Broken promise

In Dover, NH, on September 12, then-candidate Barack Obama said:

"I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."

He repeatedly told audiences that "you will not see any of your taxes increase one single dime."

However, today one of the largest tax increases took effect and it's going to hurt lower-income families more than most.

Taxes on a pack of cigarettes increased $.62 today to a total of $1.01. Other tobacco products saw similarly steep increases. The tax is going to be used to fund an expansion of SCHIP, the State Children's Health Insurance Plan, though the expansion will cover, in some states, people (not just children) in the top 25% of wage-earners in the country.

During the campaign, Pres. Obama told Americans they could have affordable health insurance without raising taxes on anyone but the rich. However, cigarette taxes are an increase on people who don't qualify as 'rich' and have a huge impact on lower wage earners because they are more likely to be smokers.

Then there is the anti-logic of taxing a product that you're trying to get people to stop using - trying so hard, in fact, that you're spending other tax dollars on the effort - and counting on what will obviously be declining revenue to fund a long-term expansion of a growing program. Can you say 'stuck on stupid'? (And no, this is not an April Fool's joke...)

The only remaining question is this: will Obama supporters who smoke see this as the breaking of promise? Or will they make the excuse that it's okay because it's 'for the children'?

More anti-logic from Columbus - SCHIP and Medicaid

Here's what I don't get:

Gov. Ted Strickland is upset because the U.S. Department of Health and Human Services rejected Ohio's plan to expand Medicaid eligibility to more families in Ohio. In fact, the state's plan would have increased the eligibility threshold from 200% of poverty level up to to 300%, meaning that families of four earning $62,000 per year would be eligible. In fact, he said he was 'appalled' by the decision.

He now plans to revise the request, increasing the eligibility threshold from 200% to 250% of poverty level. If the request is funded under SCHIP, the state would have a 30% match requirement. If the request is funded under Medicaid, the state would have a 40% match.

But then, there was today's Blade article in which the state's Medicaid struggles are detailed:

"...the governor who made expanded health care a priority angered supporters by delaying plans to restore promised dental Medicaid benefits to low-income adults that were eliminated two years ago.

As Medicaid rolls increase at a clip faster than expected, the governor also delayed promised fee increases for medical professionals providing Medicaid services.

And on Friday, the governor learned that the state likely will have to spend $207 million more for Medicaid than the budget anticipated, indicating that even more belt-tightening is to come."

So, if we've cut Medicaid services like dental benefits, delayed fee increases for medical providers and will have to spend $207 million MORE than budgeted, why are we asked the feds for permission to expand eligibility?

People making $62,000 per year are, according to IRS data, at the top end of the definition of middle class. Only 25% of wage earners make more than that - meaning that Strickland's rejected proposal was NOT covering 'low-income' families, but was, in fact, a request to cover all middle-class families - some of whom already have private insurance. And he wanted to do so while keeping cuts in services to people already enrolled in Medicaid.

The state cannot afford to meet its current commitments as budgeted, but they want to add more people onto the Medicaid rolls. Where is the logic in this?

Interesting tidbits

Here they are, global, national and local:

*** "House Democrats, convinced that President Bush blundered by vetoing an expansion of a children's health care program, plan to approve a very similar bill this week even as the administration offered new concessions Tuesday," reports the Associated Press. "The Democrats' revised bill would reduce the number of adults and higher-income families potentially eligible for the health insurance subsidies, presumably making it easier for Republicans to back it while saving face. But on the key issue of spending, Democrats say they will not budge from the original $35 billion pricetag." (emphasis added)

Umm...how do you reduce the number of adults and the number of higher-income families and still need the same amount of increase???? Anti-logic!

*** House Ways and Means Committee Chairman Charles Rangel, D-N.Y., announced today some proposed changes in tax law. Among them:

- a repeal of the alternative minimum tax starting Jan. 1, 2008 - Good!
- a 4% surtax on incomes above $150,000 for a single earner or incomes above $200,000 for a married couple - bad, because it contributes to the philosophy that the 'rich,' defined by income rather than assets, should pay more.
- an increase in the value of the child tax credit for those earning too little to owe federal income taxes - questionable, because I don't understand why people who don't owe federal income taxes in the first place need more of a federal tax break.
- extension of the research-and-development tax credit, tax breaks for teachers buying schools supplies and a deduction for state and local sales taxes - Good!

Rangel doesn't expect this to come to a vote this year, so we can watch and see how his plan works out in terms of specific legislation. As they say, the devil is in the details.

*** California wildfires are thought to be the work of an arsonist...SICK!

*** China has surged ahead of Germany for the first time to become the world's top exporter. They vaulted past the US at the beginning of this year. Machinery, equipment and cars now make up 46% of their total exports, while textiles are fading from the picture.

But in a related story, Palm Bay, Fla., may ban the purchase of products made in China. Residents would still be free to purchase whatever goods they want, but the city itself would face restrictions. Mayor John Mazziotti cites the questionable quality and safety of the goods, China's rights abuses, its record of pollution and the fact that American manufacturing jobs have been lost to China as reasons for proposing the ban.

*** Toledo's Westgate Mall is adding The Fresh Market ... woo hoo! Westgate owner Liz Holland said Fresh Market signed a lease last week. According to Holland, surveys of residents in the Westgate area showed the first preference was a gourmet grocer. Their stores feature a meat department with a butcher on duty, a European-style delicatessen, a bakery, a produce department, and fresh seafood flown into stores six times per week.

*** Toledo's ABLE plans to transform a downtown landmark that's been mostly vacant since the 1970s into a Center for Equal Justice. They want to raise $5 million over the next year to turn the former Western Union building their new headquarters for the work they do in 32 Ohio counties. Legal Aid of Western Ohio will join in the fundraising efforts.

They're offering naming rights for certain levels of donations and plan to raise half the amount from the legal community and the other half from the general public. And, so far, they've not asked for any tax dollars - how refreshing!

*** On a personal note, I had a pleasant conversation with my former colleague and current president of the Board of County Commissioners, Tina Skeldon Wozniak. She reminded me of a comment she made last year, predicting that I'd end up in radio at some point in the future. Yes, Tina, turns out you were right. And we both had a good laugh over how many times I've said that to her...

Steyn on SCHIP: Ponzi scheme?

I've long been a fan of Mark Steyn, a Canadian columnist and author, and his unique perspective on American politics. It was my husband who, after reading several of his columns online, introduced me to Steyn's witty and informative commentary.

As a Canadian, he often comments about the good things in America, especially compared to the more socialistic tendencies of European nations. His most recent analysis of SCHIP is no exception, making light of the 'for the children' catch phrase in contrast to what he describes as the real 'war on children.'

Last Thursday, Nancy Pelosi, as is the fashion, used the phrase "the children" like some twitchy verbal tic, a kind of Democrat Tourette's syndrome: "This is a discussion about America's children … We could establish ourselves as the children's Congress … Come forward on behalf of the children ... I tried to do that when I was sworn in as speaker surrounded by children. It was a spontaneous moment, but it was one that was clear in its message: we are gaveling this House to order on behalf of the children."

Etc. So what is the best thing America could do "for the children"? Well, it could try not to make the same mistake as most of the rest of the Western world and avoid bequeathing the next generation a system of unsustainable entitlements that turns the entire nation into a giant Ponzi scheme.

Steyn is always a thought-provoking read - but this column goes a step further and asks us to think not just about the short-term impact of a SCHIP expansion, but the cumulative effect it - and other entitlement programs - have ... especially on 'the children.'

UPDATED: Turns out Taxmanblog, Porkopolis and Wizbang blogs have posts on this article as well...

More on SCHIP

For a further update on the debacle that is SCHIP, cruise over to BizzyBlog for this informative post...where Tom defends the blogosphere's research...

Two tidbits from Cato Institute

The first one is particularly interesting to me because a while back I got an email from the ORP about what the priorities for the upcoming state legislature should be and 'de-regulation' was one of the options.

Market Fix Rests on Bright Ideas

"Texas power rates have increased 56 percent since 2000, and the state's electricity is among the most expensive in the country despite promises prices would go down when the state opened electric power to competition," reports The Houston Chronicle. "Many in the industry say the market is working, particularly for customers willing to shop for the best rates. Two of the state's top three political leaders, House Speaker Tom Craddick and Gov. Rick Perry, share that view."

In "Short-Circuited," Jerry Taylor, Cato senior fellow, and Peter Van Doren, editor of Cato's regulation magazine, write:

"After a pretty good 30-year run, deregulation is on the political ropes. Although loosening the shackles on banking, trucking and airlines delivered lower prices, robust competition and political applause, it hasn't worked for electricity. ... So did free market reformers take deregulation too far? Yes and no. Yes, because they promised rate reductions they had no business promising. No, because deregulation of some parts of the system was offset by more ambitious regulations elsewhere. The end result is even more economically artificial than the one we started with. ... True deregulation involves allowing market actors to run their businesses in whatever manner they like, price what the market will bear, and discover for themselves how best to deliver goods and services without government influencing those decisions with carrots and sticks. The faux deregulation we have in the electricity market unfortunately falls short on most of those counts. And that -- rather than the rate increases -- is the real problem."

And then there was this one, particularly interesting considering the upcoming political discussion on SCHIP:

Democrats See Wedge Issue in Health Bill

"Representative John R. Kuhl Jr. of New York received just his second telephone call ever from his state's Democratic governor, Eliot Spitzer, last week and was not surprised at the topic: children's health insurance," reports The New York Times. "'He said, 'I am calling you to come over to the dark side,' 'said Mr. Kuhl, who was urged by the governor to drop his opposition to health care legislation and join the effort to override President Bush's veto of the bill. Mr. Kuhl, a Republican who narrowly survived the Democratic sweep of 2006, said he was unlikely to budge. As a result, voters in his district will also be getting calls -- from Democrats and advocacy groups who are planning a telephone, radio, television and even text-message barrage against Republicans over what is shaping up as a defining domestic policy issue of the 2008 campaign."

In "Sink this SCHIP," Michael F. Cannon, director of Cato's health-policy studies and co-author of Healthy Competition: What's Holding Back Health Care and How to Free It, writes:

"SCHIP is senseless. Like its much larger sibling, Medicaid ... both programs force taxpayers to subsidize people who don't need help, discourage low-income families from climbing the economic ladder - and make private insurance more expensive for everyone else. ... All told, SCHIP is a very costly way of helping targeted families obtain health coverage...Some will complain that scrapping SCHIP would leave dependent families in the lurch. As a transitional step, Congress could convert federal Medicaid and SCHIP funding into a smaller, lump-sum payment to each state. That would serve as a halfway point toward eliminating these payments and simultaneously cutting taxes. States that want to maintain their current spending levels could raise the tax revenue themselves."

Whatever your position on the current legislation, I think the whole issue of the Federal government doing this - especially when it's called STATE Children's Health Insurance Plan - just adds more to the bureaucracy, and that's money which could be spent, instead, on direct services.

Interesting votes on SCHIP

I came across this blurb - I believe the original source was MSNBC - and wanted to share it with you:

"The clash over the State Children's Health Insurance Program (S-CHIP) is being fought largely between members of Congress from high-income states, such as Maryland, versus members from low-income states, such as South Dakota and Mississippi, which rank near the bottom in median household income, says MSNBC.

Consider:

* On the decisive Senate vote to push ahead with expansion of the S-CHIP program -- where both senators from a state voted for S-CHIP expansion -- they came from states with an average household income of nearly $50,000.

* But where both senators from a state voted against S-CHIP expansion, they came from states with an average household income of under $42,000, including the lowest-income states such as Kentucky, Oklahoma, and Mississippi."

Perhaps the senators actually realize, despite all the political rhetoric, that the planned expansion of SCHIP to the middle and upper classes is rather detrimental to those it's intended to help?

More anti-logic - this time on SCHIP

Congress has chosen a source to pay for the bulk of their proposed $35 billion increase in the State Children's Health Insurance Program - cigarette taxes.

According to numerous reports, expansion of the program (which would allow families with income up to $82,000 to qualify) would be financed with a 156 percent increase in the federal cigarette tax, taking it to $1 per pack from the current 39 cents.

And this tax will impact recipients of the SCHIP program more than others. Low-income people smoke more heavily than do wealthier people in the United States, making cigarette taxes a regressive form of revenue. Nearly one-third of all U.S. adults living in poverty are smokers, compared with 23.5 percent of those above the poverty level, according to government statistics.

So we allow expansion of the program to those who are not 'low income' or in poverty by imposing a tax that impacts low income and the poor more than others. Where's the logic in that?

But the biggest anti-logic of this expansion is the lack of any discussion or debate about basic demographics and their impact on this bill - maybe because there is little sympathy, in Congress or the nation as a whole, for taxing such a vice.

So consider this: you've got the U.S. Department of Education, the Centers for Disease Control, Substance Abuse and Mental Health Services Administration (SAMHSA), and the National Institute on Drug Abuse (NIDA) all providing grants and funding for anti-smoking campaigns. There are numerous opportunities at the state level for anti-smoking funds as well. Everyone, it seems, is spending money to get people to stop smoking - or to prevent them from starting in the first place.

And then you have this quote from Rep. Jack Kingston (R-Ga.), who said, during the House debate,

"And in order to get enough money to pay for this, it would require 22 million new smokers."

Spend money over here to get people to not smoke while spending money over there counting on an increase in smokers...Anti-logic!

The biggest irony of SCHIP - UPDATED

There are many ironies in the proposed expansion of SCHIP...but the biggest one of all is the fact that many families who are "too poor" and will thus qualify for enrollment in SCHIP, are also "too rich" and will have to pay the alternative minimum tax.

Guess the government has devised way to have OUR cake and eat it too.

***special thanks to Hooda Thunkit who pointed out that it's "our" cake...

More on SCHIP

For those following the on-going issue of expanding socialized medicine, in the form of the State Children's Health Insurance Program, I offer this column by Star Parker.

According to the article:

The reason for the launch of the SCHIP program in 1997 was affordability of health care. The point was to finance health care for children in families that earn too much to qualify for Medicaid.

Now, according to The Wall Street Journal, almost half of our nation's children have government-paid health care either through Medicaid or SCHIP.

This new proposed expansion would entrench government health care more deeply into the nation's middle class.

Whereas SCHIP coverage has commonly covered families earning up to 200 percent above the poverty line, the new proposal lifts this ceiling to 300 percent. According to the Congressional Budget Office, up to 75 percent of families in this income range already have private coverage.

This is an informative article which also addresses the issue of less government regulation - rather than more.

Socialized Medicine, SCHIP and the role of the GOP-UPDATED

As I was doing some research on the proposal to expand the SCHIP (State Children's Health Insurance Program) by taxing cigarettes and cigars, I came across and interesting perspective from Marc Kilmer of the Buckeye Institute.

(For some background information on this issue, I recommend local blogger Smoke If You Got 'Em, who has a post on the issue as well as the response to a letter he sent to Sen. Sherrod Brown. Toledo Talk also has a thread on the issue.)

Kilmer starts with an challenging question:

"If a politician ever suggested that taxes should be raised on the poor in order to pay for a product that people in the middle or upper class could already afford, it is not likely that this politician would have much of a future in office. So why, then, are so many members of the U.S. House and Senate rushing to support an effort to raise cigarette taxes (which hit the poor much harder than the rich) to pay for expanding federal health insurance program to include many middle class families?"

The reason, he explains, that SCHIP needs more money isn't just because of increasing medical costs - it's because coverage is being expanded to children in families that should be able to afford medical coverage (in some states a family of four can make up to $83,000 and still qualify) - and to ADULTS. In my logic, this doesn't make sense, as such expansions seem to be directly opposite to the original intent of covering children in families who made too much to qualify for medicare, but not enough to purchase their own insurance.

Kilmer says, "In fact, according to a recent study by the non-partisan Tax Foundation, almost 60 percent of American children would be eligible for government health care under a proposal being pushed by some Senators. Can anyone say with a straight face that this is really about “poor kids”?"

He further explains that the idea for such taxes is because "smokers impose such a heavy burden on government health care programs" so it's logical that they should pay more for medical care. But he rightly points out that children aren't supposed to be smoking, so how do you justify the use of such fund for them?

Kilmer hits the nail on the head with this statement:

"Why tax smokers more to pay for this program, then? I think it has a lot to do with the fact that people like “free” government programs. They like the concept of government funding children’s health care, but they do not want to pay for it themselves. So they pick out a group of folks engaged in activities they do not like – such as smoking – and decide to tax them."

But before you go off on the Democrats who are supporting this, remember that there are plenty on the right side of the aisle who believe this expansion of government is a good idea. In fact, it was a Republican Congress that, in 1997, gave us (what was at the time) the largest expansion of government health care since 1965, when Medicaid and Medicare were created.

The new federally funded program? "State Children's Health Insurance Program" (SCHIP).

At the time of passage, Congress estimated SCHIP would cost taxpayers $48 billion over ten years. Ten years later, the current figure being bandied about is $5.04 billion per year, which is not that much more than what's been spent, on average, each year previously. But the kicker is that the re-authorization is only for five years and some estimate that the shortfall from the states during that time frame could be $7 billion - yes, billion with a 'b'...

Ironic - when the Democrats controlled Congress in 1993, the Clinton administration failed to pass a national plan for socialized medicine. But Republicans, in 1997, implemented the administration's backup plan. According to the Association of American Physicians and Surgeons (AAPS), a "kids first" strategy which could be implemented through Medicaid was the backup option in case the larger plan failed. Many rejected 'HillaryCare' as socialized medicine...but those same people willingly took the first step toward the end goal by passing SCHIP.

So why did the GOP do this? Some speculate that they caved to an effective Democrat strategy which went something like this: Let's propose a new government program for children and fund it with cigarette taxes. Then, if Republicans oppose "KidCare" we'll charge that they don't care about children and that the only reason they oppose it is because they get large sums of money from the tobacco industry. This was a brilliant political strategy and one that is duplicated in numerous issues today. How many times do you hear, in a campaign, that it's 'for the children'?

At the time of passage, there was concern that the program would encourage families and employers to drop private health insurance and take this new government subsidy.

Estimates from the Congressional Budget Office in 1997/1998 were that half of the participants in the new program would be families who gave up private insurance. And they had good reason for such expectations....In 1987, Medicaid was expanded to pregnant women and their children with incomes 250% of the poverty level. Between 1988 and 1995, the number of kids covered by private insurance fell 8 percentage points while the percentage of kids covered by Medicaid climbed 7.6 points. Some studies showed that at least 3/4 of the shift was the result of parents dropping private coverage for themselves and their children.

Another concern at the time was that SCHIP would eventually become mandatory, regardless of family income or need. With the current proposed expansion to higher income levels, it's not yet mandatory, but it looks like it will certainly become the 'insurance of choice' for those eligible, after all - if the government is going to pay for something, why should I?

In 1994, the Republicans won control of Congress by promising to reduce government. But they didn't. Recently, under the guise of 'compassionate conservatism,' Republicans continued to expand the scope and reach of the federal government. One would think they would have learned a good lesson from previous experiences - that it is almost impossible to roll back entitlement programs once they're created, especially health-care entitlements. Yet instead of learning that lesson, in 1997 Republicans helped create the largest health-care entitlement in 30 years. And then, in 2003, they exceeded their previous record by passing what became the largest expansion of health-care entitlements when they approved the Medicare Prescription Drug program.

If they support the proposed expansion of eligibility for SCHIP, they may get credit for paving the road to socialized medicine.

UPDATE:
Fellow SOBers weigh in: Porkopolis has additional information on SCHIP and some good links, and One Oar in the Water shares thoughts about socialism and presidential candidate Ron Paul.