RAG Perspective: An American Pro-Liberty Conservative: Miscellany: 3/23/10

Tuesday, March 23, 2010

Miscellany: 3/23/10

Quote of the Day
You can preach a better sermon with your life than with your lips.
Oliver Goldsmith

A Corrupt Bill Becomes Law: What Now?

The progressive Democrats feel once the American public becomes hooked on benefits of the new federal health entitlement, the bill will be a fact of life, much like social security and Medicare. It's likely more complex than that: most benefits are largely staggered towards the middle and late decade; most American people are not subject to some of key reforms (e.g., preexisting conditions, catastrophic health expenses, high risk coverage). The issue, from the standpoint of conservatives, is not so much the benefits as the methods and the costs. Methods include a growth of the federal bureaucracy versus historical state regulation and the role of the individual, e.g., individual responsibility in minimizing health care costs and the historical freedom of the individual to pay for health care through insurance or fee for service. Costs include various federal taxes and penalties with counterproductive effects on business growth and hiring, unfunded mandates to states (subject to half the costs of unilaterally increased income eligibility for Medicaid), likely underestimated program costs and overestimated revenues, and the difficulty of making and sustaining Medicare cuts.

I would caution the Republicans to cool their jets on repeal attempts, lawsuits, revenge at the polls, etc. No one who has read my blog on a regular basis will accuse me of being soft on the bill. There are a few reasons I say this: first, I think the nation needs a breather. Second, the public is well aware of the fact this is a badly flawed bill. Third, the public is well aware of the Democrats' unchecked, unaffordable tax and spending spree. Fourth, the Republicans should take credit for certain inputs that made the best of a bad bill, e.g., the inclusion of a variation of (temporary) high risk pools and the fact that the Congress finally dropped the infamous public option. Fifth, the Republicans have been handed the gift that will keep giving for at least the coming decade: the Democrats froze the Republicans out of the most significant part of the legislation: they own it. They cannot co-opt the GOP on any and all subsequent issues: If costs blow past estimates, if the program's "deficit reduction" proves to be illusory, if participants are not happy campers with provider availability or quality of services, if Medicare cuts are too deep or aren't cut enough. Each step of the way, the Republicans will be able to tell the American people: you elected this President, and you elected this Congress; we did everything we could under the circumstances. We can change things only if you give us an electoral mandate. Finally, I think it would be in the best strategic interests of the GOP--if they should gain control of one or the other branch of government--to contrast by actions what Obama has demonstrably failed to do--act in a bipartisan fashion. The American people are tired of constant blame-shifting and partisan bickering. If you are a good poker player, the last thing you want heading into the 2012 election is giving Obama a platform to run for reelection against an uncooperative GOP Congress. If the Republicans do address a repeal issue next Congress, they must be constructive: they need to have policies which achieve the same benefits, but without federal meddling, high taxes and costs.

Let us remember, however, there are the physics of the mid-term elections: Obama will veto any repeal of what he considers to be the crown jewel of his Presidency; and even if the GOP wins control of one or both houses of Congress, there will be more than enough progressives in either house to sustain the veto. What the Republicans might be able to do is to form a coalition with centrist Democrats to deal with more short-term items, including interstate insurance marketing and pools, full-fledged medical malpractice tort reform, make certain budgetary adjustments (say, a freeze or rollback of the planned Medicaid enrollment ceiling), waive the individual mandate requirement and enforce payment for unpaid/uncovered medical services, and establish any regulatory authority independent of the Executive branch.

I think two insights from FNC contributors are particularly apropos: First, Washington Post/syndicated columnist Charles Krauthammer after the vote made a very interesting initial conclusion: Obama, whether or not he realizes it, has made the inevitability of a national sales/value-added tax. The observant reader will note I've been pushing on this theme over a series of posts, talking about how it might be the fairest way to spread catastrophic risks across the economy. I've also noted that the existing anti-business growth policies and the fact that over 40% of American workers do not contribute a single penny towards the costs of the federal government and its programs, many of which support lower-income Americans.

Second, another person (I think it was The Hill's A.B. Stoddard) made a comment that the Republicans need to shift their focus on the current unpopularity of the bill to underscore a principled opposition. There's almost 8 months until the election, which can be a lifetime in politics. In the meanwhile, the Democrats are looking to scrub some of the more egregious elements of the Senate bargain, e.g., the Cornhusker Kickback, and there's probably going to be some minor sympathetic boost to Obama and the health bill in the aftermath of passage, if for no other reason than reduction of uncertainty. Here's what the Democrats can't window dress: a $12.5T national debt. If the Republicans hammer any point home this fall, it's this: the high-tax, spread-the-wealth philosophy just kills business growth and jobs. How long can the Democrats continue to run up trillion dollar deficits? The Republicans have to drill home that the President and progressive Democrats put the new health entitlement over resolving social security and Medicare--and sooner or later, we are going to have to make painful decisions--probably a combination of spending cuts and tax hikes. Democrats today are crowing out closing Medicare drug "doughnut holes", no-cost preventive care, etc.--but when the Medicare savings appear illusory and the already too-progressive, anti-business tax structure runs short of revenue targets, and international investors stop buying our Treasury debt (and in fact downsize their positions), we are going to see the same type of painful federal program cuts I've been urging for some time.

Maryland Shows the Results of "Soak-the-Rich" Tax Policies

I am a lonely-voice conservative in a liberal state. (In fact, I wanted to move to northern Virginia, specifically for political reasons, a few years ago in taking a federal contractor assignment just inside the northwestern Capitol Beltway, but my employers lobbied against it, noting congested Beltway traffic.) In 2006, Maryland voters, strictly for partisan reasons, rejected reelection of popular Republican governor Bob Ehrlich in favor of the rising star Baltimore mayor, Martin O'Malley. (O'Malley used one of the Democrats' mighty weapons of all time against Ehrlich: Bush-bashing, in a bad election cycle for Republicans--i.e., resulting in Speaker Pelosi.) In a 2007 special session, O'Malley pushed through unpopular tax hikes, at the time dropping his approval ratings to the 30's. He has now rebounded to just over 50.

The Wall Street Journal noted in a recent editorial that raising the top state bracket by some 1.5%, instead of raising an expected $106M, resulted in a drop of $257M. A Merrill Lynch analysis noted that Maryland lost nearly $1B in its net tax base, with nearly 1 out of every 8 Maryland millionaires (no, I'm not one of them) not filing a resident tax return in 2008. (Granted, some millionaires may have died that year, but it's likely most of them simply established a principal residence in a more tax-friendly state.) Now, of course, there was an adverse stock market in 2008, which may have cut into capital gains, but it also points out some of the problems progressives face in a "soak-the-rich" plan. For example, suppose I was a millionaire sitting on $50,000 in capital gains in December 2008. All I would have had to do was realize an underwater investment in (say) bank stock holdings to offset the capital gains.

Mission for Dennis Miller:
Laughter Makeover for Hillary Clinton and Nancy Pelosi

This is not a political issue, and readers may think I'm getting a little personal here, but is the emperor wearing no clothes? How can you go through life without people letting you know that your laughter is rather unusual and possibly annoying to other people? You have what Glenn Beck and others have termed Hillary Clinton's "cackle". As for Speaker Pelosi, there is this weird, partially stifled giggle/snort, and I'm apparently not the only one whom has noticed this. So far I haven't seen many laugh-related videos posted for Pelosi as for Clinton, but I did find this satirical one. Tip for conservatives planning this coming Halloween... How scary would it be to play on auto-repeat a Clinton/Pelosi laugh montage on your front porch? (It might keep away children and small animals...)

Just to prove I'm being even-handed when it comes to laughter: have you ever heard FNC contributor and Daily Caller co-founder Tucker Carlson (whom often guest-hosts on Dennis Miller's radio talk show)? Dennis, you really need to do a laugh makeover on these 3 people; imagine if you had to do stand-up gig, and these three were in the front row...

Political Cartoon

Gary Varvel notes that Blue Dogs beg for scraps from Nancy Pelosi's table; occasionally she'll let them vote their conscience so long as those votes don't get in the way of passing progressive legislation. We know it's all bark and no bite for the Blue Dogs; no word yet, but I bet the papers that the Blue Pups crapped all over were the US Constitution and the federal budget.