Family Budgets Bear the Burden
We’ve heard a lot about how the Federal Budget Deficit may or may not be impacted by the health care reform legislation currently working it’s way through the House and Senate. But most of us are more concerned with how this legislation will impact our family budget, not the Federal budget. After all, this is where the “rubber hits the road”.
I came across this site today, the Kaiser Family Foundation site, that has couple of really nice tools to help a taxpayer consider the various health care reform bills currently working their way through both the U.S. House and the U.S. Senate.
One tool is the cost calculator and the other is a side-by-side health reform comparison tool.
On the cost calculator, select the “No” option for the question “Is Employer Coverage Available?” This will show you what the selected legislation will cost those individuals or families who will be required by law to purchase health care insurance. It will also show you how much you will have to pay if/when your employer drops your health care insurance coverage as a result of this legislation.
I compared the results from the calculator with an analysis from Heritage Foundation of the Baucus bill and found the results to be consistent.
Think your employer paid health care is safe… think again. For example: Why is it that unions throughout all sectors of the economy are supportive of this health care reform? The answer to that is simple and self-serving. For over a decade now, wages have pretty much been stagnant with many increases being at or below the cost of living. One reason is that it is difficult, if not impossible, to negotiate higher wages as the cost of providing health care insurance has risen sharply. Unions would like nothing more than to see health insurance be taken over by the Federal Government and dropped by employers. This way, they can improve their bargaining position for higher wages. Higher wages for union employees equals higher dues for the unions. Of course, the employee then has to pick up the cost of health care insurance. This may or may not be off-set by higher wages and, depending on your level of income, some government subsidies. But at the end of the day, the union employee will pay higher dues, higher taxes, more out-of-pocket health care costs, etc. This is not a win-win scenario for the union and the union employee.
In a perfect world, the employment rate would be high enough where employers would have to be highly competitive in the wages and benefit packages they offer in order to attract the most qualified employees. But, the current economic climate is such where employers are not having to compete for the best talent. And with higher deficits, higher taxes, and higher costs due to more regulation and mandates (cap-and-trade for example) it does not appear that we are in for an economic climate improvement anytime soon. Employers looking to cut costs to survive would be crazy not to look at dropping health care insurance coverage.
I would encourage you to consider the “what could this cost me” scenario if your employer was to drop the employer based health care insurance coverage to determine not only what this will cost you today, but what it could cost you tomorrow. Then, formulate your opinion based on the realities of your family budget and contact your Senator and Representative to let them know your position.
This health care insurance reform is a massive new federal entitlement, with massive subsidies that are funded by massive tax increases and the gutting of Medicare. By all measures, this is a bad idea that will have both long and short-term implications. I firmly believe that people want to do the compassionate thing here, but it is not prudent to allow our desire to be compassionate to blur our vision of reality and blind us to unintended consequences.
In his book “Money, Greed and God – Why Capitalism is the Solution and Not the Problem”, author Jay W. Richards points out that for much of U.S. history, “the federal government cost every citizen about twendy dollars a year” – and that is in “today’s” dollars. He goes on to say, “Now it costs every one of us, on average, about then thousand dollars.” You would think that with the trillions of dollars we have spent on the war on poverty through entitlement programs, we would have something to show for it. Well, we do – according to Richards, studies have shown:
- Welfare benefits have resulted in reduced work hours (9% less for husbands, 20% less for wives, and 43% less for single males)
- One study shows that for every dollar spent on subsidised income results in 80 cents reduction in labor earnings.
- Another study shows that 10% increase in welfare benefits resulted in a 12% increase in out-of-wedlock births.
- Yet another study showed that a 50% increase in AFDC and food stamps led to a 43% increase in out-of-wedlock births.
The single leading indicator for children being raised in poverty is children that are born out-of-wedlock.
These studies reveal the unintended consequences of “government mandated compassion” – the term itself is an oxymoron. Compassion implies we suffer alongside – massive federal programs do not suffer alongside. Instead, they replace people closest to the concern with bureaucratic programs that can not consider the individual need – instead they paint with a broad paintbrush grouping people into ”classes” based on certain criteria. The further we remove compassionate efforts to lend a helping-hand from the individual and individual responsibility, the more likely it is that there will be unintended consequences. Aristotle put it this way – “If you want to encourage something, reward it. If you want to discourage it, punish it.”
To limit the unintended consequences, it is best that assistance come through those that have the best understanding of actual, real needs of an individual or family. This means that the first line of help is the individual in need (what are they doing to help themselves), followed by the family, then by local charities/churches, then the larger communities of city, county, state, federal, and international organizations. The further you get from the individual, the effectiveness of assistance drops because the understanding of individual needs also drops. When effectiveness and understanding of needs drop, the likelyhood of unintended consequences will increase. This is one reason I financially support organizations – like World Vision – that put people in the community to help those in need. They don’t simply throw money at a problem, they put boots on the ground, build community, and work to raise the standard of living through real compassion – suffering alongside for the purpose of lifting up.
Here in Detroit, the Federal Government dropped a $15.2 million of federal tax dollars through the T.A.R.P. legislation for the purpose of helping those who were about to lose their homes. Over a couple of days, some 65,000 people lined up outside Cobo Hall to apply for a grant – ultimately only about 3,500 are expected to receive one. Ken Rogulski of WJR Radio in Detroit interviewed a number of applicants. One such applicant responded to his questions this way:
ROGULSKI: “Why are you here?”
WOMAN #1: “To get some money.”
ROGULSKI: “What kind of money?”
WOMAN #1: “Obama money.”
ROGULSKI: “Where’s it coming from?”
WOMAN #1: “Obama.”
ROGULSKI: “And where did Obama get it?”
WOMAN #1: “I don’t know, his stash. I don’t know. (laughter) I don’t know where he got it from, but he givin’ it to us, to help us.”
WOMAN #2: “And we love him.”
WOMAN #1: “We love him. That’s why we voted for him!”
WOMEN: (chanting) “Obama! Obama! Obama!”
Now, I realize that in that crowd of 65,000 people there are many who need and deserve assistance. At the same time, one can not ignore the reality either. This program does little or nothing to attack the real problems facing those in line. Essentially, the Federal Government borrowed $15.2 million dollars from foreign governments (that we and our children will have to pay back) to drop into this program where only a handful of people will receive any assistance. Of that hand-full, there is no real chance of the Federal Government truly understands the individual needs of the family they are trying to help. Perhaps that real help is not throwing thousands of dollars at a housing problem. Perhaps the real problem is the need for real accountability on a drug addiction, or a real need for job training, or a real need for medical assistance. My point is that this is not compassion at all. Instead this is a cold-hearted bureaucratic process assuming it knows best how to meet the needs of a hand-full of individuals.
Massive federal entitlement programs are the least effective way of addressing real need. They take billions and billions of dollars out of the hands of taxpayers to fund these programs. These dollars are filtered through layers and layers of bureaucracy – each one syphoning off more and more funds to pay for the bureaucracy itself. In turn, the taxpayer now has less of the money they earned, money they could have used to help family members or to fund local charities that are closer to the people and therefore closer to the problem. Money that could be applied directly where the rubber hits the road.
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