The Good, the Bad and the Ugly of the Tax Deal

Cato's Dan Mitchell expresses his thoughts on the deal President Obama and Congressional Republicans reached to temporarily extend Bush-era tax cuts.

The good parts of the agreement is the avoidance of bad things, sort of the political version of the Hippocratic oath — do no harm.

[...]

There will be very little economic boost from this deal. As mentioned above, people generally don’t increase output in response to short-term provisions. I worry that this will undermine the case for lower tax rates since observers may conclude that they don’t have much positive effect.

The temporary nature of the tax cuts, the revival - albeit at a lower level than before - of the death tax and the extension of unemployment benefits will likely mute any positive economic effects from maintaining the current tax rates. The economic recovery will continue, continue to slog along with unemployment remaining high and growth remaining slow.

Is Obama's Drilling Moratorium Affecting the NBA?

The NBA has purchased the financially-troubled New Orleans Hornets franchise after a reported purchase by Louisiana businessman Gary Chouest fell through. Chouest has not been available to discuss the matter with the press and speculation is rampant about why the deal was not completed.

New Orleans Times-Picayune reporter John DeShazier implies that the Obama administration may have played an indirect role.

Only Chouest knows how severely his company, global marine service company Edison Chouest Offshore, was damaged by the moratorium on deep-water drilling in the Gulf after the BP oil spill.

Only he can tell us if that’s why he couldn’t, or wouldn’t, conclude the purchase.

Unintended consequences, indeed.

Return to a Harsh, Unforgiving Life

That is the wish of those pushing an eco-friendly existence, although they'd never admit it in mixed company. Warner Todd Huston, whom I had the pleasure of meeting at BlogCon, attended the UN Climate Summit in Cancún, Mexico last week and had the opportunity to tour the Summit's eco-friendly house.

Of course, it was suitably small as the enviro-Nazis most certainly don’t want anyone enjoying a bit of elbowroom in their homes though it did have space for a few modern niceties. It had a tiny computer area, an actual flush toilet, and a four-foot-tall refrigerator that looks like it might be able to store enough food for two or three days.

But it was the laundry-room that took the cake.

You see, the enviro-nuts have decided that you should not be allowed to have a washing machine and a dryer, nor much of a water heater (the house featured a tiny five-gallon water heater). Instead of the modern convenience of a washer and dryer they’ve graciously allowed you to have a concrete tub with a washboard built into it. To dry your clothes they want you to use that original solar device: a clothesline.

Additionally, the gray water from washing your clothes is supposed to be diverted to your back yard so that it can water your little subsistence garden — because, you know, you shouldn’t be allowed to buy food. You’ll have to grow it yourself. Grocery stores are déclassé, after all.

Note later in WTH's video that the attendees to the conference don't seem to be subjecting themselves to the same deprivations they would foist upon the residents of their ideal home. I had the opportunity to speak with another conference attendee who also mentioned this exhibit along with noting the number of corporate jets and the long convoys of buses that would sit idling and belching diesel smoke at each tour stop.

As one who is descended from farmers on both sides of my family, I will say that my grandmothers, who both used washboards and clotheslines for most of their lives, would roll over in their graves at the thought of returning to those days. I also am astonished by the enviros' infatuation with subsistence farming. Throughout human history, the lives of subsistence farmers have been universally brutal, harsh and short. They are also dominated by men, as the physical labor required rewards those who are stronger and more physically-capable and, necessarily, male children are more valued than females because they are better able to perform the duties needed for survival.

These people advocate for this life because they won't have to live it. While they push the rest of us into our sardine cans with washboards and clotheslines, they will continue to flit about the globe on their private jets and fleets of SUV's feasting on all the finest the world has to offer.

We could make a real dent in the world's CO₂ output if all those lecturing me on the need to reduce my carbon footprint would simply reduce theirs to the size of mine. Somehow I don't think that idea will fly.

Why must the environmentalists' vision of a more eco-friendly existence include repudiation of more than a century's worth of technological progress? Perhaps it is not the environmental consequences but that progress that is what they really despise. Or that the fruit of that progress is available to the masses.

Nevada Think Tank Launches Litigation Center To Defend Individual Rights

"The Nevada Policy Research Institute today announced it has established a new public-interest law organization, called the Center for Justice and Constitutional Litigation, aimed at defending the rights of individuals as set forth in the state and federal constitutions."

Read more at Nevada News Bureau.

Cynical Politics of ObamaCare Responsible for Doctors Leaving Medicare

Scheduled cuts in physician reimbursements by Medicare are forcing an unprecedented number of doctors to drop out of the program that provides medical care for seniors. This could leave thousands of elderly in Nevada and millions nationwide without access to a doctor.

Delen Goldberg tells the story in the Sun but leaves out a very important piece of it,

Inaction in Washington is causing Nevada doctors to turn away Medicare patients.

Congressional leaders have failed to set reimbursement rates for doctors who treat patients covered by the federal insurance system, so rather than face uncertainty over payments, some doctors are closing their practices to Medicare recipients.

As a result, elderly and disabled patients across the state — particularly in rural and Northern Nevada — are facing increasing difficulty finding doctors willing to treat them.

Goldberg discusses attempts by Congress to change the system.

The House tried to reform the formula last year but the measure died in the Senate because of its high cost. Senate Majority Leader Harry Reid also tried to legislate a fix but couldn’t muster enough votes.

What she doesn't mention is that this "doc fix" could have been enacted earlier but for a cynical maneuver by Senator Reid and other supporters of ObamaCare designed to preserve the illusion that the legislation would reduce the deficit.

One may wonder why wouldn't the comprehensive health care legislation - that touched on such subjects unrelated to health care as tanning beds, student loans, and cellulosic ethanol - have addressed this issue that is so fundamental to Medicare? The fact is ObamaCare does address the scheduled cuts in Medicare reimbursements - by explicitly keeping them in place.

The bill that was originally introduced in the Senate pared the reductions from 21% to 0.5% for 2010 but restored the scheduled cuts for subsequent years.* On the eve of the Senate vote just before Christmas recess last year, Senator Reid attached a managers amendment to the bill that, among other things, preserved the scheduled cuts in reimbursements for all years.**

This was done because enacting the "doc fix" would have destroyed the myth that ObamaCare would reduce the deficit. Supporters of ObamaCare constantly touted the CBO report that claimed the legislation would reduce the deficit by $132 billion in its first decade. A separate CBO report estimated the "doc fix" would add $210 billion to the deficit in that same time, completely wiping out the alleged savings from ObamaCare - and then some.

So the plan was to pass ObamaCare with the scheduled payment reductions in place, then reverse the cuts in separate legislation - incurring the costs but in such a way that ObamaCare supporters could still point to a CBO score showing the bill would reduce the deficit. Senator Reid even admitted that, with respect to Medicare payments, "the doctors...know we’re going to do something to take care of them."

So when Harry Reid stated on the campaign trail that ObamaCare would reduce the deficit, he did so knowing that it was only possible by slashing payments to doctors who treated Medicare patients. And when Barack Obama asserted that under ObamaCare you could keep your doctor if you wanted, he did so knowing these cuts were part of the law - cuts that would force thousands of physicians to refuse their Medicare patients.

It is not "inaction" that is responsible for the scheduled reductions in reimbursements that are forcing doctors to leave Medicare, but deliberate and cynical action by the advocates of ObamaCare. While they can lament and condemn the cuts and their consequences, every Senator and Congressperson who voted for ObamaCare voted for these cuts. And every politician and pundit who demonized ObamaCare opponents for trying to highlight unintended consequences such as this shares responsibility for them.

* - http://democrats.senate.gov/reform/patient-protection-affordable-care-act-as-passed.pdf (p. 297, Sec. 3101)
** - http://democrats.senate.gov/reform/patient-protection-affordable-care-act-as-passed.pdf (p. 824, Sec. 10310)

A Tale of Two Gubernatorial Transitions

Guest column by Chuck Muth

After his election to the presidency in 1980, Ronald Reagan, believing in the axiom that "people are policy," immediately turned to the free-market conservative movement to help pull the country out of Jimmy Carter's recession, high unemployment, 20 percent interest rates and general malaise. Gov.-elect Rick Scott is traveling down a similar path in Florida.

But so far here in Nevada, Gov.-elect Brian Sandoval is sticking with the status quo, surrounding himself with many of the same people who were captaining the SS Nevada when it hit that economic iceberg three years ago and started taking on water.

In Florida, Gov.-elect Scott has put together a transition team which the Naples News refers to as a "hall of fame of conservative economists."

"Mr. Scott is consulting with the state's conservative think tank: the James Madison Institute," Stephen Moore of Political Diary reports. "Bob McClure, the institute's president, says that top JMI scholars have been tapped for key transition team slots. . . . Budget experts from the Heritage Foundation and the Cato Institute will also be consulted."

In addition, Moore reports that among Scott's top priorities are "the elimination of the state's corporate income tax," as well as "pension reform that requires higher contributions from state employees" and "budgets that limit the growth of government spending to the rate of growth of the private sector."

Vunderbar! So shall it be written; so shall it be done.

On the other hand, Gov.-elect Sandoval so far has hired a moderate Republican establishment figure to be his chief-of-staff, an executive from the state's biggest public relations/lobbying firm as his senior adviser, and an anti-school choice public school official as his southern Nevada director.

In addition, Sandoval's recently announced 29-member transition team includes a couple of longtime gaming executives, a Mercedes Benz dealer, a union boss, a "Republicans for Reid" state senator, a founder of a Democrat special interest caucus, two public school board members, one public school bureaucrat, a former Democrat mayor, a former university president, an energy company executive, the water authority czar, an executive from a Nevada law firm powerhouse, the ol' Chamber guy, a former labor commissioner and a mining executive.

Not one readily recognized movement conservative among them.

Newt Gingrich is fond of saying, and accurately so, that real change requires real change. Which means you don't change the captain of the Titanic with the captain of the Exxon Valdez.

Nevada's economy, budget and government demand real change. Unfortunately, we're not likely to get it from the status quo folks currently filling up the Sandoval administration. The counter-argument is that while they may not be conservatives, at least they're all "competent." And we all know how well that worked out for Mike Dukakis, don't we?

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Chuck Muth is president of Citizen Outreach, a non-profit public policy grassroots advocacy organization. He may be reached at

chuck@citizenoutreach.com

.