Taxes

Fourth Time's the Charm

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President Bush exercised the fourth veto of his administration today, and it's the first one I like: He  nixed an expansion of the State Children's Health Insurance Program that would rely on an unfair, highly regressive cigarette tax increase while extending benefits to families that are far from poor:

Speaking in Pennsylvania, Bush said he vetoed the bill because it was a step toward "federalizing" medicine and inappropriately expanded the program beyond its focus on helping poor children.

"I believe in private medicine, not the federal government running the health care system. I do want Republicans and Democrats to come together to support a bill that focuses on the poorer children," the president said, adding the government's policy should be to help people find private insurance.

Bush does not get points for consistency. If he's against federalization of health care and thinks taxpayer-funded medical benefits should be means-tested, how can he possibly justify the enormous expansion of Medicare caused by the prescription drug coverage he championed, under which I will one day be subsidizing Bill Gates' Lipitor? But he's vetoing this bill mostly for the right reasons, at the risk of looking like a stingy child hater. By contrast, Bush vetoed expanded federal funding for stem cell research (twice) based on a dubious moral distinction, rather than respect for constitutional limits on federal powers. And he vetoed Democrats' attempt to make funding for the Iraq war contingent on some sort of exit plan because he's committed to continuing the occupation indefinitely—also a mistake, in my view, and one that will prove much more consequential than the strings attached to federal research money. 

NEXT: Sending Poor Kids to Middle-Class Schools Doesn't Fix the System

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  1. I will one day be subsidizing Bill Gates’ Lipitor?

    That’s certainly a drawback, but I’d be willing to subsidize liposuction for a significant fraction of our population. I view it as a matter of improving the scenery.

  2. A principled difference of opinion about a substantive issue.

    See you at the ballot box.

  3. Bush said he vetoed the bill because it was a step toward “federalizing” medicine and inappropriately expanded the program

    Well good for him! If only he thought of that sooner.

  4. But he’s vetoing this bill mostly for the right reasons, at the risk of looking like a stingy child hater.

    He vetoed it because they gave more money than he recommended them give SCHIP.

    Is that the “right” reason to a libertarian?

    Odd — one would think that the “right” reason around these parts would be because the gov’t shouldn’t be in the health care game, not because the liberals are spending more than what Bush would spend. Or did libertarians suddenly start believing in gov’t health care for the poor?

  5. … I will one day be subsidizing Bill Gates’ Lipitor

    I think one of the best perks of having Bill Gates-level wealth would be the ability to go to the drugstore or doctor’s office and say, fuck all the paperwork, I don’t care if I get any kind of reimbursement from insurance or the Medicare or whatever, just throw a wad of bills on the counter and tell them take whatever you feel like, just hand me the Lipitor and some change. Or just keep the change. It’d be worth it to never fill out those forms again.

  6. He sure started the press conf with guns ablazin’:

    “Its a pleasure to be here in Lancaster County. You know I’m a decision
    making president, cause I have a job that requires alot of decisions be made, so thats why I make alot of decisions.” George W. Bush

  7. Republicans really need to cut the crap. They’re not free-marketeers: they should act like it.

    If I were some sort of Socialist mastermind out to wither away the free market, the modern Republicans would be my primary tool.

  8. The ignorance about this bill is stunning in the mainstream. They put the information about smokers alone funding this program at the end of their articles, or omit it all together. They fail to say that the bill expands coverage to a family of four who has a household income of up to $62,000 a year.

  9. Lewis, I’m not sure that is ignorance. I think it’s more like willfully withholding information that might lead readers to be less sympathetic to arguments that Bush is just being a big old meanie, as usual.

  10. It’d be worth it to never fill out those forms again.

    In many cases you will find that it is cheaper if you dont fill out the forms. I know my dentist charges me less than patients with insurance.

  11. Smokers are the new pi?atas. Hang ’em up and beat ’em till the cash comes out.

  12. Finally one decision by Bush that I can endorse. I also gotta give him some extra credit for this veto ’cause, as Jacob said, the uninformed will surely interpret it as an act of grandstanding by “a stingy child hater.”

  13. Bush does not get points for consistency?he’s against federalization of health care and thinks taxpayer-funded medical benefits should be means-tested

    One would think that if Bush is really against the federalization of health care he would be against SCHIP in its entirety, not just for the insufficiently poor kids.

    I will one day be subsidizing Bill Gates’ Lipitor

    I doubt it. Unlike Social Security, Medicare payroll taxes have not been capped since 1993. While Bill Gates may not be drawing earned income today, I think it is safe to say that he has paid more payroll taxes into Medicare than he will get back. That point notwithstanding, the two programs (Social Security and Medicare) still destroys more wealth in this country than anything else the Federal government does.

    A principled difference of opinion about a substantive issue. See you at the ballot box.

    Ah democracy. Two joes and a swill deciding who pays for dinner.

  14. “””In many cases you will find that it is cheaper if you dont fill out the forms. I know my dentist charges me less than patients with insurance.”””

    Cheaper on paper maybe, but I’ll bet you pay more out of pocket than most with decent dental insurance.

    “”””Smokers are the new pi?atas. Hang ’em up and beat ’em till the cash comes out.””””

    Well said.

  15. “””Ah democracy. Two joes and a swill deciding who pays for dinner.”””

    And liberty is a well armed swill contesting the vote

  16. Your confidence is underwhelming, swill.

  17. Bush uses the veto like a baby uses crying. To bully his way. But it is his prerogative.

  18. This isn’t the first Bush veto I support.

    Vetoes #1 & #3 on stem-cell research were entirely in line with a libertarian view of the role of government in scientific research.

    Since I didn’t notice this as one of the enumerated powers in the Constitution, I’d say that the government should have no role whatsoever.

    Granted, I disagree with the President’s religion-based reasoning for vetoing those particular bills, but one less taxpayer-funded research program is a step in the right direction.

    It wouldn’t be the first time he got the right answer for the wrong reasons.

  19. I’ve been watching this closely since it directly affects my livelihood. What was particularly crazy was the change in the way cigars are taxed; it would have worked out to an effective tax increase of a few hundred percent. The percentages only went up slightly, but the large cigar tax cap per stick went from $0.05 to $3. That means that a $4 would have been taxes at $0.05 before, but would now be taxes at a little over $2. Completely nuts.

  20. At the pharmacy my prescription is $4 without insurnce, or $10 with.

  21. ” That point notwithstanding, the two programs (Social Security and Medicare) still destroys more wealth in this country than anything else the Federal government does.”

    No. That honor goes to the War on Drugs.

  22. If I were President I’d do a “Constitutionality Test” for every bill that Congress hands me, and veto everything that doesn’t fall within the enumerated powers.

    If they don’t like it, they can always overrule me, but somebody’s got to take seriously their oath to “support and defend the Constitution”.

  23. “”At the pharmacy my prescription is $4 without insurnce, or $10 with””

    But how’s your dental?

  24. 18 Billion is nothing compared to what they spent on the war. THis is NOT FEDERALIZING Healthcare. THere will still be private health providers.

  25. “”” That point notwithstanding, the two programs (Social Security and Medicare) still destroys more wealth in this country than anything else the Federal government does.”””

    Destroy wealth? What does that mean?

    I doubt anyone is walking around saying, I used to be rich until I had to pay Social Security and Medicare. I don’t know anyone saying they would be rich if it wasn’t for Social Security or Medicare.

    When I look at my check, the order of most expensive taxes are
    1. Federal income tax
    2. Social Security tax
    3. NY State tax
    4. NYC tax
    5. Medicare tax

    My federal tax is a lot higher than Social Security and Medicare taxes combined.

  26. “”If I were President I’d do a “Constitutionality Test” for every bill that Congress hands me, and veto everything that doesn’t fall within the enumerated powers.””

    You would never get elected with a platform like that. It’s not popular. I use Ron Paul as an example. Sad but true.

  27. how can he possibly justify the enormous expansion of Medicare caused by the prescription drug coverage he championed

    Easy. He hadn’t been reelected yet when he championed that. Don’t you pay any attention to politics?

  28. Does anybody think there might be another reason for this veto other than the President’s stated reason?

  29. Dental is out of pocket, or on my wifes insurance.

  30. Well, the Democrats passed it, unlike the Republicans who passed the Drug benefit bill.

    Partinsanship?

  31. Destroy wealth? What does that mean?

    It means that in fewer than 20 years I have already paid more into those programs than I can actuarially expect to get back with no guarantees that:

    Payroll taxes do not continue to go up;
    The promised benefits do not go down;
    The age of eligibility does not go up and;
    The benefits I am “entitled” to do not become means tested.

    Social Security and Medicare destroy wealth because the programs are pay-as-you-go, not fully-funded. They destroy wealth because they take money from me, in my name, and give me back less. They destroy wealth because they remove a valuable incentive for me to defer gratification, save and prepare for the years when I will no longer be working by making benefit promises that the government may not be able to keep without radical changes to the program. Basically it means that if I had been allowed to keep that money and invest it I would be significantly wealthier. Is that enough? (Sorry for the threadjack)

  32. I’ve heard lower than 62,000 for a family of four, but even if we accept that figure, that is certainly not very much money at all for that many people. That’s 15,500 dollars a person, which I should think is not the amount most people with decent health insurance are making.

  33. MND,
    1/2 to 3/4 of the people in that family of 4 are making zero dollars per person, unless child labor laws have got a lot more lax recently.

  34. TrickyVic, gotta disagree with this statement:

    [paying cash is] “cheaper on paper maybe, but I’ll bet you pay more out of pocket than most with decent dental insurance.”

    Unless you are simply referring to how much you will pay on that particular day, this is impossible in the same way it is impossible to “win” at the casino. You might “win” today or tomorrow, but over any significant period of time you will statistically lose. The insurance company does not work at a negative profit. If they routinely pay the dentist more than their average customer paid for dental insurance (plus any investment income they get from your premium), they will go out of business. An insurance policy spreads out your payment and gives some level of assurance to the service provider he or she will get paid for services rendered. Yeah, yeah, group rates, etc, but you only come out ahead if you have something really icky happen to you that you could not have possibly saved for by stuffing money in the mattress rather than paying the insurance premium. You’re healthy, you lose economically. You’re average, you break even minus administration. You’re really unhealthy, you win, if you call that winning.

    As the bumper sticker says, “Ass, cash, or grass, nobody rides for free”

  35. Granted Scooby, but those 1/2 to 3/4 do eat, wear clothes, need their rooms heated, and have expensive health care needs. So a person has 15,500 a year to meet that? Sounds mighty slim to me!

  36. The Republicans hate poor people. Bush said children have no right to see a doctor when they are sick.62k is not enough for a single person to afford Healthcare if her employer doesn’t provide it.

  37. Actually seems like a brilliant plan to me. Funded by taxing smokers, the government now has an interest in seeing to it that their tax base grows to support the ever growing amount of destitute (62k!) children in need of health care.

    Most of these new smokers will of course themselves children. After years of smoking they won’t live quite as long, thus saving us money on the back end as the elderly are the largest consumer of expensive health care. Plus, we have the added bonus of solving the SS problem.

    Brilliant!

  38. SP asked: “Does anybody think there might be another reason for this veto other than the President’s stated reason?”

    Yeah. I hear Halliburton has a new process for turning little children into oil and the crony capitalists of the Bush Junta need raw material.

  39. Much as I hate to say it, Bush is right. This is mission creep and every legislator knows it. Unfortunately, there is sufficient demand for free unlimited healthcare for everyone that this is hard to vote against. We’re all screwed.

  40. 62K is vastly different depending on region. In Buffalo it’s a nice middle income. In NYC or really anywhere along the coasts, it’s a nice lower-middle to middle income–for one person.

  41. While Bill Gates may not be drawing earned income today, I think it is safe to say that he has paid more payroll taxes into Medicare than he will get back.

    Doesn’t matter. Medicare is “pay-as-you-go”, and that money is gone. People paying taxes when Bill gets his Lipitor will be paying the bill for Bill’s Lipitor.

    He vetoed it because they gave more money than he recommended them give SCHIP.

    Is that the “right” reason to a libertarian?

    Close enough. We’ll take what we can get.

    I’ve heard lower than 62,000 for a family of four, but even if we accept that figure, that is certainly not very much money at all for that many people.

    $62K is well over the median income for a family of four. If you are saying people making more than the median need government handouts for basics, then you are well and truly lost, my friend.

  42. RC-Well, if I confused the median household income with the median four person household income (see how the two can be different?) as I think you are doing, then perhaps I would be lost.
    http://www.infoplease.com/ipa/A0104583.html

    One should also add as Rhyun noted that the median income goes a LOT less farther in some places than others, and the SCHIP program is set in part by each state which would have information on whether the people involved were indeed in such a place.

  43. The mission creep is obvious — look at the legislation that launched the program (Public Law 105?33, Subtitle J – Section 4901.). It’s explicitly for “uninsured, low-income children.” Fabian socialism is alive and well.

    There are problems with the funding formula for SCHIP that even a lib outfit like R W Johnson said should be fixed by making sure all moneys are spent on the 200% FPL uninsured kids *first*. But no, both sides would rather continue the political bloodsport than think constructively.

  44. “””TrickyVic, gotta disagree with this statement:

    [paying cash is] “cheaper on paper maybe, but I’ll bet you pay more out of pocket than most with decent dental insurance.””””

    I pay zero for dental insurance. For teeth cleaning, I pay zero. How much do you pay for a cleaning?

  45. Mr. Nice –

    OK, it looks like the median income for a four person household is slightly north of $62K. Are you standing on the proposition that slightly less than half of the households in this country are incapable of paying for health insurance? How do you account for the fact that a great many households below the median manage to, in fact, pay for their own health insurance?

    the median income goes a LOT less farther in some places than others

    And this justifies a federal wealth transfer program how, exactly?

  46. “You would never get elected with a platform like that. It’s not popular. I use Ron Paul as an example. Sad but true.”

    Ron Paul’s lack of popularity has nothing to do with constitutional focus. If anything he’d have fewer supporters if he didn’t give lip service to the consitution.

  47. Ron Paul gets beat up everytime he puts the Constitution first, save a few of us that actually care about the Constitution.

    Anyone who puts liberty before saftey gets a beating from both parties. Saftey at all cost has been in vogue for a while now.

  48. Safety damn it!!! it’s all about safety.

  49. I thought it was all about the children? Liars!

  50. TrickyVic:
    I pay zero for dental insurance. For teeth cleaning, I pay zero. How much do you pay for a cleaning?

    How much does your employer pay for dental insurance, and how much does your insurer pay for a cleaning? I assure you your dental care is not free.

  51. This “debate” reminds me of the Simpon’s episode when Bart ran for Class President.

    Martin was walking around with a sign reading “A Vote for Bart is a Vote for Anarchy!” The camera then pans over to Bart, holding a sign that reads “A Vote for Bart is a Vote for Anarchy!”

    The Republicans are furiously hammering home the argument, “This is just the first step the Democrats’ plan to establish universal health care, paid by the government.”

    The Democrats respond by arguing, “This is just the first step the Democrats’ plan to establish universal health care, paid by the government.”

  52. “””How much does your employer pay for dental insurance, and how much does your insurer pay for a cleaning? I assure you your dental care is not free.”””

    No kidding! Nothing is really for free.

    The issue is how much YOU pay, not your insurance, nor your company. Perhaps if you review the original post, the term “out of pocket” was used. And I didn’t use the word free in clip you commented on either. I said zero cost to me.

    I initally responded to a comment from robc who said

    “””In many cases you will find that it is cheaper if you dont fill out the forms. I know my dentist charges me less than patients with insurance.”””

    It’s all about how much YOU or I pay.

  53. When I was last job hunting, the job that provided dental insurance also offered a much smaller salary. The difference was a lot more than the < $25 per month that my dental cleanings cost.

    Your “free cleanings” is not a data point that provides any significant information. The cost of your dental care to YOU doesn’t show up in the bill you (don’t) get from the dentist.

  54. “The issue is how much YOU pay, not your insurance, nor your company.”

    TrickyVic (and now I know why they call you that), that is NOT the issue. How much you paid today is meaningless. The point is how much you paid for the cleaning. That means how much you paid today plus how much you paid for the insurance, plus how much you paid for the insurance in terms of money taken from your paycheck that you don’t see (also known erroneously as the amount your employer paid).

    The point was “Is it cheaper to pay for the cleaning with or without insurance?” The answer is it is cheaper to pay without insurance. I think. That IS the answer, isn’t it?

  55. “””The point is how much you paid for the cleaning. That means how much you paid today plus how much you paid for the insurance, plus how much you paid for the insurance in terms of money taken from your paycheck that you don’t see (also known erroneously as the amount your employer paid).”””

    1. I pay zero for some services
    2. I pay zero for the dental insurance out of my pay check.
    3. Money not added to my paycheck is not money taken OUT of my paycheck. Unlike taxes. It may be for my benefit, but the money was never mine. At no time am I allowed to determine what is done with it nor am I allowed to say screw the insurance, just put the money in my check. I have NO ownership of that money at any point. It’s not that the money was in my check and I didn’t “See” it, as you say. It was never, ever there.

    We’ve never played foosball so you don’t really know why they call me Tricky.

  56. Vic, the HR department in your company is quite aware of how much money they are putting into your benefits package. They DO consider it a cost of employing you.

    In 2001 I was laid off and then hired back by the same company as a contractor for almost the next year. They paid me 150% of my previous salary. This was to make up for the benefits I would not be receiving as a contract worker. If the same company choose to drop dental insurance entirely, I know of no employee that would find this acceptable under the logic they weren’t getting this money from the company anyway. Its a benefit that is equal to a fixed amount of cash in your pocket.

    More importantly, I have never played foosball with you, but I DO know why they call you Tricky. It has something to do with foosball. If they ever have one of those Reason drunkfests in the Chicago area, I’m up for foosball (but there will be no tricks)

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