"Blue Dog" Democrats Still Against Pennsylvania Tax Increase

State Rep. John Pallone, one of Pennsylvania's "Blue Dog" Democrats, has penned a statewide letter to the editor noting that he, along with about 20 other unnamed House Democrats, should also receive credit for fending off a state tax increase.  Pallone writes,

Let me make it perfectly clear: I AM NOT IN FAVOR OF A TAX INCREASE and will continue to fight against a tax increase while making every effort to support adequate funding for fundamental and essential programs throughout Pennsylvania.

Pallone was one of only two Democrats to vote against HB 1416 last week - a budget that would have required a tax increase.  What remains to be seen is how many of his "blue dog" colleagues were voting simply to "advance the process" (and avoid retribution from their leadership, which often occurs), and how many would  - when the real budget vote occurs - vote to pass a budget requiring higher taxes.

Why We Must Ration Health Care

In a New York Times piece, a bioethics professor defends rationing in health care, stating we have to do it.  He uses a number of examples in which the cost of prolonging a persons life a few years, or months is just too high.

He is largely correct.  I made the same point at a health care forum last week.  It would be impossible to provide everyone all the possible medical care, treatments, and tests available - the cost would far exceed our entire GDP. 

But the question on which I disagree with the article is "Who should ration care?".  In all cases, it would be the party that controls the money.  Should be it the government?  Do you want Congress, President Obama, or a new bureaucracy in Washington DC telling you when you can't get health care?  (Note that in Canada, it is illegal to pay cash for health care, though the law is largely ignored, because so many violate it.)  Or should consumers be the ones making that choice?

There are alternatives to government takeover of health care, that put consumers and patients in charge.   Consumer-driven health plans allow individuals to make their own decisions about "rationing."

I have a couple of other quibbles with the author.  He writes, "In the U.S., some 45 million do not [have insurance], and nor are they entitled to any health care at all, unless they can get themselves to an emergency room."  This is obviously untrue, in fact, at that same health care forum, Kathryn Serkes of the Association of American Physicians and Surgeons talked about how many doctors are refusing to take insurance because of the cost of compliance, and instead dealing in cash only (at a much lower cost).

Secondly, he makes the old claim that "estimates of the number of U.S. deaths caused annually by the absence of universal health insurance go as high as 20,000."  Indeed, there is little doubt that those without insurance are in worse straits those with coverage (though to claim deaths were caused by lack of insurance is poor logic).  But those on government insurance have even worse health outcomes than the uninsured.

This only further makes the point that rather than putting more people on government insurance, we should adopt reforms that allow more individuals and families to afford private insurance. 

ObamaCare will Raise Costs and Taxes

The Director of the Congressional Budget Office warned that the "public option" and other items in Congressional Democrats' health care proposals would cause health care costs to increase, not reduced, as President Obama and others have touted.  (John Goodman offers another update from Massachusetts, which has been called a "model" for nationalized health care.)

Americans for Tax Reform has a listing of taxes in the health care reform bill, including a "surtax" on high income earners (which is largely small business owners) that would raise the top marginal tax rate to near 50% (Greg Mankiw jokes that Obama would surely veto this tax, as it runs afoul of his campaign promises).  It also included a tax on those who don't have insurance, which I'm sure excites all the uninsured who can't afford health insurance for themselves, but can afford a tax to provide health care to others.

The National Taxpayers Union has a breakdown of some key words in the health care bill.  If you think we need more "requirements,"reports," "limits," "penalties," "regulations," or "taxes" for health care, you will like this bill.  If you like "choices," "options," "privacy," "marketplace," "freedom," "rights", or "consumer-driven" health care - not so much in it for you.

Obama Reverses On Stimulus Promises

The GOP has a pretty hard hitting video on Obama's stimulus promises.  First it shows Obama's promises that the stimulus would have an "immediate impact" on creating jobs.  Then it features Obama's recent defense, given the failure of the stimulus to have a positive impact to date, that the stimulus couldn't possibly be expected to work in months (Hat Tip to Tony Phyrillas).

If only someone had warned Obama and lawmakers that the stimulus would not create jobs.

What Next for Pennsylvania State Budget?

Yesterday, the Pennsylvania House passed HB 1416, a vehicle for the state budget. But that should not be taken to mean that Pennsylvania is much closer to having a budget in place, nor is the final budget likely to look anything like HB 1416 (several House Democrats claimed to be voting yes only to advance the process, not because they liked the bill).

There are two reasons for this:

First HB 1416, as it currently exists, would not be constitutional per Article VIII, Section 13 of the Pennsylvania Constitution:

Operating budget appropriations made by the General Assembly shall not exceed the actual and estimated revenues and surplus available in the same fiscal year.

In other words, HB 1416 spends $1.3 billion from a new "Higher Education Fund", and could not become law until (or simultaneous with) passage of a revenue bill to fund that spending.  Yet no such bill has yet to be introduced, much less moved through the legislative process.

Second, the Republican-controlled state Senate is certain to amend HB 1416, likely with a modified version of SB 850.  (Just a reminders, HB 1416 spends $29.1 billion, $1.8 billion more than the Senate budget passed in May, and $300 million more than Gov. Rendell's latest budget).

Here's what will happen next:

1. The Senate will sent HB 1416 back to the House after amending it.
2. The House will vote to "nonconcur" with Senate amendments (it is possible the House could vote to concur, if enough "Blue Dog" Democrats join Republicans, but I would not bet on that outcome) and send it back to the Senate.
3. The Senate will vote to "insist" on their amendments, which would force the bill to a conference committee.
4. Conferees to the conference committee will be named, but typically this is just a sham.  The real negotiations will continue behind closed doors with the Governor and legislative leaders.  If and when they come to an agreement, they will tell the conference committee what to do.
5. The conference committee will send their "report" to both the House and Senate, which can then be only voted up or down, without possibility for amendment.
   

Cost and Benefits of State Spending Transparency

The Mercatus Center has a new podcast on state online spending transparency.  Jerry Brito, senior research fellow at the Mercatus Center, discusses the need for spending transparency in states through online databases and searchable open books.   He says that criticism (coming mostly from legislators)is unfounded - these websites are inexpensive and that states that have built these websites have spent an average of $140,000.

The Commonwealth Foundation has advocated the need for spending transparency in Harrisburg on a consistent basis, such as HB 1460 or SB 105. Many states have already seen the need for some sort of an "open book" on government spending.

Kansas is one of the first states to pass substantive transparency legislation and boasts one of the most comprehensive online databases for government expenditures. Other outstanding examples include Oklahoma’s OpenBooks website and Missouri’s Accountability Portal, which also provides the salaries of government employees.

Job Losses are Never "Good News"

A number of media outlets, such as the AP, are reporting Pennsylvania's June job losses of 3,400 with a positive spin, as in the "smallest monthly job loss since August."

But that is ridiculous spin. Losing jobs is never “good news.”  That is like saying you lost less money gambling this month than you lost last month. 

Basically businesses that have laid off workers are laying off more – that’s not good for the economy, even if the 2nd round of layoffs is smaller than the first.  It is adding more people to the unemployed lines.

And the statistic in question net jobs, meaning more folks are being let go than hired.  Our economy needs to add jobs every month just to keep the current unemployment rate from rising. 

The trend of "fewer losses" could be indicative of then end of the worst, but it could also indicate that the economy has already shed so many jobs, it could only get gradually worse.

PA Ranks Low on Ethics Disclosure, Ask Bob Mellow

The Pennsylvania legislature got a "F" from the Center for Public Integrity in a national report on lawmakers disclosing information about assets, holdings or connections to special interests. In this study which looks at accountability, performance, professionalism, efficiency, cost-saving and disclosure of information by the legislature, the PA legislature dropped two slots to 35th among states. So what do other states do that PA does not:

• State lawmakers here are not required to describe any outside employment nor the range nor value of income from it.
• Our lawmakers are not required to disclose a spouse's employment or even a spouse's name. Other states, 28 of them, see such a requirement as a good way to avoid conflicts of interest or appearances of conflict.
• Our lawmakers are not required to describe entities for which they serve as officers, board members or directors - same for spouses. The only requirement is listing "any office you hold" in a business entity.
• Our lawmakers are not required to provide information on real property they or a spouse own, nor its value, unless such property "was involved in transactions" with the state or other governmental bodies.
• They are not required to report financial interest in any business unless they own more than 5 percent of its equity or assets, nor describe any for-profit business in which they hold interest above that threshold.

The need for more disclosure is imperative as top Democrat senator Robert Mellow is embroiled in of misuse of taxpayer dollars. Senator Mellow spent more than $200,000 in tax dollars to rent office space he owned. Mellow has continued to maintain that he has been compliant with the state ethics codes.

PA School Districts Have $2.4 Billion in Reserves

New data from the Pennsylvania Department of Education (released last week) show that school districts across the state have a combined $2.4 billion in General Fund reserves as of the end of 2007-08 school year.

I raise this fact because during yesterday's budget debate, House Democrats claimed that spending "only" $5.2 billion on basic education grants was evil and mean, but spending $5.5 billion on the same line item was "for the kids."  Yet this $300 million dollar difference is one-eighth the level of money schools have but are not spending on the kids.

Furthermore, Rendell administration continues to claim that property taxes will go up if we don't spend more state dollars (and raise state taxes) on schools.  This is just further evidence that Rendell's claims are false - first because schools have already set property taxes for next year and can't be changed, so the state budget will have no impact on property tax rates - but also because schools have more than enough funding:

Property Taxes: est. $11.6 Billion
Other Local Taxes: est. $2.7 Billion
State Aid Under SB 850: $9.7 Billion
Federal Stimulus Funding to Schools: $720 Million
Federal Aid (non-Stimulus):  est. $900 million
Other Funding: est $200 million
School Districts' Budget Reserves: $2.4 Billion
TOTAL: $28.2 Billion

Is $28.2 billion not enough to fund school districts?  If I suggest $28 billion is enough, does that mean I hate children?

How much money do schools really need, when they aren't spending what they already have?  Must the answer always be "more"?