In the News: Blog

May 23 

Memorial Day Program at Northern Wisconsin Veterans Memorial Cemetery in Spooner 

May 24 

Memorial Day Program at Southern Wisconsin Veterans Memorial Cemetery in Union Grove 

May 25 

Service at the Central Wisconsin Veterans Memorial Cemetery in King 

Memorial Day Ceremony at Wood National Cemetery in Milwaukee


On tax deadline day, April 15, IRS Commissioner John Koskinen testified before my committee about the IRS’ implementation of Obamacare.

The IRS, probably the most feared civilian agency of the federal government, plays a central role in enforcing Obamacare’s individual mandate and in reconciling its subsidies. So, as chairman of the Homeland Security and Governmental Affairs Committee, I felt Koskinen (right) needed to hear what Americans have experienced.

Reports suggest that it hasn’t gone smoothly. One found that the IRS delayed refunds for “tens of thousands” of enrollees because of missing data from state-run health insurance exchanges. National Taxpayer Advocate Nina Olson said the refunds have been “held for quite a long time, since the beginning of the filing season.” Olson said that IRS employees were instructed not to tell callers why their refunds are suspended.

I read Mr. Koskinen a letter my office received from a Wisconsin couple detailing their experience with Obamacare. When filing their taxes, they learned that they will have to repay the government $11,550 that the government incorrectly used to subsidize the coverage the couple was forced to buy on the federally run exchange. The sum equals more than 18% of the couple’s income, the letter said.

“A $11,550 penalty on an annual income of approximately $60,000 for two people seems excessive,” the couple wrote, adding that they did “exactly what we were told” by the Obamacare exchange. Now, they fear they will have to raid their retirement fund to pay back what the government incorrectly calculated.

Mr. Koskinen later offered what I am sure he felt was comforting news. “You can do an online installment agreement that will allow you to spread those payments over time,” he said, so taxpayers “don’t have to immediately take draconian steps.” The IRS will charge them interest, he said, but rates now are “very low.”

That may seem accommodating to the IRS, but think about how people would end up in such a situation. Many people will unexpectedly end up owing the government money because Obamacare caused them to lose the coverage they had, forcing them to buy costly coverage through government-run exchanges that worked poorly. The government sent money to insurers on their behalf – money that, the fine print now says, they had to very carefully calibrate or they will unexpectedly have to pay the government.

If you buy coverage through an Obamacare exchange, you are required to estimate your income for next year. If you underestimate for any reason, you may be on a very costly hook.

But at least the government won’t charge you much interest for its costly error. How very generous.

Remember one year ago, when President Obama was claiming that unless Republicans again renewed the temporary, extra-long unemployment benefits enacted in the depths of the recession, the economy would suffer?

Remember how his advisers claimed that if Congress let unemployment benefits return to normal, 240,000 jobs would be lost, and how a New York Times columnist claimed it was because Republicans liked to “afflict the afflicted”?

Republicans did not heed the president. The unprecedented 99 weeks of extended benefits expired. Unemployment benefits returned to normal.

And last week, President Obama was declaring 2014 “a breakthrough year for America.” Remember that?

A groundbreaking new study explains why it was such a good year, Investors Business Daily reports: It was because Republicans ignored Obama’s advice, as 60% of the jobs gained last year were due to the cutoff of extended unemployment benefits.

I’ve said as much, but now others are saying so, too. IBD writes:

“Economists from the University of Oslo, the Institute for International Economic Studies and the University of Pennsylvania took advantage of the sudden end to this federal benefit across the country to see how it correlated with job growth.

“Their findings, published this week by the highly respected National Bureau of Economic Research, found that because Congress didn't listen to Obama, ‘1.8 million additional jobs were created in 2014 due to the benefit cut.’”

You can read the study itself here. It’s worth doing. Economists Marcus Hagedorn, Iourii Manovskii and Kurt Mitman point out just how well the economy did:

“Average employment growth was about 25% higher in 2014 than in the best of several preceding years. The employment-to-population ratio rose. The unemployment rate declined sharply. In contrast to typical predictions, the labor force participation rate suddenly halted its steady secular decline.”

The majority of the effect, the economists write, was because Congress cut off the extra-long benefits. Naysayers claimed this would cause discouraged unemployed people to stop looking entirely – to drop out of the labor force. That didn’t happen, the researchers write, because cutting benefits encourages job creation:

“Not only did the unemployed not drop out of the labor force because of losing entitlement to benefits, but instead those previously not participating in the labor market decided to enter the labor force. . . . The increased availability of jobs than draws non-participants into the labor market.”

Others have already been saying this. North Carolina cut back on extended benefits earlier. Liberals implied this was immoral, but it led to more people finding work. Other observers have been noting the helpful effects of the national cut-off already.

None of this is to imply that unemployed people were lazy. I’m not saying that, nor were conservatives. But government programs, even well-intentioned ones, often have unforeseen effects. Incentives matter. That’s a piece of science that the president and his party should start paying attention to.

“It's enough to make you wonder,” IBD writes, “how much more growth we'd enjoy if other parts of Obama's ‘middle class economics’ were jettisoned.”

The faculty of Harvard is in an uproar, the New York Times reports – the changes to employee health coverage that already hit almost everyone else in America have come to the elite university.

“Professors at Harvard have until now generally avoided the higher expenses that other employers have been passing on to employees,” the paper reports. But health care benefit costs are rising quickly, faster than the university’s revenue or the salaries it pays faculty, the Times reports. Some of those soaring costs are driven by Obamacare, according to the paper – “provisions in the health care law that extend coverage for children up to age 26, offer free preventive services like mammograms and colonoscopies and, starting in 2018, add a tax on high-cost insurance, known as the Cadillac tax.”

graph premiums

So the faculty will pay:

“The university is adopting standard features of most employer-sponsored health plans: Employees will now pay deductibles and a share of the costs, known as coinsurance, for hospitalization, surgery and certain advanced diagnostic tests. The plan has an annual deductible of $250 per individual and $750 for a family. For a doctor’s office visit, the charge is $20. For most other services, patients will pay 10 percent of the cost until they reach the out-of-pocket limit of $1,500 for an individual and $4,500 for a family.”

The plan could have saved some money by narrowing the network of providers, the paper reports, but “some of Boston’s best-known, most expensive hospitals are affiliated with Harvard Medical School. To create a network of high-value providers, Harvard would probably need to exclude some of its own teaching hospitals, or discourage their use.”

Even after these changes, the Times reports, Harvard’s plan will cover 91% of the cost of health care for the typical employee – far more generous a benefit than what Americans forced to buy coverage on Obamacare’s government-run “exchanges” will get. Still, professors are outraged. One tells the paper that increased out-of-pocket costs amount to a pay cut. “It’s equivalent to taxing the sick,” says another.

No, actually it’s equivalent to paying a doctor something for services received — because that’s what it is. It’s what most of America does.

That is the most striking part of the article: These people who are surprised and offended at having to pay part of the cost of their health care include those who have prescribed this exact approach, the Times reports:

“For years, Harvard’s experts on health economics and policy have advised presidents and Congress on how to provide health benefits to the nation at a reasonable cost. But those remedies will now be applied to the Harvard faculty, and the professors are in an uproar. . . .

“The university says the increases are in part a result of the Obama administration’s Affordable Care Act, which many Harvard professors championed.”

A fundamental problem with the Orwellian-named “Affordable Care Act” is that it takes away freedom and choice from consumers – forcing millions to drop the health plans they chose, cutting off access to doctors they trusted. This was part of the design of Obamacare. It was prescribed by experts who believed it would benefit “average Americans.” That we-know-best attitude is part of why Obamacare has remained so unpopular, so unaccepted by the American people.

Now the result is hitting the experts themselves. Perhaps this will be the Harvard faculty’s George McGovern moment.

Vermont is a model for America on health care, the Wall Street Journal sensibly pointed out earlier this week. That’s because Vermont is “where the purest progressive version of ObamaCare has imploded.”

Vermont’s Democrat Governor Peter Shumlin (at right) ran for election in 2010 promising a “single-payer” health system – one in which the government paid for all health care by taxing people, like the “public option” that liberals (including President Obama) wanted in Obamacare. Shumlin hired experts such as Jonathan Gruber to come up with a government-only plan, got the legislature to pass it, and ran for re-election on it.

He knew it mattered nationally: “If Vermont gets single-payer health care right, which I believe we will, other states will follow,” said Shumlin at the time. “If we screw it up, it will set back this effort for a long time. So I know we have a tremendous amount of responsibility, not only to Vermonters.”

Then last week, he canceled it. There will be no single-payer plan – socialized medicine -- in Vermont.

As the Journal explains, “Mr. Shumlin’s budget gremlins concluded the plan was too expensive and would damage the state economy.

“As crises of faith go, this is Mikhail Gorbachev circa 1991 territory. Mr. Shumlin ran in 2010 on an explicit single-payer platform in the most liberal state east of California, and the plan was conceived as a model for other states. He called his retreat ‘the greatest disappointment of my political life so far.’ May there be others.”

Shumlin realized the plan was simply too expensive. The Journal explains:

“Under the Vermont plan, all 625,000 state residents were to be automatically enrolled in the government plan, with the same benefits for all. As with Medicare, employers would be subject to a payroll tax that would reduce wages, and workers would pay a premium based on a sliding income scale. . . .

“If Mr. Shumlin would give to each according to his need, he would take from each far more than his ability to pay. The state accountants estimated that his plan required an 11.5% tax on worker payroll, with no exceptions.

“Individuals, meanwhile, would have paid as much as 9.5% of earnings, which would have applied to everyone making more than four times the poverty level, or $102,220 for a family of four—hardly the 1%. The full $2.59 billion in necessary funding would roughly double current state revenues (about $2.85 billion today).”

This wouldn’t save Vermonters money. For one thing, the plan mandated not gold-plated insurance but platinum-plated – it mandated an “actuarial value” of 94%, meaning that patients would cover only 6% of the cost of their care. This is a certain formula for patients and providers paying no attention of cost and value. It instead would have tried to control costs by imposing punitively low payment rates on providers. The federal government tries this now with its single-payer system for the poor, Medicaid, leading to shortages of doctors who will accept Medicaid patients.

Worse, it shifted the costs in ways taxpayers would see as unjust. Even liberal media observers admit this. “The proposed taxes would ask higher earners to spend more on health care than they do now — in some cases, far more,” noted the website Vox, which also pointed out that an 11.5% payroll tax hits high-wage payrolls much harder than low-wage ones. And remember where the burden of payroll taxes falls: On workers’ wages. Don’t believe me? Ask Jonathan Gruber.

It was all too much for Vermont to afford. The Journal lauds Shumlin for waking up:

His ideological comrades are rarely dissuaded by the prospect of economic damage, as ObamaCare proves. But Mr. Shumlin has succeeded in making Vermont a national model: By admitting that single payer will make health care both more expensive and less efficient, he has shown other states what not to do.”

Perhaps he had little choice: If Vermont really did add 21% more in tax to incomes, the people it hoped would pay for everyone’s health care could have fled to another less hostile state. If single-payer is imposed nationally, where can the targeted taxpayers run? Simple: They can work and earn that much less, to the detriment of the people they would have employed or served.

Let this be a warning, then, as the nation thinks about what will replace the mess of Obamacare. Putting more power and money into the hands of government isn’t just morally wrong, it’s unaffordable.

Federal Communications Commission Chairman Tom Wheeler won an award last week that he probably won’t take pride in. Citizens against Government Waste named Wheeler the December Porker of the Month.

Wheeler (at right) received this “honor” after increasing the size of the Universal Service Fund’s E-Rate program by $1.5 billion — resulting in a 17.2 percent increase in the “universal service” fees charged to Americans on their telephone and wireless bills each month.

The E-Rate program, which provides schools and libraries with discounts on telecommunications and Internet access, is one of four programs funded through the Universal Service Fund, or USF. The FCC began eyeing the program after President Obama launched his ConnectED program to provide 99 percent of students in America high speed broadband and high speed wireless services within five years.

At the beginning of the year, I became concerned that rather than actually reform the program to address this laudable goals, the FCC would just throw money. In February, FCC Commissioner Ajit Pai and I wrote an essay in the Milwaukee Journal Sentinel urging the FCC to reform its programs first. We wrote:

“Based on how much we spend, every child in America should be getting a world-class education, which would include connecting our classrooms to digital opportunities. To get there, the federal government doesn't need to spend more money — the Federal Communications Commission already runs a program called E-Rate that distributes over $2 billion to schools and libraries to purchase communications services each year. What we do need is real reform in Washington and an end to the waste, fraud and abuse inherent in the current program.”

One thing we pointed out in the newspaper is that while the E-Rate program is supposed to be about connecting kids to next-generation technologies, it still prioritizes basic telephone service — to the tune of half a billion dollars per year. “Indeed, a school can get funding for paging service (remember pagers?) and international long distance more easily than it can get money to wire up a classroom. That makes no sense.”

Our basic premise was this: Instead of throwing more money at the problem, we should turn the current E-Rate program into a fiscally responsible one that puts kids and common sense first.

Unfortunately, the FCC did not take this approach. I am very concerned that unelected bureaucrats have the power to raise de facto taxes on Americans. What’s worse, behind closed doors this increase was promised by the FCC for months but only instituted after the elections. The FCC is truly deserving of CAGW’s award.

It’s always good to see anyone start to acknowledge the outlines of a problem – that’s the first step toward solving it. So I was glad that the Milwaukee Journal Sentinel’s “PolitiFact” desk said I was right in pointing out how much of federal spending has slipped out of the direct control of Congress.

The newspaper was fact-checking something I said to commentator Vicki McKenna on WIBA-AM in Madison recently (the part in question starts at about 29:00). Vicki was outraged that about two-thirds of federal spending is on autopilot – “permanently” appropriated, to use the exact word that is used when talking about federal spending.

She was right to be outraged: All that Congress debates annually is about a third of federal spending, the part called “discretionary” – programs for which Congress must spend – or “appropriate” – specific sums each year. These are thousands of federal programs, from the defense budget to NASA to the maintenance bill at federal courthouses. It totaled about $1,170,000,000,000 – that’s 1.2 trillion – in fiscal year 2014, which ended Sept. 30.

Congress doesn’t appropriate money annually for the other two thirds of the budget – both the interest it owes, about $230 billion last year, and so-called “mandatory” spending, about $2,110,000,000,000, or $2.1 trillion. Mandatory spending is mostly payments the government has promised to any individuals who qualify. Examples are Social Security, Medicare, Medicaid, food stamps, veterans benefits, aid for the poor – you can see the breakdown from the Congressional Budget Office here, on page 12. These are among the largest programs in the federal budget. Past Congresses set them up, one by one, and those laws generally give those programs access to however much money it takes. As the nonpartisan Congressional Research Service puts it (emphasis added):

Mandatory spending is controlled by laws other than appropriations acts. Such laws generally take the form of authorizing legislation. Authorizing legislation establishes or continues the operation of a federal program or agency, either indefinitely or for a specified period. Mandatory spending typically is provided in permanent or multi-year appropriations contained in the authorizing law, and therefore, the funding becomes available automatically each year, without further legislative action by Congress. In most cases, the authorizing law requires payment, based on a benefit formula, to an individual or entity (e.g., a state) if eligibility criteria are met.”

PolitiFact nitpicked about whether mandatory programs are really permanent – Congress can change the law. That’s true, as far as it goes. Starting in January, when the Republican Senate majority that voters chose in November at last is sworn in, it will be possible. But as you remember from civics class, bills don’t become law until the president signs them. So until President Obama starts taking seriously the unsustainable size and scope of the federal government, or until voters replace him with a president who will, the programs that make up two-thirds of federal spending really are permanently in place.

This is how we got to the point that our government is $18,000,000,000,000 (that's $18 trillion!!!) in debt. If Congress doesn’t vote on two-thirds of federal spending, it won’t prioritize it. The share of the budget that Congress doesn’t vote on annually has been growing and is due to keep growing:

This means that the representatives the people send to Washington will have ever less control over the money the government takes from the productive economy. Americans themselves will have diminishing control over their government, which will increasingly be an automated mechanism for taking money from some Americans and giving it to others – or rewarding politically powerful groups of recipients at the expense of our children and grandchildren, who will be stuck with still more debt.

This is no way to run a country or control spending. When Republicans are in majority at last in both houses of Congress, we must do what Democrats have refused to do – set a budget, then prioritize spending through a series of appropriations bills. Then we must begin reforming how Congress spends money. We need the president, and the people who will choose the next president, to understand the problem and work with us.

That starts with understanding that it is absolutely, entirely true that two-thirds of the federal budget is now outside of Congress’ annual control.

Our liberty in the United States is precious, especially our liberty to speak and write what we believe is true – and to hear others tell us truth as they understand it. Our founders believed that all men are created with the right to this freedom. The grim fact is that not everyone in the world has it – far from it.

Venezuela is a country particularly deprived of liberty, including the freedom of speech we take for granted. The socialist thugs ruling the country permit a nominally private press to exist, but as the Wall Street Journal reported this fall, the regime has managed to shut off criticism that might have come from journalists:

“Investors with business ties to President Nicolás Maduro's leftist government snapped up three major independent news outlets and scaled back critical coverage, press-freedom advocates said.

“Using legislation, steep fines, pressure on advertisers and control of printing paper, the government during the past decade has corralled the mainstream press, said Carlos Lauria, who oversees the Americas for the Committee to Protect Journalists in New York. He and other free-speech advocates said the intimidation has deepened since Mr. Maduro was elected in April 2013 after the death of his predecessor, Hugo Chávez, with reporters detained, beaten and censored.

“Reporters Without Borders said it has collected some 500 complaints of censorship in Venezuela since 2013.”

It’s up to Venezuelans to defeat this oppression, but our country has long helped people in oppressed countries get information. We sponsor Voice of America, as one of many examples, to bring objective news from the free world into places without freedom.

That’s why I am proud to have added a provision to the Venezuela Defense of Human Rights and Civil Society Act of 2014, which passed the Senate unanimously on Monday and the House on Wednesday. The bill itself, the work of Sen. Robert Menendez, imposes targeted sanctions on those in the Venezuelan regime who oppress opposition protesters.

My amendment requires the Broadcasting Board of Governors – the U.S. agency overseeing Voice of America – to report to Congress on the obstacles faced by Venezuelans trying to obtain accurate news, to assess what our government is doing to help Venezuelans to overcome those obstacles, and to come up with a strategy for expanding our efforts.

As the Journal reported, Venezuelans are turning to blogs and other online sources to try to get honest news that the government is blocking. Our government already spends money to offer that news. We need to coordinate efforts, to better help Venezuelans get what their rulers deny them. I am pleased my colleagues in Congress agree.

It’s hard to convey how differently Washington insiders see things from the way most of us in Wisconsin do. But the videorecorded honesty of Obamacare architect Jonathan Gruber is helping make it clear.

Gruber was a health care economist famous for his ability to forecast costs. That’s why the Obama administration paid him about $400,000 to consult in the design of the “Affordable Care Act,” the 2,700-page bill with the Orwellian name that set off the chaos in health care we have all been suffering. Then Gruber started explaining to insider conferences just how harsh the law’s trade-offs are. These are the talks that are now being discovered. They’re devastating to the supporters of Obamacare, and a committee in the House is going to ask Gruber for explanations today.

So Politico, a newspaper and website written for and about Washington insiders, wrote a long article on Monday asking how Gruber could have been so devastatingly careless. “He’s a smart guy, everyone says, and he has been a hugely successful economist,” Politico writes. “So they’re all coming back to the same question: Why the hell would he say that?” The article’s conclusion is that Gruber is just too intelligent to be untruthful.

This is a problem for Democrats because Obamacare is again before the Supreme Court. A case called King vs. Burwell will examine whether Congress really meant it when the Affordable Care Act says that taxpayer subsidies for health insurance can only go to people who buy policies on state-run “exchanges,” the artificial marketplaces in Obamacare. If the law is read as written, it could ruin the administration’s system of making some people subsidize others.

So Democrats say that the law’s plain language is wrong. The Obama administration claims the subsidies really can also go to about 5 million recipients in the 36 states without their own exchanges – one of them Wisconsin.

Gruber has said otherwise. A video that came to widespread attention last week shows Gruber telling an audience in 2012:

“If you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits. But your citizens still pay the taxes that support this bill. So you’re essentially saying to your citizens, ‘you’re going to pay all the taxes to help all the other states in the country.’”

This is on top other videos on which Gruber tells insider audiences that Obamacare was sold deceptively, with the cost hidden from taxpayers via a pitch that relied on “the stupidity of the American voter,” and that Americans couldn’t be told the truth that in Obamacare, young healthy people would pay too much to subsidize health care for others. Over and over, he told insiders that Obamacare was sold by deception to get Americans to accept something they were too dumb to like.

This was all while Gruber was, as Politico puts it, “Obamacare’s ‘explainer-in-chief.’”

Politico says that Democrats are “furious” at Gruber. Of course they are. He let the cat out of the bag. But Politico’s article tries to figure out why Gruber would have been so impolitically honest – as if his honesty was the problem.

It isn’t. If Jonathan Gruber had not honestly expressed the cynical truth of how Obamacare works and was passed, we would only suspect the contempt with which the administration and Democrats view the Americans who must pay for this mess. Instead, Gruber made it clear for us. His honesty was helpful.

The question Politico, the insider newspaper, never tries answering is why Democrats would design a health care “reform” so terrible that it required lies to pass. Why invent a system that needed deception and trickery and the “stupidity” of voters to work? How must Washington insiders see ordinary Americans, and how must their insider media see them, to think that an honest bill explained plainly could never work?

Why don’t Democrats trust Americans?

The newly exposed videos of Obamacare architect Jonathan Gruber revealing that the “Affordable” Care Act was sold to America with lies is a scandal, but not because it’s a shock.

Instead, they’re a scandal because they confirms something many Americans have been suspecting for a long time – that a lot of Obamacare backers knew the promises were just smoke.

Take the idea that no one would be forced to change plans – “If you like your health care plan, you can keep it,” as President Obama put it. We now know this was a lie. But at this point, what difference does it make?

It makes this difference: It’s not just that President Obama knew that millions of Americans would be forced off health plans they chose. It’s that his backers now casually admit that Americans will have to get used to shopping for new insurance – and new doctors – every year if they want their care to be affordable.

The New York Times reported this in a matter-of-fact way, saying that of course people should shop for new plans annually if they want to avoid “big price increases.”

So while it’s true that in many places, the lowest-price plan on the government-run “exchanges” is only 3% or 4% more costly than the different plan that was lowest priced last year, “people who just stay in the plan that was cheapest — and most popular — in 2014 are looking at much bigger increases. The average rate increase for those plans across the country is 9.7 percent,” the Times reports. This is in line with what another study, by a high-profile health consultancy, said on Thursday.

The figure is higher in much of Wisconsin, the Times reports. In Milwaukee, renewing what was the cheapest “silver” plan in 2014 will mean a 15.3% rate increase in 2015. In Green Bay, staying with 2014’s insurance plan will mean a 14.4% price increase.

The Times points out that this isn’t an accident. It’s the way Obamacare was designed, as a substitute for introducing real free-market reforms to restrain underlying health care costs. Instead, consumers will pay in many ways:

“Switching plans has its costs — in many cases, it means changing doctors and drug lists. It also may mean mastering new deductibles, co-payments and other benefit structures. But it’s clear that if price is the most important thing, most Americans who bought the most popular plan in 2014 would be better off switching to something new for 2015.”

And, by design, just keeping your plan won’t be easy:

“Even consumers who are sure that renewing their current plan is worth paying a higher premium should still consider returning to the marketplace website to update their information. The subsidies that middle-income shoppers receive to help them pay their premiums are based on their income and the price of a special plan in the marketplace, called the ‘benchmark.’

“People who don’t re-enter their information will receive the same subsidy as last year, regardless of what happens to their income and the benchmark. That means that it’s easy to end up underpaying and getting hit with a big bill at tax time.”

Do you remember being told any of this when Obamacare was being sold? The people who designed the system understood what was coming, at least a little. As the talkative Jonathan Gruber put it on video, they depended on American voters not catching on in time.