September 2009 Archives

It never ceases to amaze me how the busiest woman in Washington remains so accessible.  Just this week alone, I am aware of 8-10 hours of direct Washington senior staff time devoted to Maine doctors, patients and health care professionals in reviewing the impact of the Baucus bill on Maine families and businesses.  Impressive. 

Unfortunately, it would appear that there are a number of folks in Washington who are unwilling to make the same time commitment, as they rework one sixth of our economy.

Senator Snowe laid out her understanding of the need for "full consideration" during the health care debate in a statement she released on her website on September 22:

Given the gravity of this landmark endeavor... there should be no question this undertaking commands a painstaking process and the requisite time for full consideration of the spectrum of alternatives and improvements...and to ensure the numbers "add up" within the final product - as we are the only committee of jurisdiction with respect to financing a package.  The implications of this legislation are simply too broad and monumental to do otherwise.

Senator Snowe's statement is pretty straight forward. She believes that members of the Senate Finance Committee should be able to read the bill and know how much it costs -- a sentiment she shares with her constituents back home.

On the following day, September 23, Senate democrats voted down an amendment proposed by Republican Senators Bunning and Cornyn, which would have required that the actual legislative language and a final Congressional Budget Office price tag be posted for 72 hours on the Committee website for public review. This would occur before the Senate Finance Committee could vote on final passage.

One way to easily get a sense of how irritated Senator Snowe is on a particular issue, is to time the release of one of her "statements" to the actual event to which it is referring.  Think of it like a thunderstorm - where you time how far apart the lightning and thunder are to judge just how close the storm is. I would say the storm is directly over head at this point as Snowe's statement flashed on her website shortly after the vote. She did not mince words saying,

"The fact is words matter and so do the numbers.  This amendment represents a common sense, practical, pragmatic, good government approach to understanding the totality and the collective impact of what we do. We want to be sure that we are absolutely confident in the integrity of the product that we are going to be voting on in the final analysis." Senator Snowe Press Release

Let me translate that statement for the Democrats on the Senate Finance Committee. You are skating on Potomac River ice in the middle of a Snowe storm.  It's not going to end well.  When she uses words like "common sense"  "practical" and "pragmatic" in the same sentence - you might want to consult with your Senate colleagues on the Right.  They learned to speak Moderate in the previous Administration.   The grimace on their faces -followed by a Cheshire cat smile- should be translation enough.

The way I see it -- Senator Snowe and her staff have work tirelessly to save the health care bill from complete implosion by offering a series of amendments designed to breathe new life into the reform effort --and perhaps provide the Gang of Six a little more time to work out some type of bipartisan bill.  She continues to be accessible to folks back here in Maine, and her staff is speaking daily to doctors, state legislators, other health care professional as well as patients -- in an attempt to find solutions that will work for Maine people.

I can assure you right now - that reading the bill and knowing how much it costs are the first two items on Senator Snowe's health care reform agenda and the same goes for her constituents back here in Maine.  The failure of Democrats on the Finance Committee to recognize that fact may very well signal the end of any hope for bipartisanship in health care reform.

 

Tarren Bragdon is the CEO of The Maine Heritage Policy Center and has been involved in health care policy research and analysis for over 13 years.  He served four years in the Maine House of Representatives and is the youngest person ever elected to that body.  He testified before the U.S. Senate Small Business and Entrepreneurship Committee regarding health reform in 2007, at the invitation of Chairman John Kerry and Ranking Member Olympia Snowe.  He can be reached at tbragdon@mainepolicy.org.

 

Today Maine's Department of Labor released new  unemployment data for August, 2009.  It contains some good news and bad news. 

First, the good news.  As I blogged on earlier, Maine's labor force has been shrinking and had set an unprecedented record of six consecutive months of decline.  That record will not get worse as the labor force grew slightly by 678 people.  Although this is a small number and we still have to  hope it does not get revised away in the future.

The higher labor force also means fewer "shadow unemployment" folks which left the modified unemployment rate at 9.8 percent (click "continue reading" to view chart).

However, the bad news is that the ranks of the unemployed grew by 792 people.  As a result, the unemployment rate rose to 8.6 percent from 8.5 percent.

 

The U.S. Census Bureau last week released updated information on the number of uninsured people in Maine.  Maine's number of uninsured is now 21,000 higher than pre-Dirigo (2004) and the second highest in New England.  In contrast, the number of uninsured in neighboring New Hampshire has dropped, despite the fact that New Hampshire's Medicaid program is less than half as large as Maine's.   The numbers speak for themselves.  The promise of Maine's public option experiment was to cover all of the state's uninsured people by 2009 through Dirigo Health.  Unfortunately, after spending more than $155 million in taxpayer funds and raising taxes on private health insurance to fund the Dirigo experiment, we now learn that Maine has more uninsured people than before Dirigo began.   The Dirigo policies are expensive with premiums skyrocketing 74 percent in four years, the benefits have been reduced, the program has been closed to new enrollees for two years, and the taxes to pay for this scheme actually make other health plans more expensive.  How much worse does it have to get before Maine politicians can admit that this is not working and should not be duplicated by Congress with a federal government plan like Dirigo?   Two weeks ago, Health and Human Services Secretary Kathleen Sebelius was in Maine to announce that millions of federal dollars will be spent to help prop up Maine's Dirigo disaster.  Here are several questions that she did not answer, but should have?  Given the lack of success in trimming Maine's uninsured population - how can Maine's leadership possibly justify taking federal money, during a time of unprecendented federal deficits, to prop up Dirigo?       Latest US Census Bureau figures show Maine's number of uninsured climbed by 22,000.    Maine now has 136,000 non-elderly uninsured, up 22,000 from last year and up from 115,000 in 2004, the first year before Dirigo was implemented (DirigoChoice began covering people on Jan 1, 2005). New Hampshire, with an almost identical size population, actually experienced a drop in the number of uninsured, from 136,000 in 2007 to 131,000 in 2008, despite the fact that NH's Medicaid program covers 97,000 people compared to Maine's 223,000 for this same non-elderly population. Maine (at 12.3%) has the second-highest percent uninsured of all the New England states - NH (11.5%), CT (11.4% ), VT (10.6%), MA (6.3%) and RI (13.4%) and the highest in northern New England.

The Welcome Back Tax (described here) will hurt Maine's business climate by increasing the cost to business of finding new workers and new investment.

First, the cost of finding new workers will rise because in order to attract talent "from away" Maine businesses will have to absorb some, if not all, of the Welcome Back Tax.  In a perfect world, Maine's businesses would be able to find all the skilled workers they need right here in Maine.  Unfortunately, they cannot.  As a result, this tax will put Maine businesses at a disadvantage when seeking out-of-state workers to bring to Maine.

Second, the cost of finding businesses and/or investors "from away" will also become more problematic.  A business seeking to expand in Maine will find their rate of return reduced for their non-resident owners.  A lower rate of return will force many businesses who would otherwise locate in Maine to look for greener pastures.

In the end, the Welcome Back Tax will mean fewer businesses and fewer jobs for all Mainers.

Posted by Arnie Clark, Director of the Center for Constitutional Law

There has been a lot of discussion lately over the relative merits and drawbacks of the recent blast of changes to the tax laws here in Maine.  Most of that discussion has been from a policy perspective--about whether the changes are good policy or bad policy.  One consideration that has been getting overlooked in all this is whether the new law is even constitutional to begin with.  

Take, for example, the newly created "household credit."  Under the old law, taxpayers could use deductions (standard or itemized) and personal exemptions to reduce their taxable income.  Under the new law, taxpayers can no longer use deductions and exemptions.  Instead, they use the household credit to reduce their tax liability.  (As a shining example of tax code simplification, the household credit replaces the deductions and exemptions, but the taxpayer's household credit is calculated based on what the taxpayer's deductions and exemptions would have been.) The big difference, though, is that the household credit is only available to established residents.  Suppose you are a new resident moving to the state, or a Maine native coming back to raise your family here.  You will be greeted with a big tax bill your first year back.  Meanwhile, all your neighbors with the same household income that were here before the new law took effect will pay a much lower tax.  Welcome Back!  Or, suppose you work here in Maine, but you commute from out of state to do so.  You will be greeted with a big tax bill every year.  Welcome Back!  So, what about this "household credit" and the "Welcome Back Tax" it creates?  Are they constitutional?

After a bit of looking, it appears this new law runs afoul of no less than three provisions of the United States Constitution.  This paper (pdf) summarizes how the new income tax scheme collides with the Commerce Clause, the Privileges and Immunities Clause, and the Equal Protection Clause.

The amount of the tax isn't the same for everyone.  For a family of four with an average household income, the Welcome Back Tax can amount to $2,200, and the more kids you have the higher the tax can go.  I doubt I'll hear someone explain how the Welcome Back Tax encourages businesses to move here, or encourages our young people to come back home.  I'd be even more surprised to hear someone explain how the Welcome Back Tax is constitutional.

My new study was released today showing that over the last decade state government spending has soared by $2 billion--an whopping increase of 45 percent.  As a result of this runaway spending, Maine's government payrolls have expanded by 3,400 workers while the private sector has lost 13,000 jobs.  To put it another way, for every new government job, the private sector lost 4 jobs.  The job loss is so severe that there are now fewer Mainers employed in the private sector than a decade ago.

The email dings started around 10:00 pm, and continued throughout the night as folks throughout Maine sent me the latest report on CNN.com that quotes "sources" who claim, "President Obama and top aides have quietly stepped up talks with moderate Republican Senator Olympia Snowe of Maine on a scaled-back health care bill, according to two sources familiar with the negotiations."

I know that Washington DC folks spend a great deal of time in an alternative world, but seriously - Senator Snowe engaged in behind the scenes talks with the President?  Forget for a moment that Senator Snowe has been working on health care issues since President Obama was in grammar school, the real issue here is that Senator Snowe doesn't need to do anything behind the scenes with the Whitehouse, or anyone else for that matter.

I met with her personally during the August recess back here in Maine when she talked to dozens of Maine folks in a series of health care talks throughout the state.  Here is what I learned: She is worried about costs and the impact on the deficit, the public option plan is "off the table", she wants more private insurance companies in Maine (we have 3), and she doesn't support higher taxes - especially during a recession.

Those concerns and opinions were not from "unnamed sources," they were straight from Senator Snowe.  And just to be certain, I spoke to her Chief of Staff and her Health Care Legislative Aid this morning.  There is nothing new - other than the fact that Senator Snowe continues to be committed to working for health care reform with her colleagues in the "gang of six" and that "nothing has changed that would justify the CNN story." 

I think the fundamental problem here is that the folks at the White House - who are very likely spinning this story in an attempt to pressure Senator Snowe - are totally misreading the way she operates.  While the "moderate" label is often used by the far right to protest Senator Snowe's actions - the left is about to learn a very important lesson from the Moderate from Maine. 

It is not an act.  It is not something Senator Snowe does to get re-elected or to curry favor.  She believes that there is middle ground and she looks for it. For her, middle ground means giving businesses the opportunity to join together and purchase health care - regardless of state lines. It involves tort reform, it involves ensuring folks have skin in the game (not "free" government health care) and it involves truly bending the cost curve.  The bottom line is that Democrats in Congress, and this President, have failed to find the middle ground in the health care debate. In fact, they have veered so far off the center that they will find no sympathy - behind the scenes or not - from Senator Snowe or her other moderate colleagues.

As for the other "White House" strategy where CNN reports,  "Allies of the president hope that if Snowe accepts a health care agreement, she might also bring along her Republican colleague from Maine, moderate Senator Susan Collins." Don't hold your breath.

In fact, watch and listen to the video below - Senator Collins rejects the public option, and the health care reform effort in her own words, as she responds to a question from an SEIU member. (The relevant part starts at 55:25 and runs for two minutes). 

So, my suggestion to the White House: put away your shovels, there is no Snowe in the forecast.

 

 

 

-Tarren R. Bragdon is Chief Executive Officer of The Maine Heritage Policy Center. Prior to becoming CEO in January of 2008, Tarren served for five years as the Center's Director of Health Reform Initiatives.

During 2001 and 2002, he served as the special assistant to the President of the Maine Senate, Senator Richard Bennett. In this capacity, he provided policy research, analysis and advice on a variety of policy areas, focusing on healthcare and tax policy.

From 1996 through 2000, Tarren served in the Maine House of Representatives representing District 119, part of Bangor. He is the youngest person ever to be elected to the Maine House, being sworn in when he was just eleven days past the constitutional requirement of twenty-one years of age. During his tenure in the house, he served on the Joint Standing Committee on Health and Human Services.

email: tbragdon@mainepolicy.org