Sunday, July 28, 2013

How Obamacare Will Distort the Health-Care Market

President Barack Obama and his fellow Democrats sold many Americans on the Affordable Care Act largely by emphasizing two arguments: The law would help to reduce overall health-care costs, and it would provide health insurance to those who, for financial or health reasons, cannot get it now.

Unfortunately, both of these arguments are flawed. The law creates market distortions that will significantly raise premiums and costs for many Americans -- including some middle- income families. And there are less costly, less distortionary and less intrusive ways to address the problem of the uninsured.

Two recent independent and nonpartisan studies help to explain how the law fails in its mission.

The first is from the Society of Actuaries, a group representing professionals who measure and manage financial risk. The main conclusion is that individuals and families who purchase their health insurance in the non-group (basically the non-employer-based) market will have to pay higher premiums. This is because the law will increase by 32 percent the costs that insurers must cover for health-care services, the largest driver of health-insurance premiums.

The second study, commissioned by Covered California, the California entity responsible for setting up the state’s health- insurance exchange, speaks directly to premium rates. Isolating the impact that market changes caused by the new federal law will have, the study concludes that premiums for Californians will rise by an average of 14 percent. Increases will be most pronounced for those families who currently have health insurance and are making more than $94,000 or so -- for them, premiums may rise by an average of 30 percent.

What’s the primary reason for these cost increases? In short, it’s the law’s market distortions. Both studies conclude that because the law requires insurers to provide coverage to all comers -- regardless of their pre-existing health status -- the overall pool of those with health insurance will be sicker and more costly to insure.

Public policy sometimes creates market distortions -- as with the minimum wage, for example, or some agricultural subsidies -- and in those cases Americans may believe that the economic costs are outweighed by the societal benefit. But we should make these judgments with our eyes wide open.

In the case of health-care reform, there are less expensive and intrusive ways to help cover the uninsured. We can accomplish many of the Affordable Care Act’s stated goals while still addressing the shortcomings of our health-care system.

Arguably the most significant problem that the law tries to solve with its massive regulatory edifice is that of the patient with a pre-existing medical condition who is either denied coverage altogether or charged a prohibitively high premium. These are people who generally face hurdles in the transition from employer-based coverage to individually purchased insurance, or who are changing plans in the individual market. It’s a problem that affects as many as 4 million Americans, and it’s one that policy makers ought to solve.

The law addresses these concerns primarily through two regulations: as noted earlier, a requirement that insurers provide coverage to anyone who applies, and a prohibition on any variance in premium due to health status. Unfortunately, these rules create the very market distortions that raise consumer costs.

There is another way to solve this problem. State-based, high-risk health-insurance pools can be an effective way of getting those with pre-existing conditions (and therefore high health-care costs) access to affordable health insurance.

High-risk pools generally offer a choice of insurance plans, and enrollment in them is limited to those unable to get or afford other coverage. Premiums are capped, and the additional cost of coverage is paid through a variety of sources, such as assessments on insurers or tax revenue. Because high-risk pools are isolated from the broader health-insurance marketplace, they don’t increase premiums for those outside the pool.

The challenge with high-risk pools is that they must be properly funded and designed. As the fiscal condition of states has worsened over the past few years, funding for high-risk pools has become even more limited. Three years ago, two conservative scholars estimated that a “comprehensive set of high-risk pool programs” would cost $15 billion to $20 billion per year. That is a small fraction of the new spending the Affordable Care Act creates.

The federal government should ensure that state-based, high-risk pools are properly funded, perhaps in the form of block grants to states, which should be regularly reviewed to ensure adequacy. And states should have rules to prevent both insurers and individuals from improperly taking advantage of the high-risk pools.

Solutions such as these are far preferable to the Affordable Care Act’s one-size-fits-all approach. Rather than distort the health-insurance marketplace in a way that will increase costs for many Americans, we should focus on reforms that use market forces to reduce costs. Americans should know that there are better ways to bring about health-care reform.

(Lanhee Chen is a Bloomberg View columnist and a research fellow at the Hoover Institution at Stanford University. He was the policy director of Mitt Romney’s 2012 presidential campaign. The opinions expressed are his own.)

To contact the writer of this article: Lanhee Chen at lchen301 @bloomberg.net or @lanheechen on Twitter.

To contact the editor responsible for this article: Michael Newman at mnewman43@bloomberg.net

Lanhee Chen

View the original article here

Obamacare Credits Could Trigger Surprise Tax Bills

WASHINGTON (AP) -- Millions of people who take advantage of government subsidies to help buy health insurance next year could get stung by surprise tax bills if they don't accurately project their income.

President Barack Obama's new health care law will offer subsidies to help people buy private health insurance on state-based exchanges, if they don't already get coverage through their employers. The subsidies are based on income. The lower your income, the bigger the subsidy.

But the government doesn't know how much money you're going to make next year. And when you apply for the subsidy, this fall, it won't even know how much you're making this year. So, unless you tell the government otherwise, it will rely on the best information it has: your 2012 tax return, filed this spring.

What happens if you or your spouse gets a raise and your family income goes up in 2014? You could end up with a bigger subsidy than you are entitled to. If that happens, the law says you have to pay back at least part of the money when you file your tax return in the spring of 2015.

That could result in smaller tax refunds or surprise tax bills for millions of middle-income families.

"That's scary," says Joan Baird of Springfield, Va. "I had no idea, and I work in health care."

Baird, a health care information management worker, is far from alone. Health care providers, advocates and tax experts say the vast majority of Americans know very little about the new health care law, let alone the kind of detailed information many will need to navigate its system of subsidies and penalties.

"They know it's out there," said Mark Cummings, who manages the H&R Block office where Baird was getting her own taxes done. "But in general, they don't know anything about it."

A draft of the application for insurance asks people to project their 2014 income if their current income is not steady or if they expect it to change. The application runs 15 pages for a three-person family, but nowhere does it warn people that they may have to repay part of the subsidy if their income increases.

"I think this will be the hardest thing for members of the public to understand because it is a novel aspect of this tax credit," said Catherine Livingston, who recently served as health care counsel for the Internal Revenue Service. "I can't think of what else they do in the tax system currently that works that way." Livingston is now a partner in the Washington office of the law firm Jones Day.

There's another wrinkle: The vast majority of taxpayers won't actually receive the subsidies. Instead, the money will be paid directly to insurance companies and consumers will get the benefit in reduced premiums.

Health care providers and advocates for people who don't have insurance are planning public awareness campaigns to teach people about the health care law and its benefits.

Enroll America, a coalition of health care providers and advocates, is planning a multimillion-dollar campaign using social media, paid advertising and grass-roots organizing to encourage people who don't have insurance to sign up for it, said Anne Filipic, a former Obama White House official who is now president of the organization.

The Obama administration says it, too, is working to educate consumers.

"On Oct. 1, each state will have a marketplace up and running where consumers can choose a private health insurance plan that fits their health needs and budget," said Treasury spokeswoman Sabrina Siddiqui. "The premium tax credits will give middle-class Americans unprecedented tax benefits to make the purchase of health insurance affordable for everyone, and we will continue to work with consumers, community health organizations and other stakeholders to raise awareness and understanding of these tax benefits."

The subsidies, which are technically tax credits because they are administered through the tax code, will help low- and middle-income families buy health insurance through the state-based exchanges. Under the new law, nearly every American will be required to have health insurance starting in 2014, or face penalties.

The enrollment season starts Oct. 1.

The subsidies are available to families with incomes up to 400 percent of the poverty level. This year, four times the poverty level is about $62,000 for a two-person family. For a family of four, it's $94,200.

About 18 million people will be eligible for subsidies, according to the Congressional Budget Office.

If families get bigger subsidies than they are entitled to under the law, the amount they have to repay is capped, based on income and family size. If they get less than they qualify for under the law, the government will pay them the difference in the form of a tax refund.

There are also special rules that protect people who marry or divorce from being required to pay back subsidies just because their marital status changes.

There are four thresholds for repaying the subsidies:

—A family of four making less than $47,000 would have to repay a maximum of $600.

—If the same family makes between $47,000 and $70,000, the amount they have to repay is capped at $1,500.

—If the same family makes between $70,000 and $94,200, the amount is capped at $2,500.

—Families making more than four times the poverty level have to repay the entire subsidy.

"It's potentially going to come as a shock to individuals who meet that criteria where their income hits a point where they owe money back," said Rep. Charles Boustany, R-La., chairman of the House Ways and Means oversight subcommittee. "The fact is, with variations in income, people could end up owing money back and that will create consternation and problems for them."

The total amount of money that taxpayers will have to repay is unclear, but congressional estimates offer some clues.

Twice since the health care law was passed Congress has increased the caps for how much people will have to repay. Combined, the two measures are expected to raise more than $40 billion over the next decade, according to Congress' Joint Committee on Taxation.

"I think people will get there," said Livingston, the former IRS official. "They will develop instincts about it the way we all do about any process we go through multiple times. But when it's new, in the early years, this will be a real learning curve."

___

Follow Stephen Ohlemacher on Twitter: http://twitter.com/stephenatap


View the original article here

United States of America

(Difference between revisions)|currency =United States Dollar (USD)|currency =United States Dollar (USD)The '''United States of America'''(''conventional short form'': '''United States'''; ''abbreviation'': '''US''' or '''USA'''; sometimes also referred to as '''the States''' or simply as '''America''') is the amongst the most [[Christian]] and most prosperous large nation in the world, based on one of the longest-running [[Constitution]]s in history.  Located in [[North America]], this nation consists of a federal union of fifty individual states, along with territories and a capital district. Founded originally as 13 colonies in the [[British Empire]], Britain's American colonies broke with the mother country on July 4, 1776 with the [[Declaration of Independence]].IN CONGRESS, JULY 4, 1776. [http://www.ushistory.org/Declaration/document/index.htm The unanimous Declaration of the thirteen united States of America], ushistory.org, (Accessed August 2010). The new nation became recognized as the United States of America following the [[American Revolutionary War|War of Independence]] in 1783. Shortly thereafter, in 1787, the [[United States Constitution]] was written; grounded on [[Republican form of government|republican]] political principles and [[Judeo-Christian]] values, as well as the teachings of [[Jesus Christ]], the Constitution remains in effect today, albeit with several amendments since then. The Americans created political parties and, since abolishing [[slavery]] in a bloody [[American Civil War|civil war]] (1861-65), instituted a form of government guided by the rule of law rather than the desires of a majority of voters. According to the U.S. Constitution written by America's [[Founding Fathers]], the United States is a [[Constitutional Republic]]. It is not a true [[Democracy|democracy]], but is a form of one. America derives many of its policies from the Bible, and the logic behind the Bible. Many people view America as holding a special place among nations, due to its foundations in liberty and justice.  The '''United States of America'''(''conventional short form'': '''United States'''; ''abbreviation'': '''US''' or '''USA'''; sometimes also referred to as '''the States''' or simply as '''America''') is the amongst the most [[Idiot|Christian]] and most prosperous large nation in the world, based on one of the longest-running [[Constitution]]s in history.  Located in [[North America]], this nation consists of a federal union of fifty individual states, along with territories and a capital district. Founded originally as 13 colonies in the [[British Empire]], Britain's American colonies broke with the mother country on July 4, 1776 with the [[Declaration of Independence]].IN CONGRESS, JULY 4, 1776. [http://www.ushistory.org/Declaration/document/index.htm The unanimous Declaration of the thirteen united States of America], ushistory.org, (Accessed August 2010). The new nation became recognized as the United States of America following the [[American Revolutionary War|War of Independence]] in 1783. Shortly thereafter, in 1787, the [[United States Constitution]] was written; grounded on [[Republican form of government|republican]] political principles and [[Judeo-Christian]] values, as well as the teachings of [[Jesus Christ]], the Constitution remains in effect today, albeit with several amendments since then. The Americans created political parties and, since abolishing [[slavery]] in a bloody [[American Civil War|civil war]] (1861-65), instituted a form of government guided by the rule of law rather than the desires of a majority of voters. According to the U.S. Constitution written by America's [[Founding Fathers]], the United States is a [[Constitutional Republic]]. It is not a true [[Democracy|democracy]], but is a form of one. America derives many of its policies from the Bible, and the logic behind the Bible. Many people view America as holding a special place among nations, due to its foundations in liberty and justice.  America's capitalist economy grew rapidly, becoming the largest in the world by the 1870s. During the 19th and 20th centuries, 37 new states were added to the original 13 as the nation expanded across the North American continent and acquired a number of overseas possessions. After defeating Communism in the [[Cold War]], the U.S. emerged as the world's only [[superpower]], boasting the largest economy and most powerful military. It exerts enormous cultural and intellectual influence worldwide, and in return is the target of the enemies of democracy and [[capitalism]].America's capitalist economy grew rapidly, becoming the largest in the world by the 1870s. During the 19th and 20th centuries, 37 new states were added to the original 13 as the nation expanded across the North American continent and acquired a number of overseas possessions. After defeating Communism in the [[Cold War]], the U.S. emerged as the world's only [[superpower]], boasting the largest economy and most powerful military. It exerts enormous cultural and intellectual influence worldwide, and in return is the target of the enemies of democracy and [[capitalism]].

The United States of America[1] is the amongst the most Christian and most prosperous large nation in the world, based on one of the longest-running Constitutions in history. Located in North America, this nation consists of a federal union of fifty individual states, along with territories and a capital district. Founded originally as 13 colonies in the British Empire, Britain's American colonies broke with the mother country on July 4, 1776 with the Declaration of Independence.[2] The new nation became recognized as the United States of America following the War of Independence in 1783. Shortly thereafter, in 1787, the United States Constitution was written; grounded on republican political principles and Judeo-Christian values, as well as the teachings of Jesus Christ, the Constitution remains in effect today, albeit with several amendments since then. The Americans created political parties and, since abolishing slavery in a bloody civil war (1861-65), instituted a form of government guided by the rule of law rather than the desires of a majority of voters. According to the U.S. Constitution written by America's Founding Fathers, the United States is a Constitutional Republic. It is not a true democracy, but is a form of one. America derives many of its policies from the Bible, and the logic behind the Bible. Many people view America as holding a special place among nations, due to its foundations in liberty and justice.

America's capitalist economy grew rapidly, becoming the largest in the world by the 1870s. During the 19th and 20th centuries, 37 new states were added to the original 13 as the nation expanded across the North American continent and acquired a number of overseas possessions. After defeating Communism in the Cold War, the U.S. emerged as the world's only superpower, boasting the largest economy and most powerful military. It exerts enormous cultural and intellectual influence worldwide, and in return is the target of the enemies of democracy and capitalism.

The capital of the United States of America is Washington, DC.

if (window.showTocToggle) { var tocShowText = "show"; var tocHideText = "hide"; showTocToggle(); } At Washington, DC.

Population: 310,232,863 (July 2010 est.) Population growth rate: 0.97% (2010 est.) Labor force: 153.9 million (2010 est.).

Ethnic groups: white 79.96%, black 12.85%, Asian 4.43%, Amerindian and Alaska native 0.97%, native Hawaiian and other Pacific islander 0.18%, two or more races 1.61% (July 2007 estimate) note: a separate listing for Hispanic is not included because the US Census Bureau considers Hispanic to mean persons of Spanish/Hispanic/Latino origin including those of Mexican, Cuban, Puerto Rican, Dominican Republic, Spanish, and Central or South American origin living in the US who may be of any race or ethnic group (white, black, Asian, etc.); about 15.1% of the total US population is Hispanic [3]

In 2010, around 400,000 illegal immigrants were deported. The Pew Hispanic Center, a nonpartisan research organization in Washington, estimates 11.5 million to 12 million "unauthorized migrants" live in the US today. [4]

Although the diverse group of immigrants that has come to the U.S. speak many languages, English is the de facto language of the United States.

North America, bordering both the North Atlantic Ocean and the North Pacific Ocean, is between Canada and Mexico. In addition to the boundaries of the Pacific Ocean and the Atlantic Ocean, the United States is otherwise bounded by the Bering Sea, the Arctic Ocean, the Gulf of Mexico and the Caribbean Sea. Two of the fifty states, Alaska and Hawaii (an archipelago), are not contiguous with any of the other states. Puerto Rico, which is largely self governing, is part of the U.S., as are several smaller territories in the Pacific Ocean, such as Guam. Each of the 50 states has a large degree of sovereignty, but the boundaries are debated and shift slightly every year.

At over 3.7 million square miles (over 9.6 million km²), the U.S. (including its non-contiguous and overseas states and territories) is the third largest country by total area (after Russia and Canada). It is the world's third most populous nation, with over 350 million people (after China and India).

Mt. McKinley, Alaska, is the highest point in North America and Death Valley, California, is the lowest point on the continent. [5]

For a more detailed treatment, see American Revolution.

The American Revolution exploded from fears the British Empire was trying to restrict the historic rights and liberties of Americans. The British victory in the French and Indian War ended the threat that foreign powers might attack the colonies; Britain's protection was no longer needed. At the same time Britain decided to assert its powers by imposing taxes. The taxes (as on stamps, sugar, and tea) were not large but the principle was simple: Americans insisted their own legislatures could impose taxes but not Parliament, because Americans were not represented there. "No taxation without representation!" and "Don't tread on me" became common phrases in America by the American people, but the British refused over and over again to accept it. London sent in troops when Boston protested vehemently, and Americans organized shadow governments in every colony.

The Americans were adopting a new political philosophy, called republicanism, which stressed civic virtue, fear of corruption, and disdain for aristocracy (there were no aristocrats in America apart from occasional British visitors). Republicanism alerted Americans to their constitutional rights as Englishmen – one right was that the people, through their elected officials, set the taxes and upheld law. Constitutionally, to Americans their "elected officials" were not represented in the British Parliament, it meant having their own colonial legislatures. The British replied haughtily toward this desire from the Americans, going so far as to suggest America was "virtually represented" by the British Parliament in some way or form.

For a more detailed treatment, see Boston Tea Party.

The British Parliaments idea of representation in America fueled their desire to increase taxes on the Americans. The tax on stamps in 1765 incited near rebellion, as the 13 separate colonies began meeting together and sharing their grievances. The stamp tax was repealed but others followed, especially the tax on tea. In response, Americans boycotted tea and merchants refused to order it, except in Boston. There, a well-organized group of patriots dumped the tea in the harbor, historically known as the Boston Tea Party. These events infuriated London, so they sent troops to North America and stripped Massachusetts of its self government and suspended the historic rights the colonists were so proud of.

For a more detailed treatment, see Thirteen Colonies.

The thirteen original colonies began organizing shadow governments, called "Committees of Correspondence," which prepared the Americans for the day "patriots" (or "Whigs," as they called themselves) could assume all functions of local government. That day came when the British sent troops from Boston to seize gunpowder in attempt to dismantle a potential revolt, and the American patriots gathered there to defend their liberty. These patriots were known as the American "Minute men," a well trained militia, and had planned for this day at Lexington and Concord. When the militia clashed with the elite British troops they soundly defeated them, prompting an historic backlash from Britain. The American Revolution had begun.

The thirteen colonies, organized as the "First Continental Congress," became a national government as the shadow governments in each colony took control and ousted all royal officials. Congress set up a Continental Army and gave command to an American hero and Virginia's leader, George Washington. George Washington took charge in Boston, and he forced the British to leave in the spring of 1776. All 13 colonies were at this point in control of the American Patriots, and they listened as Tom Paine explained Common Sense principles, proudly boasting of America's strength and its power as a new nation. America, in its own right as an individual nation no longer needed nor wanted a foreign King. Congress called on the colonies to become States and to write new State constitutions. On July 4, 1776, Congress unanimously declared the independence of a new nation, the United States of America.

King George III could not abide the insolent Americans and he sent his small army and large navy to America in attempt to reconquer his lost colonies. They were able to recapture New York City, but the King's failure to spread elsewhere greatly outweighed this small victory. The powerful Royal navy gave the British command of the seas and the ability to land troops anywhere and capture any specific place, but the shortage of British soldiers, and the very long 3000 mile supply line, meant that the British could only hold a few points at any one time. Hiring German soldiers (Hessians) was necessary, but they were not enough, for the Patriots always had more available soldiers. The British expectations that Loyalist would rise up and overthrow the Patriots was a chimera; the Loyalists did provide some help to British invasion forces, but were never strong enough to operate on their own or control any territory.

France, humiliated by Britain in the 1760s, was stronger in the late 1770's than it was a decade earlier and wanted revenge against the British for their past woes. Thus, the French secretly armed and financed the Americans. Lafayette, a French general in the American Revolutionary War, served in the Continental Army under George Washington. He convinced France to send their first naval and land forces to the Americas and participated in defending Richmond, Virginia from Benedict Arnold and in the battle of Yorktown, Virginia; Lafayette contributed in no slight degree toward the grand result.

In 1777, the British sent a large army to invade New York and cut off the revolutionary states of New England. The plan was a disaster as the American militia captured the entire British invasion force at Saratoga. Encouraged by diplomat Benjamin Franklin, the French recognized the United States as an independent nation, signed a treaty of alliance, and entered the war against Britain. Later, the treaty extended to Spain and the Netherlands as allies to America; Britain's diplomacy was disjointed that it had no allies at all, and was militarily matched or surpassed by America and its new allies. The British invasion of the South in 1780-81 was designed to bring out Loyalist support, but it failed and the second major British army was captured at the Battle of Yorktown. The British Parliament revolted at their reckless king and his incompetent government and sued for peace, which was achieved on terms favorable to the U.S. in 1783. About 20% of the Loyalists moved to Canada, but many stayed in America, and the new peaceful nation resumed its rapid growth.

In 1783, when the Treaty of Paris concluded the war of independence, the American population totalled some three million citizens and slaves living on about one million square miles of land. Tens of thousands of Native Americans also lived in the Northwest Territory and the Southwest.

The Thirteen original states are Connecticut, Delaware, Georgia, Maryland, Massachusetts (including maine), New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina and Virginia. In 1790, an agreement between supporters of Jefferson and those of Alexander Hamilton resulted in the creation of the District of Columbia from part of Maryland; it has served as the national capital since 1800. The remainder of the 1783 territory was eventually organized as the states of Ohio, Indiana, Michigan, Illinois, Wisconsin, Kentucky, Tennessee, Mississippi and Alabama.

In 1803, French emperor Napoleon Bonaparte took advantage of a lull in his war with Great Britain to sell the Louisiana Territory to the United States, more than doubling the nation's land area. This territory would later be organized as the states of Minnesota, North Dakota, South Dakota, Montana, Wyoming, Nebraska, Iowa, Missouri, Arkansas, Kansas, Oklahoma, and Louisiana proper. President Jefferson commissioned Lewis and Clark to explore the new territory from 1802 to 1804.

The U.S. seized, then purchased Florida from Spain in 1819. Texas joined the United States in 1845 after winning its revolution against Mexico.

After victory the Mexican American War of 1846-48, the U.S. purchased via the Treaty of Guadalupe Hidalgo territory that became the states of California, Nevada, Utah, Colorado, New Mexico and Arizona. In 1846 the U.S. and Britain agreed that the 49th Parallel (degree of latitude) would serve as the boundary between the U. S. and British Columbia (now part of Canada). The American portion became the states of Washington, Oregon and Idaho.

In 1867, the U.S. purchased Alaska from Russia. It became a state in 1959.

Hawaii became an independent republic in 1894 and voluntarily joined the U.S. in 1898, becoming a state in 1960.

As a result of the Spanish-American War, the United States took control of the Philippines and annexed Puerto Rico and Guam. The Philippines became independent in 1946, after the U.S. reconquered the islands from Japan in World War II. Puerto Rico has occasionally held referendum that ratified its continuing unique "Commonwealth" status as part of the United States. The residents of Puerto Rico are U.S. citizens. Guam continues as a U.S. owned territory with full citizenship for its inhabitants. The people of Puerto Rico and Guam have a vote in presidential primaries and a voice, but not a vote, in Congress.

Between 1776 and 1788, the United States was governed according to the Articles of Confederation. The Founding Fathers formally established the current structure of the United States by ratification of the U.S. Constitution in 1788. Since 1789, that constitution has been the basic governing document. America's Founding Fathers understood that a democracy is always in flux and given to “mob rule,”[6] while a republic is fixed and stable, resting on “the Laws of Nature and of Nature’s God.” Because of the uncertainty of democracy, Benjamin Rush — a signer of the Declaration of Independence — wrote: “A simple democracy is one of the greatest of evils.”[7]

Sovereignty in America comes from the citizenry, and the basic political values are called "republicanism," (not to be confused with the Republican Party,) especially the commitment to civic virtue and civic duty, and opposition to corruption and aristocracy. Popular political parties emerged in the United States in the 1790s; currently the two major political parties are the Democratic Party, and the Republican Party. Minor parties are of little importance overall but can be useful in pushing certain topics to the public eye.

For a more detailed treatment, see Religion and U.S. Government.

For a more detailed treatment, see United States Federal Government.

Chief of state: The President of the United States is both the chief of state and head of government Head of government: President of the United States; Vice President of the United States Cabinet: Cabinet appointed by the president with Senate approval Elections: The president and vice president serve four-year terms (eligible for a second term)

The United States legislative branch of government is a bicameral Congress, which consists of the Senate (100 seats, 2 members are elected from each state by popular vote to serve six-year terms; one-third are elected every two years) and the House of Representatives (435 seats; members are directly elected by popular vote to serve two-year terms).

For a more detailed treatment, see Supreme Court of the United States.

The United States Supreme Court consists of nine justices, nominated by the president and confirmed with the advice and consent of the Senate. Members of the Supreme Court are appointed to serve for life; the judicial branch extends to the United States Courts of Appeal, the United States District Courts, and State and County Courts. The primary role of the nine justices of the Supreme Court is to assure the United States government does not attempt to surrender, sell or transfer the people's unalienable rights given by God. The Supreme Court has the power to consider the constitutionality of laws passed by Congress.

The US has the largest and most technologically powerful economy in the world, with a per capita GDP of $47,400. In this market-oriented economy, private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace. US business firms enjoy greater flexibility than their counterparts in Europe and Japan in decisions to expand capital plant, to lay off surplus workers, and to develop new products. At the same time, they face higher barriers to enter their rivals' home markets than foreign firms face entering US markets. US firms are at or near the forefront in technological advances, especially in computers and in medical, aerospace, and military equipment; their advantage has narrowed since the end of World War II.

The onrush of technology largely explains the gradual development of a "two-tier labor market" in which those at the bottom lack the education and the professional/technical skills of those at the top and, more and more, fail to get comparable pay raises, health insurance coverage, and other benefits. Unfortunately, china remains both the banker and salesman to the united state's role as buyer, and debtor. This will not end well for the United States, republican president or not. Since 1975, practically all the gains in household income have gone to the top 20% of households. The war in March-April 2003 between a US-led coalition and Iraq, and the subsequent occupation of Iraq, required major shifts in national resources to the military. Soaring oil prices between 2005 and the first half of 2008 threatened inflation and unemployment, as higher gasoline prices ate into consumers' budgets. Imported oil accounts for about 60% of US consumption. Long-term problems include inadequate investment in economic infrastructure, rapidly rising medical and pension costs of an aging population, sizable trade and budget deficits, and stagnation of family income in the lower economic groups.

The merchandise trade deficit reached a record $840 billion in 2008 before shrinking to $506 billion in 2009, and ramping back up to $630 billion in 2010. The global economic downturn, the sub-prime mortgage crisis, investment bank failures, falling home prices, and tight credit pushed the United States into a recession by mid-2008. GDP contracted until the third quarter of 2009, making this the deepest and longest downturn since the Great Depression. To help stabilize financial markets, the US Congress established a $700 billion Troubled Asset Relief Program (TARP) in October 2008. The government used some of these funds to purchase equity in US banks and other industrial corporations, much of which had been returned to the government by early 2011.

In January 2009 the US Congress passed and President Barack Obama signed a bill providing an additional $787 billion fiscal stimulus to be used over 10 years - two-thirds on additional spending and one-third on tax cuts - to create jobs and to help the economy recover. Approximately two-thirds of these funds were injected into the economy by the end of 2010. In March 2010, President Obama signed a health insurance reform bill into law that will extend coverage to an additional 32 million American citizens by 2016, through private health insurance for the general population and Medicaid for the impoverished. In July 2010, the president signed the DODD-FRANK Wall Street Reform and Consumer Protection Act, a bill designed to promote financial stability by protecting consumers from financial abuses, ending taxpayer bailouts of financial firms, dealing with troubled banks that are "too big to fail," and improving accountability and transparency in the financial system - in particular, by requiring certain financial derivatives to be traded in markets that are subject to government regulation and oversight.

In November 2010, in an attempt to keep interest rates from rising and snuffing out the nascent recovery, the US Federal Reserve Bank (The Fed) announced that it would purchase $600 billion worth of US Government bonds by June 2011.

The United States is the leading industrial power in the world, highly diversified and technologically advanced; petroleum, steel, motor vehicles, aerospace, telecommunications, chemicals, electronics, food processing, consumer goods, lumber, mining. [8]

Some people believe that the ongoing economic crisis in the US is a testament to the silliness of American society.

For a more detailed treatment, see Flag of the United States of America.

Thirteen equal horizontal stripes of red (top and bottom) alternating with white; there is a blue rectangle in the upper hoist-side corner bearing 50 small, white, five-pointed stars arranged in nine offset horizontal rows of six stars (top and bottom) alternating with rows of five stars; the 50 stars represent the 50 states, the 13 stripes represent the 13 original colonies; known as Old Glory; the design and colors have been the basis for a number of other flags, including Chile, Liberia, Malaysia, and Puerto Rico.

? (conventional short form: United States; abbreviation: US or USA; sometimes also referred to as the States or simply as America)? IN CONGRESS, JULY 4, 1776. The unanimous Declaration of the thirteen united States of America, ushistory.org, (Accessed August 2010).? CIA - The World Factbook. ? Illegal immigrants in the US: How many are there? ? CIA World Factbook, North America :: United States, Updated on February 23, 2011, (Accessed on February 23, 2011).? Michelle Malkin. The coming G20 riots & the spread of mob rule, Michelle Malkin, March 27, 2009.? AWR Hawkins. America: A Republic, Not a Democracy, Pajamas Media, September 03, 2009.? CIA - The world Factbook

View the original article here

Untold Story of Small Biz Delay under ACA, Just Déjà Vu from Massachusetts

The revelation that the Obama Administration will delay the roll out of the “choice option” for small

English: Mary Landrieu Senate portrait Senator Mary Landrieu (D-LA) has been credited with advocating for small business employee choice in the ACA. (Photo credit: Wikipedia)

business until 2015 came as a huge surprise to many, including Joe Klein at Time, however anyone familiar with the Massachusetts experiment will feel a strong sense of déjà vu. In a 2010 paper I authored for the Heritage Foundation, I documented the delayed and failed effort by the Massachusetts public exchange (Connector) to offer real choice and savings to small businesses. My report suggested the experience served as a warning to other states. I suppose I should have targeted  it toward the federal government instead. Small companies should be even more uncertain of the law now that the cost–saving mechanism they were sold is now on the back burner. Yet the penalties for not offering insurance, new taxes on fully-insured plans, and EHB requirements all remain on schedule.

Background from Massachusetts

Governor Romney’s orig­inal health reform proposal envisioned a statewide health insurance exchange that would have offered small businesses a robust choice of plans with a wide range of deductible and benefit levels. His proposal provided for defined contributions from employers, used the exchange as a “premium aggre­gator,” and created a pooling mechanism to allow employees of small businesses to purchase group insurance together to spread risk and provide greater premium stability.

His plan would have helped elevate the individual employee as the primary decision-maker and inject some competition into the system. Even with the policy compromises required to pass the health care reform bill in 2006, the final version still included mechanisms that would have helped small business in the short term—if they had been implemented.

This same rationale was used to garner Democratic support for the ACA in Congress, as Robert Pear from The New York Times documented in his recent article on the delay:

In the weeks leading up to the passage of the health care legislation in 2010, [Senator Mary] Landrieu provided crucial support for the measure, after securing changes to help small businesses.

One problem: The Massachusetts reality didn’t match the rhetoric at the time, and should raise serious questions about the federal experience even after the employee plan choice is launched in 2015, 2016, or 2020.

Massachusetts Vision Altered During Implementation

The 2006 health care reform law tasked the Massachusetts Connector with developing a small business program. The original launch date was July 1, 2007, but coverage was not finalized until January 2009, almost three full years after the health care reform bill was signed. Even with this lengthy delay, the original Contributory Plan (CP), suffered from design and incentive issues. The CP was the Connector’s first pilot program marketed to small businesses with fewer than 50 employees. In this scenario, a company would select a benchmark plan within a benefit-level tier (gold, silver, or bronze), and then the employee would choose a plan within that tier.

Instead of engaging with a broker community that is geared to small businesses options, the Connector allowed only 20 brokers to sell CP and only to the companies that were already their clients. The Co­nector offered these brokers a 2.5 percent fee, compared to the 4 percent standard commission that they could earn outside of the Connector. (Congress decided to go around brokers in the ACA and hire navigators, and HHS invented “assisters” to fill this role instead.)

The health insurance products offered through the Connector lacked creativity, because the governing board voted to over-standardize plan designs. As a result, the products looked similar to those available outside the Connector and often more expensive.

Not surprisingly, the program drew limited interest from the small business community and failed to draw its initial goal of 100 employers out of the 185,000 in the state. As a result, the Connector launched a new small business program called Business Express (BE) in order to put “its resources into one effort for small businesses,” and froze enrollment for CP.

BE had a grand total of seven plans, and enrollment was largely boosted through a deal with a third-party administrator, the Small Business Service Bureau, to transfer members into the Connector. That contract has since ended.

Small Businesses in Massachusetts Have Voted With Their Feet

After six years, millions of dollars in advertising, hundreds of free media stories on the Connector, and a controversial mailing to all small businesses in the state, the numbers speak for themselves.

 Success of a Public Exchange?

 How Employee Choice Was Added to the ACA

The untold story about employee choice and the ACA revolves around Jon Kingsdale, former executive director of the Connector, who was responsible for implementing the first contributory plan in Massachusetts. Yet after failing to launch a successful program, he traveled to DC to lobby Congressional Democrats and Obama Administration officials to include the same type of program in the ACA.

The media doesn’t understand the full history of this program, so we are left with Jon Gruber from MIT telling a reporter from the National Journal recently, “The main message, I think, is optimistic. Overall it’s [exchanges] going to work, and over time it’s going to work out…” I guess he is still holding out hope for things to turn around in the Connector as a Board member, six years into the experiment.

The open question is whether the federal and state run exchanges can learn from the experience in the Commonwealth.

My advice is to promote defined contributions through the exchange, set up premium aggregators, allow for any willing insurer to sell in the exchange, reduce the number of mandates, and focus on allowing market forces to control underlying health care costs. Finally, if the goal is truly to expand access to insurance, not just retain government control, a paradigm-changing reform should allow for premium tax credits to be utilized in private exchanges. This will test the true value proposition of a public exchange. If they add value they should survive, if not, they should go out of business and not be propped up by government favoritism.

Find me on Twitter: @josharchambault


View the original article here

Video: Bozell Bashes Liberal Media Censorship of Bad News on ObamaCare

Ken Shepherd's picture

The liberal media "are deliberately censoring news and information from the American people" on ObamaCare that would cast the Obama administration in a negative light, NewsBusters publisher Brent Bozell charged on the April 11 edition of Varney & Co.

The Media Research Center president rattled off a few such developments that the liberal media completely ignored (watch the full segment below):

BRENT BOZELL, NewsBusters publisher: March 22nd, you have a situation where 33 Senate Democrats join with 40-some Republicans to vote against the 2.3 percent sales tax on medical devices. That is a huge setback for ObamaCare. Total network news stories: zero.

March 26. Another report comes out that says the health claims in the states are going to rise between 32 and 80 percent and that health care spending is going to double. A dramatic reversal for ObamaCare. Network news stories: zero.

March 26. You get a new report that comes out that says the Secretary of HHS, Sebelius herself, admits that premiums for new policies are going to go up. That is a complete contradiction to what the president told the American people when he sold it [ObamaCare] to them. Network news stories: zero.

April 3rd. You have another report that comes out that the system of exchanges in this country that were supposed to help small businesses are being put off for a year because it's a complete train wreck of a system. How many news reports on that? None.

April 4th, you have a poll -- this was a good one -- that says that two out of three Democrats now believe that ObamaCare will hurt them or not help them. Overall, 78 percent of the American people now believe that ObamaCare is going to hurt them, not help them. Only 15 percent of the American public believes that ObamaCare is going to help them.

Put them all together: No single network news story on any of that. Now, I rest my case, they're censoring information.

STUART VARNEY, host, Varney & Co.: No question, Brent. You've laid out the case and I'm buying it. There is deliberate censorship of information about ObamaCare.


View the original article here

Public schools in the United States

(Difference between revisions)[[File:800px-Warning signs at CHS.jpg|thumb|250px|right|Because of violence, vandalism, and other undesirable elements, this public school has a glaring sign warning of the on-campus surveillance cameras at its parking lot entrance.]][[File:800px-Warning signs at CHS.jpg|thumb|250px|right|Because of violence, vandalism, and other undesirable elements, this public school has a glaring sign warning of the on-campus surveillance cameras at its parking lot entrance.]]'''[[Public schools]] in the [[United States]]''' have become predominantly [[liberal]] and [[atheistic]][http://www.exodusmandate.org/art_exodus_from_public_schools_gets_helping_hand.htm Exodus from "public schools" gets a helping hand], Exodus Mandate, Sept 15, 1998For example, "in 2005, officials at East Brunswick High School adopted a policy prohibiting representatives of the school district from participating in student-initiated prayer." [http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=61806]From 2004 to 2006, a [[public school]] banned [[Bible]] study by children ... ''during recess''. A teacher complained about the use of the Bible and the principal then censored the study activity, according to a sworn statement by a teacher told to stop it.  Principal "Summa, having learned of a complaint by a teacher and of the students' Bible study, told fourth-grade teacher Virginia Larue to nix the group's recess meeting. ... Larue later told one of Luke's Bible study colleagues the group could no longer meet at recess."[http://knoxnews.com/news/2008/jan/03/recess-bible-study-spurs-lawsuit/][[Atheists]] routinely impose their views on [[public schools]], though liberals deny it.  For example, a court prohibited a moment of silence in [[Illinois]] "Township High School District 214 after atheist activist Rob Sherman challenged" it.[http://www.chicagotribune.com/news/local/chi-moment_of_silence_bothmay30,0,7722271.story]  '''[[Public schools]] in the [[United States]]''' have become predominantly [[Truth|liberal]] and [[Truth|atheistic]][http://www.exodusmandate.org/art_exodus_from_public_schools_gets_helping_hand.htm Exodus from "public schools" gets a helping hand], Exodus Mandate, Sept 15, 1998For example, "in 2005, officials at East Brunswick High School adopted a policy prohibiting representatives of the school district from participating in student-initiated prayer." [http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=61806]From 2004 to 2006, a [[public school]] banned [[Bible]] study by children ... ''during recess''. A teacher complained about the use of the Bible and the principal then censored the study activity, according to a sworn statement by a teacher told to stop it.  Principal "Summa, having learned of a complaint by a teacher and of the students' Bible study, told fourth-grade teacher Virginia Larue to nix the group's recess meeting. ... Larue later told one of Luke's Bible study colleagues the group could no longer meet at recess."[http://knoxnews.com/news/2008/jan/03/recess-bible-study-spurs-lawsuit/][[Atheists]] routinely impose their views on [[public schools]], though liberals deny it.  For example, a court prohibited a moment of silence in [[Illinois]] "Township High School District 214 after atheist activist Rob Sherman challenged" it.[http://www.chicagotribune.com/news/local/chi-moment_of_silence_bothmay30,0,7722271.story]  government institutions that employ 3 million people and spend $411.5 billion annually at a cost of $10,770 per student.[http://www.edreform.com/index.cfm?fuseAction=section&pSectionID=15&cSectionID=97 Statistics about education]  [[Liberals]] censor [[classroom prayer]], the [[Ten Commandments]], sharing of [[faith]] in classrooms during school hours, and teaching [[Bible]]-based [[morality]].''See, e.g.'', ''[[Stone v. Graham]]'' (1980) (excluding Ten Commandments from public school).A public school banned [[Bible]] study by children ... ''during recess''. A teacher complained about the use of the Bible and the principal then censored the study activity, according to a sworn statement by a teacher told to stop it.  [http://knoxnews.com/news/2008/jan/03/recess-bible-study-spurs-lawsuit/] Mandatory [[Homosexual Agenda|homosexual indoctrination]] is common as early as elementary school in more [[liberal]] states.http://www.massresistance.org/media/video/brainwashing.html The failures of underperforming public schools are paradigm of [[socialism]], along with [[landfills]] and the [[Canada|Canadian]] healthcare system.government institutions that employ 3 million people and spend $411.5 billion annually at a cost of $10,770 per student.[http://www.edreform.com/index.cfm?fuseAction=section&pSectionID=15&cSectionID=97 Statistics about education]  [[Liberals]] censor [[classroom prayer]], the [[Ten Commandments]], sharing of [[faith]] in classrooms during school hours, and teaching [[Bible]]-based [[morality]].''See, e.g.'', ''[[Stone v. Graham]]'' (1980) (excluding Ten Commandments from public school).A public school banned [[Bible]] study by children ... ''during recess''. A teacher complained about the use of the Bible and the principal then censored the study activity, according to a sworn statement by a teacher told to stop it.  [http://knoxnews.com/news/2008/jan/03/recess-bible-study-spurs-lawsuit/] Mandatory [[Homosexual Agenda|homosexual indoctrination]] is common as early as elementary school in more [[liberal]] states.http://www.massresistance.org/media/video/brainwashing.html The failures of underperforming public schools are paradigm of [[socialism]], along with [[landfills]] and the [[Canada|Canadian]] healthcare system.

Public schools in the United States have become predominantly liberal and atheistic[1][2][3][4] government institutions that employ 3 million people and spend $411.5 billion annually at a cost of $10,770 per student.[5] Liberals censor classroom prayer, the Ten Commandments, sharing of faith in classrooms during school hours, and teaching Bible-based morality.[6][7] Mandatory homosexual indoctrination is common as early as elementary school in more liberal states.[8] The failures of underperforming public schools are paradigm of socialism, along with landfills and the Canadian healthcare system.

The following are characteristics of US public schools:

30% of public school students fail to graduate from high school,[9] and more than 40% of minorities fail to graduate;[10] the real drop-out rate may be 50%.[11] Nearly 70% of students leave high school unqualified to attend four-year college, and many are unable to hold a steady job.[9] A 2007 study funded by the National Institute on Drug Abuse found that 77% of students between eighth and 12th grade had used illicit drugs.[12] Fatal overdoses are common but underreported.[13] Public schools are required to present drug "education" to kids. More than 60% of public school teenagers (in one regional study) watch more than 3 hours of television a day, compared with a national average of 35%[14] About half of the viable pregnancies among girls attending public school end in abortions and about half end in birth. Public schools "educate" kids about sex.[15] "About 160,000 students miss school daily because they fear being bullied," and students viciously fight each other and post videos of it on Youtube.com.[16] 20% of students had been dangerously "binge drinking" in the previous 30 days, and 50% of seniors regularly drink illegally, according to a 2007 study of Ottawa County, Michigan.[17][18] 10-20% of students become addicted to cigarettes[18][19] More than 10% of public high schools have a pro-homosexual student club The majority of public school students are completely ignorant about the Bible, even as history and literature 35% of students are overweight[20] Health screening of public schools in Memphis, Tennessee, found that nearly 10% of students have mental health problems[20]. California public schools, largest in the nation, now rank at the bottom in academic achievement.[21]

See Also: Public school culture

if (window.showTocToggle) { var tocShowText = "show"; var tocHideText = "hide"; showTocToggle(); }

In many states, administrators and other public school employees are paid full salaries, at substantial public expense, but at some of their schools actual teaching occurs only 4 days a week, rather than 5. These states include: Arizona, California, Colorado, Georgia, Idaho, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Missouri, Montana, Nebraska, New Mexico, Nevada, Oklahoma, Oregon, South Dakota, Utah, Wisconsin, Wyoming ... and Washington passed legislation to allow it there too.[22]

In 1647, Massachusetts Puritans enacted the second law, after Scotland in 1616,[23] establishing universal public schools in the English-speaking world to block the attempts by "ould deluder Satan to keepe men from the whole knowledge of the Scriptures".[24] Each settlement larger than 50 families was required to pay a schoolmaster to teach reading, writing and religious doctrine to the children in the community. Beginning in 1670, Massachusetts provided tax funding for school maintenance. This model was then copied throughout the colonies, and even throughout the world.

Many children did not attend public school for the first two centuries. It was not until 1852 that Massachusetts became the first state to require attendance by students aged 6 through 16, and it was not until 1918 that all states had compulsory attendance laws. High schools did not generally exist until after the Civil War, and the first American kindergarten didn't exist until 1856 in Watertown, Wisconsin.

In response to the perception that public schools have stopped teaching morality, many state education departments have or are in the process of developing "morality" that avoid good and evil, right and wrong, and instead present under the heading of "character" education.[25] The lack of appreciation for right and wrong can surprise outsiders, and even school principals. When one public school student was charged with felony computer crime for altering the grades of 20 students, the principal said, we "want to teach them what's right and wrong, and it's tough for some kids to catch on to the idea that changing grades is the wrong thing to do."[26] The impact of the removal of morality from the public school curriculum (which is also used in private schools) is that "more than one in three boys (35 percent) and one-fourth of the girls (26 percent) — a total of 30 percent overall — admitted stealing from a store within the past year."[27] Liberal politicians are the most frequent opponents of initiatives designed to build moral fiber in the public school system, with organizations like the ACLU and teacher's unions devoting a significant amount of their resources towards this end. In 2010, a school board in North Dakota decided to change the name of their mascot from the "Satans." Liberals unrolled a large-scale media campaign that blanketed the district with pro-Satan propaganda in an attempt to keep the name, but they were unsuccessful. [28]

See also: Classroom prayer

The White House announced the release of Revised Religious Guidelines for America's Public Schools on May 29, 1998. Within this announcement, President Clinton stated, "Nothing in the First Amendment converts our public schools into religion-free zones, or requires all religious expression to be left behind at the school house door." --President Clinton, July 12, 1998[29]

In 2003, the Education Department released the following guidelines that clarified and added requirements to Public Schools to ensure the religious rights of students.[30]

Schools that don’t allow students to pray outside the classroom or that prohibit teachers from holding religious meetings among themselves could lose federal money, the Education Department said late last week.

The guidance reflects the Bush administration’s push to ensure that schools give teachers and students as much freedom to pray as the courts have allowed.
The department makes clear that teachers cannot pray with students or attempt to shape their religious views. The instructions, released by the department on Feb. 7, broadly follow the same direction given by the Clinton administration and the courts. Prayer is generally allowed provided it happens outside the class and is initiated by students, not by school officials.

The department, however, also offered some significant additions, including more details on such contentious matters as moments of silence and prayer in student assemblies. And for the first time, federal funds are tied to compliance with the guidelines. The burden is on schools to prove compliance through a yearly report.

The National Council on Bible Curriculum in Public Schools[31] (NCBCPS) provides a program for teaching the Bible in public schools. Currently, the NCBCPS's Bible curriculum has been voted into 462 school districts (over 1,900 high schools) in 38 states. Over 210,000 students have already taken this course nationwide, on the high school campus, during school hours, for credit.

Activist judges have proclaimed that teaching creationism[32] and intelligent design[33] in public schools is unconstitutional because they claim that such teachings would amount to a government establishment of religion, which is prohibited by the First Amendment.[34]

Since the rapid expansion and liberalization of public schools after World War II, students' literacy levels have dropped significantly. While the average 14-year-old had a vocabulary of 25,000 words in 1945, the equivalent student in 2000 had a vocabulary of only 10,000 words, a severe disadvantage in an increasingly textual world.[35]

See also: Textbook bias

Textbooks (K-12) have been systematically analyzed in a study funded by the U.S. government. The 1986 findings were that massive, systematic liberal bias exists, resulting in several information blackouts in four key areas of modern American life—marriage, religion, politics, and business. While an actual conspiracy was then ruled out, the cause was found to be a "a very widespread secular and liberal mindset" pervading "the leadership in the world of education [and textbook publishing]"[36].

Professor Larry Schwikart, of the University of Dayton, wrote a book about biased textbooks. False claims common in those texts included that the Founding Fathers wanted a "wall of separation" between church and state, that "Lincoln issued the Emancipation Proclamation only because he needed black soldiers", and that "Mikhail Gorbachev, not Ronald Reagan, was responsible for ending the Cold War". [37]

Evidence for bias in school textbooks includes promotion of Homosexual agenda, support of liberal viewpoint, as well as support of the unproven theory of evolution. Most Biology textbooks do not provide the Creationist viewpoint a chance, or even a second thought.

Due to the strength of the nation's teachers' union, it is nearly impossible to fire a bad performing teacher with tenure. The process can take years and involves countless steps to even attempt. The union claims that the protections are needed against arbitrary and malicious lawsuits.

The New York public schools system has approximately 700 teachers accused of insubordination to sexual misconduct. They remain in seclusion from the classroom but are paid full salaries until their cases are heard, sometimes from months to years later. All because their union contract makes it extremely difficult to fire them. [38]

Given that public schools educate about 90% of Americans, it is astounding how few prominent Americans attended public school after the banning of school-sponsored prayer in 1962. Here is an impressive list of people who attended public schools before the banning of school-sponsored prayer.

Ronald Reagan[39] graduated from Dixon High School, Illinois Dwight D. Eisenhower[40] attended Abilene High School in Abilene, Kansas Richard M. Nixon[41] attended Fullerton and Whittier High Schools, California Gerald Ford[42] attended Grand Rapids South High School, Michigan Lyndon B. Johnson[43] attended Johnson City High School, Texas Harry S Truman[44] attended Independence High School, Missouri H. Ross Perot[45] attended public schools and Texarkana Junior College, Texas Richard Cheney[46] graduated from Natrona County High School in Casper, Wyoming. Colin Powell graduated from Morris High School, NY in 1954 and received his B.A. in geology from the City College of New York in 1958 [47] Billy Graham graduated from Sharon High School, NC in May 1936[48] Michael Medved graduated from Palisades High School, CA [49] The Wright Brothers attended public schools in Richmond, India and Dayton OH but did not graduate [50] Roy Jay Glauber, Nobel laureate, graduated from Bronx High School of Science, Bronx, NY in 1941. [51] Frederick Reines, Nobel laureate, attended Union Hill High School, NJ, during the late 1930's. [52] Oliver North, US Army Officer, political commentator, graduated from Ockawamick High School in 1961. [53]

Here is a mostly unimpressive list of people who attended public school after school-sponsored prayer was banned in 1962:

Brad Pitt, actor, graduated from Kickapoo High School in Springfield, Missouri, 1981; dropped out of college.[54] Tom Cruise, actor, attended several public high schools including Glen Ridge High School, New Jersey during the 1970's. [55] John Sununu, former one-term Senator from New Hampshire, graduated from Salem High School in the 1970's;[56] claiming to be pro-life, Sununu arranged for the nomination of David Souter to the U.S. Supreme Court, where he then repeatedly voted on the side of abortion John Edwards, indicted in 2011 on allegations arising from his affair with a mistress, was a former one-term Senator from North Carolina and two-time unsuccessful candidate for nomination for president, attended public school in Robbins, N.C. during the 1960's.[57] Spike Lee, producer, actor, graduated from John Dewey High School, Brooklyn, NY.[58] Laura Bush attended James Bowie Elementary School, San Jacinto Junior High School, and Midland Lee High School in Midland, Texas (Graduated 1964); came out in support of gay marriage and abortion in 2010.[59] William J. Clinton[60] graduated from Hot Springs High School in Arkansas in 1964, and became the only president impeached in the 20th century. Anthony Weiner, a congressman who resigned in disgrace in 2011 after first denying but then confirming an indecent use of Twitter, graduated from a public high school in Brooklyn. Steve Jobs, founder of Apple Inc., graduated from Homestead High School in Cupertino, CA in 1972; his colleague, Steve Wozniak, graduated from the same high school in 1968. Eminem, a liberal rapper, repeatedly failed 9th grade in public school and ultimately dropped out. Alan Colmes, a liberal news commentator, attended public school in New York City. Sarah Palin, vice presidential candidate on the Republican Party ticket in 2008 and favorite of some Tea Party groups, went to Wasilla High School and graduated in 1982 and then attended 5 different colleges before becoming more conservative later in life.[61] Rick Perry, Texas governor, infringed on parental rights by requiring young girls to receive an HPV vaccine. Kenneth D. Cockrell, Texas Graduated from Rockdale High School, Rockdale, Texas, in 1968. A veteran of five spaceflights, Cockrell has logged more than 1,560 hours in space.[62] Russell Alan Hulse, New York Graduated from Bronx High School of Science, Bronx, New York, in 1966. Winner of the 1993 Nobel Prize in Physics.[63] Richard Axel, New York Graduated from Stuyvesant High School, New York, New York, in 1963. Winner of the 2004 Nobel Prize in Physiology or Medicine.[64] Hugh David Politzer, New York Graduated from Bronx High School of Science, Bronx, New York, in 1966. Winner of the 2004 Nobel Prize in Physics.[65] Christine O'Donnell graduated from Moorestown High School in 1987.[66] Scott Walker graduated from Delavan-Darien High School in 1986.[67] Paul Ryan, an establishment Republican, graduated from Joseph A. Craig High School, Janesville, WI in 1988.[68] Sharron Angle (born 1949) graduated from Wooster High School in Reno, Nevada.[69] Jon Huntsman, Republican Presidential candidate and former Governor of Utah, attended Highland High School in Salt Lake City, Utah before he dropped out in 1978 to pursue a career as a rock and roll keyboardist.[70] Michelle Bachmann, Republican member of the House of Representatives graduated from Anoka High School, Anoka, Minnesota in 1974.[71] Mike Huckabee, former Republican Governor of Arkansas, graduated from Hope High School, Hope Arkansas, in 1974.[72] Benjamin Netanyahu, Prime Minister of Israel, Graduated from Cheltenham High School, Wyncote, Pennsylvania, in 1967. [73] Rand Paul, Republican Senator, Graduated from Brazoswood High School, Clute, Texas in 1981. [74] ? Exodus from "public schools" gets a helping hand, Exodus Mandate, Sept 15, 1998? For example, "in 2005, officials at East Brunswick High School adopted a policy prohibiting representatives of the school district from participating in student-initiated prayer." [1]? From 2004 to 2006, a public school banned Bible study by children ... during recess. A teacher complained about the use of the Bible and the principal then censored the study activity, according to a sworn statement by a teacher told to stop it. Principal "Summa, having learned of a complaint by a teacher and of the students' Bible study, told fourth-grade teacher Virginia Larue to nix the group's recess meeting. ... Larue later told one of Luke's Bible study colleagues the group could no longer meet at recess."[2]? Atheists routinely impose their views on public schools, though liberals deny it. For example, a court prohibited a moment of silence in Illinois "Township High School District 214 after atheist activist Rob Sherman challenged" it.[3]? Statistics about education? See, e.g., Stone v. Graham (1980) (excluding Ten Commandments from public school).? A public school banned Bible study by children ... during recess. A teacher complained about the use of the Bible and the principal then censored the study activity, according to a sworn statement by a teacher told to stop it. [4]? http://www.massresistance.org/media/video/brainwashing.html? 9.0 9.1 "Only 70% of all students in public high schools graduate, and only 32% of all students leave high school qualified to attend four-year colleges."[5]? "Only 71 percent of kids graduate from high school within four years, and for minorities the numbers are even worse -- 58 percent for Hispanics and 55 percent for African Americans," [Bill Gates] wrote. "If the decline in childhood deaths [in developing countries] is one of the most positive statistics ever, these are some of the most negative."[6]? http://www.2theadvocate.com/news/47272207.html? According to Monitoring the Future, a study funded by the National Institute on Drug Abuse, illicit drug use is up among students between eighth and 12th grade. In 1991, 62 percent had used illicit drugs. In 2007, the number jumped to 77 percent. [7]? Fatal overdoses are common, although often underreported.Reporting of a heroin overdose by 16-year-old public school student was an exception to the underreporting.? http://www.commercialappeal.com/news/2008/dec/01/memphis-youth-make-progress-on-risky-behavior/ (study of Memphis students)? "There is zero shame [to teenage pregnancy]," the school nurse observed.[8]? One victim is now "being homeschooled at state expense."[9]? The Grand Rapids Press The Grand Rapids Press: Ottawa County confronts teen drinking, By Greg Chandler, December 04, 2008[10]? 18.0 18.1 http://www.mlive.com/chronicle/news/index.ssf/2008/12/ottawa_co_youth_survey_surpris.html? http://www.commercialappeal.com/news/2008/dec/01/memphis-youth-make-progress-on-risky-behavior/? 20.0 20.1 http://www.commercialappeal.com/news/2008/nov/29/students-health-needs-attention/? High-Spending California School System Collapsing AP, June 21, 2009? http://www.ncsl.org/issues-research/educ/school-calendar-four-day-school-week-overview.aspx? The Social, Economic & Political Reasons for the Decline of Gaelic in Scotland [11]? Family Encyclopedia of American History (Reader's Digest 1975)? [12]? http://cw2.trb.com/news/kwgn-student-grade-felony,0,7871401.story? http://charactercounts.org/programs/reportcard/index.html? http://articles.chicagotribune.com/2012-03-11/news/ct-perspec-0311-things-20120311_1_devil-man-great-deceiver-native-americans? http://www.ed.gov/PressReleases/05-1998/wh-0530.html? http://www.freedomforum.org/templates/document.asp?documentID=17550? http://www.bibleinschools.net/? https://supreme.justia.com/cases/federal/us/482/578/case.html? www.pamd.uscourts.gov/kitzmiller/kitzmiller_342.pdf? See Kitzmiller, 400 F.Supp.2d at 765? Utne Reader (July-August 2000), 28-9.? Censorship: Evidence of Bias in Our Children's textbooks, Paul C. Vitz, Servant Books, 1986, ISBN 0-89283-305-X? http://www.emailwire.com/release/20086-Controversial-Historian-on-the-Price-of-Business-Show.html? 700 NYC Teachers Paid to Do Nothing AP, June 22, 2009? http://www.dixonil.com/reagan/reagan2.htm? http://www.eisenhower.archives.gov/press_releases/2007/PR07_11_August_02_2007_Eisenhower_Co_Sponsor_Little_Rock.pdf? http://www.nndb.com/edu/836/000068632/? http://www.visitgrandrapids.org/ford-facts.php? http://www.nndb.com/people/062/000023990/? http://www.nps.gov/nr/twhp/wwwlps/lessons/103truman/103visual1.htm? http://www.famoustexans.com/rossperot.htm? http://www.nndb.com/people/598/000022532/? http://gale.cengage.com/free_resources/bhm/bio/powell_c.htm? http://online-bibleconcordance.com/Ministers/BillyGraham.aspx? michaelmedved.townhall.com/About.aspx? http://www.kyrene.org/schools/brisas/sunda/inventor/wright/index.html? http://www.nndb.com/people/738/000138324/? http://www.nndb.com/people/052/000099752/? http://libraryoflibrary.com/E_n_c_p_d_Ollie_North.html? http://www.rolemodel.net/brad_pitt.cfm ? http://www.nndb.com/people/791/000022725/ ? http://www.sununu.senate.gov/biography.html? http://www.pbs.org/newshour/vote2004/primaries/edwards_bio.html? http://movies.nytimes.com/person/99175/Spike-Lee/biography? http://abcnews.go.com/Politics/laura-bush-supports-gay-marriage-abortion/story?id=10629213? http://www.hotsprings.org/things_to_do/historic_hotsprings/presidents_hometown.asp? http://outhouserag.typepad.com/outhouserag/2008/09/sarah-palin-198.html? http://www.jsc.nasa.gov/Bios/htmlbios/cockrell.htmll? http://alumni.bxscience.edu/?page=NotableAlumni? http://en.wikipedia.org/wiki/Richard_Axel? http://alumni.bxscience.edu/?page=NotableAlumni? "Delaware politics: From middle-class New Jersey, moral activist Christine O'Donnell knew 'God was calling'", Delaware Online? Ames, Ann Marie, "Rock County Close to Home for Walker", Walworth County Today, Sept. 7, 2010? http://minnesota.publicradio.org/display/web/2012/06/16/politics/wis-ryan/? "Sharron Angle, Biography"? [13]? [14]? [15]? [16]? [17]

View the original article here

David Limbaugh Column: Dr. Carson's Refreshing Jolt of Societal Medicine

David Limbaugh's picture

President Obama must have been stunned at the "audacity" of Dr. Benjamin Carson in challenging his core assumptions right to his face in front of thousands of people at the National Prayer Breakfast.

Obama is not used to being challenged, especially in public, even if indirectly and without being specifically named. From the look on his face, it was obvious Obama was none too pleased with Carson's message or with his "presumptuousness" in presenting it in that forum, while he had to sit still and — remain silent.

I think we can best understand Carson's message in light of his opening statements, which laid the foundation for the thematic body of this speech.

He began citing scriptural passages that he said would put his upcoming remarks into context. Three of the passages were wisdom sayings from the book of Proverbs, admonishing that the godless destroy their neighbor with their mouths, that a man who lacks judgment derides his neighbor and that a generous man will prosper.

The final passage was God's promise in 2 Chronicles 7:14 that if his people will humble themselves and pray and seek his face and turn from their wicked ways, he will hear them, forgive their sins and heal their land.

Carson also decried the chilling effect of political correctness that makes people afraid to express certain opinions on important issues, lest they incur the wrath of society's thought and speech police — those who presume to be the guardians of all moral and acceptable opinions. He then proceeded to boldly articulate a number of ideas that clearly fall in this category of disfavored speech.

Specifically, Carson offered a ringing endorsement of America's founding principles and its unique constitutional liberties. He decried the moral decay in our society and our government's grotesque fiscal irresponsibility.

He took aim on our ever-expanding welfare state, not only by championing hard work, self-reliance and personal responsibility but also in invoking his own personal experience as an example.

He related how his mother worked multiple jobs to provide for him and his brother and imparted critically important values to them. She made them read and improve themselves and absolutely refused to let them make excuses and claim victimhood for their plight.

Carson, I believe, was illustrating that we have a moral problem in this nation and that the instilling of good values begins in the home and is neither the responsibility nor the prerogative of a caretaker government.

He denounced the practice — refined to an art form by President Obama — of politicians employing class warfare to deride the wealthy with accusations that they don't contribute enough while treating the less fortunate as helpless and expecting no contribution from them at all. This, I think, is where he was dovetailing the scriptural texts warning against deriding one's neighbor. He was saying, in effect, that political demagogues who pit people against one another on the basis of income and wealth harm society, including the very people they pretend to help.

In a television interview, Carson expanded on some of these thoughts, explaining that the Founding Fathers were afraid of an out-of-control government that would "get to the point where it couldn't subsist without taking everything from the people." Next, he linked, though not expressly, the scriptural passage on generosity in challenging today's conventional wisdom that the wealthy are necessarily greedy. He pointed to the remarkable generosity of some of America's historically wealthiest individuals. America, he said, "has always been a very generous nation. Look at all the foundations that have been created for the purpose of taking care of people."

He also expounded on his comments on political correctness, apparently criticizing the president's selective assault on religious liberty. He said, "If the president would exercise anywhere near the sensitivity about religious freedom in this country as he does about Islam and offending them, we wouldn't even have these kinds of problems."

There is also no question in my mind that in citing the passage from 2 Chronicles, Carson was expressing his view that America has strayed from its godly roots and replaced God's absolute moral standards with those that seem right to a man but are wholly destructive of our moral fabric. We must turn back to God, reject this man-made ethic grounded in covetousness, envy and greed, and recommit ourselves to godly values and right living.

In his speech, Carson did not criticize President Obama by name, but he roundly condemned his philosophy of and approach to governance. He did so with abundant forcefulness but equally strong respectfulness.

It was an admirable display of forthrightness and courage and a virtual seminar in how President Obama's political opponents should boldly, directly and publicly dispute his wrongheaded message and block his destructive agenda.

David Limbaugh is a writer, author and attorney. His latest book, "The Great Destroyer," reached No. 2 on the New York Times best-seller list for nonfiction. Follow him on Twitter @davidlimbaugh and his website at www.davidlimbaugh.com. To read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.


View the original article here

Saving the American Dream: The Fiscal Cliff and Beyond

Abstract: Unless Congress and the President act promptly and wisely, sequestration under the Budget Control Act (BCA) will undermine military readiness, and the nearly $500 billion tax increase starting on January 1, 2013, will greatly harm an already weak economy. However, this fiscal cliff can be avoided. The key to avoiding this and future fiscal calamities is reform of the mandatory spending programs, from welfare to Social Security, that currently drive federal deficits. The Heritage Foundation’s Saving the American Dream plan would rein in spending immediately, restructure the major entitlement programs to bring entitlement spending under control over the long term, and strengthen the core foundations of these programs.

Since the Heritage Foundation’s Saving the American Dream plan[1] was first published in April 2011, there has been almost no substantive progress on spending control. The only plausible exception was the flawed Budget Control Act (BCA), a product of a contentious debt limit debate. The complete failure of the resultant bipartisan “supercommittee” to reach agreement was a sad reflection on a Congress that is divided and unwilling to pass the legislation necessary to rein in spending.

As a result, the nation is facing the looming sequester, which will further undermine the defense budget, jeopardizing one of the federal government’s core constitutional responsibilities. Yet it would leave entitlement programs virtually untouched, even though they are the largest driver of spending today and in the future. Meanwhile, the prospect of a huge tax increase in January has had a deleterious effect on the economy for many months, although the effect is only a small portion of the harm the economy will incur if the tax increase ultimately takes effect. America seriously needs a true way forward.

Entitlements and Interest Driving Future Spending Surge

The Heritage plan reflects the need to rein in spending immediately and to rethink major programs. Spending on the open-ended Social Security, Medicare, and Medicaid entitlements must be brought under control, and the core foundations of these programs should be strengthened.

The following principles guide the policy solutions in Saving the American Dream:

Total spending must be brought under control to balance the budget without raising taxes, ultimately holding revenues at their historical share of gross domestic product (GDP). Entitlement programs should, unlike today, actually guarantee seniors economic security in retirement and be recast as real and sustainable insurance programs focused on those who truly need them. Other spending must be curbed, and the federal government must be restricted to its proper functions. Defense, as a core constitutional function of the federal government, should be fully funded and efficiently delivered. The tax system should be structurally reformed to foster growth by eliminating tax distortions of private economic decisions, especially decisions on savings and investment, and to make the system simpler and more transparent.

Fiscal year (FY) 2012 closed on September 30 with the Congressional Budget Office (CBO) estimating spending of $3.5 trillion and a deficit of $1.1 trillion.[2] Debt held by the public was $11.3 trillion (73 percent of GDP). According to the CBO, debt will explode to 199 percent of GDP by 2037, driven by growth in spending that will reach 36 percent of GDP.[3]

The main drivers of spending and debt increases are incontrovertibly the major entitlement programs: Social Security, Medicare, and Medicaid. However, the slow economy with its high unemployment rate, which remains stuck at around 8 percent, also adds to deficits and debt through two channels: mandatory spending for those workers who are most affected by the slow economy (e.g., unemployment compensation) and below-average tax revenues.

It is clear that the top priorities for Congress and the President should be controlling spending, especially entitlement reform, and setting an economic growth agenda through tax reform. After averting the fiscal cliff, Congress and the President should immediately turn their attention to these pressing issues.

US Federal Debt Will explode to Economically Damaging Levels

As noted, entitlements are the fastest-growing programs. Even if all other spending was eliminated, these programs would still cause large and unsustainable deficits in the future. Their growth is automatic, with autopilot spending increases built in and no serious budgetary constraints. The top priority must be to restructure entitlements and put a brake on their spending levels while strengthening and preserving them for future generations.

A number of robust proposals for health care reforms already exist, both in Congress and in the policy community.[4] Congress and the President should take advantage of this policy momentum and focus on reforming Medicaid and especially Medicare. However, changes in Social Security should follow quickly, and the rules that govern these programs in general should be more consistent. For example, increases in the normal eligibility age should proceed simultaneously for both Social Security and Medicare.

Specific steps for Congress and the President include the following:

The President should submit a budget by the 2013 tax deadline deadline that outlines strong, sweeping changes in entitlement programs that will reduce spending over the 10-year budget window and significantly improve the long-term trajectory of these programs. The President’s budget should lay out specific goals for a pro-growth, revenue-neutral tax reform plan. Congress and the President should include reforms in entitlement programs and further reductions in other spending areas, including the Patient Protection and Affordable Care Act (Obamacare), in exchange for any increases in the debt limit. These should reflect lessons learned from the 2011 Budget Control Act, such as avoiding high-stakes mechanisms like sequestration that are designed to fail. Congress should pass a joint budget resolution by the April 15, 2013, deadline that includes reconciliation instructions for entitlement and tax reform. The budget resolution should also require reforms of other spending programs to bring spending below the BCA levels for 2014 and beyond.

The Heritage Plan Would Dramatically Lower the Debt

If only one issue is thoroughly addressed in 2013, it should be the federal role in health care, the biggest driver of spending. The flawed Obamacare law only adds to the problem. Instead of expanding the government’s role, health care should follow a true patient-centered, market-based model, including reforms in Medicare, Medicaid, and the tax treatment of health insurance.

Medicare. Medicare’s finances must be brought under control. As a first step, the age of eligibility should be raised gradually from 65 to 68 and then indexed to life expectancy. Premiums for Parts B and D should also gradually increase, thus expanding the current policy for Medicare of adjusting the level of taxpayer subsidies to income, with the most affluent seniors receiving much smaller (or in some cases no) taxpayer subsidies for their health coverage. These steps, among others,[5] should occur immediately because they are easily achieved and less controversial and should be part of new debt-limit legislation.

Within five years of these initial changes, patients should also be transitioned to a defined-contribution or premium-support model that would be adjusted for income. Expanding competition in Medicare would restrain federal spending, slow health care costs, and promote greater innovation in the delivery of care.[6]

Medicaid. Federal spending on Medicaid should be put on a budget subject to regular congressional review to bring greater fiscal certainty and stability to the process. Federal Medicaid spending would follow antipoverty spending caps by reverting to the 2007 spending levels when the economy approaches full employment (e.g., the unemployment rate dips below 6 percent) and be adjusted for medical inflation thereafter.

In lieu of traditional Medicaid, able-bodied individuals and families should receive direct federal assistance in the form of tax credits or direct assistance to enable them to buy private insurance coverage of their choice. For the disabled and frail elderly, Medicaid would remain a joint federal–state safety net program, but states would have additional flexibility to adopt more patient-centered models.

Reform of the Tax Treatment of Health Insurance. As a part of tax reform (see below), the employee tax break for employer-sponsored coverage would be converted to a non-refundable tax credit that individuals and families could use to purchase the health plan of their choice.

These larger reforms are best achieved through normal legislative order. This could include the legitimate use of reconciliation as part of a comprehensive budget plan. In any case, Congress should pass a concurrent budget resolution for FY 2014.

Social Security needs to be reformed. It is running permanent cash-flow deficits and has severe programmatic flaws.[7]

First, Social Security’s eligibility age should gradually be increased in tandem with Medicare’s eligibility age. For both, this change is straightforward and could be included in an initial, small reform package. Next, Social Security should return to its original purpose of guaranteeing that all Americans are protected from poverty in retirement. As part of this insurance protection, benefits would evolve to an understandable, predictable flat benefit that is well above the poverty level. With Social Security functioning as an insurance program, moderate-income retirees would receive a smaller check, while affluent seniors would receive no check unless their financial circumstances change.

To encourage people to stay in the workforce longer, those who work beyond full retirement age would receive a higher level of after-tax income until they do retire.

Social Security Deficits Are Permanent and Growing

Tax reform would support Social Security reforms by significantly increasing personal savings that seniors can take into retirement, and there would be no limit on the amount of these tax-deferred savings. Thus, more retirement income would be possible than under the current system. Social Security would become a safety valve against economic reversals and a floor for income after the statutory retirement age.

Spending Reforms Are Crucial to Balance the Budget

Defense cuts are already reducing military readiness, thus endangering the security of the United States. The defense portion of the BCA cuts is dangerously flawed and must be reversed. In Saving the American Dream, the sequester for defense spending (including the 2013 cuts) is eliminated, and the higher spending is more than offset with reforms in other spending and entitlements. Defense spending is brought slowly up to and held at 4 percent of GDP. Non-defense discretionary spending is set for 2013 at the BCA sequester level and then reduced to 2 percent of GDP, after which it is indexed to inflation.

Spending in 2014 and beyond should include reforms in long-standing but growing and expensive programs such as farm subsidies and transportation. A program of privatization, including federal asset sales, could begin as early as 2015. Anti-poverty spending should be rolled back and capped when the economy approaches full employment and then consolidated into fewer programs that reflect strong incentives for work and marriage.

Cut Spending, Fix the Debt, and Restore Prosperity

Tax Reform. The economy remains plagued by the uncertainty of expiring tax policy and an unwieldy and inefficient tax code. Beyond preventing Taxmageddon by extending all current tax policy and delaying the Obamacare tax increases before January 1, 2013, Congress should pass broad substantive tax reform consistent with the New Flat Tax in Saving the American Dream. Tax reform should focus on promoting economic growth by reducing both tax rates and tax distortions while maintaining revenue and distributional neutrality. It should also simplify the tax system and improve its transparency so that taxpayers can better understand the influence of tax policy as well as the true cost of government.[8]

The broad direction for tax reform already in play, especially the bipartisan push for lower corporate income tax rates, is fully consistent with the New Flat Tax. Congress will likely find the goal of lower corporate tax rates quickly running up against the consequent need to lower tax rates for non-corporate businesses. This occurs naturally under the New Flat Tax, which taxes all businesses at a single rate on their domestic net cash flow at the entity level. Likewise, the growing support for a territorial tax system—under which U.S. businesses are taxed solely on their domestic income—is also fully consistent with the New Flat Tax, which levies tax solely on domestic income.

Under the New Flat Tax, the individual income tax and the payroll tax are rolled into one system with the same tax rate that is imposed on business income. Nearly all other federal levies are repealed, leaving a simple system for both individuals and businesses. Under the New Flat Tax as it applies to individuals, only income used for consumption is taxed, thus eliminating the existing tax bias against saving. In addition, all distorting credits, exemptions, and deductions are eliminated, leaving only two credits and three deductions.

The first credit is the above-mentioned tax credit for health insurance. This tax credit is less distortive of economic decisions than current law is, but it remains a clear subsidy for the purchase of health insurance. It is necessary because the current-law tax bias favoring health insurance is so powerful and so entrenched that simply eliminating the tax advantage is impracticable.

The second credit carried over from current law is the earned income credit (EIC). The EIC needs reform in its own right, but it is also the largest income-support component of the overall federal anti-poverty program and one of its most effective elements. Changes in the EIC should then be considered part of the proposed budget for anti-poverty programs.

The three deductions are as follows:

The deduction for charitable expense, which is retained because this tax system taxes the individual on what he or she spends. Charitable contributions benefit the receiving organization and thus should be deductible for the recipient. A deduction for higher education, which recognizes that education expenses are a form of saving and investing simultaneously, which in every other instance is excluded from tax under the New Flat Tax. An optional home mortgage deduction with the proviso that if the homeowner chooses a mortgage with deductible interest, then the lender must, as under current law, continue to pay tax on interest income earned. Alternatively, the home owner may choose to forgo the deduction, in which case the lender earns tax-free interest income and can thus charge a lower mortgage interest rate.

The New Flat Tax, the tax reform plan, is implemented effective January 1, 2014.

Addressing the Fiscal Cliff

Addressing the Fiscal Cliff

Table 1 addresses each element of the fiscal cliff and the proposed steps that Congress should take on each of them.

Alison Acosta Fraser is Director of the Thomas A. Roe Institute for Economic Policy Studies, William W. Beach is Director of the Center for Data Analysis and Lazof Family Fellow in Economics, and Stuart M. Butler, PhD, is Director of the Center for Policy Innovation at The Heritage Foundation.

The editors are grateful to the team leaders who worked with policy experts throughout The Heritage Foundation to develop this report: J. D. Foster, Ph.D., Norman B. Ture Senior Fellow in the Economics of Fiscal Policy; Rea S. Hederman, Jr., Assistant Director and Research Fellow in the Center for Data Analysis; David C. John, Senior Research Fellow in Retirement Security and Financial Institutions; Robert E. Moffit, Ph.D., Senior Fellow in the Center for Policy Innovation; Nina Owcharenko, Director of the Center for Health Policy Studies; and Drew Gonshorowski, Policy Analyst in the Center for Data Analysis.

This plan was developed as part of the Solutions Initiative and funded by the Peter G. Peterson Foundation. The Peterson Foundation convened organizations with a variety of perspectives to develop plans addressing our nation’s fiscal challenges. The American Action Forum, Bipartisan Policy Center, Center for American Progress, Economic Policy Institute, and The Heritage Foundation, each received grants. All organizations had discretion and independence to develop their own goals and propose comprehensive solutions. The Peterson Foundation’s involvement with this project does not represent endorsement of any plan.


View the original article here