Trump Vows To Make Healthcare An Issue After McConnell Nixes Repeal Effort

President Trump surprised many people with his pivot to health care last week. Now it seems that Senate Republicans were just as surprised as the rest of the country. Now Majority Leader Mitch McConnell is saying definitively that the GOP is not ready to move ahead with another attempt to repeal and replace Obamacare.

Speaking with reporters on Tuesday, McConnell said, “We had a good conversation yesterday afternoon and I pointed out to him [Trump] the Senate Republicans’ view on dealing with comprehensive health care reform with a Democratic House of Representatives.”

“I was fine with Sen. Alexander and Sen. Grassley working on prescription drug pricing and other issues that are not a comprehensive effort to revisit the issue that we had the opportunity to address in the last Congress and were unable to do so,” McConnell said. “I made clear to him that we were not going to be doing that in the Senate.”

Health care reemerged as a campaign issue last week when the Trump Administration advocated that judges in a lawsuit should strike down the entire law. On April 1, President Trump announced that Republicans were “developing a really great HealthCare Plan with far lower premiums (cost) & deductibles than ObamaCare.”

https://twitter.com/realDonaldTrump/status/1112900816371900418

https://twitter.com/realDonaldTrump/status/1112903454941474817

https://twitter.com/realDonaldTrump/status/1112906931868520452

After the conversation with McConnell, the president tweeted this morning that he never intended to hold a healthcare vote before the election. Mr. Trump reiterated his belief that healthcare, an issue on which the Democrats usually hold an advantage, would be a “great issue” for Republicans.

https://twitter.com/realDonaldTrump/status/1113432687757484032

https://twitter.com/realDonaldTrump/status/1113435291472277509

The Republican reversal leads to several questions. The most obvious is whether there was any communication between Republican leaders in the healthcare pivot or whether Mr. Trump merely tweeted an off-the-cuff remark that shifted the entire strategic planning of the Republican 2020 effort. It seems likely that the GOP reacted to an unplanned announcement by Mr. Trump.

A second question is how the GOP can co-opt the issue of health care from the Democrats. As I noted last week, the previous Republican effort at repeal succeeded in shifting public opinion from favoring repeal of the Affordable Care Act to an all-time high level of approval of the law. Unless Republicans can coordinate a strong message that calms voter fears about losing coverage, the health care issue is more likely to be beneficial to Democrats.

Third, there is apparently no change in the Trump Administration’s position that courts should strike down the ACA. Are Republicans planning for the possibility that this ruling could come in the runup to the election? Do they have a plan to take advantage of the opportunity to pass a market-based healthcare reform?

Regardless of the questions and current lack of organization and planning, President Trump apparently intends to continue hammering away on healthcare. At the National Republican Congressional Committee’s annual spring dinner last night, Trump said, “We blew it the last time, man I was fed a bill of goods,” but added “we can’t run away” from healthcare or “we’ll lose.”

The back-and-forth on healthcare is reminiscent of the Keystone Kops with positions being reversed at a head-spinning rate. With Democrats in control of the House, there was never any chance that Obamacare could be repealed before the election, but President Trump has handed Nancy Pelosi an issue with which to hammer Republican candidates next year.

Originally published on The Resurgent

Even The Hospital Doesn't Know What Your Surgery Will Cost

Last week I bought a car. I don’t know how much the car cost yet. I gave the dealership a down payment and they will send me bills for the balance. I’ll get separate bills for the engine, the body, the tires, the radio and the other separate components and send a monthly payment to each supplier until I pay it off. Until I pay all the bills, I won’t know if my new car costs $10,000 or $100,000 or somewhere in between.

If you are thinking, “That’s not how this works! That’s not how any of this works,” then you’re right. Anyone who bought a car under these terms would be an idiot. That’s not how the market for new cars works at all, but this is the way we buy health care without thinking twice.

We go to the doctor and pay our copayment or deductible, but we know that this is not the entire cost of our care. The insurance companies exclude some services from the copayment and even after paying the deductible we are responsible for a percentage of our healthcare expenses until we reach an out-of-pocket maximum. When we leave the doctor’s office or hospital, we have no idea how much money we have just spent.

It isn’t that health care providers are keeping the cost of care a secret. It turns out that they don’t know how much their services cost either. The Wall Street Journal recently cited the example of Gunderson Health System in Lacrosse, Wisc. The hospital administrators had increased the price of knee surgery by about three percent per year for a decade until the list price approached $50,000.

As with most car dealerships, only suckers pay the list price. The sticker price is a starting point for negotiations. As the car lot, the buyer negotiates directly with the seller, but in the case of health care, the haggling is done between the provider and insurance companies and Medicare.

When the insurers complained about the cost of Gunderson’s knee surgeries, the hospital conducted an 18-month review of their pricing. The review included an efficiency expert, cost of materials and a tally of the time that nurses, doctors and physical therapists spent with the patient. In the end, it turned out that Gunderson’s knee surgeries cost $10,550 at most, about one-fifth of the list price.  

A big part of the problem with American health care is lack of price transparency. If hospitals don’t know how much a procedure costs, how can patients? When you don’t know what something costs, it is impossible to compare prices and shop around. When you only see the insurance copay before the procedure, there is no incentive to compare prices.

Knee surgery, the most common procedure in the US outside of childbirth, would be a good case for price shopping if the data were available to consumers. High-priced hospitals spent about twice what lower-priced hospitals spent on the procedure, but there was little difference in the quality of the work.

“It’s a standard procedure” that doesn’t vary much between hospitals, said Professor Robert Kaplan of the Harvard Business School. “Carve out the old knee and put in a new joint.”

Gunderson went further than just finding out what its costs were. It took steps to cut them. The hospital took steps to improve efficiency while improving the quality of its care. A generic brand of bone cement was substituted for the higher-cost brand used previously. Now physical therapy is started much more quickly. This reduces pain for the patients and speeds up the recovery time, making hospital stays shorter. These and other changes lowered costs by about 18 percent to $8,700.

The American health care system is one of the best in the world when it comes to quality. The biggest problem with American health care is its high costs. Lack of transparency in pricing means that there is little competition based on price. Inefficiencies at the local level boost costs for some hospitals, but the lack of transparency prevents patients from seeking out lower cost alternatives.

The current pricing system is not working well. Even after the implementation of the Affordable Care Act, health care costs have continued to rise. Reuters reported that health care costs are projected to increase by more than five percent in 2018 while CNBC pointed out that annual health care costs already exceed $10,000 per person. Health care spending is approaching 20 percent of GDP and will go higher as Baby Boomers continue to age.

In the end, it is the consumers who are hurt most by the lack of competition and transparency. When the bills that insurance doesn’t cover start rolling in, the patient may contract a serious case of post-op sticker shock. Even those who don’t have surgery pay for the inefficiencies in the system through constantly rising insurance premiums.

Originally published on The Resurgent

Trump and Republicans May Split On Obamacare Replacement

The honeymoon between Donald Trump and congressional Republicans may be ending. There is widespread disagreement between the president-elect and members of his party on Capitol Hill. At issue is not the viewpoint that Obamacare must go, but how and when to replace it.

The chasm between the two camps is underscored by a weekend interview in which Donald Trump promised that his version of a replacement plan will contain universal health coverage. “We’re going to have insurance for everybody,” Trump told the Washington Post. “There was a philosophy in some circles that if you can’t pay for it, you don’t get it. That’s not going to happen with us.”

Trump’s promise to expand the healthcare entitlement to cover everyone echoes promises that he made during the campaign to provide coverage for more people. It also puts him at odds with Republicans who oppose the Obamacare mandate and prefer to shrink the government’s role in health insurance. The traditional Republican view is that the government should remove barriers to lowering the cost of health insurance. Economic law dictates that if people want a product, more people will buy it as the price goes down.

Rep. Tom Price (R-Ga.), who Trump named as his nominee to head the Department of Health and Human Services, is one of those who have proposed alternative plans in the past. Price’s plan includes tax credits for those who purchase health insurance, a ban on penalties and denials for pre-existing conditions provided the consumer has had continuous insurance coverage, limiting health care deductions for businesses, allowing insurance policies to be sold across state lines and allowing the sale of basic, cheaper plans that would appeal to younger, healthy consumers. Uninsured people with pre-existing conditions could be covered by assigned risk pools.

A second popular Republican approach is the bill introduced by Rep. Phil Roe (R-Tenn.) and the Republican Study Committee. This bill shares many aspects of Price’s proposal and has broad Republican support. The bill also includes provisions to make the pricing of healthcare more transparent to consumers.

Because of the close balance of power in the Senate, any hardline Republican bill will be dead on arrival. There are enough Senate Democrats to filibuster a replacement bill that does not have at least a minimum of Democrat support.

“I’m willing to listen to Democrats ideas to this bill, to amendments to this bill as opposed to what they did which was to completely shut the other side out,” Rep. Roe told the Daily Caller.

One idea that may bring Democrats on board is Sen. Bill Cassidy’s proposal to allow states to choose to keep Obamacare exchanges. Cassidy’s proposal embodies the conservative ideal that states should be free to choose what works best for their citizens rather than forcing a top-down, one-size-fits-all, federal dictate.

“The bill that I have put forward would actually give states a choice: if they did nothing they would go into the alternative, that we call the state alternative, but a state could actually choose to stay in Obamacare,” Cassidy told CBS News. “Republicans have always said if you like your insurance, you can keep it -- and we mean it, so if the folks in California or New York really love Obamacare they can keep Obamacare.”

The Republican proposals to replace Obamacare all have one thing in common. The authors of the proposals, Tom Price, Phil Roe and Bill Cassidy, are all medical doctors who have had careers in private practice. They understand the real world implications of the laws that they are writing for both doctors and patients.

Some aspects of Price’s old plan may not survive his job change. “My guess is that Tom Price as head of HHS will approach things vastly different than Tom Price who was introducing legislation that was never going to become law, okay?” commented Sen. Bob Corker (R-Tenn.) in Politico.

Nevertheless, many Republicans trust Price’s ability to help shape the debate and influence the new president. “Dr. Price was a leader of our Better Way agenda on health care and helped shape ... much of what the House proposal is,” said House Ways and Means Committee Chairman Kevin Brady (R-Tex.). “So I feel like we’re heading in the same direction.”

The road to an Obamacare replacement may be a long one. Politico reports that Rep. Price’s confirmation as Secretary of Health and Human Services will not take place until sometime in February.  Much of the grunt work of crafting a replacement bill can’t take place until Price has stepped into his new role in the Trump Administration. 

Originally published on The Resurgent

The idiotic way we buy healthcare

Seven years ago, President Obama and the Democrats said that they had solved the healthcare crisis. Their Affordable Care Act promised universal coverage for the uninsured and lower prices for the rest of us. Their calculations were wrong and Obamacare ended up making America’s healthcare mess even worse.

While there are many problems with the current healthcare system, one seems to stand out among all the rest for its sheer stupidity. The most idiotic thing about the American healthcare system is that when we buy healthcare, we have no idea how much we are buying it for. This problem seems to have been worsened by Obamacare.

Aside from suffering from steadily rising premiums and higher deductibles since the onset of Obamacare, we are being blindsided by unexpected medical bills that come out of nowhere. When we go to the doctor for an office visit or check into a hospital, we have no idea what it will cost.

Medical care is the only commodity that we buy in such an insane fashion. Can you imagine going to your local car dealership and signing a contract to buy a new car without knowing how much it would cost or even what kind of car you’d be driving home? Not many people would be willing to take such a deal, but we do it every time we step into a doctor’s office.

When we go to the doctor, all most of us know for sure is that we’ll be paying the insurance copayment. My copay has gone from $20 for an office visit a few years ago to $35 today. In addition to higher copays, my PPO also makes me pay a share of many tests and procedures through deductibles and coinsurance. With my HMO from years past, I only had to pay the copayment for most services.

Not once, but twice in the past two years I have had large bills come from out of the blue for tests that doctors had ordered for members of my family that were denied by the insurance company. In both cases, I took the bills to the doctor to ask them to appeal the insurance company’s denial. In both cases, the doctors said that lab was only supposed to bill the insurance company, not their patients, for the tests in question.

This seems to represent something of a scam. The doctors order tests that aren’t universally recognized and approved and then the lab bills the insurance company. If the insurance company doesn’t pay for the questionable test, apparently the lab takes the loss rather than billing the patient. Occasionally, a bill for thousands of dollars for a test for a routine health condition slips through the cracks to the patient, but normally the patients never know how much money the insurance company is paying out on their behalf unless they actually look at those Explanation of Benefits forms that normally go straight from the mail to the trash.

A third of medical tests are considered unnecessary according to a paper in the Journal of American Medicine. This mountain of needless testing costs hundreds of millions of dollars. When the insurance companies are billed for these expensive tests, it translates in to higher premiums.

Even when you try to find out how much your healthcare costs, you might still be surprised. When I went in for a colonoscopy two years ago, I paid the doctor and the hospital in advance. I thought that this would eliminate any problems with the billing.

Since I had already paid for the procedure, it came as quite a surprise when I started getting more bills in the mail, again for more than a thousand dollars, a few weeks later. After spending countless hours on the phone getting the runaround between the insurance company, the hospital and the doctor’s office, I traced the problem to a diagnostic code that had been entered incorrectly. The confusion was over whether the scan was medically necessary or preventive care. Under the ACA, preventive care was covered at a higher rate than a procedure that is needed for an actual existing health reason. Go figure that one out.

Even after finding the problem, it took many more hours on the phone to get it corrected. Total time to resolve the issue was about six months. Many people probably would have simply paid these bills when they received them and couldn’t get them dismissed immediately. Alternatively, many others might have ignored the bills and suffered credit damage as a result. I have to wonder how many people are paying outlandish medical bills that they don’t really owe.

Some uncertainty in medicine is legitimate. It is possible to go into a hospital and have real, unexpected complications that make your stay more expensive. However, there shouldn’t be any fear of going in for a routine doctor visit and coming out with thousands of dollars for routine and unnecessary tests, even when you have insurance. The price of a colonoscopy shouldn’t double because you have a medical problem that requires you to get a colonoscopy.

There are many problems with the health care system and Obamacare, but one of the biggest is the lack of transparency in pricing. Patients should have an idea how much they will owe before they commit to a procedure. Too often now, cost is never considered by the doctor and never known by the patient. At least not until the bills start showing up in the mail.

To take it a step further, patients should be able to compare the rates of various doctors and hospitals. With any other commodity, if you want the best you’d better be prepared to pay a little extra. If you desperately need a procedure, but don’t have much money, you might prefer a safe, but less prestigious hospital or clinic. Before you pooh-pooh this idea, consider that medical tourism is already gaining in popularity as people travel to countries with better doctors, advanced treatments that may not be approved at home or less expensive care.

In short, health care reform needs to reintroduce real competition and markets. People can’t make intelligent decisions if they have no information about what a transaction will cost them. The illusion that their copayment is their only cost for care is leading to wasteful practices, large bills and inefficient medical care. Give patients the information to make good healthcare choices and the freedom to choose.

Obamacare ruling is election wild card

The Affordable Care Act finally gets its day at the Supreme Court this week. Although it may be several weeks before the Court publishes its ruling on the case, it is a sure thing that, whatever the ruling is it has the potential to have an explosive impact on the elections in November.

There are four likely outcomes for the Supreme Court ruling. First, the Court could rule that challengers to the law have no standing to sue since they have not had to pay the fine for not purchasing health insurance. This would delay a decision on the law for two to three years until after it takes full effect. Most observers consider this unlikely. Next, the Court could uphold the law in its entirety. Conversely, the Court could strike down the entire law. Finally, the Court could throw out part of the law, the individual mandate for example, and allow the remainder to stand.

The ruling will have an uncertain effect on the election. Hints at how the voters will view the ruling can be gleaned from two recent polls. According to Rasmussen, likely voters have never favored the health law. Immediately after passage in 2010, repeal was favored by a margin of 55-42 percent. In the most recent poll, taken on March 17-18, repeal was favored by 56-39 percent. Within those numbers are 46 percent who strongly favor repeal versus only 29 percent who strongly oppose it.

In a USA Today/Gallup poll of adults, Americans were split 45-44 percent on the question of whether passage of the ACA was good or bad, but the same poll shows that 38 percent believe that the law will make things worse for their family. Only 24 percent believe it will make things better. A strong majority of 72 percent believe that the individual mandate is unconstitutional. Only 20 percent believe that the requirement to purchase health insurance or pay a fine is legal under the Constitution.

Since Americans overwhelmingly oppose the ACA, Republicans have the most to gain from the Supreme Court’s decision. A victory for the administration or a muddled outcome, such as a decline to rule on the law or striking it down only in part, seems likely to aid Republicans because of the large number of Americans who strongly oppose the law. If the Court leaves the law largely intact, Republican candidates who promise to repeal the law if elected will tap into that voter anger. Anger at Democratic spending and the expansion of government fueled a landslide Republican victory in 2010 and if the Supreme Court upholds the ACA it could fuel a similar result this November.

Democrats have little to gain electorally from a Supreme Court victory. If the law is upheld, it may keep President Obama’s legacy from being tarnished as it would have been if it was found unconstitutional, but Obamacare is still a fundamentally unpopular law that was enacted without the support of the people. A reform that was supposed to have kept health insurance costs down has instead contributed to their increase at twice the normal rate of growth according to Kaiser and the cost of the law, which was touted as a plan that would reduce the deficit, is now projected cost almost double the initial estimates. If the law goes into effect, people may well find that there is even less to like about it than was previously thought.

Rep. Tom Price (R-Ga.), who is also an orthopedic surgeon, told Newsmax.com, “Both fiscally and for the sake of our health care system, Americans cannot afford the president’s healthcare law. The longer the president’s healthcare law remains on the books, the greater the threat it poses to our nation’s healthcare and our fiscal well-being.” He continued, “The CBO’s revised cost estimate indicates that this massive government intrusion into America’s health care system will be far more costly than was originally claimed. The law’s true cost to American taxpayers is part of a series of promises President Obama and Democrats in Congress made that will be broken.”

On the other hand, if the Supreme Court strikes down the law, it won’t necessarily help Republicans or hurt Democrats. A major source of contention will have been removed from the political landscape and voters who would have voted for Republicans because they opposed the ACA may move to other issues where they are more moderate. Similarly, the voters who favor the law, almost all of whom are probably Democratic voters anyway, are unlikely to be influenced by an unfavorable Supreme Court decision.

The biggest casualty of a decision sustaining Obamacare and the individual mandate would likely be the American people’s faith in government. Public opinion has been against the bill from the very beginning. Revelations of backroom deals like the “Cornhusker Compromise” and the “Louisiana Purchase” further hurt the law’s image even before it was passed. The abuse of parliamentary procedure to avoid a Republican filibuster further inflamed public opinion.

The United States has reached a point where trust in government is near 20-year lows. According to Gallup, only 19 percent trust the government most of the time. In a separate poll from Gallup last year, the federal government rated dead last in approval among a list of industries. The -46 percent net approval rating put the federal government at a historic low. Notably, respondents told Gallup that they rated state and local governments far higher than Congress or the president.

The Supreme Court is viewed more positively. Gallup’s approval rating for the Court is 46 percent versus 40 percent who disapprove. This can be compared to the approval rating for Congress at 12 percent. Sixty-three percent of Americans still trust the Supreme Court. However if the Supreme Court votes to uphold an unpopular law that was never wanted by a majority of the American people, a law that the majority of voters believes overwhelmingly to be unconstitutional, then the Supreme Court may face the same loss of trust and approval that the other branches of the federal government have experienced.

This is the great tragedy of the Obama era: that a president who once had the support and admiration of nearly all of the country, a president who pledged to eschew the “politics of cynicism” for the “politics of hope,” would become even more divisive than his predecessor; that a president who once preached the practicality of compromise and the need for national unity would use his position to short-circuit the democratic process, circumventing the will of the people and their elected representatives in Congress. The unpopularity of the Affordable Care Act and federal government itself is symbolic of the failure of President Obama to unite the people of the United States.

Originally published on Examiner.com:

http://www.examiner.com/elections-2012-in-atlanta/obamacare-ruling-is-election-wild-card

Coping with Obamacare's price increases

If you have received your open 2011 enrollment package for your company’s health care benefits, like me you may have experienced some sticker shock this year. With the passage of the health care reform law, many Americans are finding that their health insurance premiums are going up and that their benefits are going down.

To make the most of your health insurance dollars, take a little extra time this year and examine all the alternatives that your company offers. One of the first things to consider is whether you and your family use your health insurance a lot or a little. If you rarely go to the doctor or get prescriptions filled, then you probably don’t need the most expensive plan with all the bells and whistles. For people who rarely use their insurance, a high deductible plan might save money.

Major medical plans typically have a deductible and many do not include copayments. This means that you will be responsible for paying your health insurance costs until you meet the deductible. For example, if your plan includes a $1,000 deductible, you will have to pay the first $1,000 of medical expenses for the year. After the deductible, these plans usually pay a set percentage, usually 80-90% of the medical bill. This leaves the employee to pay the remaining 10-20%. This is called coinsurance.

Aside from lower premiums, an added advantage to these plans is that they reward price shopping. Since the employee is always paying a percentage of the bill, rather than a set fee, it is in their interest to find a good deal. For example, an employee paying 10% coinsurance would save $5 per office visit by choosing a doctor who charges $100 rather than one who charges $150. (The employee’s share would be $10 of the $100 bill or $15 of the $150 bill.) Again, coinsurance only is a factor after you have met your deductible.

On the other hand, if you or someone in your family has several maintenance prescriptions or has to go to the doctor frequently, then you might want to pay a higher premium for a plan with better benefits. For example, an HMO plan might have a copayment for doctor visits that is $10 regardless of how much the doctor charges. As an added bonus, HMO plans do not generally include deductibles.

One way of determining which plan is best for your family is to look at your medical history for the past year. If this was a typical year, medically speaking, you can estimate how much your costs would have been with each plan and choose the one that is most cost effective.

Consider also whether you expect to have any surgeries or other health problems in the coming year. If you are expecting to use your health insurance a lot in the coming year, obviously you should choose the plan with better benefits. An alternative would be to schedule your surgery before the end of the current year.

Especially if you are considering a high deductible plan, consider a Flexible Spending Account (FSA) if your company offers one. FSAs allow an employee to put money into an account for health spending. This money is deducted from your paycheck before taxes, so it lowers your tax liability for the year while it increases your health care spending power. As your health care bills come due, the money is deducted from your account to pay them.

There are downsides to FSAs. One is that that the money must be used for health care items. This can include doctor visits, prescriptions, glasses, contacts, hearing aids, etc. Another major problem is that the money in an FSA must be used before the end of the year. Any money left in the FSA at year’s end is lost since it cannot be rolled over to the next year. Therefore you should carefully plan how much money to deposit into your FSA to avoid a last minute rush to spend or lose the funds in your account.

Additionally, if both spouses are eligible for health insurance through their employer, consider both plans. First, it is probably not cost effective to buy duplicate coverage through both employers. Consider which plan gives you the best “bang for the buck,” the best coverage for the dollars that you spend. You may also want to look at having each spouse get an individual plan through their own employer. Take all the possibilities into account and find what works best for you.

In this economic climate, you should also consider which spouse’s job is most stable. If you choose to purchase health insurance through only one employer and that spouse loses their job, you would have to rely on COBRA until the end of the year. You can only make changes to a group health plan during open enrollment unless certain events, such as having a child or getting married, occur. COBRA is currently subsidized by the government but is still more expensive than most health plans.

One additional consideration is that you might want to forgo your employer’s group health plan altogether. For many employees, the employer pays a percentage of their premiums and this makes the group plan much cheaper than an individual plan. To find out if an individual plan is most cost effective for you, contact an insurance agent and submit an application. Remember to apply for the individual plan well before you need to make a decision on your group health plan. This way you can determine the actual premium based on your medical history and make an informed decision. Make sure to let the agent know that you do not want the insurance effective until your group plan lapses. If the individual health plan turns out to be more expensive, you can cancel this coverage before it takes effect and elect for the group plan as long as you don’t miss the open enrollment deadline.

Finally, if you are unhappy with the changes that Obamacare has brought to your health insurance, remember to vote on November 2. The upcoming election will determine the future of health care in the United States. Find out how your representatives voted on Obamacare and find out which candidates will vote to repeal the current law and replace it with a free market solution.

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The truth about the Tea Party revolution

Years from now, when the history of the Obama Administration is written, we will see that one of President Obama’s most enduring contributions to American history was to inspire the Tea Party movement. Japanese Admiral Yamamoto is rumored to have said after the attack on Pearl Harbor, “I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve” (http://bit.ly/arfK87). A more colorful version of the quote has him saying, “Gentlemen, we have just kicked a rabid dog” (http://bit.ly/arfK87). It is easy to imagine President Obama saying something similar, or even more colorful, about the Tea Parties.

The Tea Parties are a grass roots organization made up of ordinary people. Many of these people have long been critical of government spending and encroachment into the lives of liberties of individual Americans. Some are moderates who have grown alarmed at the orgy of government spending that has taken place since President Obama took office. They became even more alarmed at the lack of response from the government to the massive outcry against many of the centerpieces of the Democratic legislative agenda, particularly Obamacare.

Many newer sympathizers to the Tea Party are moderates that supported President Obama in 2008. Obama ran on a faux conservative platform and promised to usher the country into a new post-partisan era. After taking office, Obama veered sharply to the left and the political climate in Washington became even more sharply partisan than before. With heavy majorities in both houses of Congress, the Democrats apparently saw no reason to reach across the aisle to the Republicans. After all, the Republican minority was so small that they couldn’t even mount an effective filibuster.

The Tea Parties originally began as a protest against the President Bush’s TARP (Troubled Asset Relief Program) bailout of banks and President Obama’s stimulus program. The idea reportedly began on January 19, 2009 with Graham Makohoniuk, a trader who posted an invitation on internet forums to mail tea bags to members of Congress who had voted for the bills (http://bit.ly/8X65Hc). The idea was spread by a forum moderator who was also director of FedUpUSA, a group formed as a response to the March 2008 bailout of Bear Stearns.

The Tea Parties went viral after a televised rant on CNBC by Rick Santelli from the floor of the Chicago Mercantile Exchange on February 19, 2009. Santelli railed against the stimulus and mortgage bailouts to the delight of the traders looking on. When he ridiculed the Democratic notion that “you can buy your way into prosperity” (http://bit.ly/c9fwOY) the rant went viral and Santelli’s “silent majority” responded. They were silent no longer.

Shortly after, Tea Party rallies were held around the country on April 15 to oppose the bailout mentality, the expansion of government, and the looming tax increases to pay for it all. I attended one of these rallies with my five-year-old son at the Georgia state capitol in Atlanta. As Santelli had guessed, we found a cross section of America. There were people of all races, creeds, and colors. The common denominator is that they all opposed where Obama and the Democrats were trying to take the country. (Well, not all. There was a small group of about a half-dozen pro-Obama counterdemonstrators.)

Conservatives and moderates don’t usually demonstrate. We have lives. We have jobs to go to, families to feed, and things to do. When hundreds of thousands of conservatives and moderates started coming out to protest Obama’s policies, it should have been a sign for him to slow down, reach out to his opponents, and find common ground. Instead, the Democrats knew that they would likely never have such large majorities again and proceeded to ram their agenda down the throats of an increasingly angry electorate.

Throughout the summer of 2009, the movement grew. There were more rallies on Independence Day. When members of Congress went home on summer recess, they faced angry constituents at town hall meetings. On September 12, 2009, the Tea Parties marched on Washington in what may have been the largest conservative protest ever held in Washington, DC.

Tempers continued to flare throughout the winter as the Democrats continued to push Obamacare through Congress by any means necessary. One way to steamroll opposition was by belittling the Tea Parties. House Speaker Nancy Pelosi said that the “we call it Astroturf; it’s not really a grass roots movement. It’s Astroturf by some of the wealthiest people in America….” (http://bit.ly/aqGDto).

As liberals are wont to do, when it doubt, they cried “racism.” Representatives Emanuel Cleaver, John Lewis, and Andre Carson claimed that they were spit upon and subjected to racial epithets by opponents to Obamacare outside a House office building (http://bit.ly/8X65Hc). Congressman Barney Frank claims that he was subjected to a gay slur. In spite of numerous television cameras, as well as a reward offered by blogger Andrew Breitbart for evidence of the claims, there has never been a confirmation of the claims.

After the passage of Obamacare on March 20, 2010 (a date which will live in infamy), Tea Party protests continued and became a stop on the campaign trail for many candidates. A Tea Party held in Douglasville, Georgia (http://exm.nr/c5qNLD) was emceed by talk show host Herman Cain (who, as a black man, was probably somewhat surprised to learn that he was hosting a racist event according to the news media!). The Tea Party featured numerous Republican, Libertarian, and even a few Democratic candidates.

Ironically, the first victims of the Tea Party were Republicans. As primary season rolled into full swing, moderate Republican incumbents began to fall to insurgent Tea Party challengers proving that the Tea Partiers were not controlled by the Republican establishment. In contrast, they were almost as angry at Republicans who enabled the Democrat’s big government agenda as they were at the Democrats themselves. One of the first to fall was Bob Bennett of Utah, a four term Republican senator who had voted for TARP and had crafted a compromise health care bill that fell flat (http://bit.ly/9QNRjn). In Kentucky, Rand Paul, son of libertarian Republican Rep. Ron Paul, won the Republican primary over a candidate favored by the party establishment. Next came Lisa Murkowski, senator from Alaska who was upset by Tea Party favorite, Joe Miller. Most recently, in Delaware Christine O’Donnell defeated establishment Republican Mike Castle. Tea Parties are making inroads into state politics as well. In New York, Carl Palodino defeated perennial loser Rick Lazio for the Republican nomination for governor and is very close to Democratic establishment candidate Andrew Cuomo in the polls. The next test for the Tea Parties will come on November 2 when the Tea Party Republicans face off against the Democrats.

Many are still uncertain who the Tea Partiers are and what they want. Far from being out of the mainstream, a Gallup poll shows that the makeup of the Tea Parties reflects the demographics of the nation itself (http://bit.ly/dxiVvl). In almost all categories listed, the Tea Party mirrors the demographic makeup of the nation almost exactly. Three notable exceptions are “Democrats” (8% Tea Party vs. 32% US), “Less than $30,000 annual income” (19% Tea Party vs. 25% US), and “Non-Hispanic Blacks” (6% Tea Party vs. 11% US). These three groups have a vested interest in preserving Democratic rule for partisan reasons, to preserve entitlements, and for racial solidarity.

The agenda of the Tea Partiers is simple. They want to stop out-of-control government spending. They want to keep taxes low. They want to keep government at a minimal level in accordance with the Constitution. They believe that as government grows freedom declines. They want to preserve freedom. Tea Partiers are patriots. They believe that America is a great nation and doesn’t need to be apologized for. They believe, as Lincoln did, that America is the “last, best hope of Earth.”

The story of the Tea Parties is the remarkable story of the meteoric rise of a grass roots movement, which resulted in a hostile takeover of the Republican Party. It has fired the imaginations and anger of the country as people realize that they can fight back against Washington and win. Two years ago the Tea Party did not exist, but now a quarter of Americans claim membership in its ranks (http://bit.ly/asnTay). Further, 46% of Americans believe that the Tea Party is good for the country, while only 31% disagree (http://bit.ly/aQeQq9).

Thanks to the Tea Party (and the arrogance of the Democrats) the Republicans will win big in November. However, the true test of the Tea Party will be long term. Will the Tea Party activists be able to maintain control of the Republican Party and avoid a slide back into the corruption and meandering that led to the Democratic victories of 2006? Or will Tea Party Republicans succumb to the temptations of power and abandon their principles to maintain it? If the Tea Parties ultimately fail, the entire nation will pay the price in the form of high unemployment, high taxes, a sluggish economy, and disappearing freedoms.
Sources:
http://en.wikipedia.org/wiki/Isoroku_Yamamoto%27s_sleeping_giant_quote
http://en.wikipedia.org/wiki/Tea_Party_protests
http://www.youtube.com/watch?v=APAD7537RN0&feature=related
http://thinkprogress.org/2009/04/15/pelosi-astroturf
http://www.examiner.com/carroll-county-elections-2010-in-atlanta/herman-cain-featured-at-douglas-county-tea-party
http://www.americanthinker.com/2009/09/a_sham_compromise_health_care.html
http://www.msnbc.msn.com/id/37038395/ns/politics/
http://www.foxnews.com/politics/2010/05/18/tea-party-favorite-rand-paul-wins-senate-gop-primary-kentucky/
http://www.huffingtonpost.com/2010/09/14/new-york-gop-gubernatoria_n_716852.html
http://www.gallup.com/poll/127181/tea-partiers-fairly-mainstream-demographics.aspx
http://www.rasmussenreports.com/public_content/politics/general_politics/april_2010/tea_party_profile_many_ways_to_describe_a_movement
http://www.rasmussenreports.com/public_content/politics/general_politics/may_2010/46_say_tea_party_good_for_america_31_disagree
Villa Rica GA
September 25, 2010

How to eliminate Obamacare

Since it was passed against the overwhelming opposition of the American people last March, Obamacare has not gotten any more popular. Amid continuing revelations of higher costs, more taxes, federal payment for abortions, and more restrictions on personal choice the support for the repeal of Obamacare remains high. The number of voters who support the law’s repeal has consistently been in the 2/3 range, with a recent poll showing that 56% favor repeal versus only 38% who oppose it (http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/health_care_law). The numbers favoring repeal will likely increase as Obamacare is implemented. This is especially true if, as is likely, that it quickly follows the pattern of Romneycare in Massachusetts with exploding costs, price controls, and likely rationing.

The first step in dismantling Obamacare is to vote Republican. It is unlikely that the Democrats, who went against strong public opinion to pass the law in the first place, will have a change of heart and vote for repeal. The vote will eventually cost many of the Democrats their political careers.

Other parties such as the Libertarians also oppose Obamacare, but do have a realistic chance of getting elected. In the US, it is rare that a third party wins an election. More often, they act as spoilers and actually help the other side. This was true when Ross Perot drew conservative votes from George Bush and helped to elect Bill Clinton. It was true when Ralph Nader drew liberal votes from Al Gore and John Kerry and helped to elect George W. Bush. It was true when Libertarian candidate Allen Buckley helped to force Republican Senator Saxby Chambliss into a runoff with Democrat Jim Martin in Georgia’s 2008 Senate race.

If you are a conservative, be smart and vote Republican. If you don’t like the incumbent, vote against him in the primary but support the party in the general election. You may feel that Libertarian candidates are more conservative, but that it worth absolutely nothing - zilch! – if they don’t get elected. On the other hand, if you are a liberal, vote your conscience and go Green.

Voting Republican is also important in state races. For example, in the Georgia gubernatorial race one Democratic candidate is Thurbert Baker, the state attorney-general who refused Gov. Perdue’s order to file suit against Obamacare. If a Democrat, even Roy Barnes or Dubose Porter gets elected, how likely is it that the lawsuit will continue? Additionally, governors appoint replacements to representatives who resign or die. If Georgia has a Democratic governor, any replacement representatives would most likely be Democrats who would back Obama’s policies.

Recent polling indicates that it is likely that the Republicans will capture control of the House of Representatives and possibly the Senate as well (http://online.wsj.com/article/SB10001424052748704875004575375122374132154.html). The question is whether they will have enough votes to repeal Obamacare as well as some of the other damaging laws that the current administration has enacted.

It is unlikely that Obamacare will be repealed immediately because, even if the Republicans win enough votes to pass a repeal law, Barack Obama will still be president regardless of how badly the Democrats fare in the 2010 elections. President Obama will have the ability to veto any law passed by Congress. Unless the Republicans can muster enough votes to override the president’s veto, two-thirds of the house and senate, passing a repeal law would be an exercise in futility. It is unlikely that the Republicans will gain enough votes to have a 2/3 majority in both houses. It is possible that President Obama would not veto the repeal or that enough Democrats would join with Republicans to override the veto, but this is also unlikely.

Even if Obamacare cannot be totally repealed, there are things that Republicans can do to reform the reform. First, they can refuse to appropriate funding for the law’s most onerous and expensive provisions. The president cannot appropriate funds for anything himself. The president must submit a proposed budget to Congress, which must then pass it for it to become law. When President Obama submits a budget that appropriates money to fund Obamacare, Congress can simply refuse to pass the president’s budget and pass one of their own instead. The president can still veto the competing budget, but he cannot pass his own. Ultimately, the two sides would probably have to reach a compromise budget.

Second, the Republicans can pass legislation to reform Obamacare on a piecemeal basis rather than as a comprehensive bill. For example, Congress might find enough support to pass a law eliminating the individual mandate to purchase health insurance, even though there were not enough votes to repeal the whole bill. By passing a number of smaller reform laws, hopefully with veto-proof bipartisan majorities, many of the damaging aspects of Obamacare could be removed without having a veto showdown with President Obama over a repeal law.

Third, in addition to removing the worst aspects of Obamacare, Republicans should replace bad laws with good laws that restore competition and free markets to the health care industry. A reform of the employer-based health insurance market that gives individuals more choice over their insurance and medical options would be a good start. Competition means lower costs and more choices. Additionally, reform of tort laws to limit frivolous lawsuits and enormous judgments would also help to lower the cost of insurance, making it more affordable. Republicans should also favor the removal of legislative mandates from insurance policies to allow the sale of more inexpensive major medical polices.

Ultimately, at some point there will be another Republican president. Perhaps there will even be a Democratic president who is more open to free markets and competition rather than top-down government mandates. Perhaps conservative majorities will grow to the point that repeal forces can hope to override a presidential veto. When this happens, at the earliest possible moment, the Republicans should immediately move swiftly forward with a repeal bill to remove the last vestiges of Obamacare. The people expect it, the people want it, and if the Republicans don’t deliver, it will be at their peril.

The longer that Obamacare is in force, the harder it will be to remove it. Even if Obamacare is the disaster that I and many other people believe it will be, entitlements have a way of implanting themselves firmly into the political landscape. As more people become accustomed to receiving federal payments for their health insurance, even as the quality of health care deteriorates, it will become more and more difficult to convince people to leave the government gravy train and again take responsibility for their own health care. The furor over President Bush’s attempts to reform Social Security is a case in point. Even though people know that Social Security is facing a looming bankruptcy, inspired by Democratic fear mongering, they still resist change.

The lawsuit by the states against Obamacare is another avenue that is being pursued. The lawsuit is the wild card in the fight to repeal Obamacare. At last count, twenty states are suing to overturn the Obamacare law on constitutional grounds. Proponents of the lawsuit claim that Obamacare’s individual mandate is unconstitutional because the Constitution does not give the federal government authority to force people to purchase a commercial product. Additionally, some also cite the constitution’s tenth amendment which states that powers not delegated to the federal government are reserved by the states.

Critics of the lawsuit point out that the Supreme Court has historically been reluctant to overturn federal programs on constitutional grounds. They also cite the commerce clause which grants the federal government the right to regulate interstate commerce. Proponents of big government believe that the commerce clause gives the federal government practically unlimited power to regulate business.

As a historical comparison, the Supreme Court did strike down several of FDR’s New Deal programs as unconstitutional. However, the court became more acquiescent after FDR’s attempt at “court packing” in 1936. Bad policy is not necessarily unconstitutional, although in many cases bad decisions do leave unconstitutional laws on the books.

With respect to the commerce clause, insurance has traditionally been regulated by the states. Each state has its own laws and insurance policies are tailored to fit the market of each state. Insurance companies are admitted to do business in each state. For example, State Farm of Georgia cannot sell a Georgia health insurance policy in South Carolina. Therefore, the power to regulate interstate commerce would not seem to apply.

The flip side to this argument is that the Supreme Court has ruled in the past (erroneously in my view) that the interstate commerce clause can be used to regulate intrastate commerce. In Wickard v. Filburn (1942) (http://en.wikipedia.org/wiki/Wickard_v._Filburn), FDR’s New Deal compliant court ruled that a farmer could not grow excess wheat for his own use inside his own state because it affected interstate commerce. It may be time for this decision to be overturned.

In the end, the lawsuit undoubtedly has merit, but we cannot be certain of the outcome given the activist nature of approximately half of the members of the Supreme Court. This is especially true since President Obama has at least two more years in office and may get to make additional appointments. Even with the current makeup of the Supreme Court, four of nine justices do not read the explicit right of the people to keep and bear arms in the phrase “the right of the people to keep and bear arms shall not be infringed.” It is unlikely that they would not see a government mandate to buy health insurance as constitutional.

An indication of the Obama Administration’s realization that they are on very shaky constitutional ground is that they are defending the individual mandate on the grounds that it is a tax, rather than a mandate (http://www.nytimes.com/2010/07/18/health/policy/18health.html). This is in spite of Obama’s promise not to raise taxes in any form on the middle class and claims during the health care debate that it was not a tax. Either they were lying then or they are lying now.

The best way to fight Obamacare is to elect candidates that will vote to reform, replace, and ultimately repeal it. That primarily means voting for Republicans such as Georgia Senator Johnny Isakson, who is seeking reelection this year. It also means supporting Republican candidates in state and local races who will fight Obamacare in the states on constitutional grounds. Electing Republican governors and attorneys-general will keep the constitutional lawsuit alive. Additionally, constituents of Democrats should continue to voice their opposition to Obama’s big government policies and encourage their representatives to join with the Republicans in voting for small government reforms.

Sources:
http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/health_care_law
http://online.wsj.com/article/SB10001424052748704875004575375122374132154.html
http://spectator.org/archives/2010/07/20/suing-obamacare
http://www.heritage.org/Research/Reports/2009/12/Why-the-Personal-Mandate-to-Buy-Health-Insurance-Is-Unprecedented-and-Unconstitutional
http://en.wikipedia.org/wiki/Wickard_v._Filburn
http://www.nytimes.com/2010/07/18/health/policy/18health.html
San Jose CA
July 21, 2010

Photo credit:

renjith krishnan
http://www.freedigitalphotos.net/images/view_photog.php?photogid=721

Obama's war on jobs

It is much easier for the government to screw up the economy than to fix it. This is a fact that that President Obama is probably coming to appreciate as he reaches the close of his second year in office. Although Obama almost certainly means well, the effects of his policies are what count. Overall the effect is similar to what would happen if President Obama had declared war on the national economy.

The financial reform legislation passed this week is only the most recent anti-business legislation passed by the Obama Administration. The new law guarantees future bailouts by giving the government the right to seize businesses to prevent their collapse. It also establishes new layers of federal bureaucracy to create new rules for banks and financial companies (with the notable exception of auto finance companies). The new law adds costs of compliance to business and makes credit harder to obtain in the midst of credit crisis while simultaneously failing to address the problem of Fannie Mae and Freddie Mac, the quasi-government entities widely credited as being a root cause of the sub-prime mortgage crisis.

The war on jobs began shortly after Obama took office with the passage of the stimulus package. Obama claimed that the passage of the American Recovery and Reinvestment Act would keep unemployment below 8% (http://www.time.com/time/business/article/0,8599,1910208,00.html). In reality the spending package spurred unemployment to continue rising to the 10% range, where it remains today. In Georgia, the unemployment rate has been even higher than the national average at over 10% (http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LASST13000003).

The number of jobs created by the stimulus is disputed, but the fact is that when stimulus funds run out, so do the stimulus jobs. Jobs created by the $787 billion stimulus reportedly cost an average of $117,933 per job to create (http://knowledge.wpcarey.asu.edu/article.cfm?articleid=1857) while not creating a lasting boon to the economy.

The second assault on the economy was in the form of government interference in the auto industry. The Obama Administration pumped billions of dollars into General Motors and Chrysler in an unsuccessful attempt to prevent the companies from restructuring in bankruptcy. During this process, Obama not only interfered with the control of private companies, he also short-circuited the bankruptcy process and contract law. Obama’s bailout deal placed unions above secured creditors of the companies (http://www.cbsnews.com/stories/2009/05/07/politics/otherpeoplesmoney/main4997900.shtml, http://online.wsj.com/article/SB124109550079373043.html). Ultimately, the Obama Administration even forced the CEOs of both companies out and gained the right to appoint members to the boards (http://www.worldcarfans.com/109050119091/chrysler-bankruptcy-announced-by-obama---ceo-nardelli-to-step-down, http://www.washingtonpost.com/wp-dyn/content/article/2009/03/31/AR2009033101521.html). When the US government arbitrarily usurps contract law, it makes businesses less likely to engage in contracts that they are not sure will be honored. This ultimately costs jobs.

The third assault against the job market was the passage of Obamacare. Like the new finance reform law, Obamacare requires many new costly reports, including the new requirement that businesses issue a 1099 to every business or individual from whom they purchase more than $600 in goods or services (http://money.cnn.com/2010/07/09/smallbusiness/irs_1099_flood/index.htm). Additionally, Obamacare is already health care more expensive to businesses (http://www.businessinsider.com/henry-blodget-obamacare-already-jacking-up-health-insurance-costs-for-businesses-2010-3). As a result, businesses are cutting benefits to workers and hiring as few new employees as possible. Some companies are also considering additional layoffs to cut the new costs.

The next attack on jobs will likely come soon. It could be an attempt to ram through the carbon cap-and-trade tax bill that will dramatically increase energy costs. Hopefully, there will not be time to pass this bill before the election.

More likely, it will come in the form of the expiration of President Bush’s tax cuts. These across-the-board tax cuts that affected all Americans are set to expire at the end of 2010 unless Congress acts. If the cuts expire and taxes increase, it might suck as much as a $1 trillion from an economy that is struggling to recover. In spite of the fact that Democrats usually refer to them as “Bush’s tax cuts for the wealthiest Americans,” taxes were cut for all American and if they expire everyone’s taxes will increase (http://www.smartmoney.com/personal-finance/taxes/how-the-expiring-bush-tax-cuts-affect-you/). There will be less money for consumers to spend and less money for businesses to hire new employees.

One possible cause of these anti-business and anti-job policies is that President Obama doesn’t have a single person in his administration that has ever run a business (http://www.weeklystandard.com/Content/Public/Articles/000/000/016/619dvjlm.asp). They don’t know that their ideas are hurting the job market because they have never run a business. Obama appointees come almost exclusively from government and academic circles. They don’t understand free markets and have no idea what they are doing. The uncertainty derived from sweeping anti-business reforms certainly has a chilling effect on the economy as business owners hunker down to see what will happen next.

Sources:
http://www.time.com/time/business/article/0,8599,1910208,00.html
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LASST13000003
http://knowledge.wpcarey.asu.edu/article.cfm?articleid=1857
http://www.cbsnews.com/stories/2009/05/07/politics/otherpeoplesmoney/main4997900.shtml
http://online.wsj.com/article/SB124109550079373043.html
http://www.worldcarfans.com/109050119091/chrysler-bankruptcy-announced-by-obama---ceo-nardelli-to-step-down
http://www.washingtonpost.com/wp-dyn/content/article/2009/03/31/AR2009033101521.html
http://money.cnn.com/2010/07/09/smallbusiness/irs_1099_flood/index.htm
http://www.businessinsider.com/henry-blodget-obamacare-already-jacking-up-health-insurance-costs-for-businesses-2010-3
http://www.smartmoney.com/personal-finance/taxes/how-the-expiring-bush-tax-cuts-affect-you/
http://www.weeklystandard.com/Content/Public/Articles/000/000/016/619dvjlm.asp

July 17, 2010
Bedford, MA



Photo credit:
graur razvan ionut
http://www.freedigitalphotos.net/images/view_photog.php?photogid=987

Health care cover-up

When the House of Representatives voted to pass President Obama’s health care reform bill on March 21, 2010, it was opposed by a majority of Americans. In addition to opposing the bill itself, many Americans objected to the manner in which the bill was passed. To avoid the stronger Republican opposition after the election of Scott Brown from Massachusetts, the house passed a previously passed senate bill and then both houses voted on a separate bill containing fixes for the first bill. This was unprecedented.

Now it seems that there was even more political chicanery involved in the passage of the bill. Several weeks after the passage of the health care bill, on April 22 Medicare’s Office of the Actuary released a report that was full of bad news for President Obama and the Democrats [1]. This report from a nonpartisan office stated that the reform bill will actually increase health care costs, in spite of President Obama’s repeated assurances that the bill would control costs.

Further, the report stated that the bill’s cuts in Medicare could drive up to 15% of hospitals and health care providers into the red [1]. These losses could lead to fewer health care providers as demand increases. This would lead to more limited access to health care, especially for seniors who depend on Medicare. Cuts to Medicare’s Advantage program would also mean that many seniors will face higher out-of-pocket costs.

The one bright spot in the report for Democrats was that the percentage of Americans with health insurance is estimated to increase. However, even the White House admits that the bill still won’t cover all Americans.

In addition to the bad news contained in the report, it was also revealed that the report had been submitted prior to the health care vote. Reports are that the report had been submitted to Secretary of Health and Human Services Kathleen Sebelius more than a week prior to the vote [2]. Sebelius’ staff reportedly refused to review the report until after the vote. Conflicting reports [3] are that the report was received only three days before the vote, which was not enough time to review it.

In either case, it looks bad for the Democrats. It is now apparent that the rush in getting the bill passed was related directly to the HHS report. In either case, the vote was pushed through on a Sunday so that the contents of the report would not be made public before the bill became law. The Democrats knew that bad news was coming and delayed it.

In fact, one HHS staffer said as much: "The reason we were given was that they did not want to influence the vote, which is actually the point of having a review like this, you would think" [2].

He goes on to say that the contents of the report were widely known in Democratic circles: "We know a copy was sent to the White House via their legislative affairs staff, and there were a number of meetings here almost right after the analysis was submitted to the secretary's office. Everyone went into lockdown, and people here were too scared to go public with the report" [2].

After years of Democratic complaints about governmental lies, here we have a black-and-white case of intentional deceit. While President Obama and congressional Democrats were claiming that the health care bill would reduce costs, they were aware that actuaries within their own administration were pointing out the flaws in their plan. Even now, more than a month after the vote, are still claiming that the obscenely expensive bill will actually decrease the federal deficit.

All of this points to the fact that the intent of the Democrats is to mislead. They know and have known the truth about their bill for a long time. They concealed the truth in order to deceive the American people and their elected representatives into passing the bill.

We can only hope that the American people will remember this deceit and the arrogance of the Democratic leadership in November.

Repeal – Replace – Reform

Notes:
1. http://news.yahoo.com/s/ap/20100423/ap_on_bi_ge/us_health_care_law_costs
2. http://spectator.org/archives/2010/04/26/what-lies-beneath
3. http://online.wsj.com/public/article/SB10001424052748704423504575212303032885376.html

Kansas City MO
April 29, 2010

Easter egg economics: a health care parable

This weekend my town, Villa Rica, Georgia, had a public Easter egg hunt at the local recreation park. As I stood among the multitudes with my family, it occurred to me that this was similar to what we will soon be experiencing in our health care system.

To begin with, the Easter egg was free of charge on the surface. Of course, it wasn’t really free, but there was no charge at the gate and there was no fee for the games and activities. The cost was paid by local tax dollars. As the law of supply and demand dictates, since the price was low, demand was high. There were hundreds of kids lined up to hunt the eggs. So many in fact, that when the hunt actually started, it was over within minutes. Each child was lucky to get a handful of eggs.

There were also bouncy rides, face painting, balloon animals, and other activities. Because these were also free, there were long lines. The lines were also partially due to the fact that there were few volunteers who were running the activities. These people were dedicated and you could tell that most of them enjoyed making kids happy, but as the day wore on and the lines became never-ending, some of them understandably became a little frazzled.

My son stood in line for quite a while to get a balloon T. Rex. The girl who was making the balloon animals was very patient and talented (I had never seen a balloon tyrannosaur before!). Nevertheless, I noticed that the first balloon animals were very intricate and decorated with magic marker fur, eyes, and teeth. By the time that my son got his T. Rex, the product was a little more hurried and little less detailed. She was very nice, but I could tell that she wanted us to hurry so that she could get to the next balloon and, hopefully, to the end of the line before dark. Similar circumstances were found at the face painting booth and other activities.

The healthcare system will be under similar stress as the government begins to subsidize health insurance. The apparent price of health insurance will be zero to many people. This will fuel a sharp increase in demand. More people will be competing for a finite amount of resources, in this case, appointments with doctors. There simply won’t be enough doctors to go around and some people will likely have to wait weeks or months for care. When you do get an appointment, the doctor will likely hurry you though to get to the next patient and quality of care will suffer.

As people see that medicine is no longer the profitable and rewarding career that it used to be, fewer and fewer people will make the long and difficult commitment to finish medical school. There will ultimately be fewer doctors (supply) for an increasing number of patients (demand). When this happens, economic law dictates that the price should rise to reduce demand. (In fact, Investor’s Business Daily reported that 45% of doctors would consider quitting if Obamacare passed [1]. This would reduce supply even further and cause more of an imbalance with demand.)

The government is unlikely to let prices rise sharply. Over the past few years, Medicare’s reimbursement rate for doctors has been below market rates. In essence, if a doctor visit costs $100, Medicare might only authorize reimbursement of $60. The remaining $40 has to be passed along to patients with private insurance, driving up insurance rates. As a result, many doctors are not accepting Medicare patients [2].

The only alternatives to letting prices rise is to either increase supply (more doctors) or keeping prices artificially low (price controls). Since it takes a lot time to train a doctor, the supply of doctors is unlikely to increase in the short term, no matter what incentives the government provides. To cut corners on medical training would decrease the quality of care.

If the government chooses price controls, the effect will be further shortages. Demand will not be reduced, but the limited supply will doled on either a first-come-first-served basis or some sort of rationing scheme. In either case, not all of the people trying to get medical care will get it.

An obvious way to resolve these problems would be to charge more. Even an admission price of a dollar to the Easter egg hunt would cause some people to forgo the egg hunt for other activities. Only the people who really wanted to hunt Easter eggs would come. Similarly, having people pay more of the cost of their own health care would encourage people not to go to the doctor if they don’t really need to go.

Some of the proceeds from the admission fees could be used to pay the volunteers who paint faces and make balloon animals. This would encourage more people to learn these skills. More volunteers would mean fewer and shorter lines. If the volunteers were allowed to charge a dollar per face or balloon, they would make even more money and people who didn’t really want a painted face or balloon T. Rex would be provided with an incentive to stand aside in favor of those who did.

Finally, imagine that the community rose up and 60% of Villa Rica and Carroll County told their elected officials in a loud, strong voice that we do not want our local government to pay for further Easter egg hunts. Some people might be philosophically opposed to publically funded Easter egg hunts in general. Others might simply feel that in the current economy, public dollars should be saved to spend on projects that are absolutely necessary.

I hope that if a strong majority spoke in a clear voice, the city and county would reconsider spending money on the Easter egg hunt. In contrast, when almost 60% of Americans stood up to tell congress to junk Obamacare and start over [3], the government ignored them and proceeded to ram an unpopular plan down the throat of the country.

President Obama ignored signs of public discontent in numerous elections since he took office. Strong Republican victories in New Jersey and Virginia, plus Scott Brown’s senate victory in Massachusetts (which already has government-run health care), should have encouraged President Obama to seek a bipartisan solution. Instead he did the opposite. Seeing the writing on the wall that he would likely lose his Democratic congressional majorities in November, he pushed through his plan against the will of the people in hopes that the Republicans would not become strong enough to repeal it.

Election Day, judgment day for the Democrats, is less than eight months away. Currently signs are pointing to devastating Democratic losses at the hands of an angry electorate. Our democracy depends on a government that is subject to the will of the people. When a party in power so blatantly disregards the will of the people, they do not deserve to hold power. They deserve to be discarded like a rotten Easter egg.
Sources:
1. http://www.investors.com/NewsAndAnalysis/Article.aspx?id=506199
2. http://www.nytimes.com/2009/04/02/business/retirementspecial/02health.html
3. http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/september_2009/health_care_reform

Thoughts on the passage of health care reform

Freedom is inversely proportional to the size of government. Last night, our government suddenly grew in size to control almost one-fifth of the national economy. We will surely notice the loss of freedom as soon as the “benefits” of this new law go into effect in 2013. First, we will see fewer choices in our health care options and higher taxes. Later, our children will see a large loss of economic freedom as taxes are raised even further to pay for this “free” health care and Big Government makes even more of our personal choices for us.

We can see what is likely to happen in the next few years by looking at government run health care that already exists in this country. In Massachusetts, RomneyCare has caused health insurance costs to increase at a higher rate than the rest of the country [1]. Increased demand for health care with no corresponding increase in supply is causing shortages in the form of long wait times to see a doctor. Nationally, many doctors refuse to see Medicare patients because of the price controls and bureaucracy associated with the program [2]. In the future, many doctors will likely leave the profession rather than submit to restrictive regulations.

Insurance companies will be forced to cover patients with pre-existing conditions but without charging these sick people more. This means that rates will rise for everyone to pay for those who elect not to buy insurance until they are sick. Eventually many insurance companies will decide that the new rules are unprofitable and may withdraw from the marketplace entirely.

This will lead to an additional health care crisis. Depending on the party in power, further government “fixes” will be needed, which may consist of the longed-for “public option” – fully nationalized health care – of the Democrats.

Ayn Rand described this process her novel Atlas Shrugged. The government enacts regulation to fix perceived flaws in the free market. The government fix causes more problems, which require further government fixes since the marketplace is failing. Eventually, the government totally controls the market.

As both Speaker Pelosi [3] and President Obama [4] pointed out, none of us will know exactly what is in this monstrous law until it is in force. That alone should be sufficient reason to throw from congress each and every Democrat who voted for the bill, but there are plenty of other reasons as well.

The passage of the law directly contravened the will of the people. A recent poll [5] showed that 54% of Americans opposed the plan, while only 41% favored it. Moreover, only 26% strongly favored it, while 45% strongly opposed it. This is not democracy in action. Conversely, ramming the plan through will do more to erode the confidence of the people in government, especially when their worst fears are confirmed and things get worse.

This health care plan will also bust the budget in spite of claims that it will save money [8]. Analysts put the cost of Obama’s health care reform at over $1 trillion dollar, boosting the already record-breaking deficit to its highest point since WWII. Back then, we had a plan to reduce the deficit: win the war. Today, the deficits will keep rising until the government can either no longer, raise taxes or print more money. The true cost of health care reform will be measured in lost jobs, or jobs never created, as higher taxes and new regulations strangle the economic recovery.

Furthermore, the hyper-partisanship of Obama’s first year will likely become the norm. The health care battle is not over; in fact, it is just beginning. The next step, after a massive Democratic loss this November, will be to start the battle to either repeal or reform the reform. Obama is almost certain to veto any attempt to repeal his signature legislation. While Republican gains are not likely to be enough to override an Obama veto, they may win enough seats to at least make positive changes. Off the top of my head, I cannot think of any entitlement that has ever been repealed.

The battle will also move to the courts and the states over the next few years. There will certainly be lawsuits filed over the constitutionality of the government forcing people to buy insurance. I am not optimistic about this avenue since a large number of judges have questionable views about what the constitution actually says. After all, 4/9 of the justices on the Supreme Court don’t believe that “the right of the people to keep and bear arms shall not be infringed” actually means that the right of the people to keep and bear arms shall not be infringed.

At least thirty states have proposed or passed legislation that will allow their citizens to opt out of federal health insurance mandates [6]. Georgia’s senate passed a proposed opt-out constitutional amendment last week, and it should go to the house this week [7]. There is some question about the effectiveness of such measures since federal law typically trumps state laws. However, the tenth amendment to the constitution says “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” This issue will probably have to be settled by the courts as well. Even if the courts decide in favor of the states, opt-out laws will not be able to mitigate all of the damage of the federal regulations.

The first step on the road to recovery will be to remove as many Democrats who voted for the bill from office. With a few exceptions, Democrats have controlled congress since the days of FDR. The country now has a federal budget bloated with entitlements and restricted freedoms to show for it. To begin correcting this problem, we must throw the spenders out of congress, and then hold the Republicans who replace them accountable.

Sources:
1. http://online.wsj.com/article/SB10001424052748703625304575115691871093652.html?KEYWORDS=romneycare
2. http://www.bloomberg.com/apps/news?pid=20601087&sid=aHoYSI84VdL0
3. http://www.usnews.com/blogs/peter-roff/2010/03/09/pelosi-pass-health-reform-so-you-can-find-out-whats-in-it.html
4. http://patriotpost.us/edition/2010/03/19/digest/
5. http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/september_2009/health_care_reform
6. http://www.ama-assn.org/amednews/2010/02/15/gvsb0215.htm
7. http://wsbradio.com/localnews/2010/03/bill-to-opt-out-of-health-care-1.html
8. http://www.csmonitor.com/Money/Donald-Marron/2010/0320/Hold-on.-Healthcare-reform-will-cost-more-than-1-trillion

Where Martha Coakley and the Democrats Went Wrong

Yesterday Massachusetts state senator Scott Brown pulled off an upset defeat of Democratic candidate Martha Coakley in a special election to fill the seat of the deceased Senator Ted Kennedy. Senator-elect Brown, the first Republican senator from Massachusetts since 1978 and the only current GOP member of the Massachusetts congressional delegation, staged a stunning come-from-behind victory. His poll numbers surged over the past few months as the Democrats became increasingly desperate to pass a health care reform bill.

Senator Brown’s victory is all the more remarkable because Coakley had led the race by as much as 30 points only a few months ago [1]. Likewise, President Obama carried Massachusetts in November 2008 by a comfortable 26% margin [2]. What could have caused such a drastic shift in the electorate in slightly more than a year?

The answer is likely to be that the Democrats have lost the moderate voters. US elections are typically won in the middle of the political spectrum. Estimates of size vary, but the US electorate is split into three groups: the left, the right and the center. My estimate is that the left is smallest group at roughly 20%. The remainder is split roughly equally between the moderates and the right. Neither the right nor the left have the numbers necessary to win elections; they must appeal to moderate voters.

Barack Obama won because he won the moderates. Moderates and independents responded to Obama’s calls for “hope” and “change.” He promised a new era in which we would move past partisan politics. He promised fiscal responsibility and an end to government waste and corruption. Much of his campaign rhetoric actually sounded conservative. The reality of his administration has been somewhat different.

President Obama and the Democratic congressional leaders, Senator Harry Reid and Representative Nancy Pelosi, misread the election returns. They interpreted Obama’s victory, as well as Democratic landslides in congress, as a rejection of conservative principles. Once in office, they embarked on an orgy of spending programs and extreme left-wing growth of government. As the stimulus bill passed in February 2009, their popularity started to fall. When the senate passed the health care bill ten months on a strict party line vote, Democratic approval ratings plummeted. Partisanship was at a fever pitch. Legislation was cobbled together in secret meetings. Representatives voted for bills that they had not had time to read. This was not what the American people had signed up for. What’s more, it scared them. Then it made them angry.

The cracks in the Democratic support began to show in November 2009. In gubernatorial elections in New Jersey and Virginia, both states won by Obama, Republican candidates won the moderate vote, and the elections, handily. Exit polls showed that Republicans won the moderate vote by a two-to-one margin [3]. It was a short distance from there to Scott Brown’s unexpected victory in solidly blue Massachusetts.

What comes next for the Democrats is likely another round of electoral losses in November unless a strong course correction is made. Attempts to continue to push through unpopular legislation such as the health care reform and cap-and-trade will likely ensure the coming losses. If, as some Democrats have suggested, the Massachusetts secretary of state should refuse to certify Brown’s victory or the senate refuse to seat him until after the health care vote [4], then they will compound their arrogance and further anger the voters all around the country.

It remains to be seen whether (and what) President Obama and the Democrats will learn from Martha Coakley’s defeat. With ten months until the next general elections, there might be time to rehabilitate their image and prevent a catastrophic loss if they act quickly.

If the Republicans do win a large victory this year, it also remains to be seen if they have learned from their past mistakes. Just like the Democrats, the Republicans became spendthrifts with taxpayer money and caused government to grow too large. They also became corrupt and arrogant. For the sake of the country, let’s all pray that they have learned their lesson well.

Sources:
1. http://abcnews.go.com/Blotter/massachusetts-senate-race-democrats-delay-seating-scott-brown/story?id=9586196
2. http://www.boston.com/news/politics/2008/election_results/us_president/
3. http://articles.latimes.com/2009/nov/05/nation/na-election5
4. http://abcnews.go.com/Blotter/massachusetts-senate-race-democrats-delay-seating-scott-brown/story?id=9586196&page=2

Villa Rica GA
January 20, 2010

2009 Predictions Revisited

Last February, after Barack Obama had been president for about a month, I posted a series of predictions for the next several years on my blog, CaptainKudzu. Almost a year later, as Obama’s first anniversary in office approaches, I decided to revisit my forecasts and see how well I fared. The unedited version of my original predictions can be found at http://captainkudzu.blogspot.com/2009/02/twenty-predictions-for-next-few-years.html. I should note that I did not say that my predictions would be fulfilled within 2009, but over the next several years.

The current stimulus bill will fail, just as the TARP program and the 2008 stimulus checks failed.

At this point, it is generally agreed (outside the Obama Administration at least), that the stimulus bill had little or no stimulative effect on the economy. In truth, the stimulus bill was a special interest spending bill that cobbled together numerous pork-barrel projects.

The ineffectiveness of the bill can be seen in the administration’s claim that without the stimulus, the unemployment rate could top 8.5% [FNC]. With the stimulus, unemployment continued past the 8.5% and remained at 10% for December 2009 (ino.com).

While some sectors of the economy have seen short-term surges through programs such as cash-for clunkers and mortgage modifications, these have not lasted. These surges reflect government-created bubbles rather than a truly recovering economy.

Additionally, there have been widespread reports that many of jobs that were reported as created by the stimulus were reported incorrectly or fraudulently. The stimulus job numbers were often inflated to ridiculous proportions or were outright fabrications.

http://www.businessandmedia.org/articles/2009/20090526101952.aspx
http://news.ino.com/headlines/?newsid=10820100903
http://www.investors.com/NewsAndAnalysis/Article.aspx?id=512766

When the current stimulus bill fails, the government’s solution will be enact another, probably larger, stimulus bill.

A second stimulus bill is still in the future. Such a bill has been discussed throughout 2009, but has been slowed by both voter anger and the gridlock that has met the healthcare reform bill. This is still a possibility for the future.

http://www.bondbuyer.com/issues/118_222/stimulus-bill-1004019-1.html

Massive government spending will create high inflation as the government prints money to pay its debts.

Inflation is also a possibility for the future that has not been realized. Currently the inflation rate remains very low with some economists concerned about the possibility of deflation due to the contracting economy.

The Obama Administration has already over more than $1 trillion to the national debt and there are no signs that the spending spree is drawing to a conclusion. There remains a strong possibility that as the government prints money to pay its debts, the dollar will become further devalued and inflation will return. This is especially true if China slows or stops its purchase of US government securities.

The government will also raise taxes. They may not call it raising taxes. They may call it “allowing the Bush tax cuts to expire,” but most Americans who pay taxes will be keeping less of their own money.

Some taxes have already been increased. Others are yet to come.

The first Obama tax increase came in April 2009 when the federal tobacco tax increased by 62 cents per pack. This tax increase primarily affected the middle and lower-class taxpayers that Obama had pledged would pay higher taxes under his administration.

Next will likely be an extension for the estate tax. Under Bush-era legislation, the estate tax was scheduled to be repealed for one year in 2010. Democrats tried, but failed, to reach an agreement to extend the tax into 2010 at 2009 levels. Extending the tax retroactively is likely to be a priority for the first sessions of Congress in 2010.

Another upcoming tax is related to the healthcare reform bill. Most obviously, the bill would require Americans to buy health insurance and fine those who do not. Senator Max Baucus calls the fine an “excise tax” (fnc).

Additionally, however, the bill also contains a surtax on the wealthy and a tax on so-called “Cadillac” health plans. Some reports are that the surtax is not indexed for inflation and will capture more and more middle-class taxpayers in a manner similar to the alternative minimum tax. Many union workers would find their health plans taxed.

http://www.cnn.com/2009/US/04/01/cigarette.tax/index.html
http://money.cnn.com/2009/12/31/pf/taxes/estate_tax_extension/index.htm?section=money_latest&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_latest+%28Latest+News%29
http://www.foxnews.com/politics/2009/09/21/health-insurance-mandate-includes-tax-despite-obama-denial/
http://www.cnn.com/2009/POLITICS/09/25/health.care.insurance.tax/index.html

The recession will be long and the recovery will be slow.

The accuracy of this prediction is self-evident.

Job creation will be stagnant in most sectors of the economy. Government jobs will be an exception.

As noted earlier, the unemployment rate remains at 10%. It has been noted that the real unemployment rate, counting underemployed workers and those who have given up looking for work may be as high as 17.5% [cnbc].

As to the second half of the prediction, government jobs have increased since Obama took office. Not only are there more government workers, they are also earning more than in the past. USA Today reports that the number of federal workers earning more than $100,000 is at an all-time high, even before bonuses and overtime are considered.

http://www.cnbc.com/id/34040009
http://www.upi.com/Business_News/2009/08/20/Government-jobs-up-in-recession/UPI-83631250777855/
http://www.usatoday.com/news/washington/2009-12-10-federal-pay-salaries_N.htm

Unemployment will continue to remain at or above current levels for the next several years.

As noted earlier, unemployment remains at 10% with real unemployment rates as high as 17.5%.

A nationalized healthcare system will be enacted in some form.

The enactment of a national healthcare system is still ongoing. There are two healthcare bills at this point, one of which includes the so-called “public option.” The senate version has no public option, but either bill would stack the deck against private insurance. As insurance rates skyrocket due to federal mandates, congress would likely blame a failure of the market and revisit the idea of a national healthcare system.

There will be new restrictions on guns and ammunition.

The Obama Administration has not attempted to enact new gun control legislation yet. To this point, they have been pre-occupied with their version of healthcare reform.

There is a real concern that if the government takes control of the healthcare industry, they could pursue gun control as a matter of public health. This has already been considered by the Centers for Disease Control and the National Institutes of Health.

The Supreme Court’s 2008 decision in District of Columbia v. Heller affirmed an individual right to keep and bear arms. Public opinion is also firmly against strict gun control. Neither obstacle should be considered as a permanent impediment to the desire of many Democrats to enact strict gun control laws. Again, the fact that healthcare reform has become so bogged down in Congress has likely slowed the Democratic agenda.

http://www.washingtontimes.com/news/2009/oct/22/the-feds-take-a-shot-at-guns/

There will be at least one terrorist attack on US soil.

Sadly, there were several terrorist attacks in 2009. Two of the most notable were US Army Major Nidal Malik Hasan’s massacre of soldiers at Fort Hood, Texas on November 5 and the failed bombing of a Delta airliner on Christmas day. Umar Farouk Abdulmutallab, now known as the “Dingaling Bomber” or the “Underpants Bomber,” failed to successfully set off his bomb, but his attack called a success by a Yemeni branch of al Qaeda because it exposed holes in US security.

Iran will obtain a nuclear weapon.

Iran is still edging closer to obtaining a nuclear weapon. So far as we know, they have not yet been successful. Likewise, western efforts to convince Ahmadinejad to abandon his nuclear weapons programs have also been unsuccessful.

Iran’s announcement may come in the form of an attack on Israel. Even Iran does not attack, it will cause an increase in tensions in the Middle East.

Iran has not yet attacked Israel… or vice versa. Tensions remain high, however.

In an unforeseen development, the Ahmadinejad regime is fighting for its life against its own subjects. A protest movement launched several protests in 2009 after fraudulent elections which President Ahmadinejad won handily. Shamefully, the US has done little to support the dissidents. The ultimate outcome of the second Iranian revolution is yet to be seen, but is the best hope for peace in the Middle East.

The slow economy will keep oil prices fairly low for the next few years unless/until an Iran-Israel war drives prices higher.

In recent weeks, gas and oil prices have increased, due largely to cuts in production. January 2010 saw an increase to $80 per barrel. Oil consumption is still down from 2008 levels due to the recession and winter weather. In the short term, prices are forecast to remain near this level throughout the winter.

The Wall Street Journal recently reported that both oil and food prices have been inching upwards. Many economists see this as a sign of a recovery. Others believe that the recovery will be “W” shaped with a second dip to come. No forecasts that I have seen predict a return to the near $150 per barrel prices of July 2008 in the near future.

http://www.eia.doe.gov/emeu/steo/pub/contents.html
http://online.wsj.com/article/SB126300087414822579.html

A federal carbon tax, probably in the form of a cap-and-trade system, will drive energy prices, including electric bills, higher.

Again, a cap-and-trade bill is on the Democratic agenda, but has been slowed by the failure to pass a healthcare bill.

The carbon tax will also drive the prices of other goods and services higher, due to increased production costs.

It has been suggested that one reason for the slow recovery is that businesses are waiting to see the effect of impending legislation. This applies to both the healthcare bill and cap-and-trade.

An attempt will be made to censor conservative media with a revived Fairness Doctrine, although it probably will have a different name.

This has not yet been introduced, but might be in the future.

The situation in Pakistan will continue to deteriorate. Militants from Afghanistan will flee across the border to safe havens there.

Afghanistan and Pakistan remained a hotbed of terrorists in 2009. The situation in Afghanistan deteriorated even as Iraq became more stable. President Obama committed more US troops, and asked our allies for more, in the spring and finally decided to commit even more troops in the fall. Taliban attacks and both allied and American troop deaths increased in 2009.

In Pakistan, Taliban militants actually took control of the Swat Valley before being ousted by the Pakistani army. The Pakistani army also took on the insurgents in the province of South Waziristan. There are reports that insurgents who escaped the government offensives have regrouped in the mountainous areas around the Afghan border.

http://www.msnbc.msn.com/id/34644331/ns/world_news-south_and_central_asia/
http://topics.nytimes.com/top/news/international/countriesandterritories/pakistan/northwest-pakistan/swat_valley/index.html
http://www.foxnews.com/story/0,2933,580076,00.html

The Republicans will make large gains in the 2010 elections, possibly taking control of one or both houses of Congress.

We will know the accuracy of this prediction in another few months. Early indications are that the Republicans will indeed make large gains in both houses of congress.

The Democratic Party will become fragmented as moderate Blue Dog Democrats are pressured to support increasingly leftist legislation and their constituents become more and more angry.

This prediction has already come true. Since the Democrats hold a 60 seat majority in the senate, the Republicans cannot defeat or block any legislation. It is moderate Democrats who are providing the key resistance to the healthcare bill and other controversial legislation.

Interestingly, abortion is the root of much of the dissension in the Democratic ranks. The original bills in both houses provided federal funds to pay for abortions, violating longstanding precedent. Pro-life Democrats were able to insert language in the bills to keep the ban on federal funds for abortion in place. It remains to be seen whether this language will survive into the final versions of the bill, but, if not, the loss of key Democratic votes may block the bill entirely.

By the time he leaves office, President Obama will have an approval rating that is equal to or lower than President George W. Bush’s approval rating at that future time.

As of this writing, a Real Clear Politics average of polls shows President Obama’s approval rating as 48.8% [RCP]. A new poll also shows that Obama is losing ground to George W. Bush with only 50% of people preferring him over Bush and 44% saying that they would prefer Bush as president [Politico].

According to Politifact, President Obama is tied for the worst approval rating at the end of the first calendar year in office. Interestingly enough, the other president with a 49% approval rating at the end of the first year was President Reagan. A key difference in subsequent approval ratings will be that President Reagan’s policies improved the economy and national security, where President Obama’s do not.

For the record, President Bush’s final approval rating while in office was 22% [CBS] to the low 30s (politifact), depending on the poll. Obama has some distance to go to reach that range, but he is off to a good start. His current rating is a sharp decline from the 70+% that he enjoyed when he took office.
http://www.realclearpolitics.com/epolls/other/president_obama_job_approval-1044.html
http://www.politico.com/news/stories/1209/30413.html
http://www.politifact.com/truth-o-meter/statements/2009/dec/17/karl-rove/rove-says-obamas-approval-ratings-after-year-are-w/
http://www.cbsnews.com/stories/2009/01/16/opinion/polls/main4728399.shtml

The biggest unforeseen development of the year was the legislative quagmire that President Obama and the congressional Democrats found themselves in. I thought that they would use their majorities in both houses of congress to quickly ram through a healthcare bill on the heels of the stimulus package, followed quickly by cap-and-trade. The fear instilled by voters into the Blue Dog Democrats is the primary reason that this did not happen.

By my count, ten of my twenty predictions have already become fact. Another ten have not yet happened but are still likely to happen over the next few years. None of my predictions have been proven incorrect. Of the ten predictions that have not yet occurred, I will be happy if they turn out to be incorrect, but my belief is that we are still on course for their fulfillment. To prevent such predictions as inflation and nuclear Iran from happening, it will be necessary for the US to change course. That will likely require a Republican win in 2010. That, in turn, may prevent Obama from being more unpopular than George W. Bush as he leaves office.

January 8, 2009
Secaucus NJ