The War on Poverty Has Been a Colossal Flop

It’s been fifty years since Lyndon Baines Johnson and his Democrat allies began the so-called War on Poverty. Here’s Robert Rector’s take on the effort as it appeared in The Daily Signal. Although no one doubts the sincerity of President Johnson his program to erase poverty was a typical top-down attempt by a distant federal government.

LBJ’s War on Poverty. President Lyndon Johnson shakes hands with an Appalachian resident. May 7, 1964. (Photo: Newscom)

Today, the U.S. Census Bureau will release its annual report on poverty. This report is noteworthy because this year marks the 50th anniversary of President Lyndon Johnson’s launch of the War on Poverty. Liberals claim that the War on Poverty has failed because we didn’t spend enough money. Their answer is just to spend more. But the facts show otherwise.

>>> Full Report: The War on Poverty After 50 Years

Since its beginning, U.S. taxpayers have spent $22 trillion on Johnson’s War on Poverty (in constant 2012 dollars). Adjusting for inflation, that’s three times more than was spent on all military wars since the American Revolution.

One third of the U.S. population received aid from at least one welfare program at an average cost of $9,000 per recipient in 2013.

The federal government currently runs more than 80 means-tested welfare programs. These programs provide cash, food, housing and medical care to low-income Americans. Federal and state spending on these programs last year was $943 billion. (These figures do not include Social Security, Medicare, or Unemployment Insurance.)

>>> INFOGRAPHIC: 9 Facts About How the Poor in America Live

Over 100 million people, about one third of the U.S. population, received aid from at least one welfare program at an average cost of $9,000 per recipient in 2013. If converted into cash, current means-tested spending is five times the amount needed to eliminate all poverty in the U.S.

rectorchart

But today the Census will almost certainly proclaim that around 14 percent of Americans are still poor. The present poverty rate is almost exactly the same as it was in 1967 a few years after the War on Poverty started. Census data actually shows that poverty has gotten worse over the last 40 years.

How is this possible? How can the taxpayers spend $22 trillion on welfare while poverty gets worse?

The typical family that Census identifies as poor has air conditioning, cable or satellite TV, and a computer in its home.

The answer is it isn’t possible.  Census counts a family as poor if its income falls below specified thresholds. But in counting family “income,” Census ignores nearly the entire $943 billion welfare state.

For most Americans, the word “poverty” means significant material deprivation, an inability to provide a family with adequate nutritious food, reasonable shelter and clothing. But only a small portion of the more than 40 million people labelled as poor by Census fit that description.

The media frequently associate the idea of poverty with being homeless. But less than two percent of the poor are homeless.  Only one in ten live in mobile homes. The typical house or apartment of the poor is in good repair and uncrowded; it is actually larger than the average dwelling of non-poor French, Germans or English.

According to government surveys, the typical family that Census identifies as poor has air conditioning, cable or satellite TV, and a computer in his home. Forty percent have a wide screen HDTV and another 40 percent have internet access. Three quarters of the poor own a car and roughly a third have two or more cars. (These numbers are not the result of the current bad economy pushing middle class families into poverty; instead, they reflect a steady improvement in living conditions among the poor for many decades.)

Infographic by Kelsey Harris/The Daily Signal

The intake of protein, vitamins and minerals by poor children is virtually identical with upper middle class kids. According to surveys by the U.S. Department of Agriculture, the overwhelming majority of poor people report they were not hungry even for a single day during the prior year.

We can be grateful that the living standards of all Americans, including the poor, have risen in the past half century, but the War on Poverty has not succeeded according to Johnson’s original goal. Johnson’s aim was not to prop up living standards by making more and more people dependent on an ever larger welfare state. Instead, Johnson sought to increase self-sufficiency, the ability of a family to support itself out of poverty without dependence on welfare aid. Johnson asserted that the War on Poverty would actually shrink the welfare rolls and transform the poor from “taxeaters” into “taxpayers.”

Judged by that standard, the War on Poverty has been a colossal flop. The welfare state has undermined self-sufficiency by discouraging work and penalizing marriage. When the War on Poverty began seven percent of children were born outside marriage. Today, 42 percent of children are. By eroding marriage, the welfare state has made many Americans less capable of self-support than they were when the War on Poverty began.

Bono Quote, free enterprise

President Obama plans to spend $13 trillion dollars on means-tested welfare over the next decade. Most of this spending will flow through traditional welfare programs that discourage the keys to self-sufficiency: work and marriage.

Rather than doubling down on the mistakes of the past, we should restructure the welfare state around Johnson’s original goal: increasing Americans capacity for self-support. Welfare should no longer be a one way hand out; able-bodied recipients of cash, food and housing should be required to work or prepare for work as condition of receiving aid. Welfare’s penalties against marriage should be reduced. By returning to the original vision of aiding the poor to aid themselves, we can begin, in Johnson’s words, to “replace their despair with opportunity.”

Obamacare’s ‘Quiet Summer’ is About to End

Here’s a post from Guy Benson at Townhall.com about why Obamacare’s quiet summer is about to end.

Dan wrote up yesterday’s (September 9th) Washington Post/ABC News poll, which was jammed with crooked numbers for President Obama.  Most striking was the (30/55) majority deeming Obama’s presidency “a failure,” along with the prevailing opinion that he’s divided the country, and his unsightly leadership score.
The survey also included a dreadful (38/56) presidential approval rating on the implementation of Obamacare; support for the law itself was also underwater, with an outright majority opposed, despite this polling series’ silly question wording that omits any mention of ‘Obamacare’ or the ‘Affordable Care Act.’
A new Kaiser Family Foundation poll produces similar findings, with support for the president’s signature domestic accomplishment swamped by opposition. It’s been this way for years, across hundreds of national surveys.

One major reason for the enduring opposition is that the law has violated virtually every major promise erected in dishonest ideologues’ sales pitch.

Another is that an ongoing parade of unpleasant developments continues to make headlines, including the recent revelation that Healthcare.gov was hacked last month.

Apologists can cherry-pick useful data points to try to convince the public that Obamacare is reducing premium costs and driving down costs, but that’s simply not the case.  Individual market premiums exploded in 2014, and are expected to grow by roughly eight percent in 2015 (with many consumers confronting double-digit spikes) — to say nothing of high out-of-pocket costs and narrow coverage networks. Overall health spending continues an upward climb.

The law was billed as a dramatic premium reducer that would also bend down the so-called “cost curve.”  Healthcare industry expert Bob Laszewski is out with a must-read post on next steps for Obamacare.  He argues that the law may have been largely out of the news for the last few months, but a fresh round of cancellations and the coming open enrollment period are about to change all that:

To say this fall’s 2015 Obamacare open-enrollment has the potential to be problematic is an understatement. The HealthCare.gov backroom is not built yet––a year and counting after it should have been. How many people are enrolled in Obamacare? Without a government to insurance company accounting system yet built, no one knows. While the open-enrollment is now scheduled to begin until 11 days after the November election there will be plenty of renewal and cancellation letters going out in October––not the least will be more pre-Obamacare policies being cancelled this year now that their one-year extension is up––carriers aren’t necessarily allowing policies to be extended further…Does this all sound confusing? Just wait until we approach the next open-enrollment with millions of people hearing about all of this complexity and having just four weeks to get their enrollment validated for January 1. The Obamacare anxiety index is going to be off the charts well before November 15th.  Add to all of this bigger deductibles for 2015 (those go up with cost trend as well as the rates) and more narrow networks as well as generally larger rate increases for the plans that got the most enrollment and there will be lots to talk about…The last couple of months have been very quiet for Obamacare. That is about to end.

Click through for a thorough debunking of recent pro-Obamacare spin on “baseline plan” premiums, as well as a reminder that many new Obamacare consumers — a significant percentage of whom have dumped their coverage — will have to either change their plans again for face much higher rates next year.

More upheaval is on the way.  Numerous polls have consistently found that roughly twice as many Americans say they’ve been personally hurt by Obamacare than helped.  Most consumers, however, have responded that they haven’t been impacted one way or another.  That, too, will be changing for millions in the coming months and years.  The Washington Post reports:

Large businesses expect to pay between 4 and 5 percent more for health-care benefits for their employees in 2015 after making adjustments to their plans, according to employer surveys conducted this summer. Few employers plan to stop providing benefits with the advent of federal health insurance mandates, as some once feared, but a third say they are considering cutting or reducing subsidies for employee family members, and the data suggest that employees are paying more each year in out-of-pocket health care expenses. The figures come from separate electronic surveys given to thousands of mid- to large-size firms across the country by Towers Watson, the National Business Group on Health and PriceWaterhouseCoopers, consulting groups that engage with businesses on health insurance issues. Bracing themselves for an excise tax on high-cost plans coming in 2018 under the Affordable Care Act, 81 percent of employers surveyed by Towers Watson said they plan to moderately or significantly alter health-care benefits to reduce their costs.

Higher costs and reduced benefits are on the way for many who are among the the large majority of Americans receiving health coverage through their employers.  And I’ll once again direct your attention to this news package, which quotes a prominent Obamacare designer and supporter cheerfully predicting that 80 percent of employer-based plans will “disappear” within the next ten years:

An independent study cited in the piece projects that number at 90 percent.The White House knew this was coming, and Senate Democrats voted downa Republican effort to reinforce the president’s “keep your plan” promise, which continue crashing down around consumers for years to come.  Bottom line: Think the Obamacare mess is in the rear-view mirror, or that you’ve escaped its impact?  Just wait. I’ll leave you with one additional polling point:

 

New: WSJ/NBC polls shows Americans still aren’t sold on Affordable Care Act, with 34% in favor and 48% against. http://on.wsj.com/1qePzrM

Obamacare Premiums Continue To Climb

Here’s a post by Avik Roy at www.forbes.com with a comprehensive look at the rising cost of Obamacare premiums.

Democrats are trumpeting preliminary estimates indicating that premiums on Obamacare’s insurance exchanges will rise modestly, on average, in 2015. These early indications have led to a peculiar type of crowing from Obamacare supporters: “See, Obamacare isn’t collapsing!” And it’s true: Obamacare isn’t collapsing. But in the real world, we don’t measure the success of the “Affordable Care Act” by its failure to collapse. We measure it by looking at the underlying affordability of American health care. And there can be no doubt that health care today is more costly than it would have been without Obamacare.

McKinsey: 8 percent average increase in Silver plan premiums

First, the data. Last week, McKinsey released its latest analysis of preliminary rate filings for 2015. Among other things, McKinsey looked at the premium of the lowest-priced Silver plan in 2015, and compared that to the premium of the lowest-priced Silver plan in 2014. This comparison is useful because Obamacare’s insurance subsidies are geared to the cost of Silver plans, and because 65 percent of those selecting plans this past year chose Silver plans.

(As a reminder, you can buy five different types of plans on the Obamacare exchanges: Catastrophic, Bronze, Silver, Gold, and Platinum. The higher-tier plans have lower deductibles and co-pays, but higher premiums.)

McKinsey found that the premium of the lowest-priced Silver plan increased by an average of 8 percent in 2015. That’s slightly above PriceWaterhouseCoopers’ estimate of 2015 medical inflation: 6.8 percent.

McKinsey premium survey 2014-09

McKinsey-premium-survey-2014-09

In other words, Obamacare plans on average aren’t bending down the cost curve—in fact they’re bending slightly upward—but an 8 percent increase is most certainly not the catastrophic death spiral that some conservatives recklessly predicted.

PwC is conducting its own survey of 2015 exchange premiums, using a different methodology than McKinsey. PwC calculates the average 2015 premium rate increase as 7.0 percent.

It’s important to emphasize that these rate increases are preliminary, because each state’s insurance commissioner—and also the federal government—must approve these proposed rate increases before they are enacted.

We now have complete filings for 19 states: Washington, Oregon, California, Nevada, Colorado, Michigan, Indiana, Ohio, Kentucky, Tennessee, Georgia, Maine, Vermont, New York, Rhode Island, Connecticut, Maryland, and Virginia. Because these government agencies almost always try to jawbone insurers into tempering their rate increases, we could see a somewhat lower increase than what the preliminary numbers indicate.

No death spiral is imminent—but prices keep going up

It is certainly encouraging that we’re not seeing a health insurance “death spiral” on the exchanges. But measured over two years, Obamacare’s rate hikes remain toxic. And further increases are on the horizon in 2017, when some of the law’s subsidies to insurance companies are set to expire.

Contrary to Paul Krugman and other ACA cheerleaders, rate shock isn’t a myth. It’s a fact. I and my colleagues at the Manhattan Institute looked at the actual, finalized rate filings in 2014 and compared them to what was available in 2013. The average U.S. county saw a rate increase of 49 percent. You can dig through our findings, or find out how much individual-market premiums went up in your county, by visiting our interactive map.

Transcend-figure-10

 

But the health law’s $2 trillion in subsidies cushion the impact of rate shock for those whose incomes are low enough to qualify for them. That’s why 85 percent of those who signed up for exchange-based plans this last spring were people eligible for subsidies.

And Obamacare isn’t out of the woods by any means. Insurers are extremely nervous about the fact that much of the Obamacare website’s “back end”—the part that processes subsidy eligibility and payments, among other things—remains a mess. Earlier this summer, the U.S. Government Accountability Office entered 12 fake applications into the federal exchanges, and found that 11 were approved.

Insurer ‘bailout’ suppressing Obamacare premium hikes

Importantly, a set of Obamacare exchange provisions called the “three Rs”—risk adjustment, reinsurance, and risk corridors—effectively encourage insurers to offer premiums on the exchanges that are imprudently low. If you are an insurance company, and you lose money because your premiums were lower than your actual claim costs, Obamacare subsidizes that loss for you. It’s this part of the law that Sen. Marco Rubio (R., Fla.) and others have been calling a “bailout” of participating insurers.

The problem is that the “three Rs” are transitional. Reinsurance and risk corridors expire at the end of 2016, at which point insurance companies like Aetna, Humana, and Cigna will have to charge premiums in line with their costs. That may lead to a spike in premiums in 2017. Indeed, insurance companies heavily lobbied Obama consigliera Valerie Jarrett this year to spend more on the “three R” subsidies, threatening substantial rate hikes if they weren’t accommodated. They were accommodated.

Taking stock

All this is to say that the story is more complicated than either side would like you to believe. It is a good thing that premiums on Obamacare’s exchanges aren’t rising rapidly for 2015. But premiums did go up a lot in 2014. And they may go up again, as the “three R” program phases out.

The bottom line is that if you shop for coverage on your own, and you don’t qualify for Obamacare’s subsidies, you’re probably paying a lot more for insurance today than you did before. And that’s why Obamacare remains unpopular with the public.

* * *

READ AVIK’S NEW HEALTH-REFORM PLAN, Transcending Obamacare: A Patient-Centered Plan for Near-Universal Coverage and Permanent Fiscal Solvency. Follow @Avik on Twitter, Google+, and YouTube, and The Apothecary on Facebook. Or, sign up to receive a weekly e-mail digest of articles from The Apothecary.

Where O-Care could hurt Dems in November

Here’s a post by Elise Viebeck of The Hill that points out where Obamacare could hurt the Democrats in the November Elections.

There’s no question that ObamaCare isn’t the political golden ticket that Republicans had once hoped it would be.

Though the law’s poll numbers remain poor, the insurance exchanges managed to recover this spring and the issue was all but absent from summer headlines.

That doesn’t mean that there won’t be some competitive House races where outrage over the Affordable Care Act could shape the outcome, though.

In several campaigns around the country, Republicans are still hoping that ObamaCare helps them eke out a win.

Here are five vulnerable Democratic incumbents to watch whose chances could be hurt by the healthcare law.

Georgia’s 12th District : Rep. John Barrow (D)

As one of the House’s longest surviving Blue Dog Democrats, Barrow is a perpetual GOP target.

This year, he’s up against Augusta businessman Rick Allen, who introduced himself as a candidate who will “gut ObamaCare” in his latest television ad.

Allen also sought to tie Barrow to the healthcare law, noting that the five-term incumbent split with Republicans 28 times on votes to repeal, replace or dismantle it.

The trouble is, Barrow never supported the reform in 2010, and Allen can only get so far by suggesting he did.

But the GOP hopeful has help from the National Republican Congressional Committee, which has spent years blasting Barrow for each vote that didn’t fully undermine the law.

It’s Georgia’s only competitive House race and both sides are spending heavily, though political handicappers still give Barrow the edge.

“I think [Republicans] have to make a different case than they’re making now,” Barrow told The Hill on Wednesday.

“They’re making the same case they’ve made five times in a row.”

New Hampshire’s 1st District: Rep. Carol Shea Porter (D)

Shea Porter lost her seat in 2010 because of her support for ObamaCare, so it’s not surprising that she’s trying to get ahead of the issue this year.

The New Hampshire Democrat reportedly confronted President Obama in a meeting last August to say the law wasn’t working for the Granite State.

Months later, she called for heads to roll at the administration after HealthCare.gov and several state exchanges failed to launch.

And she introduced legislation to extend a payment deadline for consumers unable to complete their applications because of the exchanges’ technical problems.

The tide is turning for New Hampshire’s marketplace, which started with one insurer offering plans and will have five next year.

But it may not be enough for Shea Porter after former Rep. Frank Guinta (R-N.H.) won his primary this week.

Guinta ousted her in 2010 and has already shown he’s ready to use the healthcare law to motivate his base.

Arizona’s 1st and 2nd Districts: Reps. Ann Kirkpatrick (D) and Ron Barber (D)

Broadly speaking, Arizona is not good territory for ObamaCare supporters.

The state’s Democratic House members have consistently voted with Republicans to change or dismantle parts of the healthcare law.

The latest example came this week, when Rep. Bill Cassidy (D-La.) offered a bill that would allow insurers to continue offering non-compliant health plans to small businesses.

The measure would destabilize ObamaCare’s small business exchange, according to analyses, but it still gained support from 25 Dems.

That group included Reps. Ron Barber (D-Ariz.) and Ann Kirkpatrick (D-Ariz.), who are both running Democratic-leaning toss-up races.

Barber was not a member when ObamaCare passed, but he was serving as a senior staff member for former Rep. Gabrielle Giffords (D-Ariz.), who supported the law.

Kirkpatrick, meanwhile, voted for the Affordable Care Act and lost her seat as a result in 2010.

That makes her a tough sell in the Flagstaff-based 1st district, which sided with Republicans in the last three presidential elections.

House GOP leaders showed they’re dialed into the race this week by tapping Kirkpatrick’s opponent, Arizona House Speaker Andy Tobin, to deliver the weekly Republican address.

California’s 7th District: Rep. Ami Bera (D)

Bera wasn’t in Congress to vote for ObamaCare, but the law has weighed him down politically since before he won his first election.

A physician, Bera faced constant questions about ObamaCare before losing to Rep. Dan Lungren (R-Calif.) in one of 2010’s most closely watched races.

After winning in 2012, he’s up against former Rep. Doug Ose (R-Calif.), who is focused on making healthcare the center of yet another election cycle.

In one recent statement, Ose called ObamaCare an “absolute train wreck” and painted Bera’s position on the law as “erratic” and confused.

Attacks like these are generally a tougher sell in California than in other parts of the country.

The Golden State was called one of ObamaCare’s biggest success stories after its exchange beat expectations for 2014 enrollment.

But in Bera’s suburban Sacramento district, the issue could turn out voters for Ose.

Democrats running for Governor want big Obamacare expansions

Here’s a post by Warner Todd Huston at http://www.breitbart.com/ with a commentary about Democrat gubernatorial candidates want big Obamacare expansions.

A recent analysis of five Democrats running for Governor across the country in close elections finds them promising major expansions of Obamacare if they are elected, showing that not all Democrats are running away from the President’s signature takeover of the nation’s healthcare.

In national polls, Obamacare is underwater and sits at record low approval numbers. This is causing most Democrat candidates across the country to run away from Obamacare.

But Democrat candidates for governor in Florida, Maine, Kansas, Wisconsin, and Georgia are all angling for big Obamacare expansions, according to The Hill. If they win and fulfill their campaign promises, the consequence would be a major hike of up to $120 billion in federal spending, according to one estimate.

This drive for expansion comes in the face of the years of outright falsities President Obama delivered to the nation, saying that we could keep our doctors and insurance plans if we liked them, claims that have had a direct impact on the law’s dismal approval ratings.

But that dismal approval isn’t deterring the five Democrat candidates for governor.

Charlie Crist, Florida’s one-time Republican governor who is now running as a Democrat, recently noted that illegal immigrants should be allowed to enroll in Obamacare, and those who already have should not be removed from the rolls.

Maine’s Democratic candidate, Mike Michaud, is running in support of the President’s healthcare law.

“The only thing stopping us from being able to expand access to care is one man: Gov. LePage,” Michaud’s spokesperson recent said.

In Georgia, Democrat Jason Carter insists that Georgia’s incumbent Republican Governor, Nathan Deal, is leaving state money behind by turning away Medicaid expansion. “It’s our money, and Nathan Deal wants Washington to keep it,” Carter said.

In April, Wisconsin Democrat Mary Burke proclaimed her “unequivocal support” of Obamacare on MSNBC. But only hours later, she hedged her bets in an interview with a Wisconsin newspaper and said that Obamacare “has its problems.”

Burke, though, is still a supporter of a massive expansion of Medicaid.

Finally, Kansas Democrat Paul Davis has frequently criticized Kansas incumbent Republican Sam Brownback for refusing to expand Medicaid. Davis has said that Brownback is putting politics above the needs of the people of Kansas with his opposition to Obamacare.

 

Why We Need a Left Wing Tea Party

Donkeys may biteHere is post by well known left wing blogger and commentator Sally Kohn at The Daily Beast with her reasons why we need a left wing Tea Party. I actually thought that the Occupy groups were functioning in that capacity but apparently the ‘real’ left doesn’t think so.

The pro-choicers don’t like the populists, who don’t like the…enough already! Factions of the left, please stop being so…factiony.
On Tuesday, barring any surprises, Democrats in New York will nominate Andrew Cuomo to serve as the party’s nominee—making it highly likely Cuomo will eventually serve a second term in the governor’s office. In his first term, Cuomo lowered taxes for the rich, increased corporate subsidies, undermined public sector unions, championed charter schools, and blocked campaign finance reform. Were it not for progressive stances on marriage equality and abortion, Cuomo might easily be mistaken for a Republican. Yet for his second term, Cuomo won the backing of the influential Working Families Party—the standard-bearer of progressive values in New York politics. This should come as no surprise. For progressives, electoral politics has always been a game of compromise.

My Daily Beast colleague David Friedlander recently published an essay suggesting that some progressive political groups are angry at Emily’s List because some of the women candidates it has backed have not been that strong on issues of economic populism. Of course, the critique could be made in the other direction. For instance, the Progressive Campaign Change Committee, the main critic of Emily’s List in Friedlander’s article, is backing Iowa’s Pat Murphy in his bid for Congress—despite the fact that in recent years, Murphy earned a 100 percent approval rating from anti-abortion groups in Iowa and a 0 rating from Planned Parenthood of the Heartland (not to mention less-than-enthusiastic support from grassroots progressive groups on the ground in Iowa).

But scrutinizing all these electoral trees misses the broader, ideological forest. What is far more interesting and ultimately transformational are those rare occasions when passionate issue advocates and progressive populist groups can unite, stand firm on a set of fundamental principles, and take a risk together. Perhaps the best example of this is Elizabeth Warren—drafted as a candidate early on by the PCCC but also backed by Emily’s List even before she announced her candidacy. In fact, the two largest donors to Warren’s initial campaign? The PCCC and Emily’s List.

Warren represents the anti-compromise—the strong-on-every-issue true believer who is such a star now among political progressives in large part because she’s so damn rare. Perhaps as a left we should spend less time condemning each other for failing to hew to our particular litmus tests, behavior that at the least amounts to a counter-productive circular firing squad and at worst suggests that, say, economic populism is more of a “true progressive” issue than reproductive freedom. Instead, the various parts of the progressive electoral infrastructure should criticize each other less and collaborate more—pooling criteria and cash to back more Warren types who score well on all our issues, ultimately forcing politics and politicians to yield to our agenda rather than all-too-often the other way around.

Republicans begin by assuming that 100 percent of the voters are with them and act accordingly—and then hope that, come Election Day, they haven’t alienated more than 49 percent.
This is, of course, what the Tea Party has been impressively adept at doing—choosing uncompromising candidates to run in primaries, deeply threatening the mainstream Republican establishment by not being afraid of losing, and thereby pulling the Republican Party’s stance and leadership on issues decisively to the right. This is an even more impressive accomplishment given that, on most every issue, the Tea Party is out of step with mainstream American voters. Meanwhile, the opposite is true for progressives—from protecting reproductive freedom to passing sensible gun safety laws to raising taxes on the rich to strengthening public education, the progressive left represents a majority, and sometimes a strong majority, of the American people. And yet we can’t seem to convert those beliefs into concrete and uncompromising political power.

A Republican strategist once said that if electoral politics is a game of getting to 50 percent plus one—that is, you need half of the voters plus one more to win an election—what Democrats do is assume they start with 0 percent support and try to win over women voters plus black voters plus working-class white voters and hope the total rises above 50 percent. Whereas Republicans begin by assuming that 100 percent of the voters are with them and act accordingly—and then hope that, come Election Day, they haven’t alienated more than 49 percent.

This has always struck me as both accurate and profound. Despite being extremely out of step with the vast majority of American voters today (not to mention the even greater majority of voters of the future), Republicans continue to push their extremist agenda with an evangelism that is breathtakingly audacious. And meanwhile Democrats, including progressive Democrats, worry they have to prioritize among their core issues despite having all the wind of electoral demography and opinion polling at our backs.
Even analyzing, let along arguing about, whether we should back the pro-choice woman candidate versus the economic populist white guy candidate reflects a form of self-defeatism from the get-go that is not responsive to political reality but rather endemic to the Democratic psyche. How dare we expect, let alone demand, our elected officials to fully represent all of the views and values of the progressive movement and the American people?

This particular progressive self-defeatism echoes the historic rift on the left between economic justice issues and identity politics. Although progress has been made—for instance, the labor movement is much better on gay rights and race and gender than generations ago—the experience of identity issues being forced to take a back seat to the “more important” and allegedly universal issues of economic populism haunts many activists on the left. The implication here, for instance, is that “multi-issue” groups like the PCCC or Democracy for America are looking out for all people, while Emily’s List is just looking out for women.

That not only fundamentally misrepresents identity politics—which aims to transform society to be more fair and equitable for everyone, not simply those in a given identity group—but it reveals the inherent blind spots in the traditional Democratic/progressive straight white male infrastructure that reinforces the need for identity politics in the first place. In researching this piece, I was pointed to an effort in 2012 through which a number of progressive political groups—including the PCCC, DFA, MoveOn.org, Working Families Party and more—articulated a common questionnaire for candidates on “critical issues.” “I’m sure there are questions on there about choice,” my source told me. There weren’t. Not even one.
What this boils down to is what winning looks like. Groups like Emily’s List, the PCCC, Working Families Party and the rest exist explicitly because of the diversity failings and substantive timidity of the Democratic Party. Together, these groups help push the mainstream party further to the left. Each group plays a distinct role—Emily’s List explicitly elects pro-choice Democratic women while groups like the PCCC press an economic justice agenda. But no one push will do it. Instead of criticizing one group or another for loyalty to its piece of the progressive agenda or fighting to rank whose issue or strategy is “more progressive,” isn’t there something better everyone could be doing?

Maybe it is the WFP model—getting involved in local races, grooming candidates early on, and eventually electing genuine progressives to higher and higher offices (maybe not the governor’s mansion yet, but NYC mayor at least…). Or maybe all these groups could agree to throw down extra hard together when candidates come along who check off all the boxes—who are strong on every progressive issue and add essential diversity to our supposedly representative democracy. Maybe then we’d spend less time bickering and more time winning—and have more candidates worth fighting for in general, so Elizabeth Warren wouldn’t be so damn lonely.

 

 

A Day to Remember

Twin TowersDo you remember where you were on this day thirteen years ago? I can remember every minute of every hour right up to the time that the night mercifully covered the wreckage in darkness.

When the first plane hit I was having breakfast at a McDonald’s in Brown Deer, Wisconsin. No one thought much about it. Perhaps, it was a small plane lost in the fog?

Instead, I watched in shock as the second plane crashed into the second tower. Finally, the inconceivable happened as the two towers collapsed into the street.

We could not conceive that over the next several hours our lives and the life of our nation would be changed so dramatically by the events of this day.

By the end of the day we found out that almost 3,000 people had been killed in the airplane attacks.They had gone to work that morning and had been killed at their desks or attempting to rescue others. Almost 30% of the dead were first responders who died on the front-lines of a new type of war.

After we tallied up our losses, our President rallied the nation and sent our troops off the begin the hunt for the perpetrators. In less than a month our air force was bombing the Taliban and al-Qaeda base camps in Afghanistan.

By Christmas much of the direct combat was done but the hard job of pacification and nation-building has gone on since then. Today, Afghanistan may not not be the most stable country but they have the tools to succeed.

Iraq was next and the war there still goes on. The enemy is the same just the faces change. This time the new enemy is ISIL or ISIS or the Islamic State. They are neither Islamic or a state. Instead, they are merciless butchers who kill because they can.

However, now we’re being led by a President who is opposed to war. He believes in half-measures. He doesn’t understand the capabilities of our partners. His philosophy is to lead from behind.

He doesn’t understand that leading from behind is a formula for military disaster. Yes, we have the greatest air force ever conceived by man but wars are not won by bombing alone. Wars are won by the men on the ground who tell the enemy: ‘this piece of land belongs to me.’

 

ObamaCare’s Death by 1000 Taxes

Death by a 1000 taxesIt’s Fall again and the cascade of health insurance rates is with us once again. Here’s a post by Sally Pipes at http://www.forbes.com/ about the ObamaCare death by a thousand rate hikes. Ms. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute. Her latest book is The Cure for Obamacare (Encounter 2013).

Get ready to pay more for health insurance next year, compliments of Obamacare.

A new analysis from PricewaterhouseCoopers projects that average premiums for policies sold through Obamacare’s exchanges will increase 7.5 percent in 2015.

In nearly one-third of the 29 states that PwC investigated, premiums will rise by double digits. In Indiana, the average increase will be 15.4 percent. In Kansas, it’s 13.6 percent. Florida’s insurance commissioner says premiums are set to climb 13.2 percent.

For this latest round of premium shocks, consumers can thank Obamacare’s unwieldy mix of taxes, regulations, and mandates.

A Wall Street Journal report surmises that the most popular insurers will levy the largest rate hikes. In the 10 states the Journal examined, the largest insurer had proposed rate hikes of between 8.5 percent and 22.8 percent. Oregon’s Moda Health Plan, which accounts for three-quarters of Obamacare enrollees, is seeking a 12.5 percent boost for 2015.

All these increases in premiums come on top of 2014′s hikes. A study published by the National Bureau of Economic Research found that Obamacare has pushed premiums up by as much as 28 percent this year. A report from the Manhattan Institute put the increase at 49 percent.

So any “good” news about 2015′s premiums must take into account how much they’ve already climbed. California’s premiums, for example, are slated to climb an average of 4.2 percent in 2015. But that’s in addition to the 22 to 88 percent increases that Obamacare saddled individual buyers with this year, according to the state’s insurance commissioner.

In Indiana, the average exchange premium will be $514, according to PwC, which is nearly triple the state average in 2013, the year before Obamacare went into effect.
Meanwhile, those who want to keep their current plans could be even worse off thanks to Obamacare’s Rube Goldberg-style subsidy scheme. The law distributes subsidies after taking into account a consumer’s income and the cost of a “benchmark” plan in the state. Health care consulting firm Milliman found that changes in these variables could turn a 5 percent hike in premiums into a 30-100 percent increase in costs for a consumer who sticks with his current plan.

What’s driving these price hikes? For one, the insurance pool in the exchanges is older and sicker than insurers expected. Many people who initially signed up are no longer enrolled, either because they got insurance through other means, like employment, or because they didn’t pay their premiums.

Aetna AET +1.17%, for example, reported 720,000 signups as of May 20 — numbers included in the administration’s highly touted claim of 8 million enrollees. But by the end of June, the number of paying customers for the Hartford-based insurer had declined to fewer than 600,000.

The young and healthy are most likely to drop coverage, as they may not see the value in paying premiums if they won’t have the occasion to take advantage of their policies.

That’s a problem for insurers, who need the premiums of those individuals to offset the cost of paying for treatment for older, sicker enrollees. If young people leave the pool, then insurers have to raise rates on those who remain in order to stay solvent.

And things could be worse. The coverage available through Obamacare’s exchanges often confines patients to a narrow network of doctors and hospitals in order to keep costs down. Those narrow networks haven’t been popular — but if patients succeed in getting them expanded, premiums will increase accordingly.
Then there’s the possibility of an insurer bailout buried in Obamacare. The law’s “risk corridors” require the federal government to pay insurers if they lose too much money in the exchanges this year, next year, and in 2016.

How might they lose too much money? If the insured pool contains too many old and sick enrollees — and not enough young and healthy ones.

Obamacare’s backers act as if none of this matters. Premiums in the individual market had climbed rapidly in years before, they say, and in any case subsidies make these gold-plated plans affordable.

But even with billions of dollars’ worth of taxpayer subsidies, 43 percent of enrollees say that their Obamacare-compliant plans are difficult to afford, according to a Kaiser Family Foundation survey.

In any case, it’s all a far cry from the lower premiums the president promised. Just before signing Obamacare into law in 2010, he said it would “lower rates . . . by up to 14 percent to 20 percent over what you’re currently getting.” Employers he said, would see premiums drop $3,000 compared with where they’d be without the law.

History has proved otherwise. As long as Obamacare’s many mandates, taxes, regulations, and subsidies are in place, health insurance premiums will continue to rise.

How the IRS is botching ObamaCare tax collections

Here’s a post by Brianna Ehley at http://www.thefiscaltimes.com/ with a report how the IRS is botching ObamaCare tax collections.

 

The Internal Revenue Service is on the hot seat again as federal auditors blast the agency for not responding to taxpayer complaints in a timely manner.

The latest report from the Treasury Inspector General for Tax Administration (TIGTA) reveals that between 2012 and 2013, the IRS failed to address at least 47 percent of complaints filed against tax preparers. The report also said that another 49 percent of the complaints sat unaddressed for at least two months.

Related: How the IRS is Botching Obamacare Tax Collection

This is significant auditors said because “the burden on taxpayers can include receiving an incorrect refund amount or even owing the IRS penalties and interest.”

There’s even more at stake than delays in handling complaints. This is the second scathing report in less than a month to question the agency’s productivity and work quality. In August, the Treasury Inspector General for Tax Administration said the IRS was struggling to collect a new tax that’s critical to financing the president’s health care law; auditors say the IRS’s flawed collecting process is allowing it to raise only three-quarters or so of the revenue that was originally expected.

The IRS had originally estimated that the tax would bring in about $1.2 billion in the second and third quarters of 2013 – but it’s only received $913.4 million.

The IG’s findings, suggesting that the IRS is not meeting its expectations and completing its work, come just as the agency is taking on even more responsibilities under Obamacare.

Related: Obamacare’s Next Challenge: IRS Verification

The agency is tasked with enforcing more than 40 new provisions under the health law, including distributing insurance premium tax credits to help low and middle income people purchase health insurance through the state and federal exchanges.

IRS also will impose penalties on individuals who decline to purchase health coverage as well as medium to large employers (in 2015) who fail to provide coverage to their full-time employees.

IRS Commissioner John Koskinen has continuously warned lawmakers that the agency’s work may suffer if it does not receive an increase in funding to cover these new responsibilities.

In June, Koskinen warned an audience at the IRS Nationwide Tax Forum in Chicago, that budget cuts would hinder the agency’s ability to serve taxpayers, Politico reported. He said if the agency doesn’t receive proper funding, the level of phone service to help respond to taxpayer questions would drop to 53 percent.

“If we don’t receive the funding and we can’t do the hiring needed to handle this call volume, we estimate our level of phone service next year would plunge to 53 percent, which would be the lowest since 2008,” Koskinen said. “At 53 percent, that would mean close to half of those trying to get our help over the phone would not get through.”

Separately, he told lawmakers in Congressional Testimony that he was “deeply concerned about the ability of the IRS to continue to fulfill its mission if the agency lacks adequate funding,” Koskinen said. “Our current level of funding is clearly less than what the agency needs, especially to provide the level of taxpayer services the public has a right to expect.”

Under the $1.1 trillion omnibus budget passed this year, the IRS was allocated $11.2 billion –down from $12 billion the previous year—this was the fourth year in a row it saw its budget cut. Koskinen and other IRS officials had warned Congress that the budget cuts would put a significant strain on their ability to do their job.

However, lawmakers—especially House Republicans—were eager to cut the agency’s budget after last year’s scandal involving the alleged targeting of conservative groups, on top of IG reports revealing that the agency had spent tens of millions of dollars on lavish conferences.

“The IRS has been targeting American taxpayers, as we’ve learned, for their political beliefs for the last four or five years,” Rep. Bill Huizenga (R-MI) said in a statement after proposing to cut the IRS’s tax enforcement budget by $788 million this year. “Now this culture within the IRS has grown to one of stonewalling, double-talk and mistrust. It’s up to Congress to use the power of the purse… to rein in the IRS and force them to conduct their analysis in an unbiased manner.”

Let’s All Move to Puerto Rico

Puerto RicoHere’s a post from Dan Mitchell of the Cato Institute at http://danieljmitchell.wordpress.com/ that asks the question why we don’t all move to Puerto Rico.

Since I spend considerable time defending tax competition, fiscal sovereignty, and financial privacy, people sometimes think I can give competent advice on how best to protect one’s income from the IRS.

Hardly. Like most people in Washington, I’m all theory and no practice.

Besides, when people ask me about the ideal tax haven for an American citizen, I generally don’t have good news.

I explain that they are already living in a very successful tax haven, but then given them the bad news that only nonresident foreigners can take advantage of America’s tax haven policies. Though we should still be happy about being a haven since the favorable tax rules for foreigners haveattracted lots of investment.

With the erosion of financial privacy, the IRS has considerable ability to track your money around the world, so moving your money to an overseas tax haven may not work. Even Switzerland, for example, has been bullied intoweakening its human rights laws so that they no longer protect the privacy of nonresident investors.

Physically moving (your body and your money) to a foreign fiscal paradise such as Bermuda, Monaco, or the Cayman Islands doesn’t provide much value since the United States has the world’s most aggressive and punitive worldwide tax system. You’re basically treated by the IRS like you’re living stateside.

You can join thousands of other people and give up your American passport. But even that step has big downsides since the IRS imposes very nasty exit taxes, notwithstanding the fact that the United States is a signatory to international agreements that supposedly protect the right to emigrate without undue hassle.

But there is still one legal and effective way of dramatically reducing your federal tax burden.

Here are some details from a Bloomberg report on the relatively unknown tax haven of Puerto Rico.

Struggling to emerge from an almost decade-long economic slump, the Puerto Rican government signed a law in early 2012 that creates a tax haven for U.S. citizens. If they live on the island for at least 183 days a year, they pay minimal or no taxes, and unlike Singapore or Bermuda, Americans don’t have to turn in their passports. ……Under Puerto Rico’s new rules, an individual who moves to the island pays no local or federal capital-gains tax — capital gains are charged based on your tax home rather than where you earn them — and no local taxes on dividend or interest income for 20 years. …Moving to the island won’t kill all taxes: U.S. citizens still have to pay federal taxes on dividend or interest income from stateside companies.

And there are even some tax benefits for companies.

The government gives a tax break for businesses that move to Puerto Rico and provide services outside the country, perfect for a hedge fund with clients in New York and London. These firms pay only a 4 percent corporate tax, compared with 35 percent on the mainland. About 270 companies have applied for this incentive, according to officials.

Here are some real-world examples of rich people engaging in fiscal self defense.

About 200 traders, private-equity moguls and entrepreneurs have already moved or committed to moving, according to Puerto Rico’s Department of Economic Development and Commerce, and billionaire John Paulson is spearheading a drive to entice others to join them. …Schiff, who runs Westport, Connecticut-based brokerage Euro Pacific Capital Inc., relocated his $900 million asset management arm from Newport Beach, California, to San Juan in 2013. He plans to move to the island within the next several years. But the savings can be extraordinary, especially given the effects of compounding, says Alex Daley, chief technology investment strategist at Casey Research, a firm that publishes reports for investors. Late last year, Daley moved from Stowe, Vermont, to Palmas del Mar, about 45 minutes from San Juan. …Robb Rill, 43, managing director of private-equity firm Strategic Group PR, relocated with his wife to Puerto Rico from Florida in February 2013. He started the 20/22 Act Society, named for the tax laws designed to encourage people and businesses to set up shop here, to help educate fellow expatriates and serve as a networking group.

So what’s the catch? Well, it depends on your lifestyle preferences. Some people are willing to pay extra so they can live in a big metropolis like New York City. Others are willing to cough up a lot of their money to enjoy California’s climate.

But the folks in Puerto Rico say they have a lot to offer besides big reductions in federal taxation.

The real challenge, she says, is convincing people they can replicate their life. Will they have well-traveled, well-educated friends? Are there decent schools for their kids? Are there charities that wives can join? Is crime an issue? She takes her clients to dinner at outdoor cafes to show them it’s safe at night, and she organizes luncheons to introduce newcomers to native Puerto Ricans. …Puerto Rico isn’t just about low taxes. It has white-sand beaches and temperatures in the 80s year-round. There’s an art museum with a world-renowned pre-Raphaelite collection. It has luxury apartment buildings, over-the-top resorts such as Dorado Beach, and a handful of private international schools that send their graduates to Ivy League colleges. It has restaurants with award-winning chefs. It’s a four-hour flight to New York. And the island operates under U.S. law.

I don’t have money, so it’s not an issue for me. But if I did, my first questions would be about the prevalence of fast food and softball leagues.

But I admit that I’m a bit of a rube.

Anyhow, the New York Times also has figured out that rich people can escape class-warfare taxes by moving to Puerto Rico.

After a slow start, Puerto Rico’s status as a tax haven is beginning to catch on, and some are betting big bucks that the trickle of buyers moving there will soon become a stream. …“I take at least five calls a day from new people considering moving here,” said Gabriel Hernandez, a tax partner with the San Juan office of BDO Puerto Rico. When the law was first passed, Mr. Hernandez advised two people who relocated to Puerto Rico from the mainland United States; last year that number rose to about 15, and so far this year, he has helped more than 80 people make the move and is advising another 60 who are considering it. …As of July, 115 people — nearly all of them United States citizens — have applied and been granted the tax exemption, with another 135 forecast to make the move before the end of the year, according to Puerto Rico’s Department of Economic Development and Commerce. Last year, 151 people were granted the tax-exempt status.

The real reason to share the New York Times story, though, is a particularly laughable excerpt.

The reporter wants us to believe that escaping high taxes is “distasteful.”

While there is much to recommend Puerto Rico as a tax haven — it has better beaches than Switzerland, no immigration hassles like Ireland and is a lot closer than Singapore — there are the undeniably distasteful politics of fleeing New York to save on taxes.

If escaping high taxes in New York is “distasteful,” then lots of people with lots of money already have decided to be distasteful.

P.S. If you’re a rich person, but you don’t want to move to Puerto Rico, there are some relatively simple and fully legal steps you can take to deprive the politicians of tax revenue.

P.P.S. In other words, politicians can impose high tax rates, but that doesn’t necessarily mean high tax revenue. Which is why I’m still hoping President Obama reads what I wrote for him on the Laffer Curve.