Wednesday, May 25, 2011 - Republicans and Mediscare

Here’s a two-fer on Medicare.  The key takeaway is that any politician who thinks Medicare can be saved as-is doesn’t understand math.  Unfortunately, a large chuck of America doesn’t understand math, thus the politics is often at odds with reality. - Opinion: Republicans and Mediscare


Underneath Newt Gingrich's rhetoric last week about Paul Ryan's "right-wing social engineering" was a common anxiety about the politics of Medicare: Is this the right moment for entitlement reform? Is Mr. Ryan's proposal really too "radical" after all?

Entitlement reform is the hardest challenge in politics, which is one reason we oppose all new entitlements. But Republicans now tempted to retreat at the first smell of cordite need to understand that they are taking even larger political and policy risks than Mr. Ryan is. The Medicare status quo of even two years ago, much less 20, is irretrievably gone, and anyone pining for its return is merely making President Obama's vision of government-run health care inevitable.

As a matter of simple arithmetic, this problem can't be solved with tax increases, because health costs and thus government spending on health care are rising so much faster than the economy as a whole is growing. The U.S. capacity to pay for Medicare on present trend diminishes every year.

With ObamaCare, Democrats offered their vision for Medicare cost control: A 15-member unelected board with vast powers to set prices for doctors, hospitals and other providers, and to regulate how they should be organized and what government will pay for. The liberal conceit is that their technocratic wizardry will make health care more rational, but this is faith-based government. The liberal fallback is political rationing of care, which is why Mr. Obama made it so difficult for Congress to change that 15-member board's decisions.

Republicans have staunchly opposed this agenda, but until Mr. Ryan's budget they hadn't answered the White House with a competing idea. Mr. Ryan's proposal is the most important free-market reform in years because it expands the policy options for rethinking the entitlement state.

The reality is that Medicare "as we know it" will change because it must. The issue is how it will change, and, leaving aside this or that detail, the only alternati ves are Mr. Ryan's proposal to introduce market competition or Mr. Obama's plan for ever-tightening government controls on prices and care. - Opinion: The Medicare Test for President


Medicare reform has risen to the top of the national agenda and will be the defining issue of next year's elections. The outcome of this debate will greatly shape America's fiscal future, because without substantial Medicare savings the budget cannot be balanced. Period.

The second largest federal program and the fastest growing—with long-term liabilities in excess of $38 trillion—Medicare now threatens to bankrupt the U.S. government in the next few decades. The window is closing fast on our ability to reform it without touching current retirees' benefits.

But which part [of the Ryan plan] is the radical one? Is it the provision that guarantees that today's Medicare benefits and eligibility remain exactly as they are for seniors born before 1956, and for everyone else for the remainder of this decade? Or is it the part that gradually raises the retirement age to 67 from 65 over a period of 12 years starting in 2022? Or is it the section that gives all beneficiaries a lot more coverage options, similar to the array of health-plan choices currently enjoyed by members of Congress?

The answer, we suspect, is none of the above. For the Democrats, the real concern is that requiring health-insurance plans to compete for seniors' business would actually work to hold down costs, proving once again that markets are more efficient than government. In other words, for the party of government, it's about maintaining the government's monopoly.

The politics of spending has changed. Most Americans understand the math and recognize the challenge. They want to get behind bold, principled entitlement reforms that can save the country from a debt collapse while making the safety net stronger and individuals freer. The Ryan plan plus Medicare freedom is such a reform.

Any serious GOP presidential candidate must be absolutely clear on this issue. Kicking the can down the road is no longer an option. A candidate who is timid on entitlement reforms is not qualified to be president.





Saturday, May 21, 2011 - Stephen Colbert's Free Speech Problem - Opinion: Stephen Colbert's Free Speech Problem


Comedy Central funnyman Stephen Colbert, like most of his friends and allies on the left, thinks that last year's Supreme Court ruling in Citizens United v. FEC is, literally, ridiculous. To make his case that the ruling invites "unlimited corporate money" to dominate politics, Mr. Colbert decided to set up a political action committee (PAC) of his own. So far, though, the joke's been on him.

Campaign-finance laws are so complicated that few can navigate them successfully and speak during elections—which is what the First Amendment is supposed to protect. As the Supreme Court noted in Citizens United, federal laws have created "71 distinct entities" that "are subject to different rules for 33 different types of political speech." The FEC has adopted 568 pages of regulations and thousands of pages of explanations and opinions on what the laws mean. "Legalese" doesn't begin to describe this mess.

So what is someone who wants to speak during elections to do? If you're Stephen Colbert, the answer is to instruct high-priced attorneys to plead your case with the FEC: Last Friday, he filed a formal request with the FEC for a "media exemption" that would allow him to publicize his Super PAC on air without creating legal headaches for Viacom.

How's that for a punch line? Rich and successful television personality needs powerful corporate lawyers to convince the FEC to allow him to continue making fun of the Supreme Court. Hilarious.

Of course, there's nothing new about the argument Mr. Colbert's lawyers are making to the FEC. Media companies' exemption from campaign-finance laws has existed for decades. That was part of the Supreme Court's point in Citizens United: Media corporations are allowed to spend lots of money on campaign speech, so why not other corporations?

Whether Mr. Colbert understands that he has made the Supreme Court's point is anyone's guess. But there's nothing funny about what he has had to go through to set up a PAC, because real people who want to speak out during elections face these confounding laws all the time. And as his attempt at humor ironically demonstrates, the laws remain byzantine and often impossible to navigate, even after Citizens United.




Sunday, May 15, 2011 - The Coming Postal Bailout

I think the first step should be to cut delivery days, and not just Saturday, to significantly save on personnel costs.   Snail mail 3 days a week (or less) should be fine in this digital age.  There is no good logic for a taxpayer bailout.  The postal service monopoly is not a good reason for this type of largess and waste. - Opinion: The Coming Postal Bailout


One thing we'll say about federal bailouts—if you pay attention, you can usually see them coming a mile away. It was true of Fannie Mae and General Motors, and it's increasingly clear that the next candidate will be the U.S. Postal Service.

The odds of a multibillion-dollar rescue package went way up this week when Postal Service management reported a $2.2 billion loss for the first quarter, more than 25% higher than last year despite the economic recovery. It now appears that the $15 billion line of credit the feds have offered USPS will be used up by the end of this year, with low odds on ever being paid back.

Postal workers already enjoy a 30% to 40% edge in pay and benefits over comparably skilled private workers, according to the Postal Service's own economic analysis. Bureau of Labor Statistics data indicate the average hourly compensation for postal union members is $41 versus $28 for private industry. Postal workers also contribute far less than private workers and even less than other federal workers to cover health-care costs.  Moving to pay parity—as well as shutting down thousands of outdated post offices and ending Saturday mail delivery—would do a lot to lower USPS losses.

Thanks to the digital revolution, mail can be delivered with the click of a mouse and snail mail will continue to slowly fade away. The obligation of postal management is to negotiate this inevitable transition while protecting taxpayers from another union raid.



Thursday, May 12, 2011 - The Millionaire Retirees Next Door - Opinion: The Millionaire Retirees Next Door


The typical husband and wife who reach age 66 and qualify for Social Security, receiving the average benefit, will begin collecting a combination of cash and health-care entitlement benefits that will total $1 million over their remaining expected lifetime.

The benefactors will be a generation of younger workers who are trying to support themselves and their families while paying taxes to finance the rest of government spending.  We cannot even remotely afford to make good on these promised benefits.

Social Security and Medicare were the result of natural human impulses to create safety-net programs to prevent poverty in old age and to help needy senior citizens with their medical bills. But the programs are flawed.

To fix Social Security, Congress should start by limiting the increase in benefits of future retirees to the rate of inflation. Congress should then gradually raise Social Security's normal retirement age.

To fix Medicare, we must move away from the current system of fee-for-services and low copayments. First and foremost, copayments should be increased significantly. Medicare recipients need to have more skin in the game if they are to become cost-conscious medical consumers.  Competition among providers, not government-administered prices and government boards of experts to determine coverage, is the best way to ensure high quality and reasonably priced health care.

Many of the million-dollar couples believe they rightfully deserve the benefits they have been promised. They have, after all, spent all of their working years paying into Social Security and Medicare. And true enough, the typical 66-year old couple and their employers, on their behalf, have contributed nearly $500,000 in payroll taxes (in today's dollars) toward these benefits during their working careers.

But regardless of how much they have contributed, the hard reality is that the federal government has already spent it. No matter how deserving they are, it is younger generations of workers who have to come up with the money.




Tuesday, May 10, 2011 - Scenes From the New York Education Wars - Opinion: Scenes From the New York Education Wars


Politicians—especially Democratic politicians—generally do what the unions want. The unions, in turn, are very clear about what that is: They want happy members, so that those who run the unions get re-elected, and they want more members, so their power, money and influence grow. The effect of all this? As Albert Shanker, the late, iconic head of the UFT, once pointedly said, "When schoolchildren start paying union dues, that's when I'll start representing the interests of schoolchildren."

Union power is why it's virtually impossible to fire a teacher for non-performance….  The extent of the problem is difficult to overstate.

Of course money, a stable family and strong values typically make it easier to educate a child. But we now know that, keeping those things constant, certain schools can get dramatically different outcomes with the same kids.

Take Texas and California. The two states have very similar demographics, yet Texas outperforms California on all four national tests—across demographic groups—despite spending less money per pupil. The gap amounts to about a year's worth of learning. That's big.

At individual schools, differences can be breathtaking. One charter in New York City has students who are demographically almost identical to those in nearby schools, yet it gets entirely different results.  Eighty-eight percent of Harlem Success students are proficient in reading and 95% are proficient in math. Six nearby schools have an average of 31% and 39% proficiency in those subjects, respectively.

Critics try to discredit these differences. Ravitch argued that schools like Harlem Success aren't the answer because, as a group, charter schools don't outperform traditional public schools. Yet even Ms. Ravitch had to acknowledge that some charter schools get "amazing results." If that's the case, shouldn't we be asking why they get much better results—and focusing on how to replicate them?






Tuesday, May 3, 2011 - Political Privacy Should Be a Civil Right - Opinion: Political Privacy Should Be a Civil Right


Suppose that during the civil rights movement segregationist governors ordered all state contractors to disclose their political donations in an attempt to expose civil rights supporters to harassment and retaliation. The Supreme Court would have had none of it.

In NAACP v. Alabama (1958), the court barred Alabama from forcing the NAACP to disclose its members. Those justices would have struck down a similar effort to force the release of the NAACP's financial supporters. They would have rightly viewed it as an infringement of the constitutional right to free association and free speech.

Today President Obama is ignoring the lessons of the civil rights era he claims to revere. According to a draft executive order leaked last week, Mr. Obama plans to require any company seeking a federal contract to disclose its executives' political contributions over $5,000—not just to candidates, but to any group that might make "independent expenditure" or "electioneering communication" advertisements.

If a small businesswoman wants to sell paper clips to the Defense Department, Mr. Obama would force her to reveal contributions to groups such as Planned Parenthood or the National Rifle Association. These donations are obviously irrelevant to whether she made the most reliable bid at the lowest price. The only purpose of the executive order is to dangle the specter of retaliation (by losing her contracts) and harassment (from political opponents).

This order represents the latest salvo in the Obama administration's war on the First Amendment rights of its political opponents.



Monday, May 2, 2011 - The Debt Ceiling: Myths and Facts - Opinion: The Debt Ceiling: Myths and Facts


Since 1962, the U.S. has reached its debt ceiling 74 times, about once every eight months. Every time, the ceiling has been raised with little notice outside Washington and little, if any, change in the trajectory of government spending. But when opposing parties have held the White House and Congress, the process has always resembled a Kabuki dance. What should be a debate becomes an exercise in scoring political points.

The difference today is that the world is watching. Observers around the globe can expect to hear many old myths:

The Treasury is certain that there will be wrenching dislocations in the capital markets if the ceiling is not raised. In fact, there is no secret Treasury analysis suggesting the world will collapse. Because we've always raised the ceiling, we simply don't know the consequences of not doing so. Four times the ceiling has been reached, remaining in place for months while Congress found consensus, and there was no disruption to the capital markets.

• The Treasury will raid pension funds to avoid exceeding the debt ceiling. When the ceiling is reached but not exceeded, the Treasury has lawful tools to free up borrowing capacity and prolong the time until the ceiling's technical breaching. The Treasury correctly calls the tools "extraordinary" since they are out of the ordinary course of business, but in reality they are neither extreme nor dangerous.

The government will default on Treasury obligations if the ceiling is not raised. It is critical that we not default, but we don't have to. Hitting the ceiling means that we can spend only what we collect in taxes. According to the Congressional Budget Office, tax revenues for 2011 will be around $2.2 trillion, with net interest on the debt costing $225 billion. We can afford that interest and therefore not default.