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.

We’ve heard a lot about change over the past three years; first during a two + year presidential campaign and now 9 months into the presidency of the Barak Obama.  On the domestic front, the ideas on the table from the left:

• Cap and Trade
• Massive Health Care Reform
• Repeal of the Bush tax cuts
• T.A.R.P.

Just to name a few…

Of the above, only T.A.R.P – an $780 billion economic stimulus package – has been enacted.  This legislation was so massive in scope and so out of control that even today legislators are “surprised” by its content.  Why?  Because by their own admission they did not, and could not, have read the bill before the House and Senate leadership brought it to the floor for a vote.  The President, his Treasury Secretary, and congressional leadership had everyone whipped into a panicked frenzy with claims that if this legislation was not passed in days the entire world economy would collapse. 

So, it passed, and the deficit ballooned, and the money is rolling out and the results are pouring in.  Month after month, the unemployment rate continues to rise – e.g. reaching 9.8% nationally just yesterday (17% if you include the underemployed and those who have just stopped looking for work).  Month after month, businesses continue to fail – e.g. GM announces the closing of Saturn this week. 

Saturday, during the Defending The American Dream Summit sponsored by American’s For Prosperity, CNBC’s Larry Kudlow said. “Look, if it (T.A.R.P) was going to work, it would have worked by now.”  In Kudlow’s opinion, T.A.R.P. is already a failed, massive, government intervention into the free market and our society. 

Regardless if you agree with Kudlow’s assessment or not, one thing is true:  Irrespective of the success or failure of T.A.R.P. to stimulate our economy, our children and grand-children are going to have to foot the bill.  To me, that is simply irresponsible on our part to allow that to happen.

According to Senator Demint (R – SC):  “This year alone, the Senate has passed a $787 billion stimulus, a $350 billion Wall Street bailout extension, a $400 billion earmark-infested omnibus spending bill, a $109 billion loan to the International Monetary Fund, $6 billion to federalize charities and pay volunteers, $3 billion for cash for clunkers, $400 million in corporate welfare to help tourism corporations advertise overseas, and a $4 billion bailout of the Postal Service.” [1]

Given the apparent dismal, albeit short, track record of this administration, would it not be helpful if we were able to test their ideas before implementing them?  After all, don’t we test drugs before we give them to humans to cure them and don’t we test cars before we give them to drivers to drive them?  So, before we try to fix or drive our economy/health care/environment, would it not be a good idea to test these ideas before our legislators vote on concepts (not content) and implement change blindly?

Fortunately, the ideas being proposed by the Democrats in charge in Washington D.C. have in fact been tried and we have the ability to examine the results.  For example, California has implemented Cap in Trade and the Federal legislation passed by the U.S. House and under consideration by the U.S. Senate.  So, how’s it going in California – and elsewhere – where Cap and Trade has been implemented?

According to the Legal Planet, a blog run by UCLA’s Berkeley Law School (hardly a conservative think-tank), Cap and Trade laws have a dismal track record where ever they have been implemented.  In his article, “Cap and trade: it’s never worked, so let’s try it on a massive scale”, the author Ethan Elkind points out that the failure is the result of the lack of ability for government(s) to effectively legislate and administer environmental change with the resulting outcome being only massive tax increases and manipulation of so-called Cap and Trade markets [2].  Elkind’s position is supported by a law suit recently filed by several environmental advocacy groups against the California Air Resources Board (CARB) – the agency charged with implementing California’s Can and Trade Law – claiming that the government is failing to meet the objectives of the legislation [3].

So, if Cap and Trade laws have failed because governments, for a number of reasons, have been unable to implement them in a way to achieve the desired outcomes, then why are we moving forward to implementing them on a national scale with one economic analysis after another warning of massive job loss to India and China along with massive tax increases and massive negative economic impact on both businesses and individuals.

This is not the kind of change we need.

Footnotes:

[1] Washington Politicians’ Most Titanic Lie The Washington Examiner, Oct. 1, 2009 by Sen. Jim DeMint

[2] Cap and trade: it’s never worked, so let’s try it on a massive scale; Legal Planet, the Environmental Legal and Policy Blog, by Ethan Elkind

[3] Lawsuit alleges California’s cap-and-trade plan fails to minimize GHG emissions; Global Climate Law Blog by Lucy Wheatley Sept. 17, 2009

Today, the Treasury Dept., in response to a Freedom of Information Act (FOIA) request by the Competitive enterprise Institute released demonstrates that the Obama administration calculated the potential cost of Cap and Trade to be over $1700 per a family per a year. [3][4]

I guess we should not be surprised that a mere $1,660 discrepancy in tax impact to the American family would be overlooked by a democratic party that continues to allow the House Ways and Means Committee – you know, the committee that writes the tax code – to be chaired by Charlie Rangel (D-NY).  Yesterday, the National Legal and Policy Center filed a complaint with the House Committee Standards of Official Conduct to expand its ongoing investigation in Rangel’s under-reporting his income and capital gains by some $2 million dollars. [5][6]

Yet, we are asked to blindly believe Pres. Obama and the Democratic House and Senate leadership when they tell us that the Health Care Reform Act will be “deficit neutral”; that only the Federal Government can provide proper oversight of the health insurance industry; that only the Federal Government can provide meaningful competition to health insurance companies; that only the Federal Government can find waste, fraud and abuse in the system.  So far, the confidence meter in the ability of this administration to get anything right is pegged at zero. 

Footnotes:

[1]  Joint Program on the Science and Policy of Global Change, Massachusetts Institute of Technology, letter to Rep. John Boehner (R-OH) April 1, 2009 

[2] Cap and Trade a ‘Declaration of War’ say Republicans by Josiah Ryan, CNSNews.com Staff Writer May 01, 2009

[3] Global Warming Tax Costs Revealed in FOIA Treasury Dept Documents, CEI Analysis Confirms Massive Tax on Energy by Christine Hall, Sept. 17, 2009  

[4] Dept. of Treasury reply to FOIA request from Competitive Enterprise Institute

[5] NLPC Alleges Charles Rangel Hid More Income in Complaint to House Ethics Committee by Ken Boehm, Sept. 17, 2009 

[6] Complaint by National Legal and Policy Center filed with the Committee of Standards and Official Conduct Sept. 16, 2009