SunShot Makes Solar Energy a Long Shot

President Obama’s Fiscal Year 2013 budget includes $310 million for an ongoing energy research program called SunShot. The goal of the program is to use taxpayer subsidies to reduce the total installed cost of solar energy by 75% by the end of this decade, making it cost-competitive with other sources.

This is an admirable goal, but linking it to ongoing subsidies virtually guarantees that it won’t be met. There is no reason for private companies to develop inexpensive technology when politicians keep giving away money each year for research.

We’ve already seen this approach fail in Oregon. In 1999, the state legislature passed a law requiring that most consumers pay a three percent surcharge on their monthly electric bills to subsidize “market transformation” for renewable energy. Legislators and lobbyists agreed that the tax – which came to be known as the “Public Purpose Charge” – would go away after ten years, at which time green power was expected to be cost-competitive with coal and natural gas.

The ten-year anniversary of the Public Purpose tax will arrive on March 1, and solar energy is still wildly uncompetitive with other sources. And not surprisingly, politicians have reneged on the promise to end the tax; it was quietly extended five years ago to 2026 by the legislature, with no public discussion. This will cost consumers billions of dollars.

Politicians never seem to learn: Subsidizing failure simply begets more failure.

 

“We Have a Year to Figure out How to Violate Our Consciences”

“Never before has the federal government forced individuals and organizations to go out into the marketplace and buy a product that violates their conscience,” stated Cardinal-designate Timothy Dolan, archbishop of New York and the president of the United States Conference of Catholic Bishops. “This shouldn’t happen in a land where free exercise of religion ranks first in the Bill of Rights.”

Serious constitutional concerns have been consistently raised about the Patient Protection and Affordable Care Act (PPACA, known popularly as “ObamaCare”), passed by Congress in 2010. Twenty-seven states have sued the federal government on the grounds that Congress does not have authority to require their citizens to purchase a specific product or service, in this case, health insurance. The Supreme Court has agreed to hear some of these cases in March and presumably will rule on the constitutionality of the PPACA’s so-called individual mandate by the end of June.

Beyond this fundamental constitutional objection, another aspect of the PPACA recently took a disturbing turn. In August 2011, the Department of Health and Human Services (HHS) directed virtually all employers to include coverage of contraceptives, sterilization procedures, and abortion-inducing pharmaceuticals without copayment in their employee insurance policies. The HHS mandate has an extremely narrow conscience exemption that will not include the vast majority of religiously affiliated employers and institutions, including hospitals, colleges, schools, and social service organizations which may object to these services on moral grounds.

So, not only does the PPACA require all Americans to purchase health coverage, but Americans can be forced to pay for―or to provide as employers and insurers―things their faith may teach are wrong.

The Catholic Church, along with faithful of other religious communities, protested. The Administration has not backed down. In fact, on January 20, 2012 President Obama called Archbishop Dolan to inform him that the conscience exemption will not be broadened. Enforcement of the mandate simply will be delayed until August 2013, at which time insurance coverage of “preventive services” must include all FDA-approved forms of contraception, including sterilization and some abortion-inducing drugs.

“In effect,” Dolan said publicly in response, “the president is saying we have a year to figure out how to violate our consciences.”

Opponents of the HHS mandate stress that it is very troubling for the government to attempt to force members of one of the largest religions in the world, the Catholic Church, to directly participate in what their Church considers grave moral evils. If Catholic institutions can be forced to behave in contradiction to their moral beliefs, pay massive fines to the government, or close their doors, no other group can expect to have its “free exercise” of religion protected, either.

The last two weeks have seen a firestorm of protest, from the Catholic Church and from others seriously concerned about First Amendment rights. The Catholic bishops released statements denouncing the HHS decision, read from pulpits nationwide. Orthodox, Protestant, Evangelical, Jewish, and Muslim leaders have spoken out against the mandate, noting that if “free exercise” is not respected in this case, other abuses of religious liberty and freedom of conscience surely will follow. As chancellor and CEO-elect of Reformed Theological Seminary (one of the largest Protestant seminaries in the country) Michael Milton wrote, “This is not a Catholic issue only. It is not a contraception issue. It is a religious liberty issue. It is an American issue.”

Members of the current Administration, including Secretary of State Hillary Clinton, have begun referring to the First Amendment right to “free exercise” of religion as “freedom of worship.” This is dangerously incomplete. “Free exercise” of religion is more than the ability to choose the house of worship one frequents on weekends. Free exercise is the ability to live your faith and morals seven days a week.

Members of Congress have introduced legislation intended to prohibit the federal government from requiring a provider to provide, participate in, or refer for a specific health care service contrary to the provider’s religious beliefs or moral convictions (the “Respect for the Rights of Conscience Act,” or House Resolution 1179/Senate Bill 1467). But while Congressional leaders work to defend the rights of religiously affiliated organizations, they must not forget the rights of individual Americans, either.

Americans must send the federal government a clear message: Government must not abrogate the conscience rights of employers and insurance providers, and neither should it abridge the First Amendment rights of individual Americans by forcing them to participate in something to which they morally object. It was a small step from government forcing Americans to “go out into the marketplace” and buy health care to, as Archbishop Dolan said, “go out into the marketplace and buy a product that violates their conscience.”

 

The President’s Tax Proposal Would Cripple Charities

President Obama proposed once again that Congress reduce the federal itemized tax deduction for charitable contributions. He argues that people don’t give to charity to get a tax deduction and increased revenue could pay for other things (in the latest instance, his Jobs Act).

“I’m assuming that that shouldn’t be a determining factor as to whether you’re giving that $100 to the homeless shelter down the street,” the president said in 2009.

A tax deduction is not the motivating factor for most people who give. But lower taxes are an empowering factor. How much you give has a lot to do with how much you can give. Charitable giving is discretionary. If you pay more in taxes, it stands to reason that that money will be made up somewhere else in your budget.

Brian Gallagher, president of United Way Worldwide, notes that Obama’s proposal would reduce charitable giving by $2.9 to $5.6 billion per year, according to one study.

“That equates to eliminating all of the private donations each year to the Red Cross, Goodwill, the YMCA, Habitat for Humanity, the Boys and Girls Clubs, Catholic Charities, and the American Cancer Society combined,” Gallagher said.

State budgets for social services and safety nets are stretched, charities are struggling, and needs are increasing. The Senate was wise to reject using the charitable tax deduction as a chance to raise taxes on Americans who are voluntarily and generously stepping up to meet those needs during a recession.

 

(Disclosure: Cascade Policy Institute is a charitable corporation that benefits from donors being able to deduct their contributions.)

Drop the Envy Card: Wealth Grows From Serving Others

The politics of envy is alive and well. Too many Americans, including President Obama, propose to “tax the rich more,” even though the top one percent of earners already pay 38% of all federal income taxes and most really do pay higher rates than the rest of us. They argue that “obscenely wealthy” people such as Bill Gates and the Walton family somehow violate the American sense of fairness.

According to these misguided people, if only the wealthy paid their “fair share” and gave a bit of their “outrageous fortunes” back, everything would be fine.

Choosing the Walton family and Bill Gates as examples of the “obscenely wealthy,” however, are especially poor choices. Their creations, Walmart and Microsoft respectively, give millions of Americans more convenience, better prices and more productivity than we ever had before. Too many of us assume wealth can only come at the expense of others. In reality, most wealth comes from meeting the needs and wants of others in the marketplace.

Some point to new data that show poverty is growing. But it isn’t growing because some become wealthy. As Robert Sheaffer put it in his book, Resentment Against Achievement, poverty is the default condition of mankind. Nobody creates poverty; it is wealth that must be created. In a free society, wealth is created by helping others. The politics of envy will leave us all worse off. It’s time to grow up, and stop blaming our problems on those who succeed.

Extending Unemployment Benefits: Good Intentions, Bad Results

Last Thursday, President Obama asked Congress once again to extend unemployment benefits, allowing workers to continue receiving benefits for up to almost two years. His request may be at odds with his newly proposed chairman of his Council of Economic Advisers, Alan Krueger.

During Mr. Krueger’s career as a Princeton economics professor, he wrote about the effects of unemployment insurance on the unemployed. He, along with numerous mainstream economists, wrote that unemployment insurance increases the time that workers remain unemployed. More generous benefits lead to longer periods of unemployment. Thus, a bill aimed at helping the unemployed may actually have the opposite effect.

Many economic analyses have estimated that unemployment insurance has significantly increased the unemployment rate. For example, one recent publication from the Federal Reserve Bank of Chicago, conservatively estimated “[t]he extension of unemployment insurance benefits during the recent economic downturn can account for approximately 1 percentage point of the increase in the unemployment rate.”

Adding another 4% to the estimated 2012 deficit, the President’s requested extension would cost around 45 billion dollars. And what about the human cost? Is it right to delay so many workers’ reemployment? Is it right to artificially inflate unemployment? As with so many government programs, good intentions too often lead to bad results. In this case, those results can be measured in fewer jobs and in less personal dignity.

How many presidential buses does it take to equal the cost of one light rail car?

President Obama is traveling the Midwest on a new bus purchased by the Secret Service. The vehicle is painted all-black with tinted windows and appears to be the size of a standard Greyhound bus. Inside, we can assume that it’s tricked out with the latest in high-tech security gear and telecommunications and designed with a kitchen, shower, bedroom and lounge area.

Given its purpose, the price tag must be enormous.

Actually, it’s not. It was purchased for $1.1 million. A typical light rail car in Portland costs $4 million.

Regular transit riders might want to ponder that. A light rail car has hard seats, no headrests, minimal legroom and no on-board internet access.

The Presidential bus can go on any road in America, while light rail is limited to just a small part of the Portland region.

The proposed Milwaukie light rail project will cost $1.5 billion. If we cancelled the project, we could buy an entire fleet of presidential buses and run them to Milwaukie, with free coffee and donuts for everyone, and we still couldn’t spend as much as TriMet plans to spend on one mile of light rail.

Maybe transit customers would like to try the Presidential bus for a few months before we waste $1.5 billion on a slow train to nowhere.

The Truth about the Canadian Health Care System

By Frank S. Rosenbloom, M.D.

President Barack Obama and supportive members of Congress were able to get the Patient Protection and Affordable Care Act (ObamaCare) passed, in part by extolling the virtues of the Canadian health care system. In speech after speech, Obama has touted the alleged lower cost, “universal coverage” and better medical care of that system. All of the mentioned supposed benefits are untrue, but the most disconcerting fact is that Mr. Obama has never discussed any deficiencies of the Canadian system.

Other influential people have shared their concerns about the serious deficiencies in the Canadian health care system. Perhaps the most important of these is the man some call the ”father” of the Canadian health care system, Claude Castonguay. Although several provinces had government involvement in health care from 1946, Castonguay was the pioneer of socialized medicine in Quebec, which gave impetus to the establishment of a nationwide socialized medical care law in 1966.

However, in 2008 Castonguay had this to say about the health care system: “If nothing is done, at one point we will reach a crisis point. This is why we say it is urgent to act. There’s no miracle solution, there is no simple solution.” He has urged some privatization in the health care system to increase choice and fees of up to $100 for doctor visits. How could this be? Haven’t we been led to believe that the Canadian health care system is financially stable? In fact, the system is close to collapse.

Let’s review the facts. The Canadian health care system was established in the 1960s, when the government was spending like a drunken sailor trying to promote economic growth. Sound familiar? The assumption was that the economy would grow at a predictable rate and that the system therefore would be affordable. However, Canadians made the same fundamental mistakes governments always make when establishing entitlement programs; that the economy would act predictably and that the program’s costs would grow in a predictable linear fashion. These two assumptions have proven to be incorrect in all cases, as they were in establishing our own Medicare system.

Health care reform has been a serious issue in Canada for over fifteen years, as the financial burdens of socialized medicine have put increasing strain on resources. Canadian media regularly trumpets fears about escalating health care costs. Furthermore, since accurate statistics are kept only on government spending, substantial hidden costs are associated with that system. Some Canadians are even breaking the law by opening private clinics to relieve a system that is imploding. One significant reason the Canadian system has lasted this long is the safety valve provided by the U.S. system, where Canadians can receive timely care at a fair price. Yet, if you believe President Obama, the Canadian health care system moves along like a well oiled machine.

Although Canadians spend less per capita than we do in the U.S., the rate of rise in their health care costs has been at times equal to or greater than ours during the past decade. So, how can we be told that Canadian health care costs are rising at a slower rate than our own? The rate of rise in Canadian health care expenditures can be seen by reviewing the widely available graph below.

 
Canadian Institute for Health Information

The graph shows total expenditures in constant 1997 dollars. A quick review shows Canadian health care costs rose about 240 percent from 1996 to 2009, by which time they actually exceeded $180 billion.

By contrast, the rise in U.S. health care costs can be reviewed below.

 
Centers for Medicare & Medicaid Services, Office of the Actuary. National Health Expenditure Accounts – Projected, Table 1: National Health Expenditures; Aggregate and Per Capita Amounts, Percent Distribution, and Average Annual Percent Growth, by Source of Funds: Calendar Years 2003-2018

We see that in 1996, U.S. health care spending was about $1 trillion. By 2009 it had reached about $2.4 trillion, which is an increase during that period of about 240%. Now, wait a minute! The rate of rise of Canadian health care costs is really no lower than ours? Yes, President Obama, (and Governor Kitzhaber), there is no Santa Claus, and no Shangri-La. The often reported, widely disproportionate cost increases between the Canadian and the U.S. health care systems are a myth.

Statistics can be adjusted to promote a particular ideology, as was seen by the graph above adjusted to constant 1997 dollars and the addition of the “projected” 2018 spending in the U.S. graph. Despite these difficulties, the truth about the Canadian health care system and socialized medicine is available to anyone who diligently studies the matter. Unfortunately, many Americans have relied on liberal politicians for their information, and nothing but higher costs and lower quality medical care will be the inevitable result. If we really want costs to decrease while maintaining quality health care, we need real free market reform before the inevitable complete collapse that will occur nationally under ObamaCare and the disaster that will befall Oregon under Gov. Kitzhaber’s reform proposals.


Frank S. Rosenbloom M.D. is a practicing physician and president of the Docs 4 Patient Care Oregon chapter. He is a guest writer for the Cascade Policy Institute, Oregon’s free market public policy research organization.

You Make Too Much Money

Steve Buckstein
Cascade Commentary

You Make Too Much Money

By Steve Buckstein

Download Commentary Here

In a recent speech promoting his financial industry reform bill, President Barack Obama had what may become known as another “Joe the Plumber moment” (in which he spoke off-the-cuff about “spread(ing) the wealth around.”). This time, he said:

  • “We’re not trying to push financial reform because we begrudge success that’s fairly earned. I do think at a certain point you’ve made enough money.…”

 
Left unsaid was what the president thinks should happen to those who make “more than enough.”  Should their taxes go up? Or, should everything they earn over some arbitrary level be taken from them and redistributed to others?

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