Former IRS Commissioner Douglas Shulman and current Acting IRS Commissioner Steven Miller have been the subjects of intense questioning from Congress over the past two weeks over their relation to the Tea Party targeting scandal. For Shulman, questions remain as to whether he may have lied in front of the House Ways and Means Committee in March 2012 when questioned about allegations of targeting that at the time were simmering without mainstream awareness. He appeared to be less than forthright in his responses when questioned by the House Oversight and Government Reform Committee on Wednesday. Miller has already tendered his resignation under pressure.
But there’s another IRS scandal waiting to gain widespread awareness, and this time it undeniably has Shumlan’s and MIller’s fingerprints all over it. The IRS is unconstitutionally implementing ObamaCare exchange subsidies in states that refuse to establish an exchange.
What PPACA Says
Former House Speaker Nancy Pelosi (D-CA) infamously stated in 2010 that “we have to pass the bill [ObamaCare] so that you can find out what is in it.” It was a curious comment, one that could have any number of meanings. Here’s what I understood it to mean: This bill is so damn big, has so many moving parts, and will radically remodel the relationship between the civil society and government to such a degree that there is no way for Americans to conceptualize what life will be like under the ObamaCare utopia until we implement it.
Well, the time is nigh. And for employers, guess what? You’re really about to find out what’s in it. The employer mandate and its associated excise tax penalties are a cornerstone of the fundamental transformation President Obama has so long desired. In the ObamaCare solar system, everything revolves around the exchanges. Employer mandate excise taxes, enforced by the same IRS that recently admitted to targeting Tea Party groups, will provide crucial funding for the massive exchange subsidies.
One of the ObamaCare requirements associated with the employer mandate that has been largely under the radar until this week is requirement to provide employees with a notice informing them about the ObamaCare exchanges. From Section 1512 of PPACA:
PART II—EMPLOYER RESPONSIBILITIES
SEC. 1512. EMPLOYER REQUIREMENT TO INFORM EMPLOYEES OF COVERAGE OPTIONS.
California AB 880: “This bill would make it unlawful for a large employer to, among other things…reduce an employee’s hours or work…if the purpose is to avoid the imposition of the penalty. A violation of those provisions would result in a penalty of 200% of the penalty amount the employer would have paid for the applicable period of time.”
ObamaCare’s employer mandate is off to a disastrous start even before it kicks in. The CBO has already scored the measure to cost employers $150 billion in draconian excise taxes over the next eleven years, and there’s no telling how much the compliance costs will total. Most employers are in no position to shoulder this burden. How have they responded? For many, the only hope has been to reduce employees’ hours because the employer mandate and its associated penalty taxes apply only to employees who average at least 30 hours per week. Regal Entertainment Group recently announced that it would join the long line of mega-sized employers to be reluctantly forced down this road.
“Though the earth, and all inferior creatures, be common to all men, yet every man has a property in his own person: this no body has any right to but himself. The labour of his body, and the work of his hands, we may say, are properly his. Whatsoever then he removes out of the state that nature hath provided, and left it in, he hath mixed his labour with, and joined to it something that is his own, and thereby makes it his property.” — John Locke, Second Treatise of Government (1690)
What is “spending through the tax code?” This is an important question in light of the Obama FY 2014 budget proposal finally unveiled last week. We already know it raises taxes by more than $1 trillion. Much of this is done by eliminating so-called “tax expenditures.”
Here is how the Joint Committee on Taxation defines a tax expenditure:
Tax expenditures are defined under the Congressional Budget and Impoundment Control Act of 1974 (the “Budget Act”) as “revenue losses attributable to provisions of the Federal tax laws which allow a special exclusion, exemption, or deduction from gross income or which provide a special credit, a preferential rate of tax, or a deferral of tax liability.”
It’s well established by this point that ObamaCare’s full implementation in 2014 will cause premiums to increase significantly. This cold fact draws a sharp contrast to President Obama’s campaign promise that he would cut the average family’s premium by about $2,500 per year, and Nancy Pelosi’s 2012 pledge that under ObamaCare “everybody will have lower rates.” The Obama administration is now searching for talking points to explain these failures as the looming realities of 2014 begin to confront the administration’s prior platitudes.
The latest theory making its way through the Beltway is that coverage under ObamaCare will be more expensive because it will provide the type of comprehensive coverage that we’ve all been waiting for. Here is how the AP reported on HHS Secretary Sebelius’s recent comments in response to a study by the Society of Actuaries finding that insurance companies will have to pay out an average of 32% more for medical claims under ObamaCare:
At a White House briefing Tuesday, Health and Human Services Secretary Kathleen Sebelius said some of what passes for health insurance today is so skimpy it can’t be compared to the comprehensive coverage available under the law. “Some of these folks have very high catastrophic plans that don’t pay for anything unless you get hit by a bus,” she said. “They’re really mortgage protection, not health insurance.”
The Centers for Medicare and Medicaid Services was supposed to, under ObamaCare, reduce payments to insurance companies that offer coverage through Medicare Advantage by 2.3%. Unsurprisingly, they changed their mind. Not only are they not going to reduce payments, they’re going to increase them by 3.3%.
Medicare needs some serious reform. That’s just a fact. If it’s not, it will be bankrupt in just a few years. So why the delay? There are a few reasons. The first is that no politician wants to be labeled as the one that “kills” Medicare. It’s long been the third rail (along with Social Security, of course) of politics – touch it and your career is over. Another reason is lobbyists. According to Philip Klein at the Washington Examiner:
In February, as CMS announced plans to cut payment rates in 2014, it triggered an intense lobbying effort from insurers, who got 160 members of Congress from both parties to send letters asking the administration to back off. The insurance industry’s lobbying group, America’s Health Insurance Plans, celebrated the about face by the administration: “CMS has taken an important step to help stabilize Medicare Advantage at a time when the program is facing significant challenges.”
Let’s put aside for a minute that ObamaCare is unconstitutional, adds $6.2 trillion in debt, piles on countless new taxes, and has already racked up $31 billion and 71.5 million hours in regulatory compliance costs. Yes, that’s a lot to put aside. But for just a moment assume the role of a liberal with an entitlement mentality. For a law with enormous riches and political capital invested in it, wouldn’t you expect it to at least function on its most basic level consistent with its namesake? In other words, you would expect for the Affordable Care Act to provide affordable coverage.
The latest of ObamaCare’s fundamental flaws to be euphemistically reported as a “glitch” that needs to be “tweaked” is its failure to provide affordable family coverage for a broad group of employees. As a result, Kaiser Family Foundation estimates that 3.9 million family dependents may not be able to afford employer-sponsored family coverage or receive subsidized coverage on an ObamaCare exchange.
Understanding the family glitch requires a quick primer on the byzantine regulatory structure governing Obamacare’s subsidies:
AJ Delgado had a piece in Mediaite last weekend asking whether conservatism was dead or not. She cites three major policy “defeats” as she sees them for conservatism this month.
1) Immigration reform is all but a foregone conclusion.
2) The gay marriage debate is essentially over.
3) The plan to defund ObamaCare — conservatives’ last stand after the Supreme Court failed to throw out the Act — is over
I think Miss Delgado misses a lot in construing all of these as catastrophic defeats for conservatives. A look at each issue on its own shows that it is not as catastrophic as it first appears.
Firstly, I wouldn’t put my money on comprehensive immigration reform becoming law. After Rand Paul outlined his position on the issue last week, he has been very careful to walk back certain aspects of it. Plus, the GOP House has shown exactly no interest in this issue. Finally, this is an issue that divides Democrats as well. Blue collar unions, African Americans, and many environmentalists want to kill immigration reform as well for their own reasons.
As for gay marriage, this is probably her strongest argument. Yes the gay marriage is over. It will become the law of the land in every state in the country within 20 years, if that. What conservatives need to is rebrand on this issue. What conservatives need to fight for on this issue is to make sure adequate religious liberty and conscience protections are in place for churches, businesses, adoption agencies and others opposed to gay marriage.
Thanks to ObamaCare, you’re going to be paying more for your health insurance in 2014 - a lot more. According to health insurers, the provisions of the law that roll out next year could cause premiums to take a massive jump - up to doubling for some people. According to the Washington Post, the hardest hit will be those who buy their insurance on their own, and some small business:
…the biggest price hikes are expected to hit a group that represents a relatively small slice of the insured population. That includes some of the roughly 14 million people who buy their own insurance as opposed to being covered under employer-sponsored plans, and to a lesser extent, some employees of smaller companies.
Those of us with any sense have long predicted this would be the case. The law is expressly designed to make premiums higher for the healthy in order to make them lower for the unhealthy. This is literally the exact opposite of what “insurance” is supposed to do. Instead of charging based on an assessment of the insuree’s risk of incurring expensive costs, premiums will now be shifted in order to be more “fair”. Meanwhile, the taxpayer will be stuck with the bill for the subsidies given to help people afford these higher premiums.
Needless to say, this will have significant impact on the economy which is already not in great shape. And not much can really be done now. ObamaCare is here to stay for now, despite some Republicans’ efforts to repeal it. The law remains unpopular, but repeal is not going to happen now, and such efforts are a waste of time.
“I think the impressionable libertarian kids are going to save our nation.” — Igor Birman
Late last year, I ran across video of Igor Birman, who immigrated to the United States with his family as the Soviet Union was collapsing, warning against a more centralized government healthcare system. Birman, who now serves as Chief of Staff to Rep. Tom McClintock (R-CA), was explaining that the Soviet system relied on rationing of healthcare, which would be the end result of ObamaCare.
Earlier this week, I had the chance to sit down with Birman to discuss his story, the transformation of the United States into a police state, ObamaCare, the budget, and other destructive economic policies that are being pushed by the White House.
When asked about the recent filibuster in the Senate, Birman applauded Sen. Rand Paul and noted that it was refreshing to hear a politician be so passionate. He also compared the policies implemented as part of the “war on terror” to life in the Soviet Union, where the government frequently searched homes of ordinary citizens without cause, which he called a “fact of life,” noting that “you just accepted it as much as you did the cold weather and the long lines for the basic staples of food and water.”
Birman experienced this first-hand. “A week before we left for the United States, we went to say goodbye to my uncle in St. Petersburg and when we came back, we found our apartment just absolutely ravaged,” recalled Birman. “The authorities must have been looking for whatever lame excuse they could find to either delay or disrupt our departure.”