Third Way Perspectives
February 24th, 2014
With each new poll, it’s becoming clear that the United States is shifting to the left. A majority of Americans now supports same-sex marriage. And legalization of marijuana. And normalization of relations with Cuba.
Gallup reports that, in 2013, the percentage of Americans identifying themselves as liberals reached its highest level since 1992. True, it’s only 23 percent. Conservatives, at 38 percent, still outnumber liberals. But the trend has been slowly and steadily upward for liberals since 1996, when it was 16 percent.
This shift is due entirely to Democrats becoming more liberal — 29 percent of Democrats in 2000, 43 percent in 2013. At the same time, Democrats have won the national popular vote in five out of the six presidential elections since 1992 (all but 2004). Barack Obama won a majority of the popular vote twice — something Bill Clinton couldn’t do.
February 24th, 2014
What happens when you’re the meanest player on a team with a history of violence (say, the Philadelphia Flyers from the 1970s), but you disobey the coach too many times? No matter how good on the field, pitch or ice you may be, the head office has no choice but to cut you from the roster.
This happened recently in the world of international terrorism, where al-Qaida Central became fed up with one of its franchises and disavowed the Islamic State of Iraq and the Sham, or ISIS. This is the first time al-Qaida cut ties with one of its regional groups — surprisingly so since ISIS has been successfully driving the jihadist agenda in the heart of the Middle East.
This split is good news for the U.S. and its allies. Here’s why:
February 13th, 2014
The Navy’s Littoral Combat Ship, or LCS, program was dealt a death blow last month when the Pentagon advised the Navy to purchase only 32 of the small, fast and much maligned ships that were originally designed to combat three distinct threats — submarines, mines and groups of small boats.
This was absolutely the right move for at least three reasons.
The first, and most glaring, deficiency of the LCS is that, as a recent Pentagon’s Director of Operational Test and Evaluation report states, the “LCS is not expected to be survivable in high-intensity combat.” While the Pentagon has used similar language in previous reports, the level of detail explaining why the boat wouldn’t survive a real fight is unprecedented.
The report indicates the ship’s vulnerability is inherent in its design. In dry Pentagonese, the LCS does “not require the inclusion of survivability features necessary to conduct sustained combat operations in a major conflict as expected for the Navy’s other surface combatants.” Thus, despite having “combat” in its name, the LCS is pretty lousy at fighting enemies.
February 10th, 2014
Lost in the back-and-forth over the most recent CBO report on the Affordable Care Act (ACA) is a simple fact that any expansion of health care coverage for Americans will inevitably have an impact on America’s working habits. It is no less true of GOP proposals than Obamacare.
To make coverage more affordable, any proposal must provide some sort of subsidy. For example, the recent Republican proposal from Sens. Tom Coburn (R-OK), Richard Burr (R-NC), and Orrin Hatch (R-UT) includes a tax credit for lower income workers. The act of giving someone financial assistance for health care will naturally reduce the need to work somewhat.
Rep. Paul Ryan (R-WI) thinks this creates a poverty trap. While Ryan neglects the fact that millions of Americans are bankrupted every year due to medical bills, he instead focuses on the ACA’s subsidies to buy coverage through the federal and state marketplaces. These subsidies decline as workers earn more money, which means that workers have to work a little harder to keep another dollar in take-home pay. So yes, some people will choose to work less to keep their subsidy. But does that make the ACA a poverty trap? Of course not. We have dozens of social insurance programs ranging from food stamps to the Earned Income Tax Credit, and yet we remain the world’s greatest economy.
The alternative to phasing out benefits by income is to provide the same benefit to rich and poor alike, as many European nations do. But that requires higher tax rates or cuts in government services, which, in turn, leads to greater burdens on everyone.
Here is how CBO describes this problem in their most recent report:
CBO’s estimate that the ACA will reduce employment reflects some of the inherent trade-offs involved in designing such legislation. Subsidies that help lower- income people purchase an expensive product like health insurance must be relatively large to encourage a significant proportion of eligible people to enroll. If those subsidies are phased out with rising income in order to limit their total costs, the phaseout effectively raises people’s marginal tax rates (the tax rates applying to their last dollar of income), thus discouraging work. In addition, if the subsidies are financed at least in part by higher taxes, those taxes will further discourage work or create other economic distortions, depending on how the taxes are designed. Alternatively, if subsidies are not phased out or eliminated with rising income, then the increase in taxes required to finance the subsidies would be much larger.
This is nothing new. CBO had previously estimated that the ACA would have some impact on jobs. What’s new is that the CBO has refined his estimate and made it more precise based on the latest research.
Some conservative commentators like Avik Roy have acknowledged that GOP plans will also affect working habits due to income-based subsidies. But conservatives persist in the belief that GOP alternatives are morally superior even though their actual solutions are just different choices about the amount of the subsidies and the degree of security offered to American workers.
Economics is called the dismal science because it shows the downside to any choice. But there’s nothing dismal about having security and stability in your health care. As Jason Furman, Chairman of the Council of Economic Advisors at the White House explains, the ACA provides many economic benefits. Today, under Obamacare, millions of Americans no longer have to worry about getting coverage for a pre-existing condition. They don’t have to stay in a job that they don’t like because of their health insurance. And they don’t have to worry about losing their health care coverage if they lose their job. The GOP needs to make it clear whether they disagree with the goals of Obamacare or the means.
February 4th, 2014
It is clear that HealthCare.Gov is working better. Enrollment figures are climbing. Over 3 million Americans have selected a plan through the federal and state marketplaces, and another 6.3 million are getting coverage through Medicaid. While problems remain, the level of interest in getting coverage has grown—to as many as 2 million visits to the federal website in one day.
But amid these public proof points will be another less obvious measure of success—a decline in the need for a patchwork of programs designed to help the poor who continue to lack coverage despite the Affordable Care Act (ACA).
One of those programs, called the 340B Drug Pricing Program, however, shows no signs of slowing down. 340B requires drug manufacturers to provide discounts to hospitals and clinics that generally serve low-income patients or other groups like HIV-AIDS patients. The discounts range from 20% to 50% off the cost of drugs. Those discounts are often bigger than the discounts required of drug manufacturers for Medicaid patients.