Fighting to Preserve Liberty in America
Don’t pay attention to what you are hearing from Obama’s supporters. What they really want may be the opposite of what they are saying.
National Debt Clock A Long Time Ago When the Debt was Only $6 Trillion
Today the House of Representatives voted on a bill HR 2650, called the Cut, Cap, and Balance bill to get the runaway debt and deficit spending under control. The bill passed the house 234-190, will all but 9 Republicans voting for it and all but 5 Democrats voting against it. Tim Bishop voted no.
(This is the last of a series of articles focusing on topics presented at the Cato Policy Perspectives 2011 conference held at New York’s Waldorf Astoria hotel on Friday, April 8, 2011)
“What a difference a year makes” is short assessment of ObamaCare presented by Michael Cannon of the Cato Institute. “It cannot be fixed, it has to be repealed,” was his blunt conclusion.
As long as you are not Rip Van Winkle you should know by now that as Nancy Pelosi famously said, “We have to pass the bill, to find out what is in it.” Well, we’re finding out. We found out that it was true ObamaCare does double count $500 billion in savings, there are thousands of organizations asking for waivers from the program, and the individual mandate has been struck down by several courts.
You almost have to wonder, why in the world did he run for president? Was he swept up in the ego trip? Was he reading too much into his own press clippings? Did the historic opportunity of being the first real black president, sorry Bill Clinton, in U.S. history overwhelm a careful consideration of what the job entailed?
President Barack Obama released his budget blueprint on the same day the White House says it expects the budget deficit for the current fiscal year ending in October to hit $1.65 trillion. His budget calls for spending cuts of $1 trillion spread out over ten years. Click to read more
President Obama met with leading Hispanic legislators Robert Menendez, Nydia Velázquez, and Luis Guitierrez. It is believed they were there to discuss language being added to a Pentagon policy bill at the behest of Harry Reid, who is desperately trying to hold on to his seat by energizing the Hispanic vote to come out for him on November 2. The language would provide a path to citizenship to any illegal alien who came to this country before the age of sixteen, stayed here five years, complete high school and either served two years in the military or completed two years of college.
Of the twelve or so million illegal immigrants in this country now, I wonder, how many either meet these qualifications or are very near to doing so? This won’t get them to the voting booth on November 2, but it is meant to appeal to all others who support amnesty. At the same time, if this passes those who benefit from the bill will be reminded constantly that it was those wonderful Democrats who pulled this stunt off and expect to be repaid with their votes in all future elections.
After receiving one too many e-mails, post cards and other marketing pitches to extoll the virtues of ObamaCare, I felt compelled to send the following letter to Congressman Tim Bishop.
Dear Congressman Bishop,
Judging by the e-mails and mail pieces the marketing program now begins. To tell the 50%-60% of Americans who adamantly opposed ObamaCare, now that it has been signed into law, what good medicine it really is. Before I point out the areas on which we disagree, I would first like to call for a sense of honesty in the debate on healthcare. I applaud you for such honesty where you say on your glossy postcard that it was prepared, published and mailed at taxpayer expense. I challenge you, however, on your opening sentence.
You begin your piece by stating, “On March 21st, we stood up to big insurance companies and passed health care reform.” Really? How is using the full coercive power of the federal government to unconstitutionally force millions of Americans to buy the products of these big insurance companies, whether they want to or not, standing up to them? I’ll bet Wal-Mart wishes you would get tough with them and require all Americans to shop there on Thursdays. Are you next going to get tough with GM and Chrysler by passing legislation forcing us to buy a Malibu or a Ram pickup truck? Of course you will probably smack them around and make them comply with tougher CAFE standards, but hey, that’s what big government is for, no?
I am still waiting to find out how spending $1-$2 trillion dollars results in reducing the deficit by $143 billion in the first decade. This may be presumptuous but I have a suggestion on how to lower the deficit by $1-$2 trillion. Repeal ObamaCare and start over.
Nothing in this legislation actually goes to the root cause of reducing the cost of delivering health care. It’s all giant shell game about hiding whose pocket the money is coming from to really pay for the same old broken system. Here are some of the “benefits” you point out in your mail piece:
- Free Preventive Care Under Medicare – this eliminates co-pays and deductibles under Medicare. This doesn’t reduce what it costs medical professionals to deliver preventive medicine, it just lowers the price to consumers. Economics 101 says when you decreases the price the demand goes up. By eliminating co-pays and deductibles, someone has to make up this modest difference. It is either the medical professional who has to eat the cost, driving up rather than reducing the cost of preventive care, or it will be subsidized by the rest of us through taxes. You are betting that if every senior gets preventive care, more expensive treatments will be avoided later. The real question is: how many seniors are not getting preventive care because they don’t have a $20 co-pay and of that group, how many turn out to have a serious disease that could have been prevented? This is a much smaller group than all seniors. You cannot make seniors go to the doctor for preventive care if they don’t want to, whether it is free or not.
- Free Preventive Care Under New Private Plans– When I had my own small business, I provided our employees with healthcare. I chose a plan that provided free preventive health care. When I left that business and went out on my own, I tried to buy the same plan privately. It had a high deductible, HSA account, and free preventive care. Such plans are available, but not in New York unless you have poverty level income. The marketplace has these plans available. Government regulations prevent me from buying them. Why do we need to spend $1-$2 trillion to give me a plan that the marketplace already provides if government will just get out of the way?
- Ensuring Value for Premium Payments – This is where you require plans to spend a certain percentage of premium dollars on medical services. How does this control costs? If the underlying costs increase 100%, does it make us feel warm inside that the 100% increase in premiums that will follow will go 80% toward medical expenses? It’s still an increase in premiums of 100%.
Let me stop analyzing your mail piece here. Doctors are threatening to leave the medical practice because of this legislation which will lead to rationing. This plan does not address the underlying problem.
There is a simple way to reform health care by controlling the underlying cost of delivering medical care, rather than mandating more and more coverage and expense paid for by someone else. We all pay in the end. Here is a simpler way that does not cost $1-$2 trillion dollars but may take some of that courage you boasted about in your opening sentence.
- Eliminate 3rdparty payer. If you invite me to dinner and you tell me that you’re picking up the tab and I am handed a menu with no prices on it, look out! It’s gonna hurt. Americans are smart consumers. They will spend hours researching a car or flat screen TV before buying, because it’s coming directly out of their pocket. They play a role in how much they pay. That’s how markets work. We do not have a free market in health care. The way to do this is with high deductable insurance plans and Health Savings Accounts (HSA). If you take the lower cost of the premium for the insurance piece and add the amount to fund the HSA, the costs are about the same as the premium alone on a traditional plan. I went from a $10,000 annual premium for a traditional plan to a $5,000 premium cost for a high deductible with a $5,000 contribution to the HSA account. If you want to help people with deal with the high deductable, help them fund the HSA accounts, but keep the buying decision in their hands. Trust me, they will ask questions, they will shop around, because it’s their money and the less they spend, the more they keep. Many HSA accounts have a provision to roll money over into an IRA if the account grows large. This will take guts to implement because the public will have to be educated that they will come out ahead when they have the liberty to make their own choices. You seem tough enough to ignore the will of the people to implement what you feel is good for them, why not implement something that will actually work?
- Implement tort reform. Not an experiment here or there. If you want to show how tough you really are, stand up to the trial lawyers who fill Democratic coffers. Implement the system they have in Britain. No contingency fees and loser pays. Maybe I’ll stop seeing commercials on my TV that promote a new drug, followed by a come on from a law firm to call them if you actually took the drug because, “you may be entitled to compensation.” I have no problem with a person getting compensated when they have been harmed through the fault or negligence of a company. Human life is not perfection. We are all different. Some of us can eat three eggs a day and never have a heart problem, others may look at a pat of butter and feel pains in their chest. Lawyers shouldn’t get rich because humans are not perfect and companies can be bluffed into paying these extortionists rather than defending the case on the merits. Lawyers should get paid for the time they put into a case. OB/GYN doctors are leaving the practice in droves because they cannot afford the malpractice insurance premiums. Doctors are practicing defensive medicine ordering every possible test for fear they will be asked later, if a patient gets worse, why they didn’t order that other test. When you add the cost of malpractice insurance on top of the cost of additional tests and procedures, it doesn’t get cheaper to deliver health care and you are not necessarily delivering better health care. Let the doctors practice medicine, tell the lawyers to stop running a lottery.
- Buy insurance across state lines. As indicated previously, the plan I want to buy is available, but not in New York. The market sees a need for such a product, I want to buy such a product, the government says no. You want me to believe that now if we spend $1-$2 trillion the government will solve my problems. Get the government out of my way, thank you very much.
- Have more tailored insurance policies. Why, as I approach the golden years, do I have to buy a health insurance policy that covers pre-natal care? In vitro fertilization? Sex change operations? When I buy automobile insurance, I have about a dozen choices in every category about the kind of coverage I want. How much deductible? Do I want rental car reimbursement? Roadside assistance? Yet when choosing a health care policy, if I have a choice at all, it is a total package, take it or leave it. Who decides what has to be included? Is it me or the government regulators? If I want to have free preventive care, fine let me choose that and adjust the premium accordingly. If I want to pay the co-pay for free preventive care, give me that choice. If we had more choices, as in a free market, costs will go down. If the government says, everyone must take this, there is no competition and costs climb.
- Control illegal immigration – If emergency room costs are driving up health care costs for all, and illegal immigrants use the emergency room as their primary care provider then it would follow if you controlled illegal immigration you would drive down health care costs. Milton Friedman, the great economist, believed in open borders. However, he also said you can’t have open borders and a welfare state. It doesn’t work.
- We need to have Medicare reform. When Medicare passed the government projected that hospital coverage would grow to $9 billion by the early 1990s. It actually grew to $66 billion a 700% error in their projection. We hear again that we are going to crack down on Medicare and Medicaid fraud and this time we really, really mean it. Estimated at nearly $100 billion per year in waste and fraud, why can’t this be done without spending $1-$2 trillion?
What you and this Congress passed is a disaster. If the projections on this monstrosity “miss” by 700% like they did on Medicare, where do we go for a bail out? Who is going to bankroll that one? Your children? Your grandchildren? The six items I laid out cost next to nothing, why not try them first? You can always go back later and say we need to do more. But with ObamaCare, it could be a runaway train that no one can stop. It is a giant shell game. It doesn’t address the underlying cost of providing medical care, it only hides whose pocket is getting picked to pay the bill.
Sincerely yours,
The marketing juggernaut is just getting warmed up, but instead of standing fascinated while your Congressman plays 3-card Monty, ask him or her the tough questions. Ask them calmly, respectfully, and don’t let them dance. If they dodge your question, ask it again. If they don’t… fire them in November.
Who doesn’t love a freebie? Who does not get a thrill of good fortune by finding money in the street, no matter how insignificant the amount? We may not believe in the Tooth Fairy, but many of us believe we have a rich benevolent uncle, Uncle Sam, who is willing to lavish upon us his wealth if only we would ask. The sad truth is that Uncle Sam is not rich, but penniless and is running a ponzi scheme that would make Bernie Madoff blush.
Health Care for $20
One of the major reasons that health care costs are rising out of control is that no one is minding the store. While Washington twists itself in knots to rearrange deck chairs on the Titanic of health care, we have little to no say in how our health care dollars are spent. Our health care “insurance” system is not really insurance. Insurance is meant to protect us from a financial catastrophe. Going to the doctor for a checkup is not a catastrophe. Paying a $20 co-pay for that checkup is like finding money on the street. There is no way anyone can get a physical exam, except by a hooker, for $20. It is a good idea to get a physical checkup every year? Yes, then pay the bill and ask what you are paying for and make sure you need it. You take your car in for service don’t you? Do you file an insurance claim when you do? Can you get it done for $20. Let’s get real. What we have is called third party payer and when someone else is picking up the tab, do we care what it costs? Really? But someone is picking up the tab. Look in your other pocket, because you are. If you are generally healthy and you get your annual checkup, your insurance premium (here in New York at least) will probably run around $10,000 per year. But, hey, you only paid $20 for that physical! What if you paid the full amount for the physical, say, $500. What if your insurance premium was cut to $5,000 because you would pay most routine medical costs out of your pocket and what if you could put the $4,500 left over ($10,000 original premium, minus $5,000 current premium, minus $500 cost of checkup), into a tax free account that can be used for future medical expenses or retirement if you don’t use it? If you are a young person and stay healthy into your mid-40s, you would have accumulated over $90,000 in your medical savings account and you still have catastrophic insurance coverage and the government stays out of the picture.
Retirement for Free
Like many well intentioned Government programs, Social Security, enacted during the Great Depression, seemed like a good idea at the time. When enacted there was about 15 workers paying in for each recipient drawing out. Today there are about a little over 3 workers paying in for each beneficiary. Bernie Madoff would blush at the audacity of it. On top of that the money that is paid into Social Security can only be “invested” in Treasury Securities so the return is lousy, but safe. People reacted to Social Security by saving less because the government safety net was there. Had people been encouraged to save for their own retirement, they would not be leaving their children this legacy of a ticking time bomb. So today, many young people feel the government’s hand in their pocket when they look at the FICA line on their pay stub, but don’t believe they will ever get a penny back. Nice concept.
Bring Home the Bacon!
What’s the measure of a good Congressman or Senator? Bringing home pork for the district, no? If you are like me, you get flyers every year or several times per year, touting how Congresswoman Jones obtained federal funding for that pier at the amusement park. With 435 Congressmen you can count on this, for each $1 that your Representative brings home $434 leaves the Treasury for each of the other Congressional districts and probably more, depending on the power and seniority of your Representative. Guess who’s paying for that Turtle Crossing in Florida? that bridge to nowhere in Alaska? that airport in Johnstown, PA that no one uses? That’s right, you are. What if we decided locally if we really needed a pier at the amusement park, and if we did, pay for it ourselves? Then we could let the people of Florida decide if they want to build a turtle crossing, the people of Alaska decide if they wanted a bridge to nowhere and the people of Pennsylvania decide if they wanted an airport that no one used. Then we could cut federal taxes by an equal amount to keep them out of mischief and help us pay for these projects if we really wanted them.
Let’s Get Organized
There was a time in our history where labor unions performed a valuable service. In those times when many industrial jobs were unskilled or semi-skilled, employers could dismiss someone on a whim and replace them within the hour. Unions gave those workers some counterbalancing power and fairer treatment. Today, we have a much more sophisticated economy and workers have more skills and mobility. Union membership has declined accordingly, in the private sector at least. Why is union membership still growing in the public sector? What is different about workers in the public sector that they still need unions? Are we suggesting that all government workers are unskilled? Why do teachers need a union? Are they not skilled such that they could sell their services to the highest bidder? Why do unions fight merit pay for teachers? Why are school principals, the de facto CEO of the school and who in New York easily make six figures, unionized? Do you get an idea why our K-12 public school system is trailing the world in performance?
In Michigan, privately owned small businesses that provided day-care services suddenly discovered that they were part of a union and union dues were being withheld from their government contractual payments.
Ms. Berry owns her own business—yet the Michigan Department of Human Services claims she is a government employee and union member. The agency thus withholds union dues from the child-care subsidies it sends to her on behalf of her low-income clients. Those dues are funneled to a public-employee union that claims to represent her. The situation is crazy—and it’s happening elsewhere in the country.
Ms. Berry, runs “The Berry Patch” a private day care center she operates from her home catering to low income clients. The money that was once paid to her, now goes to a union that does little for her. She is “self employed and wants nothing to do with the union.” Don’t you think we need more of these tactics in America? Card Check anyone?
Going Postal
And let’s not forget the Postal Service. As postal rates are again scheduled to increase on January 4, let’s look at this paragon of efficiency, that is actually authorized by the Constitution. In 2008, the Postal Service lost $3 billion, and the Postmaster General John Potter pulled down $800,000 in compensation including $135,000 in incentive bonuses. What do we have to pay this guy if he actually breaks even? Also, let us not forget this is also a very heavily unionized operation.
Don’t Worry, You Won’t Feel a Thing
During World War II, FDR needed to raise more revenue to pay for the war. Fearing a backlash, his team hit upon the idea of payroll withholding. Knowing the potential backlash that would result when taxpayers had to write that big check on April 15th, he rightly figured that if he took a little bit each week, he could take a lot more in total. Statists in Washington have never looked back. It’s like the tax that was imposed on telephone service to pay for the Spanish American War that is still in place today. Instead of picking our pockets every week, what do you think most Americans would say about the size of the federal government if they had to write one big check on April 15th? There would be no tax rebates, because there would be no tax withheld. Do you think Americans would force Congress to sharpen their pencils and scale back the size of government?
Help is On the Way
Ronald Reagan said, “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help!’” But perhaps the best example of how far from our founding principles our government has strayed comes from Congresswoman Rosa DeLauro of Connecticut as she spoke during a House End of Year Wrap Up Session:
“This House–we understand, we’re there,” she said. “You can count on us because we believe that it’s our moral responsibility to make sure that you and your family need our help.”
I don’t know about you, but I don’t need the House of Representatives making sure I need their help. I need as little interference as possible from them. Their meddlesome intrusions in our lives is killing what made this country great. It is a point we cannot make often enough.
