On August 22nd, Paul Gessing, president of the Rio Grande Foundation, Dr. Deane Waldman, a pediatric cardiologist at UNMH and an adjunct scholar at Rio Grande Foundation, and former US Rep. Bill Redmond, appeared on a panel discussion to discuss the health care law known as “ObamaCare.”
The event was hosted by Libre Initiative and the panel is introduced by Michael Barrera of Libre.
8-22-12 Health care forum from Paul Gessing on Vimeo.
You can listen to Romney’s speech here. Overall, his proposals strike me as reasonable and dedicated to embracing the free market energy sources as opposed to a government-managed and controlled energy sector. This provides a stark contrast to Obama on energy.
Unfortunately, as is so often the case with Romney, he steals a measure of defeat from the jaws of victory. The theme of his Hobbs speech (complete with banners) was “Energy Independence by 2020.” This is silly. Robert Bryce, an excellent free market energy analyst has written a book on the topic.
Energy is no different from any other item that is traded across national boundaries. Even if America is “self-sufficient” in terms of energy insofar as it can produce as much energy as is necessary, the idea of “independence” makes it sound like trade in energy is a bad thing to be avoided when it actually helps us all.
In terms of his specific policies, Romney is right on in urging completion of the Keystone XL pipeline, reforming the federal permitting process, and eliminating the wasteful subsidization of wishful energy technologies. For more on Romney’s speech and the reaction to it among attendees, check out Capitol Report New Mexico.
One of many signs of Congressional ineptitude is its willingness to continue shoveling money into Amtrak (about $1.5 billion annually at last count), the government-owned (socialized) rail monopoly. Obviously, cutting $1.5 billion is not going to solve our national deficit which runs at approximately 100 times that amount, but it is symbolic and you have to start somewhere.
Recently, it was reported that Amtrak lost $834 million in the last 10 years selling hamburgers, drinks, and other food to a captive audience on its trains.
It is long-past time to sell Amtrak off to the highest bidder or, where no one will buy the railroad, simply abandon rail service. I do know that I don’t want any more of this “government efficiency” brought to my health care and other, more complicated areas of the economy.
Mark Mix, President of the National Right to Work Legal Defense Foundation and National Right to Work Committee will speak on the importance of Right to Work legislation for economic development and its potential for New Mexico at a Rio Grande Foundation-sponsored luncheon.
The event will be held on Wednesday, September 12, 2012 from noon to 1:00PM at the Marriott Pyramid which is located at 5151 San Francisco Road NE in Albuquerque.
Because of the importance of Mr. Mix's message, the luncheon is being offered at the discounted price of $25 per seat. After September 5th, the price will rise to $35.
Reserve your seat today by calling 505-264-6090 or by mail at: P.O. Box 40336, Albuquerque, NM 87196 (just note "Right to Work" on the envelope) or online here. Reserve your seat for this important event today!
According to a recent Rio Grande Foundation report (download here), New Mexico could see more than 42,000 jobs created between now and 2020 with the adoption of Right to Work legislation? Mix will explain what such a law does (and doesn’t do) and why states like Indiana and Oklahoma have adopted such laws (and why other states are considering them).
Under the leadership of Mr. Mix, the National Right to Work Legal Defense Foundation has continued to provide unparalleled free legal assistance to workers and has utilized cutting-edge legal strategies to protect workers from the abuses of compulsory unionism.
Mr. Mix frequently appears on national television shows including Fox News Channel's Your World: With Neil Cavuto, Glenn Beck and Fox & Friends, and has also appeared on multiple times on CNBC and CNN. Mr. Mix also often serves as a guest on nationally-syndicated radio shows such as the The Lars Larson Show, Jason Lewis Show, Michael Reagan Show and the Jim Bohannon Show.
Similarly, Mr. Mix's writings have appeared in national outlets such as the Wall Street Journal, Washington Times, Investors Business Daily, Washington Examiner and National Review. His pieces have also been featured in widely-read regional publications across the country including the Detroit Free Press, the Orange County Register and the Detroit News.
Mark Mix holds a BA in Finance from James Madison University and an Associates Degree in Marketing from the State University of New York. Prior to joining the National Right to Work Committee in 1990, Mr. Mix worked for several state-level Right to Work groups. He joined the National Right to Work Legal Defense Foundation in 1999.
(Albuquerque) One of the most important decisions facing state policymakers in the months ahead is whether or not to expand their Medicaid programs. Under President Obama’s health care law – as originally written – known as the “Affordable Care Act” or “ObamaCare,” the states would have been required to expand their Medicaid programs to 138 percent of poverty level.
This requirement was struck down by the US Supreme Court, but states are being strongly incentivized to expand Medicaid with the “carrot” of federal matching grants of up to 100% initially. Advocates say that New Mexico should take the “free” money and eagerly expand their Medicaid programs.
Dr. Deane Waldman, an adjunct scholar with the Rio Grande Foundation and a practicing pediatric cardiologist, has a different perspective. In his new report, “What Should New Mexico Do About Medicaid,” which is available here, he explains the issues with Medicaid from both the doctors’ and patients’ perspectives.
Waldman explains the major differences between Medicare and Medicaid, outlines some of the serious problems with Medicaid, and gives examples of Medicaid reforms that have worked in other states like Florida.
Argues Waldman of the Medicaid expansion decision, it “may look like free money, but we all know: a) there is no such thing; b) who will not get the money – providers; and c) who will not get services – patients. Medicaid will follow the same path as Medicare. More and more money will go to the bureaucracy, while less and less will go to people who actually care for patients.”
Sam Bregman is clueless. His cluelessness on economics drives me nuts. The latest exhibit is this piece in the Albuquerque Journal in which he again takes Gov. Martinez to task for “not creating jobs.”
I have debunked Bregman in the past, but I’ll take this opportunity to do it once again.
1) Politicians and government don’t create jobs. Yes, I know, plenty of people bring home paychecks from the government, but everything government does requires it to take resources from other parts of the economy. It merely shifts resources, usually to less economical/efficient uses;
2) Governors are not kings/queens. Gov. Martinez heads up one branch of New Mexico’s government (the executive). The Legislature and the Courts are dominated by Democrats. If Republicans held all three branches and the economy was in terrible shape, Bregman might have a leg to stand on, but he doesn’t;
3) New Mexico’s unemployment rate is 6.6 percent. That is too high, but it is lower than that in 33 other states and lower than the national average of 8.3 percent. The national economy, lest Bregman forget, is governed by a federal government that is headed up by President Obama. As I noted in a previous blog posting, Obama’s record on jobs is terrible. What is Bregman’s excuse for that?
4) On a more personal note, I suppose Bregman would know something about killing jobs in New Mexico. He has personally done it and no, I’m not referring to his career as a lawyer. Rather, he used to own the New Mexico Thunderbirds basketball team, but sold them to an out-of-state interest that moved them out of New Mexico, thus costing several people their jobs or at least moving them out of state. Do I blame Bregman for this? Not really. I went to a few T-birds games and enjoyed them, but if he was losing gobs of money on the deal, I don’t expect him to continue pouring money into it. But, it is bit silly for him to keep making such silly points in the newspaper.
I await Bregman’s opinion pieces on the job-killing aspects of minimum wage increases.
AFL-CIO affiliate Working America and associated organizations are currently pursuing an effort to raise the minimum wage in Albuquerque from $7.50 an hour to $8.50. Unlike past hikes in the mandated wage, this proposal would also increase the wage annually to mirror the rate of inflation.
The cause of improving low-income workers living standards is surely a noble one, but the rationale behind the proposed wage hike is riddled with misconceptions concerning the economics of labor. Well-intended policies do not necessarily generate positive outcomes, rather unintended consequences are inevitable.
Consider the purported beneficiaries of a higher minimum wage. While often portrayed as single moms with children, the reality is that only about 20 percent of those currently earning the minimum wage in New Mexico are the breadwinners in families with children. More than 50 percent either live with their families, a spouse, or have some other family support structure in place to pay a majority of the bills.
Additionally, the average family income of families with a minimum-wage earner exceeds $55,000 and the median exceeds $43,000 annually. It is far more likely that a minimum wage earner is part of a family unit with higher-paid members than it is that they are using a minimum wage job to support a family. Even in that stereotypical situation, that family is not living on a minimum wage salary. There are dozens of programs including the Earned Income Tax Credit, food stamps, and Medicaid to help pay the bills and provide needed goods and services.
Roughly half of New Mexicans who are currently working at the minimum wage have either just recently entered the workforce or are working “odd jobs” for extra income. This is affirmed by data from the Census Bureau which shows that approximately half of all minimum wage workers are what might be called their “prime working years (26-65). The other half are aged 25 or less or are older than 65.
Of course, mandated wage laws overlook the fact that different people have different skills and do work that is worth more or less in the marketplace. These laws disregard this fact and force employers to pay higher prices for labor despite massive differences in quality. The increase in the price of labor inevitably forces employers to make tradeoffs. These can include demands for the increase of worker productivity, cutting or abolishing non-mandated fringe benefits, decreasing work hours, and the firing (or non-hiring) of low-productivity employees i.e. marginal workers who often consist of the working poor and teenagers.
Already, in today’s weak economy, New Mexico’s teen unemployment rate is 22.6 percent – a dramatic increase from 13.2 percent in 2002 (prior to the last Congressionally-mandated bump in the minimum wage and the recent economic downturn). Increasing Albuquerque’s minimum wage could push even more young people out of the work force entirely.
Laws which artificially raise the price of labor send signals to entrepreneurs who view such interventions as just one more obstacle placed upon starting a small business. It is reasonable to consider that a mandated price hike on labor may very well turn away individuals who would have otherwise proceeded with entering the market. Increasing the expenses associated with starting a business will not benefit the populace of Albuquerque, but instead create barriers to entry for the aspiring entrepreneur.
Raising the minimum wage rate in Albuquerque is not the correct solution to improve the city’s economy or help those struggling to get by. The answer is to provide an environment whereby businesses can operate free of undue and harmful regulations, where individuals are free to competitively pursue employment, and private entrepreneurs are given the freedom to actualize their ideas and create value within the society. Economic liberty, not the coercive actions of the state, is what is necessary for the citizens of Albuquerque to prosper.
Ben Sugg is a policy analyst with New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.
I wrote a few weeks back about the notable decline in US carbon emissions in recent years. The mainstream media picked up on it and gave a few details in a recent story which stated that US carbon emissions are at 20 year lows.
Great news, right? Huzzah for the environment and the positive impact such emissions reductions will have on global warming. Yeah, right. As Rob Nikolewski points out over at Capitol Report New Mexico, enviros are not exactly dancing in the streets. Rather, they are instead attacking the “fracking” process which has freed up so much cheap, clean, natural gas, thus reducing carbon emissions and frustrating their efforts to mislead Americans into believing that hare-brained, government schemes are the only possible way to achieve a cleaner environment (assuming that we are to believe carbon dioxide is a pollutant). Oh, and if you believe that the recent, hot summer is the result of global warming as many enviros do, it would appear that US efforts to turn the tide may not have the significance many would desire.
There is no pleasing some people.
If you aren’t already aware, the Rio Grande Foundation has a weekly radio show on AM 1550 KIVA. This week’s show which airs Sunday afternoon from 3-4pm is available online now due to the time-sensitive nature of an upcoming opportunity for New Mexicans to demand this new option.
Before sharing more about that option, check out this incredible story from USA Today of a 14 year-old girl from Florida who attends an online school so she can manage her burgeoning small business. It’s just one of many ways in which online schooling can be tailored to the needs of students with diverse interests. So, if you want similar options for New Mexico kids….
A public hearing on New Mexico Connections Academy is scheduled on Monday, August 20th!
Come show your support for school choice and for New Mexico Connections Academy by attending the Community Input Hearing on Monday, August 20th at 2 p.m. The hearing will be held at Mabry Hall, Public Education Department, 300 Don Gaspar, Santa Fe. This is your opportunity to share your story about why your family and New Mexico need this high-quality full time virtual educational option. We really need you to come out and show your support for this proposed school! Please plan to attend.
New Mexico Connections Academy will be:
If you can’t make it to the hearing, please write to the Commissioners of the Public Education Commission. We need interested families to attend the hearing and also write a short note to the Public Education Commission asking them to approve our application. A “yes” vote on our application is a “yes” vote for your children and other children across our great state!
Public input should be sent electronically by clicking here and written input should be sent to Public Education Commission, c/o Beverly Friedman at 300 Don Gaspar Ave., Santa Fe, NM. The deadline to receive your comments is 5:00PM. on August 23rd.
Please email infoNM@connectionseducation.com if you have any questions or comments about our charter application, the public hearing, or the Founding Board.
A final decision on our charter school application is expected no later than September 30, 2012.
I guess if I were Barbara Couture and I got my paychecks from the higher education establishment, I’d be willing to say anything to keep the money flowing, but the reality of higher education is far different than she portrayed it to be in her recent column.
For starters, yes, people with a college degree do indeed tend to earn more, but there are a number of things to consider:
College tends to attract the most intelligent and ambitious. They are going to tend to rise to the top regardless of a college degree;
Four/five years of foregone earning combined with thousands of dollars spent and potentially-untold piles of debt;
A few extremely-high earners like Bill Gates skew the earnings picture;
There are wide differences in earning power between various degrees of study. Engineers are going to make more than arts majors (by and large).
By all means, go to college if it is right for you, but ambitious and intelligent people can make a good living no matter what as John Stossel recently found:
Of course, the President of NMSU cares even more about keeping the spigot of public money flowing to higher education than she does about the success or failure of individual students. As the chart below illustrates, the price of a college education had been rising for decades, long before the recent economic downturn:
What Couture and the higher education establishment refuse to admit is that the easy money in the form of federally-subsidized student loans and capital projects paid for by the states have inflated the higher ed bubble and increased the cost of college. Reducing the amount of taxpayer dollars flowing into higher ed would reduce costs in the long-term as universities were forced to respond to market reality, not “free” money. Unfortunately, Obama and his crew seem hell-bent on blowing more air into the higher ed bubble.
Politicians rarely talk about economic freedom, but one New Mexico elected official who “gets it” is Rep. Dennis Kintigh of Roswell. His opinion piece from today’s Albuquerque Journal explains some of the ways in which New Mexico falls short and explains how tax and regulatory policies have negatively impacted our economy.
The article is worth the read, but it is imperative that New Mexico elects more public officials at all levels that understand the importance of economic freedom and the steps we need to take to achieve it and greater wealth.
(Albuquerque) In response to efforts underway to raise the minimum wage in Albuquerque from $7.50 to $8.50 and indexing it to inflation, the Rio Grande Foundation has released a new report detailing the negative impacts of minimum wage hikes. The report, “Raising Albuquerque’s Minimum Wage: A Misguided Anti-Poverty Measure at Best, A Cruel Impediment to Work at Worst,” is available on the Rio Grande Foundation’s website.
Among the items to be found in the report is the fact that any increase in the minimum wage would be poorly-targeted in terms of reaching those who is supposed to benefit from the bump in wages.
Concluded Gessing, “Even if we assume nothing but benefits will accrue to those at the bottom rung of the employment ladder, an increase in the minimum wage is a poorly-targeted anti-poverty policy. After accounting for the fact that some otherwise employed individuals will lose their jobs as a result, a hike in the minimum wage becomes an impediment to the skills, discipline, and self-esteem associated with holding down a first job.”
As readers of this space know, we’ve covered Gov. Johnson’s campaign for president relatively closely here and here for starters. So, it was with great interest that I read this article about a dispute between “Michigan Rep. Justin Amash, aka: the next Ron Paul” and our own former Gov. The issue is none other than New Mexico’s film subsidy program which Johnson inaugurated and Richardson expanded.
I have to agree with Rep. Amash on this one. The worst thing about Johnson’s statements on the film subsidy program he started is his fundamental misunderstanding of the difference between “tax breaks” and outright “government subsidies.” As I’ve said before in this space, there is a big economic and moral difference between government deciding not to collect taxes on a particular, favored activity (often morally acceptable, sometimes economically logical) and taxing one group of taxpayers to then turn around and hand money to another group (neither morally acceptable, nor economically logical).
The latter is what New Mexico’s film subsidy program does and Gary should know better.
The Sierra Club is the latest environmental group attacking PNM for having the temerity to produce reliable, inexpensive, electricity. Their ad which appeared on my sports page in the ABQ Journal yesterday (August 12) claims “PNM’s Coal-Burning Power Plant Gives us More than Just Energy” and shows a kid with an inhaler. It also claims: “more than 1 in 5 New Mexico middle school students has suffered from asthma.”
Unfortunately, their claims just don’t hold up under scrutiny. They are more of a feeble attempt to spread fear. As this report and map from the Centers for Disease Control shows, the real percentage of children with asthma is less than 10 percent in New Mexico.
Now, compare that map with this one which shows the states that produce most of America’s coal-fired electricity.
Not exactly a “cause and effect” if I may say so. Texas, for example, is a serious coal state, but it has lower childhood asthma rates than we do. And, not surprisingly, New Mexico is not that big of a coal burning state. Oklahoma, like us, is not a big coal-burner, but has high asthma rates. Correlation between coal and asthma on a statewide basis is tough to come by, much less causation. Scientists don’t even know what causes asthma and what, if any role is played by air pollution (some in the linked article say more air pollution may REDUCE asthma rates).
Is coal without its problems? No, no energy including wind and solar comes without a price. But, environmentalist scare-tactics are not contributing to the debate over energy usage and sources.
I like the pick of Rep. Paul Ryan as Mitt Romney’s vice presidential candidate. Given where Romney comes from ideologically, I think it was the best pick he could make. But the media coverage of Ryan is going to be skewed badly because both Republicans and Democrats share a desire to portray Ryan as some sort of free market purist who believes in “slashing” government. He is nothing of the sort.
As Jesse Walker over at Reason points out, “On the economic front, he has backed the bank and auto bailouts, Medicare Part D, even Davis-Bacon. His reputation as a free-market stalwart rests on his exaggerated reputation as a budget hawk and his habit of praising Ayn Rand.” Of course, on the positive side of the ledger, of course, Ryan is one of the only politicians in Washington who seems to grasp the serious nature of our entitlement problem and is willing to propose specific reforms that address it.
Ryan, unlike myself, is no free market ideologue. Of course, he’s a politician and has to run for office. As a moderate reformer, he has outlined specific plans to return the United States to solvency (eventually). Unfortunately, he’s at the bottom of the ticket, not the top. The real question is whether Romney shares his VP-candidates views on reforming entitlements or whether he’s just throwing a bone to conservatives.
We at the Rio Grande Foundation have long argued for tax and economic incentives that are fair, simple, and available to all comers. As we’ve seen in recent years with the pullout of Schott Solar (incentives cost NM taxpayers $16 million) and the collapse of Eclipse Aviation which cost us $19 million, “investments” of taxpayer dollars in specific companies is a risky business (for taxpayers at least).
Now, we have Hewlett Packard which set up shop in Rio Rancho a few years ago and received $2.2 million in incentives, but is experiencing significant (albeit undisclosed) layoffs. The good news is that unlike the other deals, a majority of the incentives involved foregone government revenues that may or may not have been collected absent HP. Little of the money was in the form of outright expenditures. Of course, if you’re not HP and you’re just a regular resident or business in Rio Rancho, you are paying taxes that HP is not paying for services that benefit HP. That is certainly not fair. Worse, it is proving to be ineffective in actually developing the economy.
A better way to do economic development is to lower barriers to job creation across the board by reducing tax rates or enacting laws like “Right to Work.” Chasing the latest big-name company and offering them the sweetest incentives possible is ultimately a losing game.
Oh, and for those who opposed the Union Pacific deal, the fuel tax cut applies to any railroad.
As the scandal at the New Mexico Finance Authority continues to unfold, we at the Rio Grande Foundation attempted to answer the question “What is the NMFA and what does it do?” Our follow-up question, asked of any government agency is, “Why does the government need to do this or could the private sector handle it better?”
On the first point, NMFA acts as a bank for government agencies in New Mexico and as the article discusses, this is not the first time it has been at the center of a scandal. The primary mission, although by no means the only job of NMFA, tends to center on accessing capital (bond) markets for government agencies throughout New Mexico. The particular beneficiaries of this activity are smaller cities and governments.
Of course, when the NMFA was organized in 1992, the bond market was concentrated in a few major cities like New York. You can now find people willing to buy and sell bonds here in New Mexico and even if you are in New York, through the use of technology, you can likely undertake the groundwork necessary to underwrite government bonds.
The questions I have regarding NMFA are: “Does New Mexico really need the NMFA as currently organized? How much is this entity costing taxpayers? It would seem that the bond markets are pretty efficient these days and, with return rates depressed, there will be plenty of lenders eager to sell bonds to New Mexico’s cities, counties, and other governing entities. Am I wrong? Why not privatize the NMFA?
The chart below shows just how terrible Obama’s record is:
A few more points.
1) Presidents obviously don’t operate in a vaccum (Congress and world events play a role), but the deficit was the lowest under Clinton of any modern president, thus defying critics of spending cuts on the left and right.
2) Presidents don’t create or destroy a single job, but the policies that they and Congress enact have a tremendous impact on the long-term health of the economy.
3) George W. Bush was a terrible president (saved only by Obama’s even more pitiful record) who makes Jimmy Carter look great by comparison. Sorry folks, Carter deregulated the airlines, trucking, and not-to-be forgotten, the craft beer industry. Bush’s tax cuts, while nice at the time (and I support their preservation), have, along with Obama’s subsequent health care and regulatory policies like Dodd/Frank, contributed to greater economic uncertainty as their renewal is debated on a monthly basis. Of course, they don’t make up for his terrible record on spending and regulation.
4) As the years wear on, Bill Clinton looks better and better.
Wednesday, August 22nd 12:00 Noon to 2:00 PM Luncheon
The Albuquerque Marriott Pyramid North
5151 San Francisco Rd. NE 87109
A panel discussion on the new law and how it will affect you, your family and your business. As implementation draws near, what you need to know about compliance with expert analysis from the medical, legal, and faith community.
Confirmed panelists include:
Former U.S. Congressman Bill Redmond
Rio Grande Foundation President Paul Gessing
Rio Grande Foundation Scholar Dr. Deane Waldman
This is a free event and space is limited:
RSVP by August 20th to:
505-717-9868
In the spirit of transparency and open government, the Rio Grande Foundation and its arm, the New Mexico Watchdog, have posted all public employee data that was previously available on New Mexico’s Sunshine Portal including pay for all employees (which is a public record). The site is available here. Jim Scarantino, our New Mexico Watchdog, has a story on the topic and efforts by the unions to undermine the Sunshine Portal here.
The Washington Examiner picked up the story nationally.
(Albuquerque) The Rio Grande Foundation has updated its legislation-tracking tool, a website called: www.NewMexicoVotes.org. The website includes votes and bills introduced dating from 2008 through the 2012 legislative session.
RGF launched the site in order to provide a more transparent window for New Mexicans to follow what happens in state government. The site is free and open to the public.
With plain English bill information for each legislator (as opposed to being in legalese and grouped by bill number in an unalterable pdf format), links that show everyone who has donated to each legislator and the amount of each donation, and a whole host of additional features, those who want to track what happens in Santa Fe will find New Mexico Votes particularly useful.
Paul Gessing, President of the Rio Grande Foundation, said of the public service, “‘Votes’ is part of our organization’s efforts to bring more transparency and accountability to New Mexico state government. While the Legislature has made great strides in recent years, a constituent looking for information on votes by their legislator will have a much easier time with our site than with the Legislature’s site.”
Continued Gessing, “We want everyone to be able to find out, with a few clicks of a mouse, what his or her legislator is doing, to be able to sign on and read plain English descriptions of what each bill does in a way that the average person can understand, and know immediately what our tax money is being spent on, or whether the bill increases or decreases taxation, regulation, or government transparency.”
The Santa Fe Reporter has had some interesting articles recently discussing the topic of government workers who are concerned that their pension investments are being invested in companies with which they disagree politically. The initial article framing the debate can be found here. The father of the editor! of the paper who happens to be a CPA had an insightful posting on the site recently as well in which he explains that pension funds are NOT really used to fund corporate speech and lobbying efforts, but then questions the very real impact of government unions on the political process.
I weighed in with my own letter to the editor on the topic which I have pasted in its entirety below:
Letters to the Editor
The Santa Fe ReporterI may not agree with the philosophical reasons that government employees may not want their pensions invested in corporations, but I cannot help to sympathize with their plight.
Whether the issue is truly one of “free speech” or not is a question for the courts, but the whole debate points to the outdated model upon which government employee pensions are based. After all, today’s workers, even in government, tend to change jobs more frequently, be more savvy when it comes to retirement planning, and demand more autonomy over how their money is spent and invested than prior generations.
Pensions are a classic “one-size-fits-all” model from a bygone era. In New Mexico, by the way, that model is massively underfunded and could leave today’s young workers – private and public sector alike – holding the bag.
New Mexico could avoid the free speech problem by embracing much-needed reforms that give individual workers the freedom and responsibility to plan for and invest for their retirement in 401k-style plans. States are increasingly looking at this model due to the massive underfunding of traditional pension plans, but these free speech questions and potential legal challenges will only hasten the switch.
Recently, Congressman Steve Pearce had an excellent column outlining the reasons he opposes the “ObamaCare” health care law. Among other outlets, the article appeared in the Albuquerque Journal.
One letter writer attacked the Rio Grande Foundation and claimed that health insurers and pharmaceutical companies are behind attempts to overturn the law. As I wrote in an unpublished letter, this could not be further from the truth:
Letters to the Editor
Albuquerque JournalIn attacking Rep. Pearce for his opposition to “ObamaCare,” one of your readers attacked the Rio Grande Foundation for providing “misinformation” on the issue. In reality, the reader provided misinformation in stating that pharmaceutical and insurance companies opposed President Obama’s health care program. The truth was and remains exactly the opposite.
According to journalist Tim Carney and the Center for Responsive Politics, Obama’s 2008 campaign raised $1.2 million from the pharmaceutical industry during the 2008 election, the most it had ever given to a candidate, and more than triple its contribution to John McCain.
Even after ObamaCare passed, the health care industry continued to give to Obama. According to a 2011 analysis conducted by the Center For Responsive Politics, Obama had raised $1.6 million from the health sector, more than the $920,000 raised by former Massachusetts Gov. Mitt Romney.
There is anything inherently wrong with accepting contributions from these industries, but it reflects the fact that Congressman Pearce, the Rio Grande Foundation, and other opponents of ObamaCare are acting on principle and have not been “bought off” by a health care sector that has actually embraced the taxpayer-financing of their products (drugs and insurance).
While we may disagree with the health insurance and drug industries on their support for the law, the “reforms” will result in a windfall (at least initially) for the industries as Americans are forced to use or given (at taxpayer expense) their products.
It’s free money! That’s the line used by actor Jimmy Fallon in a series of credit card commercials. It is also the line increasingly being used by advocates of Medicaid expansion here in New Mexico and across the nation.
After all, who but a bunch of anti-social, uncaring, right wing conservatives could possibly turn down “free” money?
The answer is that anyone with even the most cursory knowledge of economics knows that there is no such thing as a free lunch or “free” money. Even barring that first-semester ECON 101 lesson, in this case the money doesn’t stay “free” forever. New Mexico taxpayers will be on the hook for hundreds of millions of additional dollars in Medicaid spending if they accept this money. Lastly, since when does Congress keep its promises?
First, some background: The Affordable Care Act (ObamaCare) tried to force the states to expand Medicaid to cover most people with incomes up to 138 percent of the federal poverty level. While the Supreme Court accepted a bulk of the new law, it did throw out the requirement that states expand Medicaid. Nonetheless, the federal government can bribe states with taxpayers’ own money.
Currently, New Mexico’s system provides coverage at somewhat lower income levels. Despite the fact that the federal government pledges to cover New Mexico’s Medicaid expansion at rates starting at 100 percent and shifting to 90 percent, the Heritage Foundation finds that the Medicaid expansion will cost New Mexico taxpayers $306 million from the years 2014-2020.
Medicaid – despite the fact that the federal government already picks up about 80 percent of costs in New Mexico – is already the fastest-growing program in the state’s budget. While the General Fund was $5.7 billion back in FY 2008 and it is now about the same at $5.65 billion, Medicaid spending in the General Fund grew by 30 percent. That means less money for education, roads, or tax reform and/or cuts.
Of course, even the federal pledge to reimburse between 90 and 100 percent of Medicaid expenses is based on the massive assumption that Congress will keep its promise to fund the Medicaid expansion indefinitely into the future. Federal Medicaid spending is growing at unsustainable rates (even before the ObamaCare expansion) and the nation is running trillion-dollar deficits every year.
Of course, these top-down, government health care “solutions” always come in over-budget. According to Reason Magazine, at its start, in 1966, Medicare cost $3 billion. The House Ways and Means Committee estimated that Medicare would cost only about $ 12 billion by 1990 (a figure that included an allowance for inflation). This was a supposedly “conservative” estimate. But in 1990 Medicare actually cost $107 billion. Similar cost explosions will likely plague ObamaCare. Who will pick up these cost-overruns?
All of the added expense and debt might be worth it if Medicaid was proven to improve health outcomes, but it isn’t. For starters, a University of Virginia study of nearly 900,000 major surgical operations found that patients on Medicaid are 13 percent more likely to die than those without insurance of any kind.
While some studies – specifically reports from a unique program in Oregon – do find that Medicaid expansions improved self-reported health, questions remain as to whether this improvement could reflect “an improved overall sense of well-being” rather than “changes in objective physical health.”
New Mexico needs more than a costly Medicaid placebo or an expanded program that actually harms overall health outcomes.
Gov. Martinez should “just say no” to Medicaid expansion. Instead, she should take a close look at a pilot Medicaid reform program from Florida where program enrollees are given incentives to take control over their own health care both in terms of dollars and treatments. Recipients in the state’s pilot programs have seen dramatic improvements in health care outcomes combined with lower program costs.
If the ObamaCare Medicaid expansion were based on sound policy, the federal government would not have to print and borrow trillions of dollars to bribe states to participate.
Paul Gessing is the President of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.
