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Clinton Foundation May Have an Enron Problem


The Clinton Foundation just announced that it will revise its tax returns for 2010, 2011, and 2012 after revelations by the Reuters news organization that it neglected to report foreign government grants on its tax returns as required by law.

Charities are required to provide a breakout of their government grants, including from domestic and foreign sources, in Part VII, line 1e of IRS form 990.

In a statement on its website, the Clinton Foundation explained that it had apparently "mistakenly combined" its foreign government funding with other funding.

This isn't just highly questionable... it's downright improbable.

Having served in senior management of a non-profit with the same tax status as the Clinton Foundation for nearly 30 years, I can testify that it's very hard to mess this up year after year.

Not only would the Clinton Foundation's management need to get it wrong repeatedly, but its CPA would as well.

And even if the CPA messed up, the errors most certainly would have been caught during an annual audit.

Auditors don't just take a charity's word for the sources and amounts of grants, but contact the sources to verify the information supplied is correct.

So, I wondered which firms could have served the Clinton Foundation so poorly from 2010-2012.

It turns out that it wasn't two firms, but a single firm: the Little Rock, Arkansas branch of BKD, LLP.

That the Clinton Foundation chose to use a single firm for both CPA services and its independent audit for multiple years is significant as it violates charitable best practices.

Ever since the Sarbanes-Oxley Act (formally, the Public Company Accounting Reform and Investor Protection Act) was adopted in 2002, the splitting of general accounting and auditing services has become standard practice, not just for publicly-held corporations but charities, too.

The splitting of accounting and auditing services was a direct result of the Enron scandal.

And now, it appears that the Clinton Foundation may be the charitable equivalent of Enron.

The accounting firm Arthur Andersen helped Enron cook its books because by doing so it could also keep much more lucrative contracts with the company.

During the early 1990s, Arthur Andersen learned that it could considerably boost its profits if its auditors approved what the Wall Street Journal called, in a 2002 article, "aggressive accounting tactics" by some of its clients.

One of its first big financial successes from using these tactics was when it helped Boston Chicken hide franchise losses in advance of an IPO.

In the auditor's performance review, he was praised for turning "a $50,000 audit fee into a $3 million full-service engagement."

BKD could have been the Clinton Foundation's Arthur Andersen, approving "aggressive accounting tactics" to hide millions of dollars in controversial government grants in the one document that the public has an absolute right to see - the Clinton Foundation's federal tax return.

It is troubling, too, that like Arthur Andersen, BKD's professional conduct has been questioned by government regulators.

The Little Rock Arkansas branch of BKD, the very branch the Clinton Foundation used for its audit and other accounting services, is currently being sued by the Federal Deposit Insurance Corporation (FDIC) for $17.5 million in connection with the failure of the First Southern Bank of Batesville.

Between December 2008 and September 2010, First Southern Bank purchased $23 million in fraudulent district improvement bonds from Little Rock attorney Kevin Lewis. BKD was the bank's accounting firm at the time and the FDIC says the firm failed to do its job.

Lewis was sentenced to 10 years in prison in 2011 and BKD's association with the case certainly became widely known at that time.

Yet, the Clinton Foundation did not make its curiously-timed switch to the firm Price Waterhouse Coopers until 2013.

If the IRS can free itself for a moment from its witch hunt of conservative non-profits, it might want to examine the books of the Clinton Foundation.

With so much smoke, there's likely to be one heck of a fire.


Bill O'Reilly is All Over Our Question to GE's Jeff Immelt

***Media alert: Tune in to Fox's O'Reilly Factor tonight to see our Justin Danhof discuss his question to Jeffrey Immelt, our colleague David Almasi's question to Boeing CEO W. James McNerney, and the crime of honest services fraud. It promises to be an exciting show.***


On Thursday Evening, Fox News Channel's Bill O'Reilly covered our Justin Danhof asking General Electric CEO Jeffrey Immelt if he would release GE's written communications with the State Department during the time State was helping GE with a deal in Algeria, and GE was donating to the Clinton Foundation.

Folks will recall that Secretary Clinton used a personal server for her emails while she was employed by the State Department, so any copies of emails at this point presumably are on the servers of those with whom she was corresponding.

O'Reilly discussed the situation at length in his "Talking Points Memo," and then went on to discuss it throughout his show, including with Fox's Bret Baier...

...and Judge Andrew Napolitano...

The National Center has been questioning why corporations receiving help from the State Department have been donating to the Clinton Foundation since April 2014, when the National Center's Executive Director, David Almasi, a Boeing shareholder, asked Boeing CEO W. James McNerney about possible conflicts of interest between Boeing's philanthropy and actions by senior public officials. David raised the question of whether Boeing had unnecessarily exposed itself to the danger of being prosecuted for honest services fraud.

A description of David's confrontation at Boeing, and Washington Post coverage of it, is available here.

On Thursday night, Bill O'Reilly discussed our question to GE's CEO with Charles Krauthammer, who didn't seem to have heard of honest services fraud. (Again, I suggest he read the press release we issued after David Almasi attended the Boeing shareholder meeting.)

Charles Krauthammer insists this is about specific politicians. We disagree. Politicians and government officials come and go. Corporations have been paying for access for decades. If the public, and corporate shareholders, confront these CEOs, and insist they stop, there is hope for reform.

When it comes to Boeing and General Electric, it is important to note that we have no evidence anything illegal happened here, and there may well have been no wrongdoing at either company. Our concern as shareholders -- and we did approach both companies as shareholders -- is that honest services fraud is vague (once again, see our Boeing press release). A company can be totally innocent and yet get caught up in a defense that costs a lot of money and harms the company's brand. It is much safer for companies to avoid contributions to ALL charities connected to ALL politicians and government officials entirely, but CEOs, at least so far, don't seem to be aware of this.

As Americans, too, we're better off not wondering if our government officials are doing things because they believe those things are in the best interest of the United States, or because a foundation the official is connected to received a contribution.

In short, when it comes to making contributions to government-official-connected foundations, even contributions made with the best and most pure intentions, corporations should "just say no."

On Friday night, Justin is scheduled to appear on the O'Reilly Factor to discuss his question to Jeffrey Immelt, our colleague David Almasi's question to Boeing CEO W. James McNerney, and honest services fraud generally, in much more detail. We encourage everyone to tune in!


ObamaCare’s Amazing Wayback Clause

The above is the title of a piece by David Catron at the American Spectator.  The “Wayback Clause” in ObamaCare is responsible for the law’s ability to impact phenomena prior to the law going into effect.  Catron noted that “most celebrated effect of this amazing provision is its retroactive reduction of medical inflation during the years preceding the law’s implementation.”

That includes, apparently, the recent slow rate of Medicare growth too.  Last week the, the Ministry of Truth Department of  Health and Human Services (HHS) released a document entitled “Medicare Spending Growth Since 2009.”  Here’s Table 1 from the document:

“What policies have contributed to the Medicare spending growth slowdown?” HHS asks.  Here’s one:

Tying Medicare Advantage (MA) payment benchmarks to Traditional Medicare, and implementing the MA Quality Improvement Program, has created new incentives for MA plans to become more efficient while improving quality.

The document doesn’t make clear which benchmarks are being referred to.  Perhaps it means the provision limiting MA plans to spending “no more than 15 % of their Medicare payment on administrative costs, insurance company profits and non-healthcare related items.”  That, however, is much like the MA Quality Improvment Plan in that neither began until 2014. And that’s what’s so remarkable about the ObamaCare’s Wayback Clause: Those programs were able to lower growth in Medicare Advantage beginning in 2009.  

Here’s another supposed contribution to slow down in Medicare growth according to HHS:

The Medicare program is implementing a wide range of delivery system reforms to improve quality and lower costs such as fostering the growth of Accountable Care Organizations and testing bundled-payment arrangements. Initial results from some models suggest some promising impacts on both costs and quality. 

Thus far, the savings achieved thus far by Accountable Care Organizations (ACOs) in Medicare have been miniscule, about $372 million, or .08 percent of Medicare’s budget.  But, more importantly, the first ACO project didn’t begin until 2012.  For a lesser law that would be a problem, but thanks to ObamaCare’s Wayback Clause, ACOs started generating savings back in 2009 if that’s when Obama Administration says that they did.

For another example of ObamaCare’s Wayback Clause in action, read Catron’s article on Jonathan Cohn’s analysis of an Urban Institute report. 


Human Toll of California's Drought A "Man-Made Disaster" 

National Center Senior Fellow Dr. Bonner Cohen was featured today on “Money with Melissa Francis” on the Fox Business Network, where he discussed the government-caused disaster that is occurring as a result of California’s tough drought restrictions.  Going back further to the current dilemma’s origins, Bonner noted this disaster is rooted in misguided policies to save a fish already considered by many to be a lost cause.

As previously reported on the Fox News web site, Bonner called the California drought a “man-made disaster.”  He said:

Southern California is an arid part of the world where droughts — even severe droughts — are commonplace, and knowing this, you’d think the government of California would have included this mathematical certainty in its disaster preparedness planning, but the government has done nothing, not even store rain, as the population has continued to grow.

On his 4/20/15 Fox Business News interview, Bonner was also quick to point out that Californians and their businesses and, by extension, all of the people who benefit from them are at risk because the government is “trying to keep the delta smelt and other related fish alive.”

Bonner noted:

[W]hat you have here is an attempt, through a diversion of water from where it should have gone — namely, to the people of California.  Instead, it has gone for the purpose of flushing water to provide habitat for a fish that is on the verge of extinction anyway.

Reiterating that California’s environment is predictable enough to anticipate and prepare for droughts, Bonner said officials there have nonetheless failed in their duty to protect their constituents:

What does any responsible government do?  It adopts policies that enable the citizenry to be prepared for what they know is coming.  And precisely that hasn’t happened in California.

You have seen water directed away from agriculture, away from drinking water, away from water to bathe in for the sake of a fish which is so far gone now they can’t even find breeding pairs for them.

Watch the entire interview below.


California Water Shortage Was Caused by Environmentalists

Lake Tahoe Dam

Our Bonner Cohen says humans are to blame for the suffering caused by the California drought:
This is a man-made disaster. Southern California is an arid part of the world where droughts -- even severe droughts -- are commonplace, and knowing this, you'd think the government of California would have included this mathematical certainty in its disaster preparedness planning, but the government has done nothing, not even store rain, as the population has continued to grow.
He's not the only one. Carly Fiorina, former Hewlett-Packard CEO:
Droughts are nothing new in California, but right now, 70 percent of California's rainfall washes out to sea because liberals have prevented the construction of a single new reservoir or a single new water conveyance system over decades, during a period in which California's population has doubled. This is the classic case of liberals being willing to sacrifice other people's lives and livelihoods at the altar of their ideology.
Rep. Kevin Dunes (R-CA):
The environmental groups did not expect to run everyone out of water, but they got greedy, shut down the whole system, and ran the whole damned state dry.
There's lots more here.

Another Reason to Oppose the Medicare Doc Fix Bill

I’m trying really hard to support the “Medicare Access and CHIP Reauthorization Act” (MACR).

Yesterday, I pointed out that it included a new Medicare payment system called the Medicare Incentive-Based Payment System (MIPS) that will incentivize physicians to avoid the sickest patients.  I concluded:

One of the goals of MACR, eliminating the unworkable Sustainable Growth Rate, is a worthy one. Getting rid of this perennial problem, however, should not come by way of a new payment system that will make it harder for sicker patients to obtain physician care. The Senate should remove MIPS. Otherwise, lawmakers risk installing an IPAB-style payment system in Medicare.

Unfortunately, the bill also contains an incentive under Medicare to encourage physicians to join accountable care organizations (ACOs).  For those of you who are unaware, an ACO is a relatively large group of physicians and other health care providers that are responsible for a group of patients.  If this sounds like bureacratic medicine, it is.  It’s not clear that ACOs are working as intended, and there is also evidence that smaller physician practices may be better for patients.

Nevertheless, Republicans have included in MACR a 0.75 Medicare payment increase for physicians who join an ACO and 0.25 percent increase for those who don’t.  (Those who don’t join will also be subject to the MIPS system).

Here’s the kicker: ACOs were the creation of ObamaCare.  

This leads to two questions:  First, why would Republicans be reinforcing a component of ObamaCare, especially one that incentivizes bureaucratic medicine?  Second, what were Republicans thinking when they drafted this bill?  (“They weren’t thinking!” —the Wife.)

At the very least, the Senate needs to remove MIPS.  MIPS imposes a penalty on physicians who don’t meet certain benchmarks.  Without that, there is less incentive for physicians to join an ACO.

I’m reluctantly willing to let slide the $147 billion increase in costs over ten years that MACR entails, as there is a decent case to be made that the other changes this bill makes to Medicare will generate savings over the much longer term.

I would so love to see the Sustainable Growth Rate (SGR) be repealed.  As I’ve argued elsewhere, it probably isn’t good for Medicare patients either as it incentivizes physicians to see fewer Medicare patients.  But with both MIPS and the ACO incentives in this bill—forget it!  Those costs are greater than the benefits of repealing the SGR.

Either remove MIPS or scrap this piece of junk and start over.


Medicare Doc Fix Bill Is IPAB-Lite

The Daily Caller has run our David Hogberg's new paper, "Medicare Doc Fix Bill Is IPAB-Lite":

David Hogberg

When the Senate returns from recess this week, it will consider the "Medicare Access and CHIP Reauthorization Act" (MACR). The bill has acquired many names such as "The Doc Fix Fix" and "Budget Buster," but a more appropriate one is "IPAB-lite."

IPAB -- the Independent Payment Advisory Board -- was created as part of Obamacare to cut Medicare expenditures whenever those expenditures grew too quickly. Thankfully, IPAB's unpopularity has thus far prevented it from getting off the ground. Unfortunately, the changes MACR makes to Medicare's payment system seem very much along the lines of what IPAB would do. After all, the new payment system within MACR is consistent with IPAB's mission, incentive structure, and likely outcomes...

Read it all here.

If this bill is not changed before passage, Medicare literally will have incentives in it that cause doctors to get paid more if they avoid the sickest patients. This is morally wrong. The House has already passed this bill, so we have to look to the Senate for any improvements. Here's hoping the Senate sees fit to make them.


Leftist Concern for Black Lives Seems More Political than Compassionate, Says Project 21’s Cooper On “O’Reilly Factor”

Debunking the left-wing narrative that police-related killings of black men proves a “systemic problem in America” Project 21 co-chairman Horace Cooper pointed out on the Fox News Channel’s “The O’Reilly Factor” that the facts show there is really “an elevated risk of death that will not come from law enforcement, but that will come from other black Americans.”

Debating liberal talk radio Alan Colmes on the 4/9/15 edition of the show, Horace noted the risk of police-related deaths in the black community needs to be seen in context:

The truth is… if you consider the elevated number of times that black Americans encounter law enforcement versus the actual number of deaths, it turns out that black people are not actually at risk.  They’re actually in a favored category.

Citing government statistics showing homicide as the second-highest risk of mortality for black men and greatly outpacing other demographics, Horace said this is “a sign that there is a disparate amount of criminality happening in this one group… [and] there will be a higher level of encounter with  law enforcement.”

Another disparity Horace revealed was a disinterest on the left when it comes to addressing the crime problem within the black community:

This is the progressive impulse.  Every single police killing is documented.  We understand all of the details of every police killing.  But what we don’t need is to have that argument made that there is a systemic problem when the evidence shows that there are other problems that progressives don’t care about.

They say black lives matter….  But when, in Chicago, there are more black deaths that happened in 2014 than in the last ten years… they say nothing about it.

Horace further suggested:

In the black community, we need to have a conversation that’s unencumbered by the radical left and progressives’ agenda that tries to use government coercion to address some problems.

Watch the full segment here.


As Liberal Congressman Blames Conservatives for SC Shooting, Project 21's Horace Cooper to Speak Sense on O'Reilly Tonight

According to veteran liberal Congressman James Clyburn (D-SC), commonsense conservatives are to blame for the shooting in South Carolina.

I'm not exaggerating: Clyburn claims the climate for the shooting was created by people who believe in self-defense, voter ID -- even redistricting!

Horace Cooper on O'Reilly

He calls these people "a cancer eating at the innards of our society," and ties our views directly to the shooting by saying "that's why you have these rogue police officers feeling they have license to do what they want to do and there will be no consequences paid for it."

Our Project 21 black leadership group isn't sitting still for this. Tune in to Fox's O'Reilly Factor tonight, April 9, to see Project 21's Co-Chairman Horace Cooper defend you and me and conservatives everywhere.

And sign up for free our e-mail newsletter to follow our work to defend YOUR RIGHT to hold commonsense conservative views without being falsely accused of murder.

Don't let Congressman Clyburn get the last word!


Black Conservatives on South Carolina Police-Involved Shooting

Members of the National Center’s Project 21 black leadership network are speaking out about the shooting of an apparently unarmed black man during a foot chase after a traffic stop in North Charleston, South Carolina.

Caught on video by a witness and alleging showing the officer firing eight bullets at and killing Walter Scott, Michael Thomas Slager has since been fired from the North Charleston Police Department and is charged with Scott’s murder.

Project 21 member Nadra Enzi, a community policing activist in New Orleans, said:

The South Carolina police shooting involving now former North Charleston officer Michael Slager illustrated the unfortunate cold-bloodedness of some police officers.

Supporters of the police and anti-crime activists shouldn’t be timid in loudly demanding the severe punishment of officers who blatantly murder and then hide behind their badges to try to cover up their handiwork.

Legitimate outrage can be easily drowned out by the rogues’ gallery of predatory protesters, such as those who wrought havoc in the Michael Brown case.  Conservative voices denouncing this crime can help dampen the racial flames fanned by radical protesters’ rhetoric.  

Americans can also unite around this issue and use it to strengthen the frayed ties that bind us.  Not doing so lends aid and comfort to professional cop-haters, career criminals and skeptics who use atrocities to justify and spread profound mistrust.

When an innocent man is unjustly killed, it should remind police supporters and skeptics alike that violent crime isn’t the exclusive province of callous citizens.  A privately owned camera phone recorded the officer’s alleged crime and possible attempt to plant evidence.

When officers do this, society is less safe — especially the segment from whence this particular victim hailed.

Project 21 member Christopher Arps, a resident of the St. Louis area who was witness to the violence in Ferguson, Missouri after the death of Michael Brown and subsequent grand jury decision not to indict the officer involved in Brown’s death, added:

The video showing the tragic shooting of an unarmed African-American man in the back, who was fleeing from a police officer, has now convinced me that body cameras should be standard equipment for all law enforcement personnel.

Until the amateur cell phone video surfaced, the officer’s account of a life-and-death struggle between him and the victim over the officer’s Taser may have prevailed.  Police body cameras safeguard everyone involved, and the time for their widespread use has come.

According to North Charleston Mayor Keith Summey, 101 body cameras are already on order for the city.  Additionally, 150 more cameras were ordered in the wake of the shooting.  There is also legislation currently under consideration in the state legislature to require that all members of South Carolina law enforcement to wear body cameras.

Project 21 member Stacy Swimp, a community activist in Michigan who is a native of South Carolina, said:

It seems that the officer not only murdered this man, but also tried to place an object by his body to justify killing him.

South Carolina has the death penalty.  I believe this officer acted maliciously and then tried to cover up his evil deed.

He should be considered for the same death penalty he handed down, except in his case it should be decided upon and administered under the law.


Good News for Rare Diseases: Big Profits

For people who had a rare disease, defined as an ailment that strikes less than 200,000 Americans, there was often little hope, at least when it came to pharmaceuticals.  Drug companies didn’t see much profit in sinking resources into developing drugs to treat them.

Thankfully, that’s changing. As the Wall Street Journal notes:

Incentives from the U.S. Food and Drug Administration to develop so-called orphan drugs can mean quicker approval, tax benefits for the developer and seven years’ protection from competition after approval. Conventional drugs typically get five. Patient groups have raised hundreds of millions of dollars to give to firms for development of orphan drugs, defined as experimental treatments for diseases with fewer than 200,000 patients at any one time.

But perhaps most persuasive: Drug companies have found that they can charge towering prices for such drugs, which often treat deadly conditions for which there are few or no options.

Those “towering” prices may seem undesirable, but they are in part responsible for the big profits on these drugs.  And it is the profits which will drive innovation.

When companies and their investors realize there is a lot of profit to be made in a certain area, they will start directing resources to that area in hopes of reaping some of the profits.  This leads to competition which, eventually, will help lower the drug prices.

But if it wasn’t for the ability to make a profit, drug companies wouldn’t be moving into the area of rare diseases.  Right now, there is no drug therapy to treat primary-progressive multiple sclerosis, the worst kind of MS.  Now that drug companies have an incentive to make money off of it, one can hope there will soon be some drug treatments for primary-progressive MS.

I’ve occassionally heard people on the political left decry profits in health care.  Companies should make a profit off of people’s illnesses, they argue.  But that’s incorrect.  Companies aren’t making a profit off of illness; they are making a profit from curing illness.

So here’s hoping that many areas of health care become very profitable.  Profit is what attracts investment in cures.


Winter Blues Can’t Be Blamed for Poor Economy — “About Those Jobs Numbers” For March 2015

It’s not a good Friday for the Obama Administration.  A new report on jobless numbers, compiled by the federal government, came out today.

The official unemployment rate is 5.5 percent.  That’s unchanged from last month, and that’s no cause for celebration.  Even though this official number did not go up, the more complete and nearly double alternative unemployment measure and the workforce participation rate still points to peril.  There are even more reminders that the American economy continues to underperform despite the assurances from the Obama Administration that things are getting better.

As he does every month, Project 21 member Derryck Green provides his monthly analysis of these unemployment statistics and the general state of the economy in the Obama era:

Spring is finally here, but the harsh winter is no real excuse for the poor economy.

Bad weather — snow, in particular — often gets blamed for a lull in economic activity.  That is being used as an excuse right now, and there was plenty of snow across the United States this past winter to take the blame.

That being said, a lot of the problems with the American economy likely have more to do with Barack Obama’s fiscal stewardship than Jack Frost’s prolonged and prodigious visit.

Today’s report on jobless figures issued by the federal Bureau of Labor Statistics helps make that point.

According to the official government estimate, there was an unemployment rate of 5.5 percent in March.  But this unchanged rate pales to the alternative — and much more sobering — U-6 jobless rate of 10.9 percent.  This is the rate that tends to be a clearer indicator of the employment situation because it includes those who are unemployed, underemployed and have removed themselves from the job market altogether.

As Jim Clifton of the Gallup polling firm recently pointed out, this official unemployment rate can be made to seem lower than it may truly be through all sorts of manipulative trickery.

And that more unforgiving alternative rate is, per usual, around twice the official rate the media will focus on and the Obama Administration will cite.  Disappointment will likely be explained away as a result of a bad winter.  For example, state labor reports in Massachusetts and Connecticut already blame snow for slowed job growth and even losses.

But any positivity or assurances of a snowy anomaly cannot cover up how the labor force participation rate is an appallingly low 62.7 percent and has been no higher than 62.9 percent through many seasonal changes of the past year.  Nothing can deny that the estimated 126,000 jobs created in March fell below expectations and marked the end of a year-long streak of monthly job creation over 200,000 jobs.  ADP, a private company that works in payroll processing, was actually optimistic earlier in the week when it estimated 189,000 jobs were created.  Both numbers are below the 225,000 that were projected.

There’s also should be concern about joblessness in key demographics that are long-term and hurting constituencies allegedly of the utmost concern to this presidency.  For example, the black teen unemployment rate was 25 percent — a sky-high number that improved but has nonetheless hovered around 30 percent for much too long.  Overall black unemployment was also way too high at 10.1 percent, which was a slight decrease from February.  Hispanic unemployment was up to 6.8 percent.

These higher-than-average unemployment rates were not just during the winter months.  Black unemployment, for example, was 11 percent in November of 2014, before a lot of snow began falling.  The unemployment rate has been dismal, whether there was snow or leaves on the ground.

These unemployment numbers could be getting worse in the future as more illegal immigrants come “out of the shadows” to benefit from the President’s recent executive action allowing some families to benefit from what’s everything short of full amnesty.  In news that should not surprise anyone, the Center for Immigration Studies revealed that Department of Homeland Security statistics indicate that over 2,000 youth are still crossing the border into the United States each month.  The lure of what is believed to be real amnesty is obviously an incentive to those flooding the border.

According to the CIS, 84 percent of these kids currently crossing the are teenage boys.  They are, or soon will, be competing in the workforce — legally or not — rain, snow or shine.  And they will be going head-to-head with unemployed American citizens for similar jobs.

It’s clearly a build-up for disaster.

Getting back to the change in seasons, unemployment is not the only poor economic indicator being blamed on the snow when it really should not.

Construction of new homes, for instance, fell the furthest in February than in the previous four years.  Housing starts were down 17 percent from January and, according to IHS Global Insight, this “poor” Commerce Department report suggests that reduced spending on construction could drag down the entire economy for the first quarter of 2015.

Bank of America’s Michelle Meyer dispelled the weather myth as it pertains to housing, telling Bloomberg: “While the initial reaction is to dismiss much of the drop because of the bad weather, the level of home construction continues to be depressed.”  There are also still 1.4 million fewer construction jobs than in 2006.

In addition to problems in the construction industry, there is a potential problem for auto sales as well.  It appears the expected drop in sales of new cars has arrived, with automakers such as Ford and Nissan reporting March sales were down by three percent.  Honda sales were down by five percent.  Volkswagen fared even worse with an 18 percent decline.  General Motors also lost two percent.

Some people want to blame a snowier March, but it is still generally supposed to be a good month for car sales.  Alec Gutierrez of Kelly Blue Book told the Associated Press that “we’re at a point where sales are going to grow at a much slower pace.”

What are government officials thinking?  Over at the Agriculture Department, while many families are planting their own vegetable gardens this spring, it would appear bureaucrats are instead trying to find better ways for Uncle Sam to deliver fruits and vegetables to those on public assistance.  They are apparently less focused on helping people in need do things themselves, and would prefer spending more on enhanced benefits.

SNAP/food stamp participation more than doubled since the start of the Great Recession.  It is expected to cost an estimated $80 billion in 2015.  At least $31 million of that is allegedly to be spent on encouraging “incentive strategies to help SNAP participants better afford fruits and vegetables.”

It would appear as if there is more emphasis on using welfare dollars to meet the desires of bureaucrats than in encouraging recipients to not need them at all.  It’s like there is no expectation of an end of attempts to slow the economic malaise that has gripped the nation throughout the Obama Administration.

Seven winters have come and gone while Barack Obama has lived in the White House.  The economy has remained in a rut throughout these winters and the following springs, summers and falls.

Even the New York Times article on these latest unemployment numbers can’t find much of merit: “This latest jobs report underscores what has been a persistent theme: that in the recovery, many working Americans have received only scant benefits from the upswing.”

It’s not the rain or the snow probably as much as the drip at 1600 Pennsylvania Avenue at fault!


Celebrity Chef Tom Colicchio Divides Us Between Red Plates and Blue Plates 

Vegetable sandwich LW

In a National Review piece just out today, food writer Julie Kelly and I review the divisive activism of celebrity chef and MSNBC food correspondent Tom Colicchio.

We write that,

If you’re looking for practical dinner advice, look elsewhere.  

I’m confident that National Center for Public Policy Center Research readers are erudite enough to already know that an MSNBC food correspondent isn’t the guy you should look to for recipes. 

Recall, for instance, when I told The Washington Post not to give mainstream credence to the 2013 National Food Policy Scorecard sponsored by Mr. Colicchio’s group, Food Policy Action. 

Jeff Stier, senior fellow at the conservative National Center for Public Policy Research, said there’s a good reason for Republican lawmakers’ performance on the scorecard. “It does not, as FPA claims, ‘reflect the consensus of top food policy experts,’ ” he said. “Rather, it represents the narrow views of a select group of some of the nation’s most ideologically divisive activists.”

Stier called the scorecard a “sham,” saying it has all the validity of an “NRA scorecard on gun ownership. But they’re playing it off as otherwise, which I think is misleading.”

Well, not much has changed since 2013. 

Celebrity chef Tom Colicchio probably doesn’t cook much these days. Having built his reputation preparing expensive entrées for his well-heeled customers at Craft Restaurants, Colicchio is now cooking up liberal food policy to expand the government’s ever-encroaching role in how we eat, and what.

 His self-promotion schedule and branding pursuits could put Kim Kardashian to shame. He’s the star and producer of two reality shows on Bravo, Top Chef and Best New Restaurant. Colicchio owns several pricy restaurants and “ethical sandwich” joints on both coasts. He lends his name to a collection of expensive artisanal kitchenware, including a coffee mug for only $46.

 But apparently television and restaurant fame don’t hold enough gravitas for this wannabe political star. Over the last few years, Chef Colicchio has emerged as the face of the food movement, culinary elitists who insist that every bite of food is a political statement (think climate-change folks going after your shopping cart instead of your SUV). 

Testifying before Congress a few years ago about the school-lunch program whet his appetite for politics. Since then, Colicchio has visited Capitol Hill several times to promote mandatory labeling of genetically modified foods, and as the guest of organic farmer Representative Chellie Pingree (D., Maine) he even attended the State of the Union address in January. No doubt the chef will want a seat at the table to spin the now controversial update to the Dietary Guidelines for Americans, due for approval later this year.

Read the full piece here.


Repealing the SGR Without Adding (Too Much) to the Deficit

Today the House passed the “Medicare Access and CHIP Reauthorization Act of 2015” which will repeal the dreaded Sustainable Growth Rate.

Unfortunately, the bill is not without its problems, not the least of which is it will cost $141 billion over ten years.  

Thanks to the folks at the Heritage Foundation for pointing out to me that there is at least $57.6 billion worth of Medicare changes in President Obama’s budget that could be used to defray some of the cost.  They include:

-$62.5 billion by increasing income‐related premiums under Medicare Parts B and D.

-$6.6 billion by increasing the Part B deductible for new beneficiaries.

-$0.8 billion by introducing home health co‐payments for new beneficiaries.

-$17.7 billion by encouraging  the use of generic drugs by low‐income beneficiaries.

-$5 billion by introducing a Part B premium surcharge for new beneficiaries who purchase near first‐dollar Medigap coverage.

That adds up to about $92.6 billion. The House bill already incorporates about $35 billion of it, meaning that there is another $57.6 billion that the Obama Administration is willing to go along with.  Include the rest and the cost drops to $83.4 billion.  

I’d still like to see that final $83.4 billion paid for, but if that was the only thing standing in the way of SGR repeal, it might be worth it.



I walked to the corner coffee shop this morning (not Starbucks) and ordered a mocha. I then asked the clerk if she could write #RaceTogether on it.

She replied that she didn’t know what I was talking about.  I smiled and said, “You know, Starbucks?”  The barista overheard me and said, “Yeah, I heard about that.  I don’t get what they were trying to do with that.”

I couldn’t help myself: “I think the goal was to lose customers.”

My encounter this morning renews my faith that there are normal people in the world who have better things to do with their time than pay attention to silly social justice campaigns.  



ObamaCare At Five: Lipstick on a Pig

The Los Angeles Times editorialists today acknowledged some unpleasant reality about ObamaCare: “…surveys show little love for [ObamaCare]— a view that hasn’t shifted much over time.”

But the Times can’t acknowledge that the law is unpopular without prefacing it with a distortion: “The general public isn’t as eager to do away with the law, widely known as Obamacare…”  Really?  The last poll conducted on the question of repeal showed 58 percent favor repeal.  The poll, commission by FoxNews last December, found that was up 53 percent from a year earlier.

You might think that the persistent unpopularity of ObamaCare would encourage some reconsideration the value of the law.  But then you realize this is the Times editorial page.  Naturally, they quickly get on with the lipstick application:

Despite the relentless attacks, however, the act has been a notable success on one front: It has helped millions of Americans obtain insurance coverage that would otherwise be out of their reach. By March, more than 21 million people had enrolled through new state insurance exchanges or Medicaid, including more than 16 million who’d previously been uninsured, and the number of Americans without coverage has dropped to a little over 12%, according to Gallup

Yes, but that 21 million include about 10 to 11 million more on Medicaid, the worst health care program in the U.S., not exactly something to cheer about.  It also includes some of the 4 to 6 million people who lost their insurance thanks to ObamaCare, rendering President Obama’s promise that if you like your health plan, you can keep you health plan” quite possibly the lie of the decade.  Funny, but the editorial doesn’t mention that.

At the end of that paragraph, they pull a fast one: “There’s much more to be done to make healthcare affordable and sustainable, but lawmakers should build on the foundation laid by Obamacare instead of continuing to battle over whether to demolish it.”  Health insurance and health care are two different things. Making health insurance more “affordable” by heavily subsidizing it does not necessarily make health care more affordable. (Indeed, it might make health care more expensive).

The editorial next claims that “One result [of ObamaCare], according to PricewaterhouseCoopers’ Health Research Institute, has been a surge of new businesses into healthcare as entrepreneurs offer their own approaches to less costly, ‘consumer-oriented’ care.”  According to the Congressional Budget Office, ObamaCare will also reduce the number of hours worked by the equivalent of 2.5 million job by 2017.  Sure hope that surge of new businesses is enough to compensate for that.

Finally, it’s hard to know what to make of this passage: “A key part of the effort to rein in healthcare costs is covering more people with insurance plans that promote wellness and prevention. [ObamaCare] has done much of that work, so the rational thing for lawmakers to do now would be to build on that progress.” Either the editorialists are lying or they are ignorant.  Let’s give them the benefit of the doubt and assume the latter.   Sorry, but wellness programs do not save money and, of the most part, don’t improve health.  And while preventive care can improve health, it generally does not save money.  Maybe the Times’ editorialists should start getting their information on such subjects from sources other than the propaganda of former HHS Secretary Kathleen Sebelius.

Of course, propaganda is very useful when trying to make ObamaCare out to be a good law.


Upset with Ringling Bros. for Taking Elephants out of the Circus? Blame PETA Instead

In an op-ed for USA Today, I remind readers that radical animal rights activists are to blame for the loss of elephants in the Ringling Bros. circus.

For all the families who have yet to take their children to a Ringling Bros. and Barnum & Bailey Circus — hurry. The company announced recently that its storied elephant act will no longer appear in the traveling circus as of 2018.

This decision has been met with disappointment by people like myself who value the wholesome entertainment that the circus provides, and bristle at hysterical attacks by animal rights extremists. Groups like People for the Ethical Treatment of Animals (PETA), on the other hand, have cheered the decision and claimed victory in the long fight against elephants in the circus. This, in their view, is a major victory in their broader war against any human ownership of animals.

But those, like me, whose initial reaction was anger at Ringling Bros. and its parent company, Feld Entertainment, for “capitulating” to animal rights activists should consider placing the blame on the activists themselves. By engaging Feld in a perpetual stream of litigation and proposed bans, activists were able to distract the company from its core competency — family entertainment — until those distractions became too onerous.

What’s particularly obnoxious about the litigation brought on by radical animal rights groups, including the Humane Society and the American Society for the Prevention of Cruelty to Animals (ASPCA), is that it was summarily dismissed in court. In fact, these plaintiffs ended up paying Feld for bringing such outrageous claims. Just last year, the Humane Society and other animal rights groups paid a $15.75 million settlement to Feld after their lawsuit alleging elephant abuse was found without merit.

Two years earlier, the ASPCA was ordered to pay Feld $9.3 million after making false claims against the company in court. These groups aren’t just having their claims thrown out; they’re so egregious that they are compensating Feld and Ringling Bros. for their misdeeds.

So the claims by these animal rights extremists against Ringling Bros. have been shown in court to be a total fraud, and claims that the “Greatest Show on Earth” is harmful to animals have been debunked repeatedly in court, as well as in the court of public opinion.

But the threats of further litigation didn’t stop. Activists publicly admit that it doesn’t really matter if you’re successful in court — the act of suing is a useful irritant that costs your adversary time, money and focus, and gets them to give in, even if the underlying litigation is without merit. . In fact, here, Feld conceded that the non-stop litigation and costs of opposing regulatory threats in localities around the country were integral to the Feld family’s decision to retire the 13 currently performing Asian elephants from the traveling circus.

The suit against Ringling Bros. is just one of a long and colorful list. I will mention just a few other animal rights zealot’s efforts here. PETA condemned the Pokémon media franchise because the video game “paints a rosy picture of what amounts to thinly veiled animal abuse,” PETA filed suit in federal court in Southern California seeking to declare that SeaWorld’s whales are being held in slavery in violation of the 13th Amendment. The failed litigation sought a court-ordered release of the whales “from bondage.” CNN reported that the suit sought “a permanent order against holding them in slavery, as well as appointment of a legal guardian to carry out the transfer of the whales to a suitable habitat.” The Animal Legal Defense Fund is planning to sue a Napa restaurant for serving foie gras during a now-overturned ban on foie gras.

The irony here is that Ringling Bros. has done far more to preserve Asian elephants’ on planet earth than the flailing animal rights groups. They, instead, are popping corks that children can’t see elephants in the circus anymore, and I’m certain will continue their tried and true pattern of focusing their time, energy and resources ginning up lawsuits or other bogus attacks on human interaction with animals — impacting the ability of companies and governments who come under their scrutiny from focusing on their missions. Sadly, I guess that’s the point.





Loretta Lynch Race Card Tactics Rebuffed by Black Conservatives

With Senate liberals refusing to allow a vote on legislation that would combat human trafficking because there are long-established protections against taxpayer funding of abortion included in it, Senate Majority Leader Mitch McConnell (R-KY) said political shenanigans will come at a price.  Until the filibuster of that human trafficking bill comes to an end, it will also effectively block any confirmation vote for Loretta Lynch to become the next attorney general.

Naturally, rather than lifting the filibuster or seeking a compromise, Senate liberals instead went on the attack.  Their weapon of choice?  The race card, of course!

Senator Dick Durbin (D-IL) chose to take the fact that Lynch is a black woman to claim that the procedural delay was akin to Rosa Parks in Montgomery, Alabama in 1955, and that McConnell was making Lynch “sit in the back of the bus.”

Over in the U.S. House of Representatives, which has no bearing on confirmation matters other than to bluster, Representative Sheila Jackson Lee (D-TX) suggested in a MSNBC interview that Lynch’s race and sex are “a factor” in why a vote is not scheduled.

Members of the National Center’s Project 21 black leadership network take exception to these liberal bullying tactics.  They see Lynch as just another nominee, not someone who deserves special treatment because of her skin color or her gender.

Speaking about the liberals’ race card strategy to push her confirmation and silence dissent, Project 21 Co-Chairman Horace Cooper, a former constitutional law professor at George Mason University and former leadership staffer in the U.S. House of Representatives, said:

This is truly shameful.

Instead of letting Loretta Lynch’s nomination rise or fall on the merits, Washington liberals in the House and Senate are trying to use her race and gender as a tool to prevent any examination of her record or agenda.

When these same so-called progressives opposed women and minorities who were conservative, such as Janice Rogers Brown for a federal judgeship, no one claimed they were bigots.   Liberals should abide by this same standard when they nominate one of their own.

Furthermore, instead of clouding the issue with racist charges, Loretta Lynch should be encouraged to be forthcoming on her positions on gun control, executive amnesty and perpetuating a politicized Justice Department. 

Project 21 member Shelby Emmett, an attorney and former Capitol Hill staffer, said:

As a black woman and an attorney, I am so sick and tired of race always being the liberals’ default talking point.

Ms. Lynch went through four years of college, three years of law school and has decades of experience to put her where she is today.  She is just as qualified as any other candidate, and thus all the scrutiny, questions, procedures and games should be fair game just like with any other nominee during the confirmation process.

God forbid that Senator Dick Durbin should see an attorney instead of a black woman who apparently isn’t on the same level as her white male peers and thus worthy of a defense based on her resume instead of her pigmentation.

True racial harmony is holding this woman’s feet to the fire — just like we would with any white, male candidate.  She can handle it. 


Hey Amy & David, You Should Adopt This Policy for NCPPR!

Now this is an awesome employee incentive program!

For a little more than four years, Eric Puryear with Puryear Law in Davenport, Iowa, has given his employees an extra $50 a month if they get their permits and carry a gun.

“Well, I really like gun rights. I think they’re a basic human right. I think so many bad things wouldn’t happen to people if they were armed for self-defense,” said Puryear.

You know, I’d be okay with even $25 a month!

More here:


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.

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