[..] These are the sort of questions that Paul needs to be asked now, because the issue is not "area politician believes kooky but harmless thing." It's "area politician espouses extremist philosophy on issue he will be voting on constantly."I'll take these one by one:
Can the federal government set the private sector's minimum wage?Depending on your interpretation of the commerce clause, it may be able to. But it certainly should never do so.
Can it tell private businesses not to hire illegal immigrants?Probably. But due to immigration laws that have been far too restrictive for far too long, we should offer most illegals amnesty at this point. However Rand Paul does not support an amnesty (yet?), so I'm speaking for myself here.
Can it tell oil companies what safety systems to build into an offshore drilling platform?Assuming the offshore platform is within the country's territorial waters, yes.
Can it tell toy companies to test for lead?I don't think it should, and I especially don't think it should be able to require them to do so expensively as per the awful bill Mattel has lobbied for that is going to put an extraordinary number of small toy companies out of business.
Can it tell liquor stores not to sell to minors?I don't think the federal government has any jurisdiction here; this is a state and local matter.
A lot of the arguments over the excise tax are getting caught in a bad, and even slightly dishonest, sales job from its supporters. Sen. John Kerry's blog post defending the policy, for instance, isn't playing it straight. Saying it won't tax employees is a distinction without a difference: It will tax insurers, which will add the tax into the cost of their plans, and employers will either choose different plans or pass the cost on to employees. Similarly, saying it will affect only "3% of premiums in 2013" is designed to obscure the fact that it will hit a lot more policies in 2020. But this is one of those cases when bad arguments mask a good policy, rather than the other way around.
Health benefits should be taxed. There's no reason the system should make a dollar in employer-provided health insurance worth more than a dollar in wages. That's a straight incentive for employers to spend more and more on health insurance, which is contrary to the needs of the country right now. The excise tax begins to expose a small portion of employer-provided health-care costs to taxes. Meanwhile, someone who doesn't get employer-provided health care and buys their own insurance is getting taxed on every dollar they spend on health care.
No one defends this system in principle. They only defend it in practice. The excise tax has its opponents, but none of them say we should make food, or broadband Internet, tax free as long as it is provided by employers -- even though those things are also important! You don't even hear them demanding that the bill make non-employer-provided health care tax free. No one, in other words, is interested in expanding this system to other sectors, or even to the rest of the health-care sector. But given that this subsidy is worth about $250 billion a year, it's got a lot of defenders.
As a final note, the excise tax is a substitute for simply capping the employer tax exclusion. The swap came about because the politics of the excise tax are superficially better: Rather than taxing "workers" or "businesses," you're taxing "insurers." But insurers pass the cost along, of course. And the excise tax is more regressive than capping the exclusion. If you cap the exclusion, people get taxed at their normal marginal tax rate, which is virtually nothing for low-income workers. The excise tax, by contrast, is a flat surtax of 40 percent, no matter what your income. in this case, making the tax sound more populist also made it substantially more regressive.
This is about the most effective presentation of data I've ever seen. I'm not even going to tell you the topic. It's just really, really good data presentation.
In 2009, the average employer-sponsored health-care plan cost a bit less than $13,500. But virtually no one cut a check for $13,500. Employers generally pay more than 70 percent of their employees' health-care costs. To employees, that seems like a good deal, particularly given how fast costs are growing. A "benefit," as it's called.And adds on his blog:
But health-care coverage is not a benefit. It's a wage deduction. When premium costs go up, wages go down. When premium costs go down, wages go up. Yet workers don't know that. In fact, the information is hidden from them. That means that cost control seems like all pain and no gain, which makes it virtually impossible for Congress to pass. It's like asking someone to diet when they don't realize it will help them lose weight.
Cost control is not, in fact, all pain and no gain. It's some pain in return for a fat raise. A 2006 study, for instance, by Harvard's Katherine Baicker and Amitabh Chandra used malpractice payments to estimate the effect of premium increases on wages. They found that a 10 percent increase in health-care premiums "results in an offsetting decrease in wages of 2.3 percent" and an increase in unemployment of 1.2 percentage points. Compensation is basically a set sum for employers, and they don't seem to care much whether it goes into wages or into health-care costs.
Workers saw this in the 1990s. This was the era of the managed-care revolution, which most remember as a horrifying failure. Famously, audiences applauded when Helen Hunt broke out into a profanity-laden rant against HMOs in the movie "As Good as It Gets." The popular backlash was so intense that by the turn of the century the managed-care experiment was virtually over. The problem with this historic failure? The data showed the experiment to be a tremendous success.
From 1989 to 1995, median wages actually fell a bit. Then, managed care kicked in. Annual growth in health-care costs fell from more than 10 percent in the early 1990s to less than 5 percent in the late '90s. Meanwhile, wages shot through the roof, rising more than 11 percent from 1995 to 2000. Then we ended the managed-care experiment, and health-care costs resumed their normal speed of growth. Predictably, wages slumped back down from 2000 to 2006. "By every observable indicator," says Harvard's David Cutler, "managed care was a huge success. It cut spending, cut the growth of spending and didn't seem to kill anyone. And yet everyone hated it."
Of course they hated it. They didn't see its benefits, only its costs. They knew they were suddenly trapped in networks and being hassled by their insurers. As for their raises, those were nice, but why are you changing the subject?
When Americans rejected managed care, in other words, they didn't know they were ending wage increases, too. But since 1990, wages have tracked changes in premiums more closely than they've tracked the growth of GDP. Maybe if more workers knew that, they would be more interested in efforts to control health-care costs.
The column ends by summarizing some ideas that have already been rejected (Ron Wyden's Free Choice Act, Chuck Grassley's proposal to add health-care costs to W-2 forms), and proposes one idea that should be added to the bill: "attach health-care costs to each paycheck. If employers listed the cost of health care alongside the bite taken by payroll taxes, it would be much clearer to workers that health-care coverage was coming out of their wages, not out of their employer's largess."Hiding health insurance from wages and calling it a "benefit" serves no purpose other than to increase the power of health providers, insurance companies, unions, and to some extent employers.
One of the lessons of this health-care reform process has been that cost control is extremely hard, in part because few of the system's participants really see an upside. Neither workers nor Medicare beneficiaries nor Medicaid recipients feel the full cost of their insurance coverage. Clarifying the connection between the cost of health care and, say, wages, would do a lot to make clear that cost control isn't just sacrifice. It's a trade, and you get something in return. That, in turn, would make cost control an easier lift next time. And there will be a next time, and health-care reform should be designed to make it easier.
As long as we help pay for each other through Medicare, Medicaid, and assorted other subsidies, the aggregate health of the nation is a concern for taxpayers, not just individuals. But this isn't just about government. As long as most of us pay health-care premiums based on the average health needs of other people (and that's true for everyone receiving employer-based health coverage, and any other type of risk-pooled coverage), the health of others will be a financial concern for us.I look at this and see yet another reason we should transition to a real individual health market, with HSAs and catastrophic-only insurance, so that people are responsible for their own health. Just like car insurance.
As of today, U.S. Senator Robert C. Byrd (D-WV) becomes the longest-serving member in the history of the U.S. Senate.Yeah, man.
To celebrate this milestone, we offer the following video, which pretty well summarizes Byrd’s extremely long tenure in the Senate. If you ever wanted to know what corruption looks like, here’s your chance.
Reston, Va.: After the Stupak [anti-abortion] amendment victory, can we expect the pro-life community to attach amendments to the Defense budget saying that no public funds can be used to kill people?
Ezra Klein: Oh, definitely. I hear they're organizing on that right now.
ATLANTA—A Zogby poll of 1,542 American grandparents published Monday found that grandsons were described as "very" to "extremely" talented by 1,542 of the respondents. "Participants in the poll were emphatic in their descriptions of the talents of grandsons in fields as diverse as advertising and sales, choral performance, baseball, talking, crawling, making their beds, video games, and instructing their elders on proper cell-phone use," pollster Tom Waterton said. "In addition, an overwhelming percentage of grandchildren were described as outgoing, sharp, and looking just like Uncle Andy, you remember Uncle Andy, he was always up to something, too bad he passed so young, he would have loved the grandchild in question." Sources at Zogby admitted that the survey was incomplete, as several hundred pollsters are still unable to get their assigned grandparents off the phone.
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