WASHINGTON, D.C. – Frontiers of Freedom recently joined 16 other free-market organizations to oppose The Aluminum Pricing Examination (APEX) Act.
The APEX Act would grant the U.S. Commodity Futures Trading Commission expansive authority over the setting of reference prices in the aluminum market, allowing political pressure potentially to distort the market by manipulating price signals.
As part of the effort a coalition letter was released urging Congress to reject the legislation that reads, in part:
By granting the government authority to arbitrarily alter market signals, supporters of the APEX Act—such as certain beer manufacturers with a history of working with politicians to distort the free market—are openly seeking to artificially deflate the price of aluminum. Such an outrageously crony abuse of government is unethical, and history shows that it will only worsen matters by further distorting the market and creating or exacerbating shortages. Domestic producers, faced with extensive government regulations and thinner profit margins, would find it increasingly difficult to survive and further erode domestic supply, a boon for foreign producers.
Republicans and Democrats alike have voiced concerns regarding America’s competitiveness within the aluminum industry. There is wide agreement that the market for American metals must remain a vibrant aspect of the U.S. economy. The APEX Act is dangerous piece of legislation, reflecting both a misunderstanding of industry pricing as well as a misapplication of government authority.
Representatives from the following 17 organizations joined the letter: American Consumer Institute, American Encore, Campaign for Liberty, Center for Freedom and Prosperity, Citizen Outreach, Competitive Enterprise Institute, Consumer Action for a Strong Economy, Frontiers of Freedom, Institute for Liberty, Institute for Policy Innovation, Less Government, Market Institute, National Black Chamber of Commerce, National Tax Limitation Committee, Taxpayers Protection Alliance, Tea Party Nation, and the 60 Plus Association.
Before the passage of ObamaCare, we were told that it would solve all the problems with high costs and accessibility of healthcare. We were repeatedly told that Americans would save thousands of dollars every year. Of course, none of the promised benefits materialized. Now many of the same people who misled us about ObamaCare are now back trying to sell us on other “solutions.”
Speaker Nancy Pelosi — who laughably told us we had to pass ObamaCare to find out what’s in it — is now peddling a new drug plan claiming it will lower costs. However, Pelosi’s plan would supposedly lower costs by imposing up to a 95 percent excise tax on hundreds of prescription medicines. Imposing confiscatory taxes is no way to lower costs, or to encourage innovation. But it is a huge stride towards socialized healthcare which is her real goal. In the end, this plan leaves consumers and patients at the mercy of government bureaucrats. Imagine when you are sick having an experience like at the Department of Motor Vehicles – long lines, lots of waiting, and poor service.
Pelosi’s plan isn’t even constitutional because it imposes a confiscatory retroactive tax on the total sales of a drug, not the profits, but the gross receipts. To escape this ruinous and confiscatory tax, Pelosi’s plan allows drug companies to agree to, and accept, government set prices. This is so abusive that it makes the mob’s protection money schemes look legitimate.
The biggest losers of Pelosi’s plan will be the Americans who will suffer and die because the medicines that could have been developed to cure their condition will not exist or will not have been developed. So as Americans age and need cures for cancer, Alzheimer’s, diabetes, etc, those cures won’t exist and it will be Nancy Pelosi’s fault. These policies have long term consequences. If she were serious about improving things, she would unleash the power of the market and competition. Instead, she empowers government at the expense of Americans.
But there is no shortage of bad ideas on Capitol Hill, masquerading as solutions. For example, Senators Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.) have proposed legislation that would change Medicare Part D prescription drug rebates to penalize drugs whose prices rise faster than the rate of inflation. It is strange that the Grassley/Wyden proposal targets Part D because it is one of the few government health care programs to successfully foster price-based productivity increases.
In most parts of the economy, over time, prices go down and quality goes up, due to increases in productivity. The underlying mechanism driving this is competition. One sign of how successful Part D has been in wielding competition is that in its first decade of existence, it cost over 40% less than what the Congressional Budget Office estimated it would. This is an historical achievement.
At the very least, the Grassley/Wyden proposal will increase the cost of participating in the market, both in terms of compliance costs, and in the changed incentives and their inevitable unintended consequences. For example, a company that requires more revenue to economically survive might raise prices slightly on all its products, instead of steeply on just one. How this all plays out is impossible to predict. What can be said for certain is the market’s “logic” would now be less about providing the most value for customers at the lowest price, and now more about the political ramifications of pricing decisions.
The Grassley/Wyden proposal exemplifies the folly of centrally-designed price controls and thus, should be cast in the dustbin of bad socialist ideas.
For example, Senator Bill Cassidy (R-La.) is a medical doctor and has been advocating for market-based approaches to healthcare reform.
There are some good ideas out there. Senators Bill Cassidy (R-La), Steve Daines (R-Mont.), James Lankford (R-Okla.) and Ben Cardin (D-Md.) are sponsoring an amendment to the horribly misguided Grassley/Wyden bill. They suggest creating new tiers of drugs for generics and biosimilars, rather than lumping them in with brandname drugs. This is an idea that makes a lot of sense and it would benefit consumers. But it should be a stand alone bill. The Grassley/Wyden bill is bad enough that such amendments do not actually cure its horrible defects. But the underlying idea of this amendment, as stand alone legislation, would have a lot of merit. The Administration has the authority to do this now under existing statutory authority — it should do so.
The problem with healthcare and medical reforms in Washington is that there is too much blind faith in the ability of big-government to simply wave a wand and somehow magically lower prices. Rather than the promised benefits, what we actually receive are terribly high unintended consequences. We saw this with the ObamaCare fiasco. Policy makers should place their confidence in the marketplace to incentivize innovation and high quality products at competitive prices.
ATR today released a coalition letter signed by 70 groups and activists in opposition to the Pelosi drug pricing proposal to create a 95 percent tax on pharmaceutical manufacturers.
As noted in the letter, this bill calls for a retroactive tax on sales that is imposed in addition to existing against income taxes:
Under Speaker Pelosi’s plan, pharmaceutical manufacturers would face a retroactive tax of up to 95 percent on the total sales of a drug (not net profits). This means that a manufacturer selling a medicine for $100 will owe $95 in tax for every product sold with no allowance for the costs incurred.
The tax is used to enforce price controls on medicines that will crush innovation and distort the existing supply chain as the signers note:
“The alternative to paying this tax is for the companies to submit to strict government price controls on the medicines they produce. While the Pelosi bill claims this is “negotiation,” the plan is more akin to theft.”
This proposal will create significant harm to American innovation to the detriment of jobs, wages, and patients, as the letter notes:
”[The Pelosi] proposal would crush the pharmaceutical industry, deter innovation, and dramatically reduce the ability of patients to access life-saving medicines.
The full letter is found here and is below:
Dear Members of Congress:
We write in opposition to the prescription drug pricing bill offered by House Speaker Nancy Pelosi that would impose an excise tax of up to a 95 percent on hundreds of prescription medicines.
In addition to this new tax, the bill imposes new government price controls that would decimate innovation and distort supply, leading to the same lack of access to the newest and best drugs for patients in other countries that impose these price controls.
Under Speaker Pelosi’s plan, pharmaceutical manufacturers would face a retroactive tax of up to 95 percent on the total sales of a drug (not net profits). This means that a manufacturer selling a medicine for $100 will owe $95 in tax for every product sold with no allowance for the costs incurred. No deductions would be allowed, and it would be imposed on manufacturers in addition to federal and state income taxes they must pay.
The alternative to paying this tax is for the companies to submit to strict government price controls on the medicines they produce. While the Pelosi bill claims this is “negotiation,” the plan is more akin to theft.
If this tax hike plan were signed into law, it would cripple the ability of manufacturers to operate and develop new medicines.
It is clear that the Pelosi plan does not represent a good faith attempt to lower drug prices. Rather, it is a proposal that would crush the pharmaceutical industry, deter innovation, and dramatically reduce the ability of patients to access life-saving medicines.
We urge you to oppose the Pelosi plan that would impose price controls and a 95 percent medicine tax on the companies that develop and produce these medicines.
President, Americans For Tax Reform
James L. Martin
Founder/Chairman, 60 Plus Association
Saulius “Saul” Anuzis
President, 60 Plus Association
Chair, Alabama Center Right Coalition
President, AMAC Action
President, American Business Defense Council
President, American Commitment
Executive Director, American Conservative Union
President/CEO, The American Consumer Institute Center for Citizen Research
Lisa B. Nelson
CEO, American Legislative Exchange Council
Vice President of Policy, ALEC Action
President, Americans for a Balanced Budget
President, Americans for a Strong Economy
President, Campaign for Liberty
President, Center for a Free Economy
Andrew F. Quinlan
President, Center for Freedom & Prosperity
President, Center for Individual Freedom
Executive Director, Center for Innovation and Free Enterprise
Peter J. Pitts
President, Center for Medicine in the Public Interest
Senior Fellow, Center for Worker Freedom
President, Citizen Outreach
President, Club for Growth
President, The Committee for Justice
Vice President, Competitive Enterprise Institute
Executive Director, Conservatives for Property Rights
President, Consumer Action for a Strong Economy
Fred Cyrus Roeder
Managing Director, Consumer Choice Center
President, Council for Citizens Against Government Waste
Executive Director, Digital Liberty
Co-Chair, Florida Center Right Coalition
President, Frontiers of Freedom
President, Galen Institute
Director of Healthcare Policy, Goldwater Institute
The Honorable Frank Lasee
President, The Heartland Institute
Vice President, Heritage Action for America
Rodolfo E. Milani
Trustee, Hispanic American Center for Economic Research
Founder, Miami Freedom Forum
Mario H. Lopez
President, Hispanic Leadership Fund
President, Independent Women’s Forum
Heather R. Higgins
CEO, Independent Women’s Voice
Resident Scholar, Institute for Policy Innovation
President, Iowans for Tax Relief
Vice President of Policy, The James Madison Institute
The Honorable Paul R LePage
Governor of Maine 2011-2019
President, Less Government
Director, Lone Star Policy Institute
Chair, Maine Center Right Coalition
CEO, The Maine Heritage Policy Center
President, Maine State Chapter – Parents Involved in Education
President, Market Institute
Jameson Taylor, Ph.D.
Vice President for Policy, Mississippi Center for Public Policy
The Honorable Tim Jones
Leader, Missouri Center-Right Coalition
CEO, Montana Policy Institute
President, National Taxpayers Union
The Honorable Bill O’Brien
The Honorable Stephen Stepanek
Co-chairs, New Hampshire Center Right Coalition
The Honorable Beth A. O’Connor
Maine House of Representatives
The Honorable Niraj J. Antani
Ohio State Representative
Executive Director, Ohioans for Tax Reform
Honorable Jeff Kropf
Executive Director, Oregon Capitol Watch Foundation
CEO, Pelican Institute for Public Policy
Executive Director, Property Rights Alliance
President, Rio Grande Foundation
James L. Setterlund
Executive Director, Shareholder Advocacy Forum
President and CEO, Small Business Entrepreneurship Council
David Miller & Brian Shrive
Chairs, Southwest Ohio Center-right Coalition
Executive Director, Taxpayers Protection Alliance
President, Tea Party Nation
Director, Right on Healthcare – Texas Public Policy Foundation
President, Trade Alliance to Promote Prosperity
Executive Director, Wyoming Liberty Group
Atop the list of what America’s senior adults want are the preservation of their independence and a secure retirement. Admirably they don’t want to end up being a burden anyone, not their spouse, not their children, and not the rest of us. The way the system is rigged, however, almost guarantees they will
Medicare-for-All, which most of the Democrats running for president have endorsed, will only lead to increased dependency. It’s a typical one-size-fits-all proposal that sounds good from the stump and may look good on paper. The numbers though, just don’t work.
The way forward is to expand choice and to allow seniors to take advantage of competition in the health care marketplace to bring prices down. Some already have supplemental insurance that helps fill the financial gap between what they need and what Medicare will pay for but it’s not enough. Some people need more than one walker in order to stay in their homes.
This is where creativity is needed. The green-eye shade types who approve Medicare expenditures spend lots of time thinking about what things cost. Considering how many taxpayer dollars are involved in later-in-life health care, that’s not such a bad thing but it doesn’t always take into consideration what people need.
That forces seniors to make hard choices that can threaten their independence. They need to have more options as they would under a proposal by Dr. Ami Bera, D-Calif., and Jason Smith, R-Mo., that would let them use pre-tax dollars stored up in health savings accounts to fill the gaps between items covered under Medicare and what they are expected to pay for out of pocket.
“Having a Health Savings Account is a powerful resource that reimburses everything from doctor and dentist visits to prescription drugs, first aid supplies, and eyeglasses. Health Savings Accounts also incentivize saving for health-care expenses by providing critical tax benefits, just as we do for saving for retirement or college,” says Kevin McKechnie, the executive director of the American Bankers Association’s Health Savings Accounts Council.
Money put away in an HSA can stay there for decades. Under current law, there’s no “Use it or lose it” provision. That means younger workers can start saving for retirement health care upon entering the workforce and, through the magic of compound interest, build up a nest egg that’s there for them anytime they need it.
That means, if they’re lucky enough to remain relatively healthy and can be disciplined financially, it can be there for them in their retirement years which, it has suddenly become clear to me, come around a lot faster than it seems they will when you’re just starting out.
The tax benefits associated with HSA’s, McKechnie wrote in a recent op-ed, “have become even more important as deductibles and other health-care costs continue to skyrocket.” Struggling families, especially those that include senior adults facing the challenges associated with aging, are finding it harder and harder to plan for they can’t see coming. Expanding the range of services that can be paid for out of health savings accounts give them an additional hedge against the unexpected.
A recent Luntz Global poll found 46 percent support for the Bera-Smith plan and the idea of using HSA funds to fill the Medigap. Expanding the list of approved items upon which HSA dollars can be spent without tax penalties is low hanging fruit as far as health care reform goes. That’s probably why the idea has bipartisan support.
The challenges presented by an aging America in which people living longer and healthier must deal with diseases that can lead more quickly to economic ruin should give us all pause. New thinking is needed, not just where treatments are concerned but in how we make it possible for people to pay for it. We could as a country decide to turn the whole business over to the government but that inevitable means care will be rationed, fewer options will be available, and decisions regarding life and death matters will almost inevitably be taken out of our hands by the bureaucracy.
No one wants to live like that, and no one wants a loved one to die like that. The Bera-Smith Health Savings for Seniors Act will cover the gaps and help bring the cost of health care under control. At least 82 percent of those who answered the Luntz Global survey think it will. It’s time to give it a chance.
Today, Frontiers of Freedom, along with 12 other organizations dedicated to promoting free markets, limited government, and constitutional principles, sent a letter of caution to President Trump about Notice No. 176, a new, massive regulation proposed by the Alcohol and Tobacco Tax and Trade Bureau (TTB). Among other concerns, the letter warned that Notice No. 176 will add two and a half times the number of regulations governing the distilled spirits industry, seemingly violating both Executive Order 1771 and Executive Order 12866.
The coalition letter reads, in part:
“TTB contends that it released Notice No. 176 to ‘eliminate unnecessary regulatory requirements and provide consumers broader purchasing options.’ Although cloaking it as a deregulatory effort, No. 176 would add two and a half times the number of regulations governing the distilled spirits industry. This comes in stark violation to Executive Order 13771 that you signed on February 3, 2017, which directs all agencies to eliminate two regulations for each new one proposed. Given that Notice No. 176 has also been said to create hundreds of millions in new business costs, it also seemingly violates Executive Order 12866, which states that the OMB’s Office of Information and Regulatory Affairs must review any new significant regulatory action before it is formally proposed.”
The full letter is available here.
Average retirement account would lose $20,000 to tax
A financial transaction tax, though popular with 2020 Democrats, would raise little revenue and substantially shrink the U.S. economy, a recently released report concludes.
A transaction tax takes a percentage from financial trades, such as the sale or purchase of stocks, bonds, or derivatives. The United States levies an extremely small charge on each transaction to fund the Securities and Exchange Commission. A number of Democrats would like to bring a full-fledged financial transaction tax (FTT) back for the first time since 1965.
The idea’s most vocal proponent is presidential contender Sen. Bernie Sanders (I., Vt.) who has introduced a plan to charge a 0.5 percent fee on financial transactions. Sanders has made the tax “on Wall Street” a central revenue source to pay for his exorbitant spending proposals.
Sen. Elizabeth Warren (D., Mass.) introduced her own FTT proposal in 2015, Sen. Kamala Harris (D., Calif.) wants one to pay for expanding Medicare, and Mayor Pete Buttigieg has also said that he is “interested in” implementing an FTT. Congressional Democrats have supported the idea outside of the campaign trail. Sen. Brian Schatz (D., Hawaii) has his own0.1 percent proposed FTT — the bill has more than 200 co-sponsors in the House, including Rep. Alexandria Ocasio-Cortez (D., N.Y.).
These Democrats and others cite several justifications for an FTT. The tax is aimed at “Wall Street,” a preferred target of populist liberals—at least in principle, that means it also falls more heavily on those who hold a lot of wealth in investments. Additionally, such a tax would impose major restrictions on so-called high-frequency trading, which involves computer-run trades at fractions of a penny—profits that could be wiped out by the tax.
“This Wall Street speculation fee, also known as a financial transaction tax, will raise substantial revenue from wealthy investors that can be used to make public colleges and universities tuition free and substantially reduce student debt,” a brief from Sanders’s office reads. “It will also reduce speculation and high-frequency trading that is destabilizing financial markets. During the financial crisis, Wall Street received the largest taxpayer bailout in the history of the world. Now it is Wall Street’s turn to rebuild the disappearing middle class.”
The scope of the tax, however, would extend beyond the confines of Manhattan, according to a report from the Center for Capital Market Competitiveness, an affiliate of the Chamber of Commerce. The report argues that FTTs shrink the economy and hurt every-day Americans, not just Wall Street fat cats.
“Main Street will pay for the tax, not Wall Street,” the report argues. “The real burden [of an FTT] will be on ordinary investors, such as retirees, pension holders, and those saving for college.”
Much like a sales tax, the costs of a financial transaction tax would be passed on to consumers, who would pay more for each trade. Taxing transactions does not just drive up costs for the ultra-wealthy, but the 6 in 10 American households that own some kind of investment. Increased costs would have substantial effects on American savings. Under the Sanders plan, for example, the report estimates that a typical retirement investor will end up losing about $20,000 on average from his IRA.
These direct effects are arguably less significant than the overall effect that an FTT would have on the financial side of the economy. As multiple Democrats have acknowledged, the goal of an FTT would be to crack down on complicated financial instruments, such as high-frequency trades, to reduce what they perceive as dangerous market instability.
These instruments mostly serve vital functions greasing the wheels of the economy, according to the center’s report. An FTT would erase the razor-thin margins on which market makers operate, and severely constrain other forms of arbitrage. They would also reduce the use of vital risk-management tools, like many derivatives and futures contracts.
An FTT, the report argues, would thus serve to substantially slow the economy. Trade volume would fall; consumer good prices would rise; municipal bonds would generate less revenue for infrastructure; the cost of credit would increase, making mortgages more expensive—in turn exacerbating the homelessness crisis, depressing young home-ownership, and reducing family formation.
Obviously, each of these effects may not be massive—the U.S. economy grew substantially even during the 50-year period when we had an FTT. But, the new report argues, the experience of other nations indicates that the costs to the economy would substantially outweigh any benefit.
For example, they cite an economic analysis of a proposed 0.1 percent transaction tax in the EU—the authors found that “such a tax would lower GDP by 1.76 percent while raising revenue of only 0.08% percent of GDP.” Sweden’s 1 percent FTT caused a 5.3 percent drop in the Swedish market—meaning a 0.5 percent FTT, as Sanders proposes, would analogously cut nearly $800 billion from U.S. market capitalization. The evidence runs the other way, too: In the year following the repeal of the U.S. transaction tax, New York Stock Exchange trade volume increased by 33 percent.
All of this is why many countries—including Spain, the Netherlands, Germany, Sweden, Norway, Portugal, Italy, Denmark, Japan, Austria, and France—have eliminated such transaction taxes.
“Bad ideas have a habit of coming around again. The U.S., like many other nations, experimented with an FTT and wisely got rid of it. Yet each generation seems to be tempted by the false promise of a painless revenue stream,” the report said. “It would be wise to pay attention to the wisdom of experience and again avoid this false temptation. After all, those who fail to learn from history are doomed to repeat it.”
Radical environmentalists are mounting a two-pronged attack on free markets and human enterprise. The first is “nature rights,” which would allow anyone to sue to stop any significant use of the land or extraction of resources as violating “nature’s” supposed “right” to “exist, persist, maintain and regenerate its vital cycles, structure, functions and its processes in evolution.” Think of “nature rights” as a “shield” against large scale enterprise.
Lesser known, but even more potentially dangerous to human thriving, is the “ecocide” movement. Ecocide would criminalize enterprise that extracts natural resources or makes widespread use of the land, as a “crime against peace,” deemed an equivalent evil to genocide and ethnic cleansing. Think of “ecocide” as a “spear” that punishes large scale enterprise.
Here’s the general definition of ecocide:
Ecocide is the extensive destruction, damage to or loss of ecosystem(s) of a given territory, whether by human agency or other causes, to such an extent that peaceful enjoyment by the inhabitants of that territory has been severely diminished.
Note that “peaceful enjoyment by the inhabitants” is a very broad term, intended to include everything from grass, fish, and insects to mice, snakes, and people. And diminishment of “peaceful enjoyment” would not require actual pollution, but could mean a declining supply of forage or a loss of foliage caused by almost any use of the land, perhaps even simple urban or suburban growth.
Advocacy for ecocide has now gone mainstream, making the august pages of the New York Times. Using the fires in the Amazon as pretext, the Times’ Brazil bureau chief Ernesto Londoño, pushes the idea that Brazil’s president Jair Bolsonaro, should be hauled before The Hague to stand trial for ecocide. From the analysis piece:
There is no international crime today that can be used to neatly hold world leaders or corporate chief executives criminally responsible in peacetime for ecological catastrophes that result in the type of mass displacements and population wipeouts more commonly associated with war crimes. But environmentalists say the world should treat ecocide as a crime against humanity — like genocide — now that the imminent and long-term threats posed by a warming planet are coming into sharper focus.
In Mr. Bolsonaro they have come to see something of an ideal villain tailor-made for a legal test case.
It is worth noting that there are no voices in Londoño’s piece critical of ecocide advocacy.
It is my understanding that the Amazon fires do not mostly involve old growth forest, but rather, lands that have already been converted to farming. Whether that is true or not, should a duly elected president of a sovereign nation be hauled before the Hague and face criminal charges because environmentalists disagree with his country’s environmental and development policies legally enacted by that president or country?
If so, China’s leader Xi Jinping had better watch his back. I mean, have you ever breathed the air in Beijing?
Oh, Wesley, who are you kidding? Communists aren’t about to be targeted by radical environmentalists.
Besides, ecocide isn’t about punishing potential environmental catastrophes such as the Amazon fires. That is just a pretext. The actual goal is thwarting enterprise and opposing capitalism.
Want evidence? Ecocide campaigners’ chief villains heretofore have been corporate CEOs, whose supposed crimes have been to extract oil from Alberta’s tar sands. Indeed, in a mock trial held in the chambers of the English Supreme Court, hypothetical corporate tar sand CEOs were imprisoned for extracting oil from the fields.
Further demonstrating the real game this is afoot, Londoño foresees President Trump as a splendid candidate for ecocide imprisonment because he has thwarted mainstream environmentalist policies:
Mr. Bolsonaro is by no means the only world leader reviled by environmentalists. President Trump has been assailed for rolling back environmental regulations and pulling out of the Paris climate accord.
See what I mean about the Amazon fires being a pretext?
Radical environmentalists intend to thwart human thriving in order to “save the planet.” As “nature rights” advances — four rivers have now been granted human-type rights — look for campaigners to push hard to make “ecocide” an international crime. If they succeed, the world will face a substantially less prosperous future.
Frontiers of Freedom President, George Landrith, made the following statement on Speaker Nancy Pelosi’s so-called Lower Drug Costs Now Act:
“Speaker Nancy Pelosi’s drug pricing plan to impose up to a 95 percent excise tax on hundreds of prescription medicines is the definition of insanity! Even more strange is the counter-intuitive title she’s given it — the Lower Drug Costs Now Act. It is difficult to imagine a more dishonestly named bill. The idea that such actions will reduce prices defies logic. Government obstacles and taxes only raises prices and slow innovation and the development of new medicines and drugs. Imposing confiscatory taxes is no way to encourage innovation or lower prices and it is a huge stride towards socialized healthcare which leaves consumers and patients at the mercy of government bureaucrats. Imagine when you are sick having an experience like at the Department of Motor Vehicles – long lines, lots of waiting, and poor service.
“Pelosi’s plan isn’t even constitutional because it imposes a confiscatory retroactive tax on the total sales of a drug, not the profits, but the gross receipts. To escape this ruinous and confiscatory tax, Pelosi’s plan allows first to agree to government set prices. This is so abusive that it makes the mob’s protection money schemes look legitimate.
“In the long run, the biggest losers will be the Americans who will suffer and die because the medicines that could have been developed to cure their condition will not exist or be developed. So as American age and need cures for cancer, Alhiemers, diabetes, etc, they won’t exist and it will be Nancy Pelosi’s fault. These policies have long term consequences. If she were serious about improving things, she would unleash the power of the market and competition. Instead, she empowers government at the expense of Americans.
The best way to ensure better medical care for all is to reject Medicare for All.
Health care ranked as most important issue, save for “the ability to beat Donald Trump,” for Democratic voters in a FiveThirtyEight/Ipsos poll taken before and after last week’s presidential debate.
The debate revealed fissures among the party’s presidential aspirants on health care.
Bernie Sanders pronounced his desire that “every American has health care as a human right and not a privilege.” But under the senator’s “Medicare for All” scheme, private health insurance becomes illegal.
Would any American regard it as in keeping with the First Amendment if the government limited all 330 million of us to one church or one newspaper? The senator’s conception of rights, several opponents seemed to say, is wrong.
“While Bernie wrote the bill, I read the bill,” Amy Klobuchar quipped. She objected to Medicare for All forcing about half of Americans off their existing private insurance. “I don’t think that’s a bold idea,” the Minnesotan noted. “I think that’s a bad idea.”
Mayor Pete Buttigieg said he supported “Medicare for all who want it.” He objected to the one-size-fits-all quality of Sanders’ plan. “I trust the American people to make the right choice for them,” he told Sanders. “Why don’t you?”
Joe Biden balked at the price, estimated to eclipse what the federal government currently takes in in revenues. The former vice president pointed out, “Nobody’s yet said how much it’s going to cost the taxpayer.”
Sanders and Sen. Elizabeth Warren, who supports his plan, pushed back. Vermont’s junior senator railed against “the drug companies and the insurance companies.” Warren explained, “I’ve never met a person who likes their insurance company.”
Given that insurance companies issue bills to consumers, this necessarily makes them unpopular. But the majority of costs come from hospitals (33 percent) and physician and clinical services (20 percent), according to the Center for Medicare and Medicaid Services (CMS). We want to kill the messenger. Those primarily responsible for the message — $25 for two aspirin pills, $120 for a cloth sling, $57,000 for a knee replacement — somehow not only escape our wrath but also win our admiration.
Hospitals gouging patients occurs most glaringly in places where hospitals operate as a monopoly and in emergency situations. The common denominator in both circumstances involves the inability to compare and shop.
In a paper published earlier this year in the Quarterly Journal of Economics, academics at Yale, Penn, MIT, and Carnegie Mellon note hospital price increases for the privately insured when competition decreases. “Prices at monopoly hospitals are 12% higher than those in markets with four or more rivals,” their abstract reads.
Monopoly hospitals also have contracts that load more risk on insurers (e.g., they have more cases with prices set as a share of their charges). In concentrated insurer markets the opposite occurs — hospitals have lower prices and bear more financial risk. Examining the 366 mergers and acquisitions that occurred between 2007 and 2011, we find that prices increased by over 6% when the merging hospitals were geographically close (e.g., 5 miles or less apart), but not when the hospitals were geographically distant (e.g., over 25 miles apart).
In the emergency room, when circumstances necessarily kill the ability to shop, spending per patient more than doubled from 2008 to 2017, according to research compiled by Kevin Kennedy and John Hargraves for the Health Care Cost Institute.
Reducing health-care costs requires more competition, not a monopoly. Change soon comes, and not necessarily legislative change of the Medicare for All variety. Data stored in the cloud and available via an app may make medical costs and outcomes transparent, which should reduce cost. Medicare for All will retard this process since the whole health-care industry will lobby against the smartphone apps, and the consolidation of the entire industry necessarily leads to less competition.
Beyond transparency enabling health-care consumers to shop, the industry appears ripe for new players. Amazon, JPMorgan Chase, and Berkshire Hathaway, for example, entered the field last year. If they do not ultimately seek to dethrone the status quo, why did UnitedHealth’s Optum sue to stop a former employee from working at the trio’s health-care startup? A $3.6 trillion industry remains too big a cash cow for the giants of tech and finance to resist a milking.
Competition is coming. Price transparency is coming. If Medicare for All is coming, then neither is coming.
Even the ‘moderate’ proposals would sabotage private coverage, driving everyone into a government-run system. That’s probably why Democrats don’t really answer questions about their health proposals.
For more than two hours Thursday night in Houston, 10 presidential candidates responded to questions in the latest Democratic debate. On health care, however, most of those responses didn’t include actual answers.
As in the past several contests, health care led off the debate discussion, and took a familiar theme: former vice president Joe Biden attacked his more liberal opponents for proposing costly policies, and they took turns bashing insurance companies to avoid explaining the details behind their proposals. Among the topics discussed during the health care portion of the debate are the following.
Most notably, Massachusetts Sen. Elizabeth Warren again declined to admit whether individuals will lose their current insurance, or whether the middle class will pay more in taxes, under a single-payer health care system. By contrast, Vermont Sen. Bernie Sanders claimed that while all (or most) Americans will pay higher taxes to fund his single-payer system, middle class families will come out ahead due to his plan’s elimination of deductibles and co-payments.
The problems, as Biden and other Democratic critics pointed out: First, it’s virtually impossible to pay for a single-payer health care system costing $30-plus trillion without raising taxes on the middle class. Second, even though Sanders has proposed some tax increases on middle class Americans, he hasn’t proposed nearly enough to pay for the full cost of his plan.
Third, a 2016 analysis by a former Clinton administration official found that, if Sanders did use tax increases to pay for his entire plan, 71 percent of households would become worse off under his plan compared to the status quo. All of this might explain why Sanders has yet to ask the Congressional Budget Office for a score of his single-payer legislation: He knows the truth about the cost of his bill—but doesn’t want the public to find out.
Believe it or not, Biden once again repeated the mantra that got his former boss Barack Obama in trouble, claiming that if people liked their current insurance, they could keep it under his plan. In reality, however, Biden’s plan would likely lead millions to lose their current coverage; one 2009 estimate concluded that a proposal similar to Biden’s would see a reduction in private coverage of 119.1 million Americans.
Minnesota Sen. Amy Klobuchar echoed Biden’s attack, saying that while Sanders wrote his single-payer bill, she had read it—and pointing out that page 8 of the legislation would ban private health coverage. (I also read Sanders’ bill—and the opening pages of my new book contain a handy reading guide to the legislation.)
For his part, Sanders and Warren claimed that while private insurance would go away under a single-payer plan, people would still have the right to retain their current doctors and medical providers. Unfortunately, however, they can no more promise that than Biden can promise people can keep their insurance. Doctors would have many reasons to drop out of a government-run health plan, or leave medicine altogether, including more work, less pay, and more burdensome government regulations.
While attacking Sanders’ plan as costly and unrealistic, Biden also threw shade in Warren’s direction. Alluding to the fact that the Massachusetts senator has yet to come up with a health plan of her own, Biden noted that “I know that the senator says she’s for Bernie. Well, I’m for Barack.”
Biden’s big problem: He wasn’t for Obamacare—at least not for paying for it. As I have previously noted, Biden and his wife Jill specifically structured their business dealings to avoid paying nearly $500,000 in self-employment taxes—taxes that fund both Obamacare and Medicare.
Tax experts have called Biden’s avoidance scheme “pretty aggressive” and legally questionable, yet neither Democrats nor Thursday’s debate moderators seem interested in pursuing the former vice president’s clear double hypocrisy about his support for Obama’s health care law.
I’ll give the last word to my former boss, who summed up the “contrasts” among Democrats on health care:
Dem debate on health care:@berniesanders: If you like your health plan, too bad, we are going to take it away now.
“Moderate” Dem: If you like your health plan, don’t worry, we will gradually take it away.#DemDebate #DemocraticDebate2078:47 PM – Sep 12, 2019Twitter Ads info and privacy104 people are talking about this
As I have previously noted, even the “moderate” proposals would ultimately sabotage private coverage, driving everyone into a government-run system. And the many unanswered questions that Democratic candidates refuse to answer about that government-run health system provide reason enough for the American people to reject all the proposals on offer.
Only if we developed a fondness for long waiting lines and ever more insurance mandates.
he United States has a complex health-care delivery system composed of private and government-funded insurance plans. Half of all Americans receive their health insurance from their employer or their spouse’s employer. Over 40 percent of Americans receive their health insurance from the government. The remainder are either uninsured or obtain health insurance through the private individual market. The current political debate concerns how large a role the government should play in our health-care delivery system.
The United States spends far more money per person on health care than other industrialized countries. Last year, overall medical spending in the U.S. totaled $3.5 trillion or 18 percent of the national gross domestic product.
Because other countries spend less on health care, they are often used as models for the U.S. Looking to other countries to solve our health care delivery system problems, however, may not be reasonable. Other countries are smaller than the U.S. and have more homogenous populations. What the people of one country favor may not be applicable or acceptable to people living in a different society.
According to a Forbes survey, the U.S. accounts for 38 percent of life-saving and life-extending medical innovations, compared to an average of 15 percent in other countries. The U.S. also leads the world in the research and development of pharmaceuticals.
In all other industrialized countries, the demand for health care is much greater than the money budgeted for it. The results of this supply/demand mismatch are chronic shortages followed by strict rationing of health care. The rationing can take many forms — from long waits, to denying the elderly access to certain procedures, to allowing individuals with political influence to receive priority attention from providers.
Canada has a truly single-payer, nationalized system that is totally funded by taxpayers. In 2018, wait times for specialty care averaged 20 weeks. In practice, Canada has a two-tiered system in the sense that officials allow their citizens to travel to the U.S. for privately funded health care.
Great Britain established a comprehensive government health-care system in 1948 that gives every citizen cradle-to-grave coverage. About 10 percent of the population has private insurance, and many physicians combine government entitlement work with private practice. Over the past year, 250,000 citizens have waited more than six months for planned treatments within the National Health Service, while 36,000 people have waited nine months or more.
Switzerland has a comparatively large private health-care sector, and patients are responsible for 30 percent of their own health-care costs. Consequently, a certain degree of health-care consumerism exists in Switzerland, and the country has been fairly successful in holding down costs. Unfortunately, as officials increase the number of benefit mandates required in insurance plans, health-care costs are rising.
Singapore has a multi-tiered system with different levels of care depending on the patient’s ability and willingness to pay more. This is similar to the system in the U.S. before the passage of Medicare and Medicaid: private hospitals and doctors treated paying patients and charity hospitals and residents-in-training cared for low-income patients.
Is there some combination of measures from other countries that the U.S. can use in reforming our health-care delivery system? Although the overall systems vary, the common factor for all other countries is government-mandated health insurance. Even those countries that have a component of “private” health care continue to mandate that every citizen have government-approved health insurance.
While universal health insurance coverage is a worthy goal, the critical point is using the best mechanism to allow the greatest number of Americans access to health care. Simply having health insurance in no way guarantees timely access to health care. The American experience with the Veterans Administration hospital system, a comprehensive, government-controlled, single-payer health-care program, reveals unacceptable wait times and huge inefficiencies.
The United States distinguishes itself from other countries by a broader use of free markets. Just like all other economic activities, the free market offers the best solution to provide the greatest access to health care and to control costs.
Instead of looking to other countries, health-care reform in the U.S. should allow Americans to freely make their own health-care decisions and use their own health-care dollars. This would give Americans the best chance to use their right to access health care. Eliminating third-party payers, greater use of health savings accounts, price transparency, and health insurance reform would put patients, rather than the government, in charge of their own health care.
When the federal government sets out to solve a problem, it often begins by making the problem larger.
For example, lawmakers may want to reduce pollution. Or cut down on the use of fossil fuels. So they pass a “Clean Air Act,” or mandate the use of renewable fuels. But now they need inspectors. And lawyers to file (and respond to) lawsuits. The big problem gets bigger as it gets bogged down in bureaucracy, and a solution may seem ever further away.
As a Microsoft blogger once joked, “if the solution begins with ‘First, install…’ you’ve pretty much lost out of the gate. Solving a five-minute problem by taking a half-hour to download and install a program is a net loss.” The same can be said about Washington. If the answer is “First, pass legislation…” then your problem probably isn’t going to get solved, especially in today’s environment of divided government.
But bad things keep happening to good people. For example, anyone with insurance can be sent to a care center that’s not covered by their network and end up with a big bill. That isn’t fair. So how can policymakers bring down their health care costs?
As always, Washington’s response begins with a big bill, the “Lower Health Care Costs Act of 2019,” penned by Tennessee Republican Lamar Alexander. One goal of the bill is to set prices in cases of surprise billing, so insured patients that are taken to out-of-network facilities without their knowledge aren’t hit with huge bills. The bill plans do to so by capping provider costs at the median in-network rate.
If the LHCC gets the prices wrong -and if the history of price controls provides any indication, it will – it could lead to yet another Obamacare-esque death spiral, where premiums rise, hospitals lose money, and doctors stop seeing patients.
The legislation’s big-government, top-down solutions won’t amount to a very effective way to push back against high prices. The faster and more effective way is to encourage competition. One way to do that is by allowing market negotiations to proceed.
The STOP Surprise Medical Bills Act, introduced by Sen. Bill Cassidy, M.D. (R-La.) and Sen. Tom Carper (D-Del.), would do just that. When cases of surprise medical bills pop up, The STOP Surprise Medical Bills Act would allow all players in the healthcare industry to submit proposals to an arbiter, who would ensure that the best offer for consumers wins the day. This process will create far more informed, data-driven decisions than the LHCC’s blanket price controls ever could.
We also need more doctors, which would increase competition among physicians and help force prices down. Instead, we’re chasing doctors out of the profession. “The United States could see a shortage of up to 120,000 physicians by 2030,” warns the Association of American Medical Colleges.
Well, federal policies can make it more difficult than ever to practice medicine. For example, it can cost more to treat Medicaid patients than the federal government is willing to pay. That squeeze is an example of the wrong way to approach price cuts, yet it’s the one that Washington usually turns to. It’s at least partially responsible for the decline in the number of doctors.
Big medical bills are a big problem. Together we can solve that problem. But first, let’s prevent Washington from making it even bigger by imposing the LHCC Act.
The 2010s have been hard on the U.S. patent system. It has been attacked from multiple directions: by big tech, which waged a lobbying campaign to weaken it; by China, which uses IP theft to siphon up to $600 billion out of America annually; and by Washington, D.C., where court decisions and legislation have thrown patent law into turmoil.
The good news is, some are fighting back. President Trump is battling to keep IP protections at the center of trade discussions with China, and the Senate Judiciary IP Subcommittee, led by Senator Thom Tillis (R-NC), held historic hearings just this month to re-stabilize the foundation that patents provide to the U.S. innovation economy.
These efforts are centered on restoring predictability. Today, inventors are uncertain of whether or not their intellectual property rights will be protected. This erodes their incentive to invest time and treasure into creating property in the first place.
Consider the recent words of retired Judge Paul Michel, who spent 22 years on the Federal Circuit and almost a decade working with patent cases. He said of the modern status quo, “I cannot predict in a given case whether [patent] eligibility will be found or not found. If I can’t do it, how can bankers, venture capitalists, and business executives?”
Predictability took its biggest hit in 2011, when Congress enacted the America Invents Act. Among its most damaging provisions was the creation of the Patent Trial and Appeal Board (PTAB), an unrestrained tribunal through which anyone can petition to have a patent declared invalid.
And petition they have. By 2016, PTAB had heard challenges to nearly 100,000 patents. A review by IPWatchdog.com found that only 4 percent of cases ended with all challenged patents being upheld.
PTAB’s overreach is particularly egregious because it is extrajudicial. Patent infringers use it to rob innovators not just of their inventions, but of their constitutional right to due process.
Just ask Josh Malone, the inventor of popular water balloon toy Bunch O’ Balloons, who had his invention ripped off by a large toy maker. When faced with his allegations of infringement, the toymaker went straight to PTAB to have his patents invalidated. It took Josh several years and millions in legal fees to finally get his patents re-validated and lost profits awarded by a jury.
Inventor Roman Chistyakov, and his now defunct company Zond, weren’t as fortunate when faced with similar abuse by infringers. Zond’s patented plasma etching technology used in razorblades and semiconductors was gang-tackled by corporate giants Intel, Toshiba, Fujitsu, GlobalFoundries, and Gillette who filed 125 individual IPR petitions costing Chistyakov and his company millions of dollars. Before the IPR proceedings, Zond owned 371 unique patent claims and employed over 20 people. By the end of the IPR proceedings, all of Zond’s patents and employees were gone.
Or consider the ongoing saga of a small company called EagleView, founded in 2008 by a roofing salesman and his software engineer brother. Their idea was to produce 3-D models from aerial images of roofs, enabling insurance and construction companies to better estimate the cost of repairs. As the company grew, established players promptly swooped in to copy the idea. EagleView alleges that Verisk Analytics, which has a market cap of over $24 billion, began stealing key technologies after its attempt to acquire EagleView fell through. EagleView filed for patent infringement, but Verisk attempted to use PTAB as a get out of jail free card by filing petitions to invalidate the more than 150 patents in question.
No matter what, patent law should always rest on the presumption of validity for patent holders and protect their right to due process in the courts. It’s the only way to ensure that the system is predictable for inventors and small companies up against corporate goliaths. None of these patent holders should have had to fight so long and hard for the basic right to have its day in court—a right that should be as central to the patent system as to any other corner of American life.
Increasingly, this is a matter of public interest. So much of modern society relies on patented innovations—from the medicines we take to the cars we drive to the computing technologies that permeate our lives.
America birthed many of these technologies by being the world’s number one protector of intellectual property. To preserve that status, we must fend off the modern siege of the U.S. patent system. We should meet the battle in our courts, our Congress, our trade deals, or anywhere else it presents itself. Innovation itself hangs in the balance.
Celebrating the 50th anniversary of the Apollo 11 moon landing has opened a wide-ranging conversation about America’s space exploration program. I remember being a young boy and watching with fascination as rockets in the Apollo program lifted off from Cape Canaveral and as Neil Armstrong and Buzz Aldrin made that giant leap for mankind on the surface of the moon. President John F. Kennedy never got to see the lunar landing, but he set the nation’s sights on the moon and helped establish America’s preeminence in space.
Sadly, by the end of the George W. Bush Administration and during the entirety of Barack Obama’s Administration, America’s space exploration program was all but shut down. Something like that can escape notice for a while, but eventually, the impact will become obvious. Imagine if the Soviets had won the space race! A great deal more than national pride is at risk.
It is high time America reassert its leadership in space. Leaving the cosmos to China would be a catastrophic mistake. The technological, economic, and national security implications are important and very real. To simply cede these matters to China would harm not only the United States, but the rest of the world. The communist Chinese intend to dominate militarily and would love for us to cede this arena to them.
Fortunately, President Donald Trump sees space as an important frontier. Early in our nation’s history, President Thomas Jefferson launched a major exploration of the western half of the North American continent. President Kennedy set in motion America’s successful Apollo 11 lunar landing. Now, President Trump is pushing America towards Mars.
On July 4, earlier this year, President Trump said, “I want you to know that we are going to be back on the moon very soon, and someday soon we will plant the American flag on Mars.” That is a worthy objective and a worthwhile goal!
Landing on Mars and returning safely home again will happen as we reestablish the capability to safely return to the moon. A round trip to Mars is about 18 months. The safety issues are exponentially more complicated than a lunar landing. There is no returning half way once headed to the Red Planet. But once we conquer these challenges, we will again be the clear and undisputed leader in technology and space exploration. That will include valuable economic benefits, obvious technological advancements, and significant national security advantages.
This is a mission worthy of a new generation of American children who dream of becoming astronauts, scientists, and engineers. But there are those who hope to demote NASA into a space agency with small dreams and mundane goals.
For example, Lori Garver, Obama’s NASA Deputy Administrator from 2009 to 2013, has recently wrote an article in the Washington Post arguing that NASA should nix plans to go to Mars and instead make its budget available for more climate science research — something that nearly every other federal agency puts plenty of money towards. According to OMB, the federal government has 19 agencies that funded climate change research to the tune of $13.2 billion in 2017 alone. But Garver sees NASA’s budget and she covets its less than 1/2 of one percent of federal spending. She wants to raid NASA’s budget to fund her own priorities — even more climate change research.
We should all be glad that Garver and her ilk were not around in the 1960’s when President Kennedy was inspiring America to aim for the moon. America needs, and will benefit from, a serious space exploration program.
But people like Ms. Garver are not the only impediment to America’s resurgence into deep space exploration. Newt Gingrich, while supportive of President Trump’s plans to go to Mars, has been advocating for policies that run counter to that goal.
Over the last few years the former Speaker of the House has repeatedly boosted Elon Musk and SpaceX as the future of space travel. From a flurry of tweets lauding the company and its founder, to a series of op-eds, including one where he encourages the government to take on “the role of an investor” in SpaceX, the policies he advocates for in the opinion pages and on social media appear to align with the company’s agenda.
Unfortunately the SpaceX agenda is mostly about getting special concessions and huge subsidies even when it fails to meet contractual benchmarks. While Musk’s prowess in space is questionable, he is a master at public relations campaigns designed to portray him as a forward thinking innovator. But the truth is, Musk is a creature of the D.C. swamp who has succeeded — far less by innovating — than by getting billions in government handouts and subsidies.
Musk’s and SpaceX’s track record on accomplishment and safety are spotty at best. Their delays and failures are commonplace. Yet, they managed to play the Washington swamp game adeptly. As a result, Musk got huge taxpayer provided subsidies for each Tesla he sold and got even larger government provided benefits and subsidies for SpaceX. Musk even managed to get the Obama Administration to pay for contract work that SpaceX failed to deliver on.
I admire Gingrich — I’ve got a photo with him hanging in my office and I signed the Contract with America. But I disagree on his proposed path to Mars that favors Musk’s legacy of failure, delay, and rent seeking. By pinning our deep space exploration hopes on Musk, Gingrich — who has a reputation as being an innovative policy mind — risks miring our space program in the swamp slime and muck that has allowed Musk to make his fortune on the backs of the U.S. taxpayer.
Going to Mars is exponentially more difficult than landing on the moon. It presents a great deal more safety challenges. Musk has proven over the past decade that safety is not his concern. In fact, he seems to view safety as a bother. Our policy makers should take this into consideration when deciding how we will take our astronauts back to the moon and beyond.
The truth is, America already has a capable new rocket that dwarfs the capabilities of the Saturn V rockets that took our astronauts to the moon. The Space Launch System will be online and ready later this year. As with any attempt to design and build something that has never been done before, the Space Launch System had some challenges. Guess what? The Apollo program had many challenges too. Even Lewis and Clark’s mission had challenges and cost overruns. When something has never been done before, developing it isn’t like buying a Betty Crocker cake mix and baking it in the oven.
Real and robust competition pushes all participants to perform their best. But SpaceX has so far been able to avoid real competition. Without any real requirement that it ultimately succeed, SpaceX has been a technological failure, even while Musk has managed a public relations success and gotten paid based on his public relations campaign, more than actual accomplishment. To make it to Mars we must encourage real competition, not Elon Musk’s fake version of competition where he gets paid regardless of what he produces.
Returning to the moon and then going on to Mars is a worthy goal and the right objective! But it won’t happen if NASA becomes just another federal agency studying climate change. And it won’t happen if Elon Musk is able to co-opt the process as he did during the Obama years. Musk’s life goal appears to be famous and rich. But America needs to make it our goal to go to Mars and bring our astronauts safely home again.