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Is the individual mandate tax in Obamacare unenforceable?

Could Obamacare actually increase the number of uninsured people? Suppose that you believe Obama's claims about ending free-riding by people on health care. Well, it turns out that Obamacare might really make them pay anything. John Merline has this at IBD:

But the uninsured problem under ObamaCare could be much worse than the CBO projects.
What the report doesn't cover is the fact that the other legs of the ObamaCare stool designed to expand insurance coverage — the individual mandate, the employer mandate and the state insurance exchanges — are also buckling.
As a result, ObamaCare will likely cover far fewer uninsured than advertised. There's even a chance that, if all goes wrong, it could actually make the uninsured problem worse.
The individual mandate, for example, is a cornerstone of ObamaCare's effort to expand coverage. But tax experts who've studied how the IRS will enforce the mandate conclude that it's likely to be ineffective, because the law makes it virtually impossible for the IRS to collect the tax penalty from those who don't pay it.
Under normal circumstances, the IRS has broad powers to collect taxes from those who don't pay what they owe. It can charge civil and criminal penalties, impose liens, and seize assets and bank accounts.
But ObamaCare specifically blocks the IRS from using these enforcement tools when it comes to collecting any unpaid ObamaCare tax penalties. . . .

Obama declares: ‘We tried our plan -- and it worked"

book3 Economy Obama2012 Obamadetachment stimulus

Is this out of touch? From Obama's speech in Oakland, California on July 24, 2012:

But here’s the problem -- we tried that and it didn’t work. (Applause.) It’s not what you believe, it’s not what I believe, it’s not what most Americans believe will actually make a difference. This country was not built from the top down; it was built from the middle class out, from the bottom up. (Applause.) That’s how we became the most prosperous nation in the history of the world. That’s the path that you can choose for America in this election. And that’s why I’m running for a second term as President of the United States. . . .

Just like we’ve tried their plan, we tried our plan -- and it worked. That’s the difference. (Applause.) That’s the choice in this election. That’s why I’m running for a second term.

When the American auto industry was on the brink of collapse, more than 1 million jobs were on the line, Governor Romney said, we should just "let Detroit go bankrupt." . . .

Dick Morris talks about how Obama is gutting the Welfare reform law

book3 obamalawless

Dick Morris negotiated the welfare reform law on behalf of Bill Clinton. Starting at about 4:10 into the video you will see the discussion.

Obama IRS rewriting Obamacare now that it is clear that states aren't doing what was intended

book3 obamacare obamalawless

Congress wrote the Obamacare law to achieve a particular result, but things haven't worked out quite as intended. In this case, Democrats wrote the law to put pressure on states to adopt the health insurance exchanges, but apparently Democrats thought that the pressure would be so great that states would have to adopt the exchanges. They never really planned for the exchanges not being set up. From the Cato Institute:

It turns out that ObamaCare makes an essential part of its regulatory scheme—an $800 billion bailout of private health insurance companies—conditional upon state governments creating the health insurance “exchanges” envisioned in the law.
This was no “drafting error.” During congressional consideration of the bill, its lead author, Sen. Max Baucus (D-MT), acknowledged that he intentionally and purposefully made that bailout conditional on states implementing their own Exchanges.
Now that it appears that as many as 30 states will not create Exchanges, the law is in peril. When states refuse to establish an Exchange, they are blocking not only that bailout, but also the $2,000 per worker tax ObamaCare imposes on employers. If enough states refuse to establish an Exchange, they can effectively force Congress to repeal much or all of the law.
That might explain why the IRS is literally rewriting the statute. On May 24, the IRS finalized a regulation that says the law’s $800 billion insurance-industry bailout will not be conditional on states creating Exchanges. With the stroke of pen, the IRS (1) stripped states of the power Congress gave them to shield employers from that $2,000 per-worker tax, (2) imposed that illegal tax on employers whom Congress exempted, and (3) issued up to $800 billion of tax credits and direct subsidies to private health insurance companies—without any congressional authorization whatsoever. . . .

Average per person wealth in Canada exceeds that for Americans

book3 Canada

Might people consider adopting Canada's economic policy of cutting marginal income tax rates and restraining government spending? Canada's marginal corporate income tax rate is about 15% below ours. That is a big difference if investors get to keep 15 cents more of every dollar that they make from Canadian investments. From Bloomberg:

On July 1, Canada Day, Canadians awoke to a startling, if pleasant, piece of news: For the first time in recent history, the average Canadian is richer than the average American.
According to data from Environics Analytics WealthScapes published in the Globe and Mail, the net worth of the average Canadian household in 2011 was $363,202, while the average American household’s net worth was $319,970.
A few days later, Canada and the U.S. both released the latest job figures. Canada’s unemployment rate fell, again, to 7.2 percent, and America’s was a stagnant 8.2 percent. Canada continues to thrive while the U.S. struggles to find its way out of an intractable economic crisis and a political sine curve of hope and despair. . . .

Washington, DC becomes known as the "recession-proof" city

book3 stimulus

Obama has certainly achieved a remarkable recovery in one US city, and it is probably safe to say that his policies of massive government spending did make a difference here. Taking money from the rest of the country and moving it to Washington, DC certainly did help the local economy, though at the expense of everyone else. From Fox News:

The City Hall corruption comes amid years of prosperity in which the nation’s capital became known as a nearly recession-proof city and a preferred market for such celebrity chefs and restaurateurs as Mike Issabella.
The changes mark a long road of success since the 1990s -- when the city, in part because of the crack epidemic, became known as “the murder capital.” Today the murder rate is at a roughly 40-year low. . . .

President Obama: "If you’ve got a business -- you didn’t build that. Somebody else made that happen."

book3 Obamaantibusiness obamadoesntunderstandeconomics

Transcript from a talk in Roanoke, Virginia on July 13, 2012:

So I’m going to reduce the deficit in a balanced way. We’ve already made a trillion dollars’ worth of cuts. We can make another trillion or trillion-two, and what we then do is ask for the wealthy to pay a little bit more. (Applause.) And, by the way, we’ve tried that before -- a guy named Bill Clinton did it. We created 23 million new jobs, turned a deficit into a surplus, and rich people did just fine. We created a lot of millionaires.
There are a lot of wealthy, successful Americans who agree with me -- because they want to give something back. They know they didn’t -- look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something -- there are a whole bunch of hardworking people out there. (Applause.)
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business -- you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet. . . .

Someone should really educate Obama about the history of the United States. A lot of states in the US didn't have public education until the 1870s, and yet they had literacy rates around 96 percent. Public universities got started well after private universities did, and so the vast majority of our colleges were originally private. That even the subways in NYC were originally built and operated privately until government price controls (a 5 cent maximum fare) and "capturing" of existing private lines. You had private highways in the US up until 1916.

Instead of passing new laws the Obama administration just unilaterally redoes the law itself: This time welfare reform

book3 obamalawless welfare

From Fox News:

. . . Republicans are accusing the Obama administration of unilaterally gutting welfare reform after the Department of Health and Human Services quietly notified states that they may seek a waiver for the program's strict work requirements.
HHS made the announcement in a policy memo Thursday, news that slipped well below the radar amid a raucous day on the presidential campaign trail. But a few prominent GOP lawmakers on Capitol Hill picked up on the change, and accused the administration of overhauling one of the most important bipartisan agreements of the past several decades.
"President Obama just tore up a basic foundation of the welfare contract" Republican Study Committee Chairman Jim Jordan, D-Ohio, said in a statement. He also called the move a "blatant violation of the law."
Mitt Romney on Friday spoke up on the change, saying: "President Obama now wants to strip the established work requirements from welfare." He said "the linkage of work and welfare is essential to prevent welfare from becoming a way of life."
How exactly the HHS change will play out is unclear. In Thursday's policy directive, the department said the states may seek a waiver from the work component of the Temporary Assistance for Needy Families Program, in order to "test alternative and innovative strategies, policies and procedures that are designed to improve employment outcomes for needy families." . . . But HHS is suddenly allowing for more flexibility in a program known -- and in many circles, lauded -- for its rigid framework. . . .

Meanwhile, the Obama administration finally is stopping its "go on food stamps" ads.

. . . The Spanish-language radio ads composed a 10-part miniseries called "Hope Park." In it, the characters were shown persistently trying to convince a character named "Diana" to go on food stamps -- known these days as SNAP, or the Supplemental Nutrition Assistance Program -- even though her husband works and she doesn't think she needs it.
"I don't need help from anyone," Diana says in Episode 4. "My husband makes enough to take care of us."
But her friends are persistent, and by Episode 10 Diana is enrolled and singing the program's praises.
The ads drew criticism at a time when one in seven are already enrolled.
The food stamp rolls have swelled since the recession, growing roughly 40 percent since 2009. As of April, more than 46 million people were in the program, which costs $80 billion a year.
Sen. Jeff Sessions, R-Ala., ranking Republican on the Senate Budget Committee, slammed the campaign as a push to enroll individuals who don't feel they need it. . . .

It would be useful for someone to go through the studies that have looked at the benefits of the welfare reform and to see what the Obama administration is putting at risk.

Get ready for flood of regulations after election

book3 CassSunstein Obama2012 Regulation

A soft freeze just means that these regulations are piling up.

But now Obama’s making it tougher to put costly new rules in place. His enforcer: Cass Sunstein, an old buddy from their University of Chicago days whose friendship with the president gives him more clout in the West Wing than many advisers of higher rank. Sunstein has imposed what is essentially a soft freeze on new regulations.
Even though that’s not official policy, the administration has been increasingly frugal in issuing regulations, according to a POLITICO review of government data and more than two dozen interviews with current and former administration officials, lawmakers in both parties, business leaders and liberal activists. The analysis of the federal rule-making database shows Obama as of Tuesday had issued 1,004 final regulations since arriving in office. That’s fewer than his two immediate predecessors, George W. Bush and Bill Clinton. This year, Obama is also on pace to put out the fewest “economically significant” regulations of any year in his presidency.
In classic Washington fashion, the administration’s slowdown of new rules is making liberals mad and winning Obama no credit from Republicans or the business community — especially not in an election year in which the over-regulator meme is so prevalent. . . .

UPDATE: The National Federation of Independent Businesses surely gets it (see stopthetidalwave.org).

So where will Americans end up going for health care?

book3 Canada healthcare

Obama has often said that he would like a health care system like they have in Canada. Look at how so few doctors these days are taking new Medicare patients. If that type of pricing policy is applied across the board, we would see fewer doctors providing services there also.

A Canadian study released Wednesday found that many provinces in our neighbor to the north have seen patients fleeing the country and opting for medical treatment in the United States.
The nonpartisan Fraser Institute reported that 46,159 Canadians sought medical treatment outside of Canada in 2011, as wait times increased 104 percent — more than double — compared with statistics from 1993.
Specialist physicians surveyed across 12 specialties and 10 provinces reported an average total wait time of 19 weeks between the time a general practitioner refers a patient and the time a specialist provides elective treatment — the longest they have ever recorded.
In 2011, Canadians enrolled in the nation’s government-dominated health service waited long periods of time for an estimated 941,321 procedures. As many as 2.8 percent of Canadians were waiting for treatment at any given time, according to the Institute.
“In some cases, these patients needed to leave Canada due to a lack of available resources or a lack of appropriate procedure/technology,” according to the Institute. “In others, their departure will have been driven by a desire to return more quickly to their lives, to seek out superior quality care, or perhaps to save their own lives or avoid the risk of disability.” . . .

On a related note:

Eighty-three percent of American physicians have considered leaving their practices over President Barack Obama’s health care reform law, according to a survey released by the Doctor Patient Medical Association.
The DPMA, a non-partisan association of doctors and patients, surveyed a random selection of 699 doctors nationwide. The survey found that the majority have thought about bailing out of their careers over the legislation, which was upheld last month by the Supreme Court. . . .

How much damage did Dodd-Frank do to the economy?

book3 dodd-frank

Peter J. Wallison has a piece at the American Magazine that the impact of Dodd-Frank on the economy.

. . . Although event studies like this are always subject to question, the fact that the same patterns are seen in overall GDP and in two major sectors of the economy lends support to the idea that they had the same cause. Moreover, no other event at the outset of the third quarter of 2010 can explain the two-year persistence of the decline that followed.
The question is why—why did this act have such a dramatic effect on the U.S. economy, essentially stifling the modest recovery that had begun almost a year earlier? The most likely explanation is uncertainty. The Dodd-Frank Act was such a comprehensive piece of legislation—and required so many new regulations before its effects could be fully evaluated—that many financial institutions and firms simply decided to wait for regulatory developments before expanding, hiring new workers, or rehiring workers who had previously been laid off.
The act also had very substantial unintended consequences. In part, this was the result of the short shrift that the relevant congressional committees gave to specific provisions before adopting the law. Following the precept of the president’s then-chief of staff Rahm Emanuel that “You never want a serious crisis to go to waste,” the law was rushed through Congress only 18 months after the Obama administration took office and 13 months after the first draft of the law was available to Congress and the public. This would have been warp speed for any one of the major provisions in the act. For a law with dozens of complex, radical, and occasionally contradictory provisions, adopting it so quickly and with so little real understanding of its effects verged on dereliction of duty. . . .

Obama administration tries to soften image of CFPB

book3 Regulation

From the WSJ's Political Diary:

. . . Mr. Cordray talks about why the CFPB brings enforcement officials to routine bank examinations. "I feel like that has been much misunderstood," Mr. Cordray says. "We want supervision examiners to understand the role of enforcement" and "the enforcement attorneys to understand the role of examination and supervision." That may be true, but it's not how any other federal banking regulator has ever done business, and for good reason. Regulators have to build trust with the regulated to encourage transparency and an open channel of communication, especially during times of crisis. The CFPB has done just the opposite by flexing its legal might. Mr. Cordray adds that he expects a "steady stream" of enforcement actions. Hmm. In part two of the American Banker series, Mr. Cordray addressed the financial industry's other big bugbear: the CFPB's recent release of a database of unverified consumer complaints against credit-card companies. "It's a free market of ideas," Mr. Cordray says, noting the database "puts pressure for everyone to compete with one another over customer service." Well, that's one interpretation. But credit-card companies have been fiercely competing with each other for decades, long before the CFPB came into existence. The release of unverified complaints—another unprecedented regulatory move—serves the interest of no one but trial lawyers looking to levy frivolous class-action lawsuits. Mr. Cordray says he understands industry's "concerns" and will "continue to listen to all sides in terms of how we can improve that database." How comforting. Mr. Cordray, like his predecessor, Elizabeth Warren, has aggressively argued that the CFPB is a force for good in the U.S. economy and that the lack of a serious congressional check on the agency is nothing to worry about. The American Banker series shows that those arguments, no matter how politely phrased, are far from settled.

By 56 to 35% Americans think that Obama has changed the country for the worse

book3 Obama2012 poll

One would think that this fact alone would give Romney a significant leg up in the election.

. . . A new poll for The Hill found 56 percent of likely voters believe Obama’s first term has transformed the nation in a negative way, compared to 35 percent who believe the country has changed for the better under his leadership.
The results signal broad voter unease with the direction the nation has taken under Obama’s leadership and present a major challenge for the incumbent Democrat as he seeks reelection this fall. . . .
The feeling that Obama has changed the country for the worse is strongest among Republicans, at 91 percent, compared to 71 percent of Democrats who support Obama’s brand of change.
Strikingly, 1-in-5 Democrats say they feel Obama has changed the United States for the worse.
Compared to the sentiment about Obama’s impact, fewer people see presumptive Republican nominee Mitt Romney as a candidate who will change the country dramatically if elected. . . .

Forget Jonathan Gruber's promises that Obamacare would "for sure" lower health insurance costs

book3 Jonathan Gruber obamacare

Remember Jonathan Gruber's crucial analysis that played such a central role in getting Obamacare passed? Remember his promise that passage would greatly reduce health insurance costs? He promised" "we know for sure the bill will do is that it will lower the cost of buying non-group health insurance." Remember that this is the same guy who got paid about $400,000 from the Obama administration and failed to mention it in all the media that he did pushing Obamacare? Well, as best as I can tell from Gruber's statements is that for some states that already have a lot of mandates, the cost of health insurance will pretty much stay the same, but in other states the cost will go up, often by a lot. Of course, none of this includes the impact from the ban on pre-existing conditions exclusion.

Avik Roy of the Manhattan Institute has the story here:

As states began the process of considering whether or not to set up the insurance exchanges mandated by the new health law, several retained Gruber as a consultant. In at least three cases—Wisconsin in August 2011, Minnesotain November 2011, and Colorado in January 2012—Gruber reported that premiums in the individual market would increase, not decrease, as a result of Obamacare.
In Wisconsin, Gruber reported that people purchasing insurance for themselves on the individual market would see, on average, premium increases of 30 percent by 2016, relative to what would have happened in the absence of Obamacare. In Minnesota, the law would increase premiums by 29 percent over the same period. Colorado was the least worst off, with premiums under the law rising by only 19 percent. . . .
"It is important to recognize some limitations in our modeling of prices. In particular, given publicly available data we cannot incorporate the effects of the ban on pre-existing conditions exclusions. . . . ."

Roy's piece is worth reading.

Obama administration blaming Fox News for class warfare rhetoric

book3 classwarfare

My book Debacle has a discussion about the anti-business, class warfare rhetoric of the Obama administration and the attempts by the Obama administration to claim that isn't true. Now in this video we have a recording of a statement where a top WH advisor who says that the class warfare rhetoric is all due to Fox News.

Newest Fox News piece: A disappointing jobs picture and no, we're not doing better than Europe

book3 op-ed unemployment

My piece starts this way:

Americans faced another disappointing jobs picture today. Of course, we could go through the numbers again. With the working age population growing by 191,000 last month, 80,000 more jobs doesn’t even come close to absorbing all these new workers, let alone employing those who have long been out of work. And then there’s the most important number of all: for 41 months, the unemployment rate has been above 8 percent.   

But how does the US labor market compare to Europe or the rest of the world? Earlier this week news reports may have made Americans feel a little better, if only by comparison. Reflecting the philosophy that you should be thankful for what you have because things could always be worse, the headline in the Los Angeles Times read: “Think 8.2% unemployment is bad? It's a record 11.1% in Europe.” An Associated Press article carried by Fox News and a host of other outlets made the same point.  

The point has not been lost on President Obama, whose administration frequently references Europe as an explanation for our slow growth. Last month, Obama noted: “slower growth in Europe means slower growth in American jobs.”

The problem with such a seemingly obvious comparison is that the US and most of Europe define unemployment quite differently. . . .

A couple of other notes.

1) About a third of those 80,000 jobs are temporary service sector jobs.
2) 85,000 people went on disability in June.
3) Obama predicted that the unemployment rate now would be about 5.8% (January 10, 2009) and 6% (February 26, 2009 estimate).

Obama administration's policy to make the military more hospitable to women

AffirmativeAction book3

So much for the tradition of drill sergeants yelling at recruits. From ABC News:

Part of the drill sergeants' evaluation focused on what they would do if a trainee refused to do as they were told. One drill sergeant tackled the scenario by simply saying "let's talk" and listening to the recruit and then providing mentoring. . . .

Obamacare already at 13,000 pages of regulations and they are just getting started

book3 obamacare Regulation

Well, this will certainly simplify health care. From Fox News:

"Oh boy," Stan Dorn of the Urban Institute said. "HHS has a huge amount of work to do and the states do, too. . . ." The IRS, Health and Human Services and many other agencies will now write thousands of pages of regulations -- an effort well under way:
"There's already 13,000 pages of regulations, and they're not even done yet," Rehberg said. . . .
According to James Capretta of the Ethics and Public Policy Center, federal powers will include designing insurance plans, telling people where they can go for coverage and how much insurers are allowed to charge.
"Really, how doctors and hospitals are supposed to practice medicine," he said.
The health department is still writing regulations, which can be controversial in and of themselves. . . .

Unbelievably, Obama still claiming that everyone can keep their current health insurance if they are happy with it

book3 brokenpromisesobama obamacare

From Obama's remarks after the Supreme Court decision upholding Obamacare:

"First, if you're one of the more than 250 million Americans who already have health insurance, you will keep your health insurance. This law will only make it more secure and more affordable." . . .

I only care about this because it shows that Obama simply won't admit the obvious to voters. To believe that Obamacare will lower the costs of insurance means that Obama really doesn't think that profits motivate firms.

Insurance companies can no longer impose lifetime limits on the amount of care you receive. . . . Because of the Affordable Care Act, young adults under the age of 26 are able to stay on their parent's health care plans -- a provision that's already helped 6 million young Americans. And because of the Affordable Care Act, seniors receive a discount on their prescription drugs -- a discount that's already saved more than 5 million seniors on Medicare about $600 each. . . .

If these changes really lowered costs, firms would have offered all these benefits on their own. More misinformation on how insurance has actually worked.

They can no longer discriminate against children with preexisting conditions. . . .

For only the fifth time in 33 years weekly wages have fallen over the last year

book3 stimulus unemployment

The BLS finds that weekly wages dropped over the year by 1.7 percent to $955 in the fourth quarter of 2011 from a high of $971 in the fourth quarter of 2010.

The U.S. average weekly wage decreased over the year by 1.7 percent to $955 in the fourth quarter of 2011. This is one of only five declines in the history of the series which dates back to 1978. (See Technical Note.) This is the only quarter in which the average weekly wage decline occurred while employment grew over the year and total wages decreased (-0.5 percent). Smaller bonus payments in the fourth quarter of 2011 contributed to the decrease in the average weekly wage. In contrast, the average weekly wage declines posted in the first two quarters of 2009 resulted from significant declines in both employment and wages. During this period, total wage declines were 5.0 percent or more, while employment losses were above 3.0 percent. In the fourth quarter of 2011, Olmsted, Minn., had the largest over-the-year decrease in average weekly wages with a loss of 21.3 percent. Within Olmsted, a total wage decline of $287.3 million (-29.1 percent) in the education and health services industry had the largest impact on the county’s decrease in average weekly wages. . . .

Hot News of the World