Category Archives: Uncategorized

Paul Ryan, Donald Trump, and a Return to Congressional Government?

Last week’s announcement by House Speaker Paul Ryan that he will vote for presumptive Republican presidential nominee Donald Trump in November received widespread attention from political commentators. However, few noted the reason behind Mr. Ryan’s public endorsement of Trump: The speaker believes Mr. Trump will effectively cede policy-making authority to Republicans in Congress.

Writing in his hometown Janesville Gazette, the House speaker spent time outlining the agenda he has worked to frame since taking office in September—creating policy teams tasked with formulating an alternative to Obamacare, principles for tax reform, an anti-poverty agenda, and more. Noting that Hillary Clinton likely wouldn’t embrace the principles behind the Republican agenda, “we need a Republican president willing to sign [this agenda] into law,” he said.

Mr. Ryan clearly believes that “the House can be a driver of policy ideas”—in fact, he said as much in his article endorsing Trump. Mr. Ryan justified his endorsement of the businessman as a practical means to enact the agenda he and his fellow House Republicans are developing: “House Republicans are helping shape that Republican vision by offering a bold policy agenda, by offering a better way ahead. Donald Trump can help us make it a reality.”

What Mr. Ryan proposes—and what the speaker believes Mr. Trump has endorsed—would amount to the greatest ceding of a policy agenda from the executive to the legislature in over two decades. The arrangement echoes then-Speaker Newt Gingrich’s Contract with America, which dominated headlines following the 1994 Republican sweep of Congress. For a time, House Republicans so controlled the policy agenda that in April 1995, President Bill Clinton plaintively pleaded in a prime-time television news conference: “I am relevant. The Constitution gives me relevance.”

For all Mr. Trump’s ability to generate headlines or set Twitter alight, Mr. Ryan envisions a scenario where a President Trump, if not entirely irrelevant, would give Republicans in Congress the lead role in formulating a governing agenda. While Mr. Trump has thus far shown little interest in policy nuances, Mr. Ryan’s gambit appears based on the premise that, when and if he takes office, Mr. Trump will continue to outsource most of his agenda to Congressional Republicans. We’ll see if this arrangement will wear well for Speaker Ryan, Republicans in Congress, or Mr. Trump himself.

This post was originally published at the Wall Street Journal’s Think Tank blog.

In Britain’s Elections, A Message for Paul Ryan and Donald Trump?

Those surprised that House Speaker Paul Ryan said he is “not ready” yet to support Donald Trump might look at results of the election taking place in Britain as Mr. Ryan spoke on Thursday.

In the U.K.’s first local and regional elections since Jeremy Corbyn became Labour Party leader in September, Labour’s results ranged from mediocre to morose. In its traditional stronghold of Scotland—birthplace of party founder Keir Hardie as well as the last two Labour prime ministers, Tony Blair and Gordon Brown—Labour came in a shocking third, behind the Scottish National Party and the Conservative Party. The Labour candidate won the London mayor’s race, but results in England were a net loss of seats to Prime Minister David Cameron’s Conservative Party.

Generally parties out of power pick up seats in “off-year” elections, whether in the U.S. or in the U.K. (The Labour Party last lost seats in midterm local elections in 1985, The Wall Street Journal noted.) The results will intensify focus on Mr. Corbyn’s leadership, a tenure that has been controversial at times and sparked unhappiness among some Labour members of Parliament.

Mr. Corbyn, an avowed socialist, has an unorthodox style that, while greatly differing from Donald Trump in substance, has its own vocal fans and critics. Some of Mr. Corbyn’s off-the-cuff comments on policy issues have sparked criticism outside and within his party: He pledged last fall to cut back on using military force and opposes nuclear weapons. He was heavily criticized over a recent intraparty battle about anti-Semitism that raised fears he had alienated potential donors and voters. Mr. Corbyn’s appearance and manners, what many consider the optics of party leadership, have also spurred debate.

Last year one of the members of Parliament who nominated Mr. Corbyn to compete for party leader told the BBC that “At no point did I intend to vote for Jeremy myself–nice as he is–nor advise anyone else to do it. … We were being urged as MPs to have a field of candidates.” A politics professor at the University of Nottingham was less subtle, calling Mr. Corbyn’s election as party leader “an act of stupidity unparalleled since Caligula appointed his horse to the Roman Senate.”

In Washington, Paul Ryan faces a situation not unfamiliar to some in Britain’s Parliament: a party leader with whom some members do not agree–in the case of Mr. Corbyn, one with whom some have said they will not serve–and someone who they fear would lead them to electoral defeat. Labour experienced losses this week, but Mr. Corbyn’s position as leader is unchanged. After Mr. Ryan said Thursday that the onus is on Mr. Trump to bring the party together, Mr. Trump fired back that he had won the Republican Party with millions of votes. The two are scheduled to meet next week. When it comes to the split between the Republican establishment and “tea party” lane, it’s not clear which faction will win out, or how they might ultimately move forward together. Mr. Ryan has incentive to maintain his independence—not least to try and protect his members.

This post was originally published at the Wall Street Journal’s Think Tank blog.

The Republican Party Split That Donald Trump’s Nomination Won’t Resolve

The general election campaign has not begun, but preliminary polling suggests that Donald Trump is a decided underdog against Hillary Clinton. For the Republican Party, there is an issue beyond the Election Day outcome–and one that, at least right now, looks unlikely to be resolved no matter who wins in November.

More so than reports of John Kasich suspending his campaign, it was Sen. Ted Cruz‘s withdrawal from the Republican primary race Tuesday night that sparked reactions from Republicans ranging from begrudging acceptance to continued hostility. Mr. Trump’s ascendance illustrates a split within the Republican Party, between the “establishment” and the “tea party” lanes, that has been widening for years. It is likely to persist, as both factions disagree on the elements that led to Mr. Trump’s meteoric rise.

A core point in the internal GOP dispute is whether political confrontation or ideological conservatism most motivates voters, including the party’s base. Steve Schmidt, a consultant to John McCain‘s presidential campaign in 2008, said on MSNBC Tuesday night that Mr. Trump’s rise was fueled by voter frustration stoked by the tea-party wing. He and other establishment figures view anger as a poor substitute for substantive policy solutions and a dead-end political strategy in general.

On the other hand, those aligned with tea-partyers view the Trump phenomenon as rising from discontent with an insufficiently conservative leadership. They see voters’ frustration and anger rooted in an establishment that overpromised and underdelivered, for example by promising to fight President Barack Obama’s executive orders on immigration “tooth and nail” in November 2014 but, just a few months later, ruling out a partial government shutdown over the issue as “not an option.”

A Cruz nomination would have left little doubt about the party’s ideological direction. Mr. Cruz often echoed Ronald Reagan’s desire to speak “in bold colors, not pale pastels,” and relying on motivated conservatives to help drive general election turnout. A Cruz-Clinton match-up would have made clear the potential, and potential limits, of a “base strategy.”

Conversely, Trump’s ideological heterodoxies—on health careabortion and even about Hillary Clinton herself—reshuffle the political landscape. Mr. Trump falls outside the “establishment” and “tea party” labels, as neither side fully embraced his ascent. Mr. Trump said Wednesday that “As far as the Republican Party coming together, it will, maybe not 100%, but it’ll come together 99% and the 1% I don’t want and it won’t have any impact.” What shape the GOP takes as some elements rally behind him and others consider different directions will definitely have an impact on the Republican Party as we have known it.

This post was originally published at the Wall Street Journal’s Think Tank blog.

Obama Administration Wants to Break Law Obama Signed

As spring turns to summer, the House and Senate will work on the 12 annual appropriations bills that fund the federal government. The backdrop to this work? The president who signed the Budget Control Act into law four years ago wants to exceed the spending levels the legislation prescribed.

In a recent blog post, Office of Management and Budget Director Shaun Donovan made clear that the administration opposes the spending levels. Mr. Donovan wrote that “sequestration was never intended to take effect: rather, it was supposed to threaten such drastic cuts to both defense and non-defense funding that policymakers would be motivated to come to the table and reduce the deficit through smart, balanced reforms.” However, because the congressional “supercommittee” formed in 2011 did not reach agreement on entitlement and/or tax changes to reduce the deficit, automatic reductions were triggered on discretionary spending, with separate caps on defense and non-defense appropriations.

But in separate letters regarding the House’s first two spending bills, Mr. Donovan wrote that “the President has been clear that he is not willing to lock in sequestration going forward, nor will he accept fixes to defense without also fixing non-defense.” Largely because of these broad disagreements over spending levels, the administration issued veto threats on the first two appropriations measures.

Ironically, President Barack Obama now opposes a policy outcome—the “sequester” spending levels—that he introduced: Multiple fact checkers have confirmed that it was administration officials who proposed the sequester mechanism during debt-ceiling negotiations in the summer of 2011. These histories directly contradict the president’s statement in an October 2012 debate with Mitt Romney that “the sequester is not something that I’ve proposed. It is something that Congress has proposed.”

The administration can say that it did not propose the sequester mechanism. It can also say—with more accuracy—that sequestration was an action-forcing mechanism that was never intended to take effect. But neither argument changes the fact that the Budget Control Act remains the law of the land. The specter of Mr. Obama vetoing spending bills—potentially setting up another government shutdown this fall—because they fail to nullify an act that he signed into law could present an optics problem for his administration.

This post was originally published at the Wall Street Journal’s Think Tank blog.

A Jab from Washington at State and Local Educators

Politico reported last week about how education leaders in red and blue states alike have pushed back against federal control in education policy. Given this environment, Washington would do well not to patronize state and local leaders’ ability to manage schools and their desire to do right by their students. Yet it appears that the Department of Education has done just that.

Consider a series of proposed requirements released last month for the federal School Improvement Grants program. In examining alternatives to the requirements, the Education Department noted that it could allocate funds “without establishing any new requirements governing their use.” However, the proposal stated, in such a circumstance state and local education authorities would have to implement the congressional requirements “without key regulatory support from the Department.” The relevant passage concluded: “We do not believe that states generally possess the capacity or expertise needed to meet this responsibility with the amount of rigor expected by Congress.”

The language sends a clear message that the Department of Education does not trust state and local education leaders’ competence to implement “evidence-based, whole-school reform strateg[ies]” without “key regulatory support” from Washington–or does not trust their intentions to act in the best interests of their schoolchildren. Either way, the message does a disservice to the many men and women who put in countless hours to reform America’s schools and educate our children. It also raises the question of whether “key regulatory support” from the Department of Education means advice and technical guidance, or more federal requirements and paperwork.

The Education Department’s attitude calls to mind Ronald Reagan’s comment about the nine most terrifying words in the English language: “I’m from the government, and I’m here to help.” Small wonder that parents and local politicians of both parties are giving that supposed assistance a second look.

This post was originally published at the Wall Street Journal’s Think Tank blog.

Obamacare’s Mandates and Pre-Existing Conditions

Tomorrow is the deadline for the first round of briefs in the Supreme Court arguments over Obamacare; various briefs will continue to be filed between now and oral arguments in March.  But we got a preview of the tortured logic we’re likely to see from Democrats over Obamacare’s individual mandate when the liberal AARP filed an early amicus brief just before Christmas.  AARP claimed that Obamacare’s mandate is justified because for individuals with chronic conditions, “even when they can get a policy, it frequently contains an exclusion for the pre-existing or chronic condition, leaving many without adequate insurance for the very health problems they are most likely to encounter.”

This assertion is particularly ironic, given that 1) AARP itself discriminates against people with pre-existing conditions, slapping waiting periods on sick individuals who apply for its lucrative Medigap policies, and 2) AARP admits in its brief that it did NOT act to end this discrimination against people with pre-existing conditions in Obamacare, as none of the organization’s “six key priorities” for health “reform” involved accepting all Medigap applicants, regardless of health status.  (It’s also noteworthy that AARP’s “Statement of Interest” in the amicus brief didn’t mention that the organization could receive over $1 billion in new profits thanks to Obamacare.)

All this is to point out that Democrats’ hands are FAR from clean when it comes to pre-existing conditions and insurance regulations, for several reasons.  First, Obamacare did NOT extend all these “essential” insurance reforms to the Medigap marketplace, as noted above.  Second, as we pointed out in October, the Administration proposed all types of discriminatory actions against people with pre-existing conditions when it came to the CLASS Act, because they do not have the political wherewithal to advocate mandatory participation in the program.

Former Obama Budget Director Peter Orszag has endorsed a federally-imposed mandate to participate in long-term care insurance, as have other liberal bloggers.  The Justice Department likewise conceded in a Pennsylvania courtroom that mandatory long-term care insurance would be constitutional.  But Democrats in Congress dare not publicly advocate that “solution.”  Even as some Democrat Members argue that the Administration’s failure to find a way forward to make the voluntary program solvent “is proof that individual insurance mandates…all work,” they refuse to endorse the policy themselves.

So as the briefs get filed in coming weeks, be ready for some side-stepping by the Administration on how CLASS discriminated against people with pre-existing conditions, or whether mandatory participation in the program might be a “solution” to its fiscal woes.  Call that a not-so-subtle hint that if the Supreme Court ever rules Obamacare’s health insurance mandate constitutional, more federal mandates – to participate in CLASS, or engage in other activities – will likely follow in short order.

Obamacare Increasing Uncertainty, Decreasing Job Growth

Businesses small and large are once again showing signs just how Obamacare is affecting their willingness to hire.  In his Sunday column, George Will writes about how Obamacare’s new health insurance mandates mean the Carl’s Jr. chain will open fewer stores, and therefore hire fewer workers:

“When CKE’s health-care advisers, citing Obamacare’s complexities, opacities and uncertainties, said that it would add between $7.3 million and $35.1 million to the company’s $12 million health-care costs in 2010, [CEO Andy] Puzder said: I need a number I can plan with.  They guessed $18 million — twice what CKE spent last year building new restaurants.  Obamacare must mean fewer restaurants.

And therefore fewer jobs.  Each restaurant creates, on average, 25 jobs — and as much as 3.5 times that number of jobs in the community.  (CKE spends about $1 billion a year on food and paper products, $175 million on advertising, $33 million on maintenance, etc.)….

CKE restaurants have 95 percent employee turnover in a year — not bad in this industry — and the health-care benefits under CKE’s current “mini-med” plans are capped in a way that makes them illegal under Obamacare.  So CKE will have to convert many full-time employees to part-timers to limit the growth of its burdens under Obamacare.

In an economic climate of increasing uncertainties, Puzder says, one certainty is that many businesses now marginally profitable will disappear when Obamacare causes that margin to disappear.  A second certainty is that “employers everywhere will be looking to reduce labor content in their business models as Obamacare makes employees unambiguously more expensive.””

It’s not just franchisees groaning under the weight of Obamacare’s mandates.  On Friday, the PBS News Hour interviewed Bobby Joslin, the owner of a small business sign company in Nashville, who agreed that Obamacare is reducing hiring:

“We’re fighting mandates that just keep coming at us at nowhere….For instance, the Obamacare, when we bring on a new employee, we don’t know what that employee truly is going to cost us in 2014.  And we’re not in the practice of hiring people and then laying them off.”

These real-world testimonials sync with the views of many economic experts.  Analysts at UBS have stated that Obamacare is “arguably the biggest impediment to hiring, particularly hiring of less skilled workers.”  And the President of the Federal Reserve Bank of Atlanta has said that he has “frequently heard strong comments to the effect of ‘my company won’t hire a single additional worker until we know what health insurance costs are going to be.’”

At a time when unemployment remains stubbornly high, and 300,000 workers LEFT the job market last month, it’s clear one of the main culprits – the many mandates in the massive 2,700 page health care law.

Democrats’ Hypocrisy on “Cutting Medicare Benefits”

The Hill reports this afternoon that several dozen Democrats sent a letter asking the supercommittee “to allow Medicare to negotiate prices for prescription drugs.”  The article goes on to cite a report from House Democrats claiming that “price negotiations could save the government $156 billion over 10 years.”  However, the Congressional Budget Office has previously – and repeatedly – indicated that the only way to achieve savings through drug “negotiation” is by restricting access to therapies for seniors.

For instance, in January 2007 CBO said that “without the authority to establish a formulary, we believe that the Secretary would…lack the leverage to obtain significant discounts in [her] negotiations with drug manufacturers.”  And in April 2007 CBO similarly concluded that drug “negotiation is likely to be effective only if it is accompanied by some source of pressure on drug manufacturers to secure price concessions.  The authority to establish a formulary, set prices administratively, or take other regulatory actions against firms failing to offer price reductions could give the Secretary the ability to obtain significant discounts in negotiations with drug manufacturers.”  In other words, the only way to achieve the $156 billion in savings Democrats claim would come from “negotiation” would be to impose harsh restrictions on seniors’ ability to access prescription drug therapies.

Given all this, some may find it a bit rich that Democrats are also criticizing those who discuss “cutting Medicare benefits” – because that’s exactly what their proposal for $156 billion in “savings” from drug “negotiation” would do.  As has been previously reported in this space, Medicare faces MAJOR structural problems – its budget deficit is larger than Greece’s, and the President’s own chief of staff admitted that the program “will run out of money in five years if we don’t do something.”  Solving these entitlement problems requires a real commitment to solutions, not the false promise that the program’s problems can be painlessly waved away through political sloganeering.

Deadline Day for DOJ: Will Administration End the Obamacare Uncertainty?

The Los Angeles Times and other news outlets have noted that today marks an important deadline in the ongoing legal battle over Obamacare.  If the Justice Department wants the full Eleventh Circuit Court of Appeals to review its decision striking down the law’s individual mandate, it must apply for such an en banc review by today; otherwise, the Justice Department’s only option would be an appeal to the Supreme Court.  The Times article notes that seeking an en banc review “could take weeks, or even months, and probably push back a Supreme Court ruling until 2013” – which some would view as a political ploy to avoid placing an election-year spotlight on Obamacare’s unpopular individual mandate.

There’s every reason for the Justice Department to avoid the dilatory nature of an en banc petition, and request the Supreme Court take up the individual mandate in the term it will start next week.  The issues surrounding the mandate have been well-argued: three circuit courts have now ruled on the mandate, and a fourth heard oral arguments on the mandate last Friday.  Meanwhile, the uncertainty surrounding the law continues to affect the broader economy – investment firms have called the law “arguably the biggest impediment to hiring,” and states have complained that they do not have sufficient information to implement the law in a timely fashion.

In recent weeks President Obama has asked Republicans to put country before party.  The question now is, Will President Obama’s Justice Department put the good of the country first, and stop the delays and uncertainty by asking the Supreme Court to rule on Obamacare immediately?

Administration’s Amnesia on How Obamacare Will Raise Premiums

Testifying before the HELP Committee, Consumer Information and Insurance Oversight Director Steve Larsen just claimed not to recall all the details of the CBO analysis of health insurance premium increases under Obamacare, but alleged that the impact on premiums would be “minimal.”  Seeing as how Director Larsen didn’t know all the details, here’s what CBO said on page 6 of its November 2009 analysis of Obamacare’s impact on premiums:

“Average premiums per policy in the nongroup market in 2016 would be roughly $5,800 for single policies and $15,200 for family policies under the proposal, compared with roughly $5,500 for single policies and $13,100 for family policies under current law.”

That amounts to a $2,100 per year increase for a family buying individual insurance, thanks to Obamacare – and a $4,600 per family difference between the increases due to the law President Obama signed and the $2,500 per-family premium reduction candidate Obama repeatedly promised.  Given that the Administration’s policy is costing a whopping $4,600 per family more than candidate Obama’s political rhetoric, is it any wonder that the Administration would claim not to remember how much Obamacare will raise premiums on struggling American families?