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Why is it that congress just won’t consider letting the Bush tax cuts for those making over $250,000 annually expire?

It ain’t all that complicated – it’s their own taxes that would increase.

From US Government Info at About.com:  “The median personal wealth for members of Congress grew to $911,510 in 2009, up from $785,515 in 2008, according to the Center for Responsive Politics. Nearly half of the members of Congress are millionaires.”

From page 3: “Of the 261 millionaire members of Congress, 55 have an average calculated wealth of $10 million or more. Rockefeller and seven other members of Congress reported personal wealth in the $100 million-plus range.”

It would appear that they are not necessarily just protecting the multi-millionaires of big business in the name of “job creation” (which is a myth), they’re looking out for themselves.  Seems some of the pork is pretty close to home, doesn’t it?

From Healthcare, August 9, 2009: It begins with “Given the size of the deficits… “My Kaiser dues are covered by Medicare (with various copayments). When I turned 65, my dues (for both me and my wife) went from about $400/month to $1750 a month; or I could accept Medicare and let you pay for it. I couldn’t afford the option, but why my dues changed by more than a factor of 3 in one month was not clear. (Actually it was clear: the Medicare law didn’t really leave anyone any choice in the matter.)” – (emphasis mine).

From A Ramble On Healthcare and Candidates, May 16, 2011: It begins with a quote from Newt Gingrich, “I am for people, individuals — exactly like automobile insurance — individuals having health insurance and being required to have health insurance. And I am prepared to vote for a voucher system which will give individuals, on a sliding scale, a government subsidy so we insure that everyone as individuals have health insurance.”

This seems to upset a great many people. Taken in isolation it ought to. The objection seems to be the notion that people ought to be compelled to pay for health care. People ought not be compelled to buy anything. Only that’s not true. What I don’t see is anyone being upset about everyone else being compelled to pay for health care for people who don’t themselves pay.

The analogy to automobile insurance seems to be overlooked. Whether you like it or not, if you drive a car you must have insurance. It’s not a choice. In most states you aren’t required to insure your own car; if it’s wrecked it’s gone and that’s your problem. But if you damaged or destroyed someone else’s car, you have to pay; and the only way we have to be sure that you will pay is to require you to have insurance. Your option is to buy insurance, or opt out of driving.

The same thing could apply to health care. Does that then reduce to the absurdity that you must have health insurance or opt out of life? Not precisely: but in that case we have the absurdity that in order for you to be free of compulsory health insurance, the rest of us must be compelled to pay it for you.  Only that’s not an absurdity: that’s the present situation. It gets worse. What we call health insurance in general isn’t working. Most health insurance insulates the cost of care from the person receiving it. That makes health care something like a free good, and the demand for free goods is nearly infinite. Costs rise steeply. The incentives are all wrong.” – (emphasis mine).

And finally, from Widipedia, “Federal Insurance Contributions Act (FICA) tax ( /?fa?k?/) is a United States payroll (or employment) tax^[1] imposed by the federal government on both employees and employers to fund Social Security and Medicare^[2] —federal programs that provide benefits for retirees, the disabled, and children of deceased workers. Social Security benefits include old-age, survivors, and disability insurance (OASDI); Medicare provides hospital insurance benefits for the elderly. The amount that one pays in payroll taxes throughout one’s working career is associated indirectly with the social security benefits annuity that one receives as a retiree.^{[citation needed]} This has caused some to claim that the payroll tax is not a tax because its collection is tied to a benefit.^[3] The United States Supreme Court decided in Flemming v. Nestor (1960) that no one has an accrued property right to benefits from Social Security.”

I take exception to the statement, “Most health insurance insulates the cost of care from the person receiving it.”  Neither I, nor anyone with whom I am acquainted, would entertain the notion that we are insulated from the cost of the healthcare we receive.  Healthcare insurance is not cheap now, nor can I recall a time when it has ever been considered cheap by me or anyone I know.  I’m now on Medicare, but I still pay nearly $120 per month for an Advantage Plan.  I pay $323 per month for my wife’s policy, $261 per month for my youngest son, and $377 per month for my daughter.  Every policy (except my Advantage Plan) has a $1000 per year deductible.

There are considerations for Emergency Room visits (provided they are followed by hospital admission), and there are copays for prescription medications, but aside from help on the cost of prescription medications, Healthcare Insurance costs me almost $16,000 per year before insurance starts paying for the care we are receiving.

Since the end of last century, no one in my family has met the deductible.  The insurance companies have received from me a combined total of over $175,692 (and I’m not even counting this year), and paid out perhaps $10,000 in costs.  My out-of-pocket expenses over that same period, not counting the monthly payments, have amounted to over $16,500.

So, since the end of last century (and not counting this year’s expenses), healthcare and healthcare insurance for my family has cost me roughly $192,000, give-or-take.  I don’t feel so insulated, for some reason; nor am I closely acquainted with anyone who does.

Healthcare Insurance companies don’t stay in business losing money, and the majority of them have been around for a long, long time.  One of the reasons that healthcare insurance premiums are perhaps more costly than necessary is in the very simple fact that healthcare costs for those who are unable to pay are passed through by healthcare providers to those of us who are able to pay and/or our insurance companies.

The FICA tax is paid by everyone who is employed, as well as their employer.  The company will never, ever collect Social Security or qualify for Medicare (although the owner(s), in the case of a small business, might).  The employees will only qualify if they live at least a month past retirement age, or become disabled (in accordance with Medicare’s very stringent definition of disability).  They are paying for something to which “no one has an accrued property right.”

If current workers are by law required to pay for my insurance (Medicare), how is that so different from being required by law to pay for their own insurance?  How is it so different from being required by law to pay for a medical insurance fund?  In degree, perhaps, but in principle?  I don’t see it, particularly in view of the undeniable fact that we are paying now and have been doing so for decades, only not solely under compulsion of law, but to satisfy the bottom line of the healthcare industry.  Now there’s a “mandate” for you; that the ER being the walk-in-clinic for the uninsured must be financed by higher healthcare costs for the insured and those who self-pay.

Can anyone have failed to notice the fierce competition in automobile insurance rates and coverage?  If one drives, one must also have automobile insurance.  If a company wants to increase their market share, they have to do it through more competitive rates and coverage, because the market is otherwise saturated; not a lot of growth potential there.  Why would the healthcare insurance industry not eventually follow the same market principles, were the market to become similarly saturated?

One final point: Jerry Pournelle “couldn’t afford the option”, so “the rest of us must be compelled to pay it for” him.  And from my previous post, “Who is a Conservative”, he is quoted as saying, “my cancer treatments cost us essentially nothing when that developed.”  Where’s the difference in principle there?  Who is entitled, and who is responsible; is there really a disconnect between the cost of care and the person receiving it?  I’m evidently not seeing all this the same way he is.

From View March 24 2010: “Writers are self-employed, meaning that we do not get health care insurance from an employer. For a long time we got ours through Roberta as a teacher, eventually gaining access to the Kaiser system when she went to the Los Angeles County Education system (Not the LA Unified School District). When she retired we continued Kaiser through COBRA, and during that time we were able to enroll as regular members. I paid my Kaiser — dues, premiums, payments? — for decades. Eventually we were told we had to shift to Medicare, the good news being that Medicare would now pay our dues. There was another Advantage program requiring us to pay a fairly nominal fee monthly, and we opted for that as well. All of which worked out well for us, and my cancer treatments cost us essentially nothing when that developed.”

From Mail May 28, 2011: “Understand that I am very much a beneficiary of the current Medicare System. It was none of my choosing. Before I turned 65 I paid about $400/month dues to Kaiser (covering Roberta and me; the kids ceased to be covered under my family policy when they came of age), with reasonable co-payments. I was willing to continue that; but the day I turned 65 I had two choices: I could pay $1250 a month for the exact same coverage; or I could accept Medicare Advantage A and let Social Security/Medicare make the vast majority of my payments for me. There wasn’t a lot of choice in that. Whichever I did I would continue to pay the Social Security Tax since I have income. Naturally I “chose” Medicare. Kaiser delivered the radiation therapy that saved me from brain cancer. I didn’t make a lot of money the years that was going on. I haven’t been making as much after that as I had before it, but I still pay into the system. I have no idea what my choices would have been under the Ryan Plan because I don’t know what the Kaiser dues would have been had there not been Medicare Advantage.
I am very happy with Medicare and Medicare Advantage. I’d be quite happy if it continued forever. Alas, I don’t see how it can. There just isn’t enough money. I wouldn’t have voted to establish Medicare as we know it, but I certainly benefited from it. The chances that those now under 55 will be able to sign up for what I have ten years from now seem rather low to me.” – Jerry Pournelle

From Wikipedia: “The Consolidated Omnibus Budget Reconciliation Act of 1985 (or COBRA) is a law passed by the U.S. Congress on a reconciliation basis and signed by President Ronald Reagan that, among other things, mandates an insurance program giving some employees the ability to continue health insurance coverage after leaving employment. COBRA includes amendments to the Employee Retirement Income Security Act of 1974 (ERISA). The law deals with a great variety of subjects, such as tobacco price supports, railroads, private pension plans, emergency room treatment, disability insurance, and the postal service, but it is perhaps best known for Title X, which amends the Internal Revenue Code and the Public Health Service Act to deny income tax deductions to employers (generally those with 20 or more full time equivalent employees) for contributions to a group health plan unless such plan meets certain continuing coverage requirements. The violation for failing to meet those criteria was subsequently changed to an excise tax.
Although this statute became law on April 7, 1986, its official name is the Consolidated Omnibus Budget Reconciliation Act of 1985 (Pub.L. 99-272, 100 Stat. 82). Because of the discrepancy between the official name of the Act and the year in which it was enacted,[1] some government publications refer to the Act as the Consolidated Omnibus Budget Reconciliation Act of 1986. The Act is often referred to simply as “COBRA”.

Oh, and it wasn’t the Supreme Court that made Emergency Room care available to everyone regardless of ability to pay, it was congress and Reagan.

Also from Widipedia, part of COBRA is “The Emergency Medical Treatment and Active Labor Act (EMTALA)[1] is a U.S. Act of Congress passed in 1986 as part of the Consolidated Omnibus Budget Reconciliation Act (COBRA). It requires hospitals to provide care to anyone needing emergency healthcare treatment regardless of citizenship, legal status or ability to pay. There are no reimbursement provisions. Participating hospitals may only transfer or discharge patients needing emergency treatment under their own informed consent, after stabilization, or when their condition requires transfer to a hospital better equipped to administer the treatment.[1]
EMTALA applies to “participating hospitals.” The statute defines “participating hospitals” as those that accept payment from the Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS) under the Medicare program.[2] However, in practical terms, EMTALA applies to virtually all hospitals in the U.S., with the exception of the Shriners Hospitals for Children, Indian Health Service hospitals, and Veterans Affairs hospitals.[citation needed] The combined payments of Medicare and Medicaid, $602 billion in 2004,[3] or roughly 44% of all medical expenditures in the U.S., make not participating in EMTALA impractical for nearly all hospitals. EMTALA’s provisions apply to all patients, and not just to Medicare patients.[4][5]
The cost of emergency care required by EMTALA is not directly covered by the federal government. Because of this, the law has been criticized by some as an unfunded mandate.[6] Similarly, it has attracted controversy for its impacts on hospitals, and in particular, for its possible contributions to an emergency medical system that is “overburdened, underfunded and highly fragmented.”[7] Charity Care or care provided to the uninsured represent an industry average of 20% of total cost of care provided[citation needed]. The uncompensated or non-reimbursed amounts are written off as bad debt thus becoming a tax write off and the unpaid bills are also sold to third party collection agencies for an average of 20 cents per dollar[citation needed]. However, health insurance reimbursements for services provided have continually been reduced by the health insurance companies[citation needed]. Medicare and Medicaid reimbursements for services have also been reduced[citation needed]. The increasing financial pressures on hospitals and the passage of EMTALA and the additional costs of regulations that health service providers are required to maintain have caused consolidations and closures of many emergency room facilities[citation needed]. However, the number of emergency room clinics, or emergency rooms not attached to a traditional hospital, have increased, as they are generally more efficient and cost less to operate than a traditional hospital-based emergency room[citation needed]. There is debate[by whom?] about the extent to which EMTALA has led to cost-shifting and higher rates for insured or paying hospital patients, thereby contributing to the high overall rate of medical inflation in the U.S.”

I find it interesting that Jerry Pournelle has directly benefitted from some of those things he now denigrates and decries. The reason that COBRA allowed him to continue his healthcare coverage after Roberta’s retirement was signed into law by Reagan, and contained Title X as outlined above. Employers who did not offer a group health plan that met the requirements of the federal government were denied income tax deductions, that penalty subsequently changed to an excise tax.

Jerry was born and raised in the south. I feel quite certain that he has heard and understands the phrase, “Put your money where your mouth is.” It would appear that Jerry Pournelle may be a Conservative on paper, but he certainly seems to be quite the Liberal when it comes to his wallet.

“…my cancer treatments cost us essentially nothing when that developed.” As Jerry would say, why are we obligated to pay for someone else’s healthcare – like his?

I started this Thursday, and it carried through until today.  Again, I have edited the headers to reflect my email address here, and re-arranged the emails with oldest first.

From: bbearren@bbearren.com
Sent: Thursday, March 29, 2012 3:38 PM
To: Jerry Pournelle
Subject: Borrowing from China

Jerry,

Give it a break, old man!  For every dollar we borrow from China, about three dollars are “borrowed” elsewhere.  Most of the federal debt is owned by the U.S.  And it’s not so much “debt”, as it is an IOU.  As the economy improves (and it is, as you well know), the debt shrinks in and of itself through increases in revenue.

But of course, you know this.

We are not all readers of pure fiction; like the “Drill, baby, drill” idiocy that you have so far ignored.  Some of us try to deal in reality.

And for all your dire predictions that our “Democracy” will commit suicide, we’re not a “democracy”.  We’re a democratic republic.

Bruce

From: Jerry Pournelle
Sent: Thursday, March 29, 2012 8:26 PM
To: ‘bbearren@bbearren.com’
Subject: RE: Borrowing from China

So it’s all right to borrow money but not from China?

Jerry Pournelle

Chaos Manor

From: bbearren@bbearren.com
Sent: Friday, March 30, 2012 4:47 AM
To: ‘Jerry Pournelle’
Subject: RE: Borrowing from China

I ain’t that dumb, Jerry, nor so easily deflected.  The federal government has been borrowing money for more than two of your lifetimes.  Of course you knew that.

It’s not all right to imply that the US government is financed wholly by China and to expect all of your readership to swallow that gross exaggeration hook, line and sinker.

As you are very well aware, the national debt is not held in entirety by a single country, and the majority of that debt is held by the citizens of the United States.  I tire of being written down to; I’m not a dummy, and I loathe “sound bites”.

There are most certainly legitimate discussions to be entered into regarding the national debt and the implications of that debt in size and scope, but it is rather ridiculous and absurd to refer to that debt as “money borrowed from China” to, as you have said a number of times, an “intelligent readership”.

This chart  would appear to indicate that we have been dealing with federal debt for a couple hundred years; it’s not a new thing.  And again,  you knew that.

The article accompanying that chart also points out that the rapid rise in the Debt/GDP ratio began in the Reagan era, and continues.

It is also rather disingenuous to ignore the fact that continued economic recovery lowers the deficit simply by increasing revenues, with no other changes necessary.  The deficit is and always has been a moving target.

Bruce

From: Jerry Pournelle
Sent: Friday, March 30, 2012 2:30 PM
To: ‘bbearren@bbearren.com’
Subject: RE: Borrowing from China

Money is fungible. I suppose you are playing the Samuelson game. We owe it to ourselves, so it’s no problem? We can saddle the next generation with the costs?  Is this what you are saying?

And we presume that quantity does not count?   Clearly you like what we are doing with the borrowed money; tell me about the benefits. During the Cold War we understood or thought we understood the requirement/

Jerry Pournelle

Chaos Manor

From: bbearren@bbearren.com
Sent: Friday, March 30, 2012 3:11 PM
To: ‘Jerry Pournelle’
Subject: RE: Borrowing from China

I was born in 1945.  As the “future generation” I was saddled with a huge debt, along with the rest of the baby boomers.  But lo and behold, before I was even old enough to start earning a living for myself, the federal debt as a percentage of GDP was lower than it was before the beginning of WWII, and continued to decline until the Reagan years.  A growing economy took the saddle off, wonder of wonders.

Which, by the way, is what I was saying.  Did you not get it, or just not want to?

And how did you get from, “It’s not all right to imply that the US government is financed wholly by China and to expect all of your readership to swallow that gross exaggeration hook, line and sinker” to, “Clearly you like what we are doing with the borrowed money.”  What should be clear is that I think it disingenuous to imply that the majority of federal debt is held by China.

You decry “the media” and yet you tend to emulate them in part, issuing “sound bites” such as “borrowing from China”, and ignoring the illogical “Drill, baby drill”.

Bruce

From: Jerry Pournelle
Sent: Friday, March 30, 2012 6:25 PM
To: ‘bbearren@bbearren.com’
Subject: RE: Borrowing from China

And what I find astonishing is that you are more concerned about to whom the money is owed than that it is so very large. And that you find it necessary to use terms like old man in making your case. Thank you. I think it is clear now

Jerry Pournelle

Chaos Manor

From: bbearren@bbearren.com
Sent: Friday, March 30, 2012 5:24 PM
To: ‘Jerry Pournelle’
Subject: RE: Borrowing from China

No, it is not at all clear now.

What I find astonishing is that you either fail or refuse to get the point, which is, alarmingly, not that difficult.  You should no longer denigrate “the media”, in view of your apparent choice to emulate them in their use of “sound bites”.  It is this condensed exaggeration to which you stoop to attempt to make your point, and not the point itself.  It does indeed make a difference in to whom the money is owed.  Federal debt is not at all the same in any way, shape, or form,  as personal debt.  We don’t owe “the bank”, we owe us.  We, as an economic power, can grow our way out of the vast majority of that debt by virtue of a strengthening economy resulting in increased revenues, all else being equal.  We are yet a few years away from that, but it is certainly within the realm of possibilities.

Refining the tax code by eliminating loop holes and shelters is another way of increasing revenues, although I don’t see much chance of that any time soon.  But I am encouraged by the size of the debt in the fact that, eventually, it should have a tendency to realistically force some bipartisanship into our federal government and result in actually getting some non-rhetorical proposals all the way out to the floor where they will be open to debate for the nation to see and hear.

I am also born and raised in the south.  “Old man” is a term generally used for someone, regardless of age, who is stuck, by choice, in the past.  I give you as example Mr. Graves, long departed, who absolutely refused to go along with Daylight Saving Time.  He was consistently an hour late for any and all appointments during the summer.  He did get to church on time, though, because he had to depend on a ride, and that person who afforded him transportation to church would arrive early enough to encourage Mr. Graves to go ahead and get dressed for church, early though it might have been, or miss his ride entirely.

This is not the country in which you were raised; nor is it the country in which I was raised.  But I have never expected this country to remain static.  I believe that if the Framers had expected this country to remain static, they would not have written into the constitution the ability to amend it.

It seems that, though the Framers were looking forward, you continue to look back.

Bruce

From: Jerry Pournelle
Sent: Friday, March 30, 2012 8:45 PM
To: ‘bbearren@bbearren.com’
Subject: RE: Borrowing from China

Thank you

Jerry Pournelle

Chaos Manor

From: bbearren@bbearren.com
Sent: Friday 3/30/2012 10:53 PM
To: ‘Jerry Pournelle’
Subject: RE: Borrowing from China

You’re quite welcome.

Bruce

but I’ve still got a couple of days before the start of my next project, so I’m catching up a bit on some of my reading.  I keep reading the same, tired mantras from conservatives – get rid of Job-Killing-Regulations that are stifling business growth, and give more tax cuts to the rich that are certain to create jobs.  Both ideas are lame, but the conservatives don’t seem to be able to come up with anything new.

There have been a number of polls of small-to-medium business owners asking what their biggest concerns are in this recession.  Number One in such polls is almost always a lack of consumers.  Regulations is sometimes number two, but in some polls it’s even further down the list.  I would presume that a successful small-to-medium business owner might have a pretty good handle on how to run his or her business, and what they perceive to be their most immediate need.

Two of my favorite counter-arguments to the tired refrain of tax-breaks come from Warren Buffett (if he doesn’t know what rich people want, who does?) and Nobel prize-winning economist Paul Krugman.

Mr. Buffet first: from an op-ed in the New York Times,

“Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.”

Maybe I’m just stupid, but when it comes down to what a rich person will or won’t do with his money, I’m inclined to take the word of the rich guy over the word of someone who ain’t nowhere near that bracket.

And from Dr. Krugman: also from an op-ed in the New York Times,

“In fact, that idle cash has become a major conservative talking point, with right-wingers claiming that businesses are failing to invest because of political uncertainty. That’s almost surely false: the evidence strongly says that the real reason businesses are sitting on cash is lack of consumer demand. In any case, if corporations already have plenty of cash they’re not using, why would giving them a tax break that adds to this pile of cash do anything to accelerate recovery?

It wouldn’t, of course; claims that a corporate tax holiday would create jobs, or that ending the tax break for corporate jets would destroy jobs, are nonsense.

So here’s what you should answer to anyone defending big giveaways to corporations: Lack of corporate cash is not the problem facing America. Big business already has the money it needs to expand; what it lacks is a reason to expand with consumers still on the ropes and the government slashing spending.

What our economy needs is direct job creation by the government and mortgage-debt relief for stressed consumers. What it very much does not need is a transfer of billions of dollars to corporations that have no intention of hiring anyone except more lobbyists.”

We need more consumers; consumers create jobs.  The government could create quite a few jobs directly by hiring contractors to repair our badly deterioriating infrastructure, and we seem to have some of that in every state in the union.