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New Possible Strategy for Georgia Health Insurance Reform

Mike Klein

A behind-the-scenes coalition that believes the U.S. Supreme Court will overturn the federal health care reform law is working on a new health insurance strategy for Georgia.

Almost certainly, this summer’s biggest headline will be the Supreme Court decision to uphold or overturn the Patient Protection and Affordable Care Act which President Barack Obama’s administration counts as one of its finest achievements.  Two federal appellate courts upheld the law and one rejected it.  Supreme Court arguments are scheduled for the final week of March.

Federal law trumps state law, so nothing in the evolving state strategy could be implemented in Georgia if the Supreme Court upholds the federal health care reform law.  The Georgia Public Policy Foundation has hosted meetings of interested parties working on state health insurance reform options, but the Foundation has not assisted with drafting legislation nor has it taken a position on possible legislation.

A staggering 1.8 million Georgians have no health insurance.  They are not in group plans.  They do not have individual plans.  One-in-five men, women and children living in Georgia have no health insurance.

Coalition principles include restructuring the private market to increase competition and improve portability, protection against loss of coverage, and improved affordability for people and small businesses.  A core strategy is the expansion of defined contribution plans administered by employers.

Employers who cannot afford to offer health insurance will be able to make a defined contribution to a tax-free Health Reimbursement Account or HRA. Employees may use these pre-tax dollars to pay insurance premiums.  Pre-tax dollars in health savings accounts, another type of tax free account, could be used for deductible co-pay charges and a wide variety of wellness programs.

Consumers who do not have access to employer health plans would be allowed to deduct 100 percent of health insurance premium expense from their state income tax.  Current law does not allow for that deduction.   In addition, the proposal would allow small businesses to take advantage of “list billing” that would allow employees to pay for their individual health policy premiums with pre-tax dollars.

All of these efforts address the tax inequity of the current system that critics contend needlessly places the cost of health insurance beyond the reach of many families.

Small firm employers often find it almost impossible to offer comprehensive major medical insurance benefits.  The strategy proposes several ideas.  Companies with 10 or fewer employees could receive state tax credits for each employee who is enrolled 12 consecutive months in a major medical program.  Credits would be available for three years.  The entire program would end after ten years.

The strategy includes a focus on keeping currently insured Georgians insured.  Small businesses and their employees would have the same access and protections available to large firms and their employees. People who lose jobs after age 55 would have better access to COBRA extended coverage.  They could purchase extended coverage until Medicare eligibility at age 65.

Another idea addresses health insurance access for employees who leave small firms.  Currently small firm employees are eligible for just three months while large firm employees can extend and pay for insurance coverage for 18 months.  The proposal would equalize both groups at 18 months.

Another effort would focus on providing access to primary care for the uninsured.  A new “Georgia Charity Care Network Tax Credit” would be similar to the existing private school tax credit.  The credit could be taken by an individual or corporation that makes a cash contribution to an approved charity health care network.  There would be maximum annual contribution levels and the program would be capped at $2 million maximum per year for three years.

Federal health care reform requires that Georgia must create an insurance marketplace or the federal government will impose one in 2014.  A state health insurance advisory committee report published in December said the state should opt for its own program, but it stopped short of saying the General Assembly should begin to plan for that program now.  Georgia is waiting on the Supreme Court ruling.

The coalition believes a private, free market health exchange would provide all the benefits of a government-run model, but without the drawbacks. Georgia, which leads the nation in health information technology, is home to several companies already providing similar services.

A regional health insurance idea would enable Georgia to partner with four or more states to create a large private marketplace.  Major medical and group insurance carriers whose policies are approved in any member state would be able to offer those policies in other member states.  Georgia’s insurance commissioner would be authorized to explore major medical partnerships with other states.  Any plan approved by a partner state would be available to consumers in the other partner states.

One feature of federal health care reform enables children to remain on their parents’ health insurance policies until age 26.   The Georgia twist would revise that to “tax dependent” children.  The distinction is that insurance eligible young adults must be dependents, not just grown children who have begun their independent lives, except where they are riding on parents’ health insurance policies.

Several other strategies are being considered.  One would create a high risk pool for people with pre-existing conditions, which would help stabilize the individual and small group market.  Pre-existing conditions restrictions would be standardized to not more than 12 months in group and individual plans.  Expanded physician choice options would benefit health care consumers.

Overall, the emerging Georgia health insurance strategy is not an attempt at medical care reform – who gets medical treatment, how much they get and who decides their treatment.  All of the ideas currently being discussed pertain only to insurance factors.   By one estimate, it might be possible to reduce the number of uninsured, non-Medicaid eligible Georgians from 1.8 million to 600,000.

(Mike Klein is Editor at the Georgia Public Policy Foundation

February 13, 2012 Posted by | Uncategorized | , , , , , , , , | Leave a comment

Georgia Charter Schools: Entrenched Status Quo Won Out Over Enlightenment

Mike Klein

Two weeks ago hope and change seemed possible.  Two thousand students, parents and start-up charter school supporters gathered on a sunny winter morning outside the State Capitol to rally on behalf of the principle that equal opportunity begins in school.  Now we know that too few inside the great stone building cared to hear their message.  Entrenched status quo has won out over enlightenment.

On Wednesday the state House rejected HR 1162 which sought to place a constitutional amendment question on the November ballot that would ask voters:  “Shall the Constitution of Georgia be amended to allow state or local approval of public charter schools upon the request of local communities?”  The measure fell ten votes short of the 120 two-thirds majority it needed.

Georgia is precariously close to earning a reputation – if it has not already earned that onerous reputation – as a state that prefers education entitlement to innovation.

The establishment of charter schools – as one vehicle to improve education everywhere, for all kids –was forcefully championed by former President Bill Clinton.  During the Clinton administration charters grew from literally just a handful to thousands nationwide.  And whatever else you might think about President Barack Obama, his administration has been an equally forceful supporter of charter schools.

Georgia has 1.65 million public school students.  Fewer than 30,000 attend start-up charter schools.  Fewer than 4 percent attend any charter school.  Whatever threat charter schools pose to traditional public education, it is hard to imagine that their success would topple the existing business.

And isn’t that what this is really all about, the public money of public education.   Public education spending — K-12 and higher education — accounts for more than half of the state’s $18.6 billion budget.  Local property tax dollars add billions more dollars to public education spending.   Money = control.  Control = power.  Nobody in power willingly cedes power.  It is a rule of politics and war:  Never cede power or surrender territory.

Therefore, we have wealthy public school districts, whose superintendents earn hundreds of thousands of dollars per year, arguing that the establishment of a few start-up charter schools constitutes a threat to the financial monopoly that controls public education.  The monopoly is a partnership of convenience between school boards, teacher organizations and politicians who support status quo.

At least temporarily, they have won.  What now?  One of the bill sponsors moved to reconsider the motion, so that means the House will have at least one more chance to reverse course.

Start-up charter school supporters, thousands of families, Governor Nathan Deal’s office and others with a dog in this fight have worked on the constitutional amendment strategy since May when the Georgia Supreme Court overturned the state charter schools commission.  Now they have only whatever time remains in the current General Assembly, probably two months, to address this problem.

The 2008 Legislature was correct when it created the state charter schools commission as an alternate authorizer after local school boards reject charter school applications.  The Supreme Court was wrong.  And the 2012 Legislature, to date, is wrong to reject the constitutional amendment option that would enable voters to decide the question.

(Update:  Thursday morning the House voted 114 – 49 to reconsider which means HR 1162 will receive a second vote.)

(Mike Klein is Editor at the Georgia Public Policy Foundation)

February 9, 2012 Posted by | Uncategorized | , , , , , , | Leave a comment

Deal, Olens Welcome Supreme Court Health Care Review

Mike Klein

Governor Nathan Deal and Attorney General Sam Olens issued strong statements on Monday in support of overturning federal health care reform, just a few hours after the U.S. Supreme Court said it will review  legislation that became law 20 months ago.

Olens said the Supreme Court hearing scheduled for early next year is “a crucial step in our long fight to reign in the federal government’s unconstitutional over-reach into the healthcare marketplace.”  Deal’s statement recognized “the fight against the crippling mandates of Obamacare,” which has become a popular term for federal health care reform.

Georgia is among 26 states that sued President Barack Obama’s administration to overturn the Patient Protection and Affordable Care Act, which became law in March 2010.  The central and dominant point of contention is whether a federal government individual mandate could require that each American purchase health insurance or face financial penalties starting in 2014.

Governor Deal said, “Obamacare would vastly expand our state’s Medicaid enrollment, creating a huge new tax burden on Georgia taxpayers. Frankly, our state can’t afford these new unfunded mandates, and what we’re seeing is that the majority of states feel the same way. The outcome of this case is hugely important to the future of Georgia, and we have high hopes for a favorable decision from the Supreme Court next year.”

Governor Nathan Deal

During his State of the State address in January Deal said the federal health care law would add 650,000 Georgians to state Medicaid rolls, costing $2.5 billion in new state expense over ten years.  “It’s appropriate and expected that the court would rule on an issue so central to Americans’ individual liberties. As governor, I’m especially happy to see the court look into whether the federal government can force state governments to take on huge new spending programs.”

Olens outlined the scope of the Supreme Court review: “The Court has agreed to review whether the individual mandate exceeds the limited powers of Congress; whether the individual mandate, if unconstitutional, can be struck down on its own or whether the whole law must fall; whether the federally mandated expansion of Medicaid exceeds Congress’s powers under the Spending Clause of the Constitution; and whether the Anti-Injunction Act affects the Court’s jurisdiction to hear the challenge to the individual mandate.”

The timetable established by the Court – arguments in February or March and a decision likely in June – means the justices will deliver their opinion before Republican and Democratic presidential nominating conventions, and months before November 2012 national elections that could become a referendum on the expansion of federal government ala the health care model.

Petitions and briefs are posted on the U.S. Supreme Court website.

Attorney General Sam Olens

Four federal appellate courts have heard Patient Protection and Affordable Care Act cases.  The Supreme Court accepted the case that came through Atlanta’s 11th Circuit Court of Appeals where justices ruled the individual mandate is unconstitutional.

Opponents include the National Federation of Independent Business, a small business group, and states that argue the law’s expansion of Medicaid eligibility will become a budget buster.  Medicaid expenses are the single fastest growing segment of the Georgia state budget.

Supporters counter argue that reform — sometimes known as Obamacare — will make health care more accessible to millions of Americans.  Some supporters consider the measure to be as historic as the creation of Social Security, Medicare and the Civil Rights Act.

Federal appellate courts in Cincinnati and Washington upheld the law.  One in Richmond, Virginia declined to rule because the individual mandate provision is not in force until 2014.

(Mike Klein is Editor at the Georgia Public Policy Foundation)

November 14, 2011 Posted by | Uncategorized | , , , , , | Leave a comment

Obama Gives States What They Want: Less “No Child Left Behind”

Mike Klein

No Child Left Behind has moved one step closer toward No Longer Totally Relevant.

President Barack Obama‘s administration used the White House briefing room on Monday afternoon to announce that states may apply for waivers to avoid 2014 testing mandates in NCLB.  State school superintendent John Barge said Georgia will apply for the waiver.

No Child Left Behind was the education initiative of President George W. Bush.  It was modeled on a program enacted when he was Texas governor.  It requires that 100 percent of public school students be proficient in math and reading by 2014.  NCLB is blamed for creating a “Teach the Test” mania as schools struggled to make AYP – Adequate Yearly Progress.

“No Child Left Behind, in those terms, we’re not going to see that again,” Barge said when we spoke on Monday afternoon.   “Certainly it’s not the death knell for accountability, but does it put the actual terms AYP (Adequate Yearly Progress) and No Child Left Behind in question, possibly.  We will still have accountability.  It will just look different.”

Addressing the White House press corps, Domestic Policy Director Melody Barnes described NCLB as “a punitive system that does not allow for reform.”  Barnes said the administration moved forward with its own NCLB changes because Congress has not rewritten NCLB.

“No Child Left Behind is four years overdue for being rewritten,” said U.S. Education Secretary Arne Duncan.  “It is far too punitive.  It is far too prescriptive.  It led to dummying down standards and narrowing curriculum … We can’t afford to have the law of the land be one that has so many perverse incentives or disincentives to the kind of progress that we want to see.”

John Barge, State School Superintendent

Barnes and Duncan made clear that states will become eligible for NCLB waivers if they embrace reforms that the administration believes are necessary to move education forward.   States that do not agree must continue to abide by the current No Child Left Behind legislation.

Whereas NCLB was a top down federal mandate on states, Barge said the national Council of Chief State School Officers has been working  on a replacement for NCLB’s single-minded reliance on standardized testing as the principal measuring stick for education success.

“We all know that a student can pass a test but that student may be anything but prepared to be successful,” Barge said.  The model being proposed to Washington by the state education chief executives will rely on some two dozen or more indicators, Barge said, including SAT and ACT scores, college credits earned during high school and other measurements to evaluate success.

NCLB is sometimes identified as the reason for a surge in test cheating scandals.

The Atlanta Public Schools test cheating scandal made national news when 178 educators were identified as participants in falsifying tests to improve school performance.  Atlanta is not alone.  Duncan has said federal officials will look into other possible cases nationwide. On Monday, he singled out Tennessee for taking the right approach to measuring achievement.

Arne Duncan, U.S. Education Secretary

“The state of Tennessee like many states had a low bar under No Child Left Behind,” Duncan said.  “They were in fact lying to children, lying to parents.  They were saying that 91 percent of students were proficient.  They did the courageous thing.  They raised the bar significantly.

“Tennessee went from 91 percent of children proficient in math to 34 percent.  That was a very tough lesson but for the first time, they are telling the truth.  The current law provides lots of penalties for that kind of courage,” Duncan said.

“We want to move those (penalties) and reward states that are telling the truth … Everywhere I go, teachers, parents, principals, school board members, state superintendents are asking for flexibility to do the right thing.”

(Mike Klein is Editor at the Georgia Public Policy Foundation)

August 8, 2011 Posted by | Uncategorized | , , , , , , | Leave a comment

As Economy Collapsed: White House Scheduled a Nice Photo-Op

Mike Klein

On the same day that the administration released another weak monthly unemployment report President Barack Obama went to the picturesque Washington Navy Yard to announce new efforts to put American veterans back to work.   And you think that’s no coincidence?

Media seemed desperate on Friday morning to put the most positive possible spin on federal labor statistics that 117,000 new jobs were created in July, and new job totals for May and June were revised slightly upward.  By any measure the economy remains stagnant.  But that is what passed for good news during a tough week in which very little went right for the President.

On Tuesday the White House was boxed into a corner and forced to accept a debt ceiling deal that candidate Barack Obama never in a thousand years would have thought possible during the heady 2008 campaign.  The President was significantly outmaneuvered in negotiations and at the very end it was Vice President Joe Biden who cut the deal with Republican leaders.

Wednesday evening it was back to aggressive campaign flourishes in Chicago where images of national debt discussion were replaced by images from a lavish $35,000 per plate Obama 2012 fundraiser that raised millions, most of it eventually going to the Democratic Party.  Could that timing have been any worse?  One day later on Thursday the U.S. stock markets had their worst day in three years, sparking fears of a double dip recession.

The Super Committee that was created under the debt ceiling legislation will argue for months before Republicans and Democrats present a plan to cut at least $1.2 trillion over the next decade.  You will hear a lot about sacrifice during those rigid negotiations.  Here is a bit more sacrifice: investors lost $1.9 trillion in 6.5 hours on Thursday.

Incidentally, investors are sometimes called people.  People own retirement accounts, people pay for educations, people pay for Grandma, people pay all manner of local, state and federal taxes, people own small businesses that employ people like themselves.  People can’t print money or sell bonds to China.  People can just watch their lifetime investments plunge.  Some people hope they can control their destinies without relying on government.

You could hardly blame the White House for wanting to announce something good on Friday.  Monthly jobs numbers are no surprise to the administration. They knew what was coming.  They knew what all those charts would look like on television.  They know the U.S. domestic economy needs to create well above 200,000 jobs and preferably 300,000 jobs per month to grow.  They know it must come really quick to prop up Obama 2012.

So if the administration wanted to find a patriotic backdrop like the Navy Yard to announce a new veterans’ job initiative on the same day it released another dismal jobs report, then perhaps that was their best damage control.

When you are the White House you do what seems to work best.  You create a photo-op.

(Mike Klein is Editor at the Georgia Public Policy Foundation)

August 5, 2011 Posted by | Uncategorized | , , | Leave a comment

The New American Parliament: It’s No Longer a Two-Party Game

Mike Klein

Paul Krugman is a Nobel Prize in Economics recipient and he is perhaps even more celebrated as a left wing thinker – some might say extremist.  His economic and political writings have been a staple inside The New York Times for a dozen years.  Krugman is widely quoted, he is often a broadcast media guest and overall, the guy really knows his economics.

However, sometimes even bright guys miss the mark and I would offer that his recent New York Times column “The Centrist Cop-Out” missed the mark.  In Krugman’s World, Republicans are evil, sinister and ghastly.  Democrats are good and Barack Obama is a centrist.  Krugman does not recognize that it is no longer about just two political parties.  That day is gone or nearly gone as we move closer to an American Parliament akin to European and Israeli models.

Krugman’s opening sentence: ““The facts of the crisis over the debt ceiling aren’t complicated.  Republicans have, in effect taken America hostage, threatening to undermine the economy and disrupt the essential business of government unless they get policy concessions they would never have been able to enact through legislation.”

Krugman’s closing sentence: “The problem with American politics right now is Republican extremism, and if you’re not willing to say that, you’re helping make that problem worse.”

Between his open and close, Krugman names others who like himself believe President Barack Obama is a moderate conservative and he disabuses the notion of a centrist uprising.  Krugman writes, “As I see it, it’s coming from people who recognize the dysfunctional nature of modern American politics, but refuse, for whatever reason to acknowledge the one-sided role of Republican extremists in making our system dysfunctional.”

Paul Krugman, New York Times Columnist

Krugman misses the much larger point.  The two-party American political system is moving toward extinction.  We already have at least three political parties and others could emerge as new groups recognize opportunities and rise to challenge customary power elitists.

For starters, we still have traditional Democrats and Republicans.  The Tea Party sometimes acts like traditional Republicans and sometimes does not.  Plus you have to consider that what Republicans already experienced could easily happen to Democrats.

A Democratic style Tea Party could challenge traditionalists and assert its power or split from the party.  This splinter group could rise because of dissatisfaction with the President or with the new debt relief committee that must identify at least $1.2 trillion in spending cuts.  That will require butchering sacred cows and Democrats will have their hands on the cleaver.

Republicans and Democrats – for the better part of a full century – have stuck to their historical scripts and comfortably played the same game over and over.  Occasionally there was a political hiccup like Ross Perot but by in large, the players were the players and the rules were the rules.  Often times it has been hard to distinguish any differences between them on many national issues.

What we’re witnessing now is being played out on one stage, the debt ceiling deal stage, but you can certainly see how it might expand.  Nobody in the voter world or equally important in the media world is used to more than two political parties or has any background in how to interpret what is happening.

Nearly everyone wants to stick to old rules which would mean not having to acknowledge that what we are witnessing is the beginning of the American Parliament – a multi-headed political entity in which coalitions will vie for power, majorities will disappear and pluralities will dominate.

You have to at least consider the possibility.

(Mike Klein is Editor at the Georgia Public Policy Foundation)

August 1, 2011 Posted by | Uncategorized | , , , | Leave a comment

Folks Could Get Run Over When Debt Limit Rubber Meets the Road

Mike Klein

Chances are extremely high that you know someone who receives Social Security or Medicaid or unemployment compensation or another federal benefit payment.  If so, they may be scared.

More than 1.6 million Georgians receive Social Security or Supplemental Security Income monthly benefits.  Some receive both.  Nobody knows what they will receive starting next week when direct deposits and paper checks are due on August 3 and 10.  That’s just one way that you can look at the real world impact of adults behaving angrily in Washington political circles.

The federal debt limit ceiling fiasco that has Washington in volcanic gridlock has become some kind of weird super energy cell that drives politically bitter conversations and it holds a lightning bolt over real Georgians whose lives might depend to a great degree on federal assistance.

About 15 percent of all Georgians – about 1.5 million — receive Medicaid benefits.  Twelve percent – about 1.2 million — receive Medicare benefits.  The state has more than 200,000 enrolled in the children’s health insurance program.  What happens to them next week?  Medicaid and the PeachCare children’s program cost Georgia about $694.4 million per month.

About 181,000 Georgians receive weekly unemployment compensation benefits.  Will those checks still be written next Friday if the federal government suddenly goes into fiscal default?

These are real world, feet-on-the-hot-pavement questions.  No doubt, the next several days in Washington will be historic, regardless of how it plays out, but away from Washington real world folks are trying to understand the impact created by something way beyond their control.

Unemployment checks appear safe.  “The long and short of it is the unemployment insurance payments will go out like they are supposed to,” said state labor commissioner Mark Butler.  Checks are written on Friday.  This week Georgia paid $47 million to 181,665 recipients.

In an average month, Georgia writes almost $200 million in unemployment benefit checks.  Funds to cover those checks are derived from taxes paid by employers into the unemployment insurance trust fund.  The state account is flush and Georgia has not needed to borrow money from Washington since April.

Social Security and Supplemental Security Income benefits would be less certain during a Washington financial default.  The federal government owes benefits payments to 28 million Americans next Wednesday and 27 million more payments are scheduled one week later

President Barack Obama famously said he could not guarantee benefits will be paid unless Congress agrees how to raise the debt limit ceiling and sends legislation he is willing to sign.  Others contend payments, or at least partial payments, could continue by selling Social Security trust fund bonds in a scenario that raises cash, but also requires issuing other bonds.

All that matters to folks are their checks and direct deposits.  The Social Security Administration website has nothing that would help citizens through this minefield.  When I looked today the top news announcement on the SSA website was an entry about reduced hours in field offices starting next month.  There was nothing about possible delayed benefits or even how one should follow that information trail.  Equally unhelpful: the White House website.

Each month in Georgia more than 1.4 million people receive more than $1.5 billion in Social Security benefits, according to data provided by the SSA’s Atlanta public affairs office.  Another 228,500 receive almost $118 million per month in Supplemental Security Income benefits.

Or to describe that in a different context, 17 percent of Georgia residents depend on SSI or Social Security checks, based on newest SSA available data from December of last year.

Moody’s Corporation, the big international debt ratings service, recently named Georgia among a small number of states that would be least affected by a federal government default.  Still, the percentage of federal dollars inside the state budget is great.

The current fiscal year budget includes $18.1 billion in state funds, $10.8 billion in federal funds and about $8.6 billion from other sources, including the lottery, tobacco settlement funds, motor fuel taxes and other receipts.  So to have some percentage of that in doubt for any length of time is a big deal for everyday folks from all walks of life, particularly those using health care.

Brian Robinson, deputy chief of staff for Governor Nathan Deal, said this in an email:  “Because of the uncertainty surrounding what Congress and the president will do, federal agencies have not contacted their state counterparts to discuss potential funding disruptions.”  Governor Deal’s office asked agencies to report how they would be affected if the federal payments faucet slows down and how they would prioritize their spending.

At some point, rubber always meets the road.  This time, a lot of folks could also get run over.

(Mike Klein is Editor at the Georgia Public Policy Foundation)

July 29, 2011 Posted by | Uncategorized | , , , , , , , , | Leave a comment

Tom Price: Debt Limit Battle Could Propel Obama to Re-Election

Mike Klein

Georgia congressman Tom Price warned Thursday that the outcome of the debt ceiling limit battle in Washington could send President Barack Obama down the road toward a successful re-election bid unless Republican Party members decide to hang together and vote together.

“It is imperative to stop the madness in Washington,” Price said during a conference call with health care policy analysts from around the nation.  “The bill that will be on the (U.S. House of Representatives) floor this afternoon is not at all what I would have wanted it to be, nor likely what you would have wanted it to be, but it is I believe the only kind of construct that can get through the Senate and force the President to be signed into law.”

The Galen Institute and the Institute for Policy Innovation originally scheduled the four-term Georgia congressman for a health care policy discussion.  That was forced to share the clock with the debt ceiling controversy that seems to change almost hourly.  Price said Republican Party members should support the bill advanced by House Speaker John Boehner of Ohio.

Congressman Tom Price

“If something like this doesn’t happen, then I believe Barack Obama’s hand is strengthened to a huge degree,” Price said, “and not just in the area of the debt ceiling and spending, but in every other single aspect that the Congress will deal with over the next 15 to 16 months and make him much more likely to get re-elected.”

The House debt limit ceiling bill has broken the Republican Party into factions.  Three Georgia congressmen – Phil Gingrey, Tom Graves and Paul Broun – oppose the Boehner legislation because they believe it does not cut enough from federal government spending.  Tea Party Republicans oppose the bill.  Others argue the Boehner bill is the best option at this moment. Continue reading

July 28, 2011 Posted by | Uncategorized | , , , , , , | Leave a comment

Making the Moral Case … Not the Money Case … For Economic Policy

Mike Klein

Has national economic policy become a moral issue?  When he addressed the University of Colorado at Denver business school last Thursday evening, JPMorgan Chase CEO Jaime Dimon said a United States default on its debts and payment obligations would be a “moral disaster.” The big bank was among many who received government funds known as TARP.

Dimon may well have been channeling the innermost thoughts of American Enterprise Institute president Arthur Brooks who spoke about making the moral case for economic change when he addressed Georgia Public Policy Foundation members this month in Atlanta.

Brooks noted off the top, “If you love free enterprise, you need to start talking about morality.”   His view about current national economic policy: “This train is going toward a cliff.”

The following excerpts are from Brooks’ prepared remarks.  You can watch his presentation below or click here now.

“My parents were a little bit mixed up politically but they were very good parents.  My Dad said one time, you know, son, I want to die peacefully in my sleep like my grandfather, not screaming in terror like his passengers.  That could be a joke about our policy makers in Washington, DC right now.  These are perilous times.  We are running more than a new trillion dollars in deficit in 2012. There is no balance under the President’s budget ever.

“Government as a percentage of GDP will never fall under 23% if President (Barack) Obama has his way, and this means trillions of dollars in future taxes and debt and or default, something that would be unprecedented for the United States.  It seems sometimes like our policy makers are peacefully sleeping while we are screaming in terror.

Arthur Brooks, President, American Enterprise Institute

“Successful policy revolutions all look like this: They all started with a moral case for change, not with a money case for change, not with a pragmatic case, with the moral case for change.  Second, they demolish the things that were in their way.  They talk about why the status quo is incorrect, it’s morally degenerate and it has to go.

“Third, they proposed real solutions that real Americans could understand, could grasp, not just esoteric, not just stuff down in the weeds but real solutions.  And finally, there was leadership which induced people to make the sacrifices that they needed to make to have these things come about.  When you look at the things that happened under Franklin Delano Roosevelt, like him or hate him, he was an effective leader who went through those four steps.

“The great Ronald Reagan went through those four steps and we’re going to have to through those four steps again if we’re going to solve the current crisis.  The hardest point is making the moral case. Conservatives never want to talk about the moral case when it comes to economics and right now, conservatives are very uncomfortable about the whole idea of morality.

“The reason is because it makes people think about Jerry Falwell.  It makes people think about God and guns and gays and abortions.  But that’s not what we’re talking about when we’re discussing the free enterprise system.  We are talking about something else and if you say morality, people tend to think the wrong thing, you fear, so the result is we don’t talk about the moral case for free enterprise.

“We talk about the money case for free enterprise.  I’m telling you, I’m looking at the data all day long.  It’s losing.  It is a losing argument to say that the problem with Obamacare is to say that could permanently cut a quarter of a percentage point off the long-term economic growth rate.

“Americans don’t find that compelling.  What they’re getting is two choices.  They’re getting a choice between a left-wing moral case for a false kind of fairness and they’re getting right-wing materialism that says it’s all about economic growth.

“If you think either one of those things is going to get Grandma to let go part of her Medicare, you’ve got another thing coming, because she’s not going to.  What do we need?  We need to have the real moral case.  We need to have the rejoinder to the left that speaks to the heart and if we don’t, we’re going to fail.”

Link to complete presentation on the Georgia Public Policy Foundation YouTube site.

About Arthur Brooks

Arthur Brooks is a Seattle native and classically trained musician who performed with the City Orchestra of Barcelona for twelve years while he studied to obtain bachelors and masters degrees in economics.  Brooks received his doctoral degree in economics policy analysis from the Rand Corporation.  He was an assistant professor of public administration and economics at Georgia State University from 1998-to-2001.  He was a consultant to the Rand Corporation for ten years and he joined the Syracuse University faculty for two years.  Brooks became an AEI visiting scholar in 2007 was named AEI president in 2009.  Link

About the American Enterprise Institute

AEI is a private, nonpartisan, not-for-profit institution dedicated to research and education on issues of government, politics, economics, and social welfare. Founded in 1943, AEI is home to some of America’s most accomplished public policy experts — from economics, law, political science, defense and foreign policy studies, ethics, theology, health care, and other fields.  Link

(Mike Klein is Editor at the Georgia Public Policy Foundation)

May 23, 2011 Posted by | Uncategorized | , , , , , | Leave a comment

NATO Top Diplomat in Atlanta: Washington and Pakistan Need Each Other

Mike Klein

Pakistan’s prime minister uttered menacing words toward Washington on Monday as diplomatic nerves continue to fray after American troops took out Osama bin Laden.  But thousands of miles away in Atlanta, the NATO Secretary General was equally forceful in saying that success in that part of the world means Washington and Pakistan need each other.

“Osama bin Laden apparently has been hiding in Pakistan for quite some years.  That fact raises a lot of questions,” NATO’s Anders Fogh Rasmussen said.  “My bottom line is that we need strong cooperation from Pakistan.  If we are to ensure long-term peace and stability in Afghanistan and beyond, then we need the positive engagement of Pakistan.”

Rasmussen noted that he spoke with President Barack Obama after the military strike that took out the al Qaeda terrorist.  “Osama bin Laden stood against all the values that America and Europe have shared and upheld for many decades, freedom, tolerance and humanity.”

NATO’s Secretary General also brought this observation to Atlanta:  “Over the past few months brave people throughout the Arab world have cried out for freedom, freedom that we have enjoyed for many decades, not least thanks to NATO.  Change is taking hold in the Middle East and North Africa but Libya is an exception. Colonel (Moammar) Gadhafi and his regime are repressing their people who have expressed the desire for freedom.”

Rasmussen made Atlanta the second of four cities on a whirlwind getting-to-know-you better tour that began in Washington, D.C. this past weekend, continues in Austin, Texas on Tuesday, and then moves to Chicago before the Secretary General returns to Washington later this week.

NATO Secretary General Anders Fogh Rasmussen (NATO Photo)

“My bottom line is, there is no alternative to a positive engagement with Pakistan,” the former two-term Prime Minister of Denmark told 200 World Affairs Council of Atlanta guests at The Commerce Club.   “We should support those forces in Pakistan that realize the real threats against the Pakistani society come from terrorists and extremists.”

Pakistan is feeling emotionally tattooed after Americans parachuted under the cover of night into Abbottabad, landed in bin Laden’s compound, easily killed him and then flew away with his shot-up body and an enormous cache of intelligence that U.S. officials believe will be invaluable in the effort to find and kill or capture more terrorists.

Pakistan reacted with bewilderment, dismay and embarrassment last week. Then on Monday, a defiant Prime Minister Yousuf Raza Gilani told his Parliament that bin Laden’s death was “justice done” but he also warned Washington, “Unilateralism runs the inherent risk of serious consequences.”

U.S. officials now believe intelligence taken from bin Laden’s compound proves the terrorist was still engaged at high levels within al Qaeda, which has long been tied to Afghanistan’s Taliban.

Rasmussen said Taliban insurgents are at a crossroads. “Continued fighting will lead to Taliban defeat.  So, time has come for the Taliban to cut links with al Qaeda.  Extremism has no future.  Cut links with al Qaeda, renounce violence, engage in the political process, help rebuilding the Afghan society.”

Rasmussen seemed publicly less concerned about growing political pressure that bin Laden’s death means the United States should downsize its costly military commitment in Afghanistan.

“International terrorism still poses a direct threat to our security and stability across the world.”  Afghanistan, Rasmussen said, “has been ravaged by over 30 years of conflict.  We have the right strategy, the right resources and the resolve to see this through.  We will continue our mission to ensure that Afghanistan does not return to being a sanctuary for extremists and terrorists.”

Rasmussen has several times publicly stated that Libyan dictator Colonel Moammar Gadhafi must go.  “There is no military solution solely to the problems in Libya.  And, it’s hard to imagine that attacks against the civilian population would stop as long as Gadhafi remains in power.”

NATO assumed command of multi-national forces aligned against Libya five weeks ago.  “Consider this: What if we had stood by and watched as Gadhafi’s regime killed innocent civilians in Benghazi?  What would that have said about our values?” Rasmussen asked.

NATO has flown 5,500 sorties against Libyan government forces.  “We have significantly downgraded Gadhafi’s war machine. The clear message is, Gadhafi, it’s time to leave.  Your time is out.  There is no future for you and your regime.”

Rasmussen arrived in the United States on Saturday.  He visited wounded service personnel at the U.S. military hospital in Bethesda, Maryland.  The NATO Secretary General is also making time to meet with Georgia and Texas National Guard troops. “I am grateful for their service and for their sacrifice.”

(Mike Klein is Editor at the Georgia Public Policy Foundation)

May 9, 2011 Posted by | Uncategorized | , , , , , , , | Leave a comment