Latter-Day Saints Should Applaud Obama’s Executive Action on Immigration
Last week, President Obama announced that because of Congress’s failure to pass a bipartisan immigration reform bill, he is taking executive action to help improve our badly broken immigration system. At the same time, Obama acknowledged that his executive action would not solve all of our immigration challenges and that only new legislation would provide a comprehensive solution. Notwithstanding the fact that many previous Republican presidents used executive actions to reform our nation’s immigration policies, Republicans predictably responded to President Obama’s action with outrage, even though it was House Republicans who purposely stalled on taking up immigration reform after the Senate overwhelmingly passed a bipartisan reform bill in 2013. Among those expressing disdain for the President’s actions are Mormon conservatives. However, if those conservatives understood the position of the Church of Jesus Christ of Latter-day Saints on immigration reform, they would applaud the President’s initiative.Read more
The Calm Before the Storm
So we lost the Senate. Yea, it hurts. Pick yourself up. Dust yourself off. And get ready for the storm – the real storm -- coming in two years. You know, the political storm where Democrats take back the Senate and retain the White House. No, I’m not being overly optimistic. No, I am not riding on dancing unicorns jumping through candy-covered rainbows. I am saddled on a brute horse charging through the political lines of defeat. The Electoral College is on our side. The popular vote is on our side. The Senatorial election map is on our side. 2014 will be a contest quickly forgotten and 2016 will be our triumphant return to Rome.Read more
What Do Stalin, Mao and Obama Have in Common? Nothing.
Over the past several years, as President Barack Obama has occupied the White House, his detractors have ceaselessly labeled his policies as communist or socialist. Pundits like Glenn Beck often carefully choreographed imagery of the Soviet Union’s hammer and sickle flag, or the Nazi’s swastika when referring to Mr. Obama and his policies. The notion that Democrats support socialism has become a foregone conclusion in conservative communities. As one who formally studied economics and political science at BYU, hearing these terms twisted far from their actual meaning, and observing the comparison of programs like Medicare and the Affordable Care Act to Stalinist Russia, make me cringe. For Republican strategists, the purpose in making such comparisons to the genocidal regimes of Stalin, Mao, or Hitler is obvious- striking fear in their largely uninformed constituents. This messaging strategy has worked marvelously as more and more Americans now simply refuse to even consider the merits of any policy proposal that the GOP punditry has labeled “socialist” or “communist.”Read more
Is Obamacare Doomed for Failure?
When the media finds a narrative it loves, it tends to hang on, even when the facts do not compute. The poll numbers for the Affordable Care Act (ACA), or Obamacare, have plummeted since the embarrassingly flawed roll-out of the online health insurance exchanges, and as reports spread regarding cancellations of some lower-grade insurance policies. And while some of the recent criticism of the health law is appropriate and much of the damage self-inflicted, polls also show that most Americans know very little about the health reform law. “Health Affairs,” a leading peer-reviewed journal on health policy, recently conducted a survey of top health care executives from large hospitals and health care systems across the U.S. and found surprisingly positive viewpoints about the prospects for ACA’s success. It is noteworthy that the individuals polled for this survey are health policy leaders who are well informed on how care is delivered and health care budgets are managed. Of those surveyed 65 percent believe that the U.S. healthcare system will be somewhat or significantly better than it is today by 2020. When asked about the prospects for improvements in their own organizations, 93 percent predict that the quality of care will improve. Similar attitudes were forecasted for reductions in cost and improvement in delivery of care all around.Read more
Shutdown Antics Threaten Constitutional Order
The current shutdown of the federal government and upcoming showdown over the debt ceiling has caused many people to ask who is to blame for this gridlock. The media, in its effort to try to report both sides of the story, often end up giving balanced treatment to an unbalanced phenomenon. What we have is an extremist element within the minority political party that refuses to accept the results of the previous elections. Leading up to the shutdown, House Republicans demanded defunding of the Affordable Care Act (or Obamacare) in exchange for passing a continuing resolution budget that would fund the rest of the federal government for a brief period. Republicans also threatened to prevent the debt ceiling from being raised that could result in a catastrophic default on our national debt if their demands are not met. In making these demands, Republicans are attempting to thwart the Constitutional order of our government while threatening financial and economic chaos.Read more
Government Shutdown - The Lincoln Analogy
Obamacare pales in comparison to the importance of freeing the Slaves. And shutting down the government is nothing at all like Civil War. But the principles are exactly the same.
President Obama came in inexperienced and made mistakes - so did President Lincoln. But they both promoted the overriding principle of Constitutional government of, by, and for the People - all of us People - not any particular faction, party, or philosophy, except for this: The Constitution is not some stale, old parchment perpetually framed in the National Archives and in the context of the 1700s. No, there is relevance today for the principles that "all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are Life, Liberty, and the Pursuit of Happiness." All our individual ideals and aspirations have value as we learn to work together within the framework for government that our Founders were inspired to construct. And those principles should last for the eternities.Read more
Living the 1963 Dream
Growing up my parents always expected me to be knowledgeable of current events. We held regular discussions during family meals and it was a ritual to sit in front the television and watch the nightly news. As a voracious reader I gravitated to any newspaper or magazine that came into our home. I would also listen in on my parent’s conversations with other adults. As a young child in Chicago living in the 1960’s I was initially shielded from the de-humanizing effects of segregation. I went to integrated schools and occasionally had white friends.Read more
The Affordable Care Act (Obamacare) Explained
In 2009 when President Obama first took office, America faced a serious healthcare problem that had been ignored for decades. Significant changes needed to be made to address our nation’s problems, which included rising costs and inadequate care following a trajectory to insolvency. At President Obama’s inauguration forty-five million citizens did not have access to insurance, using the emergency room as their primary care facility. Medicare and Medicaid were facing default and driving federal deficits to record levels. The private healthcare industry accounted for 21 percent of total US GDP, contrasting with 11-13 percent for comparative nations. In addition, the US healthcare budget faced $60 trillion in unfunded liabilities over the next 75 years, with no solution. To compound the problem, private industry was leveraging tax-payer dollars for short term profits, disregarding long term accountability.
At first glance the challenge to obtain healthcare solvency appeared insurmountable. Many demanded scaling back Medicaid, while others wanted to implement similar single-payer programs as found in Germany, Japan, Canada, or England. Several blamed insurance and pharmaceutical industries for driving costs, and others cited frivolous lawsuits which drove doctors to provide unnecessary care. Almost all voices aligned that cutting Medicare was not an option due to voter demographics, and any legislation to weaken private industry would be met with cries of socialism. It was under these conditions that the Affordable Care Act (ACA) was debated and passed which brought together ideas from every political ideology.
The Affordable Care Act, also known as Obamacare, is one of the most significant pieces of legislation signed into law in the recent history of the United States. Although the law is complex and appears ambiguous, understanding the intent of this law is critical to evaluating its merits. Simply stated, the ACA can be broken into three areas of responsibility:
Business: Shifts healthcare responsibility away from the government to private industry.
Individual: Levels the playing field between private healthcare providers through the use of exchanges, thereby fostering competition for individual policies.
Government: Expands state Medicaid to cover families under 133 percent of the poverty line (Medicaid currently covers up to 100 percent).
Large corporations with elastic goods depend on low cost structures and therefore low wages. In many regards these businesses are as dependent as the lazy, using government to subsidize their benefits and pocketing the difference. Almost half of the uninsured (46%) work full time with 28% working part time. Many of these full time workers are employed by companies like Wal-Mart, whose average associate receives $1,000 in annual government entitlements. Subsidizing benefits with governmental entitlements has allowed corporations and shareholders to enjoy record profits. They also place greater pressure on government liabilities and drive up costs to taxpayers.
Obamacare (ACA) holds all businesses and corporations responsible for supplying healthcare. If a business employs more than 50 full time workers, they are responsible for providing insurance or paying a penalty (the implementation of this mandate was recently postponed for a year). If a company employs 25 people or less, tax credits are provided to subsidize coverage. Seventy percent of all healthcare costs happen in the final fifteen years of an individual’s life, typically while under the umbrella of Medicare. Access to life-long preventative medicine is critical in lowering Medicare liabilities. Shifting coverage to private industry also lowers the government’s emergency room expenses which the uninsured use in place of primary care physicians.
There has been significant reaction to the healthcare law’s corporate directive. Mandating industry to provide insurance for their employees will increase costs for any entity not already doing so today. This is a fair criticism, especially when it comes to small businesses that cross the fifty employee threshold. However, looking at cumulative data and avoiding anecdotal arguments allows for a balanced discussion of the overall impact. When it comes to small business, less than ten percent fall into that much-discussed mandated responsibility, as the other ninety percent currently meet Obamacare (ACA) requirements. To assist both the ten percent and the 90 percent, Obamacare gives access to competitive exchanges (known as SHOP) which will drive down costs for employers currently offering healthcare.
When an individual is not covered by an employer or as a dependent, they are responsible for their own insurance. Beginning in October 2013, the government will create a competitive vehicle where insurance companies meeting basic requirements can compete for business. Similar to websites Expedia or Lending Tree, once personal criteria is entered, insurers will publish rates and the consumer can choose a plan based on price or benefits. Known as insurance exchanges, these will be launched nationally to help consumers make educated choices and provide a baseline for coverage comparison. Exchanges will soften interstate requirements and prerequisites allowing for productive competition between insurance providers.
Similar to existing employer-provided healthcare, a person's individual policy will also allow access to preventative medicine. Even more important, individual healthcare will allow small firms (fewer than fifty employees) to compete with the benefits of larger firms when attracting employees as benefits are universally.
Since the bulk of uninsured individuals are under 35 years (65%), providing coverage for them is critical to lowering costs for all private insurance companies, given their healthy age demographic. These younger, healthier participants are needed to offset high risk individuals, much like auto insurance or Medicare. Because the inclusion of low risk individuals is critical in driving down costs, it is imperative they sign up. One of the concerns is that uninsured individuals will forgo purchasing their insurance until they need it. At this point, the only penalty they will face is an $89 annual tax, which is not very persuasive. However, if the exchanges are able to drive down prices making health insurance affordable and attractive, this concern should be overcome (we will know in October).
On the government side, Obamacare (ACA) legislation mandated that State Medicaid programs cover individuals whose annual earnings fell within 133 percent of the Federal Poverty Level (FPL). The FPL currently covers at 100 percent, so the ACA provided funding to cover the increase; however, this mandate was struck down by the Supreme Court. States can now opt out of expanding Medicaid, forgoing federal subsidies and leaving millions of their state residents uninsured. Since those in this demographic tend to be part of the healthier population, the aforementioned balance between the healthier individuals providing offset to sicker individuals will be more difficult to obtain, and insurance prices may not reach their full potential.
Living in Arizona and watching the fight over Governor Brewer’s decision to expand Medicaid, it’s hard to understand why any state would opt out. The expansion will bring additional funding, jobs, and access to healthcare. States rejecting the Medicaid expansion will lose out on $8.4 billion in federal funding, exclude coverage for 3.6 million uninsured, and see $1 billion more in uncompensated spending. Even more problematic, states rejecting expansion will see non-reimbursable emergency room and Medicare costs grow.
While I have argued that healthcare coverage is a three-pronged responsibility, many feel that a single payer healthcare system is the preferred model. This caused some to level the charge that President Obama did not fulfill one of his signature promises from the 2008 campaign: obtaining single payer healthcare. Instead he took Governor Romney’s framework from Massachusetts, authored by the conservative Heritage Foundation, and leveraged the plan in a spirit of compromise. Initially this infuriated supporters as they felt betrayed on an issue they believed was mandated from the decisive election victory. While President Obama may have expected this, what he probably didn’t expect was the venomous backlash from the right, even though the ACA is based on a healthcare plan they helped create, implemented by a popular centrist Governor.
Perhaps what opponents are politically afraid of is not the demise of the American healthcare system, but the potential success of Obamacare (ACA). Currently three states have released preliminary pricing for their healthcare exchanges with better-than-anticipated results. By October all states will see competitive pricing on the exchanges and citizens across the US will begin shopping for their preferred rates and cutting through political propaganda. For the governors of states that rejected the expansion of Medicaid, they will have to explain to 3.6 million employed voters why similar citizens in other states have healthcare and they do not.
While no legislation is perfect, the ACA improves access to healthcare, not only for the uninsured, but also sets guidelines to improve care and protect consumers through some of the following benefits:
- Pre-existing conditions will not be a barrier to coverage.
- Preventative medicine will be included by every approved insurer saving billions of dollars on Medicare.
- A defined percentage of insurance revenue must be applied to the actual care.
- Parents can keep their dependent kids on their insurance until the age of 26.
- Insurers cannot drop coverage due to personal changes in healthcare.
- Doctors will be paid with Medicare rates, currently higher than Medicaid rates.
- The “lifetime cap” for individual reimbursements is removed.
Perhaps the biggest criticism is the expense of the Affordable Care Act (ACA). But according to the non-partisan CBO, Obamacare (ACA) is deficit neutral. If Obamacare was to be repealed, there would be no change to our annual deficit or national debt. Any additional costs associated with the law are offset primarily by scale and penalties paid by those unwilling to buy private insurance. In fact the latest projections by the CBO resulted in $150 billion budgetary savings over 10 years versus the system currently in place. Opponents also charge that Obamacare is a tax for those who remain uninsured. This is a fair statement; however the receipts collected will help offset emergency room liability for the uninsured that all taxpayers subsidize today.
To understand the new healthcare law, it is imperative to ask the right questions in order to open up honest debate. Obamacare (ACA) is a far cry from socialism; its main purpose is to reduce Medicare and uninsured emergency room expenditures through access to care. It uses tax penalties to push citizens away from government and into the hands of private insurance companies. Obamacare (ACA) also delivers improved quality of life due to access to health care, unattainable for most Americans due to cost -- a significant benefit to society. Finally the most compelling argument for the ACA is our inability to call the United States the greatest country when our healthcare expenditures are the highest in the world and millions of our citizens lack basic insurance coverage. The Affordable Care Act still needs revision, but it is a much needed improvement over the previous status quo.
Thanks to Elizabeth Eastmond for her edits.
Today’s Founding Fathers
We all owe a debt of gratitude to our country’s Founding Fathers. Their drive and tenacity put into place the longest surviving constitutional republic in the world. The Constitution is nothing short of inspired; stitched together through compromise and collective experience. I do not believe it is chance that such an extraordinary group of individuals were able to set aside their vast differences and create a common document. I also believe that today’s presidents are equally inspired and have a deep commitment to the progress of our nation.Read more
Understanding the US Budget
The United States budget can be broken into two groups, DISCRETIONARY spending and MANDATORY spending. About 7% of the budget is interest paid on our debt – which will only increase, but should also be considered mandatory as defaulting is not an option.
As you can probably guess mandatory spending is outside of the President’s control and is regulated by established laws in place. Mandatory spending includes Social Security, Medicare, Welfare, Food Stamps, etc. The last major bump in Mandatory spending came in 2003 under Medicare Part D which approved an additional $17 trillion in additional spending across the upcoming 50-60 years. The only change that has been made to mandatory spending under President Obama, is Obamacare. However, the CBO calculated the program is deficit neutral due to mandate penalties offsetting increased spending. So when you hear that Obama is responsible for the record recipients on welfare and food stamps, it’s a completely bogus claim as this spending is mandated by laws already in place.
[caption id="attachment_365" align="alignleft" width="300"] Here is the breakdown of mandatory spending:[/caption]
Discretionary spending makes up 31% of our total federal spend but represents the majority of our budget conversations (you can sense my frustration). The discretionary budget is subject to annual appropriations in which the Congress and President have to agree each year. Have you heard the saying that Congress controls the purse? They do – but only for bills that have not yet been signed into law. If a new budget is not passed, continuing resolutions can be approved by congress allowing discretionary spending to continue at historical levels (which is happening currently). The largest part of discretionary spending is military which makes up 57% of the entire discretionary budget. If you take away military the remaining discretionary spend includes education, international support, governmental employees, transportation (PBS, Planned Parenthood, Big Bird, etc, etc) and make up 13% of our total Federal budget. This meager 13% is what our President truly controls and can pull annual levers to grow or shrink.
[caption id="attachment_366" align="alignright" width="300"] Here is a breakdown of discretionary spending:[/caption]
Now (here’s where I get on my soap box), when people call President Obama a big spender or big government, I immediately assume they have no idea what drives our budget or do not understand the budgetary process. Besides the one year spike of stimulus spend (2009 – the vast majority being used to shore up state budgets), President Obama has been remarkable in keeping discretionary spending in check. Discretionary spending has only grown 10% (it's actually declining if you take into account the sequester cuts) in four years but compared to any president since Eisenhower – this is strong. Just to give a point of reference, a 10% increase in discretionary spending only attributes to 4% of total federal spending growth. If we want to hold President Obama responsible for 4% spending growth these past four years, this is a reasonable accusation.
Two of the worst presidents controlling total discretionary spending in the past 30 years? Presidents Ronald Reagan and George W. Bush.
[caption id="attachment_367" align="alignleft" width="300"] Budgetary history of Non-Defense discretionary spending:[/caption]
Now one can make the point that President Obama should be held responsible for not working with Congress to tackle mandatory spending (70% of our total budget) and that’s a fair statement. However, with such backlash around Obamacare – which used marketplace principles to drive down costs modeled after conservative think-tank ideas of the 90’s – there is no way Republicans were going to let anything pass that would be a political win. To overcome any type of political posturing Democrats would need 60 votes from the Senate to beat any filibuster making any legislative fix to mandatory spending near impossible.
If the fiscal cliff is not solved, and tax revenues increase, we do not need laws in place that regulate the added income. Any law governing spending would be placed into the mandatory bucket and would be difficult to modify. Increased revenue will be applied to the total budgetary deficit as any incremental discretionary spending will need to be agreed upon by Congress and the President (which it wont). Given President Obama’s track record with discretionary spending, I am confident the money will be used to close the budgetary gap. Now one can argue that legislation could be signed to cap spending and I think that’s a fair conversation. But once again, the problem is our budget issues are being driven by mandatory spending.
One more thought – history does not necessarily mean more tax revenue equals more spending. Under President Clinton, tax revenues jumped and spending was kept relatively in check which is why he left office with a budget surplus. Plus, as I have pointed out our budget problems have more to do with military and mandatory spending and less about the growth of non-defense discretionary spending which the President and Congress control.
Now I know some of these claims fly in the face of widespread perception of President Obama’s fabricated runaway spending habits (and Democrats for that matter). The beauty of everything claimed in this post is that it can be fact-checked and I encourage all to do so. Too much miss-information is driven by media outlets which makes budget conversations more about regurgitated talking points than actual numbers.
(I wrote this in email to a friend about what happens to the increased tax receipts if the fiscal cliff is ignored)