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InsiderOnline Blog: August 2013

Catching Up

We were off last week. Here is a quick rundown of some of the things we missed:

Drew Johnson was fired from his job as the editorial page editor of the Chattanooga Times-Free Press for riffing on Johnny Paycheck with the headline: Take Your Jobs Plan and Shove It, Mr. President. According to Johnson, the paper fired him by creating a policy about changing headlines without approval and then applying it to him retroactively. [Washington Times, August 1] Johnson, by the way, is the founder of the free-market Tennessee Center for Policy Research (now called the Beacon Center of Tennessee), which has done a lot of great policy work as well as investigative reporting. In particular, the group broke the story of global warming fighter Al Gore’s $30,000 per year electric bill back in 2007.

The entire United States code is now available in XML format. Ap creators, get to work!

Congress and the administration have been scrambling to fix a bungled attempt to make sure ObamaCare applies to Congress. But the fault is not, as has been reported, a badly worded amendment introduced by Sen. Charles Grassley (R-Iowa). Rather, Majority Leader Harry Reid (D-Nev.) had replaced the Grassley provision with language that required members and their staff to enroll in an ObamaCare exchange, but made no provision for the government to pay for the coverage. That left congressional staff, many of whom make less than $50,000 per year, looking at a huge cut in compensation. There is no administrative fix that the law allows, conclude Robert E. Moffit, Edmund Haislmaier, and Joseph Morris. [The Heritage Foundation, August 2]

On the other hand, the duty to enforce the law as written didn’t stop the administration from deciding to delay ObamaCare’s mandates on employers. As health care reporter Robert Pear has aptly noted: “The confusion raises the inevitable question: If they did not know exactly what they were doing to themselves, did lawmakers who wrote and passed the bill fully grasp the details of how it would influence the lives of other Americans?”

Another ObamaCare bungle: Congress recently got around to hearing testimony on the question of whether the Internal Revenue Service can extend federal tax credits to federally-created health insurance exchanges despite the fact that ObamaCare as written provides them only for those exchanges established by the states. The dispute sounds arcane, but it’s a big deal because without the tax credits, the employer penalties can’t be applied, which means another major source of ObamaCare funding goes away. Here are some key points from key witness Jonathan Adler:

The [Patient Protection and Affordable Care Act] is quite clear on this point. The tax credits for the purchase of qualifying health insurance plans are provided for under Section 1401 of the PPACA, which creates a new section of the Internal Revenue Code – Section 36B. This provision authorizes tax credits for each month in a given year in which a taxpayer has obtained qualifying health insurance through a state-run exchange. As defined by Section 1401, a “coverage month” is any month in which the taxpayer is “covered by a qualified health plan … that was enrolled in through an Exchange established by the State under section 1311.” The amount of the tax credit is also calculated with reference to a qualifying health insurance plan “enrolled in through an Exchange established by the State under [Section] 1311 of the Patient Protection and Affordable Care Act.” Section 1311 further establishes the “requirement” that an “Exchange” be “a government agency or nonprofit entity that is established by a State.” To further erase any doubt, Section 1304 of the PPACA also defines “State” as “each of the 50 states and the District of Columbia.” The cost-sharing subsidies provided under Section 1402 are similarly limited as this section expressly provides that cost-sharing reductions are only allowed for “coverage months” for which the aforementioned tax credits are allowed. [Internal citations omitted.] [House Oversight Committee, July 31]

President Obama’s economic speeches, writes Richard Epstein, show that “he constantly thinks of his greatest regulatory failures as his great successes”:

No other president has “saved the auto industry,” albeit by a corrupt bankruptcy process, or “taken on a broken health care system,” only to introduce a set of unworkable mandates that are already falling apart, or “investing in new technologies,” which tries to pick winners and ends up with losers like Solyndra. The great advances in energy have come from private developments, most notably fracking, and not from the vagaries of wind and solar energy, which no one has yet figured out how to store for future use when needed.

The President seems utterly incapable of seeing the downside to any of his policy choices. They are announced from on-high as all gain and no pain. In the face of stagnant growth, weak corporate earnings, and continued high unemployment, he shows not the slightest recognition that some of his programs might have gone amiss. [Defining Ideas, July 30]

July 31 was the 101st anniversary of Milton Friedman’s birthday, and whenever we think about Friedman we think about the time he schooled Phil Donahue on the supposed virtue of political elites:

Big profit-seeking corporations aren’t interested in making stuff that makes poor people better off, right? Wrong: The McDonald’s Double Cheeseburger is “the cheapest, most nutritious and bountiful food that has ever existed in human history,” writes Kyle Smith: “It has 390 calories. It contains 23g, or half a daily serving, of protein, plus 7% of daily fiber, 20% of daily calcium and so on. Also, you can get it in 14,000 locations in the US and it usually costs $1.” [New York Post, July 29]

Correction: According to McDonald’s online menu explorer, McDonald’s Double Cheeseburger actually has 440 calories.

The cities that offer the best combination of opportunity, cost, and culture are mostly from the South, write Joel Kotkin and Wendell Cox:

Both No. 1, Austin, Texas, and No. 2, New Orleans, are places where people can enjoy the cultural amenities and attitudes of “progressive” blue states but in a distinctly red-state environment of low costs, less regulation, and lower taxes. These places have lured companies and people from more expensive regions, notably California and the Northeast, by being not only culturally rich but also amenable to building a career, buying a home and, ultimately, raising a family in relative comfort.

Like the Texas state capital and the legendary Crescent City, most of our top cities are located in the American South and lower Midwest, and they attract businesses and people not only from other sections of the country but also increasingly from abroad as well. These include No. 3, Houston, and the smaller but burgeoning oil town of No. 4, Oklahoma City. These are followed by three fast-growing, low-cost Southern cities: No. 5, Raleigh-Cary, North Carolina; No. 6, Nashville; and No. 7, Richmond, Virginia.

Ranked eight through fifteen by Kotkin and Cox are: Washington, D.C.; San Antonio; Minneapolis-St. Paul; Dallas; Seattle; Salt Lake City; Charlotte, N.C.; and Columbus, Ohio. [Daily Beast, July 30]

More good news for Texas: Tort reform has made health care easier to find:

By the end of 2013, 10 years and three months after the effective date of HB4 [the tort reform law], the number of licensed physicians in the state will almost have doubled. It is anticipated that Texas will have somewhere close to 60,000 doctors to care for its citizens, almost twice as many as it had in 2003. The number of physicians in Texas is now growing at twice the rate of the state’s population—a statistic that helps prove the success of HB4’s reforms in increasing access to health care.

What is even more impressive, however, is how many physicians are moving to Texas from other states. Rural communities are adding needed specialists, and medical centers in Houston, Dallas, Fort Worth, and San Antonio are expanding at unprecedented rates. For example, the border community of El Paso has added more than 200 physicians, including orthopedic surgeons, emergency care specialists, pulmonologists, pediatricians, internists, anesthesiologists, family practice doctors, oncologists, and pediatric cardiologists since 2003. Additionally, Memorial Hermann Hospital System added—in just one year—26 pediatric subspecialists; a normal year before enactment of HB4 would have resulted in just one or two new subspecialists. [Internal citations omitted.] [“Ten Years of Tort Reform in Texas: A Review,” by Joseph Nixon, The Heritage Foundation and the Texas Public Policy Foundation, July 26]

William Wilkins, chief counsel of the Internal Revenue Service, met with President Obama two days before providing guidance to IRS personnel on how to handle tax-exempt applications from conservative groups. How fishy is that? Here’s an e-mail shared by TaxProf Paul Caron:

[A]gency general counsels are not authorized to give legal advice to the President. They advise their agency heads. Only the AG and by delegation the Office of Legal Counsel to the President is authorized to give legal advice to the President. In my seven years of working at a General Counsel’s office, I have never once heard of our general counsel meeting with the President. OLC would go crazy if he did. I have worked on a couple of legal opinions that did go to the White House. And each time they were staffed through OLC. Nothing went to the President that wasn’t signed off on by OLC and delivered to him by OLC.

So I can’t for the life of me come up with any kind of innocent explanation for why Obama would have met with the Chief Counsel of the IRS. That meeting shouldn’t ever happen, and especially not without the Commissioner of the IRS being there. [TaxProf Blog, July 23]

Congressional investigators released emails showing coordination between the Internal Revenue Service and the Federal Election Commission in targeting oversight at conservative groups. In particular, as Kim Strassell reports, the FEC contacted the IRS looking for information on the American Issues Project. So determined was FEC staff to get AIP that it conducted a multiyear investigation that had never been authorized by the FEC commissioners, wrote three different reports presenting three different theories on how the AIP might be exceeding limits on political spending, and tried to rewrite the standards for judging spending without any notice to anyone. Concludes Strassel: “The broader AIP case is, in fact, beyond improper. It’s fishy. The Obama campaign takes its vendetta against a political opponent to the FEC. The FEC staff, as part of an extraordinary campaign to bring down AIP and other 501(c)(4) groups, reaches out to Lois Lerner, the woman overseeing IRS targeting.” [Wall Street Journal, August 1]

Those trying to credit ObamaCare for reducing health care spending have mixed up changes in demand with changes in costs. And also mixed up the order in which things happened. Joseph Antos: “Something happened to make runaway health spending slow down. In 2002, that spending grew 9.7% a year. By 2009, the growth rate fell to 3.9% a year—and did not change for 3 years.” But: “Health reform wasn’t even signed into law until 2010, well after health spending growth had dropped. In the immortal words of James Carville, it’s the economy, stupid. Millions of people lost their jobs during the deep recession that ended in 2009, and many of them still don’t have work. Without a job and the health insurance that comes with it, it’s difficult to pay for health care.” [AEIdeas, July 31]

From Chris Conover, some evidence that employers are shifting their workforces from full-time to part-time in order to avoid triggering ObamaCare mandates:

For every new [full-time] job added to the economy [in 2013], there were 4.3 [part-time] jobs added! In most (non-negative) years, the ratio is the reverse: that is, there are typically 5 FT jobs added for every new PT job. Even in 2004—the year with the second-highest ratio during this time-frame–there were 2 FT jobs for every PT job, yielding a ratio of 0.5. Even if growth in PT vs. FT workers reverted to its historic pattern for the balance of 2013, the year’s average monthly ratio still would be four times as large as the 2nd highest ratio from 2004.

As U.S. News and Report’s editor in chief Mort Zuckerman argues “At this stage of an expansion you would expect the number of part-time jobs to be declining, as companies would be doing more full-time hiring.” [Forbes, July 31]

Posted on 08/07/13 08:51 PM by Alex Adrianson

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