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  • More Punishment for Thrifty Seniors from Federal Medicare Laws

    September 2, 2015 2:25 PM

    If two couples make almost the same amount of money, should one of them be charged $2,000 more in Medicare Part B premiums? Logically, no, but to the federal government, the answer is sometimes “yes.” This problem will get worse in 2016, and much worse by 2018.

    Under federal law, an elderly couple can be charged thousands extra annually for Medicare premiums if their income goes up by just a few dollars (which can occur because they saved their money, and thus have more savings account interest or investment income). That’s because Medicare premiums suddenly jump by big amounts at certain income levels, rather than rising gradually the way your taxes do when your income rises.

    Now, these arbitrary income cliffs will get even worse due to a quirk in federal law. As the Fiscal Times notes in “Millions Facing a Hefty Increase in Medicare Premiums in 2016,”

    Nearly a third of the roughly 50 million elderly Americans who depend on Medicare for their physician care and other health services could see their premiums jump by 52 percent or more next year. That’s because of a quirk in the law that punishes wealthier beneficiaries and others any time the Social Security Administration fails to boost the annual cost of living adjustment. . . .

    an estimated 15 million seniors, first-time beneficiaries or those currently claiming dual Medicare and Medicaid coverage will see their premiums jump from $104.90 per month to $159.30 for individuals . . .Higher-income couples would pay multiples of that increase.

    As Reuters notes, even before this quirk jacks up rates, the economic punishment for earning a few extra dollars is already slated to increase dramatically due to the recently passed “doc fix” legislation to raise more revenue for Medicaid providers (known as the Medicare Access and CHIP Reauthorization Act of 2015):

    Affluent enrollees already pay more for Medicare. Individuals with modified adjusted gross income (MAGI) starting at $85,000 ($170,000 for joint filers) pay a higher share of the government's full cost of coverage in Medicare Part B and Part D for prescription drug coverage. This year, for example, seniors with incomes at or below $85,000 pay $104.90 per month in Part B premiums, but higher income seniors pay between $146.90 and $335.70, depending on their income.

    The [“doc fix” law] will shift a higher percentage of costs to higher-income seniors starting in 2018 for those with MAGI between $133,500 and $214,000 (twice that for couples). Seniors with income of $133,000 to $160,000 would pay 65 percent of total premium costs, rather than 50 percent today. Seniors with incomes between $160,000 and $214,000 would pay 80 percent rather than 65 percent, as they do today.

    As Valley News notes, this economic punishment for earning a few extra dollars will now rise further due to the ironically named “hold harmless” provision in federal law. “High-income retirees . . .will be hit hard. . . . Affluent seniors already pay more for Medicare Part B and also Part D for prescription-drug coverage. . . . ‘When you combine it all, it's looking pretty ugly,’ says Sharon Carson, a retirement strategist at J.P. Morgan Asset Management.”

  • How to Fix Regulation without Representation

    September 2, 2015 1:35 PM

    Before it departed for its August recess, the House passed the Regulations from the Executive In Need of Scrutiny (REINS) Act. It would require Congress to hold votes on all new agency regulations costing at least $100 million per year, and would limit agency’s ability to regulate unilaterally.

    In a piece over at The Hill’s Congress Blog, Wayne Crews and I make the case for the reconvening Senate to pick up the baton and also pass REINS:

    There is an urgent need to free consumers, entrepreneurs and small businesses from the costs and hurdles associated with federal red tape. The REINS Act would be an excellent anchor for reform, allowing Congress to clean out obsolete rules and strengthen rulemaking disclosure and oversight. REINS deserves both a vote in the Senate and to reach President Obama’s desk. If the president vetoes it, it’ll be up to him to explain why Americans should be controlled by agency bureaucrats rather than the people they elected to represent them in Congress.

    Read the whole thing here.

  • Court Upholds Legality of NSA's Bulk Collection of Telephone Records

    August 31, 2015 4:35 PM

    On Friday, the U.S. Court of Appeals for the District of Columbia Circuit handed down its much-awaited ruling in Obama v. Klayman, one of several lawsuits challenging the legality of the NSA’s bulk collection of Americans’ telephone records. In 2013, the District Court for D.C. issued a preliminary injunction after it found the plaintiffs were “substantially likely” to show that the NSA was collecting their telephone records in violation of the Fourth Amendment to the U.S. Constitution. The D.C. Circuit disagreed with this conclusion, reversing the preliminary injunction and sending the case back to the lower court for further proceedings.

    Although the D.C. Circuit’s decision in Klayman has major implications for future cases about government surveillance, it won’t immediately affect the NSA’s bulk collection program. When the District Court in D.C. granted the plaintiffs a preliminary injunction, the court decided to “stay” its preliminary injunction pending an appeal—meaning the NSA could continue its bulk collection while the lawsuit made its way through the federal courts. This process has taken longer than expected, with nearly two years elapsing since the preliminary injunction issued in December 2013.

  • NLRB's Joint-Employer Ruling: Payback for Unions at Workers' and Business' Expense

    August 31, 2015 8:18 AM

    In a radical new ruling, the National Labor Relations Board (NLRB) late last week threw all American franchise and contract businesses into a state of uncertainty. In a 3-2 decision, the NLRB ruled that companies can now be held responsible for labor violations committed by franchisors and contractors. It’s hard to overstate the potential fallout from this decision.

    First, the NLRB has turned the clock back 30 years in American employment practices, which have seen massive growth in flexible, more autonomous business and employment arrangements—such as franchises, contracted work, suppliers, and so on. I said as much in my initial review of the NLRB ruling.

    Reading the lengthy, full decision, it is surprising how explicit the majority opinion is in that endeavor. They are proudly reactionary when it comes to labor and employment standards, wanting to rein in the developments of the past three decades in American employment practices. Time and again, the majority refers to Board decisions and Supreme Court opinions from the 1970s or earlier.

    This decision makes contracting specifically much less attractive to companies. It essentially raises the transaction costs of hiring. And, as we know from Ronald Coase, lowering transaction costs is the main reason why we have corporations in the first place. More functions will be brought in-house, and with the raised costs, people will lose their jobs as a result. They will certainly lose the flexibility many people value of working for staffing companies rather than one particular employer. Unions may well not benefit at all, and those who have lost their jobs will be able to blame them for their place in the unemployment line.

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

    August 31, 2015 6:59 AM

    As the 2015 Federal Register topped 50,000 pages, federal agencies issued new regulations for everything from bicycles to tuna.

    On to the data:

    • Last week, 73 new final regulations were published in the Federal Register, after 76 the previous week.
    • That’s the equivalent of a new regulation every two hours and 18 minutes.
    • So far in 2015, 2,178 final regulations have been published in the Federal Register. At that pace, there will be a total of 3,260 new regulations this year, which would be more than 200 fewer rules than the usual total of 3,500-plus.
    • Last week, 1,261 new pages were added to the Federal Register, after 1,993 pages the previous week.
    • Currently at 50,334 pages, the 2015 Federal Register is on pace for 75,351 pages.
    • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Nineteen such rules have been published so far this year, none in the past week.
    • The total estimated compliance cost of 2015’s economically significant regulations ranges from $1.32 billion to $1.41 billion for the current year.
    • 181 final rules meeting the broader definition of “significant” have been published so far this year.
    • So far in 2015, 367 new rules affect small businesses; 53 of them are classified as significant. 
  • Cooler Heads Coalition News

    August 28, 2015 9:57 PM

    Originally published in the Cooler Heads Coalition newsletter:

    News You Can Use | Marlo Lewis

    Coordination between Governors, White House, and Tom Steyer

    E-mails obtained through Washington State’s freedom of information law reveal a behind-the-scenes campaign to use governors’ and state attorneys general offices, green pressure groups, and renewable energy companies “to advance President Obama’s climate change regulatory and treaty agenda,” according to a new report by attorney Christopher Horner prepared for the Energy and Environment Legal Institute.

    Key plotters include billionaire Democrat fund raiser Tom Steyer, Cylvia Hayes (fiancée of former Oregon Governor John Kitzhaber), and senior White House officials. The e-mails “reveal a broad-based campaign” to use private contributions to coordinate the actions of governors, state attorneys general, and utilities to mandate and subsidize renewable energy.  The report, writes Horner, “documents a convergence of big money and big government to underwrite pressure groups and echo chambers, to scheme behind closed doors and ‘creatively engage utilities’ to craft and impose a transformative and unpopular agenda” on the U.S. electric power sector.

    Inside the Beltway | Myron Ebell

    President Obama Calls Opposing Government Mandates and Subsidies Anti-Free Market

  • CEI's Coalition Letter to Prevent New Bailouts of Fannie and Freddie

    August 28, 2015 8:01 AM

    As the Dodd-Frank “financial reform” celebrated its fifth anniversary this summer, just about every financial business—as well as many nonfinancial firms—have come under its thumb. This is true whether or not these companies had anything to do with the financial crisis.

    Community banks and credit unions that had nothing to do with the subprime mortgage meltdown suddenly found that they couldn’t issue mortgages to creditworthy borrowers, thanks to provisions such as “qualified mortgage” and “qualified residential mortgage” mandates enforced by the Consumer Financial Protection Bureau, the unaccountable new agency created by Dodd-Frank. Stable insurance companies such as MetLife that never faltered during the crisis and served policy holders for decades suddenly found themselves subject to bank-like capital requirements that even liberal Democrats like Sherrod Brown said was inappropriate.

    (MetLife is currently challenging the authority of Dodd-Frank’s Financial Stability Oversight Council (FSOC) in a lawsuit. The Competitive Enterprise Institute (CEI) has a separate lawsuit challenging the constitutionality of both FSOC and the CFPB that garnered a partial victory recently in the D.C. Circuit Court of Appeals.)

    Yet Fannie Mae and Freddie Mac, the two government-sponsored enterprises that many observers—from American Enterprise Institute scholar Peter Wallison to New York Times business columnist Gretchen Morgenson—say were the proximate cause of the crisis still face no requirement for any type of capital cushion.

  • Did North Dakota Just Authorize Pepper-Spraying Police Drones?

    August 27, 2015 1:26 PM

    The Daily Beast’s Justin Glawe has written an article about a North Dakota law aimed at limiting law enforcement use of unmanned aircraft systems (UAS), or drones. He claims that the law was watered down by police interests and corporate lobbyists, and that the weakened protections now authorize law enforcement’s use of non-lethal UAS-mounted weapons:

    With all the concern over the militarization of police in the past year, no one noticed that the state became the first in the union to allow police to equip drones with “less than lethal” weapons. House Bill 1328 wasn’t drafted that way, but then a lobbyist representing law enforcement—tight with a booming drone industry—got his hands on it.

    The bill’s stated intent was to require police to obtain a search warrant from a judge in order to use a drone to search for criminal evidence. In fact, the original draft of Representative Rick Becker’s bill would have banned all weapons on police drones.

    Then Bruce Burkett of the North Dakota Peace Officer’s Association was allowed by the state house committee to amend HB 1328 and limit the prohibition only to lethal weapons. “Less than lethal” weapons like rubber bullets, pepper spray, tear gas, sound cannons, and Tasers are therefore permitted on police drones.

    Scary stuff, right? I certainly don’t want the police to have armed UAS—whether they be deployed with lethal or non-lethal weapons—and requiring warrants is a good first step. But based on a reading of the statute in question, it does not appear to do what Glawe and others claims it does.

  • Federal Labor Agencies Attack Workers and the Economy

    August 27, 2015 1:10 PM

    Today, CEI released a report on the Obama administration’s effort to pay back its union allies by way of federal labor agencies.

    The National Labor Relations Board and Department of Labor are using their regulatory and adjudicatory powers to prop up labor unions that are experiencing a decades-long decline in membership. Not only do the agency actions serve as political payback to a special interest group, the rules and decisions severely disrupt the workplace and how companies do business. Further, the actions stand in stark contrast to the NLRB and DOL’s missions to protect worker rights, not benefit special interest groups like Big Labor.

    And this regulatory barrage could not have come at a worse time. Currently, 6.5 million workers are seeking full-time employment, but federal regulations have subjected them to part-time work. In addition, labor participation rate is at a 38-year low of 62.6 percent. Worse, federal agencies upsetting common business practices via regulation is a surefire way to keep the below-average employment numbers where they are.

    The report focuses on three significant actions coming out of the DOL and NLRB: DOL’s proposed overtime rule change, NLRB ambush election rule, and the upcoming NLRB joint employer decision.

  • CEI Issues Report on the Nation’s Six Worst State Attorneys General

    August 27, 2015 8:08 AM

    Today, CEI issued another of its periodic “worst state attorney general” lists, in a lengthy report explaining why those attorneys general received that dubious distinction. (Previous versions were issued in 2007 and 2010.) The Nation’s Worst State Attorneys General 2015 is now available.

    Pennsylvania’s recently indicted Kathleen Kane was rated the worst state attorney general. As the Huffington Post notes, “Almost half of Pennsylvania voters want Kathleen Kane, the state's embattled Democratic attorney general, to step down, according to a Quinnipiac University poll released Tuesday. Forty-nine percent said Kane, who is facing criminal charges relating to allegations she leaked information about a rival, should resign. Twenty-seven percent said she should remain in her position.” Fifty-four percent of Pennsylvania voters disapproved of her job performance, while 20 percent approve. Kane was indicted on August 6 for illegally leaking grand jury material and a subsequent cover-up. Kane is charged with perjury, official oppression, obstruction of justice, and contempt of court.

    State attorneys general are supposed to represent the interests of their clients, not their own. For attorneys general, that includes representing state agencies that are sued, defending state laws, and giving unbiased legal advice to state officials. But AGs are often self-seeking politicians who chafe at having to perform these duties rather than aggrandizing their own power. For many, it is tempting to use their office to enrich themselves or their trial lawyer friends, or to file lawsuits attacking political opponents or out-of-state businesses that have done nothing illegal, but have no redress at the polls.

    Past examples include former Texas attorney general Dan Morales, who was jailed for mail fraud and tax evasion related to Texas’s 1998 tobacco settlement; Alabama’s Richmond Flowers, who was sentenced to eight years in prison for conspiring to extort payments from companies; and Missouri’s William Webster, who was sentenced to two years in prison for rewarding lawyers who donated to his campaign with bigger settlements.


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