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Posts Tagged ‘spending’
November 14th, 2016 at 11:38 am
NY Times’s Paul Krugman Discredited In Record Time
Posted by Timothy Lee Print

There may be no commentator more exposed and discredited in recent years than The New York Times’s Paul Krugman.

Where to even begin?  My personal favorite might be his call for a massive spending “stimulus” when Obama entered office, which he estimated should be approximately $600 billion, to return economic health to the nation.  ”When I put this all together,” he said, “I conclude that the stimulus package should be at least 4% of GDP, or $600 billion.”  Obama ended up getting something much larger, closer to $1 trillion.  Yet when the U.S. proceeded to suffer the worst decade of economic performance in U.S. history and multiple failed “recovery summers,” Krugman just shamelessly published a later piece entitled “How Did We Know the Stimulus Was Too Small?”

Fast forward to election night, when he moped and went on record predicting that markets would never recover from Donald Trump’s victory.  You can’t make this stuff up:

It really does now look like President Donald Trump, and markets are plunging.  When might we expect them to recover?

Frankly, I find it hard to care much, even though this is my specialty.  The disaster for America and the world has so many aspects that the economic ramifications are way down my list of things to fear.  Still, I guess people want an answer:  If the question is when markets will recover, a first-pass answer is never.”

So what happened immediately after Krugman’s solemn prediction?  Well, markets reached another record high on Friday.

Perhaps Krugman simply recognizes the wreckage of Obama’s legacy, and masochistically seeks to outdo him?

December 4th, 2015 at 9:44 am
ObamaCare Meltdown, Cont’d: Health Spending Rises Most Since 2007
Posted by Timothy Lee Print

When even The New York Times issues lamentations as the consequences of ObamaCare become more clear, it’s obvious that things aren’t going well:

Health spending grew faster than the economy in 2014, and the federal share of health spending grew even faster, as major provisions of the Affordable Care Act took effect.  Total spending on health care increased 5.3 percent last year, the biggest jump since 2007, and accounted for 17.5 percent of the nation’s economic output, up from 17.3 percent in 2013, the Department of Health and Human Services said in its annual report on spending trends.”

But not to worry.  The Obama Administration assures us that things are fine:

The spending report comes as the Obama administration is already on the defensive over rising premiums and deductibles on insurance policies sold through the health law’s exchanges.  Last month, United Health Group, one of the nation’s largest health insurance companies, significantly lowered its profit estimates and blamed the federal health care law.  Obama Administration officials said Wednesday that the rise in health spending last year did not undermine their conviction that the Affordable Care Act had been a boon for the nation.”

Of course, this is the same administration that assured us just hours before the Paris terrorist attacks that ISIS is contained, not to mention that “if you like your doctor, you can keep your doctor, period.”  Per Nancy Pelosi’s claim, we’re finding out what’s in ObamaCare, and the only question is whether this or the Iran nuclear accord – which we’re now told Iran didn’t even sign – will prove the worse of Obama’s two signature “achievements” as time progresses.

July 31st, 2015 at 10:01 am
Sticker Shock: Healthcare Spending Spikes As ObamaCare Takes Effect
Posted by Timothy Lee Print

For some time now, Barack Obama and his apologists have trumpeted slowing healthcare costs as somehow attributable to ObamaCare.  Never mind that the declines predated Obama’s election, and that even The Washington Post gave him three Pinocchios in its Fact Checker analysis of this claim on November 5 of last year:

Healthcare inflation has gone down every single year since the law [ObamaCare] passed, so that we now have the lowest increase in healthcare costs in 50 years – which is saving us about $180 billion in reduced overall costs to the federal government and in the Medicare program.”

To illustrate how he played the role of rooster taking credit for the sunrise, healthcare cost inflation reached 7% in 2003, but plummeted to approximately 2% before Obama even took office.

Regardless, but healthcare costs are spiking again as ObamaCare actually takes effect:

Growth in national health spending, which had dropped to historic lows in recent years, has snapped back and is set to continue at a faster pace over the next decade, federal actuaries said Tuesday…  The jump comes after five consecutive years of average spending growth of less than 4% annually – a rate touted by the Obama Administration as the lowest since the government began tracking health spending in the 1960s and a sign that the health law’s Medicare provisions were helping rein in health costs.”

Ooops.

Chalk up yet another failure of ObamaCare, which helps explain why it remains so unpopular among Americans as we “find out what’s in it” in the words of Nancy Pelosi.

May 4th, 2015 at 7:59 pm
ObamaCare Exchanges Are Losing Money

The reason 35 states chose not to build a local ObamaCare exchange – even though the federal government made billions of dollars available to do so – is pretty simple: After an initial burst of funding the a state must foot the bill to maintain it.

That’s turning out to be a very costly proposition.

Consider Oregon.

“The case of Oregon is the most extreme,” explains an editorial in the Washington Examiner. “After spending $200 million to develop its own health insurance exchange, the Beaver State was forced to abandon it altogether because of pervasive and intractable technical problems.”

It gets worse.

“Tiny Vermont spent roughly $4,000 for every uninsured Vermonter to develop its exchange – more than enough to buy a pre-ObamaCare policy for everyone for an entire year,” says the editorial. “And yet after spending so much, the Green Mountain State may soon follow Oregon’s lead in abandoning its creation. Minnesota faces a similar situation.”

Recall that ObamaCare’s upfront establishment grant money was designed to make it seem like the controversial health law didn’t add to the federal deficit by enticing states to take on the legacy costs of operating the exchanges. With Healthcare.gov becoming the de facto nationwide ObamaCare exchange, that gamble has backfired, but not before wasting lots of taxpayer money.

March 19th, 2015 at 6:11 pm
AEI Scholar: House GOP Budget Needs Work

James Pethokoukis of AEI argues that the new House GOP budget puts too much emphasis on cutting the deficit and not enough on increasing economic growth.

“Indeed, the entire thrust of the budget seems to be that the federal debt is America’s biggest problem,” he writes. “But where’s the evidence? Low interest rates are hardly signaling investor alarm. And not only is the federal debt issued in U.S. dollars, our currency is the world’s reserve. The U.S. is not Greece. The big economic danger here isn’t a debt-driven financial crisis. It’s chronic slow growth from having to sharply raise taxes if we don’t restructure entitlements in a way that promotes saving and work.”

Of course, House budget writers do intend to reform entitlement spending drivers like Medicare and Medicaid – and eventually, one hopes, Social Security. So from at least this standpoint Pethokoukis and the House Budget Committee seem to be in agreement that structural fixes are needed to get entitlement spending on a sustainable trajectory.

What seems to divide them, however, is the motivation for doing so. For the budget drafters it may be containing and reducing an exploding deficit. For Pethokoukis and others, it’s kick-starting the economy to generate more wealth up-and-down the income ladder.

One of these two motivations will ultimately decide what conservative entitlement reform looks like. It will be interesting to see which prevails in the run-up to 2016.

March 17th, 2015 at 1:40 pm
New House Budget Solidifies Ryan’s Legacy

New House Budget Chairman Tom Price (R-GA) is picking up right where his predecessor Paul Ryan (R-WI) left off.

Today, Price introduced his first federal budget proposal which borrows heavily from Ryan’s plans, “including a plan that would transform Medicare into a voucher-like ‘premium support’ program for seniors joining Medicare in 2024 or later,” reports Fox News. “They would receive a subsidy to purchase health insurance on the private market.”

Price would also keep Ryan’s idea to convert Medicaid and food stamps into federal block grants that states can spend with more freedom than they do now.

Though this budget stands little chance of passing because Republicans in Congress don’t have the votes to overcome a certain veto by President Barack Obama, retaining the core of Ryan’s reform package sends an important signal that these budget proposals are now the fundamental elements of any conservative spending reduction agenda. Every GOP presidential aspirant will have to weigh in on whether they support this approach and what, if any, changes they would make.

This is deliberative democracy at its best.

January 22nd, 2015 at 8:50 pm
Doctor Pay Raise Increases Medicaid Access

Think rationing health care spending has an effect of which patients doctors see?

A new study released by the New England Journal of Medicine found that Medicaid beneficiaries enjoyed a 7.7 percent bump in the number of appointments doctors scheduled with them when government reimbursement rates increased.

Unfortunately for the poor who use Medicaid, once ObamaCare’s temporary subsidy phased out, states didn’t have the extra money to continue the higher reimbursements to doctors.

And so, it’s likely that doctors will respond to the new (lower) price signal and cut back on the number of Medicaid patients they schedule.

From a policy perspective this study confirms that doctors respond to economic incentives, and that if we as a society are going to help the poorest of the poor get adequate health care Congress and the president need to start prioritizing federal spending so that there’s more money available to help those who need it.

If the folks in Washington, D.C. are looking for a place to start trimming, former U.S. Senator Tom Coburn’s (R-OK) “Wastebook 2014” is a good place to start.

October 9th, 2014 at 3:15 pm
Arkansas’ Medicaid Expansion Violated Obama HHS’ Own Budget Neutrality Rules

The Government Accountability Office (GAO) says that the State of Arkansas and the federal Department of Health and Human Services (HHS) violated federal guidelines when they agreed to expand Medicaid under a “private option” plan.

Arkansas was one of the first states to get permission from the Obama administration to expand Medicaid, but on different terms than laid out in ObamaCare.

Medicaid is the state-federal program that pays for health care services for the nation’s poor and disabled.

Under normal circumstances, Arkansas would only be allowed to get a waiver from ObamaCare’s expansion structure if it could prove that its plan would be budget neutral.

Guess what happened instead.

“According to federal regulations, the U.S. Department of Health and Human Services (HHS) has certain procedures they must follow when reviewing state requests for Medicaid waivers,” write experts at the Foundation for Government Accountability.

“One key component of any waiver is budget neutrality: states seeking waivers must demonstrate that they will not spend any more federal dollars under the waiver than they would have without the waiver. But as it turns out, the Obama Administration cut corners and ‘did not ensure budget neutrality’ requirements were actually met before approving Arkansas’ ObamaCare expansion.”

The result is an additional $778 million more in spending on Arkansas’ version of Medicaid expansion than would have occurred had HHS insisted on following its own budget neutrality rules.

The entire analysis of the GAO’s report is worth reading since it explains other serious problems with the Arkansas plan. Perhaps the most egregious is the depth at which the Democratic governor’s office and loyal state agencies went to mislead Republican state legislators on the true cost of the expansion. Evidence of bad faith negotiations like this make it impossible to have a substantive policy conversation. Even now there are reports that the governor is peddling incorrect information, and trying to silence opposition.

What’s emerging from the Arkansas fiasco is the extent to which supporters of bigger government will go to entrench their policies – truth, fairness and accountability be damned.

September 9th, 2014 at 7:51 pm
ObamaCare’s Popularity Dropping Ahead of Midterms

“Just 35 percent of voters now support the Affordable Care Act, down 3 percentage points from May, according to a monthly poll by the Kaiser Health Foundation,” reports The Hill.

Moreover, the poll found that 47 percent of respondents feel negatively about the law, otherwise known as ObamaCare.

The RealClearPolitics average of six national polls is even worse: 53.8 percent say they oppose the law, with only 40.3 percent in favor.

Little wonder that the controversial health law is so unpopular. States are continuing to resist Medicaid expansion under ObamaCare’s terms for fear of a Trojan horse spending spree, and consumers are getting shut out of some of the country’s best hospitals.

All this and it is still almost two months until the midterm elections.

President Barack Obama may not be on the ballot this year, but his eponymous health law surely is.

May 15th, 2014 at 1:02 pm
ObamaCare’s Medicaid Expansion Will Cost California an Additional $1.2 Billion

“Nearly one-third of California’s total population – roughly 11.5 million people – will be enrolled in Medi-Cal next year, according to Gov. Jerry Brown’s administration,” reports the L.A. Times.

“Enrollment is expected to exceed previous estimates by 1.4 million, and administration officials said it would cost the state $1.2 billion more than originally thought.”

Brown’s health policy czar calls the jump in enrollment part of the “woodworking effect;” meaning that the media’s attention on ObamaCare’s insurance exchanges enticed many people to sign up, only to find out they already qualified for Medi-Cal (California’s name for its Medicaid program).

Readers may recall that ObamaCare expands eligibility for Medicaid into higher income brackets. To get states to go along, ObamaCare pays for all of the new spending associated with covering these new enrollees (at least until 2017). But for those who would have qualified under the old system – where states contribute 50 cents to every dollar spent – the state gets no relief.

This is the scenario California finds itself in as officials head into the budget negotiation season needing to find an additional $1.4 billion they didn’t plan for.

Ever the populist, Brown is reframing Sacramento’s miscalculation as a case of voters needing to fund their good intentions. “I’m proud we did it,” referring to the expansion as “a huge social commitment on the part of the taxpayers of California.” “But we also have to take into account this thing is growing.”

April 1st, 2014 at 6:48 pm
ObamaCare Promotion Driving Up Medicaid Applications

“According to a recent study by Avalere, the average application rate [for Medicaid] has increased 27 percent among non-expansion states and 41 percent for those expanding,” writes Angela Boothe of the American Action Forum.

For example, Tennessee – a state that chose not to expand its Medicaid program under ObamaCare – is still experiencing severe pressure on its budget due to high numbers of people trying to enroll. Though only the beginning of April, the Volunteer State has already enrolled the maximum number of people it projected to cover for the year. Adding to the pressure on state budget writers is the reality that by refusing to expand Medicaid under ObamaCare – which covers 100 percent of the increased costs until 2017 – part of the expense for covering the new enrollees falls on the state. If you work in a non-Medicaid state agency in Tennessee, beware bean counters wielding knives.

The Avalere report highlights the fact that ObamaCare creates a unique burden for non-expansion states like Tennessee. Because of the controversial health law’s media saturation, millions of people are aware that they are probably eligible for some sort of government assistance to purchase health coverage. Of these, many are discovering that they already qualify for Medicaid, even before ObamaCare was enacted. The awkward situation for states like Tennessee is that ObamaCare is still expanding Medicaid, just without any extra financial help.

If non-expansion states like Tennessee continue to see record Medicaid enrollment increases this year, don’t be surprised if anti-ObamaCare governors and legislatures start to rethink their opposition to expansion. Of course, as I’ve explained elsewhere, it would be a serious mistake to swap a three-year federal bailout for decades of increased costs by expanding Medicaid on ObamaCare’s terms. But for desperate lawmakers looking for a quick fix, ObamaCare’s “free money” may be too tempting to pass up.

January 24th, 2014 at 3:18 pm
NY’s Schumer Calls on Dems to Defend Government

Talk about a New York state of mind.

In the run-up to the 2014 election, U.S. Senator Chuck Schumer (D-NY) “charts an agenda for Congress that includes extending unemployment benefits, raising the minimum wage, making college more affordable and investing in infrastructure,” according to the L.A. Times.

“Times are now ripe for a renewed and robust defense of government,” Schumer said in a speech to the liberal Center for American Progress Action Fund. And he clearly doesn’t fear any potential downside. “The best way to deal with the tea party’s obsessive anti-government mania is to confront it directly, by showing the people the need for government to help them out of their morass.”

Those who live in glass houses shouldn’t throw stones. The real maniacs in Washington, D.C. are liberals like Schumer who think Americans are eager to be told how government will meddle even more in the economy. Raising the minimum wage in an anemic employment market is a sure way to increase joblessness. But maybe that’s the point. The result is more people directly dependent on government outlays for their daily needs.

And then there is the inflationary effect of government spending on the price of college tuition, as well as the fact that ‘infrastructure investment’ is really code for pork barrel projects channeled to public employee unions.

Schumer’s call for a full-throated defense of government may get cheers in the liberal salons of the NYC-DC corridor, but echoing it would bring swift electoral defeat for his colleagues in more conservative states.

November 29th, 2013 at 5:37 pm
Obamacare Swells New York’s Medicaid Rolls

“Since the Oct. 1 rollout of the Affordable Care Act in New York, nearly half of New Yorkers who signed up for insurance on the state-run exchange qualified for Medicaid,” reports the New York Post.

Apparently, the media attention surrounding Obamacare enticed many lower-income Empire State residents to apply for insurance, only to find out they qualified for taxpayer subsidized Medicaid instead. If every New Yorker that qualifies for Obamacare’s expanded version of Medicaid actually signs up, the state’s total Medicaid population could hit 6 million in a few years. That would be nearly 1/3rd of the state’s population.

The implications for federal spending levels are ominous. Currently, Medicaid spending is split between states and the feds. But once 2014 arrives, “the feds will pick up 75 percent of the tab and eventually 90 percent for childless Medicaid adults, instead of the current 50 percent.”

As the Post’s article indicates, Obamacare’s failure to lure enough buyers onto its public-private insurance exchanges is only half the story. The real win for those who want to impose a government-run, single-payer system onto the American health care system may be in the massive expansion of Medicaid consumers paid for out of the federal treasury. Thus, even if the public-private part of Obamacare fails, the number of citizens depending on Washington for health care will increase dramatically. In the long run, that may be just what Obamacare’s staunchest supporters desire.

September 20th, 2013 at 11:36 am
House Votes to Defund ObamaCare

The U.S. House of Representatives just voted 230-189 to pass a stopgap spending bill that will fund the government for the next three months and DEFUND OBAMACARE.

The Senate will begin to take up the House bill on Monday.

September 16th, 2013 at 7:04 pm
Remember Obama Phones?

Looking for a job? How about getting trained by a government contractor to “forge signatures and falsify data”?

National Review is reporting that a former employee at TerraCom, Inc., a cell phone provider under the federal government’s Lifeline program, was encouraged to use the tactics to help boost the company’s revenues from $32.6 million in 2011 to $52.3 million in 2012.

Though a drop in the bucket for a line-item that costs $2.189 billion, the revelation serves as a reminder for how bad the so-called “Obama Phone” program has been administered.

So does this: “Lifeline’s costs have increased by 166 percent in the past five years,” according to NR.

Hmm… that means the program, around since the 1980’s, dramatically spiked in 2009 and hasn’t stopped since. Any guess as to what – or who – is responsible?

May 2nd, 2013 at 1:16 pm
Hidden Costs of Gang’s Immigration Bill

Andrew Stiles explains the reality behind the Gang of Eight claim that illegal immigrants won’t be eligible for public benefits until 13 years after being legalized:

“A notable loophole in the Gang’s legislation explicitly prohibits DHS from considering the likelihood that an applicant for provisional legal status will become a “public charge” — defined as any individual who is “primarily dependent on the government for subsistence, as demonstrated by either the receipt of public cash assistance for income maintenance, or institutionalization for long-term care at government expense.” Critics fear that if a significant number of immigrants meeting that definition are given legal status, state and local government could face an immediate financial burden, and one that could worsen over time.”

Moreover, as I explain in my column this week, the Gang’s prohibition against using federal law’s “public charge” criteria to decide whether illegal immigrants should be legalized undermines claims from Gang members and their allies that mass legalization won’t lead to big government spending increases.

The Heritage Foundation’s Robert Rector is still studying the impact of the Gang’s legalization effort on government spending, and my hunch is that he, unlike the Gang, will include the probable increases incurred by state and local governments if the public charge prohibition becomes law.

If so, the American people will get a clearer picture of the actual costs of legalization. Only then can we have an honest debate about what to do.

April 5th, 2013 at 3:52 pm
HHS Refuses State Requests for Medicaid Expansion Flexibility

States looking for flexibility under ObamaCare in how to structure and pay for expanding Medicaid can take a hike, according to an analysis by the Heritage Foundation.

States like Arkansas and Indiana have requested waivers from the health reform law’s expansion formula that creates millions of new enrollees at an eventual cost of billions of dollars to states.

The hope was to use existing state-based models like Indiana’s successful health savings account for low-income Hoosiers to increase Medicaid enrollment while retaining cost certainty for state budget writers.

But those hopes were dashed after the federal Department of Health and Human Services released a frequently asked questions (FAQ) sheet that flatly denied any request to deviate from ObamaCare’s one-size-fits-all, open-ended spending commitment for Medicaid.

With this announcement, the Obama administration has definitively articulated its idea of bipartisan reform.  Republican governors who capitulate and get in line are welcomed with open arms.  Those like Indiana’s Mike Pence can take their policy entrepreneurship somewhere else.

April 1st, 2013 at 2:49 pm
Indiana’s Pence Makes Progress with Innovative Medicaid Expansion

The Indianapolis Star reports that Indiana Republican Governor Mike Pence, a possible 2016 presidential candidate, cleared an important hurdle today when the state’s House Public Health Committee approved a bill to expand Medicaid eligibility without relying on ObamaCare’s open-ended spending incentives.

Pence’s plan would increase Indiana’s Medicaid enrollment by an estimated 400,000, but within the state’s Healthy Indiana initiative begun in 2007.  As a health savings account, Healthy Indiana allots a certain amount of money to qualifying Hoosiers who then shop for doctors and treatment options within their budget.  In effect, it transfers the decision making process for health care away from government bureaucrats to private citizens.  By capping the amount, Healthy Indiana also gives state budget writers more certainty about the cost of Medicaid expansion in future years.

Contrast this with the unlimited spending commitment envisioned by the Medicaid expansion system under ObamaCare, and conservatives will see why Pence’s proposal should be watched closely.  Under ObamaCare, states would pay no cost for expanding their eligibility pool up to 138 percent of the federal poverty line.  But starting in 2017, those that expanded enrollment would pay for 10 percent of the increase.  Though seemingly a small percentage, the costs will run into the billions, with even more likely if the federal government decides to reduce its 90 percent subsidy, as President Barack Obama has already hinted at doing.

The future of health insurance reform looks like it will include some mix of government-regulated exchanges, subsidies, and cost controls.  The question dividing conservatives like Mike Pence and Paul Ryan on one hand from liberals like Obama on the other, is who gets to make the lion’s share of the decisions on how health insurance dollars are spent.  Conservatives value individual choice, while liberals favor centrally planned mandates.

Ironically, if the President wants ObamaCare to be fiscally sustainable, he’ll have to accept that the only way to do it is allowing conservatives like Pence and Ryan to inject into it as much personal freedom as possible.

March 22nd, 2013 at 12:18 pm
Tom Coburn Axes Taxpayer Money for Absurd Research

From Quin’s lips to U.S. Senator Tom Coburn’s ears…

Yesterday, Quin highlighted one of the many wasteful uses of taxpayer money funded by the National Science Foundation, a federal government agency that subsidizes some pretty dubious projects. (Such as the sex lives of ducks.)

Also yesterday Coburn, a Republican from Oklahoma and a committed budget cutter, persuaded a majority of his Senate colleagues to limit NSF political science grants to only those studies that are certified as “promoting national security or the economic interests of the United States.”

Citing just one example, Coburn said that “There is no reason to spend $251,000 studying Americans’ attitudes toward the U.S. Senate when citizens can figure that out for free.”

As I understand it, Coburn’s amendment only curtails political science-related research, meaning that the project Quin cited may still be allowed going forward. Even so, it’s a hopeful sign that Coburn established a precedent for at least one part of the federal budget that aligns national spending with the (true) national interest.

March 16th, 2013 at 3:22 pm
WSJ: GOP Medicaid Flippers’ Wishful Thinking

An editorial in the Wall Street Journal nails a specious legal argument by at least two GOP governors trying to convince their Republican legislatures to approve the ObamaCare Medicaid expansion now, with the intention of opting out when the state’s bill comes due in three years.

The argument, a product of a private law firm in Ohio, makes some nice lawyer’s points, but ultimately fails to take into account how government programs – and the politics that drive them – actually work:

But there’s no evidence in the original law or the Supreme Court opinion that states can join or leave at their own whim. The logic of Justice Roberts’s opinion  [upholding ObamaCare] suggests that once states adopt new Medicaid, the program immediately becomes the old program for the purposes of the law and then states can’t leave.

The Becker memo also cites “guidance” from the federal Health and Human Services Department that states “may decide later to drop the coverage.” But these informal documents on the HHS website lack the force of law or even of regulation; they aren’t part of the Federal Register. In any case, HHS doesn’t have such authority. Congress didn’t grant the Administration any more statutory leeway than it did the states.

We wouldn’t be surprised if HHS is promising flexibility now only to revoke it later as a deliberate bait and switch. That wouldn’t be any more deceptive than Mr. Kasich’s legal claims. Republicans tempted to sign up for ObamaCare’s Medicaid expansion had better think twice because once they do, the likelihood is they’re ceding control forever.

The decision facing Republican legislatures is straightforward: Either continue with Medicaid as it is and have (some) discretion over your state budget, or accept ObamaCare’s expansion and get ready to lose control.

It’s time for the GOP flip-floppers to be honest about the implications of this decision and debate the choice, and the consequences, on the merits.