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October 31, 2009

Differences in Cost of Two Health Care Reform Plans

Speaker of the House Nancy Pelosi and her senior legislators unveiled the House’s H.R. 3962 health care reform bill Thursday morning, according to this CNSNews.com report, which notes the bill “would impose an array of new taxes, fees and government mandates on major players in the health industry, including insurers, doctors and drugs and medical devices makers.”

The Tax Foundation reports  the Congressional Budget Office (CBO) has scored the 10-year cost of H.R. 3962 at $1.05 trillion. By comparison, CBO costed Senator Max Baucus’s (D-Montana) proposal at $829 billion. (Tax Foundation’s news release and Fiscal Fact No. 200) Both plans are financed with cuts to Medicare, and both have one large new tax. However the two taxes are very different. The Tax Foundation explains the basic differences and similarities of the two bills this way:

“ . . . Both bills would impose a financial penalty on individuals if they do not buy health insurance, although the House penalty is higher. In both plans, employers would have to pay a penalty to either the government or to new "health exchanges" if they do not provide a government-approved health insurance plan to employees, and once again, the penalty is larger in the House bill.

“Also, both health care plans are financed by large net cuts to the Medicare program, mostly by lowering what the federal government is willing to pay doctors, hospitals and other health providers. Economists expect such Medicare cuts to be felt by both the health care industry and patients covered by Medicare.
“Each plan has one large new tax, but those are quite different. Sen. Baucus's bill raises substantial revenue with a 40-percent excise tax on the value of so-called Cadillac health insurance plans. Democrats in the House shun the "Cadillac tax," agreeing with labor unions who have often bargained for the most expensive health insurance coverage. Instead, they propose a surtax on high-income tax returns. Single filers earning over $500,000 in adjusted gross income (AGI) and couples earning over $1 million would pay 5.4 percent of any additional dollar of income.[2] That surtax would be on top of the scheduled tax rate hike on the ordinary income of high-income taxpayers that is set to take effect in 2011 (top rate moves from 35 percent to 39.6 per”

One item of interest is that total deficit reduction of the Pelosi bill is listed at $104 billion while total deficit reduction of the Baucus bill is $81 billion. After the costs skyrocket, there won't be any need to worry about deficit reduction. With the House and Senate working feverishly to get a bill to the President, stop by frequently for updates.

October 30, 2009

Cash for Clunkers a Real Clunker

On Wednesday, the Christian Science Monitor reported on a study by Edmunds.com that suggested the federal government’s Cash for Clunkers program “mostly gave money to people who were going to buy a new car anyway.” Here’s how the Monitor started their reporting:

“American taxpayers paid a lot of cash for those clunkers: $24,000 for each new car sold, according to a study released Wednesday.

“That’s a lot of money, especially when the so-called “cash for clunker” stimulus program offered only a maximum $4,500 in cash for each person who traded in an old gas-guzzler and bought a new car.

“The government could have done almost as well by just giving away cars for free, instead of creating an elaborate incentive program, according to an analysis by the automotive information firm Edmunds.com (link is to their press release) in Santa Monica, Calif.”

The Edmunds report drew fire from the White House, however, according to today’s Washington Times, whose William Ehart reports:

“The White House lashed out again Thursday at a media outlet, calling the automotive site Edmunds.com "wrong (again)" for saying that the "cash for clunkers" program cost too much money and had little lasting impact on car sales or the economy.

“I think they've got their B team responding," Mr. Anwyl said. "I know there are smart people at the White House, but I don't think they're blogging today. Why are they even messing with this? We're talking about the White House.

In response to the Edmunds report, the White House made two points, according to a Fox News report:

"The White House made two points: First, Clunkers credits drew additional shoppers to showrooms, some of whom bought cars even without rebates and, second, that the U.S. economy will benefit in the fourth quarter as automakers increase spending to rebuild depleted inventories. 

“A seemingly startled Edmunds promptly responded to the White House post, calling the first contention "a bit odd" and attributing manufacturers' Q4 production increases not to the Clunkers program but to slowly improving overall sales.

And Congress and the White House think they can plan and manage a complete makeover of the health care? Sheesh! To quote Vasko Kohlmayer, writing at FrontPageMag:

"The idea that a government that is itself in need of a bail out can come to anyone’s rescue is becoming increasingly untenable. Even the administration’s once-loyal supporters in the mainstream media no longer believe it."

October 29, 2009

Thought for the Day

"I began reading not only the economics of Thomas Sowell (our greatest contemporary philosopher) but Milton Friedman, Paul Johnson, and Shelby Steele, and a host of conservative writers, and found that I agreed with them: a free-market understanding of the world meshes more perfectly with my experience than that idealistic vision I called liberalism."

   ~ David Mamet

HT Dan Henninger at Wall Street Journal

October 28, 2009

Ronald Reagan’s "A Time for Choosing”

Ronald Reagan delivered a speech on October 27, 1964 while campaigning for Barry Goldwater. Formally titled “A Time for Choosing,” it is also called “The Speech.” The excerpts below are from that speech at AmericanRhetoric.com, where its authenticity was certified although other versions can be found at Reagan2020.us, among other websites.

“We’re at war with the most dangerous enemy that has ever faced mankind in his long climb from the swamp to the stars, and it’s been said if we lose that war, and in so doing lose this way of freedom of ours, history will record with the greatest astonishment that those who had the most to lose did the least to prevent its happening. Well I think it’s time we ask ourselves if we still know the freedoms that were intended for us by the Founding Fathers.

“Not too long ago, two friends of mine were talking to a Cuban refugee, a businessman who had escaped from Castro, and in the midst of his story one of my friends turned to the other and said, “We don’t know how lucky we are.” And the Cuban stopped and said, “How lucky you are? I had someplace to escape to.” And in that sentence he told us the entire story. If we lose freedom here, there’s no place to escape to. This is the last stand on earth.”

[ . . . ]

“Well, I, for one, resent it when a representative of the people refers to you and me, the free men and women of this country, as “the masses.” This is a term we haven’t applied to ourselves in America. But beyond that, “the full power of centralized government” -- this was the very thinkg the Founding Fathers sought to minimize.”

“They knew that governments don’t control things. A government can’t control the economy without controlling people. And they know when a government sets out to do that, it must use force and coercion to achieve its purpose. They also knew, those Founding Fathers, that outside of its legitimate functions, government does nothing as well or as economically  as the private sector of the economy.”

[ . . . ]

“No government ever voluntarily reduces itself in size. So, governments’ programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth.”

Reading the entire speech makes it clear why it’s called “the speech.”

October 27, 2009

National Health Insurance: A Virginia Perspective

The independent, nonpartisan Virginia Institute of Public Policy, which is dedicated to liberty, freedom and private property, recently published a study (requires Adobe) of the “effects of proposed national health care reform on Virginia.” The study was conducted by the firm Arduin, Laffer, & Moore Econometrics.

According to the report synopsis:

“Adjusting for the growing U.S. population, the dollar level of expenditures on health care has exceeded the growth in overall consumer prices in the economy every year for nearly the past 50 years. Such a trend can- not continue forever. In 1960, the private sector funded over three-quarters of the nation’s health care expenditures. Individuals paid nearly one-half of the total national health care expenditures through out-of-pocket expenditures.”

The authors list five major consequences for Virginia:

  • "Virginia would see reduced economic growth in 2019 by 4.5 percent compared to the baseline scenario.
  • “In addition to federally-funded expenditures, the net present value of all Virginia state government expenditures through 2019 that will occur as a result of a federal health care reform is $2.1 billion, or a $275 bill for every man, woman, and child in Virginia.
  • “The current net present value of funding health care reform based on President Obama’s priorities will be $4,176 for every person in Virginia. This comes to a total net present value of $32.4 billion in total costs that Virginia residents will have to bear.
  • “The source of funding for Medicaid expansion will have a major impact on the Virginia state budget. Because Virginia does not have the option to run trillion dollar deficits, the cost of the additional $0.5 billion in health care expenditures as a percentage of total tax revenues would increase as well. Virginia’s tax collections would have to be 0.9 percent larger in order to cover the additional $0.5 billion in health care expenditures in 2019. This number does not include the additional cost to Virginia of expanding Medicaid if the federal government fails to pick up the tab.
  • “The cost on Virginia could be higher, and the national cost lower, if the federal government pushes the fi nancial responsibility for covering the expansion of lower-income individual’s health insurance coverage off to the states. While the federal costs will decline, Virginia’s costs will increase by a total of $6.8 billion (the net present value being $5.2 billion).”

The study lists a number of solutions, focusing on incentives for patients and medical providers and reflecting the free market. For example, leveraging health savings accounts and allowing interstate purchases of insurance.  The study also concludes:

“One of the objectives of reform should be a simpler system. The extraordinary complexity of the current system not only frustrates health care providers and patients alike but also adds to the cost. This complexity is also responsible for much of the waste in the system, which is estimated to be 30 percent of health care spending.”

However, the bureaucratic maze that would be required by the House Democrats Health Plan would add to both the complexity and the cost of health care. (to see the maze of an organizational chart that would be required, see our July 23, 2009 growls).

October 26, 2009

Washington Spending Machine Rolls On

An editorial in today’s Wall Street Journal says:

“House Republicans on the Budget Committee added up the 2009 appropriations, the stimulus funding and 2010 budgets and found that federal agencies will, on average, receive a 57% increase in appropriated funds from 2008-2010. By contrast, real family incomes fell by 3.6% last year. There's no recession in Washington.”

For a bit of comparison, the Journal points out:

“Throughout the era of Republican rule in Washington, we scored GOP lawmakers for their overspending and earmarks—and so did Nancy Pelosi and other Congressional Democrats. So how do their records compare? From 2001-2008 the average annual increase in appropriations bills came in at 6.4%—or about double the rate of inflation. In this Congress spending is now growing six times faster than inflation.”

In conclusion, the Journal writes:

“Democrats must figure that they can get away with this sort of rap because no one will call them on the reality of what they're spending. And they're probably right about a press corps that has ignored the spending boom since Democrats took over Congress in 2006. Meanwhile, the spending machine rolls on, all but guaranteeing monumental future tax increases.” (emphasis added)

October 25, 2009

Arlington County Board Gets Set to Raise Taxes

Although Fiscal Year 2011 will not begin until July 1, 2010, the Arlington County Board just made the most important decision on the FY 2011 budget on Saturday when it provided so-called budget guidance to the County Manager as he begins preparing the proposed FY 2011 budget, due to be released in February 2010.

The budget guidance the Board adopted “authorizes a Fiscal Year (FY) 2011 budget no greater than the adopted FY 2010 budget ($947 million).” In addition, a potential budget gap of $80 to $100 million must be closed “by equally dividing between revenue increases and expense/service reductions,” according to this press release from the county.

Most revenue sources have remained much the same except for real estate tax revenues. According to the Manager’s report to the Board for agenda item 38.B. (requires Adobe), estimated real estate tax revenues were:

  • FY 2010 Adopted Budget        $494.1 million
  • FY 2010 Revised Budget         $471.7 million
  • FY 2010 Projected                  $448.7 million

The Manager told the County Board that real estate taxes will decrease next year "by roughly nine percent" with commercial property expected to decrease by 14%.

The press release tries to de-emphasize the possibility of tax increases by talking about “revenue increases,” but thanks to the Sun Gazette’s reporting, and which we growled about on October 9, the Board is already thinking about raising the real estate tax rate in the neighborhood of five or six cents.

Question for any one of the Board’s five panjandrums: what was the logic used to close the budget gap “evenly” between cutting expenses and increasing tax revenues? Why not close the gap entirely by cutting expenses?

October 24, 2009

“A Free Market Can Fix Health Care”

The Cato Institute’s ’s Director of Health Policy Studies, Michael Cannon, is the author of a new Policy Analysis, “Yes, Mr. President, A Free Market Can Fix Health Care, published earlier this week.  Following is the the policy analysis' executive summary:

“In March 2009, President Barack Obama said, "If there is a way of getting this done where we're driving down costs and people are getting health insurance at an affordable rate, and have choice of doctor, have flexibility in terms of their plans, and we could do that entirely through the market, I'd be happy to do it that way." This paper explains how letting workers control their health care dollars and tearing down regulatory barriers to competition would control costs, expand choice, improve health care quality, and make health coverage more secure.

“First, Congress should give Medicare enrollees a voucher and the freedom to choose any health plan on the market. Vouchers would be means-tested, would contain Medicare spending, and are the only way to protect seniors from government rationing.

“Second, to give workers control over their health care dollars, Congress should reform the tax treatment of health care with "large" health savings accounts. Large HSAs would reduce the number of uninsured Americans, would free workers to purchase secure health coverage from any source, and would effectively give workers a $9.7 trillion tax cut without increasing the federal budget deficit.

“Third, Congress should break up state monopolies on insurance and clinician licensing. Allowing consumers to purchase health insurance licensed by other states could cover one-third of the uninsured without any new taxes or government subsidies.

“Finally, Congress should reform Medicaid and the State Children's Health Insurance Program the way it reformed welfare in 1996. Block-granting those programs would reduce the deficit and encourage states to target resources to the truly needy."

The great advantage of a free market is that innovation and more prudent decision-making means that fewer patients will fall through the cracks.” (emphasis added)

We would add tort reform to that list of four. Most importantly, though, is maintaining a free market rather than attempting a government takeover of the world’s finest health care system, not to mention muzzling the system with legions of bureaucratic constraints.

Take some time to read the entire policy analysis (requires Adobe); we think you’ll agree Mr. Cannon’s prescription for health care reform is a logical starting place for health care reform.

October 23, 2009

How Big Is The Federal Deficit, Really?

Last weekend, the New York Times reported “(t)he Obama administration said Friday that the federal budget deficit for the fiscal year (2009) that just ended was $1.4 trillion, nearly a trillion dollars greater than the year before and the largest shortfall relative to the size of the economy since 1945.”

Assume for a few minutes that Congress was fiscally responsible, and was willing to increase income taxes enough to close the deficit. Don’t hold you breath waiting for Congress to become fiscally responsible, however, since the federal government has run a deficit for 37 of the past 40 years, according to the latest Fiscal Facts (Number 197) published yesterday by the Tax Foundation.

First a bit of background on the deficit:

“During the fiscal year that's just beginning, fiscal year 2010, the federal government plans to spend $3.8 trillion dollars, the largest annual expenditure ever. On the revenue side, taxes will bring in about $2.3 trillion, so the federal government is creating a shortfall of approximately $1.5 trillion. That projected deficit will vary as the months pass, but it may well end up being even higher than the record-setting deficit in 2009 of $1.4 trillion. Those huge amounts translate into a federal government that will spend $33,000 on each household but that will raise only $19,000. (emphasis added)

“Although President Obama and the Congress do plan to raise taxes, which will cut into the deficit, they also have new spending plans, leaving the budget with historically huge deficits throughout the next decade. Those deficits will be financed by selling U.S. Treasury bonds to people all over the world and paying them back with interest in years to come. But instead of borrowing, could a congress willing to bring taxpayers the full bill for this year's spending erase the deficit by raising taxes this year?

“Using the Tax Foundation's Microsimulation Model, we can project how much revenue a broad-based increase in federal income tax rates would generate. However, when the rates necessary are spelled out, it becomes apparent that deficits this large simply cannot be closed with higher federal income tax rates. This year and for several years to come, even if congressmen were willing to present the full bill to the taxpayers in the form of higher taxes to match their spending level, they could not do so."

So how big would that bill be? The Tax Foundation puts it bluntly:

“Assuming deductions, exemptions and credits were kept the same as they are now, the government would have to nearly triple every tax rate . . . Instead of taxing couples with rates that range from 10 percent to 35 percent, tax rates would have to start at 27.2 percent and range up to 95.2 percent.” (emphasis added)

For example, taxpayers with incomes ranging from $75,000 to $100,000, who now make an average payment of $7,055 would have to pay an average of $$20,515 in order to close the deficit. Something to really thank Congress for!

October 22, 2009

Another Month, Another Washington Porker

Citizens Against Government Waste (CAGW) has named Senator Kay Bailey Hutchison (R-Texas) its October 2003 Porker of the Month, “a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers.” In its justification, CAGW wrote:

“The four-term senator from Texas is loading up her goodie bag just before Halloween as she prepares to leave the Senate to run for governor. While claiming to be a fiscal conservative, Sen. Hutchison requested 149 projects worth $1.6 billion for authorization and appropriations bills for fiscal year 2010.”

CAGW added further:

“In a March 6, 2009 Dallas Morning News article, Sen. Hutchison said, “I do think that earmarks are a legitimate role of Congress. I don’t think that we should be earmarking things that do not have a national interest…Can it be overdone? Yes. Should it be transparent? Yes. But that is the role of Congress, to determine how we spend money.” On September 28, 2009, she told the Austin American-Statesman that “I’m proud of being able to garner Texans’ fair share of their tax dollars.”

“Sen. Hutchison is repeating the same old insidious quackery about the earmarking process: that it can be made accountable and that it somehow levels the spending playing field,” said CAGW President Tom Schatz. “The only fair way to distribute the taxpayers’ money is to eliminate the practice altogether and instead work to ensure that every dime of taxpayer money is spent using the budget laws and rules that they themselves established. Earmarking is a secretive, wasteful process that breeds a culture of corruption in Washington and distrust among taxpayers.”

It is the second time Sen. Hutchison has been named a Porker of the Month. She was previously a co-Porker of the Month along with Sen. Mary Landrieu (D-Louisiana) in September 2003.

Trying to shame most politicians is a difficult job, but CAGW is to be congratulated for continuing to award its dubious award.

October 21, 2009

Would U.S. Senate Deceive Taxpayers?

In an open letter to the United States Senate, a coalition of 20 organizations, including the National Taxpayer Union sent an open letter to Senators urging them to not “deceive taxpayers by hiding health reform costs." The letter reads:

“On behalf of the millions of members represented by the undersigned groups, we urge you to oppose S. 1776, the "Medicare Physician Fairness Act," and its appalling and dishonest attempt to mask the tremendous costs health care reform will impose upon American families and businesses. Considering the enormity and complexity of our health care system, the American people deserve honesty and transparency in a reform debate. This kind of legislative scheming fails to live up to the high standards to which this Congress claims to aspire.

“Introduced by Senator Debbie Stabenow (D-MI), S. 1776 would raise reimbursements for physicians through Medicare to the tune of $247 billion over 10 years. While this so-called "doc fix" has merit under the right circumstances as a means of preventing further erosion of physician participation in the Medicare program, this legislation contains no spending reductions elsewhere to offset its considerable cost. It would require that the Senate vote to waive its own budget rules, intended to protect taxpayers, and would represent a violation of "PAYGO" rules in the House as well. Perhaps more importantly, it serves as a deceptive measure to reduce the perceived cost of various plans for comprehensive health care overhaul.

“Earlier this month, one such piece of legislation introduced by Finance Committee Chairman Senator Max Baucus (D-MT) received a 10-year cost estimate from the Congressional Budget Office of $829 billion. It achieved a score more than $200 billion lower than the $1.042 trillion plan drafted by the late Senator Ted Kennedy (D-MA) and the Health, Education, Labor, and Pensions Committee in part by reducing physician reimbursements through Medicare. By engineering a $247 billion reversal of part of the Baucus bill in separate legislation, it is clear that some leaders in Congress had no intent of allowing those reductions to take effect.

“If Congress seeks a "doc fix," it should draft it into comprehensive health care reform legislation and allow it to be debated in proper context. Splitting higher reimbursements into a separate piece of legislation can only be an underhanded bait-and-switch attempt to deceive an American public that deserves better.”

Growl at Virginia's two senators and Arlington's representative in Congress, either calling or writing to them using their contact webforms:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

For information about other members of Congress, visit the Library of Congress’ THOMAS website.

October 20, 2009

Growth of Government and Economic Liberty

Dr. Walter E. Williams, an economics professor at George Mason University, delivered a speech in August during a cruise from Venice to Athens, which has been adapted in the September 2009 edition of Hillsdale College’s “Imprimis.”

In the speech, he focuses on limited government and individual liberty, saying:

“To see the extent to which liberty is yielding and government is gaining ground, one need simply look at what has happened to taxes and spending.”

The adapted speech is worth reading in its entirety, especially the closing paragraph:

“Americans have never done the wrong thing for a long time, but if we're not going to go down the tubes as a great nation, we must get about changing things while we still have the liberty to do so.”

And consider subscribing to Imprimis, and read other great speeches each month. Besides, it’s free.

October 19, 2009

Thought for the Day

"Oliver Wendell Holmes said, "Think things, not words." In words, many see a need for "social justice" to override "the dictates of the market." In reality, what is called "the market" consists of human beings making their own choices at their own cost. What is called "social justice" is government imposition of the notions of third parties, who pay no price for being wrong."

   ~ Thomas Sowell

HT Column at Townhall.com

October 18, 2009

A Lesson in Congressional Vote-Buying

We’ve growled before (including September 30 and June 26) about the massive energy tax/climate change bill that passed the U.S. House of Representatives. Also called Waxman-Markey, H.R. 2454 could spell suicide for the American economy.

Americans for Prosperity (AFP) released a policy paper in September, Exposing the Special Interests Behind Waxman-Markey, which exposes “the backroom dealings that helped the U.S. House pass this flawed legislation.” According to the paper’s summary, AFP:

“examined how campaign contributions, pork-barrel projects and free carbon emission allowances were all used to buy votes.  The paper also shows how Wall Street trading houses, electricity producers and the Left’s political allies all stand to benefit from the Waxman-Markey energy tax bill.”

The four major findings from the paper are:

Buying Votes
In a one-week span surrounding the vote, Democratic leadership PACs contributed $130,000 to the reelection campaigns of 41 swing votes. Earmarked projects include:

  • Rep. Bobby Rush (D-Ill.) $1 billion in energy-related job training
  • Rep. Alan Grayson (D-Fla.) $50 million hurricane research center
  • Rep. Mary Kaptur (D-Ohio) $3.5 billion federal power authority,
  • Rep. Frank Kratovil (D-Md.) $1 billion in Maryland agriculture offsets

Free Allowances: The Biggest Corporate Welfare Program in History
The paper explains how giving away emission allowances, as Waxman-Markey does, amounts to corporate welfare.  Explanations from environmental economists Kristen Sheeran and James Barrett, the Government Accountability Office, White House Budget Director Peter Orszag, and energy company CEOs John Rowe and Mike Morris all say the same thing: consumers will pay, companies will benefit. (emphasis added) Gifted allowances can be traced to:

  • Rep. Collin Peterson (D-Minn.) $400 million for rural electric cooperatives
  • Rep. Rich Boucher (D-Va.) 43% of free permits for coal-burning utilities
  • Rep. Gene Green (D-Texas) 2% of free permits for oil refiners

Eco-Protectionism: Are Carbon Tariffs Smoot-Hawley II?
Waxman-Markey contains a dangerous return to protectionism.  The bill allows the president to impose carbon tariffs on imports whose companies have not reduced emissions.  The paper com- pares these provisions to the 1930 Smoot-Hawley Act that sparked a trade war contributing to the Great Depression.  China and India have already reacted harshly to threatened carbon tariffs.

Union Giveaways and Green Construction
Finally, the paper outlines how Waxman-Markey was designed to benefit Democrat’s union con- stituencies.  All projects must meet Davis-Bacon requirements, which increase costs and favor union contractors.  The bill also funds massive green jobs training programs, which are narrowly focused on benefiting minorities and “empowerment zone” communities.”

And naturally paid for by America's taxpayers. What a deal?

October 17, 2009

Christmas in September for Congress

Citizens Against Government Waste (CAGW) reports that Congress must think there is no recession because of the U.S. Senate’s “plans to pass the fiscal year 2010 Legislative Branch Appropriations Act, which will increase spending by 5.8 percent.” Citing a story by Politico, the CAGW press release says the bill:

“includes increases for staff salaries and the Architect of the Capitol, as well as new money for parties for dignitaries and VIPs, mailings for town hall meetings, and political consultants.”

CAGW president Tom Schatz said:

“Members of Congress are beginning to look like aristocrats in the French court of Queen Marie Antoinette . . . Taxpayers across the country are reeling from a 9.7 percent unemployment rate, stock markets losses that have devastated their retirement funds and their ability to send their children to college, as well as chronic uncertainty about their economic future.  The country is facing a record $1.6 trillion budget deficit and $11.8 trillion national debt.  For members of Congress, there is no uncertainty there is always enough money to satisfy their every whim, because taxpayers are paying for it.”

Growl at Virginia's two senators and Arlington's representative in Congress, either calling or using their contact webforms:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

For ohter information about members of Congress, visit the THOMAS website

October 16, 2009

Comparing Virginia on Sources of Revenue

The Tax Foundation released a Fiscal Fact (Fiscal Fact No. 194) this month, which highlights the fact that “states rely differently on property, sales, income and other taxes.” The source data comes from the Census Bureau. According to the Tax Foundation’s senior economist Gerald Prante, "Each of the 50 states' fiscal systems vary widely, and they all rely on various sources of tax revenue due to different endowed resources and policy priorities.”

The report provides four “top ten” tables “highlighting the states that rely heavily on each of four major categories: property taxes, individual income taxes, general and selective sales taxes, and "licenses and other taxes.” For example, New Hampshire (61.3%) relies the most on revenue from property taxes followed by Vermont (42.1%) and New Jersey (41.7%).The state of Washington relies the most on general and selective sales taxes (62.1%) followed by Nevada (58.2%) and Tennessee (56.6%). Oregon relies the most on individual income taxes (44.1%) followed by Maryland (39.7%) and Massachusetts (35.6%).

Virginia relies on individual incomes taxes for 31.6%, but did not rank in the “top ten” of any other category. The other sources of of state and local revenue for Virginia are property taxes (31.0%), general sales tax (14.5%), selective sales tax (11.9%), corporate income taxes (2.7%), and licenses and other taxes (8.3%).

In reporting on the Tax Foundation analysis, Stateline.org writes:

“States that rely too heavily on one tax are vulnerable to revenue fluctuations that can be especially harmful during recessions. In Oregon, for instance, where individual income taxes account for 44.1 percent of total government tax revenue, lawmakers this year were slammed by a huge revenue decline as employment — and personal income — decreased. That has resulted in major spending cuts and is forcing some school districts to resort to four-day weeks.”

The chart that follows is from Stateline.org, and provides readers a helpful way to compare all 50 states and the District of Columbia.

 

HT Tax Prof Blog

October 15, 2009

Federal Government’s Long-Term Fiscal Outlook

Based upon a bipartisan Congressional request, the General Accountability Office (GAO ) has been publishing “long-term fiscal simulations of what might happen to federal deficits and debt levels under varying policy assumptions” since 1992.

They just published their Fall 2009 update (requires Adobe), a rather succinct 13-page document, which is quite readable and contains several useful charts. GAO introduces their report writing:

“Weaknesses in the economy and financial markets—and the government’s response to them—have contributed to near-term increases in federal deficits, which reached a record level in fiscal year 2009. While a lot of attention has been given to the recent fiscal deterioration, the federal government faces even larger fiscal challenges that will persist long after the return of financial stability and economic growth. As shown in figure 1, GAO’s simulations continue to show escalating levels of debt that illustrate that the long-term fiscal outlook remains unsustainable. In little over 10 years, debt held by the public as a percent of GDP under our Alternative simulation is projected to exceed the historical high reached in the aftermath of World War II and grow at a steady rate thereafter.” (emphasis added)

Although it does not need saying, GAO says “the longer action to deal with the nation’s long-term fiscal outlook is delayed, the greater the risk that the eventual changes will be disruptive and destabilizing.” Is it any wonder that citizens are becoming involved in their local tea party movements?

October 14, 2009

A Tax Bill Disguised as a Health Care Bill

Former director of the Congressional Budget Office, Douglas Holtz-Eakin, asks in an op-ed in today’s Wall Street Journal, “Remember when health-care reform was supposed to make life better for the middle class?” The short answer, he writes is that the Baucus bill that passed the Senate Finance Committee yesterday, would hit middle class families “with a double-digit increase in their marginal tax rate.” Holtz-Eakin also asks:

“Why does it make sense to double down on the kinds of entitlements already in crisis, instead of passing medical malpractice reform and allowing greater competition among insurers? Why should middle-class families pay more than $2,000 on average, by my estimate, in taxes in the process?”

The National Taxpayers Union also criticized the Senate Finance Committee for its vote for the Baucus health care bill, citing its hidden tax increases. In a press release yesterday, Pete Sepp, NTU’s vice president for policy and communications said:

“Instead of trimming back wasteful spending and passing common-sense reforms, like implementing fundamental tax reform, allowing purchases of health insurance across state lines, or proposing strong tort reform, the Senate Finance Committee today chose a path that would heap further burdens on one the most over-leveraged groups on Earth: the U.S. taxpayer.”

HT Government Bytes

October 13, 2009

Those Dastardly Health Insurance Companies? Not!

The health insurance industry has been at the eye of the liberal storm for quite a while now, as evidenced by the headline of a post today at Huffington Post. It read, “Insurance Companies Remind Public Why We Hate Them.”But is that hate really warranted?

John Goodman’s Health Policy Blog is the source for the table below. It comes “from the 16-page 2008 Health Insurance Report Care released by the American Medical Association.” Of the eight health care provides, the highest percentage of denials were made by Medicare (6.85%) and only one private insurer even comes close, i.e., Aetna.(6.80%). The private insurers have significantly lower rates of denial.

Guess only liberals and their progressive brethren would see these statistics and continue to think that government is compassionate.

October 12, 2009

Comparing the Arlington Public Schools on Hiring and Spending

Mike Antonucci, director of the Education Intelligence Agency, has completed updating his school district enrollment, hiring, and spending tables for the 13,836 operating public school districts in the United States based upon data from the U.S. Census Bureau. Education Week says, “Antonucci scrutinizes the teachers' unions, sparking praise from some people and scorn from others.”

The tables enable you to compare how enrollment, hiring, and spending changed from 2001-02 to 2006-07. Highlighted below are the percentage changes for the public school systems for the counties of Arlington, Fairfax, Prince William, and Loudoun as well as Virginia and the United States:

  • Change in Enrollment Since 2001-02: United States 2.7%, Virginia 5.0%, Fairfax 2.1%, Prince William 22.3%, Loudoun 45.7%, and Arlington <3.4%>.
  • Change in K-12 Teachers Since 2001-02: United States 5.0%, Virginia 21.3%, Fairfax 8.7%. Prince William 60.7%, Loudoun 100.2%, and Arlington 8.3%.
  • Change in Per Pupil Spending Since 2001-02: United States 25.5%, Virginia 36.1%, Fairfax 38.2%, Prince William 37.9%, Loudoun 39.2%, and Arlington 46.8%.
  • Change in Amount Spent on Compensation Since 2001-02: United States 24.5%, Virginia 36.1%, Fairfax 38.4%, Prince William 38.6%, Loudoun 41.8%, and Arlington 47.0%.

I’m reminded of something a news reporter who covered Fairfax County perhaps 15-20 years ago told me. He said parents there would dreamily talk of the wonderful programs they could have if the Fairfax County Public Schools had as much to spend as the Arlington Public Schools.

October 11, 2009

Thought for the Day

"Were we directed from Washington when to sow, and when to reap, we should soon want bread."

   ~  Thomas Jefferson

HT Patriot Post

October 10, 2009

Thought for the Day

"It will be of little avail to the people that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant changes that no man who knows what the law is today can guess what it will be tomorrow.

   ~ James Madison, Federalist No. 62

HT Patriot Post

October 09, 2009

Will Arlington County Real Estate Tax Rate Increase?

Earlier this morning, Scott McCaffrey reported at the online Arlington Sun Gazette that Arlington County’s  “real estate tax rate (is) almost assured to rise in 2010,” writing (emphasis added):

“County Board Chairman Barbara Favola on Oct. 7 acknowledged what is by now all but obvious: Real estate tax rates are headed up next year in order to close a looming budget gap.

“Favola told members of the Arlington County Democratic Committee that the county government was facing a budget gap of $45 million, with a comparable shortfall looming for schools.”

McCaffrey added, “Best guess from among those watching the process: County officials may raise the rate 5 or 6 cents per $100 assessed value next year.”

In case Chairman Favola hasn’t noticed, the “official” unemployment rate just increased to 9.8% nationwide, and although Virginia’s and Arlington County’s are lower than the national average, she certainly makes one wonder  if she’s been smoking some Arlogance.

October 08, 2009

When a Second 'Read' is Important

The Congressional Budget Office (CBO, along with staff of the Joint Committee, on Taxation released a preliminary analysis of the Senate Finance Committee’s proposed health care reform bill, yesterday (requires Adobe Reader). Note that it is a preliminary analysis; as the CBO warns:

“That analysis reflects the specifications posted on the committee’s Web site on October 2, 2009, corrections posted on October 5, and additional clarifications provided by the staff of the committee through October 6. CBO and JCT’s analysis is preliminary in large part because the Chairman’s mark, as amended, has not yet been embodied in legislative language.”

Unfortunately, the CBO warning, which appeared in the first paragraph of their letter, is not reported by Lori Montgomery and Shallagh Murray in today’s Washington Post although the online story includes a link to the CBO letter. Montgomery and Murray start their puff piece by writing:

“Congressional budget analysts gave an important political boost Wednesday to a Senate panel's health-care overhaul, projecting that the $829 billion measure would dramatically shrink the ranks of the uninsured and keep President Obama's pledge that doing so would not add "one dime" to federal budget deficits.”

A sober presentation of the CBO’s preliminary analysis is presented by Yuval Levin in the National Review Online’s blog, The Corner. He explains:

“It’s preliminary because there isn’t yet an actual text of the bill, only legislative specs. The bottom line: CBO estimates that bill would cost $829 billion over the next ten years, but that because of the new taxes and penalties, various Medicare cuts, and cost-control measures the bill promises, it would actually reduce the deficit projection for the next ten years by about $81 billion, from $7.14 trillion to $7.06 trillion — assuming all those taxes, cuts, and measures were in fact carried out as proposed.”

Levin also says, “One striking feature of the letter is the tone of skepticism about the likelihood that the cost-saving measures laid out in the bill would in fact be enacted and effective,” and cites the following language from page 12 of the letter, including:

“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.”

So, did the Post leave the difficult parts of the CBO letter to its readers to decipher? And does the Post plan to do any reporting on the three pages of "additional clarifications provided by the staff of the Senate Finance Committee" as an attachment to the CBO letter? Or is this just the latest example of their "top-sheet reporting?"

UPDATE (10/9/09): Michael Tanner, a senior fellow at the Cato Institute and co-author of "Healthy Competition: What's Holding Back Health Care and How to Free It," has an op-ed scheduled for today's Investor's Business Daily (IBD). Tanner writes that while the Baucus bill is an improvement over the Senate's HELP committee bill, that's a "low bar," adding "the Finance Committee bill still represents a radical government takeover of the U.S. health care system." Tanner writes:

"Let's start with the price tag. According to the report just released by the Congressional Budget Office, the bill will cost roughly $829 billion over the next 10 years. And, significantly, it is even projected to reduce the budget deficit over 10 years by $81 billion. Of course, both those numbers are misleading.

"The $829 billion cost is for the next 10 years, 2010-2019, but the most expensive provisions of the bill don't take effect until July of 2013. The cost over the bill's first 10 years of actual operation is closer to $1.3 trillion.

"In addition, the bill assumes that Congress will implement a 21% reduction in Medicare payments that is already scheduled under current law. The only problem is that Congress has been supposed to make those reductions since 2003 — and never has. There is no reason to believe it will do so this time either.

"Most importantly, the bill does not achieve its deficit reduction by controlling spending or reducing health care costs. In fact, by the end of the 10-year budget window, the cost of the program is expected to be growing at 8% per year. But revenue from the bill's new taxes would be growing between 10% and 15% per year." (emphasis added)

UPDATE (10/9/09): At American Thinker, Stephen Bennett asks: "I don't get it. How can the establishment media and the Democrats say the Baucus Bill scored well and is cost positive health care legislation? By running a con game, of course. Yesterday, the CBO scored the Senate’s version of Health Care, the Baucus bill. The verdict: the bill will cost $829 billion yet knock $81 billion off the federal deficit. Does that make sense to you? Not if you’ve been able to cut through the propaganda." In addition to answering his question, he adds "As bad as the Baucus bill is, the House Health Care Bill is even worse."

October 07, 2009

Your Tax Dollars at Work. Not!

A report released September 30 by the General Accountability Office (GAO) (requires Adobe) found “Medicaid fraud (of) more than $63 million in 5 states alone,” CNSNews.com reported today. The news service said GAO “also found widespread doctor-shopping by Medicaid recipients.” Additional specifics reported by CNSNews.com:

“A California man took on the name of a dead person to receive taxpayer-funded health care for more than three years, charging $200,000 to the Medicaid system, including $2,870 to buy controlled substances under an assumed identity.

“A Houston-area physician’s assistant kept on signing the name of the doctor who once employed her after that doctor had died. The prescriptions, many of which were also covered by Medicaid, were also for prescription pain killers.

“More than 1,800 prescriptions were filled for people who are dead and another 1,200 prescriptions were written with the signatures of deceased doctors, according to an investigation of five states by the Government Accountability Office (GAO). And those were only two of the startling findings in a report that discovered $63.2 million in waste in five states alone.”

Trying to put a twist on the GAO report, ABC News wrote:

“That could be good news for President Obama, who argues that a massive expansion of health care coverage can be funded by squeezing waste out of the current system. But as Obama continues to press for a government-run health insurance plan, the GAO report also reveals shortcomings in how the government manages Medicaid.”

Reporting on the same GAO report, Fox News pointed out, “Medicaid also paid $2.3 million to 65 health care providers and pharmacies, even though they are barred from receiving federal funds.”

Growl at Virginia's two senators and Arlington's representative in Congress, either calling or using their contact webforms:

  • Senator Mark Warner (D) -- write to him or call (202) 224-2023
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

October 06, 2009

Downsizing the Federal Government

Congratulations to the Cato Institute for their new initiative and website, Downsizing the Federal Government. As everyone know, and the website points out, “The federal government is running massive budget deficits, spending too much, and heading toward a financial crisis. Without a change of direction in Washington, average working families will be faced with huge tax increases and a lower standard of living.” The website points out:

“Some people have lofty visions about how government spending can help society. But the essays on this website put aside such “bedtime stories” about how government programs are supposed to work, and instead focuses on how they actually work in the real world.”

Please visit Cato’s new website. See how each department in  the federal government grew. Learn how the different departments spend your taxes. Obtain background information the different departments. Then look in the mirror, and ask yourself if you really want to turn over healthcare to the federal government.

HT Government Bytes, National Taxpayers Union

October 05, 2009

Drill, Drill, Drill

The National Taxpayers Union recently sent comments to the U.S. government’s Minerals Management Service regarding MMS’s 2010-2015 plan for oil and gas leasing in the outer continental shelf. [The public comment period closed September 21, 2009, but a phone call to the Program Manager’s office today indicated they will still accept comments although they will not be part of the official record.]

Some of the issues addressed by NTU in their letter to MMS included:

“Many of the factors leading to current energy prices are outside the control of the federal government. However, the extent to which we allow domestic companies to explore for energy is very much within Washington’s control. Ending these costly restrictions would have the benefit of providing a steady stream of oil supply, thereby helping to calm market volatility.

“Domestic energy exploration is possible without creating major environmental hazards. The nation’s offshore areas where there currently is not a drilling moratorium, such as portions of the Gulf of Mexico, did not experience any oil spills or significant environmental problems after being struck by Hurricane Katrina, a Category 5 storm.

“In addition, allowing for responsible exploration would help to lower taxes and reduce budget deficits. This would occur by producing an influx of tax revenue from additional lease sales and royalties, as well as from income and excise taxes.

“The Congressional Research Service recently estimated the potential federal revenue from Arctic National Wildlife Refuge (ANWR) oil development at $191 billion over 30 years – roughly $18.36 per barrel, based on projections of recoverable reserves. Applying that formula to the 107 billion-plus barrels of recoverable oil that federal agencies estimate is in ANWR, in the nearby National Petroleum Reserve, and offshore tells us that sensible drilling could yield nearly $2 trillion in overall revenue over 30 years, or an average of about $65.5 billion per year. That amounts to sufficient money, for example, to completely repeal the Alternative Minimum Tax without boosting budget deficits.”

ACTA members and Growls readers are urged to use the MMS link above and comment on the proposed 2010-2015 leasing plan. Our apologies for just noticing the NTU letter, but we thank NTU for commenting on the MMS leasing plan. Note also that one issue not addressed in NTU's letter is the jobs that would be generated from more drilling for oil and gas.

October 04, 2009

Thought for the Day

"I love gridlock. Gridlock means government can't do things."

   ~ P.J. O'Rourk

HT Source: Cato's Letter, Spring 2008

October 03, 2009

Thought for the Day

“No law can give power to private persons; every law transfers power from private persons to government.”

    ~ Karl Popper, English

HT OnPower.org

October 02, 2009

Who Gets It? Who Pays For It?

Two new “Fiscal Facts” from the Tax Foundation (#189, “Accounting for What Families Pay in Taxes and What They Receive in Government Spending,” #190, “Basic Facts on Redistribution and the Impact of Obama’s Policies.” and news release) point out that “most families earning up to $109,000 will get more back from government benefits" than they pay in taxes, specifically saying:

"Currently, most families earning up to roughly $86,000 receive more in federal spending than they pay in federal taxes," said Tax Foundation President Scott Hodge. "By 2012, if President Obama's proposals on taxes, health care and climate change become law, families earning up to $109,000 will, as a group, be receiving more in federal spending than they pay in federal tax."

“In 2012, Obama's policies will increase the average amount of income redistributed from the top 1 percent of families to more than a half-million dollars per family—$505,000, up from an average of $378,000 today. (emphasis added)

“Even if none of Obama's policies becomes law, the extent of current income redistribution is remarkable: The top-earning 40 percent of families will transfer $826 billion to the bottom 60 percent in 2012. If Obama's policies become law, the federal government will redistribute nearly $1 trillion from the top-earning 30 percent of families to the bottom 70 percent (those earning up to $109,000).

“In fiscal year 2010, the lowest-income families will receive $10.44 in federal spending for every dollar in taxes they pay. Middle-income families, who are the targeted beneficiaries of many Obama policies, will receive $1.15 in government spending benefits for every dollar they pay in taxes.” (emphasis added)

To see just how much federal spending families receive per dollar of taxes they pay, the following chart provides the picture, which comes from Fiscal Facts #189:

 

October 01, 2009

Two thoughts for Today

“The saddest epitaph which can be carved in memory of a vanished liberty is that it was lost because its possessors failed to stretch forth a saving hand while yet there was time.”

“Arbitrary power and the rule of the Constitution cannot both exist. They are antagonistic and incompatible forces; and one or the other must of necessity perish whenever they are brought into conflict.”

    ~ George O. Sutherland (1862-1942), Associate Justice, U.S. Supreme Court

HT OnPower.org