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- Cap & Trade Rally in Springfield/ Do You Really Get to Keep Your Health Insurance? – http://eepurl.com/dh8i #
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Citizens To Rally Against Cap & Trade in Springfield, Ill.
Climate Change Legislation
being considered in Washington
will cause ILLINOIS CONSUMERS huge economic pain and produce little environmental gain
Legislation approved by the House of Representatives will cost 2 million American
jobs, raise gasoline and diesel prices up to $4 per gallon, raise electric rates, make American businesses less able to compete globally, and reduce America’s energy security.
Join us and voice your disapproval.
Illinois Rally For Jobs and Affordable Energy
Location: Crowne Plaza Hotel, 3000 South Dirksen Parkway, 2nd Floor Ballroom, Springfield, Illinois
Date: September 1, 2009
Time: Doors open at 11:30 a.m.
Rally begins at 11:45 a.m. (Lunch included)
The U.S. Senate will soon take up climate/energy/tax legislation.
Let our U.S. Senators know they need to oppose the Waxman/Markey House Bill and not make the same mistakes.
Commentary: If You Like Your Insurance, Can You Really Keep It?
Commentary
Contact: Greg Blankenship | gkblankenship-at-all4growth.org | 217.544.4759
(Springfield, Ill.) One of the most common refrains of President Obama during out national debate over who is going to pay for our nation’s health care is that under his plan, “If you like your insurance, you can keep it.”
The line is an attempt to combat one of the main reasons why the Clinton health reform died the death of thousand cuts in 1993. Then, like today the vast majority of voters who had insurance and like what they had and didn’t want the government interfering with what they had.
The President’s refrain suggests he learned something politically from the early 90’s fisticuffs over health care. But, stubbornly, the question remains among the electorate. His plan isn’t popular – but the latest polls show opposition is leveling – and the President simply hasn’t sold, “If you like your insurance, you can keep it.”
And there is good reason for that skepticism.
In any market exchange there is a supplier of a good and buyer demanding a good. For the seller there has to be a market upon which the seller can profit. But if the producer supplying the good can’t profit from the sale, then the producer is going to move on to something more productive or goes out of business.
Now, President Obama, being a politician, isn’t going to be the one to interfere with the demand side of the equation. However, the intent of would be reformers would very much interfere with the supply side of health insurance. Here are three ways in which you might like your health insurance, but won’t be able to keep it.
Right off the top three million Americans wouldn’t have a choice according to the Congressional Budget Office. These are elderly Americans participating in Medicare Advantage. Medicare Advantage is a Medicare plan in which seniors can choose to opt for private insurance coverage instead of traditional Medicare. About 20% — about 10 million seniors — of Medicare enrollees participate in the program because it provides more generous benefits than traditional Medicare. Under plans before Congress, the plan would be slashed by $150 billion over 10 years that could drive insurance companies out of the program.
Another manner in which you could lose your current coverage is that your employer could drop your coverage and simply pay a fine. Under an employer mandate in which businesses provide health benefits or pay a fine, some companies may find it easier to just pay the fine. It’s the recognition of this incentive that leads critics of the public option to argue that the public option will cost more than the Obama Administration and congressional drafters of the plan claim.
A third way in which you can be denied the health insurance you like occurs when the insurance simply goes away. This is what happened in places in New York and New Jersey when their state legislators told insurance companies they could no longer deny coverage for pre-existing conditions, had to charge everyone living in the same community the same price whether or not they were young or old, sick or healthy. Many insurers simply left these markets because they no could no longer make a profit. Young people and young families decided they couldn’t afford to subsidize the old and infirm and simply chose to go without insurance. That’s why the fastest rising group today without insurance are families in big states making $75,000 per year or more.
In each of these scenarios you may like the insurance you have and may seek to keep it, but the suppliers of the insurance you like will no longer be willing to provide it. Or, even worse, it may still be offered to you but at prohibitively higher costs. No, the President wouldn’t be breaking the his promise that, “If you like your insurance, you can keep it.” Of course he never promised that the insurance you liked will still be there once his health plan was implemented.
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Greg Blankenship is President of the Illinois Alliance for Growth.
Twitter Updates for all4growth
- Great day to be put on the hog. Perfect weather. Even need a light jacket #
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- @mkhammer it’ll hapen sooner than you think. in reply to mkhammer #
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Frankly and simply: THEY’VE QUIT DRINKING
Tom Korologos explains why dealmaking in Washington, DC has gone away.
It’s still true in Illinois state government that deals are done over drinks. Whether it be at a lobby reception or in one of Springfield’s downtown bars, democrats and republicans still talk to one another in the state capital. Lobbyists interact with one another and legislators. Friendships are struck.
It doesn’t mean people are less partisan or they lose their bearings. But it does make it much harder to demonize someone or convey hatred when you’ve shared a drink the night before. Politics are very raw in Springfield, the edges are rough, and players often view politics as a zero sum game. Given that ugly nature of Illinois politics, I’d hate to see it where we didn’t have that moderating influence in Springfield.
Twitter Updates for all4growth
- Decisions, decisions…. Scotch or Bourbon for a night cap??? #
- For all my Chicago friends out there: The Cubs are 9 games out behind the Mighty, Mighty Redbirds. That means all is good w/the universe. #
- We should all take time to read & note: The 12 most annoying types of Facebookers. Not a complain … just sayin’. http://bit.ly/5H5ZO
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Note to IL Pol. Inst.: Underreporting IL State Spending Doesn’t Help Efforts To Reform
My old haunt, the Illinois Policy Institute, published a one pager on state spending last week that appears to want to shock its readers into anger over the fact that state spending has grown by 39% in the last ten years. That’s on average 3.9% per year according to their analysis of state appropriations. The title of the paper is “Out of Control” and they describe that 3.9% average annual inflation adjusted growth as an explosion.
Their argument is that:
Illinois’s population growth has been minimal, increasing just under 7 percent between 1998 and 2008. Population growth has been limited, but not so with per capita spending. In 1998, state spending per resident was $3,500. Ten years later, state spending per resident was $4,600 (inflation adjusted). Government spending growth on a per-person basis hasbeen on a sharp–and unaffordable–upward curve.
But when I looked at the 10 year period prior to the IPI’s analysis I found 3.1% inflation adjusted growth. That’s when Republicans ran Illinois. If we are to believe the numbers then Democrats have increased spending by .8% on inflation adjusted average yearly basis when compared to Republicans. Is that all that shocking?
Average change in year-to-year real gross state product in Illinois averages 1.7% those ten years IPI examined (the average (the avg. year-to-year change in the inflation rate was about 2.98% those years). So, we have real state spending exceeding real growth in the economy by 2.2% if we use state appropriations as our guide. Still angry?
From all of this it wouldn’t take long for a skilled state spender to convince Illinoisans that the Illinois Policy Institute is making a mountain out of a molehill. The state looks friggin’ well run and the Institute looks like a bunch alarmists touting a solution — tax and expenditure limitations — that isn’t all that far off from what we have now.
But wait — and here’s the twist — IPI is exactly right. State spending is out of control. There has been an explosion in state spending. But spending limitations aren’t going to address the problem because the problem isn’t in appropriations. The problem is the structure of Illinois government itself. The truth is IPI is underreporting state spending growth because much of Illinois’ spending growth is off budget. Appropriation numbers also fail in explaining how tax dollars are being spent today, leading to a fiscal wreck in the future.
A better way to understand Illinois’ problem is to look at how state spending was done in the 1990’s compared to today. In both ten year periods (1987-1997 and 1998-2008) there were recessions and booms. As noted above, appropriations grew at a 3.1% real rate from my replication of IPI’s reported methodology. That is not far a cry from the 3.9% growth this last 10 years.
The difference was that Illinois was paying down previous debt and meeting its pension obligations during the prior period. The pay cycle for Medicaid bills was about 18 days, according to one retired senate appropriator, compared with up to 180 days for certain providers today. In 2009, the Medicaid payment cycle “increased sharply, for example. Medicaid was paid for during the most of the 90’s, that wasn’t the case during the Blagojevich/Quinn Administrations.
Today, the state debt has been more than doubled, plans intended to make Illinois’ public pensions solvent mid-century were gutted. Payments to Medicaid are billions of dollars behind and rolled over year-to-year which isn’t measured in appropriations. Most of the Medicaid expansions are off budget due to a little talked about law passed during the Walker Administration that gives the Dept. of Health Care and Family Services effective carte blanche (Sec. 25 of the State Finance Act) to hold on to Medicaid bills and reimburse health care providers whenever they wish. In other words, last year’s bills are being paid from this year’s budget and this year’s bills will be paid out of next year’s budget.
So much for lapse period expenditures (the window at the start of the fiscal year in which last fiscal year’s bills can be paid). The fastest growing and largest portion of general revenue spending is Medicaid and Medicaid is unhinged from budget obligations. According to the Commission on Government Forecasting and Accountability 2010 GAAP Report, this will account for $2.3 billion in hidden spending on top of appropriations — raising the state’s deficit on a modified accrual basis to $14.7 billion instead of the $12.4 billion reported by Governor’s Office of Management Budget.
Then there are pension payments. They were first taken off budget by Blagojevich when he began to borrow money to make pension payments. Bonds payments are essentially off budget. His first year in office, that meant $2 billion spent and shifted into state debt. This year $3.5 billion was borrowed for pension payments and taken off budget. That $3.5 billion is spent today and shows up as annual bond payments in future budgets — and automatically paid. It’s free money for the purposes of a current year balanced budget on paper.
Americans for Prosperity’s Joe Calomino testified earlier this year about other off-budget spending. The Illinois Libertarian Party in 2003 claimed to identify $4 billion in off budget spending not accounted for in that year’s spending. The truth, however, is that no one really knows how much Illinois is spending and those doing the spending like it that way. I’ve written in the past how Illinois has 1750 plus state programs but no catalogue of programs. Through the appropriations process or not, Illinois often doesn’t know how or what it is spending money on or whether they are wasting money on redundant programs.
In this year’s capital bill (which is not part of general revenue fund spending but its own spending blue print on top of the budget) community groups received money they didn’t ask for. Judicial Watch and Americans for Prosperity had to sue to get the Memorandums of Understanding between the Gov. Blagojevich and the General Assembly released last year. Those MOU’s outlined “grants” to family members of senators and other pet projects — i.e. pork.
The truth is that the Springfield spenders want groups like the Illinois Policy Institute, Americans for Prosperity and the Illinois Alliance for Growth looking at appropriations line items because those numbers show you what the spenders want you to see. What groups like ours need to do is look behind the curtain at the spending that isn’t readily available. Pressure needs to be placed on the General Assembly, the governor, the constitutional officers and the bureaucracy to force an audit of state government — a huge, daunting and probably nearly impossible task.
Finally, pithy one pagers looking at the wrong numbers with no context and silver bullet solutions will just aid the Springfield’s spenders not hinder them. The Balanced Budget Amendment is the perfect example of this. It acts as a ratchet on spending increases because in flush years lawmakers go nuts with spending and in lean years they carp about the need to hike taxes to maintain services. I’m a supporter of expenditure limitations and have written about them, but applying them to appropriation lines won’t be very useful in stopping this hidden spending.
It is critical to understand that state spending in Illinois is a target that cannot be nailed down as a matter of design by the spenders. Only through a thorough understanding of how Illinois works, and an enormous effort will anyone ever get a grip on what has happened to this state since 1996 — and for that matter 1970. And that cannot be accomplished with a 700 word superficial one pager that underreports spending and can be spun by the spenders.
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- I’m wondering whether or not Pres. O is snookering us on his fiscal outlook . He’s setting some pretty low expectations to exceed. #
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Cash, Clunkers, and Clientilism
Nicki Kurokawa at the Independent Women’s Forum divulges that cash for clunkers was just the beginning:
“Cash for Clunkers has been junked, having exhausted its Congressionally-approved funds. Good riddance to bad rubbish (the program, that is, not the useable cars that were unnecessarily retired at a loss to the economy.)
Now, brought to you by the same geniuses that approved that broken-window program, comes: Cash for Appliances!
Intended to assist struggling U.S. appliance manufacturers, the program will provide rebates of $50 to $200 for the purchase of energy-efficient dishwashers, stoves, and fridges.
Why stop there? Many industries are suffering. Why not a “cash for clogs” program to help U.S. footwear manufacturers (which would also serve the dual purpose of getting those heinous shoes out of circulation, which totally offend my sensibilities)? Or a “bucks for bagels” program to help bakers? Or a “greenbacks for golf balls” program to help, uh, golf ball manufacturers?”
While the Illinois Alliance for Growth does need a new beer fridge, and lets face it there are a lot of tacky shoes out there, we aren’t getting these goodies for free. When it comes to cash for clunkers, in some states, not Illinois, you can get whacked pretty good on the sales tax front — well at least more so than if you just traded your car in.
Nicki rightly points out that this government picking winners and losers and that’s bad enough. She also notes that industries will seek to become clients of the state. Why innovate, why compete when you can have big brother rig the system in your favor. Line enough pockets and hey, you win.
Yet, there is also a fiscal cost to these schemes. But if it costs x to make a dishwasher and part of that is subsidized, then that subsidy is going to have to come from somewhere. Mainly your neighbor and yourself as well as your children in the future. We’ll pay in the form of higher taxes to pay off the debt. And that federal debt to be paid off with higher taxes will also eventually lead to higher interest rates which means you pay more for your housing, credit cards and other big ticket items traditionally paid with through borrowing.
In sum, you pay more and more, and get less and less. That isn’t what this country is supposed to be about.
