth and become US citizens.
-Streamline the work visa program and the seasonal work visa program. If I can order a kindle book from Amazon with a single click and have it downloaded to the kindle within a minute , it tells me the technology is probably available to make such a program much easier than it is at present.
-Kill the “anchor baby” provision. It may take a Constitutional amendment, but whatever it takes, remove the incentive. Heck in some countries they have tour packages aimed specifically at pregnant women in other countries to come here and have their baby. Sorry – no short cuts, no breaking the line, no gaming the system.
-Deal with the illegals in the country. Require them to register by a certain date or face permanent deportation. Once registered provide them with a clear, but back of the line path to citizenship, if they so desire. Make the requirements tough but fair. My guess is we’ll find many, if not most, of them would instead prefer a work visa or a seasonal work visa rather than citizenship. Many are here illegally because they can’t get those sorts of visas now.
-Secure the border. We do have an existential treat. Throughout our history we’ve had many existential threats. As long as different ideologies exist, especially those based in religious zealotry or secular imperialism, we’ll continue to have existential threats. Until those go away, we’re always going to have borders and those borders are going to have to be guarded to protect our citizenry.
I believe in immigration. I believe, in some ways, it represents the heart and soul of this country. I believe in giving those what want to work hard and better themselves the opportunity to come to this country to do so. But they need to come here legally through an improved system to do that. Since we do indeed have a welfare state, I want those who try to game that system by illegal entry stopped. And since we have existential enemies, I want them stopped at the border too.
It may not be my moon pony and unicorn utopia, but it is reality and it is that with which we have to deal. Then we can work on utopia.
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Yesterday, Arizona Governor Jan Brewer signed into law a controversial immigration bill, the text of which you can find here (PDF). Now, before getting into the bill itself, et me just say I’m not an open-borders guy. The sheer mass of illegal immigration is a problem in the southern border states. If you’re interested, I went into more detail a few years ago on the subject.
The law itself provides for the following:
- Makes it a misdemeanor for an illegal alien to solicit work in any way shape or form, so no more hanging out around Home Depot.
- Makes it a code violation to knowingly employ illegal aliens, and may subject the business to suspension or terminations of any and all licenses, i.e. business license, liquor license, etc.
- No jurisdiction in the state can refuse to enforce immigration laws.
- Illegal aliens are considered to be trespassing if found on any public or private property in the state of Arizona. I.e., physically present anywhere in the state. It’s a class I misdemeanor. If the illegal alien has drugs or money in his possession, that bumps the charge to a Class 3 felony.
- A person may be arrested on the spot for this extended offense of trespassing if the officer has probable cause to believe the person is an illegal alien.
- A peace officer may stop any person operating a motor vehicle if the officer reasonably believes the vehicle is being used to transport or smuggle illegal aliens.
- A vehicle used to knowingly transport illegal aliens is subject to mandatory immobilization or impoundment.
I saw a statement by an Arizona police spokesman at Tucson PD that said, essentially, that this new law would never, ever be used by peace officers in racial profiling. And you can believe as much of that as you please. If you think the cops in AZ will be rounding up blue-eyed, blond-haired fellows who say “aboot” instead of “about”, I’ve got a bridge to sell you. It connects Manhattan with Brooklyn. It’s in great shape. Worth every penny.
Essentially, if you’re a swarthy, dark-haired gentleman, the cops can stop you and ask for your papers. You should probably obtain a copy of your birth certificate, Social Security card, and Sons of the American Revolution membership certificate, and keep them with you at all times. And lose the attractive Ricardo Montalban accent, because that’s certainly not going to be an asset when speaking to the nice officer.
And if you do pick up a few day workers at Lowe’s, don’t be surprised when the cops stop you, then laugh at your insistence that you just wanted some weeding done or nice raised garden installed, and insist on calling you “Mr. Coyote” as they impound your vehicle and drag your ass off to jail.
I really don’t see how this law can pass Constitutional muster. It practically requires racial profiling. It will almost inevitably lead to civil rights violations of both lawful immigrants and American citizens, as police officers demand proof of citizenship, and subsequently arrest some poor sap who left his wallet at home. It’s just a disastrously bad law.
Now look, I understand that illegal immigration is a tough problem. I believe that we do need to better secure the borders. I know the Feds do little more than lip service at enforcing immigration laws. So, I understand why state government are frustrated, and grasping at something else they can do to ease the budgetary, law enforcement, and social service strains that illegal immigration puts on state and municipal budgets.
But this sort of state effort is so intrusive and far-reaching, and so ripe for abuse, that it can’t possibly be the right answer to the problem. I see no way that it can be enforced in a manner consistent with basic civil rights. It’s just a bad law.
Or is it the constant demonization of capitalism?
Sixty percent (60%) of U.S. adults nationwide say that capitalism is better than socialism. A new Rasmussen Reports telephone survey finds that 18% disagree, while 21% are not sure.
How can you not be sure? As I see it, you can only not be sure if you really don’t know what each of them are -seriously. That 18% disagree isn’t a big deal. That 21% don’t know, is a big deal.
But what’s up with this?
However, it’s important to note that just 35% believe a free market economy is the same as a capitalist economy. In fact, despite tepid support for capitalism, 77% of Americans prefer a free market economy rather than a government managed economy. That’s consistent with the 75% who say that business is better at customer service than government.
So 17% of that 21% (one assumes those with a definite positive belief in socialism (18%) would know that captalism is a free market system) like a “free market economy” but don’t know what the hell that really means?
Ye gods … They know “free market” is good and preferable, but capitalism has been so demonized by politicians, academics and activists that they don’t associate it with “free market”.
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Yes, yes, I know – it comes as a complete surprise. No question, we all thought having more covered by insurance, no pre-existing conditions, no caps on payouts and lower premium costs – all the while run by our efficient government – would surely lower costs. It’s just logical, right?
President Obama’s health care overhaul law will increase the nation’s health care tab instead of bringing costs down, government economic forecasters concluded Thursday in a sobering assessment of the sweeping legislation.
You know, you want to laugh at this because most people who gave up on moon ponies and unicorns when they were 8 knew that what was promised by this bill wasn’t possible. But it is hard to laugh at this level of mendacity. Isn’t it interesting that now suddenly the truth begins to filter out – after the fact, of course.
USA Today, in true sycophantic fashion, tries to lessen the blow to the administration by calling it a mixed verdict. It also notes it is the first look at the legislation by “neutral experts”. That’s because it was so important to rush this bill through without giving anyone time to read or analyze it – you know, so the benefits could kick in … in 2014.
And what do these experts find? Well it is less than a “mixed verdict”. As I read it, it’s an outright condemnation of the law.
[T]he analysis also found that the law falls short of the president’s twin goal of controlling runaway costs. It also warned that Medicare cuts may be unrealistic and unsustainable, driving about 15% of hospitals into the red and “possibly jeopardizing access” to care for seniors.
Translation: this goes to the central political point about the bill. Who among the politicians in DC are going to be willing to take on the necessary cuts to Medicare promised by the bill (to “pay” for it) and alienate one of the most powerful demographic election blocs?
The Medicare actuary says no one.
The report acknowledged that some of the cost-control measures in the bill — Medicare cuts, a tax on high-cost insurance and a commission to seek ongoing Medicare savings — could help reduce the rate of cost increases beyond 2020. But it held out little hope for progress in the first decade.
“During 2010-2019, however, these effects would be outweighed by the increased costs associated with the expansions of health insurance coverage,” wrote Richard S. Foster, Medicare’s chief actuary. “Also, the longer-term viability of the Medicare … reductions is doubtful.”
Of course they are, and anyone but the moon pony crowd knew that going in. It’s like the promise of eliminating “waste, fraud and abuse”. If there was any appetite or ability to do that, don’t you think the estimated $60 billion a year in Meidcare waste, fraud and abuse would have been eliminated by now?
And what if they did make the cuts? Anyone, what is the likely reaction of health care providers? Uh, “we don’t take Medicare/Medicaid patients anymore”? That is exactly what will happen. That means those with government insurance coverage won’t be able to find access (unless that too is eventually mandated).
A separate Congressional Budget Office analysis, also released Thursday, estimated that 4 million households would be hit with tax penalties under the law for failing to get insurance.
The U.S. spends $2.5 trillion a year on health care, far more per person than any other developed nation, and for results that aren’t clearly better when compared to more frugal countries. At the outset of the health care debate last year, Obama held out the hope that by bending the cost curve down, the U.S. could cover all its citizens for about what the nation would spend absent any reforms.
The report found that the president’s law missed the mark, although not by much. The overhaul will increase national health care spending by $311 billion from 2010-2019, or nine-tenths of 1%. To put that in perspective, total health care spending during the decade is estimated to surpass $35 trillion.
The administration doesn’t even argue the point, claiming that’s a bargain for insuring 95% of the country. Of course, what USA Today doesn’t point out is that 75% of the 4 million households that will be hit with those tax penalties average less than $60,000 a year individually and families making less than $120,000 a year.
Also keep in mind that the CBO analysis and estimate are based in the assumption that absolutely everything in the bill goes as planned – to include the Medicare cuts. Or said another way, the $311 billion “cost’ is a joke and it will most likely cost far more than that.
The CBO also looks at Medicare:
In addition to flagging the cuts to hospitals, nursing homes and other providers as potentially unsustainable, it projected that reductions in payments to private Medicare Advantage plans would trigger an exodus from the popular program. Enrollment would plummet by about 50%, as the plans reduce extra
benefits that they currently offer. Seniors leaving the private plans would still have health insurance under traditional Medicare, but many might face higher out-of-pocket costs.
That brings us back to the politics and the polite word used -’unsustainable’ – to mean the cuts just aren’t going to happen.
USA Today ends its article with this:
In another flashing yellow light, the report warned that a new voluntary long-term care insurance program created under the law faces “a very serious risk” of insolvency.
What they’re talking about is this:
One other interesting note from this study was a paragraph on the new Community Living Assistance Services and Supports insurance program for home care, known as the CLASS Act.
While it produces a $38 billion net savings through 2019, that’s mainly because you have to pay five years of premiums before you can start taking advantage of the program.
After that, the Medicare Actuary doesn’t like the way it looks in financial terms.
“Over the longer term, expenditures would exceed premium receipts, and there is a very serious risk that the program would become unsustainable as a result,” the study says.
“Unsustainable” – pay 5 years of premiums before you get the first benefit and the “expenditures would eventually exceed premium receipts”. Sounds exactly like every other program I’ve seen designed and engineered by politicians. That’s why we’re in the freakin’ fiscal mess we’re in now.
And the moon pony crowd keeps believing you can get something for nothing and that we can fix crap like this to where it will actually work and cost less too.
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I’ve been mentioning what’s going on in the state of New Jersey as a positive example of what is necessary to reign in government and government spending. Hard decisions have been made there and, in an epic battle with public service unions (specifically the teacher’s union) Governor Chris Christie seems to be prevailing.
Not so in Illinois where, amazingly, the public service unions held a big rally yesterday and chanted “raise my taxes”.
Thousands of protesters bused down by labor unions and social service advocates rallied at the Capitol today in an attempt to pressure state lawmakers into raising the income tax to avoid more budget cuts. A spokesman for Illinois Secretary of State Jesse White estimated the rally crowd at 15,000, with more than 12,000 marching around the building. That would appear to make it the largest Capitol protest since the Equal Rights Amendment crowds a quarter-century ago. Bus after bus pulled up on streets surrounding the Capitol complex and dumped sign-waving protesters clad in purple, green, red and blue shirts that represented a show of strength from a variety of public employee unions and dozens of groups that formed what they named the “Responsible Budget Coalition.”
“Responsible Budget Coalition” my foot. “I want my job, benefits and perks unchanged coalition” is more like it.
Their goal, of course, is to pressure Illinois lawmakers into raising income taxes to continue spending at the level that is leading Illinois into bankruptcy.
Illinois has a $13 billion dollar budget deficit. $2 billion in cuts to education have been proposed. But Democratic Governor Pat Quinn would rather raise income taxes thantake on his base (public service unions such as the teacher’s union) by make those hard and tough choices necessary to reign in the deficit. And, one assumes, because Illinois educators have done such a great job in the past (ranking 32nd out of 50 in 2005-06 and dropping 3 more to 35th isn 2006-2007).
So Quinn has come up with a budget plan that rests on “5 pillars” :
Creating Jobs, Cutting Costs, Strategic Borrowing, Continued Federal Assistance and Increased State Revenues.
Quinn claims he can create 439,000 jobs in the next 6 years by using $6 billion. The same “shovel ready” game plan that’s worked so well on a national level is now the panacea for Illinois unemployment. He also is going to give small businesses a $2,500 tax credit for employees they hire. Yeah, that’ll cover the cost of new hire, won’t it? In fact, his entire jobs creation plan is a recreation of the Obama plan which has done zip to spur job creation.
But now we get to the fun part – Cutting costs (well, not really).
State Employees and Operations – The Governor’s plan includes more than $203 million in savings through employee furlough days, renegotiated employee contracts, employee health insurance savings and additional travel restrictions. The state will also change the way it does business, including reviewing, reducing or re-bidding all contracts over $1 million; historic procurement reform; and consolidating state office spaces.
Pension Stabilization – The state’s current public pension system costs are growing significantly, adding to the mounting deficit. Without bold reform, the system will fall apart, forever disrupting thousands of lives. Stabilizing the system so that existing employees and retirees will keep their current benefits, while new hires become part of a streamlined pension system will save approximately $300 million in the first year.
Health and Human Services – Services such as home care for older adults, child care and community mental health services will be reduced by $276 million. Scaling back prescription drug assistance and group health coverage for state retirees, combined with a managed care pilot program for seniors and adults with disabilities who are enrolled in Medicaid will save the state $325 million.
Performance Metrics – The state will implement rigorous performance metrics that will improve accountability and performance, and will make sure programs run more efficiently. A new Web-based system will be designed for collecting and reporting performance updates.
Education – Education will see approximately $1.3 billion cut from general state aid, special education, student transportation, grants and universities.
Now – this is a state with a $13 billion dollar deficit – correct? Count up the “savings” and cuts proposed here. Approximately $2.2 billion dollars. $2.2 billion in “savings”. [As an aside - note the cuts in health care.]
So what about the rest of the deficit number? Well, of course, the answer is “strategic borrowing”. Oh, and an increase in the state’s income tax by 33%.
Well the state “owes” vendors, providers, colleges and universities $5 billion dollars, and it is high time the taxpayers paid these bills. Additionally, the Governor, knowing very well that Democrats have now become the party of public service employees (and that necessarily means preserving their jobs, salaries, benefits and perks) contends it is the duty of the Illinois tax payer to cough it up for education:
Governor Quinn challenged lawmakers to pass a 1 percent income tax surcharge to support education. The surcharge will help restore educational funding, while also enabling the state to get caught up on the millions of dollars owed to public schools, community colleges and universities. “We can’t afford to deny reality or delay action any longer. We don’t have time for any more partisan battles, parliamentary maneuvers or political expediency,” said Governor Quinn. “As we tackle this budget, let’s remember: We are fighting for our children, our communities, and the future of our state.”
What he’s actually fighting for is the continued support of the public service unions.
And thus the well timed astro-turf “populist” uprising among the beneficiaries of misspent Illinois tax dollars.
A tale of two states. One facing up to the fiscal reality of the day, and the other in the middle of trying to deny reality and maintain the status quo. Certainly everyone understands that at some point, some tax increases may have to be considered. But is it too much to ask the state to show some good faith and cut the bloated and costly state apparatus that is unable at this point to run in anything but a deficit? A $13 billion deficit is no small potatoes for a state budget. Proposing $2.2 billion in cuts and then wanting to put off $1.3 billion of those with a tax increase doesn’t demonstrate any seriousness at all about cutting the size and cost of state government.
While the bussed in protesters may have been many, according to the report, the Illinois taxpayers are many more. Time to lay down the law to your lawmakers. Cut spending. Take a tip from New Jersey. Make the hard choices and do the tough job of cutting the size and cost of government. Otherwise, if the public tantrum the public service unions throw is allowed to work,, you can expect to be on the hook from now on ensuring those jobs, salaries, benefits and perks are forever maintained, while you watch the cost of government continue to spiral out of control.
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