Monday, December 24, 2012

Obamacare: Accelerating Our Orwellian Descent

During our All-Day Republican Caucus we discussed the Affordable Care Act (a.k.a. Obamacare) and its impact on state government and Utah citizens.  The information presented was disconcerting to say the least.

To start, let me share a joke that was shared in our meeting:

A patient walks into the doctors office for a follow up exam.  The doctor greets the patient:

Doctor:  "I have good news and bad news for you, which do you want to hear first?"
Patient: "Well, lets hear the good news first."
Doctor: "The good news is we found out you have five days to live."
Patient:  "If that is the good news, what is the bad news?!"
Doctor: "The bad news is we got the lab results three days ago."
This morbid humor characterizes to a degree what Utah has been dealing with regarding Obamacare rules and regulations.  The Federal government has asked the States to make specific decisions regarding how it will implement Obamacare policy.  To help the States know how to make their decisions, the Feds have promised to give information on what the rules and regulations will be.  Unfortunately, the Feds have not given the State enough information to make an informed decision.  This, even while the deadlines continue to come and go.  Governor Herbert's letter to Kathleen Sebelius best illustrates the Federal Government's failure:     Governer Herberts Letter to Kathleen Sebelius

So this helps illustrate the dysfunction at the Federal level in implementing its own policy.  They have created a bureaucratic monster so complex that they haven't figured out which feet to put on which legs or where the legs are supposed to go and how many there should be.

Yet, while the monster appears to be missing brains too, it is still armed with a powerful stinger.  Starting in 2014, potent and painful penalties await the general public and business owners who find themselves on the wrong side of Obamacare:

  • Families who do not have "qualified"  health coverage will be fined up to $2,085 per year.
  • Business owners (50 employee +) who do not provide "qualified" coverage for their employees must pay a fine of $2,000 per employee per year.       

In addition, since the intent of the Affordable Care Act is to provide "affordable" health care for everyone, everyone will now be taxed more to pay for this newly affordable care.  Starting in 2013:

  • New 40% Excise Tax on High-Cost Plans
  • Tax Deductions for Medicare Part D are Eliminated
  • New Medicare Payroll Tax
  • New Medicare Tax on Investment Income
  • New $2,500 Limit to Flexible Spending Accounts
  • Floor Raised on Deductible Individual Medical Expenses from 7.5% to 10% of Income  
All these new taxes add up to about $492 BILLION in money leaving taxpayers pockets and going to the Federal Government.  That equates to about $1,640 per American (man, woman, and child) in new tax burdens for 2013 alone.  Yet more new taxes are scheduled for 2014 and beyond.

One of the most upsetting parts of Obamacare law (if you aren't upset enough already) is its effort to push as many people possible into Medicaid.  The new law accomplishes this through devious financial incentives.  For instance, if you are an individual who is not covered by your employer, you will likely seek an insurance policy as an individual in the new Exchange marketplace. (Exchange is a fancy term for a website that will have policies for you to buy.)  If you get a personal policy, you can apply to get a tax credit for the cost of your premium for the year.  However, to get that tax credit, you have to apply for Medicaid...even if you don't want Medicaid benefits.  And, if you qualify for Medicaid, guess what?  You don't get your tax credit!  

This diabolical scheme creates the ultimate incentive for people to capitulate and enroll in Medicaid rather than indulge in such old-fashioned practices as self-reliance and rugged individualism.

Of course, all these new Medicaid applications need to be processed and Obamacare law requires that the States foot the bill for processing all this paperwork.  It will cost Utahans at least $38 Million and could cost much more just to hire all the new paper shuffling bureaucrats to process the tax-credit applications each year.  I can think of much better uses for that money; and I am sure you can too.

The 2013 General Session will prove eventful as we grapple with these new Federal laws that contradict Utah values.  State statute must be changed by the will of the Legislature in order to bring our law in compliance with Obamacare.  I am in favor of a strong dose of Federalism for just such an occasion.        


Wednesday, December 19, 2012

All-Day Caucus: Big Changes Coming

We had an opportunity to meet as a Republican Caucus and discuss many of the issues we will be facing in the 2013 Legislative Session.

One of the important things we discussed was the Guiding Principles of our Legislative efforts this year.  Here they are:

2013 - Utah Republican Caucus Guiding Principles

Of our time, we spent about 2 hours discussing Obamacare.  I will be treating that subject in a whole separate post a little later.  You won't like what you read...but you need to know anyway.  Stay tuned for more on that subject.


We also discussed our budget to a great degree.  With the "Fiscal Cliff" debate ongoing, it is making it very difficult for us to plan.  If everything stays like it is today (which it won't) then we have about $300 Million is new revenue to spend.  That is what we are building our budgets around.  However, if we "go ever the Fiscal Cliff" then our new revenue turns into a $200 Million deficit and we will have to cut programs.  It's a lovely scenario to say the least.  In my business, I always try to underpromise and overdeliver.  Consider this your warning that things could get ugly from a budget standpoint this session.  If not, then there shouldn't be too many complaints.

The governor's proposed budget is interesting in that it allotted for a 1% increase in the Weighted Pupil Unit and a 1% increase for salaries for state works but not a 1% salary increase for teachers.  I don't know if that was a technical oversight or posturing for negotiation.  Either way, that little detail is sure to get some attention from the education community.  Based on our discussion, the Legislature seems prepared to fund a 1% increase in teacher salary.


Alcohol policy will be changing this year as well.  I spoke to Senator Valentine over the summer and he indicated he is working on a Master License concept that would allow businesses that need multiple licenses to operate to consolidate to just one.  This would then free up the excess licenses for use by other businesses.  This should hopefully ease some of the burden in the business community who is impacted by the scarcity of supply of such licenses.  Also, we were told that there will be a proposed change to the "Zion Curtain" provision that places an awkward partition between bartenders and patrons at restaurant bars.


The proposed food tax increase was brought up momentarily.  It was panned by the body. Don't expect a lot of excitement from the House of Representatives on this subject.


The last item of business was regarding the proposed Mandatory Helmet Bill for motorcyclists.  This bill was viewed very skeptically by my constituents.  It also didn't help that the rhetoric surrounding the bill was very divisive and highly agitated the opposition to it.  I spoke against the bill on the grounds that the people should be trusted to make decisions for themselves,  that micromanaging behavior based on trying to protect the public coffers was a slippery slope to greater government intrusion in our lives, and that this bill was an assault on a symbol of freedom and independence.  I asked for a Caucus position against the bill and one was received by unanimous vote.  What this means is that if the bill passes the Senate where it has originated, it will not make it far in the House and will most certainly fail a Floor vote.  

Thursday, December 6, 2012

Federalism: Saved By The Potheads?

The state of Washington recently legalized the use of marijuana.  The Telegraph reports more on the situation:

The new law only allows cannabis to be smoked inside, and doing so in public is still subject to a $100 fine.
However, the Seattle Police Department told its 1,300 officers that until further notice they shall not issue tickets, and no officers were present at the Space Needle event.

On the city's police website, spokesman Jonah Spangenthal-Lee said: "The department's going to give you a generous grace period to help you adjust to this brave, new, and maybe kinda stoned world we live in."

He added: "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a Lord of the Rings marathon in the privacy of your own home, if you want to."
After my gut reaction of repulsion at the idea of legalized marijuana, I had a couple more thoughts.  First, the Seattle Police Department "maybe kinda" needs to hire a new spokesperson.  The second, is that Washington has just crossed a new and unprecedented threshold in social experimentation.       

What is even more interesting is the way state lawmakers have designed (and perhaps justified) the measure:

In Washington it is now legal for adults over the age of 21 to possess an ounce of the drug, or up to 16 ounces of cannabis-infused goods like brownies or cookies, or up to 72 ounces in liquid form.
 It will be subject to a 25 per cent tax at each stage of that process. The move is expected to bring hundreds of millions of dollars in tax revenue for spending in areas including schools and health care. The establishment of the regulation and tax system will take another year. (my emphasis added)
This seems to me like selling your birthright for a bowl of porridge.  It's very short sighted.  The education and healthcare damage done to the population through increased marijuana usage will exceed any fiscal "benefit" the state receives.  They will spend more than that on marijuana users who need more education and increased healthcare services as a result of their own usage.   Just give it time.  This will be a one step forward, two steps back policy. 

Yet, not all is lost.  There may be some silver lining in the cloud of smokey munchy-inducing haze.  The marijuana issue has been a key front line in the 10th Amendment/state's rights fight.  The report continues:

Washington's stance comes in the wake of an already escalating conflict between the federal government and states over the burgeoning medical cannabis industry.
Prosecutors in several areas of Washington said last month that they were dismissing scores of existing cannabis possession cases.
I read Thomas Woods' book Nullification a couple years ago when I was first elected to the Utah Legislature.  One of the fundamental acts of asserting Federalism and state's rights is the cooperation of state authorities (like prosecutors, sheriffs, and state employees) in implementing the new state's rights based policy.  That kind of buy-in appears to be working in Washington.

The question then is what will the Federal government do?  In the article, the Feds say that nothing has changed.  However, the local political support that Federal agents once enjoyed has diminished significantly.  Many times these Federal agents live in the states they are assigned to work in.  Do you think it will be easy for them to act against the wishes of their neighbors and community?  In a practical sense, compelling local Federal agents to enforce Federal statute against the wishes of the community will be very unpopular, adversarial, and ultimately ineffective.

For this reason, I wish Washington well on its adventure into Federalism.  Although I don't believe their new marijuana policy will be a blessing to their people in the long-term, they have acted according to their own consciences and created laws that best serve the will of a majority of its people.

If they are successful, they will set a strong precedent.  Utah will have an opportunity to follow its own course and establish laws that are better executed, less expensive, and in harmony with the conscience and will of Utahan's.  We can shed ourselves of the clumsy and obtuse mandates of a cumbersome and bloated Federal government that has overstepped its Constitutional bounds.

We would be wise to watch carefully.  So, while Washington state is lighting up, the Utah Legislature should be looking out.    

Monday, December 3, 2012

House Committee Membership 2013-2014

Here is the list of Representatives and who will be sitting on which Standing Committees:

Standing Committees 2013-2014 PDF

And here is who is sitting on the various Appropriations Subcommittees: Exec Approps 2013-2014 PDF

District 9 Committee Assignments 2013-2014

I received a call from Speaker Lockhart today with my assignments for the 2013 Legislative Session. 

Standing Committees:

Political Subdivisions - VICE CHAIR - I have served on this committee for the past two years and have enjoyed the subject matter that comes before us.  We deal with land and title issues as well as municipal and county governance.  We also hear topics related to election law and points related to the political economy in general.  I was notified that I will be promoted to serve as Vice Chair of the committee  which will be an exciting new opportunity. 

Business and Labor - This committee deals with many exciting issues relating to government interaction, regulation, and interference (-cough-) in the marketplace.  Since the decisions made by the committee deal with issues that have such a significant impact on the economy and commerce, I look forward to voicing my opinion to help to keep our government within its proper bounds.  

Appropriations Subcommittee:

Business, Economic Development and Labor Appropriations - I have also served on this committee the past two years.  We oversee and fund an interesting medley of departments and programs including the Department of Alcohol Beverage Control, homeless initiatives, USTAR, Department of Commerce, and more.  Many of our programs actually generate a profit for the taxpayer.  I look forward to continue making a difference by focusing taxpayer money to generate the best return on the dollar. 


Speaker of the 3rd House - I am not quite sure what I did to deserve this position but I accepted it anyway. Perhaps it is my dry comedic stylings or my personal fascination with doilies and cutlery.  Regardless, I will be in charge of the House social calendar, evening events, and the Speaker's Dinner.  So don't be surprised if the House is graced with the soothing tunes of blues/funk/rock music during dinner or I hire a bunch of mimes just to add an avant-garde edge to the event...or both.