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As we’ve been following this story regarding the IRS for years, here’s the latest update from the Washington Times:
Nearly seven years after it applied to the IRS for nonprofit status, the Albuquerque Tea Party has finally been given a decision: Denied.
The tax agency, under orders from a federal judge, is belatedly tackling the remaining tea party cases that it delayed for years, and so far the tea party isn’t doing well. Only one of the three groups in the case was approved, and the other two, including Albuquerque, got notices of proposed denials last week.
The applicants will have a chance to appeal, but the denials aren’t sitting well with the groups, whose attorney said it’s more evidence that the IRS continues to single out the tea party for abuse.
“It is clear that we still have an IRS that is corrupt and incapable of self-correction,” said Jay Sekulow, chief counsel at the American Center for Law and Justice, which represented a number of tea party groups in a case against the tax agency.
The one group that was approved was Unite in Action, a Michigan-based organization that first applied for tax-exempt status more than six years ago. The Albuquerque Tea Party and Tri Cities Tea Party from Washington state were notified of proposed denials.
“It is clear that we still have an IRS that is corrupt and incapable of self-correction,” said Jay Sekulow, chief counsel at the American Center for Law and Justice, which represented a number of tea party groups in a case against the tax agency.
Still to come is a decision on Texas Patriots Tea Party, a group that is part of a separate class-action lawsuit out of Ohio. A judge in that case ruled late last month that the IRS was likely violating the group’s First Amendment rights by delaying its application and ordered the tax agency to process and decide on the application.
The IRS, which declined to comment on the new decisions, admitted in court that it did subject the tea party groups to intrusive scrutiny, singling them out because of their political viewpoints and forcing them to go through hurdles that other groups didn’t face.
IRS officials over the summer promised both the courts and Congress that the agency would begin to process all outstanding applications after years of delay that it blamed on a “litigation hold” policy.
Under that policy, the IRS said once a group sued, the agency stopped work on its application. Federal courts held that policy was both ill-advised and not a hard-and-fast rule and ordered the agency to get back to work.
In a notice filed last week, the IRS said it has now met its first deadline.
“As of November 8, 2016, the Internal Revenue Service has issued determinations with respect to each of the Plaintiffs whose applications for tax exempt status had been pending,” the agency said.
Mr. Sekulow said the groups never should have faced the delays, adding that they showed “continuing problems inside the IRS.”
In a court filing this weekend Mr. Sekulow asked a federal judge in the District of Columbia to officially declare that the IRS violated groups’ First Amendment rights.
The groups also said they are worried that the IRS decision-making in applications that were denied might have been skewed by the entire history of the targeting.
The Albuquerque Tea Party first applied on Dec. 29, 2009. Four months later, it got a two-page, 10-question reply from the IRS, beginning years of back and forth. It has faced a series of follow-up questions, the years long delay in court and an offer to be approved — if the group would agree to limit its political advocacy to 40 percent of its activities.
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Jay Cost is one of my favorite writers these days, blending history and analysis in a straightforward tone. Here’s his take on why Clinton lost:
“Political coalitions are tricky things to manage in the United States. Ours is a country of more than 320 million people but only two major political parties—so each side’s voting bloc tends to be unstable at the margins, where national elections are actually won and lost. It is hard to build a winning coalition, harder still to maintain it during the laborious process of governing, and hardest of all to hand it off to a designated successor. It takes a politician of the highest caliber—a Roosevelt, a Reagan—to accomplish all this.
As last week’s results clearly demonstrated, Barack Obama is not cut from such an Augustan cloth. The political coalition he built in 2008 burst apart in spectacular fashion. His successor will not be Hillary Clinton, his secretary of state, but Donald Trump, the man who accused him of being a foreigner.
No lame duck president has ever had to suffer such ignominy. If Obama were to quietly steal out of town on January 20, as John Adams and John Quincy Adams did upon their defeats, nobody could blame him. Even so, Obama’s coalition fell apart because he failed utterly to maintain it during his tenure.
For eight years, we have heard stories about Obama’s “coalition of the ascendant.” Single women, millennials, Latinos and Asians, gays and lesbians, and so on, drove Obama to a fantastic electoral victory in 2008 and would power the Democrats for a generation—or more—to come.
While these blocs were integral to Obama’s triumph in 2008, there were other, more humdrum factions as well—the typical ones that every Democratic politician, be he as cool as Obama or as boring as John Kerry, has to win over. The suburban women of Florida’s I-4 corridor. The blue-collar workers in Dubuque and Erie. The African Americans in Detroit and Milwaukee, who are always counted on to deliver an enormous haul for the party. These voters are not the stuff of highfalutin’ think pieces for liberal magazines, but they were nevertheless an essential part of Obama’s victory.
They abandoned his successor last week. Not altogether, of course—but enough to serve the Democrats a shocking defeat.
There had been warning signs from virtually the start of Obama’s tenure. He won a smashing victory in 2008 by sweeping the traditional swing states and adding new ones to the list—Colorado, Florida, Iowa, Michigan, Nevada, New Hampshire, North Carolina, Ohio, Pennsylvania, and Virginia. But voters in all these states signaled at some point over the last seven years that their loyalty was not unconditional. Starting with Bob McDonnell’s whopping victory in the Virginia gubernatorial race in 2009, then Scott Brown’s surprise Senate triumph in Massachusetts, and finally to the Tea Party wave of 2010—it was evident by the halfway point of Obama’s first term that personal affection for him did not necessarily translate to support for his policies or other Democrats. Then came 2012, in which the president was reelected with 3.6 million fewer votes than he received four years prior. The admonition was repeated in 2014, when the Republican wave that hit the House of Representatives in 2010 wiped the Democrats out of their Senate majority.
Obama’s response to these electoral setbacks was to pretend they did not happen. Again and again, he stubbornly refused to change course. When he lost his filibuster-proof Senate majority in 2010, he passed an unfinished version of Obamacare through the budget reconciliation process. When he and House speaker John Boehner were on the cusp of striking a grand bargain on taxes and entitlements in the summer of 2011, he insisted on additional tax hikes at the last minute, skunking the deal. When he won a narrow victory in 2012, he called for extensive gun control legislation, framing the debate in Manichean terms that alienated those Midwestern voters who had the gall to support him and the NRA simultaneously. When the Democrats lost the Senate in 2014, he enacted immigration reform through executive fiat and brokered a highly unpopular deal with Iran.
Last but not least, he handed off leadership of his party to Hillary Clinton. Weighed down by personal and professional issues, she was his opposite in almost every way. During the Democratic primary battle of 2008, she had been a useful foil for Obama, illustrating his point that it was time for a new approach to governance. Now, she was the heir apparent—as if his voters would not care either way. Turns out they did.
Much of the blame for last week’s defeat obviously belongs to Clinton, who was a terrible candidate. But one cannot overlook Obama’s responsibility in this epic debacle. He blessed Clinton’s candidacy early in the cycle, despite the fact that she was under investigation by the FBI. And for years prior, he had acted as though he could do as he wished and retain the loyalty of his voters.
He was wrong. Clinton dramatically underperformed with the white working-class in the Midwest. She did not receive sufficient margins from African Americans in the Rust Belt or the South. And though she had the noxious Trump as her opponent, she failed to make up for these setbacks with swing voters in places like suburban Charlotte or Philadelphia. Nor did she make many inroads with traditional GOP constituencies in Milwaukee and Grand Rapids, who had been turned off by the bombastic Republican in the primaries. Even the Latino vote disappointed, leaving Florida out of reach and Colorado surprisingly close. Only the Harry Reid “machine” in Nevada functioned as expected.
When Obama leaves the White House in two months, the Republican party will hold more public offices than at any point since the Great Depression. The president’s greatest political ambition will therefore go unrealized: He is not the 21st century’s Ronald Reagan; he is its Woodrow Wilson.
The 28th president was quite a bit like Obama, a cerebral type with unceasing confidence in his superior intellect and moral purity. But Wilson’s ambition to recast society in his own image outstripped his political acumen. Elected in a landslide in 1912, he only narrowly squeaked by in 1916. Four years later, his would-be successor lost to Warren Harding, one of the most unspectacular specimens ever to occupy the Oval Office. Wilson tarnished the reputation of progressivism so badly that the GOP would enjoy complete control over the government for the ensuing decade. It was Franklin Delano Roosevelt—a pragmatic man who lacked Wilson’s scholarly disposition but had an intuitive grasp of what the people expected of him—who would become modern liberalism’s hero.
Maybe some Democrat down the line will re-create Obama’s coalition and reshape it in a durable way. After all, Obama was on to something back in 2008. There are common interests among working-class whites in the Midwest, college kids, minority voters, and suburban women. Democrats have thought for a decade that this coalition was waiting to emerge. Not so, but a gifted politician could unite that group and build a coalition for the long haul. Such a leader would have to be more like FDR or Reagan than like Wilson—or Obama.”
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Over the next week or two, I’ll do a more thorough analysis of portions of Trump’s tax plan. Here it is in full, so that you don’t have to go searching for it:
DONALD J. TRUMP’S VISION
- Reduce taxes across-the-board, especially for working and middle-income Americans who will receive a massive tax reduction.
- Ensure the rich will pay their fair share, but no one will pay so much that it destroys jobs or undermines our ability to compete.
- Eliminate special interest loopholes, make our business tax rate more competitive to keep jobs in America, create new opportunities and revitalize our economy.
- Reduce the cost of childcare by allowing families to fully deduct the average cost of childcare from their taxes, including stay-at-home parents.
TAX LAW CHANGES
The Trump Plan will revise and update both the individual and corporate tax codes:
Individual Income Tax
Tax rates
The Trump Plan will collapse the current seven tax brackets to three brackets. The rates and breakpoints are as shown below. Low-income Americans will have an effective income tax rate of 0. The tax brackets are similar to those in the House GOP tax blueprint.
Brackets & Rates for Married-Joint filers:
Less than $75,000: 12%
More than $75,000 but less than $225,000: 25%
More than $225,000: 33%
*Brackets for single filers are ½ of these amounts
The Trump Plan will retain the existing capital gains rate structure (maximum rate of 20 percent) with tax brackets shown above. Carried interest will be taxed as ordinary income.
The 3.8 percent Obamacare tax on investment income will be repealed, as will the alternative minimum tax.
Deductions
The Trump Plan will increase the standard deduction for joint filers to $30,000, from $12,600, and the standard deduction for single filers will be $15,000. The personal exemptions will be eliminated as will the head-of-household filing status.
In addition, the Trump Plan will cap itemized deductions at $200,000 for Married-Joint filers or $100,000 for Single filers.
Death Tax
The Trump Plan will repeal the death tax, but capital gains held until death and valued over $10 million will be subject to tax to exempt small businesses and family farms. To prevent abuse, contributions of appreciated assets into a private charity established by the decedent or the decedent’s relatives will be disallowed.
Childcare
Americans will be able to take an above-the-line deduction for children under age 13 that will be capped at state average for age of child, and for eldercare for a dependent. The exclusion will not be available to taxpayers with total income over $500,000 Married-Joint /$250,000 Single, and because of the cap on the size of the benefit, working and middle class families will see the largest percentage reduction in their taxable income.
The childcare exclusion would be provided to families who use stay-at-home parents or grandparents as well as those who use paid caregivers, and would be limited to 4 children per taxpayer. The eldercare exclusion would be capped at $5,000 per year. The cap would increase each year at the rate of inflation.
The Trump Plan would offer spending rebates for childcare expenses to certain low-income taxpayers through the Earned Income Tax Credit (EITC). The rebate would be equal to 7.65 percent of remaining eligible childcare expenses, subject to a cap of half of the payroll taxes paid by the taxpayer (based on the lower-earning parent in a two-earner household).
This rebate would be available to married joint filers earning $62,400 ($31,200 for single taxpayers) or less. Limitations on costs eligible for exclusion and the number of beneficiaries would be the same as for the basic exclusion. The ceiling would increase with inflation each year.
All taxpayers would be able to establish Dependent Care Savings Accounts (DCSAs) for the benefit of specific individuals, including unborn children. Total annual contributions to a DCSA are limited to $2,000 per year from all sources, which include the account owner (parent in the case of a minor or the person establishing elder care account), immediate family members of the account owner, and the employer of the account owner. When established for children, the funds remaining in the account when the child reaches 18 can be used for education expenses, but additional contributions could not be made.
To encourage lower-income families to establish DCSAs for their children, the government will provide a 50 percent match on parental contributions of up to $1,000 per year for these households. When parents fill out their taxes they can check a box to directly deposit any portion of their EITC into their Dependent Care Savings Account. All deposits and earnings thereon will be free from taxation, and unused balances can rollover from year to year.
Business Tax
The Trump Plan will lower the business tax rate from 35 percent to 15 percent, and eliminate the corporate alternative minimum tax. This rate is available to all businesses, both small and large, that want to retain the profits within the business.
It will provide a deemed repatriation of corporate profits held offshore at a one-time tax rate of 10 percent.
It eliminates most corporate tax expenditures except for the Research and Development credit.
Firms engaged in manufacturing in the US may elect to expense capital investment and lose the deductibility of corporate interest expense. An election once made can only be revoked within the first 3 years of election; if revoked, returns for prior years would need to be amended to show revised status. After 3 years, election is irrevocable.
The annual cap for the business tax credit for on-site childcare authorized by Sec. 205 of the Economic Growth and Tax Relief Reconciliation Act of 2001 would be increased to $500,000 per year (up from $150,000) and recapture period would be reduced to 5 years (down from 10 years).
Businesses that pay a portion of an employee’s childcare expenses can exclude those contributions from income. Employees who are recipients of direct employer subsidies would not be able to exclude those costs from the individual income tax and the costs of direct subsidies to employees could not be used as a cost eligible for the credit.
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As a financial guy, I find that there are certain things that Trump is suggesting in his tax plan that are just flat out ridiculous. For instance, his childcare plans are ludicrous — because we simply cannot have things that add huge complexity to the code anymore. The idea is worth exploring, but his suggested implementation is atrocious. We can’t keep doing this. The tax code is already Byzantine enough for taxpayer and tax preparer.
A potential problem with his plan is in regard to his proposed 15% tax rate for corporate and individual businesses — again, it’s hugely complex. Furthermore, I think the 15% rate for business rate is too low, especially coming from the perspective of the current corporate tax rate; the change is rather drastic, and probably a little too low from a revenue perspective. 20% is a better rate and keeps us competitive in a global market.
There are some main things that his plan does that simplifies the code: for instance, he kicks out the Obamacare tax, kicks out Alternative Minimum Tax (AMT). These are both monstrously complex tax issues, and removing them is beneficial to the code.
Finally, as all the non-Trump supporters are talking about Trump’s plan and how it will bankrupt everything — they are assuming he’ll get everything! It’s really a non starter — you can modify his plan somewhat all over, here and there, and the growth it will give the economy will pay for itself. Couple it with cutting spending, and you really can have a much stronger economy, which will be good for both the debt and deficit.
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“Obamacare is working as designed” — except for the part about “individuals free-riding the system,” according to Jonathan Gruber, one of the chief architects of Obamacare. His assertion is that Obamacare doesn’t need any kind of overhaul; the people are the problem. They aren’t doing what they are supposed to in order to make Obamacare work.
“We have individuals who are essentially free-riding on the system, they’re essentially waiting until they get sick and then getting health insurance. The whole idea of this plan, which was pioneered in Massachusetts, was that the individual mandate penalty would bring those people into the system and have them participate. The penalty right now is probably too low and I think that’s something that ideally we would fix.”
Not enough people want to participate in the government run healthcare system, so the solution is to punish them more by levying a greater tax/penalty/fee to pay for the spiraling costs.
For tax year 2016, the penalty will rise to 2.5% of your total household adjusted gross income, or $695 per adult and $347.50 per child, to a maximum of $2,085. For tax year 2017 and beyond, the percentage option will remain at 2.5%, but the flat fee will be adjusted for inflation.
So, people aren’t using Obamacare because it’s expensive — premiums this year are rising at an average of 25%. So they choose to forgo insurance and pay a penalty, and then it’s their fault for not paying into the system, so we need to raise the penalty rates higher to force them to choose between insurance with high premiums or no insurance with high penalties. This doesn’t sound like it’s about healthcare. It sounds like it’s about more money for a healthcare system that is hemorrhaging funds at an alarming pace.
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I’ve written about disparate impact numerous time over the years, warning that this tactic would begin to be seen more frequently beyond the business world, such as in housing and labor. Thomas Perez and Loretta Lynch are two of its fiercest advocates, and a recent story in the Wall Street Journal suggests that my prediction is coming true.
The idea of “disparate impact” holds that a defendant can be held liable for discrimination for a race-neutral policy that statistically disadvantages a specific minority group even if that negative “impact” was neither foreseen nor intended. The Department of Labor has leveled that charge at a Silicon Valley software firm, Palantir Technologies.
According to the Wall Street Journal, five years ago, the Department of Labor accused Palantir of racial discrimination against Asian-Americans on three occasions, saying “the racial composition of Palantir’s hires for three positions—out of 44 job titles—in 2010 and 2011 didn’t mirror its applicant pool. Palantir hired one Asian and six non-Asian applicants for a quantitative-analysis position out of a pool of 730 “qualified applicants,” 77% of whom were Asian. For a software-engineer position, the company hired 14 non-Asian and 11 Asian applicants out of 1,160 applicants (85% of whom were Asian). The complaint says the odds of this occurring “by chance” are one in 3.4 million.”
But here’s the problem. The Department of Labor, by looking at everything entirely by race, completely ignores (excludes?) the idea that a company hire employees based on skill. Palantir argued this point in response: that the Department of Labor’s “analysis assumes incorrectly that anyone having any ‘domestic education,’ any ‘internship,’ any ‘prior experience,’ and ‘Java skills’ should be considered ‘equally or more qualified’ for the positions.” It adds that the department is “essentially advocating” an “illegal quota system.”
“Palantir notes that a quarter of its workforce and 37% of its product engineering team are of Asian descent. Of the 33 hired by Palantir during 2010 and 2011, 36% were Asian. Two of the four members of Palantir’s senior leadership identify as Asians. And more than half of the managers who oversaw the hiring process are Asian.
If Palantir had selected employees at random, 80% would be Asian. Then Labor might have said it is guilty of discriminating against Latinos and blacks.”
As if the charges weren’t bad enough, the Department of Labor decided to take it further this month after Palantir fought back with its responses. Labor has requested a “an administrative-law judge to cancel Palantir’s federal contracts and force the company to compensate the alleged victims of its discrimination.” Of course, since Palantir did not actually discriminate against anyone, no one has requested compensation. Only in the world of disparate impact analysis did Palantir do anything wrong, and since the Department of Labor does not disclose its methodology of determining disparate impact violations (except for broad statistics), no company can actually know if they are violating this kind of bogus “policy” of the Department of Labor.
It’s this kind of egregious action by the Department of Labor that makes being a business owner in the current climate a very difficult thing.
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From Bloomberg:
“A growing number of people in Obamacare are finding out their health insurance plans will disappear from the program next year, forcing them to find new coverage even as options shrink and prices rise.
At least 1.4 million people in 32 states will lose the Obamacare plan they have now, according to state officials contacted by Bloomberg. That’s largely caused by Aetna Inc., UnitedHealth Group Inc. and some state or regional insurers quitting the law’s markets for individual coverage.
Sign-ups for Obamacare coverage begin next month. Fallout from the quitting insurers has emerged as the latest threat to the law, which is also a major focal point in the U.S. presidential election. While it’s not clear what all the consequences of the departing insurers will be, interviews with regulators and insurance customers suggest that plans will be fewer and more expensive, and may not include the same doctors and hospitals.
It may also mean that instead of growing in 2017, Obamacare could shrink. As of March 31, the law covered 11.1 million people; an Oct. 13 S&P Global Ratings report predicted that enrollment next year will range from an 8 percent decline to a 4 percent gain.”
To see Obamacare enrollment shrink this coming year would be another devastating blow to the already fiscally precarious situation. Enrollment is not nearly what was predicted in 2010 when the law passed — and the program needs — to stay afloat. Obamacare is certain to receive an overhaul next year, but what kind of reform will depend largely on who is in charge of the White House and Congress.
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Nonfarm payrolls increased 156,000 for the month and the unemployment rate ticked up to 5 percent, the Bureau of Labor Statistics reported Friday. Economists surveyed by Reuters had expected 176,000 new jobs and the jobless rate to hold at 4.9 percent. The total was a decline from the upwardly revised 167,000 jobs in August (compared with the original number of 151,000).
A broad measure of unemployment and underemployment was 9.7% last month, holding steady from August and July but down from 10% a year earlier. The gauge known as the U-6 includes unemployed Americans, workers who are stuck in part-time jobs because they can’t find full-time work, and people who are marginally attached to the labor force.
The report is as expected: mediocre for Americans after more than eight years.
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The long-forgotten IRS scandal has continued to limp along largely unnoticed. Unfortunately, the IRS has not entirely curbed its behavior of discrimination, despite assurances. Some tea party groups still have not had their applications approved; the longest seems to be nearly seven years (Dec. 2009). And that’s not all.
Incredibly instead of finishing the process, more questions and information has been requested in some instances. Yet even more incredulously, the “IRS has taken the unprecedented step of publicly filing actual return information,” putting taxpayer return information in the public realm; it released on of the sets of questions it sent to a tea party group in Texas. Here’s more:
“The IRS has taken the unprecedented step of publicly filing actual return information,” said Edward Greim, who is handling the case on behalf of more than 400 groups targeted by the IRS.
Still, the move to release the information has inflamed an already tense class action legal battle between the IRS and tea party groups who feel the agency is still targeting them more than three years after it promised to cease.
Mr. Greim said releasing the letter is proof that the IRS can’t be trusted to fairly handle the cases.
“The IRS‘ conscious decision to attach this Section 6103-protected request to a public filing makes it even harder to believe that the IRS can treat TPTP and similar groups fairly and neutrally. This is, and will continue to be, a core focus of our litigation in the coming weeks,” he said.
Both the IRS and officials at the Justice Department, which is acting as the tax agency’s lawyer, declined to comment, citing the ongoing legal battle.
But the tax agency said in court papers that Mr. Greim has been misleading the court, and said the documents were designed to prove that the IRS has been dealing fairly with the TPTP. The IRS said the information it requested focuses on the tea party group’s activities and whether they would be illegal for a tax-exempt group to engage in.
“It is more of the same: spurious attacks on the IRS and mischaracterizations of the facts,” the Justice Department said in its briefs.
The IRS admitted in 2013 that it singled tea party groups out for intrusive scrutiny, including crossing lines by asking questions about the groups’ associations, meetings and even members’ reading habits. Some groups received multiple letters, each time further delaying their applications.
After being dinged by its inspector general, the agency promised it would stop asking inappropriate questions, and insisted it canceled the use of secret targeting lists to single out groups.
But a federal appeals court this summer ruled that as long as some groups are still stuck in the backlog, the IRS is still conducting illegal targeting.
The tax agency, which had been blocking processing, claiming it couldn’t do anything while the court cases were proceeding, quickly kicked into gear and announced they would process the three remaining cases.
In a letter last week to the TPTP, the IRS fired off a new set of questions — the fourth inquiry the group has received since it applied for nonprofit status in 2012. In the new questions, IRS agent Jerry Fierro said he looked over the group’s website and spotted potential trouble spots, including “rallies, parades, educational workshops, speaking events, voter registration drives, fund raisers and straw polls.”
The IRS says those activities could squelch a group’s application.
Mr. Greim, the lawyer for the TPTP, said in making its letter public, the IRS was showing how aggressive its tactics are toward tea party groups. He said the agency, which has held up the TPTP’s application for 41 months, only gave the organization 30 days to respond, and said if the questions aren’t all answered, it could derail the application again.
“The IRS‘ conscious decision to attach this Section 6103-protected request to a public filing makes it even harder to believe that the IRS can treat TPTP and similar groups fairly and neutrally,” Mr. Greim said.
Section 6013 of the tax code prohibits sharing of information from taxpayers’ returns.
Tax experts said the IRS letter is likely considered protected information, but they said the IRS is probably on safe legal ground because the law allows for information to be filed if the taxpayer is a party in a lawsuit and the filing directly relates to an issue in the case.
In addition to the TPTP, two other tea party groups that were targeted by the IRS are still awaiting approval. Unite in Action, a Michigan-based group, applied in 2010, and the Albuquerque Tea Party applied nearly seven years ago, in December 2009.
Jay Sekulow, chief counsel at the American Center for Law and Justice, which represents the other two groups, said they have not received a new set of questions similar to the list sent to the TPTP. But he said he’s been prodding the
IRS for a final decision.
“We again demanded that they review their applications and process them in a fair and expeditious manner,” he said in a statement.
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The New York Times has admitted the failures of Obamacare: loss of insurers in many marketplaces, high premium costs, the collapse of many co-ops, overreaching federal mandates, and more. The Times suggests that change is necessary in order to ensure Obamacare’s survival, but seems to endorse even more government participation, not less.
There is a renewed push for a public option. One of the more ridiculous justifications from the article comes from the charge that “private insurance companies could not be trusted to provide reliable coverage or control costs” and that “the shrinking number of health insurers is proof that these warnings were spot on.” To suggest that it is the collapse of many markets is the fault of the insurance companies themselves is absolutely ridiculous.
And another laughable observation on the structural and technical problems of Obamacare: “The subsidies were not generous enough. The penalties for not getting insurance were not stiff enough. And we don’t have enough young healthy people in the exchanges,” essentially blaming everyone else for the failures. The insurance companies didn’t offer cheaper enough plans. The taxpayer didn’t pay enough in penalties/fines/taxes. Too many sick people and too few healthy people enrolled. The solution: offer more government money, paid for by extracting more penalties/fines/taxes for those who chose not to purchase insurance, and spend more money trying to convince more healthy people to buy trust Obamacare and buy into the exchanges. You can’t make this up.
What’s more, many of the same champions of Obamacare are not calling for even more drastic, government-centered, expensive alternatives. “On Sept. 15, Senator Jeff Merkley, Democrat of Oregon, introduced a resolution calling for a public option. The measure now has 32 co-sponsors, including the top Senate Democrats: Harry Reid of Nevada, Chuck Schumer of New York and Richard J. Durbin of Illinois.”
The public option could take a couple of different forms. One would be a government sponsored health plan available as an option in every market. The other option would be that a single payer option, championed by Sanders, which would be essentially Medicare for all. Unfortunately, such ideas would only compound the problem, which, as its root, is money.
Any public option would drive up medical costs, and Obamacare now is financially unsustainable. A government sponsored plan “would have an unfair advantage if it both regulates and competes with private plans,” while a single-payer plan would be even more egregiously expensive as it would shoulder the costs for everything.
While completely repealing Obamacare is probably not a viable solution or possibility anymore, other changes such as making insurance portable across state lines, widening the use and availability of health savings account should also be explored, not shunned. Merely throwing more money after bad money will only worsen Obamacare for everyone.
