The Sorry Story of Congress’ Latest “Stimulus” Bill

As Yogi Berra’s infamous saying goes, it’s déjà vu all over again—and not in a good way.

I refer not just to the rapid economic slowdown, panicky markets, and multiple Federal Reserve bailouts related to the coronavirus epidemic, all of which echo the financial crisis of 2008. I speak also of Nancy Pelosi’s infamous comments a decade ago this month about Obamacare:

The House of Representatives—both Democrats and most (all but 40) Republicans—went along with legislation that not only wasn’t paid for, and didn’t contain any long-term reforms to programs desperately in need of them. They passed a bill whose cost still remains unknown (the Congressional Budget Office has yet to issue a cost estimate), which none of them had time to read—and might not even accomplish its supposed objectives.

Word emerged over the weekend that flaws in the bill require at least one, and possibly more than one, correction. The Wall Street Journal reported the House will attempt to pass “a technical fix on Monday.” But even as Treasury Secretary Steven Mnuchin, who negotiated the package with Pelosi despite being “relatively green” on such matters, tried to minimize the objections, others weighed in more strongly.

The Capitol Hill publication Roll Call said the bill may need a “do-over” regarding its paid family leave provisions. The National Federation of Independent Business weighed in with objections after the bill’s passage in the House, saying that small firms wouldn’t receive the tax credits quickly enough, and could face cash-flow problems as a result.

A congressional source confirmed to me that concerns about the family leave provisions could prompt a rewrite that’s more than technical in nature. These developments should surprise no one acquainted with prior slapdash attempts to legislate on the fly, but they should force Congress to slow down such a ridiculous process.

TARP and Obamacare

This past weekend, House leaders released the final version of their “stimulus” legislation at 11:45 p.m. Friday night. The House’s vote on the bill ended at 12:51 a.m. Saturday—just more than an hour later. Members of Congress had a whopping 66 minutes to review the 110-page bill before voting on it. Even the Republican Study Committee, a conservative caucus in the House, barely had time to issue a 10-page summary of the bill before the vote gaveled to a close.

That the legislation needs a technical fix (and possibly more than one) merely continues Congress’ practice of passing complicated legislation members do not understand. For instance, in March 2009 Sen. Chris Dodd (D-CT) had to accept responsibility for inserting a provision into the “stimulus” at the behest of Obama administration officials that allowed AIG officials to collect more than $1 billion in bonuses, despite the firm requiring a massive bailout from the federal government via the Troubled Assets Relief Program. The entire controversy demonstrated that no one, not even the lawmakers who drafted the “stimulus” and TARP bills, fully understood the bills or their effects.

Consider too this description of the infamous Obamacare bill:

The Affordable Care Act contains more than a few examples of inartful drafting. (To cite just one, the Act creates three separate Section 1563s.) Several features of the Act’s passage contributed to that unfortunate reality. Congress wrote key parts of the Act behind closed doors, rather than through ‘the traditional legislative process.’…. As a result, the Act does not reflect the type of care and deliberation that one might expect of such significant legislation.

That description comes from Supreme Court Chief Justice John Roberts’s 2015 ruling in King v. Burwell, a case about whether individuals purchasing coverage from the federal exchange qualified for subsidies. Roberts’s ruling called the language a drafting error, and permitted individuals in all states to receive the subsidies. But if an innocent drafting error, the mistake had potentially far-reaching implications, which few if any members of Congress realized when they voted for the bill—without reading it, of course.

Rushing for the Exits

To call the nascent controversy surrounding the “stimulus” legislation a fiasco would put it mildly. Worse yet, much of the controversy seems unnecessary and entirely self-inflicted.

Congress had absolutely no reason to pass the bill just before 1 a.m. on Saturday. Financial markets had closed for the weekend, and the Senate had adjourned until Monday afternoon. Voting early Saturday morning, as opposed to later in the day on Saturday, or even on Sunday, didn’t accelerate passage of the bill one bit. However, it did allow members of Congress to leave Washington more quickly.

In other words, the leaders of both parties—who agreed to the rushed process leading up to the vote—made getting members out of town a bigger priority than giving members the time to do their due diligence as lawmakers. It’s an understandable instinct, given the serious consequences of the coronavirus on all Americans, particularly the older profile of many legislators. But it’s also an abdication of Pelosi’s own claim last week that “we’re the captains of this ship.”

This post was originally published at The Federalist.

Would Employee Choice Drive Up Health Insurance Costs?

Obama administration officials recently released a document implying that allowing small-business employees to choose their health insurance policy could raise premium levels.

BenefitsPro.com reported last month on a document issued by the Centers for Medicare and Medicaid Services (CMS).  The document requires state insurance commissioners to certify:

That the 2015 Transition to Employee Choice would be in the best interest of small employers and their employees and dependents, given the likelihood that implementing employee choice would cause issuers to price their products and plans higher than they would otherwise price them.

The form and certification relate to the small-business insurance exchanges implemented under the Affordable Care Act. The law was designed to allow employees of small businesses to pick plans from a variety of insurers (Humana, Blue Cross Blue Shield, Cigna, etc.). But technical delays associated with the botched launch of HealthCare.gov forced the CMS to postpone the rollout of employee choice. As a result, small-business employees in the federally run exchange this year choose only from plans offered by the insurer their employer picks—rather than any insurer offering exchange coverage.

The CMS statement that expanding employee choice would cause insurers to raise premiums directly contradicts administration reports last year that the exchanges prove “market competition works.” It remains unclear what prompted this about-face. But given ongoing technical problems with the federal exchange, it’s possible that the CMS is attempting to dissuade states from participating in an employee choice program still not ready for prime time.

This post was originally published at the Wall Street Journal Think Tank blog.

A Big Premium Failure for Obamacare — and the Commonwealth Fund

The Commonwealth Fund is out this morning with its annual study regarding premium increases – which shows once again how badly both Obamacare, and Commonwealth itself, have failed in their premium projections.  The study admits that “health insurance is expensive and has become less affordable, no matter where one lives.  Insurance premiums rose sharply in all states during these eight years [i.e., 2003 to 2011] and, because wages failed to keep pace, increase as a share of median household income.”  But the report claims Obamacare will change all that:
If premium growth were to slow to 1 percentage point below projected levels if recent rates of increase continue, the cost of family coverage would drop an average of $700 annually by 2015 and $2,029 by 2020.…Even greater amounts could be saved if the annual premium growth rates were to slow by 1.5 percentage points.  An average of $1,042 could be saved annually on family coverage by 2015.  The savings would more than double to $2,986 annually by 2020.

There are two problems with this approach.  First, under Commonwealth’s “best-case” scenario, premiums would still total $21,754 by 2020 – that’s an increase of $6,732 from 2011 alone.  But candidate Obama promised repeatedly that his health plan would cut premiums – not merely “slow the growth rate,” but CUT premiums in absolute terms – by an average of $2,500 per family within his first termA projected increase of “only” $6,700 under Commonwealth’s best case scenario comes nowhere near close to meeting candidate Obama’s pledge to cut premiums by $2,500 – rather, it breaks that promise by nearly $10,000 per family.

The second issue is the way in which the Commonwealth Fund, just like candidate Obama himself, has consistently moved the goalposts in the wrong direction – admitting every year that the premium savings it promises are just around the corner have not materialized:

  • In 2010, Commonwealth claimed that we could save $3,403 in premiums by 2020, and that under its best case scenario, premiums would total $19,938 per family in that year.
  • Last year, Commonwealth claimed that we could save $3,173 in premiums by 2020, and that under its best case scenario, premiums would total $20,620 per family in that year.
  • This year, Commonwealth claims that we could save $2,986 in premiums by 2020, and that under its best case scenario, premiums would total $21,754 per family in that year.

Notice a pattern here…?

Given that Commonwealth’s supposed premium savings are disappearing faster than a pile of magic beans, why should we believe them – or the President – that Obamacare will EVER do anything to control the skyrocketing premiums harming struggling families?  Instead of holding campaign-style rallies in an attempt to raise taxes on job creators, President Obama could get to work on fulfilling his campaign pledge, and avoid socking middle-class families with tens of thousands of dollars in higher premium costs due to his unpopular law’s failure to deliver.

We Told You So: Nation’s Largest Employer Scales Back Health Coverage

Over the weekend, more details emerged about how Obamacare is transforming the American workforce – and not for the better.  The New York Times reported on many small firms not hiring new workers, or scaling back hours for existing workers, to avoid the law’s new taxes.  And the Huffington Post reported that Wal-Mart has changed its employment policy, eliminating health insurance benefits for new part-time workers – thereby dumping them on to Obamacare’s exchanges:

Walmart, the nation’s largest private employer, plans to begin denying health insurance to newly hired employees who work fewer than 30 hours a week, according to a copy of the company’s policy obtained by The Huffington Post.  Under the policy, slated to take effect in January, Walmart also reserves the right to eliminate health care coverage for certain workers if their average workweek dips below 30 hours.…

Labor and health care experts portrayed Walmart’s decision to exclude workers from its medical plans as an attempt to limit costs while taking advantage of the national health care reform known as Obamacare….“Walmart is effectively shifting the costs of paying for its employees onto the federal government with this new plan, which is one of the problems with the way the law is structured,” said Ken Jacobs, chairman of the Labor Research Center at the University of California, Berkeley.

“Walmart likely thought it didn’t need to offer this part-time coverage anymore with Obamacare,” said Nelson Lichtenstein, director of the Center for the Study of Work, Labor and Democracy at the University of California, Santa Barbara.  “This is another example of a tremendous government subsidy to Walmart via its workers.”

In pursuing lower health care costs, Walmart is following the same course as many other large employers. But given its unrivaled scale, Walmart’s policies tend to influence American working conditions more broadly.  Tom Billet, a senior consultant at Towers Watson, a professional services firm that works with large companies to develop benefit plans, said other companies are also crafting policies that will exclude some part-time workers from medical coverage.  Billet portrayed the growing corporate interest in separating out part-time workers as a reaction to another aspect of Obamacare – the new rules that require companies with at least 50 full-time workers to offer health coverage to all employees who work 30 or more hours a week or pay penalties.

One major bottom-line question in this development relates to how many more people will be added to government health rolls by this apparent trend.  In last month’s job data, the Bureau of Labor Statistics estimated nearly 28 million Americans work part-time – defined by the BLS as fewer than 35 hours per week.  Using Obamacare’s less stringent 30 hours per week standard would reduce that 28 million number somewhat – and many part-time workers do not have access to employer-provided health insurance currently.  (Of firms offering insurance to their employees, 28% extend that offer to part-time workers as well – a fact which only indirectly illuminates the number of part-time workers receiving insurance coverage from their employer.)

All that said, the point remains that millions – and perhaps tens of millions – of part-time workers who currently receive insurance from their employers could lose it due to Obamacare – and federal taxpayers will be stuck paying the bill.  That’s not “reform,” and it’s not a change millions of American workers, to say nothing of American taxpayers, can believe in.

Mr. President, Where’s #My2500?

As part of its continued efforts on the fiscal cliff, Campaigner-in-Chief Obama and the White House started a new #My2K hashtag on Twitter, to promote its plan to raise taxes on small businesses. (Some may find it slightly ironic that the President thinks middle-income families’ tax cut is their money, while small businesses’ tax cut is his money to play with.)

But that got us wondering: Where’s #My2500 – Obamacare’s promised reduction in health insurance premiums?  As a reminder, candidate Obama promised repeatedly that his health plan would CUT premiums by an average of $2,500 per family within Obama’s first term.  But as the below graph shows, while candidate Obama promised premiums would fall by $2,500 on average, premiums have risen by $3,065 since Barack Obama was elected President.

So maybe, just maybe, instead of running around holding campaign-style rallies in an attempt to raise taxes on job creators, President Obama could get to work on fulfilling his campaign pledge, and bringing us #My2500.

The REAL Fright Night: Obamacare’s Scary Impact on Americans

In an interview with the Des Moines Register last week, the President claimed that “Obamacare turns out not to be the scary monster that the other side has painted.”  Many may disagree, because on this Halloween day, it’s clear that the legislation includes several “monstrous” provisions likely to wreak havoc on the American people, their jobs, and their health care:

“Count Tax-YOU-lots:”  This creature will suck the life out of the American economy, by imposing $1 trillion in job-killing tax increases on all Americans—taxing people who can’t afford to purchase government-forced insurance, taxing businesses who want to hire new workers, taxing small businesses, even taxing health benefits.

Weird Scientists:  Bureaucrats working for a new comparative effectiveness institute, funded by a tax on health benefits, could publish the protocols needed to deny patients access to life-saving treatments on cost grounds.  In addition, the law’s Independent Payment Advisory Board (IPAB) will make binding rulings on how to reduce Medicare spending below an arbitrary cap.

Frankenstein:  Refers to the dozens of bureaucracies created by the legislation—to say nothing of the difficulties for patients to receive actual treatment—all in the name of health care “reform.”

A Ghoulish Czar:  By one count, Obamacare includes nearly 2,000 commands using the words “The Secretary shall”—allowing the federal government, in the form of the HHS Secretary, to intervene in all manner of personal health care choices taken by millions of Americans.

However, while creating new and frightful government bureaucracies for the American people, Democrats have managed to include sweet treats for themselves and their liberal allies:

  • Senate Democrats received goodies for parochial interests, including a mine in Libby, Montana;
  • ACORN and Planned Parenthood could be eligible for enrollment and outreach grants as “navigators;” and
  • AARP’s popular Medigap policies are not subject to the same pre-existing condition restrictions or price controls placed on all other private insurance plans—thus allowing the organization to continue to receive hundreds of millions of dollars in “kickbacks” by overcharging seniors for coverage.

While Halloween may come and go, many may be concerned that the monsters created in Obamacare will stay—causing permanent fright for all Americans forced to live under Democrats’ government takeover of health care.

Washington’s Government Takeover of Health Care

The Washington Post reported yesterday of a major development in Obamacare implementation here in Washington:

The District’s small businesses may have to buy their employee health insurance through a city-run exchange come 2014, following a controversial vote by a city board.  The D.C. Health Benefit Exchange Authority, charged with implementing the federal health-care overhaul law, voted Wednesday to accept a recommendation that all health-insurance plans sold in the city for 50 members or fewer must be purchased through the exchange.

In other words, you can buy any plan you like – so long as it’s the government plan.

District officials attempted to defend this onerous mandate by saying they needed to ensure a viable marketplace: “For the exchange to be sustainable, it has to have approximately 100,000 people…If the exchange isn’t sustainable in the long haul, if it does not have enough people, then we are wasting our time and our effort.”  This is the same kind of logic that led Democrats to create the unprecedented mandate that nearly all Americans purchase a product for the first time ever – because Obamacare would be unsustainable without a large market.  Now we get word that even with an individual insurance mandate, one key element of Obamacare – the Exchange – could be “unsustainable” and a “waste of time” without even more government intrusion – telling people not just to buy something, nor just what to buy, but even where to buy it.

As one letter of opposition from the D.C. business community noted, Barack Obama repeatedly promised that “you will not have to change plans” under Obamacare.  This week’s development in the District of Columbia is yet another illustration of that broken promise.  Moreover, the fact that Washington wants to shut down the private health insurance market and replace it with a government-run Exchange further proves that Obamacare is indeed a government takeover of health care.

Coming Attractions: Obamacare Goes Hollywood!

Over the weekend, the New York Times reported on California’s attempts to implement Obamacare.  Among other things, the state is looking to build support for the law by hiring a PR firm to engage in some old-fashioned Hollywood propaganda:

Realizing that much of the battle will be in the public relations realm, the exchange has poured significant resources into a detailed marketing plan — developed not by state health bureaucrats but by the global marketing powerhouse Ogilvy Public Relations Worldwide, which has an initial $900,000 contract with the exchange….

And Hollywood, an industry whose major players have been supportive of President Obama and his agenda, will be tapped.  Plans are being discussed to pitch a reality television show about “the trials and tribulations of families living without medical coverage,” according to the Ogilvy plan.  The exchange will also seek to have prime-time television shows, like “Modern Family,” “Grey’s Anatomy” and Univision telenovelas, weave the health care law into their plots.  “I’d like to see 10 of the major TV shows, or telenovelas, have people talking about ‘that health insurance thing,’ ” said Peter V. Lee, the exchange’s executive director.  “There are good story lines here.”

Indeed, there are many good story lines – and television show ideas – from Obamacare.  We have several we’d like to suggest:

“The Office:”  Kathleen Sebelius and federal bureaucrats channel Dwight Schrute in the famous “Health Care” episode, deciding which treatments and diseases will, and will not, be covered under Obamacare.  No word yet on whether Count Choculitis will in fact be considered a covered benefit under the law.

“Lost:”  Instead of being trapped on an island, participants in this series will instead be marooned in a vast federal bureaucracy including 159 new boards, bureaucracies, and programs, along with over 12,800 pages of regulations.  In the pilot episode, thousands of small businesses found that Obamacare’s complex small business tax credit left them stranded and confused amidst a complicated array of paperwork that bogged down their firms – and saw many businesses not qualify for a credit at all.

Nick Riviera, M.D.:”  The networks originally proposed a revival of the popular “Marcus Welby” series.  Unfortunately, due to Obamacare’s unsustainable reductions in Medicare reimbursement rates, Dr. Welby – along with many other medical providers – will soon stop practicing medicine.  As a result, the networks resorted to “The Simpsons’” most famous graduate of Hollywood Upstairs Medical College.  Expect to see members of the medical review board as recurring characters in this show…

“Unhappy Days:”  In this show, Tom Bosley is forced to shrink his hardware store business, as Obamacare’s employer mandate will discourage new employment.  Rather than pay tens of thousands of dollars in penalties, he stops hiring new workers and converts his full-time employees to part-time status.  His workers respond with a single despondent reaction: “Whoa!

Coming soon to a small screen near you!

Obama’s Health Care Legacy: A $3,000 Premium Increase

The most important story in health care today involves the release of the Kaiser Family Foundation’s annual survey of employer-sponsored health insurance premiums.  According to the survey, premiums rose by $56 per month, or $672 per year, for the average family health insurance plan – that’s an increase of more than 4 percent, more than twice the rate of inflation.

As a reminder, candidate Obama said repeatedly his bill would CUT premiums by an average of $2,500 per family – meaning premiums would go DOWN, not merely just “go up by less than projected.”  The campaign also promised that that those reductions would occur within Obama’s first term.  However, the annual Kaiser Foundation survey of employer-provided insurance found that average family premiums totaled $12,680 in 2008, $13,375 in 2009, $13,770 in 2010, $15,073 in 2011, and $15,745 this year.  In other words, while candidate Obama promised premiums would fall by $2,500 on average, premiums have risen by $3,065 since Barack Obama was elected President.  (A visual representation of this broken promise – updated to reflect this year’s survey data – is attached below.)

Other conclusions from the Kaiser study:

  • You CAN’T Keep Your Current Coverage:  The survey found that a majority (52%) of workers have now been forced out of their pre-Obamacare coverage – that’s an increase of 8 percent from just last year.  The loss of employees’ pre-Obamacare coverage is occurring even faster than the Administration’s own estimates, which concluded half of all employers – and as many as 80% of small businesses – will be forced to give up their current coverage by 2013.  Just as important, by giving up their pre-Obamacare plans, both employers and employees will be subjected to costly new mandates that will increase premiums.
  • New Requirements are Raising Premiums:  Significant percentages of workers were in plans that had to change their services covered (41%) or cost-sharing requirements (33%) to meet Obamacare’s new preventive service mandates.  And the percentage of plans having to increase their benefits due to Obamacare rose by 10 percent when compared to last year.  These new mandates by definition will raise premiums for plans, as this year’s premium increase demonstrates.

Just before Obamacare passed, former Speaker Pelosi famously said we had to pass the bill to find out what’s in it.  Today we have once again found out just how much the 2700-page law is failing to live up to the President’s promises.

The REAL Truth about Obamacare

Secretary Sebelius has an op-ed in this morning’s Washington Post entitled “The Truth about Obamacare.”  Unfortunately, the op-ed makes several statements about Obamacare that warrant fact-checking and rebuttal.  Herewith, decoded from the Administration’s spin, the REAL truth about Obamacare:

Claim #1: “The Supreme Court decision upholding the Affordable Care Act was a turning point in the health-care debate, a chance to stop refighting old political battles…”

This claim misleads in two key respects.  First, as we pointed out the day of the ruling, the Supreme Court upheld some of the law – and overturned other portions.  The Court explicitly ruled that “The Affordable Care Act is constitutional in part and unconstitutional in part.”   And in its ruling, the Court threw more than half of the law’s coverage expansions into doubt – because it said Obamacare was unconstitutionally coercive on the part of the states by forcing them to expand their Medicaid programs.

Second, even as the Court upheld the individual mandate under the taxing power, President Obama and the Administration seem pathologically unwilling to concede that the mandate is a tax increase – “fighting old political battles” by re-litigating the basis for the Court’s decision in a vain attempt to avoid an admission that Obamacare broke the President’s promise not to raise taxes on the middle class.  If the President doesn’t want to “refight old political battles,” why won’t he publicly accept that the mandate is a multi-billion dollar tax increase?

Claim #2: “One claim is that the Affordable Care Act is driving up Americans’ health-care costs.  The facts tell a different story.”

The Department’s own actuary noted just last month that Obamacare will increase spending on health care by $478,000,000,000 in its first seven years alone.  That means that costs are going UP even as candidate Obama repeatedly promised that they would go DOWN.  While candidate Obama promised that premiums would go DOWN by $2,500, they actually have gone UP by nearly as much – from $12,680 in 2008 to $15,073 in 2011, according to Kaiser data.  And the Congressional Budget Office found that Obamacare’s new insurance mandates will raise premiums on the individual market by an additional $2,100 per family.  The Secretary’s attempt to argue that premium costs are going up by slightly less is a misleading attempt to define the President’s campaign promise downward and avoid admitting yet another broken campaign promise.

Claim #3: “Another falsehood repeated by opponents of the law is that it is putting a greater burden on small businesses.  Again, the facts show that the opposite is true.”

The facts show that between the time of enactment and last month, the Administration has released a whopping 12,825 pages of Obamacare-related regulations and notices in the Federal Register – and thousands more are likely on the way.  If the Secretary really believes her Department issuing thousands of pages of mandates, regulations, and diktats helps small business, perhaps she should look for opportunities to work in private industry herself – because she would quickly find out that thanks to Obamacare, the private sector is not “doing fine.”

Claim #4: “A third false attack recycled in recent weeks is that the Affordable Care Act cuts Medicare benefits.  In truth, Medicare is stronger than ever.”

That’s not what Nancy Pelosi said.  In an interview with CNBC’s Maria Bartiromo last November, Pelosi admitted that Democrats “took a half a trillion dollars out of Medicare in [Obamacare], the health care bill.”  That is EXACTLY what Obamacare did – it resulted in $500 billion in Medicare spending reductions, savings that in the words of the non-partisan Congressional Budget Office “will not enhance the ability of the government to pay for future Medicare benefits” – because those savings will be used to fund other unsustainable entitlements. 

In short, Secretary Sebelius is 0-for-4 on her claims when it comes to Obamacare being upheld, lowering costs, helping small business, and preserving Medicare.  It’s as good an argument as any for why the law should be repealed – because if these incomplete and misleading statements are the best arguments the Administration can put forward to support the law, there’s no reason not to repeal it.