Category Archives: Regulation

The Cost Of Manna From Mount Olympus

Business, Economy, Healthcare, Labor, Regulation

Nancy can be seen in media photo opportunities smooching a gold-embossed copy of the bankrupting healthcare bill. You can’t expect the little woman to grasp that the regulation and confiscation of private property, what’s left of it, has costs.

Caterpillar, “the world’s largest maker of construction and earth-moving equipment, said Wednesday that the new healthcare legislation in the U.S. will cause the company to take a $100 million tax charge in the current quarter,” reported Fox News.

Caterpillar said the additional expense and higher taxes to come could damage the recovery efforts that began after the company lost 75% of its profit in 2009.

According to the Charleston Gazette, “In the first two days after the law was signed, three major companies – Deere & Co., Caterpillar Inc. and Valero Energy – said they expect to take a total hit of $265 million to account for smaller tax deductions in the future.”

“With more than 3,500 companies now getting the tax break as an incentive to keep providing coverage, others are almost certain to announce similar cost increases in the weeks ahead as they sort out the impact of the change.

Figuring out what it will mean for retirees will take longer, but analysts said as many as 2 million could lose the prescription drug coverage provided by their former employers, leaving them to enroll in Medicare’s program.”

The WSJ reports that,

“AT&T Inc. plans to take a noncash $1 billion charge in the first quarter in anticipating the impact of changes brought by the nation’s health-care overhaul.”

The Dallas-based telecommunications giant is the latest—and largest—company to take a charge to account for the increased costs under the new health-care plan. Specifically, the legislation prevents corporations from deducting tax-free subsidies they receive from the government for providing retirees with prescription-drug benefits.

The company will evaluate prospective changes to its active and retiree health-care benefits, according to a filing with Securities and Exchange Commission on Friday.

The size of AT&T’s charge is notable. The company employs more union workers than all of the U.S. auto makers combined, and has to support a sizeable retiree base

I FULLY EXPECT to hear shortly from our insurance company as soon as it has figured out how to nudge us over onto ObamaCare.

CBOafs Scores Always Way Off

Debt, Democrats, Economy, Government, Healthcare, Political Economy, Regulation

Has any bill passed by Washington ever come in on or under budget? Of course not, but faith runs eternal among the faithful. Cato Institute’s Michael Cannon has said what I did in my last column, “Heeere’s Health-Scare”: “Ultimately, the CBOafs’ forecast is only as good as their premise, which is faulty” (my version). “The Democrats have required the CBO to adopt some really unrealistic assumptions … even if those projections are accurate, politics gets hold of that program. And people start demanding more out of that program” (Cannon’s).

Here are some facts from a research paper authored by FreedomWorks Foundation:

* “The Medicare Program: When Medicare was instituted in 1965, there was no Congressional Budget Office. Instead, in 1967 House Ways and Means analysts estimated the cost of the program. Medicare, they predicted, would cost $12 billion in 1990. (1) They were wrong—by a staggering factor of 10. The actual spending in 1990 was $110 billion. (2) And Medicare costs continue to skyrocket. Through the first 9 months of 2009, Medicare has cost taxpayers $314 billion and that price tag continues to grow by 10%. (3)

In the case of the Medicare Program, the government estimate was off by over 816%. If the CBO estimate for the Senate health care bill is off by the same percentage, then the price of reform may be as high as $7.74 trillion.”

Republicans Just Jealous

Democrats, Elections, Healthcare, Political Economy, Regulation, Republicans

I’m always appalled by individuals, even on this site, who keep faith with the two-party system—and especially, the Republican Party—which, they insist, can be reformed. They’ve been watching the worms wriggle longer than I; but from where I’m perched, it is plain that had Republicans not made such a nuisance of themselves for so long, they’d be standing where BO is standing, heralding the near completion of the work of FDR.

That ObamaCare is awfully similar to (Mitt) RomneyCare is also plain to policy wonks who’re in the know. David Frum is an example. Admonishing the GOP for losing it by ostensibly tacking right—engaging in “overheated talk” and refusing “to deal”—David Frum points out that,

The Obama plan has a broad family resemblance to Mitt Romney’s Massachusetts plan. It builds on ideas developed at the Heritage Foundation in the early 1990s that formed the basis for Republican counter-proposals to Clintoncare in 1993-1994.

The FrumForum has more on the statist points of intersection between Romney- and ObamaCare:

Romneycare … did not create a federal bureaucracy; it created a state bureaucracy. It did not raise taxes; but instead was based on $300 million in free federal money. But in the main outlines, the two programs are identical.

My colleague Vox Day writes the following:

“…it is completely shameless for Republicans to complain that nationalizing health care is an unconstitutional expansion of federal power.”

“It wasn’t all that long ago that Republicans held the White House, the Senate and the House of Representatives. With the exception of an 18-month senatorial interregnum from May 2001 to November 2002, the Republican Party held unilateral control of all three branches of the federal government for six years. And what did it do with it?”

“Republicans wasted their electoral popularity on two unnecessary and unpopular military occupations. They foolishly transformed what had briefly been a bipartisan budget surplus into what were then thought to be nearly unprecedented deficits. They stupidly created a new federal entitlement program that has turned out to cost far more than was originally estimated. And, to top it all off, they arrogantly ignored the clearly expressed wishes of the American public and handed over $700 billion to a collection of corrupt and insolvent bankers.”

Lessons From Big Daddy O & His Right-Hand Ho

Barack Obama, Constitution, Democrats, Economy, Healthcare, IMMIGRATION, Regulation, Republicans, Welfare

HERE’S WHAT I TOOK away from the weekend long Pelosi Palooza and Obama health-care orgy:

With one flick of a pen, a politician is able to render finite resources infinite; that in the hands of millions of new affirmatively appointed state hires, private property—approximately $409.2 billion, confiscated from rightful, productive owners— will be funneled into so-called state-of-the-art health care. Basically turned into gold. That bilking “$69 billion more in penalties for individuals and businesses who don’t meet mandates to buy insurance” will generate plenty and prosperity like nothing else, just as The Founders envisaged.

Most of the revenue would come from higher Medicare taxes on about 1 million individuals earning more than $200,000 and about 4 million couples filing jointly who make more than $250,000

What assorted idiots and moochers-in-the making took away from this legislative theft is that it is constitutional to single out a distinct segment of society—the productive—for punishment. The only consideration that counts is, “How many Americans want it?” Gimme, gimme, gimme is the new national anthem.

“The man with the Reverse Midas Touch,” Big Daddy O, and his right hand Ho, have taught the nation so many lesson, not least that attainder laws are now constitutional (Article 1, Sections 9 and 10), and that “our high-minded messiah has the authority to punish an (innocent) group of people—more or less 5 million Americans who’ll shoulder the hulking H.R.4872 Reconciliation Act of 2010—“without the benefit of due process.”

Scrap that; no moocher knows what attainder laws are.

And if you don’t yet know that the Republicans are your fair-weather friends who’ll sign their own mammoth bills when they occupy the same seats in the game of political musical chairs they play exclusively with the Dems—then listen to stupid Michael Steel condemn freedom-loving demonstrators for their righteous ire and promise statists like Geraldo Rivera and Sheppard Smith of FoxNews that a welcoming immigration bill is next.

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Here’s a good precis of H.R.4872 Reconciliation Act of 2010, courtesy of the WSJ:

The $940 billion health-care overhaul will take nearly a decade to roll out in full. A look at the key parts of the bill and when they go into effect.
2010

Coverage

* Subsidies begin for small businesses to provide coverage to employees.
* Insurance companies barred from denying coverage to children with pre-existing illness.
* Children permitted to stay on their parents’ insurance policies until their 26th birthday.

2011

Coverage

* Set up long-term care program under which people pay premiums into system for at least five years and become eligible for support payments if they need assistance in daily living.

Taxes and fees

* Drug makers face annual fee of $2.5 billion (rises in subsequent years).

2013

Taxes and fees

* New Medicare taxes on individuals earning more than $200,000 a year and couples filing jointly earning more than $250,000 a year.
* Tax on wages rises to 2.35% from 1.45%.
* New 3.8% tax on unearned income such as dividends and interest.
* Excise tax of 2.3% imposed on sale of medical devices.

Cost control

* Medicare pilot program begins to test bundled payments for care, in a bid to pay for quality rather than quantity of services.

2014

Coverage

* Create exchanges where people without employer coverage, as well as small businesses, can shop for health coverage. Insurance companies barred from denying coverage to anyone with pre-existing illness.
* Requirement begins for most people to have health insurance. Subsidies begin for lower and middle-income people. People at 133% of federal poverty level pay maximum of 3% of income for coverage. People at 400% of poverty level pay up to 9.5% of income. (Poverty level currently is about $22,000 for a family of four.)
* Medicaid, the federal-state program for the poor, expands to all Americans with income up to 133% of federal poverty level.
* Subsidies for small businesses to provide coverage increase. Businesses with 10 or fewer employees and average annual wages of less than $25,000 receive tax credit of up to 50% of employer’s contribution. Tax credits phase out for larger businesses.

Taxes and fees

* Employers with more than 50 employees that don’t provide affordable coverage must pay a fine if employees receive tax credits to buy insurance. Fine is up to $3,000 per employee, excluding first 30 employees.
* Insurance industry must pay annual fee of $8 billion (rises in subsequent years).

Cost control

* Independent Medicare board must begin to submit recommendations to curb Medicare spending, if costs are rising faster than inflation.

2016

Taxes and fees

* Penalty for those who don’t carry coverage rises to 2.5% of taxable income or $695, whichever is greater.

2017

Coverage

* Businesses with more than 100 employees can buy coverage on insurance exchanges, if state permits it.

2018

Taxes and fees

* Excise tax of 40% imposed on health plans valued at more than $10,200 for individual coverage and $27,500 for family coverage.

—Sources: House bill; Kaiser Family Foundation

Corrections & Amplifications
The House health legislation imposes a 2.3% excise tax on the sale of medical devices. An earlier version of this article incorrectly said the tax was 2.9%, the figure before a last-minute change to the legislation.