Republicans, Democrats flip-flop on health care
I just came across a very enlightening article on the ongoing debate over US health care policy by Merrill Matthews at the Institute for Policy Innovation, who was writing in Forbes.
Matthews makes the point that, during the last round of intensive health care reform debate that occurred in the early 1990s, most Democrats vehemently opposed the individual mandate for coverage that is the cornerstone of Obamacare (and the reason federal District Court Judge Roger Vinson declared the law unconstitutional). What Democrats wanted at the time was guaranteed issue, a provision that would outlaw the freedom of insurers to deny coverage. Several states passed legislation during that period abolishing this freedom.
However, guaranteed issue meant that premiums would rise and push healthy individuals out of the insurance market. This resulted in premiums rising even faster as healthy individuals realized that they could wait to purchase health insurance until they became sick. Before long, only very sick people were in the insurance market and premiums were sky-high.
This policy failure is how Democrats came to support the individual mandate provision.
Meanwhile, Republicans, many of whom supported the individual mandate during the last round of debate, have abandoned their support of the policy in the wake of public outcry over Obamacare. Further, in an ironic twist, many Republicans are also now supporting the concept of guaranteed issue even as they revile against Obamacare.
In times like these it's hard to tell who's playing for which team. It appears everyone has swapped uniforms.
Read moreFirefighter union chides firefighters for sick leave abuse?
If consistent NPRI research into county payroll records had not yielded public investigation into and subsequent outcry over sick leave abuse at the Clark County Fire Department, it's highly doubtful that IAFF Local 1908 would have issued this reprimand to its own members today. Today's notable shift in union propaganda should be viewed as a great victory on behalf of taxpayers.
Federal judge: Obamacare unconstitutional
A federal judge in Florida has declared the Patient Protection and Affordable Care Act unconstitutional. From Reuters:
U.S. District Judge Roger Vinson, appointed to the bench by President Ronald Reagan in 1983, ruled that the reform law's so-called "individual mandate" went too far in requiring that Americans start buying health insurance in 2014 or pay a penalty.
"Because the individual mandate is unconstitutional and not severable, the entire act must be declared void. This has been a difficult decision to reach, and I am aware that it will have indeterminable implications," Vinson wrote.
Read more here.
'Twas the Week Before Session
With the start of the 2011 Nevada Legislative Session just a week away - and with NPRI having just released its own blueprint for addressing the state's fiscal challenges - I thought I'd add something a bit on the lighter side to the raging debate. Enjoy:
'Twas the week before Session and all through the state
NPRI was plotting to make liberals irate
For Geoff at his keyboard and Steve with his pen
Had forged a new plan to send off to Carson
The data had all been compiled with care
With hopes that the hearing it would get would be fair
For though it could save the state billions in cash
The fear was that lawmakers would do something rash
There'd been talk of tax hikes, taking more from your check
For business owners and families, quite a pain in the neck
Couldn't the Left see the plain budget truth?
Had they not read Suprynowicz, Mitchell or Muth?
The size of the deficit had been oversold
Leaving small-government advocates out in the cold
Liberals planned fiscal havoc, the private sector to loot
And to leave education in shambles to boot
Yes those Leftists were scheming and making their case
Meandering, slandering and pandering to their base
From Reno to Vegas, we could hear their loud call
"If we don't raise your taxes, the sky will soon fall!"
"More spending we need," that's what Horsford did say
And Oceguera, too, at least twelve times a day
"It's all for the children, have you Righties no heart?"
It was clear they thought voters were not very smart
The case had to be made that spending should be cut
Lest Nevada's economy remain in its rut
Was it too much to ask, for that's how it seemed
That government be made to live within its means?
Voters searched frantically for someone to trust
To stave off this cycle of boom and then bust
For the Left was now plotting to trump Sandoval
And spend away, spend away, spend away all
For Nevadans it seemed it was time to despair
Unemployment would rise as the markets turned bear
To whom could they turn to expose the Left's lie?
And it was then that along came NPRI
Just as all were distressing, north, south, east and west
Those free-market champions proved up to the test
Their plan reined in spending, not a single new tax
Based not on crazed rhetoric, just plain, simple facts
They'd delivered a blueprint that could save our fair state
But the Session was looming - it would soon be too late
That free-market think tank still had much work to do
For hostile lawmakers numbered more than a few
As the Left's talking points grew still more absurd
It was now up to Victor to go spread the word
On Ralston, on Harris, on Manders, on Stock
In papers, on TV, on radio talk
So the stage has been set for a big budget battle
Will Nevada find itself up a creek with no paddle?
Or will our economy get back on its feet?
And will we rise to the challenges that we must meet?
Only time will tell how it all will play out
But 'twill be entertaining, of that there's no doubt
So a few final words as we prep for the fight
Happy Session to all! Now be sure to vote Right!
UNLV president shamelessly misleads the public on budget cuts
If there were one message I could impart to those interested in Nevada's budget debate, it would be this: Don't be manipulated.
For the next four months, advocates for higher spending will do anything to scare you into believing that the modest budget reductions in Gov. Brian Sandoval's budget will harm something you hold dear.
Does it matter if they have to claim that people are dropping dead in the streets, or deceive you by using misleading facts? Apparently not. These individuals will say anything - anything - to scare you. And they will certainly try to deceive you.
So take all the scare stories you're going to hear with an enormous grain of salt and search out the truth.
Speaking of scare stories, consider how UNLV President Neal Smatresk shamelessly attempted to deceive the public last night on "Face to Face" regarding the scope of the governor's proposed budget reductions to higher education.
The video is after jump, and his statement starts at the 6:43 mark.
Neal Smatresk: Our current budget's $172 million. It would go down to $125 million. That's a huge reduction by any measure. To put that in perspective, in the last four years, we've had a $49.6 million budget reduction. Over the next two years, we take another $47.5 million budget reduction for a cumulative $97.1 million and 52, 52 percent of our budget gone in a six-year period.
...
Neal Smatresk: I estimate we lose a third to up to half of our whole programs if that cut actually goes through. [Emphasis added]
Ignoring the erroneous 52 percent figure, Smatresk is telling you that UNLV's current budget is $172 million, which is completely false.
UNLV's current operating budget (Fiscal Year 10) is $625,578,929! This means that the $47.5 million budget reduction, which Smatresk claims is "unimaginable," is less than 8 percent of UNLV's current budget.
(UNLV's total operating budget includes General Fund subsidies, tuition, self-supporting funds, and grants and contracts. Also, I don't know if the cut Smatresk cites is accurate.)
It also means that when Smatresk says, "Our current budget's $172 million," he's failing to include about $450 million in revenue. Let me repeat that: He's failing to include an additional $450 million that UNLV will spend this fiscal year.
And you don't just forget $450 million in a $625 million budget. You choose not to mention it in an effort to scare the general public - by setting aside the truth because it doesn't serve your purposes.
For some perspective, consider that UNLV's total operating budget in 2003 was $370,197,405.
Only $200 million more to spend than it had eight years ago? No wonder Smatresk says these cuts would "incite a reasonable amount of panic." (The $200 million figure is not adjusted for inflation or student growth.)
For more: Here is a spreadsheet of total higher education spending in Nevada from Fiscal Year 2000 to Fiscal Year 2010, as compiled by Regent Ron Knecht from NSHE data.
Video of Smatresk's remarks is after the jump.
Smatresk remarks from above are at the 6:43 mark.
Sandoval's education plan based on proven reforms
One of the most exciting parts of Gov. Brian Sandoval's State of the State speech was the vision he laid out for education in Nevada. Gov. Sandoval's plan includes the following: end teacher tenure, give parents more choices through vouchers or open enrollment, end social promotion, grade the schools and institute a limited pay-for-performance system.
The good news for Nevada's parents and children is that similar reforms have worked wonders in Florida. Under the leadership of then-Gov. Jeb Bush, Florida instituted many of these reforms in 1999. And the results speak for themselves.
So will these reforms work in Nevada? Gary Peck, Executive Director of the NSEA, and I debated that question yesterday on Face to Face. Video after the jump.
Notice how Gary keeps changing the subject when Florida's education reforms come up. The above reforms have increased student achievement in Florida and would increase student achievement in Nevada. Why doesn't he want to talk about them?
Most of the facts I reference are in these two documents: Fact sheet on Nevada K-12 education: Funding and Fact sheet on Nevada K-12 education: Reforms.
Be sure to watch the second segment as well.
Borrowing is not a budget solution
While Gov. Sandoval's budget proposal has many positive elements - lower General Fund spending, significant education reforms, performance-based budgeting and no tax increases - there are a few worrisome items.
One of the biggest is this revenue source in the Executive Budget.
The Executive Budget securitizes a portion of the Insurance Premium Tax for the next five years in order to augment FY 2012 revenues by $190 million.
Basically, the governor is recommending using future Insurance Premium Tax receipts as collateral for a $190 million loan. While this is a better option than the sale-leaseback agreements that Arizona and California have entered into, it suffers from the same fundamental problem - debt is not a budget solution.
Senate Majority Leader Steven Horsford is already jumping all over this short-sighted proposal.
"This is like taking out a second on my house to pay my bills," Senate Majority Leader Steven Horsford said. "I think a lot of families that have done that have seen the consequences of that approach. It's put people in bankruptcy. How is that proposal by the administration any different?"
Of course, Sen. Horsford preferred method of paying Nevada's bills - raising your taxes - isn't ideal, either.
What's the real alternative? Reduce spending, ideally down to pre-2005 levels, through performance-based budgeting.
Why pre-2005? Because in 2005, Nevada raised inflation-adjusted, per capita spending by 30 percent (pgs. 5-6). That level of spending wasn't sustainable then and isn't sustainable now, despite Gov. Sandoval's best efforts.
Comparing cuts in the public and the private sectors
Gov. Sandoval's speech last night (if you missed it, Write on Nevada's live blog is here) and his proposed budget (2,942-page PDF here) are going to drive much of the conversation both in Nevada and on this blog over the next few months. This is especially true because Democrats likely won't release their plan to raise taxes until sometime in May.
Before we dive into the details, let's compare spending reductions in the public sector to those in the private sector. Gov. Sandoval's budget does contain some cutbacks - a 5 percent reduction in state worker pay, slightly less money for education, unfunded responsibilities for county governments and a smaller government subsidy for higher education, among other things. But these cutbacks only result in an 8 percent reduction in General Fund spending, to $5.8 billion, and several hundred million in spending outside of the General Fund for things normally funded by the General Fund.
Let's compare that to the private sector and the cutbacks some families, individuals and business have had to make.
"He's looking forward with optimism. I'm looking forward with skepticism," said Susan Beyer, who is unemployed and looking for work.
But Beyer also said Nevadans need to learn to cut back, as her family has had to do.
"We've had to cut back 70 percent," she said. Nevadans need to "put your big girl panties on and go ahead." [Emphasis added]
Cuts of 8 percent (plus hundreds of millions in additional spending) compared to 70 percent cutbacks. That's the perspective Nevada's lawmakers need to remember as they consider Nevada's budget in this next session.
Live blog of Gov. Sandoval's State of the State
If you're looking for Gov. Sandoval's speech online, you can listen live at kxnt.com or watch a live stream via the North Lake Tahoe Bonanza.
Overall thought: A good speech that provided a clear roadmap for how to balance Nevada's budget without raising taxes.
More from NPRI's Geoffrey Lawrence:
"Gov. Sandoval should be applauded for submitting a performance-based budget that reduces General Fund spending by 8 percent, and for seeking to reduce or eliminate many duplicative government agencies and boards, grant more educational control to school districts and universities, and implement education reforms that have worked in other states. The governor made a clear and compelling case that Nevada's government needs to be driven by the pursuit of results and that an emphasis on performance can produce equal or better results with fewer resources.The live blog entries are after the jump.
"The governor's Executive Budget successfully incorporates many of the reforms long advocated by NPRI. While not perfect, the proposed Executive Budget demonstrates that the state budget can be balanced with existing revenues, and without the need for a tax increase.
7:10 Oceguera's dancing around calling for tax increases, dancing, dancing, dancing. And I don't think he ever comes out and says he wants to raise taxes. Will hold townhalls to try and generate support for job-killing tax hikes instead.
7:07 Calls for eliminating bad teachers, but you get what you pay for in terms of per-pupil spending.
7:05 Tries to co-opt Sandoval's bucket analogy, but I don't think it's working.
7:03 Need greater reductions in government spending, but it will ... be ... painful. Calls for the elimination of outdates agencies. Will offer specifics (but not right now, in fairness this is a short time)
7:01 Says Nevada's difficulties are greater than Sandoval believes.
7:00 Now Oceguera's response available at 8 News Now.
6:57 Ends speech on a positive note. You can download the speech here.
6:54 Calls for a defined contribution PERS plan for new government employees, but no details.
6:53 Calls for collective bargaining reforms.
6:46 Introduces school reformer Michelle Rhee. Sweet!
6:43 Wants to grant autonomy of tuition to the Regents.
6:41 Not much on vouchers, bummer. Just a quick mention.
6:40 Some great reforms here in education. Eliminate teacher tenure (tepid applause), eliminate programs rewarding advanced degree attainment for educators (because it doesn't improve student achievement) and end social promotion. Ending social promotion would be huge.
6:38 Great takedown on class-size reduction. Why aren't more students graduating? Proposes using class-size reduction money as block grants to districts. Praises CCSD Superintendent Dwight Jones.
6:37 Good stuff on education. System is broken not the teachers. More money isn't the answer.
6:34 Sandoval promises more money for Nevada small businesses. Why does he want government picking the winners and losers here? As Sandoval's mentioned previously, Nevada's been trying these types of economic development models for 100 years. Why hasn't it worked yet?
Maybe it's necessary politically to make it seem like you're doing something to "create jobs," but these policies don't work in the long term.
6:33 A good personal appeal to business leaders outside of Nevada.
6:32 Double groan. "I support all efforts to make Nevada the renewable energy capital of the country."
6:28 Highlights a company attracting businesses to Nevada without government subsidies. Now that sounds like a winner.
6:25 "Our future lies in ... renewable energy ..." Has renewable energy turned a profit -- anywhere -- without government subsidies? How is this a plan for long-term economic growth?
6:24 Groan. Wants a 50 percent increase in goverment spending in economic development aka subsidies.
6:21 Great letter from a small business employee -- great reminder of the burden of government taxes, fees and regulations.
6:20 Will reduce payments to Medicaid providers.
6:20 Looks to provide solutions, not being liberal or conservative.
6:18 Believes Obamacare is unconstitutional, but must prepare for it. Could cost Nevada $574 million by 2019.
6:17 $5.8 billion in total General Fund spending, I don't think that includes the $425 million from construction monies.
6:16 "Monetizing the state insurance premium tax proceeds." Not sure what this means, but sounds like he's selling future tax revenues for a lump sum. Not ideal, if that's the case.
6:16 Taking the room tax revenue for education funding not teacher salaries.
6:14 "We made better us of existing dollars..." Not taking from capital construction funds. Changing the reserve requirement to allow greater spending.
6:13 $118 million restored to Health and Human Services.
6:11 No mass layoffs, 5 percent pay cut replaces furloughs, 9 percent reduction in total local/state school support.
6:10 Sandoval says his budget includes an 8 percent reduction in total spending, which would put total General Fund spending at $5.8 billion. GF revenues are currently projected to be $5.3 billion.
6:08 Sandoval clearly refutes the $3 billion budget myth. Good work. Starts budget at $5.3 billion (revenue projections)
6:06 "Some believe government is the only solution to our current plight. I disagree. Unemployment, foreclosures, bankruptcy - the cure is not more government spending, but helping businesses create jobs. The key is to get Nevada working again."
A great line, but the question is will Sandoval suggest helping businesses create jobs by keeping government out of the way or by having the government pick the winners and losers in the economy.
6:01 Sandoval enters to a nice round of applause. Generic thanks all around.
5:54 And now we wait until 6pm. You might be interested in this, via @twindra on Twitter:
Join Senator Horsford at 7:20 PM for a conference call! He will follow F2F with a call to constituents! (712) 432-0190 (712) 432-0190 pascode: 7881805:48 An important reminder, please turn off your cell phones.
5:38 NPRI's preview of the speech and what to look for in it.
*** As this is a live blog, please forgive any spelling errors. I may be making minor corrections throughout the speech.
What's missing from Speaker Oceguera's talking point?
After Gov. Sandoval's State of the State speech tonight, Assembly Speaker John Oceguera is going to give the Democratic response.
And while he probably won't outline a particular tax increase he supports, he'll probably try to build the case for tax increases using a talking point he's grown fond of.
The state could make the largest cuts in history and the largest tax increase in Nevada history and still not close the gap, Oceguera said.Let's review. In the last biennium, Nevada spent $6.4 billion from the General Fund. In this biennium, Nevada will have about $5.33 billion to spend. State agencies want to spend about $8.3 billion (although Oceguera is using an $8.1 billion figure).
Do you see what Speaker Oceguera's failing to mention in the quip above?
He's assuming the largest spending increase in Nevada's history - a 27 percent increase in General Fund spending, from $6.4 billion to $8.1 billion.
The largest tax hike and largest spending cut can't solve the gap created by the largest (proposed) spending increase in Nevada's history. Instead of being a shocking statistic, that makes sense. Wanting a 27 percent increase in state spending during an economic recession is going to give you a big hole to fill.
Let's see if Oceguera tries to use this misleading line tonight, and if anyone mentions what he's leaving out (besides NPRI, of course, via our live blogging).
