Where do food stamps come from?
They come from taxpayers—certainly not from family farms. Yet the “farm” bill, a recurring subsidy-fest in Congress, is actually 80 percent food stamps and other government nutrition programs.
The food stamps sweeten the farm deal for lawmakers, who admit that the combination works for their political purposes. As Heritage experts Daren Bakst and Diane Katz explain:
The food stamp portion creates a reason for urban representatives to support farm subsidies, and for farm-state lawmakers to support food stamps.
Talk of de-politicizing agriculture programs and welfare policy is met with stiff resistance. For example, Senator Thad Cochran (R–MS), ranking Republican on the Senate Agriculture Committee, recently told the North American Agricultural Journalists group that food stamps should continue to be included in the farm bill “purely from a political perspective. It helps get the farm bill passed.”
Food stamps are there to help “get the farm bill passed.” And the relation of the rest of the farm bill to farming is also questionable. Bakst and Katz note that “Congress has expanded the farm bill over time into a costly compilation of disparate programs. Along with agriculture and food stamps, the legislation includes dozens of forestry, conservation, energy, and rural development programs.”
It has become the norm that Congress lumps billions—even trillions—of dollars in taxpayer-funded programs together into huge bills. This allows them to sneak in plenty of special-interest pork.
Each of these programs deserves to be evaluated on its own, and taxpayers deserve transparency from Congress about how it plans to spend our money.
For example, food stamps are a massive program that needs a careful look. Food stamp spending has doubled under the Obama Administration, and participation is at historic highs. Recruiters hold bingo games and other “parties” to try to get more people on the food stamp rolls.
Farm commodity programs are also a major concern and in dire need of reform. Congress may eliminate the egregious direct payment program, which pays farmers for doing nothing. However, instead of stopping there, both the House and Senate farm bills would replace direct payments with programs that could wind up being even costlier.
Food stamps and farming ultimately have to do with food, but that’s about all they have in common. Making the farm bill 80 percent food stamps just doesn’t make sense.
Time to Free Farmers and End Costly Depression-Era Subsidies
- With budget deficits soaring, Congress should reduce unnecessary spending in the farm bill. The Congressional Budget Office estimates that direct spending under the Senate and House 2013 farm bills would be $955 billion and $940 billion for the 2014-2023 period, respectively.
- Farm subsidies shift the costs of agricultural risk to taxpayers and entice farmers to take even greater risks.
- These subsidy programs hurt farmers by imposing contradictory policies that tie their hands and reduce their ability to utilize their land as they deem fit. By allowing free markets to work, farmers and taxpayers can both benefit through less burdensome government intrusion into farm policy.
- Crop insurance costs are skyrocketing. From 2000-2006, the average annual cost to taxpayers for subsidizing crop insurance was $3.1 billion. That cost is expected to grow to $8.9 billion from 2013-2022.
- Unlike other farm programs that have subsidy caps, there is no limit on the amount of premium subsidies that farmers can receive under the crop insurance program.
- While the House and Senate farm bills would, as of now, eliminate the direct payment program, new programs in both bills would likely negate any savings.
- The farm bill subsidies disproportionately benefit large and profitable businesses. About 75 percent of large farms with incomes of $250,000 to $999,999 receive subsidies, compared to 24 percent of farms with incomes of $10,000 to $249,999.
- About 61 percent of farms function without taxpayer subsidies.
Tariffs, Mandates, and Quotas Increase Food Prices
- Americans pay two to four times higher prices for sugar than consumers in other countries as a result of government “protections” for the sugar industry, including quotas and tariffs.
- Consumers pay hundreds of millions of dollars more for milk, butter, cheese, and a variety of other dairy products because of government-imposed artificial limits on dairy production.
- Biomass subsidies to promote “renewable” fuels divert corn supplies from food manufacturing to ethanol production and displace soybeans and other crops, thereby propelling food prices upwards.
- The increases in food prices fall most heavily on the poor.
A Path for Reform
- Meaningful reform requires lawmakers to consider food stamps and other nutrition programs in separate legislation from farm programs. This would allow policymakers to give the proper attention to each and not force distinct issues into one cluttered bill.
- Food stamps should be reformed along the lines of other modern welfare programs (such as Temporary Assistance for Needy Families) within the Department of Health and Human Services.
- Congress should begin the process of fully eliminating farm subsidies by restricting eligibility and imposing income limits and subsidy caps.
- The repeal of flawed farm policy such as direct payments should not be offset by the creation of new “safety net” programs, such as the proposed “shallow loss” and price loss coverage programs.
- Farmers already have a variety of private-sector options to mitigate agriculture risks, including diversifying product lines, leveraging assets, and maintaining cash reserves.
After months of advocating for a “balanced approach” to our debt and deficits, it seems like the administration is pulling a 180 on the debt ceiling. Despite the overwhelming support from Americans (73 percent) to tie a debt ceiling increase to spending cuts, the administration is saying they “will not negotiate.” A “balanced approach” to raising the debt ceiling would take steps to address our long-term fiscal crisis (as outlined in the latest CBO report). What’s “balanced” about a clean increase?
WHAT HAPPENED TO BALANCE?
Administration Demands Clean Increase In Debt Limit:
Treasury Secretary Jack Lew: “We Will Not Negotiate Over The Debt Limit.” (Peter Schroeder, “Extraordinary measures become standard as US hits debt limit again, The Hill, 5/19/13)
Despite Months Of Advocating For A “Balanced Approach” To Debt And Deficits:
UPI: “Obama Urges ‘Balanced Approach’ On Debt.” “President Barack Obama Saturday renewed his call for a ‘balanced approach’ to reducing the federal debt.” (“Obama urges ‘balanced approach’ on debt,” UPI, 2/16/13)
Yahoo! News: “Obama Calls For ‘Balanced Approach’ To Avoid Fiscal Cliff.” (Deborah Lutterbeck, “Obama Calls For ‘Balanced Approach’ To Avoid Fiscal Cliff,” Yahoo! News, 11/9/12)
Press Secretary Jay Carney “Balanced” Deficit Reduction: “It is the president’s position that in pursuit of balanced deficit reduction that includes both entitlement reforms and revenues from tax reform…” (Press Secretary Jay Carney, Press Briefing, 3/11/13)
Jay Carney Touts “Balance” In The President’s Budget: “The president’s budget proposal … continues the work of reducing our deficit in a balanced way.” (Jay Carney, Special Report with Brett Baier, Fox News, 4/10/13)
Treasury Secretary Jack Lew Calls For “Balanced, Long-Term Approach” On The Sequester: “We think that the sequester is irresponsible and it should be replaced with a more balanced longer-term approach …” (“Treasury Secretary Lew on Long-Term Unemployment, Party Divide on Spending Cuts,” PBS Newshour, 5/8/13)
AMERICANS OVERWHELMINGLY SUPPORT A BALANCED APPROACH TO THE DEBT LIMIT
Public Notice Poll: 73 Percent Of Voters Say That If Congress Increases The Debt Limit, Then Congress Should Also Require The Government To Cut Spending. (“New Poll: Majority of Americans Want Spending Cut, Taxes Lowered To Balance Budget,” Tarrance Group Survey, 4/22/13)
Latest CBO Report Says Long-Term Debt Will Continue To Rise, Warns Of “Serious Negative Consequences”: “Under current law, the debt is projected to decline from about 76 percent of GDP in 2014 to slightly below 71 percent in 2018 but then to start rising again; by 2023, if current laws remain in place, debt will equal 74 percent of GDP and continue to be on an upward path. Such high and rising debt later in the coming decade would have serious negative consequences: When interest rates return to higher (more typical) levels, federal spending on interest payments would increase substantially. … Finally, a large debt increases the risk of a fiscal crisis, during which investors would lose so much confidence in the government’s ability to manage its budget that the government would be unable to borrow at affordable rates.” (“Updated Budget Projections: Fiscal Year 2013 to 2023,” Congressional Budget Office, 5/14/13)
Bankrupting America Launches New Debt Ceiling Resource Center
Bankrupting America, a project of Public Notice, today launched a Debt Ceiling Resource Center to provide facts and the latest news and developments as Congress debates increasing the nation’s debt ceiling this summer. The resource center will educate Americans about the key drivers of the debt, provide a 10-year projection of future increases and explain why any deal in Congress must include equal to or greater spending cuts in return. To help put the issue into perspective, Bankrupting America will also launch a new video series, “The Literal Debt Ceiling,” consisting of short web videos that will help break down the key issues, provide a commonsense perspective and highlight the dangers of failing to fix the problem.
White House Senior Advisor on IRS Scandal: “The law is irrelevant”
According to The New York Times, “The chief White House lawyer, Kathryn Ruemmler, learned last month that a Treasury inspector general had concluded an audit of the Internal Revenue Service’s targeting of conservative groups, weeks before the matter became public, according to a senior White House official. The White House counsel’s briefing came about the same time that Treasury Secretary Jacob J. Lew met with the Treasury inspector general for tax administration, J. Russell George, to learn his draft audit of the controversial I.R.S. effort was complete, the official said. The acknowledgment that Ms. Ruemmler knew about the I.R.S. inquiry weeks before it became known publicly came as a senior adviser to President Obama, Dan Pfeiffer, mounted a combative defense of the administration on Sunday. … On ABC’s news program ‘This Week,’ Mr. Pfeiffer said that he did not know whether laws had been broken at the I.R.S., but that regardless, the agency’s actions were seriously wrong. ‘I can’t speak to the law here,’ he said. ‘The law is irrelevant. The activity was outrageous and inexcusable, and it was stopped, and it needs to be fixed so we ensure it never happens again.’”
Paul Ryan: IRS Scandal Is “Big Government Cronyism”
The Hill reports, “Rep. Paul Ryan (R-Wis.) on Sunday called the Internal Revenue Service scandal a defining example of ‘big-government cronyism.’ ‘This is rotten to the core. This is arrogance. This is big-government cronyism,’ said Ryan on “Fox News Sunday.” The 2012 GOP vice-presidential nominee and House Budget committee chairman said the mismanagement which allowed IRS to target and delay applications for tax exempt status from conservative groups highlighted the failures of the Obama administration. … ‘This is what’s disturbing about this,’ he said. ‘We had a challenge in the campaign against empty rhetoric. Now the country is seeing what this kind of big unlimited government does in practice. And that is not a pretty picture.’”
“Obama’s budget is another instance of lost credibility”
Jennifer Rubin editorializes in The Washington Post, “It turns out that President Obama’s Office of Management and Budget is no more trustworthy than the rest of his administration. His budget, unsurprisingly to conservatives, is not ‘balanced’ and does not deliver on its promise to cut $1.8 trillion in spending over a decade. The Post reports: President Obama’s most recent budget request would reduce borrowing by $1.1 trillion over the next decade compared with current law — almost entirely through higher taxes on the rich, large estates and smokers, congressional budget analysts said Friday. … The same accounting gimmicks remain (‘those savings include money the government never intended to spend anyway, such as a contingency fund for the wars in Iraq and Afghanistan and nearly $300 billion in unneeded disaster relief’). In fact, without these tricks, ‘Obama’s budget blueprint would actually increase spending over the next decade by roughly $700 billion, according to CBO figures.’ Oh, and his budget never balances. Once again, what he told us is very different from reality. The difficulty the president now faces is not merely the multiple scandals and the perception that his administration has crossed the line from partisanship to illegality, but the growing recognition that almost nothing he says can be taken at face value. The presumption of integrity and assumption of good faith has vanished in a cloud of unkept promises, wrongdoing and ineptitude.”
Lawmakers Have Been “Doing Nothing” to Bridge the Gap on a Budget Deal
Reuters reports, “A sudden improvement in the outlook for the government deficit over the next decade has alleviated some of the pressure on lawmakers to act. … The news about the shrinking deficit came Tuesday, when the Congressional Budget Office slashed its deficit forecast for 2013, projecting it will be equivalent to 4 percent of America’s economic output, less than half its 2009 level, and will drop to 2.1 percent, based on current projections, by 2015. But the report said the deficit would start widening again in 2016 and continue on an upward path with ‘serious negative consequences’ on the economy, increasing ‘the risk of a fiscal crisis.’… They [Lawmakers] have been doing little, for example, to bridge the gap between budgets passed in March by the Democrat-controlled Senate and the Republican-controlled House of Representatives. No conference committee has been formed to reconcile deep spending cuts in the Republican plan with nearly $1 trillion in tax hikes in the Democratic version.”
Small Businesses Fearing Obamacare Aren’t Getting Help from Congress
The Hill reports, “Small businesses looking for a break from President Obama’s healthcare law aren’t getting any help from Congress. The law’s critics spend a lot of time talking about its potential effects on employers, and small businesses in particular. But there hasn’t been a real effort on the Hill to address the provisions that will have the most immediate impact on small businesses. In part, the lack of action stems from Republican divisions over whether it’s OK to ‘fix’ parts of the healthcare law. Some conservatives say the party should focus solely on repealing the law and shouldn’t help Democrats solve potential problems.”
“Employers Eye Bare-Bones Health Plans Under New Law”
According to The Wall Street Journal, “Employers are increasingly recognizing they may be able to avoid certain penalties under the federal health law by offering very limited plans that can lack key benefits such as hospital coverage. Benefits advisers and insurance brokers—bucking a commonly held expectation that the law would broadly enrich benefits—are pitching these low-benefit plans around the country. They cover minimal requirements such as preventive services, but often little more. Some of the plans wouldn’t cover surgery, X-rays or prenatal care at all. Others will be paired with limited packages to cover additional services, for instance, $100 a day for a hospital visit. Federal officials say this type of plan, in concept, would appear to qualify as acceptable minimum coverage under the law, and let most employers avoid an across-the-workforce $2,000-per-worker penalty for firms that offer nothing.”
Tough Days Ahead for Obamacare Implementation
The Washington Post editorializes, “Thought you had seen the last of the fighting over the Affordable Care Act, also known as Obamacare? Since its passage in 2010, after all, it has survived Supreme Court review, innumerable challenges from House Republicans and Mitt Romney’s unsuccessful campaign to evict its author from the White House. Nonetheless, with the heart of the reform set to take effect next year, its most contentious days may lie ahead. The law will affect Americans’ health and pocketbooks, and its implementation entails many challenges and quite a few unknowns. … President Obama last month said nothing will change for the 85 to 90 percent of Americans who have insurance. That’s not quite right. Even some people who are currently insured may see premium increases — or, depending on their health, gender and age, reductions. For example, the 10 percent or so who are in the individual insurance market will shop at ‘exchanges’ — new health-care marketplaces for individual purchasers — where the currently uninsured also will go. The law protects the old and the sick, but that also means that some of the young and the healthy might have to pay more than they do now, particularly if price-control mechanisms don’t work as well as hoped.”
S&P Analyst: ‘Political Brinkmanship’ Remains Major Threat on U.S. Credit Rating
The National Journal reports, “The debt-ceiling deal expired over the weekend, but the credit-rating agency that sent shock waves through financial markets when it downgraded the U.S. credit rating in 2011 is again warning Congress that a credible five-year plan to stabilize the federal deficit is as necessary—and elusive—as ever, National Journal’s Stacy Kaper reports. In an exclusive interview, Nikola Swann, Standard & Poor’s top analyst for the U.S. government’s rating, said that making big fiscal decisions in a crisis setting hurts the U.S. rating outlook and that continued ‘political brinkmanship’ remains a major threat. … S&P’s current AA-plus rating with a negative outlook means there is at least a 1 in 3 chance that the agency will lower America’s rating by 2014.”
‘Love has won out over hate’: France becomes 14th country to allow gay marriage. Obama budget would cut U.S. deficit by $1.1 trillion over decade: CBO. Lawmakers Accuse IRS Officials of Lying in Tax Scandal
Incoming IRS chief asked to conduct “thorough review” of agency. Two states say 2014 Obamacare insurance costs on low side. Obama budget would cut U.S. deficit by $1.1 trillion over decade: CBO
As we work to rein in wasteful spending and improve retirement security, our nation cannot afford to overlook Medicaid’s long-term care financing crisis.
We’re completely unprepared for the coming “age wave.” More than 15 million Americans will be 85 years or older in 2040. While seven in 10 seniors will need some type of long-term care (LTC) during their lives, only one in 10 has private LTC insurance coverage. Almost 14 million seniors could suffer from Alzheimer’s in 2040, and the annual rate for a private nursing home room continues climbing, reaching $81,030 in 2012.
Research shows many Americans mistakenly believe they have LTC coverage through Medicare when they do not. The misinformation puts their retirement plans at risk. Without change, millions of middle-class baby boomers will turn to a welfare program, Medicaid, to finance these needs.
The authors of Obamacare pretended to solve Medicaid’s LTC financing problems by creating the Community Living Assistance and Support Services (CLASS) program, a national entitlement, promising a daily cash benefit to disabled Americans. The program failed because liberals promised the impossible: a self-funded, fiscally sound program that prohibits underwriting without forcing healthy Americans to participate. As it fell apart, Senator Tom Harkin (D-IA) criticized CLASS because “it’s voluntary.”
Less supportive Democrat Senators called it a “Ponzi scheme.” And the Congressional Budget Office (CBO) warned it would “inevitably add to future deficits (on a cash basis) by more than it reduces deficits in the near term, even though the premiums would be set to ensure solvency of the program.”
Aggressive congressional oversight forced Department of Health and Human Services (HHS) Secretary Kathleen Sebelius to concede the program was unsustainable and admit she lacked legal authority to rewrite the program. HHS attorneys warned CLASS could leave some enrollees “worse off” or unable to “recoup their paid premiums” once it failed due to legal challenges.
The Secretary stopped implementation, but she defied commonsense by urging Congress to keep the budget-busting program on the books. When Senate Democrats finally agreed to repeal CLASS, they replaced it with a flawed commission and tasked its Democrat-appointed majority with producing a plan in September. Congress should reject any recommendations for CLASS 2.0. We can’t afford a new mandatory, publicly funded LTC entitlement.
Instead, lawmakers should listen to the Government Accountability Office and better inform middle-class baby boomers of their probable need for LTC and the fact Medicare won’t cover it. This gives patients and caregivers time to plan ahead. Unfortunately, the Obama Administration refuses to improve its taxpayer-funded efforts to increase Americans’ awareness of this problem and has rejected calls to work with state governors to expand private LTC coverage. Liberal advocacy groups have long opposed this approach, preferring to force Americans to pay into a new federal program. Like CLASS, it would collapse under empty promises years before a shrinking group of American workers struggles to fund Medicare and service interest on the debt in 2040.
CLASS and the commission are distractions. We won’t solve our LTC problem without reforming Medicaid, our nation’s default LTC program. Medicaid LTC spending has grown at an annual rate of 6.5 percent since 1995. According to the CBO, federal spending in this area will top $1.1 trillion annually in 2021.
States also struggle as increased Medicaid spending crowds out other budget priorities, and they blame federal rules, allowing individuals with substantial assets to enroll in this welfare program. In a letter to Congress, the state of Virginia writes “the federal government should give states greater flexibility to consider assets when determining eligibility for LTC coverage through the Medicaid program.” The state of Wisconsin agrees this will “help ensure the long-term sustainability of such programs for their residents in most need of government assistance.” Federal rules force states to disregard more than a half million dollars in home equity and the entire amount of other valuable assets during enrollment.
Making matters worse, the 2010 law prohibits states from tightening loopholes that allow welfare abuse. Virginia provides an example of a Medicaid applicant who purchased a $900,000 annuity, naming his wife the beneficiary of $89,000 per month. Obamacare forces Virginia to ignore this income when deciding eligibility.
Why should Medicaid allow middle-income and upper-income Americans to have their LTC financed by taxpayers so they can pass inheritances along to their children? Since 2000, seniors’ home equity grew by 50 percent, reaching $3.2 trillion in 2013. Easy access to welfare is unsustainable, and it creates no incentive to protect assets with LTC insurance or to use a home-equity conversion for LTC needs. Tighter restrictions won’t force seniors out of their homes, and federal law helps them appropriately protect these assets from Medicaid estate recovery through a program Congress expanded in 2005.
To protect Medicaid for poor Americans, we recently introduced the Medicaid Program Integrity Act. The bill would give states the option to reduce the Medicaid home equity exemption as low as $50,000. It would also eliminate Obamacare’s Maintenance of Effort rules, preventing states from closing loopholes allowing Medicaid abuse.
Congress should reject CLASS 2.0, encourage personal responsibility, and protect Medicaid for those it was intended to protect. Ultimately, this will give middle-class Americans greater choice, independence, and control over the long-term care services they need in a setting of their choice.
SHOCK: White House Can’t Avoid Furloughs
Bloomberg reports, “President Barack Obama began experiencing first-hand the effects of across-the-board federal spending cuts as the first wave of White House furloughs kicked in yesterday. The $85 billion in cuts known as sequestration hit White House staffers with day-long furloughs scattered throughout the next two weeks. All staff classified as non-commissioned will miss one work day without salary during May’s first pay period while commissioned officers who, as assistants to the president don’t qualify as leave-earners, will have to take a pay cut commensurate with the planned furlough, spokesman Jay Carney said. ‘It affects everyone in the White House,’ Carney told reporters at yesterday’s daily briefing. Administration officials said about 468 people work at the White House, though they cited for that figure a payroll report from July 2012 — which doesn’t reflect turnover in the administration — and declined to provide updated numbers.”
Pentagon Seeks More Flexibility to Manage Sequester
Reuters reports, “The Pentagon is preparing to ask Congress soon for more authority to shift funds to cope with automatic spending cuts, confronting lawmakers with another exception to the ‘sequester’ just days after they gave a break to the flying public and the airline industry. The request may be sent to the House of Representatives’ Appropriations Committee as early as next week, a House Republican aide said on Wednesday. The Pentagon won increased budget flexibility in March, but officials have told members of Congress they believe it was insufficient to cover shortfalls intraining and operations. The Defense Department move would follow closely the fix last week to ease airline flight delays caused by the temporary furloughs of air-traffic controllers by the Federal Aviation Administration. … The Pentagon was one of several government agencies that won some budget flexibility in a stop-gap government funding measure passed in late March. That allowed more than $10 billion that was locked up in other accounts to be shifted to the Pentagon’s operations and maintenance account, which funds training exercises and military readiness.”
“Promises, Promises: Obama $4T Deficit Cut Plan”
The Associated Press reports, “Even after a hard-fought deficit-cutting deal in 2011 and a tax-increase measure in January, Washington still has a considerable way to go to wrestle intractable budget deficits under control. The Congressional Budget Office estimates cumulative deficits of roughly $7 trillion over the coming decade and warns ‘such high and rising debt would have serious consequences,’ including higher interest costs for the government, reduced national savings and investment and a potential fiscal crisis.” During his campaign, President Obama said, “’ I’ve put forward a specific $4 trillion deficit-reduction plan.’ … Obama based the $4 trillion claim on last year’s budget and updated it in the budget he released in April. It incorporates $2.6 trillion in deficit savings already achieved by capping annual appropriations bills over a decade, the January tax increase on wealthier earners and the resulting savings on interest payments on the debt. The rest would come from a 10-year $583 billion tax increase, an additional layer of tax increases from slower indexing of tax brackets for inflation, modest curbs to federal health care programs and further savings on interest payments on the $16 trillion national debt.”
“The next sequester victors?”
POLITICO reports, “Congress and President Barack Obama spared the FAA from the full brunt of sequester, sending a clear message: We’re willing to cave. Now advocates for other agencies and programs are lining up by the newly opened door, looking for fixes to their own across-the-board budget cut woes. Some are better positioned than others to come out ahead, especially causes with a powerful story: Think of long waits, terrorism threats or deadly disease outbreaks. It also helps to have powerful lawmakers willing to go to the floor for you and weather criticism that they’re picking favorites in a law designed to hurt everyone equally.” Click here to see other agencies and programs that might be able to work their way around the sequester.
Reid Agrees Health Care Law A “Train Wreck” Without More Funding
The Hill reports, “Senate Majority Leader Harry Reid (D-Nev.) says he shares colleagues’ concerns that the Affordable Care Act could become a ‘train wreck’ if it’s not implemented properly. Reid warned that people will not be able to choose health insurance plans on government health exchanges if federal authorities lack the resources to set them up and educate the public. ‘Max said unless we implement this properly it’s going to be a train wreck and I agree with him,’ Reid said, echoing a warning delivered last month by Senate Finance Committee Chairman Max Baucus (D-Mont.).Reid warned the federal government is not spending enough money to implement the law because of Republican opposition to ObamaCare. ‘Here’s what we have now, we have the menu but we don’t have any way to get to the menu,’ Reid said.”
ACA “still not well liked or well understood”
The New York Times reports, “Three years after President Obama signed the health care reform law, there are concerns that the process of implementing it will be rocky. Even some of the law’s supporters are worried. Perhaps more troubling for the White House, the Affordable Care Act is still not well liked or well understood. The Obama administration had hoped that over time, the legislation would gain enough support to help smooth over the rough patches of putting it into practice. Instead, public opinion has remained mostly static: a plurality of Americans still disapprove of the law, and a substantial portion of the public remains uncertain about what it says, according to recent polls.”
New Study Undermines Assumptions Behind Medicare Expansion
The Washington Examiner reports, “During the health care debate, liberals argued that government had to a moral duty to enact legislation that expanded health insurance among lower-income individuals. But a landmark study published in the New England Journal of Medicine dramatically undermines this assumption and shatters the rationale behind the law’s Medicaid expansion. In 2008, Oregon expanded its Medicaid program, but because the state could not cover everybody, lawmakers opened up a lottery that randomly drew 30,000 names from a waiting list of almost 90,000 and allowed them to apply for the program. This created a unique opportunity for health researchers, ultimately allowing them to compare the health outcomes of 6,387 low-income adults who were able to enroll in the program with 5,842 who were not selected. … Ultimately, the authors concluded that, ‘This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured health outcomes in the first two years, but it did increase use of health services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain.’ So, the study suggests that expanding Medicaid is one way of reducing financial pressure on low-income groups, but it’s costly and does not improve their health.”
“Democrats Dissing ObamaCare”
The Wall Street Journal reports, “Mark Sanford and Elizabeth Colbert Busch on Monday held their first and (likely) only debate in the run-up to next week’s special election for the 1st congressional district in South Carolina. The media tittering over Mrs. Colbert Busch’s decision to publicly slap the former Republican governor over his extramarital affair obscured the more notable political comment of the night. That moment came when Mrs. Colbert Busch slammed her own party’s health-care law: ‘Obamacare is extremely problematic, it is expensive, it is a $500 billion [higher] cost than we originally anticipated, it’s cutting into Medicare benefits and it’s having companies lay off their employees because they are worried about the cost of it. That is extremely problematic, it needs an enormous fix.’ South Carolina’s first district is a conservative place—it voted overwhelmingly for Mitt Romney in last year’s election—so Mrs. Colbert Busch has every political reason to distance herself from her party and its health law. Yet she becomes one of the first Democrats to attempt to win an election on the back of criticism of her president’s signature achievement.”
‘Permission Structure’ Phrase Used By Obama Draws Criticism
Reuters reports, “It sounds like something teenagers need before borrowing their parents’ car, but ‘permission structure’ is actually a phrase being tossed around by President Barack Obama to describe his efforts to make deals with Republicans. At a news conference on Tuesday, Obama expressed frustration with resistance to his ideas among congressional Republicans, saying that he thought ‘deep down’ some of them wanted to ‘do the right thing’ but worry about such consequences as being challenged in primary elections. He said the only way to break the impasse might be to ‘create a permission structure’ to allow them to do what’s best for the country. … The phrase puzzled reporters and was mocked by Republicans seeking to highlight what they see as Obama’s ineffectiveness in pushing his agenda in Congress. … The phrase has been used frequently within Obama’s inner circle, dating back at least as far as his 2008 presidential campaign and a former Obama aide said it is a favorite term of Obama senior adviser Dan Pfeiffer. ‘Sometimes there is an issue that seems intractable and in order to help someone find a path your point of view, you have to build in a process that helps them see your point of view more clearly,’ the former Obama aide explained.”
“Debt and Growth In A Time of Controversy”
Salim Furth writes for The Heritage Foundation, “The weight of the evidence indicates that high debt slows growth, but there is no magic threshold above which any country at any time will experience slower growth. This truth has been illustrated in the recent controversy around ‘Growth in a Time of Debt,’ an academic paper by Carmen Reinhart and Kenneth Rogoff. ‘Growth in a Time of Debt’ has been widely cited in the policy world for its conclusion that gross debt above 90 percent of gross domestic product (GDP) is associated with lower economic growth. ‘Growth in a Time of Debt’ argues that episodes of high debt tend to last a long time. … Growth in a Time of Debt” showed that very-high-debt countries grow more slowly, on average, than other countries. That finding remains valid after a vigorous and hostile critique, but that single paper was never more than a small part of the broader understanding of how debt can hurt growth. In the United States, the question is not whether gross debt at 90 percent of GDP is acceptable. With gross U.S. debt now over 100 percent of GDP, that milestone has been passed. Rather, the question is whether the nation will continue on a path that promises to take us to debt at 200 percent of GDP within 25 years. If the U.S. continues to borrow at profligate levels to pay for routine spending, it may not be able to borrow to defend itself in an unforeseen war or to ease the pain of the next great recession.”
Congress rammed Obamacare through without many Members even reading the bill. Now it’s applying that same frantic, complex, pie-in-the-sky legislating to immigration. The similarities are frightening.
1. Extreme Costs
The Government Accountability Office now projects that under the most realistic scenario, Obamacare will add $6.2 trillion to the primary deficit over the next 75 years. That’s a staggering figure, especially considering the fact that President Obama pledged in 2009, “I will not sign a plan that adds one dime to our deficits—either now or in the future.”
The Gang of Eight’s immigration plan granting amnesty to those unlawfully in the U.S. will cost already burdened American taxpayers more than they can bear. When he last crunched the numbers during the 2007 amnesty debate, Heritage’s Robert Rector calculated that a general amnesty would cost some $2.5 trillion—after considering what legalized immigrants would likely pay in taxes and receive in government benefits and services. His updated research on the latest proposal, due out soon, is likely to find a higher price tag in 2013.
2. False Promises
Remember President Obama’s promise that “If you like your health care plan, you can keep it”? That’s just one of the most famous (or infamous) broken promises of Obamacare. The Congressional Budget Office projects 7 million people will lose their employer-sponsored coverage by 2022 because of the law.
On immigration, Heritage President Jim DeMint told CNBC’s Larry Kudlow this week: “I’ve heard a lot of promises about bills that have gone through Congress. …The only thing that I know about this bill is that it’s going to give legal status and eventual citizenship to those who came here unlawfully. The rest are just promises.” One of those promises is border security—as Heritage’s James Jay Carafano explains, the bill would not actually secure the border.
3. Have to Pass It to See What’s In It
Nancy Pelosi wasn’t kidding when she said Congress would have to pass Obamacare “to see what’s in it.” That’s because the bill gave federal agencies free rein to write regulations that would become the real-world version of the law—and even though it passed in 2010, the regulations are still being written today.
The immigration bill does the same thing—it gives over congressional authority to federal agencies, allowing unelected bureaucrats to think up all the details later.
4. Piles on Already Broken—and Broke—Entitlement Programs
Obamacare plans to add millions of people to the Medicaid rolls—the largest expansion ever to this problematic program, which is already unsustainable and needs vital reforms.
Likewise, the immigration bill would add millions to the number of people on various taxpayer-funded benefits, from Medicare and Social Security to welfare. As DeMint said, “These programs are already broke. Our country is already $17 trillion in debt. This will be a net loss, a huge cost to taxpayers.”
5. Perks for Special Interests
Whenever the legislative process turns fast and furious, Members of Congress start loading on special-interest deals that are less likely to be noticed in the chaos. Obamacare was full of favors for Big Labor. Now, the immigration bill is carrying all sorts of special-interest goodies—not to mention a bonanza for immigration lawyers.
This isn’t the way Congress should make laws. It’s only making the same mistakes all over again—and we’ll be paying for them.
More and more lawmakers in Washington are lining up to say we don’t have a spending problem and are ready to defend their massive deficits that add trillions to the debt. But a new poll from Public Notice shows that the vast majority of Americans disagree; the best way to improve the economy is by cutting spending and exercising some fiscal restraint. At the same time, the Congressional Budget Office (CBO) is warning that the debt is unsustainable without “significant” changes to entitlement spending, and the federal government is still wasting billions. Washington can keep telling themselves spending isn’t a problem all they want, but everyone else knows it’s time for an intervention.
LAWMAKERS ASK: WHAT DEBT CRISIS?
More Lawmakers Reject The Idea That Washington Has A Spending Problem. ”Call them the debt crisis dissenters. The two parties are miles apart on how to cut the deficit and national debt: Republicans want to slash spending even more. Democrats want to raise revenue. And then there are the other Democrats — the ones who reject the entire premise of the current high-stakes fiscal fight. There’s no short-term deficit problem, they say, and there isn’t even an urgent debt crisis that requires immediate attention.” (Ben White and Tarini Parti, “Democrats Ask: What Debt Crisis?” POLITICO, 4/28/13)
“Democrats Such As Virginia Sen. Tim Kaine And Maryland Rep. Chris Van Hollen Are Coming Around To The Point Of View That Fiscal Austerity, In All Its Forms, Is More The Problem Than The Solution.” (Ben White and Tarini Parti, “Democrats Ask: What Debt Crisis?” POLITICO, 4/28/13)
Democrats Now More Likely To Oppose Spending Cuts In Exchange For Debt Ceiling Increase: “This intellectual shift away from the need for more immediate deficit reduction is likely to make this summer’s debt ceiling fight even tougher. Democrats are now increasingly likely to revolt against GOP demands, which could include a dollar of spending cuts for each dollar increase in the nation’s borrowing limit.” (Ben White and Tarini Parti, “Democrats Ask: What Debt Crisis?” POLITICO, 4/28/13)
They Aren’t The First In Washington To Say Spending Isn’t A Problem:
President Obama: “We don’t have an immediate crisis in terms of debt. In fact, for the next ten years, it’s gonna be in a sustainable place.” (President Barack Obama, Interview with George Stephanopoulos, ABC News – Good Morning America, 3/13/13)
Rep. Nancy Pelosi: “[I]t is almost a false argument to say we have a spending problem, we have a budget deficit problem.” (Cameron Joseph, “Pelosi: ‘Almost a false argument’ to say US has spending problem,” The Hill, 2/10/13)
Sen. Tom Harkin: “I want to disagree with those who say we have a spending problem. Everyone keeps saying we have a spending problem. And when they talk about that, it’s like there’s an assumption that somehow we as a nation are broke.” (Tom Harkin, C-SPAN, 2/14/13)
Rep. Steny Hoyer: We Have A “Paying-For” Problem. “The country has a paying for-problem. We haven’t paid for what we bought. We haven’t paid for our tax cuts. We haven’t paid for the war. … If we don’t pay, we shouldn’t buy.” (“Dem Leader Refuses to Say We Have a Spending Problem—U.S. Has a ‘Paying-For Problem,” Fox News, 2/12/13)
Sen. Mary Landrieu: Washington Spending Not “Out-Of-Control”: “I am not going to keep cutting the discretionary budget, which by the way is not out of control, despite what you hear on Fox News.” (Sen. Mary Landrieu (D-La.), “Dem. Senator: Washington’s Spending Problem Exists Only On Fox News,” Fox News, 1/29/13)
BUT A NEW PUBLIC NOTICE POLL SHOWS AMERICANS DISAGREE
New Public Notice Poll Shows Americans Say Fiscal Responsibility Will Improve The Economy:
Public Notice Poll: Two-Thirds Say Spending Cuts, Tax Cuts Will Improve The Economy: According to a Tarrance Group survey released by Public Notice, two-thirds of Americans (66 percent) believe the federal government should cut spending and 62 percent believe taxes should also be lowered to create jobs and grow the economy. (“New Tarrance Group Survey: Majority Of Americans Want Spending And Taxes Cut To Balance Budget,” Public Notice, 4/22/13)
70 Percent Say A Balanced Budget Will Lead To Economic Growth: A significant majority (70 percent) also believes that a balanced budget would help the nation’s economy. (“New Tarrance Group Survey: Majority Of Americans Want Spending And Taxes Cut To Balance Budget,” Public Notice, 4/22/13)
After Sequester, More Than 60 Percent Want More Spending Cuts: “In the wake of the sequester, more than 60 percent of Americans still say the first thing Washington should do is find more spending to cut. This included a majority of Independent voters (63 percent) and a plurality of Democrats (40 percent).” (“New Tarrance Group Survey: Majority Of Americans Want Spending And Taxes Cut To Balance Budget,” Public Notice, 4/22/13)
THE CBO SAYS THE DEBT IS UNSUSTAINABLE WITHOUT SIGNIFICANT CHANGES TO ENTITLEMENT SPENDING
CBO Director: Debt Will Be Unsustainable Without “Significant” Changes To Entitlements. “Under questioning from Sen. Ron Johnson, who highlighted the dire state of Medicare and Social Security finances, Elmendorf stated that putting the budget on a sustainable path would require major reforms to entitlement programs or massive tax increases that would hit the middle class.” (Philip Klein, “CBO director: Debt will be unsustainable without ‘significant’ changes to entitlements or broad tax hikes,” The Washington Examiner, 2/12/13)
Social Security Will Be Insolvent In 20 Years (Everyone Under 45). (Social Security Administration, The 2012 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, 4/25/12)
The Medicare Trust Fund Will Be Exhausted In 11 Years (Everyone Under 44). (Centers for Medicare and Medicaid Services, 2012 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 4/25/12)
CBO Estimates Entitlement Spending Will Double In The Next Decade. “Spending on Social Security and healthcare will double to $3.2 trillion a year over the next decade, threatening a sharp rise in national debt unless Congress acts to avoid the danger, congressional researchers warned on Tuesday.” (David Morgan, “Social Security, health spending to hit $3.2 trillion a year,” Reuters, 2/5/3013)
Entitlements To Become More Expensive, More Unmanageable In Long-Term: “[B]arring a major fix by the president and Congress, the government’s finances will start to worsen again as the three major entitlement programs – Social Security, Medicare and Medicaid – become more and more expensive and unmanageable under the increasing weight of retiring baby boomers.” (Tom Raum, “Gov’t Fiscal Outlook Improving – But Only For Now,” Associated Press, 3/12/13)
“Untenable Budget Situation Unless Addressed.” “During this decade and the next, the number of Americans over the age of 65 will jump by 75 percent while those of working age — the people who fund entitlements through their tax contributions — will nudge up by just 7 percent. On top of that, entitlement benefits typically grow faster than both inflation and wages, and can pay out significantly more than people pay in. The median lifetime Medicare taxes paid by new retirees in 2030 will be $180,000; while the median paid benefit will be a staggering $664,000. Vastly more elderly, combined with steadily larger retiree benefits, and relatively fewer taxpayers to fund them create an untenable budget situation unless addressed.” (Jon Cowan and Jim Kessler, Editorial: “Entitlement reform key to U.S. future,” POLITICO, 2/26/13)
AND WASHINGTON CONTINUES TO WASTE BILLIONS OF TAXPAYER DOLLARS
Taxpayers Suffer Loss In Auto Company Investment: “Fisker Automotive Inc. spent more than six times as much U.S. taxpayer and investor money to produce each luxury plug-in car it sold than the company received from customers, according to a research report. … Fisker has spent $1.3 billion in taxpayer and venture capital money, or $660,000 for each car it sold, the report said.”(Angela Greiling Keane, “Fisker Spent $660,000 on Each $103,000 Plug-in Car,” Bloomberg, 4/18/13)
- “The potential loss of $171 million would be largest loss of federal loan money since the 2011 failure of solar panel maker Solyndra, which declared bankruptcy and laid off all its workers after receiving a $528 million loan from the Energy Department.” (Matthew Daly, “Obama Adminsitration Had Advanced Warning On Fisker,” The Associated Press, 4/24/13)
FAA Tech Upgrade Running Nearly Half A Billion Over Budget “With No End In Sight:” “For more than a decade the FAA has promised to modernize and make the civil aviation system more efficient and reliable, but the only things it has reliably generated are delays or cost overruns or usually both. The project, known as NextGen, is four years off schedule with no end in sight. … A 2011 investigation found that one part of NextGen ran $330 million over budget—or half of the FAA sequester—and then the FAA paid the contractor responsible $150 million in bonuses…. The overruns are now approaching $500 million, and that’s merely one item.” (The Wall Street Journal, “Flying the Government Skies,” 4/23/13)
IRS Overpaid Upwards Of $13 Billion In Tax Credits: “The Internal Revenue Service (IRS) overpaid between $11.6 billion and $13.6 billion in tax credits designed to help low-income families in fiscal 2012 , the Treasury Department announced in a report released Monday.” (Julian Hattem, “IRS overpaid up to $13.6B in low-income tax credits, report finds,” The Hill, 4/22/13)
Postal Service Hemorrhaging $25 Million A Day: “The U.S. Postal Service could become ‘a significant burden to the taxpayer’ if it does not get needed flexibility to change its business operations, Postmaster General Patrick R. Donahoe told Congress Wednesday. … ‘We are losing $25 million dollars every day and we are on an unsustainable path.’” (“USPS losing $25 million daily with ‘broken business model,’” The Washington Post, 4,17,13)
Redundant Federal Programs Wasting Billions: “Redundant federal programs are leading to billions in waste, congressional auditors say, and the government is slow to adopt reforms to fix the problem. The White House says President Obama recognizes the problem and will propose eliminating redundant programs in the budget plan he releases Wednesday. … Over the past three years, the Government Accountability Office found 162 areas where agencies are duplicating efforts, at a cost of tens of billions of dollars. How many billions? No one knows.” (Gregory Korte, “Report: Redundant Federal Programs Waste Billions,” USA Today, 4/9/13)
- Billions For New Mapping Data: “Government agencies are spending billions on new mapping data — without checking whether some other government agency already has maps they could use.” (Gregory Korte, “Report: Redundant Federal Programs Waste Billions,” USA Today, 4/9/13)
- Duplicative Renewable Energy Programs: “At least 23 different federal agencies run hundreds of programs to support renewable energy.” (Gregory Korte, “Report: Redundant Federal Programs Waste Billions,” USA Today, 4/9/13)
- Lack Of Coordination Between Branches Of The Armed Services: “Each branch of the armed services is developing its own camouflage uniforms without sharing them with other services.” (Gregory Korte, “Report: Redundant Federal Programs Waste Billions,” USA Today, 4/9/13)
- Overlapping Research At The Department Of Homeland Security: “29 Department of Homeland Security contracts that partly or completely overlapped with research being done by another part of the same department. Five contracts funded research into the detection of the same chemical.” (Gregory Korte, “Report: Redundant Federal Programs Waste Billions,” USA Today, 4/9/13)
Stimulus-Funded Condom Study Creates Zero Jobs. The details of a stimulus grant awarded to Indiana University to study condom use have now been released on a government website. The study, titled ‘Barriers to Correct Condom Use,’ is now completed, according to the website, and the university received $423,500 of stimulus funds to perform the study. The stimulus project yielded a total of 0.00 jobs created, according to the federal government. ‘No jobs created/retained,’ the form says under ‘Description of Jobs Created.’” (Daniel Halper, “$423,500 Stimulus Program on ‘Correct Condom Use’ Yields Zero Jobs,” The Weekly Standard, 4/4/2013)
House Oversight and Government Reform Committee Report Finds Unimplemented Recommendations Could Have Saved Taxpayers $67 Billion. “The Committee’s review found that the backlog had grown to a high of 16,906 open recommendations. Using the most conservative cost-saving estimates, implementing these recommendations could save taxpayers $67 billion per year.” (House Oversight and Government Reform Committee Report, “Staff Report: Open and Unimplemented IG Recommendations Could Save Taxpayers $67Billion,” 3/5/13)
Energy Department Approved $3.5 Million in Bonuses to 10 Employees, Some As Much As 82 Percent Above The Market Rate. “Federal employees are facing unpaid days off and salary cuts due to the sequester, but several contract workers inside the Energy Department are still raking in the cash. Ten individuals at the department’s Oak Ridge nuclear laboratory are set to make an extra $3.5 million above and beyond their normal pay, according to an Energy Department inspector general investigation that exposes a lavish bonus system. The 10 people are executives at the company UCOR, which the department hired for environmental clean-up. And despite watchdog warnings that the executives’ salaries are as much as 82 percent above the market rate, Energy Department officials continue to pay out the bonuses.” (Phillip Swarts, “Energy Department approves lavish bonuses: $3.5 million to 10 workers alone,” Washington Guardian, 3/29/13)
IRS Video Production Unit Costs Taxpayers $4 Million A Year: “The Senate’s top tax-writer wants answers from the IRS about a ‘Star Trek’ spoof that the tax-collecting agency has now apologized for making. … Baucus also questioned why the IRS had a video production unit at all — especially at its reported $4 million a year price tag. The ‘Star Trek” parody and a separate takeoff on “Gilligan’s Island” cost around $60,000 in tandem, the IRS has said.” (Bernie Becker, “Baucus to IRS: How did the ‘Star Trek’ video happen? Who’s responsible?” The Hill, 3/27/13)
Energy Department Mismanaged More Than $90 Million In Stimulus: “The Energy Department’s (DOE) internal watchdog is attacking DOE management of a $1.5-billion stimulus program to help develop technology that captures industrial carbon dioxide emissions. An Office of Inspector General (IG) audit made public Tuesday examines $1.1 billion in funding for 15 projects. The audit notes three project recipients together received $90 million even though reviews of the proposals ‘identified significant financial and/or technical issues.’” (Ben Geman, “Report: Energy Department Mismanaged Stimulus-Backed Climate Program,” The Hill, 3/22/13)
“Pentagon Handed Out $419 Million In Improper Travel Reimbursements Last Year.” “While making improvements in some spending areas, the Defense Department was singled out this week for failing to trim unnecessary travel reimbursements. In fact, the Pentagon’s internal watchdog concluded that wasteful travel spending actually grew last year to a total of $419.3 million, accounting for roughly five percent of the Pentagon’s mammoth $8.4 billion travel budget.” (Phillip Swarts, “Pentagon Handed Out $419 Million In Improper Travel Reimbursements Last Year,” The Washington Guardian, 3/21/13)
Over 3 years after passage the House Small Business Committee held a hearing to examine how small businesses are dealing with implementing the Affordable Care Act. The video below features a small business owner who was a leading White House spokesman for ObamaCare:
“I realize that this law would be the most disruptive instrument to the American workplace in my lifetime”
WASHINGTON, D.C. – Three years after passage of the health care law, the House Small Business Committee held a hearing with small businesses and a former CBO Director on the implementation of the law and how small companies are doing with compliance. The witnesses testified that the uncertainty, cost, and complexity of the law is proving to be a barrier to economic growth.
Dr. Holtz-Eakin, former CBO Director: The ACA is very costly. It has about $24 billion in reported regulatory compliance costs. These are estimates that come from the administration itself. Eighty Million hours of paperwork time spent complying with those regulations, to give you some perspective – that’s 40,000 full time employees filling out paperwork for a year nonstop.
William J. Gouldin, Jr., President, Strange’s Florists, Greenhouses and Garden Centers, Richmond,VA: I realize that this law would be the most disruptive instrument to the American workplace in my lifetime and no one seemed to know or care, right in the middle of worst recession, depression, since the great depression.
Louisa McQueeney, General Manager, CFO, Palm Beach Groves, Lantana, FL: It’s not addressing the cost, it’s not addressing the cost enough. And we have no control of the cost what so ever. I can go to a doctor’s office and, and I have asked, how much is a particular procedure and you get no answer, none.
Rep. Tom Rice (R-SC): It’s obvious, but what’s the affect on the employment status in the United States?
Dr. Holtz-Eakin: This is a negative. I don’t think there is any way around that. Whatever your other objectives might be, if you set out to enhance job creation and growth in the United States, you wouldn’t pass a bill with a trillion dollars in taxes, a large and unknown entitlement program, and this amount of regulation. That isn’t a good strategy.
Rep Chris Collins (R-NY): Do you have a comment on how the health insurance tax, $800 billion, might impact any and all health insurance policies?
Dr. Holtz-Eakin: I expect that tax to be fully passed forward to the premiums that people pay for their health insurance. No question about it.
Rep. Scott Tipton (R-CO): “I just see a huge train wreck coming down,” Baucus told Health and Human Services Secretary Sebelius at a Wednesday hearing. “You and I have discussed this many times, and I don’t see any results yet.” Is the confusion, is the cost, one of the biggest obstacles that, where the government isn’t becoming a stepping stone but a stumbling block for American prosperity and job creation.
Dr. Holtz-Eakin: As I mentioned in my opening statement the cost is real, these are self-reported cost of the agencies, HHS in particular, reported by the administration. This law has 11—it’s in my written testimony—11 particular regulations that HHS has identified as having a significant economic impact on small business. That’s a very unusual number. This doesn’t happen very often. I think the scale of the cost are real. Can’t ignore that. The second thing is the uncertainty is enormous about what will and will not get done. I think Senator Baucus’ comments reflect whether the uncertainty about whether the exchanges will up and running on time. We’ve already seen the administration put off the so called S.H.O.P. provisions which were supposed to find options for small businesses. Just what will be there of the law is an open question.