Federalism Showdown

Idaho governor signs law requiring Idaho AG to sue the federal government if residents are forced to buy health insurance. AP

Professor Epstein Wants Wal-Mart Doctors

Professor Richard Epstein from the University of Chicago School of Law has written an op-ed in Forbes regarding the current health care proposals being floated in the House and Senate. Unsurprisingly, as a staunch libertarian, Professor Epstein does not support the current plans. His proposed solutions are quite surprising however:

The current bills should be dropped forthwith. The new motto is "redistribution last." Deregulation of an overheated market should be the new focus. Slash state mandates on health care coverage; allow interstate competition in insurance markets; relax interstate licensing requirements; permit nonmedical institutions like Wal-Mart ( WMT - news - people ) and CVS pharmacy to enter the primary care markets; reform medical malpractice law; and thin out senseless privacy diktats. Lower costs will revive the voluntary market and reduce costs and increase access for seriously sick people. The health care debate will continue to careen out of orbit until we return to the basic libertarian presumption that government intervention is an evil until shown to be a good.

Can Wal-Mart save healthcare? The article is worth the read.

P.S. Forgive my recent infrequent posting. It's final seasons here in California.

A Current Look at the Deficit and Proposed Tax Changes

Time for an update on our nation's deficit. As you may know, the United States' total debt is limited to a statutory ceiling set by Congress. Currently, this ceiling is $12.1 trillion. As of Friday, November 13, 2009, our nation's debt stood at $11.99 trillion. At our current rate of cash burn (something like $100 billion a month), we don't have very long before we hit the ceiling. Congress will likely increase the ceiling, albeit with some huffing and puffing from deficit hawks, because a failure to do so would constitute a default by the United States and would shut down the government (that being said, such a situation happened before in 1995).

Increasing the debt ceiling may keep the wheels of government spinning, but it does nothing to fix the underlying problem: the gargantuan chasm between spending and revenue. Recognizing this, the Obama administration is floating some interesting proposals for dealing with the epic mismatch:

1) Domestic agencies will likely face a 5 percent cut or a freeze of their budgets;

2) Excess TARP money may be used to reduce the debt (somewhat circular in that TARP is all borrowed funds to begin with);

3) The roughly $47 billion a year Medicare fraud industry will (hopefully) be attacked.

Congress is also looking at ways to "generate more revenue" (read: raise taxes) to not only reduce the deficit, but also to pay for new domestic programs such as health reform. For example, the recently passed health bill contains a 5.4 percent surtax on individuals making over $500,000 and families who make over $1,000,000. Interestingly, unlike most of our tax brackets, this surtax is not indexed for inflation. That means, essentially, that more and more people are subject to the tax as their nominal incomes increase into the area covered by the bracket--a phenomenon called bracket creep.

As currently implemented, the surtax would affect 0.3 percent of taxpayers in 2011 and due to the lack of indexing, 0.5 percent of taxpayers in 2019.

O-N-E L-E-S-S. I Want to be One Less.

I am sure many of you have seen the commercial for Gardasil, Merck's HPV vaccine that was approved by the FDA in 2006 to prevent cervical cancer in women ages 9-26. Gardasil protects against 4 types of HPV, including 2 types (16 and 18) that cause 70% of cervical cancer cases and 2 more types (6 and 11) that cause 90% of genital warts cases. I know several young women who have gotten this vaccine in an effort to further protect themselves from sexually transmitted diseases. Just last week, Bloomberg news reported that the FDA cleared the vaccine for use in males as well.

Call it fear, call it whatever you want. I'm just not comfortable with it. This vaccine was approved in six months by the FDA, and its efficacy rate has only been measured up to five years. Although I don't doubt Merck's reliability, (given the englightening Vioxx debacle) I can't quite get on board with a vaccine that does not detect much more than an annual pap smear. Also, as time goes on, Merck continues to expand the side effects and had to recently change the labeling to include fainting and seizures.

That being said, I am all for individual choices. I fully support having the option to get the vaccine if I so desire, and I respect those who believe this vaccine is the best way to fight cervical cancer. However, once the government decided to make Gardasil mandatory for immigrants, it went too far. How can the CDC liken an HPV vaccine to one for the measles or chicken pox where children can actually spread the disease just by common interaction? And if the vaccine isn't mandatory for US citizens, what kind of judgment is the American government making about immigrant women? Welcome to the United States where we will deny you entry if you don't get a vaccine that we cannot guarantee is safe for our own people. Let freedom ring.

Is President Obama Aborting his Campaign Promises?

The new hot topic surrounding the President's healthcare plan is a ban on federal insurance subsidies that will assist women in obtaining abortions. The New York Times reports that the ban has support from both Republicans and a large number of moderate Democrats, and both the House and Senate are waiting to hear the position of the Obama administration.

Obama has encouraged a fresh conversation on the abortion issue, and he has clearly established his support of reproductive rights. In the short time since becoming president, Obama has already struck down the Mexico City policy prohibiting U.S. money from funding international family-planning clinics promoting abortion. Also, he has nominated several pro-abortion advocates for high positions, including David Ogden as Deputy Attorney General and Elena Kagan as Solicitor General. However, the president has firmly promised to reach a middle ground with pro-life supporters, and he may just have to compromise on his healthcare plan to do it.

Your Friends and Mine. . . .

Happy Labor Day! Now on to the post:

While the details of any health bill are still being hammered out, there will be one certain outcome of any bill: the IRS will have a whole lot more power.

Here is a laundry list of the (likely) new powers Congress will bestow upon the Service should any health care legislation pass:

1) You will have to report your health insurance status to the IRS;

2) Your insurer will have to report your health insurance status to the IRS (you thought they would trust you?);

3) The IRS will be responsible for fining you if you fail to purchase adequate insurance;

4) The IRS will be responsible for administering a web of subsidies and tax credits to help low-income individuals obtain health insurance, including releasing your tax information to a central authority who will determine if you are eligible for those credits and subsidies.

That last point is one of the scarier ones. If you thought having Progressive Auto Insurance watching you from the skies was unsettling, just imagine your earnings history, address, social security number, and any other juicy tax tidbits suddenly finding themselves spawned across several government computer systems.

But that's not all! Not only will your information be spread throughout the "system," but the government is also planning to use your tax returns to advertise other government services to you:

In H.R. 3200, the IRS would be required to provide taxpayer information to the Social Security Administration for the purpose of helping Social Security officials find qualifying seniors who can then be encouraged to enroll in the prescription drug program. 'There is no precedent for using taxpayer information for the purpose of identifying people to go out and advertise to them,' says the House expert.

Should your information really be used this way? Tax returns have generally been treated with a high degree of confidentiality. This confidentiality seems reasonable considering that everyone is required to provide their annual earnings information to the government (Tip: Your 1040 is not optional). Essentially, the government acknowledges they are invading your privacy, but in exchange, they promise to keep your information safe (theoretically). Maybe we are witnessing the end of that grand bargain.

Check your mailbox, the government may have sent you a notice indicating that you are eligible for their cheese.