This week our blog will be focusing on the unreported part of the new care law: the law of unintended consequences.

One of the major health care expenses in the federal budget is Medicaid, which is the federal assistance program from the needy. Unfortunately, while Washington was busy passing a health care law that will raise premiums for everyone else, little attention was paid to a cut in the Medicaid reiumbursement rate.

http://www.nbcdfw.com/news/health/Doctors-Threaten-to-Pull-Out-of-Texas-Medicaid-98202569.html

This is the fee the government pays to doctors who treat the poor. It’s scheduled to take place in September. And doctors in my state aren’t very happy about it:

“A survey by the Texas Medical Association, the state’s largest physicians interest group, showed that 45 percent of its members who responded said they would limit how many Medicaid patients they would treat if the Medicaid fees were cut by 1 or 2 percent, while another 24 percent said they would stop accepting any Medicaid patients.”

It may well be a good idea to reduce the Medicaid fees. But this is a discussion that should have had in public, deliberative process. And that’s not what what we’ve had in Washington lately.

Young people voted in record numbers for President Obama in 2008. In 2014, they will pay for it:

http://www.google.com/hostednews/ap/article/ALeqM5hLAMW_KTqY_JVMQF-gNn3O0_uUcQD9EOIBQO0

That’s because that’s the year all Americans will be required to purchase health insurance. According to a study by the Associated Press, young people purchasing their own health insurance on the open market will likely face an increase in their premiums of “17 percent on average, or roughly $42 a month….”

Why is this? As the article notes:

“The law relies on…young adults to shoulder more of the financial load in new health insurance risk pools. So under the new system, [young Americans] could expect to pay $300 to $500 a year more.”

In other words, to help pay for older Americans’ health care, Obamacare will make young people pay more than they are paying now. Much more.

Again I ask: did anyone think through this before we made it a law?

Uh oh. Can you say “unintended consequences”?

http://www.google.com/hostednews/ap/article/ALeqM5gmzNv5LYXOA6UM_XmUHdOe9augtQD9ELVL3G1

So the new health care law is supposed to reduce costs, right? It won’t. Basic economics teaches that companies pass on their extra costs to others. So all the new regulations and mandates are going to get passed onto you and me in higher premiums.

But as the article above notes, even the health care coverage you get at work is going to change:

“In the first two days after the law was signed, three major companies — Deere & Co., Caterpillar Inc. and Valero Energy — said they expect to take a total hit of $265 million to account for smaller tax deductions in the future. With more than 3,500 companies now getting the tax break as an incentive to keep providing coverage, others are almost certain to announce similar cost increases in the weeks ahead as they sort out the impact of the change.”

By reducing the health care tax deductions companies can file, the federal government has inadvertently reduced the health care coverage these companies will offer.

Did anyone not think this through before passing this new law?

This week we continue our series on the new health care law and some of the items that you might not know about.

Today, we focus on a constitutional aspect of the law. Remember when we talked last week about the bill requiring individuals to purchase health insurance? Did you know that this marks the first time in American history that the federal government has required an individual to purchase a product?

And there is a reason why it’s the first time: because it’s not constitutional. The Commerce Clause of the Constitution gives the federal government the right to regulate companies that transact business across state lines. But it says nothing about requiring individuals to purchase anything.

That’s why several states have already filed suit. Obamacare may well be unconstitutional.

16,000.

That’s a number that should scare all Americans. Why? Because that’s the number of new IRS agents that will be hired by the government to enforce the new tax provisions in the Obama health care law. The new law requires every American to purchase health insurance; and any American not purchasing it will be required to pay a fine to the government. To make sure these fines are paid, 16,000 new IRS agents will be on the patrol to collect the money.

This doesn’t make any sense. At a time of economic recession, we should be helping families and small businesses, not taxing them and then punishing them.

Today we begin our series on the behind scenes stories of the recently-passed health care bill. And we do so by taking a look at one of the favorite talking points that Democrats have used: that the bill will reduce the budget deficit.

How is it possible to increase spending and reduce the federal deficit at the same time? It’s not. So how do Democrats claim they do it? Because they invented a trick called “double counting.” Here is how it works:

“Basically, Medicare, like Social Security, has a “trust fund” (actually, more than one), which is supposed to fund it until the trust fund is exhausted in 2019. The “trust fund” does not exist in any meaningful sense, because its “assets” consist of claims on the general fund, i.e. all the rest of the tax money. As Medicare goes into deficit, it trades in those assets to cover its funding gap, which means the general fund has to find the money to pay off the special bonds by either raising taxes, cutting other spending, or borrowing more money. After the trust fund is exhausted, the general fund has to find the money to pay for the Medicare deficit by either . . . raising taxes, cutting other spending, or borrowing more money. The difference to taxpayers is nil. Technically, when you cut Medicare spending, that money shows up as an increase in the Medicare trust fund, rather than some other possible accounting entry. But the effect on the unified budget is the same: the money saved by cutting Medicare is spent on other stuff.”
http://www.theatlantic.com/business/archive/2009/12/cbo-democrats-double-counting-medicare-savings/32538/

In other words, Democrats are claiming that by reducing Medicare, they are saving money that can be spent on health care and not increase the deficit; but any money saved from Medicare comes out of the same general operating budget. Therefore, any increase in spending increases the deficit. Period.

Double counting is double speak.

Last night the House of Representatives passed legislation to change health care in this country. You probably have heard all about it.

But what you probably haven’t heard about is all the gimmicks and short cuts that are included in the bill, like the fact that the bill is “paid for” by double counting.

Check in each day this week and next week as we take you behind the scenes and expose some of the gimmicks that make this bill bad for your health.

Today we continue our series on taxes. More specifically, we continue our conversation about the bad tax policies the Obama administration is pursuing to pay for its health care plan:

http://www.msnbc.msn.com/id/35844649/ns/health-health_care/

We’ve talked about this before on the blog, but it’s worth repeating since it’s such an important part of the president’s health care plan. As the article notes, the President:

“is proposing that high-income Americans pay Medicare taxes on the money they make on their investments. Historically, only earned income has been subject to that tax.”

So not only is the President raising taxes to pay for health care, but he’s creating an entirely new tax in that Americans will now pay payroll taxes on investment, something that has never happened before.

Mr. President, let’s stop raising taxes, let’s start over and let’s find a health care plan that works.

One of the reasons that gas prices are going up is that oil is a depleting resource. For decades, we’ve been drilling for oil here in the United States. As a result, we have less of it and more need to rely on foreign oil.

That’s why it’s more important than ever that we look to sources of energy that are here in the US and that are renewable. My favorite example is biomass. Biomass is essentially fueled by burning wood products. And we have plenty of wood products in America. In fact, we will always have plenty of wood products in America.

So why would we import oil from the Middle East when we could generate energy from biomass here in the United States?

Today we continue our series on presidential do-overs. And the health care issue provides a perfect opportunity to do something that the American people want to see from their president: they want him to confront his own party.

As we’ve discussed on this blog before, great presidents always take on their own party. This shows the rest of the country that they are more than presidents, they are leaders. After all, anyone can confront an enemy, But confronting a friend is harder. Yet health care gives the president the chance to do just that.

So instead of outsourcing health care to Nancy Pelosi and Harry Reid, he can work with Democrats and Republicans and create a plan that takes some simple steps that will work: like giving individuals tax credits to purchase their own insurance, or reducing (rather than increasing) the number of regulations on health plans. These two steps would help contain health care costs. So if the president is really serious about “bending the cost curve” he can start by bending the ears of his own party.

Today we continue our series on do-overs. What should President Obama do over from last year’s health care debacle?

This time he should try and include Republican ideas. And the early indications are that he is especially interested in one: medical malpractice. http://www.cnn.com/2010/POLITICS/02/09/obama.health.care/

That’s a good place to start. How can we reduce the cost of health care when doctors and insurance companies are getting sued frivolously? Lawsuits only help lawyers. Meanwhile, the rest of us get stuck with the bill. Last year, Obama didn’t seem interested in medical malpractice. This year, he seems open to it. That’s a good do-over.

Last week we ended our series on what Obama should do next. This week we begin a new series on what Obama should go back and re-do. By all accounts, his first year in office created a lot of controversy. How can he fix that?

We’ll start by focusing on a key issue where we know the president has stated he is going to try and move forward: health care. Okay, fine. But what should health care reform look like? We know what it shouldn’t look like: the bill House and Senate Democrats produced last year. It’s time to start over. So this week, I’ll be giving the president some helpful hints about what should and shouldn’t be a part of health care reform.

Check back in each day for more information!

Today we continue our series on what Obama should do next, particularly with the budget.

Of course, a big part of the budget is taxes. Here is an interesting fact: in 2011, the Bush tax cuts from 2001 will expire. That means that marginal tax rates will increase, capital gains tax rates will increase and dividends tax rates will increase. In other words, a huge tax increase is coming.

But Obama could change that. He could call for extending the Bush tax cuts, or better yet, making the tax cuts permanent. At a time of great economic challenge, we need lower taxes now more than ever.

Today we continue our series on what Obama should do in his budget. One thing he shouldn’t do is raise taxes:

http://ca.news.yahoo.com/s/reuters/100201/us/usreport_us_budget_backdoortaxes

Unfortunately, it looks like this budget might attempt to raise taxes using the “back door.” Here is how: the Bush tax cuts of 2001 are schedule to expire in 2011. If Obama lets them expire, taxes will go up for millions of Americans.

Are you an investor? Your taxes will go up. Are you an income taxpayer? Your taxes will go up. Are you a teacher who uses an education tax credit? Your taxes will go up. Trying to inherit your family’s land? Your taxes will go up.

President Obama can and should stop this right now by calling for the continuation of these tax cuts…otherwise we’ll all be paying more.

This week, we continue our series on what’s next for President Obama. And the timing couldn’t be better.

President Obama will soon unveil his new budget. I’ve got some ideas on what should and shouldn’t be in there. After all, politics is about money. So the budget is the place to look to see how a president wants to lead and where he wants to go.

Check back in each day this week for more on what President Obama should do next.

Today we conclude our series on what Obama should do next.

And this is maybe the most important step: he needs to return to being the Obama of 2008. On the campaign trail, Candidate Obama promised a new kind of politics, where he would focus on solutions, not ideology. Sadly, as  President, he has not always been well-served by his staff or by his friends in Congress who have pushed him to the left.

It’s time to return to a solutions-based politics. Now that would be change we can believe in!

Tonight when President Obama delivers his State of the Union Address, here is something else he should do: challenge Republicans to work with him on cap and trade.

Some sort of carbon legislation is going to happen eventually. So the choice Republicans face is: do we want a cap and trade system or a carbon tax? A carbon tax would most likely come in the form of a dramatic increase in the cost of fuel at the gas pump. Conservatives won’t support that. Instead, a cap and trade system would provide a marketplace where carbon credits are bought and sold.

President Obama should call out Republicans on this issue and encourage them to work with him to create a carbon-trading system that will help our economy and our environment.

Today we begin our series on what Obama should do next. And this is a great time to discuss this since he’s delivering his State of the Union Address this week. What should he say?

He should say that he had the best of intentions in his first year, but that he overreached. He should say that he wants to work with Republicans to find bipartisan ways to solve problems.

Take health care, for example. Everyone agrees that the current health care system is unsustainable. Health care costs go up 10% every year. That can’t continue. But instead of pushing for more mandates on health insurers (which they will pass on to the consumer in higher premiums) why not borrow a Republican idea and offer tax incentives for individuals and families to purchase their own health insurance with pre-tax dollars the way corporations can do?

This would be a great way for Obama to still get what he wants (health care reform) but change direction and show the country that he heard the message in Massachusetts and wants to work with people on both sides of the aisle.

It’s the politics of carbon credits that is complicated, not the economics.

The economics is as simple as trading any commodity. First, greenhouse gas emissions will be capped. Second, markets are used to allocate the emissions among the group of regulated sources. That’s it. The result of this simple trading process is that the free market will help monetize and incentivize carbon so that businesses produce lower carbon emissions.

Pretty simple, right? It is. But even if it’s simple, it’s not easy. It will take political leadership to get the country to pursue a carbon credit plan.

Today we continue our series on carbon credit by discussing how it works economically.

http://www.canada.com/vancouversun/story.html?id=253242ea-dad8-445e-be8b-22f0b1a7d3ab&k=80479

Essentially, carbon credits create a value that can be bought and sold in a marketplace. As the article notes:

“A ‘carbon market’ works something like this: Governments set tough greenhouse-gas emission caps. Companies that exceed the caps are heavily penalized or taxed. But they can escape some of the pain if they buy ‘carbon credits’ from companies that fall below their own greenhouse gas caps. Eventually, the theory holds, the environment will win because companies will use cleaner technology and clean up their act to avoid having to pay fines or purchase the carbon credits, which could cost in the millions of dollars.’”

The law of supply and demand is at work here. Since there is a demand for a clean environment, the carbon credits are emerging as a new supply to meet that demand.

This makes sense economic sense. And that’s why five U.S. states have already created a carbon trading market. Carbon credits are not just the future, they are the now.