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OpenMarket: September 2013

  • Obamacare Quadruples Rates for Some, Subsidizes Some Wealthy Who Retired Early

    September 30, 2013 3:02 PM

    Due to Obamacare, North Carolina "will see individual-market" health insurance rates "triple for women, and quadruple for men."

    In Tennessee, Obamacare will triple men's premiums, and double women's, in the market for individual health insurance.  Nationally, Obamacare will increase men's premiums by 99 percent, and women's by 62%.

    Kathy Kristof of CBS MoneyWatch describes experiencing a 67 percent spike in her premiums, for a worse policy than she had before:

    The promise that you could keep your old policy, if you liked it, has proved illusory. My insurer, Kaiser Permanente, informed me in a glossy booklet that “At midnight on December 31, we will discontinue your current plan because it will not meet the requirements of the Affordable Care Act.” My premium, the letter added, would go from $209 a month to $348, a 66.5 percent increase that will cost $1,668 annually. . .the things that mattered to me — that I would be able to limit my out-of-pocket costs if I had a catastrophic ailment — got worse under my new Obamacare policy. My policy, which has always paid 100 percent of the cost of annual check-ups, had a $5,000 annual deductible for sick visits and hospital stays. Once I paid that $5,000, the plan would pay 100 percent of any additional cost. That protected me from economic devastation in the event of a catastrophic illness, such as cancer.

    Kaiser’s Obamacare policy has a $4,500 deductible, but then covers only 40 percent of medical costs for office visits, hospital stays and drugs. Out-of-pocket expenses aren’t capped until the policyholder pays $6,350 annually.

    Meanwhile, some wealthy early retirees have figured out how to qualify for Obamacare subsidies at taxpayer expense.  They do this by living on tax-free income and deferring their receipt of taxable income—an option not available to people who have to work for a living.  As the commenter Alan Lovchik noted yesterday,

    Hey you RICH early retirees who are not on Medicare yet and are buying your own medical insurance!! The Affordable Care Act of 2010 (Obamacare) will give you TOTALLY FREE insurance coverage.  You must be rich enough to take advantage, so the poor and middle class are probably left out of this wonderful opportunity.
  • Green Policies Translate Into Less Food, Higher Prices

    September 30, 2013 1:03 PM

    Thanks to misguided bureaucracy and fear mongering from environmental activists, myriad valuable products are disappearing from the marketplace. Walmart, Proctor & Gamble, and Johnson and Johnson are leading the way by following green advice to phase out a host of valuable chemical technologies because of misinformed green hype.

    Pesticides—which are needed to feed a growing world population and fight vector-borne diseases—are often found on the regulatory chopping block, thanks to environmentalist scare campaigns related to both food safety and wildlife protection.

    In Europe, as in the United States, pesticide regulations are driving a host of products off the market and will surely raise prices and reduce the ability of European farmers to produce food.  While green groups suggest that we should fear these chemicals, what we really need to fear is their crazy policies.

    A recent article in a European farmer’s publication explains how nonsensical European pesticide regulations will likely affect food production there:

    "We are essentially moving towards a European regulatory system more driven by ideology than science, and that is more than a little concerning," says John Peck, BASF's technical lead for the UK and Northern Europe. …This new wave of legislative pressure could leave farmers with a very depleted chemistry set (see Table 1). In some cases entire crops could become uneconomic to produce; in others the use of certain pesticides may only be permitted in certain parts of the country, at certain times of the year, or on certain parts of the farm.

    The article points out that such policies will reduce crop yield, dropping wheat yields by an estimated 12 percent, for example.  Reduced yield creates adverse environmental impacts by demanding that more land be farmed, leaving less land for wildlife.

  • CEI's Battered Business Bureau: The Week in Regulation

    September 30, 2013 9:12 AM

    80 new regulations, from bird hunting to fluted kidneyshells.

  • Environmental Regulations Threaten Refining Sector Jobs

    September 27, 2013 12:35 PM

    I had the privilege of meeting with Charlie Drevna, President of American Fuel and Petrochemical Manufacturers this week. He had some extremely interesting things to say about the way mounting environmental regulations are threatening jobs in the refining sector that he represents.

    A particularly compelling insight he provided was that many of the Obama administration's environmental regulations actually contradict each other. For instance, CAFE regulations require higher fuel efficiency from automobiles. Yet the Renewable Fuel Standard, which mandates the use of less efficient ethanol, reduces fuel efficiency. Meanwhile, the Tier III rules from EPA contradict the rulemaking on greenhouse gas emissions: refineries need to do more processing to reduce sulfur in gasoline, which increases emissions at a refinery by up to 2.3 percent, while at the same time they are required to reduce greenhouse gas emissions.

    Two more examples: to reduce ozone in the atmosphere under the National Ambient Air Quality Standards (NAAQS) requires more energy. More energy requires more greenhouse gas emissions, so there is another clear contradiction. Finally, state sulfur regulations contradict federal greenhouse gas regulations -- if you use energy to reduce the sulfur in heating oil, you will increase your greenhouse gas emissions.

  • Modest Food Stamp Cuts Are Long Overdue

    September 26, 2013 3:32 PM

    The House of Representatives recently voted to cut the "food stamp program by $39 billion over the next 10 years, while reforming the program to tighten eligibility and emphasize the importance of work." As the Cato Institute's Michael Tanner notes, the "outcry among congressional" liberals and administration officials in response to the vote "is just plain silly given how modest" the cuts are. As he observes, these cuts "simply trim around the edges of the program," which has mushroomed from $18 billion to $82 billion since 2000. As he points out, far from imposing draconian cuts, the House vote leaves spending at historically high levels, and merely curbs recent abuses and egregious loopholes that have caused costs to explode over the last few years:

    Aggregate Spending will still remain at elevated levels even with these cuts. Even with the additional cuts (totaling $39 billion), average outlays from 2013-2023 will be almost $73.5 billion, which is more than $5 billion more than outlays were in 2010 (they were $68.3 billion). . .

    Almost all of the savings come from returning to traditional SNAP rules or ending loopholes. . . The Republican plan would also eliminate the so-called LIHEAP loophole, which allows states to increase benefits for individuals who also receive utilities assistance under the LIHEAP program. Approximately 16 states have used this loophole to leverage nominal (as little as $1) LIHEAP payments into an increase in households’ SNAP benefits. Republicans would require states to provide LIHEAP benefits of at least $20 in order to qualify for the exemption, preventing them from manipulating the system to increase federal payments.

    While the cuts are a good start, they should go further and substantially trim the amount that most recipients get per month. Food stamps are so generous that it is baffling that anyone would oppose cutting them, unless they've never actually bought groceries while bargain-hunting. As someone who used to live on rather little, I think it is a prime area to cut. Even when I later worked in a law firm, I generally spent less on food than people receive on food stamps.

  • CEI Podcast for September 26, 2013: "The Cupboard Is Bare"

    September 26, 2013 3:01 PM

    Senior Communications Director Brian McNicoll lists off a series of programs and departments that should be removed from the very full federal cupboard.

  • Massive Marriage Penalties in Obamacare Health Insurance Exchanges

    September 26, 2013 10:30 AM

    On the Obamacare health insurance exchanges, being married can cost you a lot. Get divorced (or avoid getting married, if you live together), and you save $7,230 per year if you are a fairly typical 40-year-old couple with kids (example: the husband working full-time, and the wife working part time, with the husband making $70,000, and the wife making $23,000). If you are a 60-year-old couple with equal incomes and no kids, and you make $62,041 a year, you save $11,028 a year by getting divorced or remaining unmarried. These are the amounts of money you will lose if you get married, since you will lose this amount of taxpayer subsidies due to Obamacare's discriminatory treatment of married versus unmarried couples. That's the reality confirmed by an Obamacare “calculator" provided by the pro-Obamacare Kaiser Family Foundation showing how Obamacare’s “tax credits” work.

    This calculator is not designed to make Obamacare look bad: Indeed, it has been touted by Obama's own proxies at BarackObama.com, known as Organizing for Action: "In a September 13 email, Erin Hannigan of Organizing for Action’s 'Truth Team' bragged about" this “cool calculator” showing how Obamacare’s “tax credits” work, and encouraged everyone to “share it on Facebook or Twitter.”

    The tax increases Obama demanded in the fiscal cliff deal also contain a “marriage penalty,” although only for upper-income households (since the maximum rate kicks in at $450,000 for married couples — that is, $225,000 for each spouse — versus $400,000 for singles). Obamacare's new tax on investment income, which applies to married couples making above $250,000 per year, also contains marriage penalties (for example, if an unmarried couple makes $390,000 -- $195,000 for each partner -- they owe no investment tax, even if all of their income is investment income, and even if a married couple with the same income would pay the Obamacare investment tax on a significant portion of their income).

  • Don't Nudge On Me

    September 24, 2013 12:52 PM

    In a recent New York Times column, David Brooks describes American culture as “mentally lazy.” Overcoming that, he argues, requires a dose of what he calls “social paternalism” in public policy.

    Is he right?

    I thought about that yesterday, as I drank a can of pink grapefruit-flavored San Pellegrino while sitting in an old family friend’s living room. The friend had just returned from swimming laps and wore Speedo jammers—knee-length, spandex-tight swim trunks, a jarring sight on an adult male. “Mary,” he said. “Here’s the problem with the media today: No one can just sit with someone they disagree with and listen to their point of view anymore.” (Was I not listening to a man in Speedo jammers with all manner of civility?)

    He continued, “America wants a media outlet that will provide civil disagreement; she just doesn’t know it yet.”

    He presented, in effect, an interesting anomaly. Conflict around an idea creates buzz. Yet, bombast causes sources to lose credibility with media consumers. “News” coverage and opinion pieces dwell in a Catch-22: The ridiculous get attention while the substantive get lost in the fray—and then the ridiculous get dismissed anyway. Subsequently, the public, though engaged in a whirlwind of dramatic press, tunes out.

    Where I differ with AMiJ (Adult Male in Jammers) is on what it is the public wants. Why search for an even-keeled news sources when loud commentary and feuding pundits attract so many eyeballs? A talk show where two or more parties calmly discuss current events without exaggeration would not do as well as the over-the-top pundits.

  • Labor Department Imposes Disability Hiring Quotas, Even in Divisions that Don't Get Federal Contracts

    September 23, 2013 3:13 PM

    The Obama Labor Department has just finalized rules that will effectively require businesses that get federal contracts to adopt a 7 percent hiring quota for the disabled. Much of the American workforce is employed by a federal contractor, since most large companies have federal contracts. So this will affect much of the economy, and impose massive new costs on American business.

    Disturbingly, the new rules require a 7 percent quota not just for the division of the company that receives a federal contract, but for the company as a whole. And they require that the 7 percent quota be met not just for the company as a whole, but also in each line of business in the company. That means they effectively must be met even in job categories where the number of disabled people is lower than average, either because the qualified labor pool is disproportionately able-bodied (like those that require hard physical labor) or because the job is not compatible with certain mental or psychological impediments that qualify as disabilities.

    As the Cato Institute's Walter Olson notes, the rules impose quotas in all but name; the director of the Office of Federal Contract Compliance Programs

    insists the initiative should not be described as quotas, since contractors falling short will not suffer automatic penalty. Instead, they’ll be thrown into a process of auditing and having their internal procedures put under review and having to demonstrate progress and that sort of thing. Nothing penalty-like about that! Also, if their willingness to go along with this process doesn’t please the federal overseers, they can eventually be debarred from any future contract work, a devastating economic sanction for many firms. Crucially, the feds are applying the regulation to firms’ entire workforce even if only a single divisions has federal contracts, so that if, say, a food company has one line of business that caters to the military, and nineteen others that do no federal contracting whatsoever, all twenty lines must adopt the quot… sorry, benchmarks. [Cleveland Plain Dealer, OFCCP, Government Executive, Federal News Radio]

  • The Regulatory Improvement Commission

    September 23, 2013 11:22 AM

    Senators Angus King (I-Me.) and Roy Blunt (R-Mo.) are introducing a bill that would create just such a commission. Over at The American Spectator, Wayne Crews and I discuss the proposal:

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