Sunday, January 16, 2011

Attempts to Repeal Health Care Resume This Week, Continuing the False Claims of Job Killing

"The effect of the law on jobs is likely to be modest," said Katherine Baicker, an economic adviser to President George W. Bush who is now a professor of health economics at Harvard. "The most important effects of the law will be on health costs and coverage and the efficiency of the health care system, not on jobs."
- from an article by Robert Pear, in the New York Times
Even economic advisers to the most recent Republican president don't call the 'Obamacare' health care reform job killing.  Who is Katherine Baicker, and why should we care?  Here is a brief synopsis of her CV to explain why we should pay attention to her opinion:
From 2005-2007, Professor Baicker served as a Senate-confirmed Member of the President’s Council of Economic Advisers, where she played a leading role in the development of health care policy. She currently serves on the Editorial Boards of Health Affairs, the Journal of Health Economics, and the Forum for Health Economics and Policy; as Vice Chair of the Board of Directors of Academy Health; on the Congressional Budget Office's Panel of Health Advisers; and as a Commissioner on the Medicare Payment Advisory Commission.
Simply put, this woman appears to know what she is talking about,
 and there is no reason to assume she is an Obama partisan source.  If, as the thrust of the article by Robert Pear is correct, this is not a 'jobs killing' law.  It is certainly not a 'budget buster' either, as it will reduce the national debt, not enlarge it.  More importantly, if Katherine Baicker is correct, and the initial expansion in the number of small businesses which are offering health insurance under the earliest changes brought about by this legislation suggest she is correct, the it is beneficial for our economy to improve the value of health care we  purchase, by offering more bang for the buck, by more effectively controlling the out-of-control health care cost spiral.

Lets look at why the 'Obamacare' health care reform has made that important improvement.  According to the Los Angeles Times article:
Major insurers around the country are reporting that a growing number of small businesses are signing up to give their workers health benefits, a sign of potential progress for the nation's battered healthcare system.

The increase, although not universal, has brought new security to thousands of workers, many of whom did not have insurance or were at risk of losing it.
So, naturally, the Republican Congress wants to repeal the legislation, because they hate anything the Obama administration does that succeeds.  It makes them look bad, and it doesn't help them promote their alternate reality, the fact-free one espoused by 'pundints' like Limbaugh or political figures like Boehner, Bachmann or Palin, that doesn't pass fact checking.  Because all those people who now have health care and insurance aren't going to be happy at seeing this legislation repealed.

Back to business as usual, or at least, they will try.  Fortunately this won't get past the Senate, and presumably Obama wouldn't sign it if it did.  But it makes the Republicans / Tea Partiers  happy their politicians tried; that would be the base members who don't want to know if this legislation is making a positive, constructive difference, and who don't know the facts about the health care reform legislation.  That would be the ones who swallow the myths about 'Obamacare', instead of being reality based.  The ones who didn't for example, READ it.  The ones who still believe Palin's 2009 Lie of the Year about Death Panels, while in Arizona the Republican denial of health care to organ and bone marrow transplant patients is resulting in a steady number of deaths; in other words - actual Republican death panels in action.

16 comments:

  1. This is a pure grandstanding, waste of the people's money and time, move.

    It has ZERO chance of success, less than zero really. It won't come to a vote in the Senate, and the President would issue a veto which would not be overriden. It is 100% Bullcrap, it is 100% contrary to "getting Washington back to work". It's beneath our elected officials to waste thier time and our money on things they know full well can never, ever be successful.

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  2. I presume Pen, you mean the grandstanding is the attempt to repeal the health care reform legislation?

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  3. While I agree that repealing the health care reform is not going to succeed, there is some merit in what some of the republicans are saying.

    There is no, and I repeat no, evidence that this bill will reduce anyone's health care costs. In fact, I suspect that the costs of health insurance iwll go up, not down. Insurance companies are in business to make money. They don't give a rat's ass about their customers' health, and anyone who believes that they do is delusional. Faced with the requirement that they spend more on health care and less on administrative costs, they will raise premiums to make sure their profits are there.

    This whole mess, due to President Obama's horrible leadership, reminds me of when Kansas converted to a requirement that everyone be required to have automobile insurance. The insurance companies promised that rates would go down. Did they? Hardly. The rates promptly increased because now they had a larger, captive audience.

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  4. This comment has been removed by the author.

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  5. dog gone said...
    And yet, ToE, I'm sure it is an improvement that people are buying liability insurance for their cars and for their driving, to cover injuries as well as property damage they might do.

    But as to what is being accomplished by the health care reform, that was not the case before, that appears to be an economic improvment - this is from the linked LA Times article:

    "The increase is partly attributed to a tax credit created by the nation's new healthcare law. Some insurers are aggressively marketing the break, which can offset up to 35% of a company's costs.

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  6. I don't see how anyone can say this will not have a negative effect on jobs. Just look at the math. Say a business has 170k budget for employees, currently it costs them 50k per employee. So if they increase the budget 30k they could hire one more. With the health care lets say it costs them 55k per employee. 5k is being reasonable as I pay about 6k per year and supposedly I am only paying 30-40% of the cost. Now at 55k per employee the same business would have to get an additional 50k to hire one more. It just makes sense it would be less likely to happen at a 50k cost than at a 30k cost.

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  7. I guess Tuck, you could ask people who get paid to crunch the numbers, like Professor Baicker.

    Presumably it would be that 35% tax credit that the LA Times speaks about that makes the difference.

    Or you could look at the CBO's numbers which also confirm that. The CBO is underappreciated....

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  8. The point is, the health care reform is going to fail on one of its basic premises, that it would reign in the rapidly rising cost of health care and health insurance. NOTHING in the reform bill will do that, and in fact, the subsidies, will probably raise the overall cost of health care.

    The bill also costs the American taxpayer at LEAST 800 billion dollars over 10 years, and more likely, much more than that. (Has anyone ever heard of a government program costing LESS than what was budgeted?) Where is the money going to come from? From taxing the rich? Oh, I forgot about that... we won't tax the rich, because Obama and the democrats are spineless and won't stand up to republican bullies.

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  9. You can't tax the rich enough to pay for all this. Already the top 10% in income pay roughly 80% of the federal taxes. How much can you raise the rate before some of them say it isn't worth the trouble and stop making money? What happens when a Warren Buffett of someone sells off their companies puts his money in a checking account and lives off of it with no income? Then the govt gets 0 from him. Granted that is taking it to the extreme but believe it or not people do take taxes into account deciding what to do with their money. A lot of companies use short term bonds for cash flow and a lot of rich might not invest in them if 70 cents of every dollar profit goes to the govt. The govt needs to be careful about changing the tax policy too much. You take away the deduction for charity and lots of charities would have less money and more of the poor would rely on the govt for support. You take away the deduction for mortgage interest and lots of people who would buy a house will rent and less houses will be built and sold.

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  10. No one is suggesting a higher tax rate than the one that existed under the Clinton administration, which would be quite sufficient. The wealthy 1% or 2% did just fine under those tax rates.

    As to the 80% of all taxes? I refer you to Warren Buffet:
    http://www.timesonline.co.uk/tol/money/tax/article1996735.ece

    "Buffett blasts system that lets him pay less tax than secretary"
    Warren Buffett, the third-richest man in the world, has criticised the US tax system for allowing him to pay a lower rate than his secretary and his cleaner.

    Speaking at a $4,600-a-seat fundraiser in New York for Senator Hillary Clinton, Mr Buffett, who is worth an estimated $52 billion (£26 billion), said: “The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”

    Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent. Mr Buffett told his audience, which included John Mack, the chairman of Morgan Stanley, and Alan Patricof, the founder of the US branch of Apax Partners, that US government policy had accentuated a disparity of wealth that hurt the economy by stifling opportunity and motivation.

    I think Mr. Buffet knows what he is talking about, in terms of what the wealthy pay in taxes, rather bettr Tuck than you and I.

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  11. http://journalstar.com/news/local/govt-and-politics/article_72b734d4-fbdc-11de-badf-001cc4c002e0.html

    Warren Buffett said Thursday he'd have voted for the Senate's health care reform bill, and Sen. Ben Nelson was courageous to do so.

    Buffett's defense of Nelson came in a telephone interview from Omaha following more than two weeks of intense political fire directed at Nebraska's Democratic senator.

    "What we do know is the present system is not working well," Buffett said. "Health care costs have galloped up as a percentage of GDP (gross domestic product), and we haven't covered the population the way a rich country should.

    "It is time for us to try to make an improvement."

    Recognizing the legislation no doubt will "require modification over time," Buffett said, "I would have made the same vote" that Nelson did.

    "I think he did the right thing. I think he did the courageous thing.

    Again, Tuck - no offense, but I trust the number crunching, and the conclusions about health care reform espoused by the likes of Warren Buffet over you or I attempting that humber crunching.

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  12. Tuck,

    First, the upper 5% pay about 40% of the total income tax because they make nearly 50% of the national income. When we had a tax rate of 70% on the wealthiest incomes and a corporate tax rate much higher than today (in 1980), people neither stopped making factories nor cars nor anything else. In fact, lower tax rates weren't an incentive to produce on-shore or create factories here, they were an incentive to do the exact opposite and move the jobs off-shore so that they could keep the now vastly higher level of profits.

    It is a logical falacy to suggest that having the wealthiest pay somewhat higher taxes will kill jobs. They can make 40% of 1 B or 35% of 2 B, if it's me, I'm taking the 700M rahter than the 600M. Further, history has shown this to be exactly not the case.

    We seem so fearful of actually taxing those who benefit the most from paying the share they need to in order to keep the system afloat. There is a solution, prevent them from making it, and ensure instead it is made by the middle class, then tax the middle class. I'm all for that solution, but how, exactly, are you going to make that happen?

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  13. Actually here is what the IRS data says.
    The top-earning 5 percent of taxpayers (AGI over $159,619), however, still paid far more than the bottom 95 percent. The top 5 percent earned 34.7 percent of the nation's adjusted gross income, but paid approximately 58.7 percent of federal individual income taxes.
    And these figures are from 2000-2008 so the Bush tax cuts were in place for most of it. The whole article is here.
    http://www.taxfoundation.org/news/show/250.html
    All the figures are only federal individual income tax so since social security, medicare, unemployment, and a lot of state taxes cap at some point it is easy to believe Warren Buffets secretary paid more taxes, as a percentage of income, than he did. I seriously doubt she paid more actual dollars to the treasury than he did.

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  14. Ttuck wrote:
    "it is easy to believe Warren Buffets secretary paid more taxes, as a percentage of income, than he did. I seriously doubt she paid more actual dollars to the treasury than he did."

    Yes Tuck, we're talking about percentages here, including percentage of income, in establishing fairness.

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  15. Grr... I had a comment and it went away.

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  16. Tuck,

    I wrote a much more elaborate reply, but here goes (again).

    Thanks for the correction to my data, frankly, I was operating from memory - but my numbers weren't so appreciably far off as to change the underlying dynamic. That dynamic is, the top 5% make SOO much more in proportion to their share of the population, it's hardly surprising they pay a very large share of the taxes. They aren't paying double their income percentage (which might be the case if their tax rate was double the middle class), in fact what it seems is that they're paying about 150% of average (36% paying 50% of taxes).

    Why is that (is the begged question), and the answer is simple. It's because we believe (rightly) that asking someone who has $100 disposable income per year to pay $1500 in federal taxes so that someone who has $630,000 a year in income could pay only 100,000, is profoundly unfair. To have $100 in disposable income (income left after paying for food, home, and clothing), someone is making $15,000 per year. Contrastingly, to have $460,000/year in disposable income you hav an income of $1,000,000.

    No, $1500 isn't equal to $100,000. But by the same point, asking someone to forego food for a month to pay their federal tax bill (on the one hand) or for the other person to have $330,000 in disposable cash vs having say 250,000 (e.g. a tax rate of 20%) is hardly unfair. It means the person making a million is spending 370,000 on food, shelter and clothing, hardly living like a pauper.

    Our fathers (those of the greatest generation) understood that the reason we wanted a tax rate of 70% is to prevent the vast accumulation of wealth into the hands of a very few but more importantly, to provide a DISINCENTIVE to such accumulation because it was seen (rightly) as a counter/opposite position to reinvestment and/or pay to the labor pool.

    From 1965 to 1980 we had a 70% rate, yet, the wealthy contributed far less (roughly half) toward the total income tax pool? Why is that? The answer is simple, because the middle class contributed more, and the supposedly rapaciou tax rate of 1980 (more than double of today) actually took in less money. What has happened since is that (by virtue of the changes in the tax codes) wealth has rapidly accumulated upward, not through some sort of "redistribution" by the government, but rather redistribution brought about by the owners of industry who moved jobs offshore to cut labor costs while keeping more in profits for themselves.

    The consequence is that we've slipped dramatically in overall standard of living. We manufacture nearly nothing in the US any longer (of heavy equipment and computing equipment certainly), and we are returning to a nation much more like what we were in 1900 than 1950. A nation where we have a very small ultra-wealthy class, what will eventually be a small middle-class, and a large under-class. We are moving toward being far more like a third-world country, poor and underfunded schools, poor infrastruture, corrupt and inept government, and a nation controlled by the most wealthy and most powerful.

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