Sunday, August 9, 2009

Health Care Reform...America's #1 Issue?

This Sunday morning, August 9Th, I watched the NBC program "Face the Nation." There was quite a bit of discussion about, for lack of a better name, "The Obama Stimulus Program," and the Congressional plans for health care with Mayor Cory Booker(D)of Newark, New Jersey and Michael Bloomberg(I) of New York City. Interestingly both agreed that tax relief for small business was the key to stimulating employment in their cities. Mayor Booker even mentioned fmr. Congressman Jack Kemp's enterprise zone program as an example of government tax relief that works.

Employment statistics show that small business creates more jobs than giant companies do in the United States. Much of the discussion about whether the stimulus program is working centered on as New York Times reporter David Brooks said "if it temporary, targeted and timely?" All agreed that the "Cash for Clunkers (see previous post) has been all three of those things and is very popular with the America People.

Enter discussion of health care reform. Again according to the "Meet the Press" panel, even the most well informed cannot articulate what is in the bill and what its effect will be. Again the consensus is that the American people want to see health care costs come under control and that issues like preexisting conditions be addressed through legislation mandating insurance companies to cover them. When asked about the need to increase taxes for middle class Americans to pay for the plan, no one on the panel could explain how the program would be financed and they avoided the issue of tax increases.

In one of the early plans for financing universal health care, small businesses would be required to cover their employees with a health care plan or they would be penalized with additional taxes. While I am personally sympathetic with the plight of the uninsured, I recognize that the way to increase employment is to give tax relief to small businesses not burden them with additional taxes that may well cause them to close down. I personally understand the issue of small business payroll because I co-owned and operated a convenient store for ten years with sales of over 1 million dollars annually. At the end of each month, I had to write withholding checks to the state and federal government as well as insurance premiums for workers compensation. I can tell you that it was often a great challenge to be able to pay our employees and the government in the same payroll cycle. I believe my company was very typical of small businesses all over the country. I can tell you that if my company had been required to provide health care coverage for our employees we could not have continued to operate thus laying off between fifteen and twenty-five full and part time employees. In this case the governmental cure would have been worse than disease.

America needs health care reform. More people should be covered and costs must be stabilized but the devil is "in the detail." The ultimate reform must be fully understood by the members of Congress and the Administration proposing it. It must be bi-partisan and it cannot be rushed through in a rough shod manner with its effects unknown. The stimulus plan was rushed through and the results are mixed at best. Health care is simply too important and too complex to become a political football. This is not the time for our government to promote legislation that might actually cause more unemployment. All of our government's time should be spent on evaluating the action they have already taken and looking forward to how America will recover the millions of jobs that have been lost. Unemployed citizens do not pay taxes. Unemployed people become depressed and desperate. They become hopeless and they stop supporting local issues like school levies thus hurting the economy even more.

I would suggest that Health care reform is not the number one issue in America today. The number one issue in America today is creating sustainable jobs and getting our people back to work. After that, the government should focus on other important issues of which health care is one.

Wednesday, August 5, 2009

Cash for Clunkers...the only stimulus program that works!

I have recently been reading and hearing through the newspapers and media about the tremendous success of the "Cash for Clunkers" program from our Federal Government. It appears to be so tremendously successful that the initial one BILLION dollars of funding is nearly depleted. Yesterday I stopped at a local Toyota Dealer to ask about the new Prius (fuel efficient hybrid). He told me he had none to show me, new or used! I asked if this is because of the "Cash for Clunkers" to which he replied "absolutely!" The Prius will give a qualified buyer the maximum $4500 tax credit. Now the Feds wants (US House has already approved), the US Senate to approve an additional 2 BILLION dollars to keep the program running through the end of '09. I believe they should.

Well its a good thing something is working because most of the rest of the 1 TRILLION+ dollar stimulus package is NOT. As I listened and watched the discussions of how much and where the money should be spent before the Stimulus bill was passed, I noticed the number of dollars for infrastructure keep falling. The initial discussion was in the neighborhood of 1.5 TRILLION, but ultimately that fell to about 750 BILLION. That would seem to be a lot of money but compared to what Departments of Transportation spend annually, its a rather modest amount.

Take the Ohio Department of Transportation for example. Ohio has one of the largest interstate systems in the Nation and the second largest number of bridges (both county and state). ODOT's annual construction budget is in the neighborhood of 1.5 BILLION dollars. ODOT received approximately 900 MILLION in stimulus money, a little more than half of what it spends anyway.

Because the funds were earmarked for "shovel ready" projects and because ODOT had very few projects that qualify as "shovel ready" much of the additional money was spent on bridges that were NOT in the worst shape and for repaving roadways that will ultimately need further work in just a few years. Not really rebuilding America's "crumbling infrastructure" as the President called for.

The vast majority of the Stimulus money went to bail out broke state governments. While that did keep many government employees and programs working it did nothing to "Stimulate" the economy. At best it kept things from getting worse.

I could go on and on as to why the Federal Government simply cannot do anything fast. One example is again with building roads. I read about a simple project in Indiana extending a highway whose construction stopped halfway before its ending point. The second half of the project was set to sell in the spring of this year. Even though the roadway was designed and the right-of-way purchased, the local authorities noted that due to the fact they were spending "FederalStimulus money" on the project, it had to be reviewed by the Federal Highway Administration and now due to "paperwork" it will not sell until 2010! Our government is its own biggest problem! Taxing people then giving it back again is extremely inefficient and wasteful.

If we are to get through this terrible recession and continue to succeed as a Nation we must insist on a smaller NOT larger government. Big Government is well intentioned but by design not able to be proactive or even reactive to major problems. According to Thomas Jefferson.."the government is best which governs the least..." I think he knew what he was talking about.