Monthly Archives: October 2013

54-40 Or Fight

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Not an inch of territory lost.  (Not to mix timelines, or anything.)

Last night the Congress passed, and the President signed, a bill whose result is to re-fund the government through mid-January and raise the debt ceiling sufficient to allow increased borrowing into early February.

What Republicans and Conservatives got out of this debacle is this:

  • continued funding at sequester levels, including the second, deeper round of sequester-required spending cuts that kick in 15 Jan
  • a requirement that HHS verify the income-based eligibility of those receiving ObamaCare subsidies, HHS Secretary certification of that verification, and an HHS audit to confirm/refute the accuracy of the verification
  • back-pay for furloughed workers
  • a bipartisan budget committee to develop a broader plan—a “grand” bargain—by mid-December.  This committee is to be led by the House Budget Committee Chairman, Paul Ryan (R, WI) and the Senate Budget Committee Chairman, Patty Murray (D, WA)

The internal…discussions…among the Republican Party members of Congress demonstrated the lack of cohesiveness within the caucus, and that contributed to the weakness of the tactics chosen for what was intended to be two separate fights—over funding levels and over borrowing levels.  In the end, though, the fundamentally weak tactics were guaranteed to fail by the timidity of Senate Republicans, who visibly wilted under the vitriol of their Democrat opponents.

Hopefully, the things to be learned from this actually will be learned, including the demonstrated lessons of the value of a coherent party message, worked out before the battle begins, and the value of actually talking with their constituents and their Democrat opponents’ constituents, rather than just speechifying on the House or Senate floor or granting the occasional interview in a Capitol Hill hall or front steps.

Unfortunately, the cynical divisiveness of dinosaurs like Senator John McCain (R, AZ) in the aftermath of last night’s votes don’t create much confidence in the ability of Republicans and Conservatives to learn those lessons.

Not an inch of territory lost.  Sort of.

More Obamacare, or Is It Obamacare IT?

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…or does it matter?

Here are some examples that Paul Bedard, writing for the Washington Examiner, described:

  • CNNMoney reported one family “found a bronze-level plan for roughly $357 a month, after their subsidy…[b]ut it comes with a $12,600 family deductible”
  • Enormous rate increases.  A research group found that a 30-year-old male nonsmoker “will see his lowest cost insurance option increase 260%”
  • Some who already buy their own insurance are seeing their policies non-renewed, with replacement offers only for expensive new policies.  The Christian Science Monitor reported on a North Carolina family who had been buying Blue Cross and Blue Shield insurance for $380-a-month.  “BCBS is offering them a new plan for three times the cost, $1,124.50 a month…with an $11,000 deductible”
  • A California couple [told the Fresno Bee] that the Obamacare policy suggested to them included a 40% increase in their doctor’s office co-pay.  “Our co-pay skyrocketed from 0% to 40%, and the maximum out-of-pocket increased an additional $2,300”
  • Kaiser Health News found a lack of competition in some pockets of the country.  “18% of counties have only one insurer offering plans, and 33% of counties have only two insurers competing”
  • Little uniformity to premiums charged around the nation.  “For instance,” Kaiser also reported, “Cigna is offering 50-year-olds one of its midlevel plans for $614 if they live in Flagstaff, AZ; that same plan, with different hospitals and doctors, will cost $428 in Phoenix and $395 in Nashville.”

Whether these (especially the deductibles and the enormous premiums) are actual costs to be inflicted or more IT failures to match up government-snooped personal information accurately, the train wreck is in progress.

Affirmative Action, Again

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Michigan’s Proposition 2 is in front of the Supreme Court, with oral arguments having occurred last Tuesday.  Prop 2 is an amendment to Michigan’s constitution which the citizens of that state very solidly approved ‘way back in 2006, with 58% voting for it.  The amendment banned racial discrimination affirmative action in public education and in state employment and contracting.

Why is this even a question for the Supremes?  Because the 6th Circuit Court struck down the people’s voice on the odd pseudo-logic that banning racial preference was somehow harmful to minorities.  It would, as The Wall Street Journal put it, “bar a black student from seeking preferential admission to the University of Michigan while allowing applicants with alumni connections or other attributes to try to gain an edge.”

The 6th‘s argument is curious especially because the Michigan citizens’ amendment doesn’t discriminate on the basis of race; it bans exactly that.  Minorities can, for instance, go on about seeking special preferences based on family—just as anyone can at nearly any college or university in the country.  Minorities can go on about seeking special preferences for funding for sickle-cell anemia, which particularly afflicts blacks (oh, wait, there’s that disparate impact thing) or on and on.  No one can seek special preferences on the basis of race, though.

Coalition to Defend Affirmative Action, Integration and Immigrant Rights and Fight for Equality by Any Means Necessary attorney, George B Washington, says with no trace of irony,

We don’t believe in the colorblind Constitution.  We’re making what we think is a straightforward defense of the rights of black and Latino young people” to seek admissions preferences from university officials….

It doesn’t get any starker than this: eliminating discrimination on the basis of race is to discriminate on the basis of race because discrimination on the basis of race is a race right.

What should be a slam dunk in the Supreme Court, though, isn’t.  Justice Ruth Bader Ginsburg said the 14th Amendment had been applied to protect politically weak “minorities against hostile, disadvantageous legislation” imposed by the majority.  True enough: the 14th demands “equal protection of the laws” for all, regardless of race (or any other non-meritorious characteristic).  By banning racial preferences, the citizens of Michigan did exactly than, and so those good citizens protected Michigan’s politically weak “minorities against hostile, disadvantageous legislation.”  Ginsburg chooses not to see that, however.

Additionally, Justice Sonia Sotomayor had this:

It’s always wonderful for minorities that they finally get in, they finally have children, and now you’re going to do away [with] that preference for them.  It seems that the game post keeps changing every few years for minorities.

No.  The problem is the constant insistence on racial preference—on judgment not by the content of a man’s character, but by the color of his skin.  The so far denied change is to eliminate that pernicious discrimination.

Finally, many have argued that Prop 2 actually has hurt minorities: their enrollment in Michigan’s colleges and universities, has fallen since the amendment was adopted.  A look at actual facts presents a different picture, though.  The graph below, from the University of Michigan and The Wall Street Journal, illustrates.

Plainly, there has been no effect at all on one minority group (which has been carefully ignored throughout the pro-affirmative action types—no discrimination here, though).  Americans of Asian descent has been constant since 2000, six years before passage of the amendment.

Black enrollment has fallen off.  But that downward trend was well established long before passage; their enrollment has been dropping steadily since 2001.  Since passage, the drop-off has continued, unchanged.

Hispanic enrollment paints a somewhat different picture.  This group’s enrollment has been flat since passage, halting a slight downward trend from a 2002 peak.

At worst, the citizens’ amendment has had no effect on minority enrollment.

Again, I ask: why is this even a question for the Supremes?  Except that it’s necessary in order to reverse a racially ignorant ruling by the 6th.

Food Stamps and Farm Support

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Why do we even have food stamps and farm support?  Here’s a brief, over-simplified history.  During the Great Depression, with unemployment at historic levels and mom-and-pop farms failing at a high rate (not enough income from not enough sales of produce to an unemployed population), Franklin Roosevelt pushed through Congress a pair of bills that had negative impacts on the unemployed and on those farms (and that prolonged the Depression, but that’s for a different post).

Those two bills were wage controls in the form of a mandated minimum wage that an employer could pay—or that a prospective employee could accept—and a mandated minimum price at which a farmer was allowed to sell his produce (thus, farm supports).  Think about that: in a time of enormous unemployment (Obama’s 10% unemployment in 2009 was full employment, and today’s 7.2% is Phat City compared to Depression levels), Americans were priced out of the labor market.  And at the time those Americans couldn’t get work, they had no income from which to pay those artificially inflated farm prices.

Roosevelt thought about that, and the light went off in his head: he pushed through Congress a mechanism for giving subsidies to the poor (read: unemployed) so they could afford to buy food (thus, food stamps). (It didn’t occur to this Progressive to rescind his minimum wage and price support programs so the markets could clear, folks could get work, and they could buy their own food.)

That’s the long and short of it: food stamps and farm supports are Depression-era attempts fix a failing economy.  Today, Americans pay over $14 billion annually in the form of farm support tax money transfers, and we pay nearly $80 billion per year in the form of food stamp tax money transfers (to a near-record 47 million Americans).

What to do about this?  Much has been made, especially by conservatives and by Conservatives, of States’ Rights—the 10th Amendment, and all that.  What too often gets overlooked, though, is the dual of that: States’ Obligations.  The States should be taking care of themselves on this, not taking money from the taxpayers of other States’ citizens.

My solution is in two parts.  One part is to take all money the Feds currently send to the States for farm support and food stamps and convert the funds to block grants, making the year of conversion the baseline year.  Every year after that, reduce the size of each block grant by 10% (let’s say) of the baseline amount until the money being sent to each state for each program is $0.  This gradual, but steady, forced reduction gives the States time to break their addiction to OPM and to adapt to relying solely on internal State funds for what are essentially internal State problems.  Aside from that, the good citizens of nearly bankrupt New York or nearly bankrupt Illinois have no business being forced to send their tax money to a nearly bankrupt California or a flush Texas.

The other part is to get rid of the ethanol mandates.  American refineries are required by the EPA to blend over 18 billion gallons of ethanol into their gasoline.  The primary source of that ethanol is corn, and as recently as 2011, 40% of US corn production went to ethanol rather than to food.  That elevates the price of a broad range of food, and not just corn-based food, at that.  Food that eats corn—beef and chickens, for instance, and the eggs from corn-fed chickens, get elevated prices from that diversion.  It spreads further: the prices of corn substitutes, like wheat, soya beans, and so on, are also elevated by this diversion.  The States’ problems funding their own food stamp programs (to the extent any of these programs persist when the States discover they can’t fund them with OPM) will be greatly reduced by the increase in food affordability due to the elimination of this pernicious mandate.

Really, What Default?

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President Barack Obama and his…colleagues…in the Senate keep threatening national default if those Evil, Anarchist, Terrorist Jihadi Republicans don’t promptly shape up and pass a budget, raise the debt ceiling, and otherwise give him a blank check.  One of his more recent threats is this:

…if Republicans aren’t willing to set aside their partisan concerns in order to do what’s right for the country, we stand a good chance of defaulting.

Let’s look at some numbers:

So much for default.  Federal revenues exceed debt payments by roughly 12:1.  There’s a double potful of money left over, too, even by DC standards—nearly $2.5 trillion.

What other major expenses are there?

  • Social Security and Medicare payouts in 2012 (close enough to 2013 outlays for this discussion) were a combined $1.4 trillion.
  • Medicaid and CHIP transfers to the states in 2012 ran to $260 billion.

(Incidentally, the various Social Security System trust funds had some $2.6 trillion on hand as of 2012.  Although payroll tax revenues aren’t enough to cover outlays, so that pile is being drawn down, there’s plenty to last through quite a long delay in raising the debt ceiling.  Let’s assume for the sake of this illustration, though, that the SS/Medicare outlays are being paid out of the general revenues.)

Our debt payments are easily covered (so no default) and so are our entitlement payments (so our seniors and our poor are taken care of), and we have $840 billion in annual Federal revenues left to spend on such minor matters as national defense, Federal payroll, scheduled payments to government contractors, and so on.

Certainly, those Federal revenues come in in fits and starts, but that’s the environment any private sector business faces all the time.  They plan ahead so they can deal with those uneven flows.  The Federal government can do such planning, also.

The only way a default will happen will be if Obama decides not to make the debt payments.  The only way our seniors and poor will be hurt will be if Obama decides to withhold payments to them.  His only purpose for doing such shameful things is to make a political point, to heap blame on Republicans for his own failures.

One last thing: it’s interesting to note that he’s threatened to veto a House proposal to mandate prioritizing Federal outlays.