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Health Care Odds & Ends: Government Incompetence Edition

1. Fixing The Doc Fix Is Tricky.  Congress is finally getting around to eliminating Medicare’s Sustainable Growth Rate (SGR), something it should have done a long time ago.  The SGR is a system for cutting Medicare’s physician fees that has proven unworkable.  Congress routinely suspends the cuts imposed by the SGR and replaces them with a small increase, a process known as the “Doc Fix.”

I’ve argued that Congress should get rid of the SGR (for a somewhat longer treatment go here and scroll down to “Sustainable Headache”.)

Yet some conservative groups are opposing the current SGR fix, and they raise two legitimate points.  First is that Congress has usually found “offsets”—i.e., cuts in the budget—to help pay for the various Doc Fixes. Without those offsets, the national debt would have been $165 billion higher since 2003.  Second, the current reform costs $200 billion over ten years, while only $70 billion of that is offset.  For more on conservative objections, go here.

The opposing view is that the Congress doesn’t need to fully offset it since it won’t be paying for Doc Fixes anymore.  Congress has spent about $170 billion on Doc Fixes over the last 12 years.  “I think what’s happening is that both Republicans and Democrats have come to the conclusion that, first they were paying for patches [Doc Fixes] with mostly gimmicks anyway, and second, that the new payment system has a good chance of saving money in the long run,” said Robert Laszewski, founder and president of Health Policy and Strategy Associates. 

For more on this, see Peter Suderman at Reason.

2. Most ObamaCare Policies In New York Have Restrictive Provider Networks.  “…there’s one popular feature that most New Yorkers can’t find in any of the health plans offered on their state exchange: out-of-network coverage,” writes Michelle Andrews at Kaiser Health News. Most plans, including all in the New York City area, “are health maintenance organization-style plans that cover care provided only by doctors and hospitals in the plan’s network.”

This is what happens when the government forces insurance plans to cover ten “essential” benefits, and conform to guaranteed issue, community rating and medical-loss-ratio regulations.  One of the few ways left for insurers to keep costs down is to scrimp on the quality of provider networks.  

3. Guess What Canada’s Oh-So-Wonderful Single-Payer System Doesn’t Cover?  Canadian Alheli Picazo is a writer and former elite gymnast who has suffered from a severe digestive tract problem. Her condition caused her to suffer “from severe acid reflux. This wore down the enamel of her teeth and caused the equivalent of osteoporosis in her oral cavity. The 30-year-old needs urgent oral surgeries, including bone and tissue grafts, to remove and replace what she described painfully as ‘the increasingly diseased bone.’”  Unfortunately, “Picazo has to wait until she can amass the $100,000 needed to pay for the procedures” because Canada’s system does not cover dental care.  

The article, which appeared in Vox, noted that “This is similar to a gap in Obamacare: health plans on the exchange aren’t required to offer dental coverage.”  Guess what? There is another plan in the U.S. that doesn’t cover dental care.  Here’s a hint: it’s the program that activists point to when they want to promote single-payer here in America.


Conservative and Libertarian Alternatives to ObamaCare

I was on the “Up Front” radio program on KTLF out of Minnesota this morning, and as I promised, here is a link to the spreadsheet showing all the health care reform plans offered by the political right.

At issue is the Supreme Court case King v. Burwell, a case that has the potential to unravel ObamaCare.  The Court heard the case about two weeks ago and will likely render its decision in June.  If the plaintiffs win, then about 6 million people in federal exchanges would lose their premium subsidies.  That would give Congress an opportunity to re-open ObamaCare entirely.

While the mantra among the political left is that conservatives, libertarians and Republican don’t have alternatives to—i.e., plans that are better than—ObamaCare, the spreadsheet gives the lie to that mantra.

There are terms in the spreadsheet that are rather “wonky” such as refundable, tax exclusion and HIPPA.  A glossary is provided in the National Policy Analysis that accompanies that spreadsheet.  The NPA is entitled, “If Plaintiffs Prevail in King v. Burwell, Conservatives and Libertarians Have Many Health Care Reform Options Ready to Help People who Lose ObamaCare Subsidies.” 


Many Changed Their ObamaCare Plans Because It Was Too Expensive Not To

According to the headline over at National Journal, “Obamacare Enrollees Are Surprisingly Smart Shoppers”. What makes them so smart?  Well, about 1.2 million exchange enrollees “ended up switching plans.”  

Or perhaps they just aren’t inordinately stupid.  After all, if keeping the plan you chose last year could result in premium hikes of hundreds if not thousands of dollars more this year thanks the ObamaCare’s goofy subsidy mechanism, shopping around is the pretty obvious thing to do.

The National Journal’s Sam Baker, to his credit, makes note of this: 

Before the 2015 open-enrollment period, which ended last month, it was an open question whether consumers who signed up in 2014 would come back to the exchanges and shop around for a better deal.

If they didn’t, they were at risk for particularly large premium increases, because of quirks in the way the law’s insurance subsidies are calculated. The Health and Human Services Department strongly encouraged returning consumers to shop around this year. 

Unfortunately, the article then reports the Obama Administration’s spin without reporting any dissenting voice:

Kevin Griffis, HHS’s acting assistant secretary for public affairs, said the rate of plan-switching was better than HHS had expected and higher than the rates for Medicare Part D.

Consumers’ engagement will also send a message to insurance companies, he said, that “it’s critical to compete on price” on the law’s insurance exchanges.

More likely it is sending the Obama Administration a message that it has constructed a messed up system.  But don’t count on that message getting through.


Fixing Veterans Health Care

About two weeks ago Concerned Veterans for America released a report on how to reform veterans health care.

The title of the report doesn’t exactly inspire confidence: “Fixing Veterans Health Care: A Bipartisan Policy Taskforce.”  Bipartisan is too often a euphemism for liberal.

The members of the taskforce include Dr. William Frist, Rep. Jim Marshall, Dr. Michael Kussman, Darin Selnick, Pete Hegseth and Avik Roy.  Roy appears to be the only free-market oriented member of the group.

However, some of the report’s recommendations are quite good.  For example, one of the Principles for Veterans’ Health Care Reform is: “The veteran must come first, not the VA. The institutional priorities of the VHA weigh too heavily in current planning, funding and care delivery decisions. We believe the interests of veterans should be paramount.”  Another is: “Veterans should be able to choose where to get their health care. Based on eligibility, veterans should have the option to take their earned health care funds and use them to access care at the VA or in the voluntary (civilian) health care system. Because private health care is somewhat costlier than VHA [Veterans Health Administration]-based care, most veterans who choose this option will be expected to share in some of the costs of such care, through co-pays and deductibles.”

So, Veterans can take the money they get from the VHA and use it to buy private health insurance.  That’s a very good start.

But here is where it begins to get worrisome: “Those veterans who choose to use VHA facilities should receive timely and quality care. In order to achieve this goal, the VHA should be restructured—as an independent, efficient, and modern organization—that can compete with private providers.” (Italics added.)

In the VHA’s new, independent role, the Veterans Health Insurance Program would administer the insurance and premium supports.  The Veterans Accountable Care Organization (VACO) would actually provide the care and would be the one competing with the private sector.  But if it competes, will VACO be allowed to go out of business should it fail just like other competitors in the private sector would?  If not, then the playing field is titled at a 45 degree angle, with the VACO’ endzone at the top and everyone else’s at the bottom.

I’ve emailed Avik Roy about this.  Will let you know when he gets back to me.


The VA Scandal May Be Much Worse

From USA Today:

The Department of Veterans Affairs’ [Office of Inspector General] has not publicly released the findings of 140 health care investigations since 2006, potentially leaving dangerous problems to fester without proper oversight, a USA TODAY analysis of VA documents found.

The Inspector General has declined to comment on what is in the reports.  That said,

It is impossible to know how many of the investigations uncovered serious problems without seeing the reports, but all concerned VA medical care provided to veterans or complaints of clinical misconduct.

Thus, it is possible that nothing damaging is in the reports, which means that this is a “nothing burger.”  However, 140 reports would be a very big nothing burger.

For those who need a refresher on the VA scandal, here is my summary from 2014:

Employees at the VA were manipulating data on wait times for care so that the VA appeared better than it was at meeting its standard of a maximum 14-day wait for treatment. Many whistleblowers at the VA were harassed and, in a few cases, even fired. The result was that over 57,000 veterans waited at least three months for a doctor’s appointment while nearly 64,000 veterans were never added to any waiting list. We may never know exactly how many of these veterans suffered in pain or saw their conditions worsen while they waited for treatment. We do know the deaths of at least 23 veterans are attributable to delays. 

From 2000 to 2011, there were at least 26 reports—six from the Government Accountability Office (GAO) and 20 from the VA Office of Inspector General (OIG)—that examined wait times within the VA system.  That should have been a warning sign that something was seriously wrong, but, as I explained in my policy analysis, the reports were ignored because intellectuals had convinced policymakers that the VA was a wonderful health care system.

Wait times are far from the only problem with the VA that has been made public, as even a cursory look at the Veterans Affairs OIG websites shows. But to now learn that there may be many more problems that have not been made public is a bitter pill to swallow.


Gender-Bending Gym Rule Goes Too Far in Catering to LGBT Agenda

Yvette Cormier walked into the women’s locker room of a Planet Fitness location in Midland, Michigan and claimed she saw a man changing in there.  She alerted the front desk of the gym.

It was then that Cormier discovered Planet Fitness has a “no-judgment” policy that allows those who consider themselves to be transgendered to use the locker room of their choice.  While no one was apparently confronted that day, a local man who considers himself a woman told the media that he was a guest at the gym that day and used the women’s locker room.

When Cormier later complained to the Planet Fitness corporate office and told other female members of the Midland location about the locker room policy and what happened to her, her membership was cancelled.

A Planet Fitness spokesman told CNN that Cormier’s actions were “inappropriate and disruptive.”  In rebuttal, Cormier said: “I didn’t go out to specifically bash a transgender person that day.  I was taken aback by the situation.  This is about me and how I felt unsafe.”

But it’s not about her, as her concerns about safety and privacy are apparently second to a Planet Fitness policy embracing the LGBT agenda.  People can use locker rooms based on the gender they think they are at that moment.  A unisex changing area is not a compromise at least one local transgender activist is willing to accept.  Charin Davenport told “I don’t think anyone should require me to use [a unisex locker room].  I use the facility that I am comfortable with.”

Planet Fitness seems to feel the same way.  And Cormier will have to find herself a new gym.

Project 21 member Bishop Council Nedd II, the rector of St. Alban’s Anglican Church in central Pennsylvania and the archbishop of Abu Dhabi, says people shouldn’t have to be confronted with such gender-bending surprises when they go to work out.  Those who are offended by Planet Fitness’s embrace of the LGBT agenda over the rest of society, he suggests, should show the gym chain how they feel by taking their business elsewhere:

Planet Fitness claims to offer a “non-intimidating, welcoming environment” for its members.  But when a female member said she was uncomfortable with a transgendered male using the same locker room as her, and warned other women about whom they might encounter in that locker room, it was the woman who lost her gym membership.

This woman, who is now forced to find another gym, had a simple request: “I should feel safe in there.”  The Planet Fitness policy reportedly allows people to choose locker rooms “based on their sincere self-reported gender identity.”  How does Planet Fitness measure and prove sincerity?  This is obviously something that can be abused at the expense of those who paid Planet Fitness to use their facilities with fair expectations of safety.

The policies and practices of Planet Fitness are capricious and arbitrary.  A company claiming to follow a “no judgment” policy harshly judged a woman complaining about a perceived safety issue.  Her compromise for allowing transsexuals in the locker rooms is “post it, tell me or put a unisex bathroom in.”  Yet this is apparently “inappropriate” and politically incorrect.

This woman’s membership should absolutely be reinstated, and Planet Fitness should revise its policies.  Until then, those who believe one’s gender organs should determine which locker room they undress in and those with moral objections or a desire for a family-friendly facility should consider boycotting Planet Fitness gyms wherever they are found.

A reasonable person should not be penalized for expecting a gender-specific gym locker room be free of people of the opposite gender.


Project 21's LeBon Defends Voter ID, Decries Big Government Abuses on MSNBC

Appearing last week on MSNBC, Project 21 Co-Chairman Cherylyn Harley LeBon boldly spoke out in favor of laws that are protecting the integrity of the American voter from potential fraud, saying: “I’m a black leader.  I’m in favor of voter ID.  I don’t really care what the other black leaders are saying.”

A guest of uber-liberal host Chris Matthews on the 3/6/15 edition of “Hardball,” Cherylyn defended the need for common sense procedures such as voter ID that safeguard the identity of legal voters.  Beating back the tired racial rhetoric of Matthews and his other guests, Cherylyn explained:

Voter ID laws, in fact, have been proven to increase black voter participation — as they did in the state of Georgia… In the state of Georgia, black voter participation increased after they passed the state voter ID law… People do have photo IDs.  How do you think you can get any form of government assistance?  How are people flying on planes?

Later, while discussing the newly-released U.S. Department of Justice report alleging racial discrimination in the Ferguson Police Department, Cherylyn pointed out that the system of preying upon local residents with pernicious fines and harsh punishment for not paying those fines is the sign of an overbearing government obsessed with finding new sources of spending money.  And this is a problem not just isolated to the suburbs of St. Louis.

Cherylyn said:

This is not just happening in Ferguson.  This is happening in a number of communities across the country where there are black leaders… These cities want revenue… Why can’t these mayors come up with other ways of increasing revenue?


Risk Analysis Division's Comments to Consumer Product Safety Commission on Proposed Chemical Ban

Below are the comments submitted by RAD to the Consumer Product Safety Commission in response to a proposed rule to ban children’s toys and child care articles containing specified phthalates.

I am writing on behalf of the Risk Analysis Division (RAD) of the National Center for Public Policy Research. RAD is concerned with the proliferation of regulations that impinge on consumers’ access to safe and affordable products.

We have been concerned about the process that led up to the proposed rule known as “Prohibition of Children’s Toys and Child Care Articles Containing Specified Phthalates.”
Docket ID: CPSC-2014-0033

The Chronic Hazard Advisory Panel (CHAP) on Phthalates was fraught with precautionary approaches that made a recommendation of extending a ban on phthalates in certain applications nearly a foregone conclusion. From the CHAP report’s controversial use of cumulative risk assessment to the use of no-longer relevant exposure data, to the unorthodox failure to open up the study to public peer review consistent with OMB Information Quality Bulletin for Peer Review, the CHAP report is a flawed basis for developing what should be science-based regulations.

One especially ill-conceived aspect of the proposed rule illustrates why the failures in process lead to failures in policy-making.

The proposed rule would extend the ban on DINP from a temporary ban on mouthable children’s toys and child care articles containing DINP, to a permanent ban on even non-mouthable children’s products.

The justification cited by the Consumer Product Safety Commission to support this heavy-handed rule was that non-mouthable products are touched- and that can also cause exposure, thus adding to the cumulative exposure from other phthalates, such as DEHP.

But DINP is among the least potent phthalates. And exposure from toys and child care articles, even mouthable ones, is a very minor source of DINP exposure in the first place, and an even more minor concern in terms of cumulative phthalate risk, given DINP’s low potency.

Cumulative exposure from DINP in children’s products may have conceivably been a concern when overall phthalate exposure was much higher prior to the legislative ban on certain phthalates, but with overall exposure much lower now, DINP exposure from touching should barely even be considered de minimis.

Yet the CHAP report failed to take today’s lower exposure levels into account, instead relying on data that was not only old, but no longer relevant given the bans of more potent phthalates. A cumulative assessment based on exposure levels we know to be no-longer accurate renders the CHAP report irrelevant when considering cumulative exposures.

What’s worse, even though CPSC was aware of this fatal flaw in the CHAP report, it relied on this aspect of the report, ignoring these concerns that would have surely been raised had the CHAP report been subject to open peer review.

The supposed logic of the extension of the DINP ban is that all exposure, no matter how remote, is a problem.

The CHAP report didn’t even justify an expansion in a direct manner, rather leaving CPSC to conjecture as to a basis for the ban.

In fact, the CPSC wrote,

“The Commission notes that the CHAP assessed the risks of DINP both in isolation and in combination with other phthalates. Considered in isolation, staff concluded that DINP would not present a hazard to consumers because the MoE (830 to 15,000) is well in excess of 100. (CHAP, 2014, p. 99). This is consistent with previous work. (CHAP, 2001; CPSC, 2002). “

Instead, the CPSC relies on the cumulative risk theory:

“the Commission agrees with the CHAP that DINP is antiandrogenic and contributes to the cumulative risk. Specifically, the CHAP found that 10 percent of pregnant women and up to 5 percent of infants have a HI greater than one. Therefore, as discussed previously, the Commission concludes that the cumulative risk of male developmental reproductive effects should be considered ‘to ensure a reasonable certainty of no harm to children, pregnant women, or other susceptible individuals with an adequate margin of safety.’”

This, all despite outdated data. Yet nonetheless, CPSC writes,

“The Commission believes that the expansion in scope is appropriate because exposure occurs from handling children’s toys, as well as from mouthing. (CHAP, 2014, Appendix E1). The additional exposure from handling toys would add to the cumulative risk. Therefore, the Commission concludes that expanding the scope of the DINP prohibition to include all children’s toys is necessary to ensure a reasonable certainty of no harm to children with an adequate margin of safety.”

It should be noted that not even the precautionary European Commission (EC) goes this far.

In fact, the EC submitted a comment to this docket addressing this point. (see:!documentDetail;D=CPSC-2014-0033-0032 )
To justify going beyond even the EC, the proposed rule states:

“As discussed in the CHAP report, there are multiple studies related to the male developmental reproductive effects of DINP, many of which were published after 2005, the date of the EC directive. Thus, the Commission concludes that because the CHAP report addresses uncertainties regarding the potential hazard associated with DINP, an expansion of the prohibition on DINP to all children’s toys is appropriate.”

Yet at the same time, the CPSC ignores the most relevant change related to phthalates between then and today: that is, a range of other, more potent phthalates have been banned and thus the cumulative risk has fallen precipitously. To suggest that the EC directive is too lenient on DINP because it relies on old science is an insult to the intelligence of even the most casual observer who is aware that the CHAP report’s assessment of cumulative risk is based on data that we know, because of the recent ban, to be out of date and no longer relevant, especially when attempting to gauge cumulative risk.

Even more troubling to a policy analyst, is that the proposed CPSC rule comes close to acknowledging the scientific weakness of the case to extend the ban on DINP to non-mouthable products, by arguing that the effect of the ban would be minimal. “Additionally, we expect that expanding the scope to all children’s toys would have a minimal effect on manufacturers because few products would need to be reformulated to comply with the broader scope. (See Tab A of the staff’s briefing package.) In practice, children’s toys and toys that can be placed in a child’s mouth all require testing for phthalates. The testing costs are the same in either case. The only change caused by expanding the scope to all children’s toys is that toys too large to be mouthed could not be made with DINP.”

First, CPSC doesn’t bother to consider any effect on consumers or the potential that in the future, smaller manufacturers would be burdened by this regulation, which offers no demonstrated public health benefits in exchange for even “minimal” costs.

Second, the CPSC fails to take into account the potential for future uses of DINP in non-mouthable children’s products.

Third, the notion that the effect on manufacturers is supposedly minimal is a weak basis for keeping a safe and useful chemical out of the hands (but not mouths) of consumers, even children.

When Congress passed the Consumer Product Safety Improvement Act in 2008, it did not give the CPSC power to remove safe products from the marketplace if the effect of such a ban would be minimal. It simply didn’t give CPSC power to remove products that were safe, or that could only be shown to present a risk based on old exposure data we know to be no-longer accurate.


A Lefty Admits That ObamaCare Has Made Us More Dependent on Government

If you are a conservative or libertarian and are in a particularly generous mood, send a thank you note to Bloomberg’s Joshua Green.  He recent piece entitled “Is Washington Ready for the Death of Obamacare?” gives us a preview of the strategy the political left will use should the plaintiff’s prevail in King v. Burwell and the subsidies to federal exchanges be shut off.

But it does more than that.  For a while now, many on the political right have warned that ObamaCare is making us more dependent on government.  Green inadvertently confirms it.

Here are Green’s warnings:

-If the plaintiffs prevail, millions of people in 34 states who bought insurance on federal exchanges would suddenly lose the subsidies that make it affordable. Consequently, most would lose their coverage. A Rand study pegged the number at 9.6 million people, with premiums soaring 47 percent for those still able to afford them. 

-The result would not just leave millions uncovered but also risk destroying the individual health-care markets in states that don’t act. According to a brief filed by a consortium of hospital trade groups, “A market without subsidies will trigger a premium ‘death spiral’ in those states: With subsidies gone and premiums pushed higher, younger and healthier patients will likely drop coverage. Those that remain, paying the higher rates, are likely to be sicker and use more health-care resources. That, in turn, will push rates for everyone in those states even higher, which will cause more to drop coverage, and so on.”

-On the business front, the effects would be no less significant…Entire segments of the health system redesigned their business models to take advantage of the ACA’s incentives. Hospitals, for instance, were given a trade-off: They stopped receiving government payments to offset the cost of treating the uninsured, cuts that amount to $269 billion over a decade. In return, they were promised millions of new patients insured through federal subsidies. 

-The ACA also opened up a flood of investments in digital health ventures. A recent study by StartUp Health, a New York incubator, found that $14.5 billion has been invested since the law was signed, including $6.5 billion last year. “If Congress is unwilling to take action, it would clearly make it less attractive to invest in things related to the coverage expansion,” says Bob Kocher, a partner specializing in health-care IT at the venture capital firm Venrock. “It slows the rate of change in the health-care ecosystem in a way that’s bad for everybody and hurts companies going after these new patients, who are going to suffer.”

Ed Haislmaier at Heritage disputes most of these claims, but the larger point is that, based on Green’s article, conservatives and libertarians were absolutely right. Policyholders, insurers, hospitals and investors in digital health care are now dependent on government, much more so than they were prior to ObamaCare.

Of course, that may be what the left wanted all along.  After all,the more people who are dependent on the government spigot, the harder it is to ever turn it off.  Of course, few of them will ever admit that.  Heck, they only barely acknowledge the government dependence has grown under ObamaCare.


Hard Truths Overshadow Happiness about Unemployment Figures — “About Those Jobs Numbers” for February 2015

There’s no denying that the American economy is in a state of flux.  Where is President Barack Obama going to take our economy?  It doesn’t seem to be in the right direction by any stretch of the imagination.

Employers are obviously nervous.  Hiring is a not the simple process it once was.  People who want and need jobs are despondent and actually giving up looking for employment.  Plans are delayed and hopes are dashed as the Obama era grinds along.

There are plenty of things to be nervous about.

For one, the U.S. Supreme Court this week heard arguments in the case of King v. Burwell — a challenge to ObamaCare that could halt the federal subsidies propping up the state health care exchanges.  Justice Sonia Sotomayor suggested her fellow jurists could send ObamaCare, the policy Americans couldn’t examine in detail until it was enacted, into a “death spiral” if it turns out that ObamaCare was as poorly-crafted as the plaintiffs allege.  And the Obama Administration allegedly has no Plan B in the event the justice do rule against them.  Not smart.

Furthermore, White House Press Secretary Josh Earnest said Obama is “very interested” in taking an executive action that would raise taxes on businesses.  This could be hard on businesses already feeling a pinch in the Obama economy.

And then there is the capitulation in Congress that will allow President Obama’s executive action on immigration to become further established and harder to dismantle.  Millions of new applicants for legal work status could join the estimated 7.4 million foreigners — almost a million of them are thought to have come to America illegally – receiving work permits from the government since 2009.  They are now competing with a large contingent of unemployed American citizens for the few available jobs.

Jobless numbers just released by the government offer little encouragement when one looks at the big picture.

As he does every first Friday of the month when the federal Bureau of Labor Statistics issues its newest data on American unemployment, Project 21 member Derryck Green provides an in-depth analysis of the nation’s employment situation and the general state of the economy under Barack Obama’s stewardship.

This month, with the official jobless rate falling to 5.5 percent (but the overall figure being twice that percentage!), Derryck is once again feeling pessimistic:

There’s been a revision to the gross domestic product (GDP).

The federal Bureau of Economic Advisors (BEA) just released a second revised estimate of the fourth-quarter GDP for 2014.  According to their report, the nation’s GDP was revised downward from 2.6 percent to 2.2 percent.

America’s economic growth was redefined downward.  What was once a source of great pride for President Obama and his supporters is diminished.  This fact, by the way, received to no real media attention.

Chances are that this number will be revised further downward when the BEA releases a third estimate at the end of this month, when they will also announce the overall rate for which the economy grew in 2014.

Private sector estimates regarding job creation coming from payroll processor ADP doesn’t create optimism.  Their report, released before the federal government’s estimates, noted job creation was once again below expectations in February.  Last month, ADP predicted that 212,000 private sector jobs were created, well below the 220,000 that were expected.

According to the latest federal Bureau of Labor Statistics (BLS) jobs report, only 295,000 jobs were created last month — an increase of 38,000 from last month. 

The BLS announced the national unemployment rate fell in February to 5.5 percent.  The alternative U-6 number — a more accurate accounting of the nation’s unemployment rate because it includes the unemployed, underemployed and discouraged job seekers — was twice that at 11 percent.

Despite the drop in the official unemployment rate, the workforce participation rate fell again.  It was at 62.8 percent in February, and that rate has been stuck between 62.7 percent and 62.9 percent since April 2014.  That alone should offset any cheering over the official unemployment rate dropping.

Additionally, the unemployment rate for blacks increased slightly to 10.4 percent.  For black teens, their unemployment rate increased into the 30s again to 30 percent.  The unemployment rate for women and Latinos was 4.9 percent and 6.6 percent, respectively.

Despite these disappointing numbers, it’s likely that the mainstream media will try to put a happy face on things.  Expect breathless reports of these modest gains and assurances from pundits that the economy is getting stronger.

But the coverage of this relatively good-sounding jobless report will likely ignore some hard truths.

Among those hard truths:

  • Staples and Office Depot have agreed to merge, potentially costing thousands of employees their jobs;
  • RadioShack filed for bankruptcy protection and plans to liquidate its stores.  Part of the plan is to close its headquarters and potentially lay off more than a thousand workers;
  • Target plans to lay off several thousand workers as part of a $2 billion cost-cutting plan;
  • Obama vetoed the Keystone XL pipeline authorization passed by Congress and effectively killed the jobs that go along with it;
  • According to Challenger, Gray and Christmas, a private company reporting on economic matters, U.S.-based employers announced plans to cut 50,579 jobs last month.  That’s five percent fewer than the 53,041 in January, but still up 21 percent from a year ago.  They also report job layoffs in the first two months of this year were up almost 20 percent from the same time last year;
  • The number of people filing for jobless benefits rose last week to 320,000 — above the 295,000 filers projected and the highest since May 2014.  ZeroHedge reported that, “non-seasonally-adjusted claims surged 29,361 to 310,000 making 2015 the worst start to the year for claims since 2009;
  • U.S. factory orders were down for the sixth straight month, something not seen since the recession of 2008;
  • The U.S. student loan program could need a $500 billion bailout because of the sharp increase in borrowing.  This is no surprise when one considers the poor economy is forcing the more than 30 percent of Millennials who cannot find a job are still living with their parents.  Of course, since the bad economy forces people to live with their family or other roommates rather than living on their own, we understand why the U.S. homeownership rate is at a 20-year low.

To read a really unnerving assessment of the actual conditions of the economy, there’s a particularly scary analysis of the economy posted on Zero Hedge that really puts one on edge.

But worry ye not.  Obama has just the plan to put us on the road to prosperity.  According to his Press Secretary Josh Earnest, Obama is “very interested” in raising taxes through executive action.

Of course this would probably be unconstitutional — but when has that prevented him before?


King v. Burwell--Will Kennedy Swing Left?

After yesterday’s hearing of King v. Burwell, it appears that Justice Anthony Kennedy is the swing vote.  Kennedy worried that if the plaintiffs are correct, that subsidies can only flow to exchanges established by a state, then it puts states in the position of being coerced by the federal government:

Let me say that from the standpoint of the dynamics of Federalism, it does seem to me that there is something very powerful to the point that if your [the plaintiffs’] argument is accepted, the States are being told either create your own Exchange, or we’ll send your insurance market into a death spiral. We’ll have people pay mandated taxes which will not get any credit on on the subsidies…It seems to me that under your argument, perhaps you will prevail in the plain words of the statute, there’s a serious constitutional problem if we adopt your argument.

Kennedy later said, “It may well be that you’re correct as to these words, and there’s nothing we can do.”  In other words, the plaintiffs are right that ObamaCare says subsidies can only flow to state-based exchanges, but the Court won’t do anything about it since agreeing with that interpretation creates a situation where the federal government is coercing the states.

Two points on that, one light-hearted, the other serious.

First, Phil Kerpen of American Commitment referred me to his tweet from 2014 in which he predicted this (at the time, the case was still called Halbig):

After seeing that, I asked Phil if I give him $1,000 in late January of next year, would he pick the Super Bowl winner for me?

On a serious note, Kennedy’s argument doesn’t hold much water since the federal government is already sending state insurance markets on a march toward the death spiral.  The subsidies have not been attractive enough to entice sufficient young people to sign up for coverage on the exchanges, something that I predicted back in 2013.  Thus far, insurance premiums haven’t sky-rocketed, but that’s largely due to the “risk corridors” which cover most of the losses insurers incur on the exchanges (few losses, no reason to raise premiums much.)  However, Republicans Congress stopped the first year of the risk corridors in the recent Cromnibus bill.  Now that insurers won’t be receiving risk corridor payments for the first year of the exchanges, expect to see some double-digit premium increases for 2016. Then the death spiral begins.

Avik Roy examines Kennedy’s death spiral argument in some more detail and also argues that Kennedy is not likely to swing to the left in this case.  Well worth the read.

Here’s another reason why Kennedy might not side with the left.  If a phrase in a law is vague as is, arguably, the part of ObamaCare that says subsidies may only go to the states, then the Court often defers to the regulatory agency’s interpretation of the phrase, something known as “Chevron Deference.”  Here’s what Kennedy said about that:

Well, if it’s if it’s ambiguous, then we think about Chevron. But it seems to me a drastic step for us to say that the Department of Internal Revenue and its director can make this call one way or the other when there are, what, billions of dollars of subsidies involved here? Hundreds of millions?

….And it…seems to me our cases say that if the Internal Revenue Service is going to allow deductions using these, that it has to be very, very clear.

Kennedy appears to be saying that the phrase needs to be very clear before the I.R.S. can hand out billions of tax dollars.

Last point: Predicting which way the Court will go in a close case like this is fraught with peril.  At the hearing for NFIB v. Sebelius, the Court seemed very likely to strike down the individual mandate.  And we know how that turned out.


King v. Burwell: End of ObamaCare?

Today the Supreme Court is hearing King v. Burwell, a case that has the potential to unravel ObamaCare.  If the plaintiffs win, then about 6 million people in federal exchanges would lose their premium subsidies.  That would give Congress an opportunity to re-open ObamaCare entirely. Wikipedia actually gives a nice summary of King v. Burwell, and Scotusblog is doing an excellent job of reporting on the oral arguments.

In anticipation of this, NCPPR is releasing an excel file today showing how a dozen free-market health care reform plans (i.e., what we replace ObamaCare with after it is repealed) fare on various policy issues such as tax credits, Medicaid and pre-existing conditions.  The plans run the gamut, from Heritage and Cato, to Rep. Tom Price and the Republican Study Committee. The excel file is accompanied by a policy analysis that defines some terms in the spreadsheet that may be unfamiliar to readers.

No doubt the political left will continue to insist that the political right has no health care plan, but the excel file puts the lie to that claim.  There are plenty of policy options to choose from that would both help people who lose subsidies and move our health care system in a free-market direction.

In addition, the Heritage Foundation has outlined how Congress should respond if the plaintiffs in King v. Burwell succeed.

The big question, of course, is will they succeed?  Well, sorry to end this post on a discouraging note, but an early analysis of the oral arguments by Phil Klein at the Washington Examiner says that the plaintiffs and those favoring them “should be nervous.”

UPDATE: Senator Ted Cruz (R-TX) has just released his health care plan today.  I will update the excel file as soon as I go through the plan’s details.


Republicans Usually Ask for Higher Spending During "Members' Day." This Year, Some Called for Cuts

I worked for the House of Representatives from 2007-2008.  While there, I attended the 2008 “Members’ Day” hearing at the House Budget Committee.

Members’ Day is when the Budget Committee gives representatives a chance to testify about their own priorities for the federal budget.  While the hearing usually lasts somewhere between four to six hours, in 2008 45 minutes was all I could stand.  I watched the rest back at the office.  (It can be viewed on Youtube here.) Without exception, the Democrats testified in favor of either protecting various federal programs from cuts or spending more on them.  But the few Republicans who also testified did largely the same.  Very dispiriting.

I tuned in via the internet to this year’s hearing expecting much the same. Thus, I was pleasantly surprised to see some Republicans, and even one Democrat, dash my low expectations!

The two best testimonies came from Reps. Bob Goodlatte (R-VA) and David Schweikert (R-CA.)  Goodlatte testified about the need for a balanced budget amendment and an overhaul of the tax code.  Schweikert talked about administrative changes that the federal government could make to save money.  For example, he said if three federal employees working in three different agencies need to take a trip to Richmond, Va. on the same day, why do they each take a separate government vehicle?  He claimed “there’s an app for that” which allows agencies to coordinate such things.  Schweikert said the federal government is way behind the private sector on that (no kidding!)

Rep. Rich Nugent (R-FL) disappointed by calling for the spending cap to be lifted on defense spending.  Not the worst thing in the world, but I’m the type of conservative who thinks budget savings need to be found in all areas.  However, Nugent recovered a bit when he did say that spending cuts were necessary, although he did not talk about specifics.

The biggest disappointment came from Rep. Mia Love (R-UT).  She argued against cuts in the Obama Administration’s budget for a water project in Utah.  Utah is experiencing a drought, she claimed, and Utah will pay 35 percent of the cost of the project.  Supposedly Utah will have to pay back the federal government the rest of the funding over time, although you can be sure it’s at a cushy interest rate that you have no hope of getting in the private sector. Not the worst thing in the world to defend from spending cuts, but since Love has been routinely touted as one of the big up-and-comers, her testimony was a let down.

The most promising start came from Rep. Alex Mooney (R-WV).  He first called for “defunding overreaching agencies,” and he specifically mentioned the Legal Services Corporation.  (To learn more about why we should get rid of the LSG, go here and here.)  He next asked for the Environmental Protection Agency to back off ozone regulations that are threatening coal-fired power plants.

To use a basketball analogy, Mooney had just nailed two three-point shots with nothing but net.  His third attempt was eagerly awaited.

He then talked about the need to fund federal mine-closing services because such services are beneficial to the communities near a closed mine.


But then a Democrat member of the Budget Committee, Donald Norcross (D-NJ), made a save.  He questioned Mooney as to why closed mines were not the responsibility of the companies that owned them.  Mooney didn’t have a good response.  

There are two lessons we can take from last week’s Members’ Day hearing.  The first is how much progress the center-right has made in recent years.  Back in 2008, it was almost unthinkable that Republicans would argue for spending cuts during Members’ Day.  That some now do shows how much Tea Party organizations and other conservative and libertarian groups have made in pushing the GOP in the right direction on the issue of spending.

The second lesson is how far we have to go.  Only two Republicans espousing unadulterated conservative/libertarian positions on the budget is not enough.  We’ll know that we’re getting close to our destination when (1) a lot of GOP members testify during Members’ Day about the need for spending cuts and each one singles out a specific agency for elimination, and (2) a few Democrats do the same.


Project 21 Member Wins CPAC Blogger Award

Project 21’s Wayne DupreeCongratulations to Project 21 member Wayne Dupree, who was named “Blogger of the Year” at the 2015 Conservative Political Action Conference (CPAC) this past weekend at the Gaylord National Resort in suburban Washington, D.C.

In addition to his work with the National Center’s black leadership network, Wayne created the NewsNinja website his own Internet radio network — We Are America Radio (WAAR) — to give additional voice to black conservatives “ready to step up in defense of their country and its future.”

Over the past year, Wayne’s work with Project 21 has included the prominent black public affairs web site EURWeb, the One America News Network and radio stations nationwide.

In the past, the CPAC Blogger of the Year Award was won by now-familiar media personalities such as Katie Pavlich and Mary Katharine Ham.  Other award recipients at the 2015 CPAC included the “Journalist of the Year” that was awarded to Jim Geraghty of National Review, the “Andrew Breitbart Defender of the First Amendment Award” to Phil Robertson of “Duck Dynasty and the “American Hero Award” that was posthumously given to former U.S. Navy SEAL sniper Chris Kyle.

Wayne said of his honor:

I am very surprised, shocked, humbled and honored to receive this award.

When you get into this grassroots fight to help save the country from an agenda that has been set forth to destroy the very fabric it was built on, you never think of awards and presentations.  This year, I went to CPAC with the idea of interviewing as many frontline newsmakers as possible to see where they were on issues that plague our communities and neighborhoods.

I’ve been doing this for less than three years now.  To have come this far this fast with so many grassroots supporters is truly amazing.  I am happy to be recognized, but I will be happier if we are able to change the course of this country — with conservative values leading the way.

Wayne’s CPAC acceptance speech is featured below:



Who Photobombed Col. Allen West?

Project 21's Bishop Council Nedd II was interviewing former U.S. Congressman Col. Allen West when a familiar face photobombed the interview. Click the picture to find out who...

Bishop Nedd West Trump CPAC 022815


The Dashing Federal Budget

Yesterday the House Budget Committee held “Members’ Day.”  I’ll write more about that tomorrow, over the weekend, Monday, Tuesday.

For the time being, enjoy what happens when a committee staffer handling the computer forgets that even during an intermission the video camera is still running:

 UPDATE, 4:41pm:  As of right now, when you click on the Members’ Day link above, it will lead you to a video that will post the message, “Non-existent video.”  Not sure why the powers that be have taken down the hearing video.  Maybe they are trying to make it less dashing?


Jeff Stier of the National Center and Niger Innis of Project 21 to Appear on Special CPAC Panel on Regulations and Freedom


At CPAC today at 2:30 PM, Niger Innis of Project 21 and The TeaParty.Net and the National Center for Public Policy Research’s Jeff Stier will appear on a special Washington Times panel, “Regulatory Assaults on Your Freedom You May Not Know About.” They will be George Landrith of Frontiers of Freedom Institute. Washington Times Opinion Editor David Keene will moderate. CPAC attendees: The location is Camellia 3.


Why We Don’t Believe Costco Chairman Jeffrey Brotman

CostcoLogoWHaving ruffled the feathers of the leadership of Costco, America's second largest retailer, last Friday, I plan to attend the 2015 Conservative Political Action Conference (CPAC) this Friday to respond to false claims made by Costco Chairman Jeffrey Brotman jointly to the National Center and the One American News Network regarding the National Center's Employee Conscience Protection Project.

Brotman's claims came in an email response to me as director of the National Center's Free Enterprise Project and to Rick Amato, a One American News Network host, after repeated pressure from the National Center asking Costco to implement policies to protect its 100,000 employees from potential discipline for their private political and civic actions and personal beliefs.

The National Center's request came following breaking news in April, when the CEO of Mozilla was forced from his job because he contributed $1,000 to a 2008 referendum defining marriage under California law. Colleagues at Mozilla held a different view and he lost his job.

Upon investigation, the National Center discovered that some corporations, such as Coca-Cola, had pledged to employees that they would not be fired or treated adversely at work because of personal, off-the-job legal political or civic activities, but most corporations had no such protections. Employees could be fired, demoted, denied promotions or raises because their supervisor disagreed with their politics or their views on policy issues, even if the issues in question had nothing to do with work.

The National Center began approaching CEOs of the latter companies to suggest they give their employees this protection and submitted shareholder proposals on the subject to nearly two dozen corporations.

Most of the corporations the National Center approached were very willing, and made formal changes to give their workforce freedom of conscience protections. These firms included, but are not limited to, General Electric, PepsiCo and Visa. But Costco not only refused to protect its workforce, but also fought back before the Securities and Exchange Commission (SEC), winning the support of that Obama Administration agency and blocking the shareholder proposal (which sought only a non-binding recommendation from shareholders to management) from even being placed before Costco shareholders.

Costco is an outlier from our experience. Most corporations we approached understood the inherent value in a workforce that is free to engage the political arena as the workers see fit without the fear of on-the-job reprisal and many have amended their policies to reflect this belief. Costco has claimed that top management will protect its entire workforce from such potential discrimination, but its policies do not bear this out, and, so far, the company's management has spent considerable time and resources fighting any such policy change.

After I appeared on Rick Amato's s February 17 broadcast to highlight Costco's unwillingness to amend its corporate policies and Rick called on viewers let Costco know their views, Costco Chairman Jeffrey Brotman emailed Rick and I in an effort to refute the story.

In his email, Brotman claimed Costco already protects its workers from retaliation if they hold private political or civic views differing from those of their supervisors, and does so in the manner the National Center seeks. This is incorrect, or at the very least, Costco has repeatedly failed to provide evidence that it is correct.

In his email, Brotman wrote:

The suggestion that Costco "has retained the right to fire its employees for their private political actions" is simply false, and we disclaim any such right. Our Employee Agreement, which governs the rights and responsibilities of all our employees, contains a long list of protected characteristics, including "race, color, national origin, ancestry, sex, sexual orientation, gender identity or expression, religion, age, pregnancy, disability, work-related injury, covered veteran status, political ideology, genetic information, marital status, or any other factor that the law protects from employment discrimination."

Brotman's email went on to claim that Costco employees are also barred from harassing others based on these protected characteristics.

What Brotman's email left out is more telling than what it included. He failed to mention that Costco's Employment Agreement bars employees from engaging in any 'unlawful' discrimination. That distinction is very important since 50 percent of Americans live in a jurisdiction in which political discrimination is perfectly legal. In those locations, an employer or supervisor can terminate someone simply for disagreeing with him politically and that employee would have no legal recourse. And this includes many locations that have Costco stores.

It means nothing to say that Costco will bar its employees from engaging in unlawful discrimination. It doesn't have the right to allow its employees to break the law. What we are doing through the Employee Conscience Protection Project is asking companies to go above and beyond what the law requires and to protect all of their workers no matter where they happen to be situated.

Furthermore, Brotman's email seems to make the claim that Costco has substantially implemented the National Center’s proposal. That simply isn't true. Costco's legal team had the opportunity to make this claim when it petitioned the SEC for the legal right to remove our resolution from its proxy statement. It chose not to do so. After reviewing the evidence from Brotman's email, which clearly shows Costco's policies do not match our employee protection request, it is clear why Costco’s legal team declined to advance this argument.

To read the full legal exchanges between the National Center and Costco regarding exclusion of the shareholder proposal in which the SEC determined that protecting workers from political discrimination is an interference with ordinary business operations, click here and here. To read a press release about my initial confrontation with Brotman at the 2015 annual meeting of Costco shareholders, click here.

These false assertions by Brotman raise some other interesting legal questions. Under the Sarbanes-Oxley financial reform law, executives who sign financial reports and internal controls must certify the validity of the content in those documents. Falsely certifying documents is punishable by fines and potential prison time. While it is unlikely that a federal prosecutor would deem Brotman's email to be actionable under Sarbanes-Oxley, it is worth noting that a false statement in such a correspondence seems to, at a minimum, violate the spirit of the law.

I also responded to Brotman's email on the February 20 broadcast of The Rick Amato Show.

Through corporate activism, the National Center's Employee Conscience Protection Project has successfully ushered in new protections for hundreds of thousands of American workers from potential political discrimination. And since it was announced earlier this month, the project has received significant media attention, including coverage by the San Francisco Chronicle, Politico, the Daily Caller and, obviously, The Rick Amato Show.


ObamaCare Taxes the Poor

This, apparently, is the new ObamaCare theme song:

From the press release for an H&R Block report:

So far in the 2015 tax season, H&R Block, the world’s largest consumer tax services provider, is seeing a majority (52 percent) who enrolled in insurance via the state or federal Marketplaces paying back a portion of the Advance Premium Tax Credit (APTC). The average amount paid back is $530, decreasing the tax refund on average by 17 percent, according to analysis almost six weeks into the 2015 tax season.

When people applied for insurance on the ObamaCare exchange in 2013, they had to give or the website of their state exchange their 2013 income to calculate their premium subsidy for 2014.  However, if their income increased at all in 2014, then they would be receiving a subsidy that was too high.  Come 2015, they would have to pay part of that subsidy back on their taxes.

The actual report doesn’t give a breakdown of what people owe by income, but it’s easy to take a rough guess at what income range this tax increase falls. Subsidies begin at 133 pecent of the federal poverty level (FPL) for a person in a state that has expanded Medicaid under ObamaCare, and 100 pecent FPL for those in states that have not.  The subsidies stop at 400 percent of the federal poverty level (FPL), which in 2014 was about $46,700 for a single person and $95,400 for a family of four.  

However, just because an individual has an income at or below 400 percent FPL doesn’t mean that he or she will receive a subsidy.  Indeed, the closer one gets to 400 percent FPL, the less likely that he or she will receive a subsidy.  The reason why is a bit complicated, and I won’t go into it here.  For those interested, see this policy analysis by Sean Parnell and myself.  In short, it’s probably not many people near the top of the range who are paying this tax, since they probably didn’t qualify for subsidies in the first place.

The taxes are probably not falling on many people in the upper middle (250-350 percent FPL) of the range, since many of them don’t qualify for subsidies either. As this PDF file that I created back in 2013 shows, in most states subsidies stop for 30-and-40-year-olds at someplace in the $30,000 range, usually well before 350 percent of FPL is reached.  For 20-year-olds, the subsidies generally stop in the $20,000 range, almost always before 300 percent FPL is reached and often before 250 percent FPL is reached.  

A scan of the PDF file suggests that the many people who will to have to pay more taxes due to ObamaCare are probably near the 200 percent FPL range ($23,340 for a single person). That’s not wealthy, and not too much below that could be considered “poor.”  And, undoubtedly, some of those people who are poor are owing taxes on their ObamaCare subsidies.

In the liberal world, such taxation is panned as “regressive.”  Yet, so far, I can’t find a single liberal publication that has picked up on this and criticized it.  Can’t imagine why.


ObamaCare Exchanges: Goal-Post Shifting And Glitches

Just before the ObamaCare exchanges re-opened in November of last year, the Obama Administration predicted that about 9.1 million people would be enrolled in the exchanges through 2015. Last week the Administration announced that 11.4 million people had signed up via the exchanges, which makes it likely that the goal of 9.1 million enrolled will be reached.

“Signed up” and “enrolled” mean different things.  Someone who has signed up has not necessarily paid his first premium, while an enrolled individual has.  At the end of the first open enrollment period 8 million people had signed up, but by late 2014 only 6.7 million remained enrolled.

However, even if 9.1 million is reached, it misses the 12 million predicted by the Congressional Budget Office in January of this year.  That 12 million is a revision downward as this table shows: 

A few thoughts:  First, CBO’s enrollment predictions for 2014 and 2015 continued to decline.  CBO got it about right for 2014. Will it do similarly for 2015?

Well, and second, that depends.  Right now it seems unlikely that more than 10 million will be enrolled by the end of 2015.  Unless, of course, there is a sudden uptick due to the “special enrollment period” the Obama Administration announced Friday that will run from March 15 to April 30.

Third, notice how far CBO predictions have fallen for 2014 and, to a lesser extent, 2015.  That makes it somewhat fun to speculate how much predictions for 2016 and 2017 will drop.  If enrollment for 2015 ends at about 10 million, then it has increased only about 3.3 million over 2014.  But, if we take CBO at face value, it will increase another 11 million in 2016 to reach 21 million.  Fat chance!  Expect that 2016 number to come way, way down in the ensuing months.


Oops!  Don’t start doing your taxes just yet:

The administration sent the wrong tax information to 800,000 people who have enrolled in ObamaCare, officials announced Friday.

The information used to calculate subsidies was wrong on about 20 percent of tax forms, an error that could delay tax refunds for thousands of people. 

Administration officials stressed that the vast majority of customers received the correct forms, and White House spokesman Josh Earnest said the issue impacted “a very small fraction of people.”

One fifth is a small fraction?  One wonders if Earnest really believes the stuff he is shoveling.

Anyway, no need to worry.  The administration has recent experience with giving people more time to file their ObamaCare taxes.