It is appropriate that the Democratic leadership of the U.S. House of Representatives unveiled their latest attempt at health care reform shortly before Halloween. It has the countenance of a rather sinister looking phantom as it slowly begins to emerge from the mists of back door Congressional deals between special interests, Speaker Pelosi, and the Obama White House.
Even before the fog totally lifts to expose the full form of the legislation, it is obvious that some features that really would work to reign in costs of a new health care system are totally missing. Most obvious—and unsurprising—is the lack of any tort reform measures that would reduce the expensive practice of defensive medicine currently being practiced by medical service providers to reduce their exposure to expensive lawsuits.
The nation’s trial lawyers didn’t even have to work up a sweat to prevent any medical malpractice reform language from entering the House bill. The majority party that relies heavily on contributions from well-heeled plaintiffs attorneys successfully carried out its role as lap dog of the plaintiff’s bar and kept any vestige of tort reform out of the legislation.
Allowing health insurance to be purchased across state lines also failed to be included in the House version of the health care reform legislation. The Pelosi team has continually harped on the need to make sure that there is enough competition in the health insurance marketplace to keep the insurance companies honest.
Unfortunately, they don’t want that competition to be unleashed into the private sector. They prefer to create a public insurance option instead—one that will be directly or indirectly backed by the full faith and credit of the U.S. government and will have undeniable competitive advantages over the private sector.
What is very clear as the beast emerges from the mists is that Congress’s penchant for playing the taxpayers as fools is alive and well on the Potomac.
Pelosi and Company gleefully proclaimed that the cost for their legislation comes in slightly under $900 million and doesn’t add to the deficit. The validity of that claim was questioned immediately by those who pointed out that the House bill removes the $250 billion doctor and hospital “fix” that would prevent them from being exposed to the drastic Medicare cuts in reimbursement that the current law calls for.
In order to prevent an avalanche of opposition from those providers, the House leadership—in a testimony to cynicism—plans to introduce a separate bill to do the “fix.” The official scorer of the fiscal impact of legislation, the Congressional Budget Office, was not authorized to include the cost of the “fix” in the health care reform legislation since it is not in the health care reform bill. But it will happen and when it does it will result in a further expansion of the huge federal deficit.
Perhaps the most serious flaw—and there are many—in the House bill is the relatively small penalty individuals will have to pay if they do not purchase health insurance. If younger individuals only have to pay a relatively small penalty for not having health insurance, they will take the easy way out and simply pay the penalty. If they get seriously ill, they will then opt in. If the final legislation allows this option, higher premiums for the vast majority of the privately insured are inevitable.
The House bill is ill-conceived and scary. It is a witches’ brew of partisan politics and special interest favoritism. It needs to re-enter the mist and come back in a more fair and affordable form.
Wednesday, November 11, 2009
Sunday, November 1, 2009
Lord Action Was Right
The popular 19th century English nobleman, Lord Acton, is perhaps best remembered for the statement: “Power corrupts; absolute power corrupts absolutely.” History is littered with public figures that are appropriately described by those words. Considering some of the shenanigans going on with the health care legislation in Washington, Senate Majority Leader Harry Reid can certainly be added to the list.
There is no doubt that Reid is in a tough spot. President Obama has stacked up a huge pile of political poker chips, betting on a winning hand on health care reform. He will be harmed politically if he loses, and his fellow Democrats in Congress will feel the collateral damage. But it is not easy to muster the votes necessary to make significant changes to one-sixth of the U.S. economy—as Harry Reid has learned. Adding to Reid’s difficulties is the fact that he has to run for re-election next year, and polling data indicate that he is far from being a shoo-in.
The last thing Reid needs is to be a major factor in passing legislation that will push the crumbling budget of the State of Nevada further into the abyss. One of the central features of the proposed legislation could do just that. It would allow millions of individuals whose income levels currently preclude them from qualifying for Medicaid to meet eligibility requirements for the program. But there is a rub: states must put up a five percent match to help cover the additional costs.
Reid has made no bones about what he plans to do to avoid any political fallout back home. He has stated unequivocally that he will not allow a health care bill to come to the floor if it increases Medicaid costs for Nevada. He seems to be getting his way. The Senate Finance Committee bill would exempt four states—Michigan, Oregon, Rhode Island, and (yes) Nevada—from the requirement to pay the five percent funding match. The alleged justification for making the exception is that those states have been the hardest hit by the recession.
The Senate should rebel against Senator Reid feathering his own nest.
Other states shouldn’t have their budgets savaged by another huge unfunded mandate coming down from Washington while watching Reid and a handful of his cronies grin like bandits counting their loot. If states are going to have to be fiscally penalized to make the numbers work for the health care reform legislation, then all states should have to bear the burden.
The health care reform debate is starting to focus attention on what happens when arrogance meets partisanship. It is almost impossible to pass legislation that will cover all of the uninsured, reduce the overall cost of health insurance, and “not add a dime” to the deficit as President Obama promised. There are going to be winners and losers—and some very big losers—if the legislation passes. The likely losers will be young Americans and healthy policy holders who will have to pay much higher costs to insure or subsidize the elderly, the uninsured, and individuals with health problems or unhealthy life styles.
The main science driving the health care debate at this juncture is political science. After watching the political class making hash out of health care legislation, voters might want to ponder another quote from Lord Acton: “It is easier to find people fit to govern themselves than people to govern others. Every man is the best, the most fit judge of his own advantage.”
Senator Reid is living proof of the wisdom in those words.
There is no doubt that Reid is in a tough spot. President Obama has stacked up a huge pile of political poker chips, betting on a winning hand on health care reform. He will be harmed politically if he loses, and his fellow Democrats in Congress will feel the collateral damage. But it is not easy to muster the votes necessary to make significant changes to one-sixth of the U.S. economy—as Harry Reid has learned. Adding to Reid’s difficulties is the fact that he has to run for re-election next year, and polling data indicate that he is far from being a shoo-in.
The last thing Reid needs is to be a major factor in passing legislation that will push the crumbling budget of the State of Nevada further into the abyss. One of the central features of the proposed legislation could do just that. It would allow millions of individuals whose income levels currently preclude them from qualifying for Medicaid to meet eligibility requirements for the program. But there is a rub: states must put up a five percent match to help cover the additional costs.
Reid has made no bones about what he plans to do to avoid any political fallout back home. He has stated unequivocally that he will not allow a health care bill to come to the floor if it increases Medicaid costs for Nevada. He seems to be getting his way. The Senate Finance Committee bill would exempt four states—Michigan, Oregon, Rhode Island, and (yes) Nevada—from the requirement to pay the five percent funding match. The alleged justification for making the exception is that those states have been the hardest hit by the recession.
The Senate should rebel against Senator Reid feathering his own nest.
Other states shouldn’t have their budgets savaged by another huge unfunded mandate coming down from Washington while watching Reid and a handful of his cronies grin like bandits counting their loot. If states are going to have to be fiscally penalized to make the numbers work for the health care reform legislation, then all states should have to bear the burden.
The health care reform debate is starting to focus attention on what happens when arrogance meets partisanship. It is almost impossible to pass legislation that will cover all of the uninsured, reduce the overall cost of health insurance, and “not add a dime” to the deficit as President Obama promised. There are going to be winners and losers—and some very big losers—if the legislation passes. The likely losers will be young Americans and healthy policy holders who will have to pay much higher costs to insure or subsidize the elderly, the uninsured, and individuals with health problems or unhealthy life styles.
The main science driving the health care debate at this juncture is political science. After watching the political class making hash out of health care legislation, voters might want to ponder another quote from Lord Acton: “It is easier to find people fit to govern themselves than people to govern others. Every man is the best, the most fit judge of his own advantage.”
Senator Reid is living proof of the wisdom in those words.
Tuesday, October 13, 2009
Workers Should Have the Right to Vote
There is a bill in the U.S. Senate that would radically alter the process for deciding whether a union will represent you at the bargaining table with your employer. That bill’s sole purpose is to provide unions greater leverage in labor/management relations.
And while the health care issue has understandably dominated the public’s attention, you should keep an eye on this issue, too.
Lately, the debate over health care has pushed virtually everything else in Congress to the back burners. Nevertheless, unions and their allies in Congress want to force a vote on their bill. Last week, Senate Health, Education, Labor and Pensions Committee chairman, Sen. Tom Harkin (D – Iowa), said that he was still hoping to bring the bill up for a vote this fall. However, the unions have to clear a significant hurdle first. They must secure 60 votes from among the country’s 100 senators to avoid a guaranteed filibuster by opponents.
All 40 Republican senators are against this bill, which means that all 60 Democratic senators are needed to invoke cloture to prevent the filibuster. While most of the Democrats would vote to do this, a number of moderate Democratic senators have not signed onto this bill, including Louisiana’s Sen. Mary Landrieu.
Her reluctance is understandable–and commendable. S. 560 was named the Employee Free Choice Act by its authors, but it is more commonly referred to as “card check” because it would essentially eliminate secret ballot elections and replace them with an open card registration procedure known as card check.
Existing law allows workers to hear both sides–as they would in an election campaign–and then to privately decide in a voting booth whether they want union representation. S. 560 seeks to change the rules for union organizing campaigns so that workers only get the union’s side of the story.
Currently, unions wanting to obtain bargaining rights hire organizers to solicit workers’ signatures on cards authorizing a union certification election. If 30 percent of the workers sign the cards, the union can petition the National Labor Relations Board to conduct an election, which it supervises to assure that neither the employer nor the union intimidates the workers.
Many workers are not interested in being represented by a union, but will sign the cards so organizers will leave them alone.
When the election is held, they then vote against unionization. That is why the standard goal of organizing campaigns is to collect signatures from 75 percent of workers. Unions will always choose card check because they already collect more than a majority of signatures anyway. So, S. 560 would effectively eliminate the secret ballot election procedure.
The inability of union leaders to secure outright support for S. 560 from Sen. Landrieu and other moderate Democratic senators like her has prompted Sen. Harkin and a handful of other supportive senators to attempt to develop an alternative approach to overcome their reluctance. Yet, the only alternative that would satisfy union leaders will be one that rigs the game and keeps workers from getting the full story before deciding to allow a union in their workplace.
The existing law is fair and protects workers from being unduly pressured by their employers or union organizers. S. 560 was not brought by a host of workers begging to have the law changed, but by union leaders who see their membership sinking as workers find unions less relevant and beneficial in today’s economy. Senator Landrieu would be wise not to support cloture on this bill or on any variation of it that the union leadership would support.
Jim Patterson, LABI’s Vice President of Governmental Relations and Employee Relations Council Director, contributed to this column.
And while the health care issue has understandably dominated the public’s attention, you should keep an eye on this issue, too.
Lately, the debate over health care has pushed virtually everything else in Congress to the back burners. Nevertheless, unions and their allies in Congress want to force a vote on their bill. Last week, Senate Health, Education, Labor and Pensions Committee chairman, Sen. Tom Harkin (D – Iowa), said that he was still hoping to bring the bill up for a vote this fall. However, the unions have to clear a significant hurdle first. They must secure 60 votes from among the country’s 100 senators to avoid a guaranteed filibuster by opponents.
All 40 Republican senators are against this bill, which means that all 60 Democratic senators are needed to invoke cloture to prevent the filibuster. While most of the Democrats would vote to do this, a number of moderate Democratic senators have not signed onto this bill, including Louisiana’s Sen. Mary Landrieu.
Her reluctance is understandable–and commendable. S. 560 was named the Employee Free Choice Act by its authors, but it is more commonly referred to as “card check” because it would essentially eliminate secret ballot elections and replace them with an open card registration procedure known as card check.
Existing law allows workers to hear both sides–as they would in an election campaign–and then to privately decide in a voting booth whether they want union representation. S. 560 seeks to change the rules for union organizing campaigns so that workers only get the union’s side of the story.
Currently, unions wanting to obtain bargaining rights hire organizers to solicit workers’ signatures on cards authorizing a union certification election. If 30 percent of the workers sign the cards, the union can petition the National Labor Relations Board to conduct an election, which it supervises to assure that neither the employer nor the union intimidates the workers.
Many workers are not interested in being represented by a union, but will sign the cards so organizers will leave them alone.
When the election is held, they then vote against unionization. That is why the standard goal of organizing campaigns is to collect signatures from 75 percent of workers. Unions will always choose card check because they already collect more than a majority of signatures anyway. So, S. 560 would effectively eliminate the secret ballot election procedure.
The inability of union leaders to secure outright support for S. 560 from Sen. Landrieu and other moderate Democratic senators like her has prompted Sen. Harkin and a handful of other supportive senators to attempt to develop an alternative approach to overcome their reluctance. Yet, the only alternative that would satisfy union leaders will be one that rigs the game and keeps workers from getting the full story before deciding to allow a union in their workplace.
The existing law is fair and protects workers from being unduly pressured by their employers or union organizers. S. 560 was not brought by a host of workers begging to have the law changed, but by union leaders who see their membership sinking as workers find unions less relevant and beneficial in today’s economy. Senator Landrieu would be wise not to support cloture on this bill or on any variation of it that the union leadership would support.
Jim Patterson, LABI’s Vice President of Governmental Relations and Employee Relations Council Director, contributed to this column.
Saturday, October 3, 2009
Yesterday, Today and Tomorrow from a State Budget Standpoint
The biggest issue facing Governor Jindal and the Legislature in 2010 will be the state budget. No other issue will come remotely close to capturing the same amount of attention and scrutiny in the run-up to the legislative session next March. Considering the fact that the governor must submit an executive budget outline in February, the countdown is on.
The budgeting process is going to be anything but fun in 2010. Soaring revenues fueled by incredibly high oil and gas prices and billions of dollars of hurricane recovery money are a thing of the past. Slower revenue growth is likely to meet a huge loss of federal Medicaid money in the budgeting process next year, and the result will not be pleasant.
To better understand the future direction of the state budget, a look at the two most recent budgets helps to put things in perspective.
In 2008 when the governor and the Legislature fashioned the 2008-2009 budget, state government was still rolling in high cotton. Money was pouring into the treasury so fast it was hard to spend it all—but Lord knows we tried. The total state budget increased by $1 billion and the state general fund portion of it (the part funded only by state generated revenue) went up by a whopping $1.24 billion. That budget also contained an increase of 1,000 state job positions. This significant expansion of the state budget came after a similar sizeable increase in the 2007-2008 budget fashioned in the last year of the Blanco administration. But what goes up must come down—and our governor and Legislature began to learn that lesson last spring when they wrote the 2009-2010 budget.
The budget debate last spring and early summer contained a lot of wailing and gnashing of teeth. The House members wanted to bring spending back in line with existing revenues. A majority of the Senate wanted to increase taxes and lessen the amount of cuts.
Governor Jindal did not support tax increases, so the House version of the budget became the basic blueprint. The result was that the total state budget decreased by $1.5 billion from the previous year and the state general fund portion dropped by $1.21 billion.
That budget also called for a reduction of 1,200 authorized (but probably not filled) job positions in state government. In essence, the governor and the Legislature simply reverted back to 2007-2008 spending levels when they crafted the current budget. But remember, those spending levels were a huge increase in and of themselves due to higher oil and gas prices and hurricane recovery money.
Now the road gets bumpier for the governor and the Legislature. Unless the federal government changes the formula for determining the state match for Medicaid funding (or carves out a temporary exemption for Louisiana), there will be $1 billion less revenue to use to come up with the same spending levels as exists in the current budget.
Several cost savings panels are meeting to come up with recommendations for reducing expenditures and identifying efficiencies in state government operations. Unfortunately, most of the potentially low hanging fruit in the cost savings arena has already been harvested.
To come up with a billion dollars of spending reductions, some sacred cows are going to have to be sacrificed—things like the multiplicity of institutions in post-secondary education and the large amount of state funding provided for local government services and construction projects.
How the governor and Legislature handle the budget next spring will impact the fiscal future of Louisiana for years to come. Let’s hope they do better than Congress.
The budgeting process is going to be anything but fun in 2010. Soaring revenues fueled by incredibly high oil and gas prices and billions of dollars of hurricane recovery money are a thing of the past. Slower revenue growth is likely to meet a huge loss of federal Medicaid money in the budgeting process next year, and the result will not be pleasant.
To better understand the future direction of the state budget, a look at the two most recent budgets helps to put things in perspective.
In 2008 when the governor and the Legislature fashioned the 2008-2009 budget, state government was still rolling in high cotton. Money was pouring into the treasury so fast it was hard to spend it all—but Lord knows we tried. The total state budget increased by $1 billion and the state general fund portion of it (the part funded only by state generated revenue) went up by a whopping $1.24 billion. That budget also contained an increase of 1,000 state job positions. This significant expansion of the state budget came after a similar sizeable increase in the 2007-2008 budget fashioned in the last year of the Blanco administration. But what goes up must come down—and our governor and Legislature began to learn that lesson last spring when they wrote the 2009-2010 budget.
The budget debate last spring and early summer contained a lot of wailing and gnashing of teeth. The House members wanted to bring spending back in line with existing revenues. A majority of the Senate wanted to increase taxes and lessen the amount of cuts.
Governor Jindal did not support tax increases, so the House version of the budget became the basic blueprint. The result was that the total state budget decreased by $1.5 billion from the previous year and the state general fund portion dropped by $1.21 billion.
That budget also called for a reduction of 1,200 authorized (but probably not filled) job positions in state government. In essence, the governor and the Legislature simply reverted back to 2007-2008 spending levels when they crafted the current budget. But remember, those spending levels were a huge increase in and of themselves due to higher oil and gas prices and hurricane recovery money.
Now the road gets bumpier for the governor and the Legislature. Unless the federal government changes the formula for determining the state match for Medicaid funding (or carves out a temporary exemption for Louisiana), there will be $1 billion less revenue to use to come up with the same spending levels as exists in the current budget.
Several cost savings panels are meeting to come up with recommendations for reducing expenditures and identifying efficiencies in state government operations. Unfortunately, most of the potentially low hanging fruit in the cost savings arena has already been harvested.
To come up with a billion dollars of spending reductions, some sacred cows are going to have to be sacrificed—things like the multiplicity of institutions in post-secondary education and the large amount of state funding provided for local government services and construction projects.
How the governor and Legislature handle the budget next spring will impact the fiscal future of Louisiana for years to come. Let’s hope they do better than Congress.
Tuesday, August 25, 2009
Keeping Manufacturing Alive
Some of the highest paying jobs in America are created by companies that make things. Manufacturing has been a mainstay in the U.S. economy since the beginning of the industrial revolution. Some say that manufacturing is passé, that technology is the future, and that it doesn’t matter if manufacturing dries up and blows away.
The flaw in those arguments (actually there are numerous flaws) is that one of the biggest users of technology today is manufacturers.
Modern manufacturing operations are the showcase for innovative technology. Gone are the days, for instance, when hundreds of laborers engaged in the back-breaking activity of wrestling with logs in a forest products plant. A typical worker in those facilities today is more of a technician than a log wrestler.
State-of-the-art machinery moves the logs, determines the best possible value that can be extracted from them, and turns them into profitable products. The same is true of many industries, such as steel, durable goods, petroleum refining, and chemical manufacturing. Technology is the driving force that has increased productivity in American manufacturing, which has kept us a global leader in manufacturing output.
As noted above, advancements in technology have led directly to a diminution of manufacturing employment in the U.S. Many Americans believe that most of the manufacturing job losses—and there have been millions in the last few decades—are due to plants closing in the U.S. and moving to less-developed countries.
Certainly there has been some of that phenomenon occurring, particularly with low-technology industries. But, until this point, the majority of manufacturing job losses has been due more to productivity advances through technology than out-sourcing manufacturing jobs to foreign countries.
That may change soon. Government policies can have a major impact on any industry, and manufacturing is no exception.
Several issues pending in Congress could accelerate the departure of manufacturing industries and jobs from the U.S. Enactment of “cap and trade” legislation tops the list.
If energy costs rise exponentially for manufacturers in the U.S., companies will undoubtedly look more favorably at countries that do not artificially raise their cost of doing business by raising their energy costs.
Another federal issue that will impact the future of American manufacturing is the “card check” legislation pending in Congress. Some manufacturers work with a union agreement. Others do not. Manufacturers are not generally concerned about the wages involved with a collective bargaining agreement. They already have some of the highest wage scales in the private sector.
What troubles them are the voluminous work rules that come with a union contract. These contract requirements inhibit the productivity advancements necessary for manufacturing to survive in the modern world.
The current health care debate also has the full attention of U.S. manufacturers. The vast majority of our domestic manufacturers provide quality health insurance coverage for their workers. Proposals in Congress would mandate that coverage and possibly tax manufacturers for providing it.
The manufacturing community is very wary of government-imposed mandates from past experience involving many issues. Limiting their ability to design quality, affordable insurance plans for their workers—and possibly making them pay taxes to provide it—will not make them more likely to keep or expand their operations in the U.S.
If America is to remain a world leader in making things, government officials should step lightly when considering policies that could make more of our best jobs leave our shores.
Improving the quality of education, encouraging more research and development, and maintaining job-friendly tax policies will help keep manufacturing jobs in America. Passing some of the proposals pending in Congress will definitely have the opposite effect.
The flaw in those arguments (actually there are numerous flaws) is that one of the biggest users of technology today is manufacturers.
Modern manufacturing operations are the showcase for innovative technology. Gone are the days, for instance, when hundreds of laborers engaged in the back-breaking activity of wrestling with logs in a forest products plant. A typical worker in those facilities today is more of a technician than a log wrestler.
State-of-the-art machinery moves the logs, determines the best possible value that can be extracted from them, and turns them into profitable products. The same is true of many industries, such as steel, durable goods, petroleum refining, and chemical manufacturing. Technology is the driving force that has increased productivity in American manufacturing, which has kept us a global leader in manufacturing output.
As noted above, advancements in technology have led directly to a diminution of manufacturing employment in the U.S. Many Americans believe that most of the manufacturing job losses—and there have been millions in the last few decades—are due to plants closing in the U.S. and moving to less-developed countries.
Certainly there has been some of that phenomenon occurring, particularly with low-technology industries. But, until this point, the majority of manufacturing job losses has been due more to productivity advances through technology than out-sourcing manufacturing jobs to foreign countries.
That may change soon. Government policies can have a major impact on any industry, and manufacturing is no exception.
Several issues pending in Congress could accelerate the departure of manufacturing industries and jobs from the U.S. Enactment of “cap and trade” legislation tops the list.
If energy costs rise exponentially for manufacturers in the U.S., companies will undoubtedly look more favorably at countries that do not artificially raise their cost of doing business by raising their energy costs.
Another federal issue that will impact the future of American manufacturing is the “card check” legislation pending in Congress. Some manufacturers work with a union agreement. Others do not. Manufacturers are not generally concerned about the wages involved with a collective bargaining agreement. They already have some of the highest wage scales in the private sector.
What troubles them are the voluminous work rules that come with a union contract. These contract requirements inhibit the productivity advancements necessary for manufacturing to survive in the modern world.
The current health care debate also has the full attention of U.S. manufacturers. The vast majority of our domestic manufacturers provide quality health insurance coverage for their workers. Proposals in Congress would mandate that coverage and possibly tax manufacturers for providing it.
The manufacturing community is very wary of government-imposed mandates from past experience involving many issues. Limiting their ability to design quality, affordable insurance plans for their workers—and possibly making them pay taxes to provide it—will not make them more likely to keep or expand their operations in the U.S.
If America is to remain a world leader in making things, government officials should step lightly when considering policies that could make more of our best jobs leave our shores.
Improving the quality of education, encouraging more research and development, and maintaining job-friendly tax policies will help keep manufacturing jobs in America. Passing some of the proposals pending in Congress will definitely have the opposite effect.
Friday, August 7, 2009
Independents Are Taking a Second Look
By Dan Juneau
Presidential campaigns are in some respects like a gruesome war. Large, well-financed armies of partisans slug it out in battles designed to rally their voters into action and to drive down the favorable impressions of the opposing candidate.
But the growing trend in modern elections centers on securing the votes of independent voters not affiliated with either party. This block of voters has increased significantly in the last few decades. They tend to be more conservative than most Democrats on fiscal issues and more liberal than most Republicans on social issues. Recent Democratic successes in both congressional and presidential elections have revolved around securing a majority of these independent voters to back Democrats.
A recent public opinion survey by the Gallup organization contains a clear message that independent voters may be becoming concerned about their decision to place one-party rule in the hands of the Democrats.
The poll, conducted July 17-19, had some interesting findings. Some 59 percent of the respondents said that the Obama administration’s proposals called for too much federal spending. Not surprisingly, 90 percent of Republicans felt that way, compared to only 28 percent of Democrats. But a solid 66 percent of independents expressed strong concern about the high level of federal spending.
In a similar vein, 52 percent of the respondents felt that the Obama agenda was moving toward too great an expansion of the federal government. Again, 83 percent of Republicans held that view while only 17 percent of Democrats concurred. But 60 percent of independent voters expressed a concern that the federal government is growing too large, too fast.
Other recent polling data show that the president’s popularity is falling, support for his handling of key issues is diminished, and the generic ballot question of whether the voters would prefer a Democrat or Republican in Congress is moving more in the direction of the Republicans. Next year is an election year in which every House member and roughly a third of the Senate face elections. That being the case, this recent Gallup poll should be a wake-up call for the president and the congressional members of his party.
Americans have recently seen the enactment of a “stimulus” package totaling almost $800 billion. But they have seen few positive results from that huge amount of government spending.
Voters have also seen the House pass a thousand-page energy/climate change bill that will expand the government’s role in the economy and pit winners against losers in various states and industries. And now Congress is debating perhaps the largest and most expensive expansion of government ever in the form of health care legislation, including a public insurance option backed by the federal treasury.
Many Democrats in Congress are getting uncomfortable with the rush to enact huge new spending programs that will lead to an increase of direct government intervention in the economy. The Gallup poll indicates those Democrats have good reasons to feel that way. The president and the Democratic leaders in Congress are getting concerned that public opinion is shifting away from them on these crucial issues.
They are trying to ram the health care legislation through before members of Congress go home for their August recess. But moderate Democrats are not moving lockstep behind President Obama and the Democratic leadership at this juncture.
One of the major reasons why they are getting cold feet is the fact that they know they must have the votes of those fiscally conservative independent voters if they are going to retain the seats that many of them won from Republicans in the last few elections.
Presidential campaigns are in some respects like a gruesome war. Large, well-financed armies of partisans slug it out in battles designed to rally their voters into action and to drive down the favorable impressions of the opposing candidate.
But the growing trend in modern elections centers on securing the votes of independent voters not affiliated with either party. This block of voters has increased significantly in the last few decades. They tend to be more conservative than most Democrats on fiscal issues and more liberal than most Republicans on social issues. Recent Democratic successes in both congressional and presidential elections have revolved around securing a majority of these independent voters to back Democrats.
A recent public opinion survey by the Gallup organization contains a clear message that independent voters may be becoming concerned about their decision to place one-party rule in the hands of the Democrats.
The poll, conducted July 17-19, had some interesting findings. Some 59 percent of the respondents said that the Obama administration’s proposals called for too much federal spending. Not surprisingly, 90 percent of Republicans felt that way, compared to only 28 percent of Democrats. But a solid 66 percent of independents expressed strong concern about the high level of federal spending.
In a similar vein, 52 percent of the respondents felt that the Obama agenda was moving toward too great an expansion of the federal government. Again, 83 percent of Republicans held that view while only 17 percent of Democrats concurred. But 60 percent of independent voters expressed a concern that the federal government is growing too large, too fast.
Other recent polling data show that the president’s popularity is falling, support for his handling of key issues is diminished, and the generic ballot question of whether the voters would prefer a Democrat or Republican in Congress is moving more in the direction of the Republicans. Next year is an election year in which every House member and roughly a third of the Senate face elections. That being the case, this recent Gallup poll should be a wake-up call for the president and the congressional members of his party.
Americans have recently seen the enactment of a “stimulus” package totaling almost $800 billion. But they have seen few positive results from that huge amount of government spending.
Voters have also seen the House pass a thousand-page energy/climate change bill that will expand the government’s role in the economy and pit winners against losers in various states and industries. And now Congress is debating perhaps the largest and most expensive expansion of government ever in the form of health care legislation, including a public insurance option backed by the federal treasury.
Many Democrats in Congress are getting uncomfortable with the rush to enact huge new spending programs that will lead to an increase of direct government intervention in the economy. The Gallup poll indicates those Democrats have good reasons to feel that way. The president and the Democratic leaders in Congress are getting concerned that public opinion is shifting away from them on these crucial issues.
They are trying to ram the health care legislation through before members of Congress go home for their August recess. But moderate Democrats are not moving lockstep behind President Obama and the Democratic leadership at this juncture.
One of the major reasons why they are getting cold feet is the fact that they know they must have the votes of those fiscally conservative independent voters if they are going to retain the seats that many of them won from Republicans in the last few elections.
Tuesday, July 21, 2009
Where Do We Go From Here?
The Legislature has adjourned, but the dust from this session probably will not settle before next year's session begins. Louisiana, like many other states, is at a critical crossroads. Two governors and two different Legislatures significantly overspent volatile oil and gas revenues in the two years prior to the current one. That was the major cause of the budget crisis state government faced this year. The problem is easy to identify. Simply go back to the decision made under the Blanco administration to fully fund the Rainy Day Trust Fund and allow skyrocketing oil and gas revenues to flow into the state general fund where they could be spent on recurring expenditures. That is exactly what the Legislature did in Governor Blanco's last year and again in Governor Jindal's first year in office. This year, the chickens came home to roost. Unfortunately, even more chickens will be looking for roosting space in the next few years.
Last Thursday, the head of the Congressional Budget Office told Congress that the federal budget is unsustainable going forward with current spending levels-much less the increases being proposed. Some well-credentialed fiscal guru needs to give our governor and Legislature the same message.
In addition to Louisiana's declining revenue problem, the federal government has informed us that, due to a temporary upward blip in personal income, we will be paid $1 billion less in Medicaid money next year. Our state leaders are on their knees begging for mercy from that decision, but there is a strong likelihood that their pleas will go unanswered. Compounding the problem is the fact that in two years, hundreds of millions in "stimulus" dollars will no longer be coming from Washington. The time to plan for that is now, not two years from now.
Another ominous sign on the horizon is the very negative attitude the Obama administration and the majority in Congress is showing toward the oil and gas industry. The industry is facing a drastic increase in taxes and more restrictions on domestic exploration and production. If domestic oil and gas activity is curtailed by new federal laws and regulations, our state revenue picture will become even bleaker.
Governor Jindal is first up at bat in addressing these problems since he must submit an executive budget proposal to the Legislature early next year. What the governor submits in his annual executive budget usually provides the basic blueprint for what comes out of the process. Certainly, the governor can't expect any increase in revenues coming from natural growth in the foreseeable future. That being the case, he will supply the early vision as to how state government must be reconfigured to match appropriate spending levels with real-world revenue projections. His executive budget should also clearly indicate what his spending priorities will be.
The executive and legislative branches should not wait for next year to begin reshaping the delivery of state services to match new revenue realities. Close scrutiny should be given to state funding of local government services, consolidation of functions in post-secondary education, civil service reforms that would enhance state government's ability to consolidate its workforce, and other spending reforms that would reduce the expense side of the state fiscal ledger.
It was fun to be governor or a legislator in the revenue-boom years after the hurricanes when recovery money was flowing and oil and gas prices were setting records. The party is now over. It is time to clean up the excesses and make government work as best as possible with the revenues that are available. That is what families are doing all across Louisiana. Their elected leaders should follow suit.
Last Thursday, the head of the Congressional Budget Office told Congress that the federal budget is unsustainable going forward with current spending levels-much less the increases being proposed. Some well-credentialed fiscal guru needs to give our governor and Legislature the same message.
In addition to Louisiana's declining revenue problem, the federal government has informed us that, due to a temporary upward blip in personal income, we will be paid $1 billion less in Medicaid money next year. Our state leaders are on their knees begging for mercy from that decision, but there is a strong likelihood that their pleas will go unanswered. Compounding the problem is the fact that in two years, hundreds of millions in "stimulus" dollars will no longer be coming from Washington. The time to plan for that is now, not two years from now.
Another ominous sign on the horizon is the very negative attitude the Obama administration and the majority in Congress is showing toward the oil and gas industry. The industry is facing a drastic increase in taxes and more restrictions on domestic exploration and production. If domestic oil and gas activity is curtailed by new federal laws and regulations, our state revenue picture will become even bleaker.
Governor Jindal is first up at bat in addressing these problems since he must submit an executive budget proposal to the Legislature early next year. What the governor submits in his annual executive budget usually provides the basic blueprint for what comes out of the process. Certainly, the governor can't expect any increase in revenues coming from natural growth in the foreseeable future. That being the case, he will supply the early vision as to how state government must be reconfigured to match appropriate spending levels with real-world revenue projections. His executive budget should also clearly indicate what his spending priorities will be.
The executive and legislative branches should not wait for next year to begin reshaping the delivery of state services to match new revenue realities. Close scrutiny should be given to state funding of local government services, consolidation of functions in post-secondary education, civil service reforms that would enhance state government's ability to consolidate its workforce, and other spending reforms that would reduce the expense side of the state fiscal ledger.
It was fun to be governor or a legislator in the revenue-boom years after the hurricanes when recovery money was flowing and oil and gas prices were setting records. The party is now over. It is time to clean up the excesses and make government work as best as possible with the revenues that are available. That is what families are doing all across Louisiana. Their elected leaders should follow suit.
Thursday, July 9, 2009
Action Picks Up In Washington
By Dan Juneau
Major committees in Congress are moving quickly—some would say too quickly—on legislation that will have a great impact on our health and our pocketbooks. The bills that are advancing are quite momentous. If they were being shaped by sound, well-researched analysis, perhaps the proposals wouldn’t be as scary. Unfortunately, much of the health care and energy legislation is being developed more by deal-cutting than by what works in the real world.
The health care legislation is a prime example. The cost estimates for the bills being shaped in various committees range from $1 trillion to $3.5 trillion over a 10-year period. With the budget deficit for next year already slated to be almost $2 trillion, even the spend-happy Congress is under pressure to pay for whatever is proposed and not simply add the cost to the ever-increasing federal deficit.
One of the major taxes being discussed to pay for the health care bills is a tax on employer-provided health insurance. Such a tax could raise almost $500 billion to offset the cost of covering more of the uninsured and underinsured. The problem is it could blow a hole in the foundation of our health care system that is based on coverage paid for all or in part by employers.
Some of the loudest critics of this tax proposal are the labor unions that have negotiated labor contracts with Cadillac benefits largely paid for by their employers. The staunch opposition of the unions is leaving its mark. One of the major Senate proposals now calls for creating an exemption from this tax for—you guessed it!—labor unions. If such a plan passes, non-union workers could be subject to having their employer-provided health insurance premium payments taxed as ordinary income.
That means that, in addition to the regular income tax rate they are subject to applying to this benefit, they would have to pay Medicare and Medicaid taxes on the amount as well. Their employers would also have to pay their share of the Medicare and Medicaid taxes. Non-union employers and employees would have to pay the tax while their union counterparts would escape the burden.
Substituting politics for sound policy decisions is very much at play with the energy legislation under consideration in Congress as well. Speaker of the House Nancy Pelosi is determined to have “cap and trade” legislation—that would limit carbon dioxide emissions and drive up energy costs—enacted by the end of summer.
But Pelosi and Company ran into a wall of opposition from many members of their own Democratic Caucus who are concerned about the economic impact of the legislation on their constituents. Particularly upset are farm state Democrats who believe the legislation could jeopardize their re-elections. The Waxman-Markey bill cannot pass without those key votes. So what happened? Deals were cut to placate the concerns of some but left the constituents of other congressmen (many in “Red States”) on the hook for paying potentially huge increases in energy costs.
This is no way to run a railroad. If a complete revamp of the nation’s health care system is a necessity, then everyone—union members included—should have to pick up the huge cost of paying for it. If significantly increased energy costs are the price that must be paid for reducing carbon dioxide emissions, then everyone in every region of the nation should have to bear those costs. There are sound reasons for opposing both the “cap and trade” legislation and the health care bills. Playing politics with who gets the bill for them only adds fuel to the fire.
Major committees in Congress are moving quickly—some would say too quickly—on legislation that will have a great impact on our health and our pocketbooks. The bills that are advancing are quite momentous. If they were being shaped by sound, well-researched analysis, perhaps the proposals wouldn’t be as scary. Unfortunately, much of the health care and energy legislation is being developed more by deal-cutting than by what works in the real world.
The health care legislation is a prime example. The cost estimates for the bills being shaped in various committees range from $1 trillion to $3.5 trillion over a 10-year period. With the budget deficit for next year already slated to be almost $2 trillion, even the spend-happy Congress is under pressure to pay for whatever is proposed and not simply add the cost to the ever-increasing federal deficit.
One of the major taxes being discussed to pay for the health care bills is a tax on employer-provided health insurance. Such a tax could raise almost $500 billion to offset the cost of covering more of the uninsured and underinsured. The problem is it could blow a hole in the foundation of our health care system that is based on coverage paid for all or in part by employers.
Some of the loudest critics of this tax proposal are the labor unions that have negotiated labor contracts with Cadillac benefits largely paid for by their employers. The staunch opposition of the unions is leaving its mark. One of the major Senate proposals now calls for creating an exemption from this tax for—you guessed it!—labor unions. If such a plan passes, non-union workers could be subject to having their employer-provided health insurance premium payments taxed as ordinary income.
That means that, in addition to the regular income tax rate they are subject to applying to this benefit, they would have to pay Medicare and Medicaid taxes on the amount as well. Their employers would also have to pay their share of the Medicare and Medicaid taxes. Non-union employers and employees would have to pay the tax while their union counterparts would escape the burden.
Substituting politics for sound policy decisions is very much at play with the energy legislation under consideration in Congress as well. Speaker of the House Nancy Pelosi is determined to have “cap and trade” legislation—that would limit carbon dioxide emissions and drive up energy costs—enacted by the end of summer.
But Pelosi and Company ran into a wall of opposition from many members of their own Democratic Caucus who are concerned about the economic impact of the legislation on their constituents. Particularly upset are farm state Democrats who believe the legislation could jeopardize their re-elections. The Waxman-Markey bill cannot pass without those key votes. So what happened? Deals were cut to placate the concerns of some but left the constituents of other congressmen (many in “Red States”) on the hook for paying potentially huge increases in energy costs.
This is no way to run a railroad. If a complete revamp of the nation’s health care system is a necessity, then everyone—union members included—should have to pick up the huge cost of paying for it. If significantly increased energy costs are the price that must be paid for reducing carbon dioxide emissions, then everyone in every region of the nation should have to bear those costs. There are sound reasons for opposing both the “cap and trade” legislation and the health care bills. Playing politics with who gets the bill for them only adds fuel to the fire.
Wednesday, June 24, 2009
Not One For The Record Books
The 2009 Regular Session of the Legislature is approaching its conclusion, and it probably will not generate fond memories in the minds of most individuals. Gertrude Stein once described Oakland, California by saying: "There is no 'there' there." It is difficult at this juncture to capture the "there" in this convocation of the Legislature.
Granted, the budget shortfall usurped almost every other potential topic during the session. Trying to plug a billion-dollar-plus hole in the operating budget was acts one, two, and three of the three-act play that was this legislative session. And, as with most acting performances, there was a lot of posturing and over-playing of roles.
The current battle of the budget centers around the House that wants to make a significant amount of cuts now (believing that there is more fiscal pain coming in the next two budgets), and the Senate that feels the amount of cuts proposed by the House is too severe. The Senate wants to take a significant amount of money from the Rainy Day Fund and to increase tax revenues to supplement the budget. Many members of the House have concerns about tapping the Rainy Day Fund at this juncture and are dead set against raising taxes. The two chambers are on a collision course with only a week left in the session.
Fiscal disputes such as the current one are somewhat rare. Why? Because the Legislature usually follows the governor's lead on budget matters. Governor Jindal has been a player but not necessarily a dominant one thus far in the budget debate. Yes, he said he would not allow any taxes to become law, but that didn't stop the Senate from (illegally) trying to advance one. Perhaps that was just posturing on the Senate's part so they could appear to be funding unfunded elements of the budget and jamming the House with the issue.
But the House wasn't in the mood for a jam. In an interesting move, the House concurred with the Senate amendments to the budget instead of sending the legislation to a conference committee. The Senate then loudly protested that the House had the audacity to adopt the amended version of the budget that the Senate had sent them. (Talk about audacity!) Now the Senate is amending House bills to send more revenue raising measures back to them in order to put pressure on the House to lessen the amount of cuts in the budget that is now sitting on the governor's desk.
The clock is ticking and the outcome of the battle over the budget is still up in the air. One of two scenarios is going to prevail in some fashion: Either the House's view (serious budget cutting needs to begin now because the news only gets worse in subsequent budgets) or the Senate's plan (raise more money now and hope for better times going forward) will become dominant. The outcome could be resolved fairly quickly if Governor Jindal sold the public on exactly what he thinks the solution to the problem should be-and why. He has stated in the past that he is not for raising taxes or tapping the Rainy Day Fund (except for perhaps $50 million) to address the budget shortfall. If that is where he still is in the deliberations, a forceful statement by him would likely conclude the issue. If he has changed his mind, it is time to let the world know.
Granted, the budget shortfall usurped almost every other potential topic during the session. Trying to plug a billion-dollar-plus hole in the operating budget was acts one, two, and three of the three-act play that was this legislative session. And, as with most acting performances, there was a lot of posturing and over-playing of roles.
The current battle of the budget centers around the House that wants to make a significant amount of cuts now (believing that there is more fiscal pain coming in the next two budgets), and the Senate that feels the amount of cuts proposed by the House is too severe. The Senate wants to take a significant amount of money from the Rainy Day Fund and to increase tax revenues to supplement the budget. Many members of the House have concerns about tapping the Rainy Day Fund at this juncture and are dead set against raising taxes. The two chambers are on a collision course with only a week left in the session.
Fiscal disputes such as the current one are somewhat rare. Why? Because the Legislature usually follows the governor's lead on budget matters. Governor Jindal has been a player but not necessarily a dominant one thus far in the budget debate. Yes, he said he would not allow any taxes to become law, but that didn't stop the Senate from (illegally) trying to advance one. Perhaps that was just posturing on the Senate's part so they could appear to be funding unfunded elements of the budget and jamming the House with the issue.
But the House wasn't in the mood for a jam. In an interesting move, the House concurred with the Senate amendments to the budget instead of sending the legislation to a conference committee. The Senate then loudly protested that the House had the audacity to adopt the amended version of the budget that the Senate had sent them. (Talk about audacity!) Now the Senate is amending House bills to send more revenue raising measures back to them in order to put pressure on the House to lessen the amount of cuts in the budget that is now sitting on the governor's desk.
The clock is ticking and the outcome of the battle over the budget is still up in the air. One of two scenarios is going to prevail in some fashion: Either the House's view (serious budget cutting needs to begin now because the news only gets worse in subsequent budgets) or the Senate's plan (raise more money now and hope for better times going forward) will become dominant. The outcome could be resolved fairly quickly if Governor Jindal sold the public on exactly what he thinks the solution to the problem should be-and why. He has stated in the past that he is not for raising taxes or tapping the Rainy Day Fund (except for perhaps $50 million) to address the budget shortfall. If that is where he still is in the deliberations, a forceful statement by him would likely conclude the issue. If he has changed his mind, it is time to let the world know.
Tuesday, June 9, 2009
The Games People Play
Dan Juneau
A recent ruckus in the state legislature has created a lot of anger and garnered national media attention. The incident involved a sneak attack amendment that Representative Avon Honey managed to get tacked onto one of his bills. The result was a 99-0 vote in the House of Representatives for a bill that, as amended, would enact changes in Louisiana’s unemployment compensation law to be eligible for unemployment compensation stimulus money approved by Congress.
There is more than meets the eye in this maneuver. The bill that was amended was on the “consent calendar” of the House agenda. That part of the agenda is reserved for bills that are totally non-controversial and can be considered quickly in order to speed up the legislative process. The original bill pertained to changes in the workers’ compensation law—not unemployment compensation.
Placing an unemployment compensation amendment on the bill violates the “dual object” provision in the Louisiana Constitution. That provision is designed to maintain order in the legislative process by preventing bills from being hijacked willy-nilly by amending them to have more than one objective.
Essentially, Representative Honey’s last second, unconstitutional amendment to his bill on a calendar reserved for totally non-controversial bills violated the legislative process on several levels, but that was just the opening act. When the bill arrived in the Senate, another game was played when it was referred to committee.
Under the Senate’s rules, the bill should have either not been referred due to its dual object flaw or, if referred, it should have gone to the Senate Labor and Industrial Relations Committee. Instead, the bill was referred to the Senate Finance Committee, presumably under the pretext that it has an impact on state finances.
Senate rules do provide for the dual referral of bills that have a significant fiscal impact. However, the rules clearly state that those bills must first go to the substantive committee (in this case, Labor and Industrial Relations), and only if they advance from that committee should they go to the Finance Committee for the fiscal impact review. The rules of procedure were abused and violated in both the House and the Senate on Rep. Honey’s bill.
Why?
Unfortunately, it has a lot to do with game-playing and message-sending. The unemployment compensation stimulus issue has devolved, to a significant degree, into a Republican versus Democrat and Jindal versus Obama spat. Other bills were filed to do exactly what Rep. Honey’s unconstitutional amendment attempts to do.
However, each time those bills were scheduled for hearing in the House committee, the authors declined to have them considered in a free and open debate on their merits. Instead, the route of subterfuge and abuse of legislative rules was taken.
Governor Jindal’s opposition to taking this portion of the stimulus money has to do with future tax increases on struggling employers to pay for the added benefits once the federal money is gone. His objection is a valid one. Some claim that the stimulus money in question is needed to delay tax increases and benefit cuts that will occur as unemployment claims climb in the future.
That is a bogus argument. Those tax increases and benefit cuts will occur next January regardless of the stimulus money. What the changes in our unemployment compensation law will do is bring us closer to additional employer tax increases and unemployment benefit cuts in the future as the unemployment trust fund has to continue to pay for the new benefits once the stimulus money is used up.
There is room for honest debate about the unemployment compensation stimulus money. There shouldn’t be any tolerance for abuse of the process so that some folks can play games and send messages.
A recent ruckus in the state legislature has created a lot of anger and garnered national media attention. The incident involved a sneak attack amendment that Representative Avon Honey managed to get tacked onto one of his bills. The result was a 99-0 vote in the House of Representatives for a bill that, as amended, would enact changes in Louisiana’s unemployment compensation law to be eligible for unemployment compensation stimulus money approved by Congress.
There is more than meets the eye in this maneuver. The bill that was amended was on the “consent calendar” of the House agenda. That part of the agenda is reserved for bills that are totally non-controversial and can be considered quickly in order to speed up the legislative process. The original bill pertained to changes in the workers’ compensation law—not unemployment compensation.
Placing an unemployment compensation amendment on the bill violates the “dual object” provision in the Louisiana Constitution. That provision is designed to maintain order in the legislative process by preventing bills from being hijacked willy-nilly by amending them to have more than one objective.
Essentially, Representative Honey’s last second, unconstitutional amendment to his bill on a calendar reserved for totally non-controversial bills violated the legislative process on several levels, but that was just the opening act. When the bill arrived in the Senate, another game was played when it was referred to committee.
Under the Senate’s rules, the bill should have either not been referred due to its dual object flaw or, if referred, it should have gone to the Senate Labor and Industrial Relations Committee. Instead, the bill was referred to the Senate Finance Committee, presumably under the pretext that it has an impact on state finances.
Senate rules do provide for the dual referral of bills that have a significant fiscal impact. However, the rules clearly state that those bills must first go to the substantive committee (in this case, Labor and Industrial Relations), and only if they advance from that committee should they go to the Finance Committee for the fiscal impact review. The rules of procedure were abused and violated in both the House and the Senate on Rep. Honey’s bill.
Why?
Unfortunately, it has a lot to do with game-playing and message-sending. The unemployment compensation stimulus issue has devolved, to a significant degree, into a Republican versus Democrat and Jindal versus Obama spat. Other bills were filed to do exactly what Rep. Honey’s unconstitutional amendment attempts to do.
However, each time those bills were scheduled for hearing in the House committee, the authors declined to have them considered in a free and open debate on their merits. Instead, the route of subterfuge and abuse of legislative rules was taken.
Governor Jindal’s opposition to taking this portion of the stimulus money has to do with future tax increases on struggling employers to pay for the added benefits once the federal money is gone. His objection is a valid one. Some claim that the stimulus money in question is needed to delay tax increases and benefit cuts that will occur as unemployment claims climb in the future.
That is a bogus argument. Those tax increases and benefit cuts will occur next January regardless of the stimulus money. What the changes in our unemployment compensation law will do is bring us closer to additional employer tax increases and unemployment benefit cuts in the future as the unemployment trust fund has to continue to pay for the new benefits once the stimulus money is used up.
There is room for honest debate about the unemployment compensation stimulus money. There shouldn’t be any tolerance for abuse of the process so that some folks can play games and send messages.
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