BigEthanol:TheRFScanhelpmitigategas

Big Ethanol: The RFS can help mitigate gas prices! CBO: The RFS is going to cause higher gas prices.

posted at 8:41 pm on June 26, 2014 by Erika Johnsen

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Well, this is rich.

In light of the recent political turmoil in Iraq and the potential for disruption to the global oil supply, Big Ethanol would like you to know that the Renewable Fuel Standard — i.e., the mandate through which the federal government forces you to buy ethanol by forcing U.S. refiners to blend an ever-increasing volume of so-called biofuels into the country’s oil supply — is a great way to enhance our domestic energy security and mitigate the impact of any surges in gasoline prices. They even made an advertisement about it, via HuffPo:

The liberal group Americans United For Change released a new television ad Thursday tying the fight over domestic renewable fuel standards to the situation in Iraq.

The ad highlights concerns that the current violence in Iraq may cause an increase in gasoline prices. “More chaos over there means higher prices here,” the ad warns. …

The group said the ad buy is worth $400,000. The ads will run in the Washington, D.C. area this Sunday during “Meet the Press,” “Face the Nation,” “This Week,” “Fox News Sunday” and “60 Minutes.” They will also run on MSNBC, CNN and FOX News next week. In addition, the group said it’s planning an “aggressive digital media campaign.”

When Congress first enacted and later expanded the Renewable Fuel Standard in 2007, lawmakers were relying on the crucial assumption that Americans’ demand for gasoline would continue to increase ad infinitum. Instead, innovation, greater fuel efficiency, and an economic recession resulted in slackening demand for gasoline, making the RFS’s requirements and the inherent subsidy for ethanol producers therein costly and unworkable for everybody else. The EPA finally started to acknowledge this reality last year and is currently mulling over whether to relax the requirements for 2014; that’s an eventuality that the Big Ethanol lobby desperately wants to avoid, and it’s trying to capitalize on the Iraqi instability to gin up more support for the mandate that sustains the bloated ethanol industry.

We already knew that the ad’s argument that ethanol means “less pollution” is totally bogus, but as for this latest claim about the Renewable Fuel Standard being a helpful policy to put downward pressure on gas prices? Yeahhhh… no, via The Hill:

Gasoline’s price will increase up to 9 percent, and diesel fuel will rise by up to 14 percent by 2017 because of the Renewable Fuel Standard (RFS) if Congress does not repeal it, the Congressional Budget Office (CBO) said Thursday.

The CBO’s analysis estimated that, in order to comply with the increasing mandates called for under the Energy Independence and Security Act, fuel refiners would have to more than triple their use of advanced biofuels by 2017, and would have to use much more ethanol in gasoline than the 10 percent blend that older vehicles can tolerate. …

The agency predicted that the Environmental Protection Agency, which oversees the RFS, will keep the mandate levels similar through 2017, since increasing them “would require a large and rapid increase in the use of advanced biofuels and would cause the total percentage of ethanol in the nation’s gasoline supply to rise to levels that would require significant changes in the infrastructure of fueling stations.”

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Tags: biofuels, CBO, Environmental Protection Agency, ethanol, gas prices, lobby, Renewable Fuel Standard

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Report:Obamaadmincongratulatesitselfoncuttingsubsidy-eligible

Report: Obama admin congratulates itself on cutting subsidy-eligible enrollees’ premiums by an average of 76 percent

posted at 6:41 pm on June 18, 2014 by Erika Johnsen

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The Department of Health and Human Services took on a quietly triumphant tone in releasing their latest ObamaCare report this week, gladly proclaiming that federal subsidies have helped to offset the prices of premiums paid by eligible ObamaCare enrollees by an average of 76 percent as evidence that ObamaCare is working. Since almost nine out of ten enrollees have been eligible for some amount of assistance, that’s a lotta’ discounts:

Premiums that normally would have cost $346 a month on average instead cost consumers just $82, with the federal government picking up the balance of the bill. …

It suggests that the federal government is on track to spend at least $11 billion on subsidies for consumers who bought healthcare plans on marketplaces run by the federal government, even accounting for the fact that many consumers signed up for coverage in late March and will only receive subsidies for part of the year. …

Obama administration officials Tuesday focused on the availability of affordable coverage for millions more consumers.

“What we’re finding is the marketplace is working. Consumers have more choices, and they’re paying less for their premiums,” Health and Human Services Secretary Sylvia Burwell said in a statement.

Which certainly sounds lovely, until you remember that “the federal government picking up the balance of the bill” actually means “taxpayers picking up the balance of the bill.” The estimated $11 billion in subsidies noted above only includes signups through the federal marketplace, and when you add in all of the states that ran their own exchanges, the cost could be more than $16.5 billion for this year alone — but the country can only absorb the collectivized/redistributed costs of ObamaCare up to a point, and those costs are only going to keep on rising. To name a few, those costs are coming in the form of fewer choices in terms of narrower networks and necessarily comprehensive plans (completely screwing over the young and healthy), larger deductibles, and of course, rising premiums, via a new study from the National Bureau of Economic Research:

We provide comparisons for purchasers of self only coverage in California and in 23 states with minimal prior state premium regulation before the ACA now using federally managed exchanges. Using data from the Current Population Survey, we find that the average prices increased by 14 to 28 percent, with similar changes in California and the federal exchange states; we attribute the increase primarily to higher premiums in exchanges associated with insurer expectations of a higher risk population being enrolled.

And an updated study from the Manhattan Institute examines premiums in 3,137 of the United States’ 3,144 counties, concluding that, on average, individual-market premiums are up by an average of 49 percent. As Peter Suderman at Reason aptly summarizes:

Relying on a 3,137 county comparison of the five cheapest individual plans available prior to Obamacare with the five cheapest plans through the exchanges, the study by health policy fellow Yevgeniy Feyman found that, on average, premiums were up 49 percent under Obamacare. Again, that’s an average, and it masks some variation—in New York, which had unusually restrictive, badly designed health insurance market rules prior to Obamacare, premiums are actually down quite a bit—but it indicates that the overall trend for unsubsidized premiums is up. …

To the extent that insurance is relatively cheap, it’s because taxpayers are footing a big chunk of the bill. Obamacare didn’t reduce the price of insurance; if anything it raised it—and then used tax revenues to cover the difference.

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Tags: CBO, costs, Department of Health and Human Services, ObamaCare, premiums, subsidies

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Romney:Let’sraisetheminimumwage posted

Romney: Let’s raise the minimum wage

posted at 2:01 pm on May 9, 2014 by Ed Morrissey

Alternate headline: Romney not running for President in 2016. Mike Barnicle braced Mitt Romney on the GOP’s demographic issues and its “conservative bent” on popular initiatives like immigration reform and a minimum-wage hike. Romney talks about the big tent of Republicanism, but notes that he supports a minimum-wage hike:

“I think we ought to raise it, because frankly, our party is all about more jobs and better pay, and I think communicating that is important to us,” Romney said on MSNBC’s “Morning Joe.”

In recent days, two of Romney’s former opponents, Rick Santorum and Tim Pawlenty, have also urged their part to raise the minimum wage.

Republicans are correct to aim toward blue-collar economics, especially after the debacle of focusing on the so-called “47 percent.” The minimum-wage hike, especially as proposed by the Obama administration, is the wrong way to go about it. The US has repeatedly hiked the minimum wage, and yet has ended up in the same position in regard to the percentage living in poverty anyway. Why? Because raising the minimum wage only temporarily boosts buying power, as prices rise and jobs erode in response to the higher costs it imposes.

In fact, as the CBO pointed out, the majority of the costs end up being borne by the poor the minimum-wage hike is supposed to help:

Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects (see the table below). As with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million workers…

The increased earnings for low-wage workers resulting from the higher minimum wage would total $31 billion, by CBO’s estimate. However, those earnings would not go only to low-income families, because many low-wage workers are not members of low-income families. Just 19 percent of the $31 billion would accrue to families with earnings below the poverty threshold, whereas 29 percent would accrue to families earning more than three times the poverty threshold, CBO estimates.

Moreover, the increased earnings for some workers would be accompanied by reductions in real (inflation-adjusted) income for the people who became jobless because of the minimum-wage increase, for business owners, and for consumers facing higher prices.

If minimum-wage hikes solves problems of poverty and inequality, then we would have solved both of those issues decades ago. We have yet to see any evidence that they actually produce anything but an extremely short-term benefit, and mostly to those who don’t need it. (Amity Shlaes presented an argument this week that it actually made the unemployment situation during the Depression substantially worse.) Unfortunately, the GOP hasn’t done a very good job of pointing out the pitfalls of this policy, while Democrats mainly demagogue the point on “fairness.”

What kind of economic message should Republicans have? We need to focus on policies that expand opportunity, especially in the entrepreneurial arena. The massive decline of business births over the last several decades has curtailed the kind of job creation and economic expansion that puts pressure on labor markets to increase compensation. As I argued in my column for The Fiscal Times this week, that decline is a result of a massively-expanded federal regulatory regime that stifles start-ups while giving advantage to rent-seeking large players in markets:

The problem, therefore, is national, and must relate to regulatory or tax policy or a combination of both. During this period, though, taxes didn’t increase sharply for businesses, at least not until recently.  With few and temporary exceptions, though, the federal regulatory regime has only increased.  The Phoenix Center pointed out this implacable escalation in its April 2011 policy bulletin on regulatory expenditures.

As a share of private sector GDP, the federal regulatory burden has increased over the same period as this study. The Phoenix Center recommended at the time that even a small decrease in federal regulatory burden – just 5 percent, roughly decreasing the regulatory budget by less than $3 billion – would generate an additional $75 billion in the economy and add 1.19 million new jobs to the private sector.

Instead, we passed Obamacare.

We have another indirect method to test this conclusion, too. Expanded regulation tends to favor larger and more established firms in a market, which have more resources and better economies of scale to deal with compliance issues. Sure enough, the Brookings Institution study found that kind of dynamism alive and well. “Whatever the reason,” the authors conclude, “older and larger businesses are doing better relative to younger and smaller ones.”

Instead of increasing costs on business and stifling even more jobs, the GOP should be aiming at cost and regulatory reductions, an expansion of energy production to lower costs even further, and streamlining the tax code to rid ourselves of the rent-seeking policies that offer unfair advantages to larger players. Republicans and conservatives should consider a more comprehensive and deliberate effort to rein in market consolidations on that basis, too. Anti-trust has always been more of a function of the other end of the political spectrum, but any effort to defeat crony capitalism has to aim at two targets: the reduction of centralized power in the public sector, and the reduction of centralized power in the private sector. Unless we’re serious about both, we’re not serious about ending crony capitalism, and we’re not serious about blue-collar economics.

Tags: blue collar economics, CBO, crony capitalism, economy, minimum wage, Mitt Romney

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CBO:Uhm,aboutObama’sFY2015budgetproposal…it’s

CBO: Uhm, about Obama’s FY2015 budget proposal… it’s way more expensive than the White House claimed

posted at 8:01 pm on April 17, 2014 by Erika Johnsen

I mean… I suppose it was never really, truly meant to be a useful document that could serve as a bipartisan guide on honest-to-goodness, passable policy proposals, anyway — even the New York Times deemed the FY2015 budget blueprint Obama released in March little more than a “populist wish list.” That’s probably why, for the fifth time, the White House didn’t bother abiding by the statutory deadline and why the U.S. House voted it down by an impressive 413 to 2. And yet… I nevertheless find myself discomfited:

A report released Thursday by the nonpartisan Congressional Budget Office says President Barack Obama’s budget request would mean significantly larger budget deficits than the White House claims.

CBO says the budget plan proposed last month by Obama would produce deficits of $6.6 trillion over the next 10 years — $1.6 trillion more than the White House estimates.

The main reason is that the White House has a rosier estimate of the economy‘s performance over the decade than CBO. That means the administration predicts higher tax revenues. …

CBO also says Obama’s budget contains $1.4 trillion in tax increase over a decade, much more than claimed by the White House. A $456 billion chunk of that comes from higher revenues because of an influx of workers through immigration reform. CBO also notes that Obama’s budget contains $193 billion over a decade in new tax credits for the working poor that officially are counted as spending because they’re issued as refunds.

So, the White House informed us that the budget plan would cut deficits by $2.2 trillion over ten years, but the CBO insists that that number is actually only about $1 trillion — and that even that would be achieved by a whole lotta’ tax hikes, which in turn would have a punishing effect on our already bogged down economy. Perfect.

Tags: Barack Obama, Budget, CBO, debt and deficit, economy

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Krauthammer: Can we all remember that we have added $7 trillion to the debt in 5 years, please?

Krauthammer:Canweallrememberthatwehave

CBO:ObamaCarepremiumsandhealthcarespendingwillrise

CBO: ObamaCare premiums and healthcare spending will rise by less than expected, because…

posted at 6:41 pm on April 15, 2014 by Erika Johnsen

The Congressional Budget Office released a report this morning that has received a lot of attention from ObamaCare’s many staunch media advocates because it essentially concludes that the cost of expanding coverage through the exchanges will be billions less than the CBO was predicting just a couple of months ago. That’s great news for the president’s crowning legislative achievement, right?

Health-insurance premiums for plans sold on the Affordable Care Act’s exchanges will be lower than previously expected, according to a report released Monday by the Congressional Budget Office.

The findings, by Congress’s nonpartisan spending analysts, result largely from the fact that insurance companies have redesigned plans on the government-run exchanges to shave costs. CBO found that individual policies on those marketplaces have narrower networks of doctors and lower reimbursement rates for health-care providers than is typical of employer-sponsored health plans.

As a result, CBO expects the federal government to spend about $165 billion less over the next decade on subsidizing health-insurance plans for lower earners than the office projected two months ago. Total spending on those subsidies is projected at $1.032 trillion between 2015 and 2024. The report was part of a broader federal spending update released Monday.

Did you catch that? Let’s go straight to the report for a closer look:

A crucial factor in the current revision was an analysis of  the characteristics of plans offered through the exchanges in 2014. Previously, CBO and JTC had expected that  those plans’ characteristics would closely resemble the characteristics of employment-based plans throughout the projection period. However, the plans being offered through the exchanges this year appear to have, in general, lower payment rates for providers, narrower networks of providers, and tighter management of their subscribers’ use of health care than employment-based plans do. …

The lower exchange premiums and revisions to the other characteristics of insurance plans that are incorporated into CBO and JCT’s current estimates have small effects on the agencies’ projections of exchange enrollment. Although lower premiums will tend to increase enrollment, narrower networks and more tightly managed benefits will tend to reduce the attractiveness of plans and thereby decrease enrollment. The net effect on projected enrollment in the exchanges is small.

In a nutshell, the CBO initially made its projections under the assumption that the plans offered through the exchange would be largely similar in terms of benefits to the sorts of plans being offered by employers — but that definitely isn’t going to be the case. The narrowed networks that insurers are using to keep costs down and the lower reimbursement rates for doctors and hospitals are things that neither consumers nor providers tend to like in the long run — which will likely mean more strain on the system and higher costs further down the road.

Tags: CBO, doctors, exchanges, health insurance, network, ObamaCare, premiums

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Howmany“new”Obamacareexchangeenrolleeswerepreviously

How many “new” Obamacare exchange enrollees were previously uninsured?

posted at 2:41 pm on March 31, 2014 by Guy Benson

Health care expert Bob Laszewski explains why the answer to this simple question should be the decisive factor in determining the relative success or failure of Obamacare:

Are enough people getting coverage who didn’t have it before to justify the sacrifices the people who were already covered––in the individual, small group, and large employer market––are making or will make? I will suggest the country will never really be able to judge how good or how bad Obamacare is until that question is answered…It’s easy to answer this question. We only need ask the carriers for two numbers:

1. The number of people they insured (and were paid for) in both the individual and small group markets as of December 31, 2013––the day before Obamacare started covering people.
2. The number of people that were insured (and paid for) in both the individual and small group markets on a specific date––March 31, 2014, for example.

I will suggest that asking for both the small group and individual market numbers is important as people have a tendency to move between the markets, particularly as employers drop coverage and their people go, or don’t go, into the exchanges. Then subtract one total from the other. We would have an excellent idea of just how many more people, net of any gains and losses, secured private insurance since Obamacare’s launch. Then people could make their judgments about how well Obamacare accomplished health insurance reform free from all of the spin.

Laszewski adds that independent of the previously uninsured issue, the administration’s enrollment figures are also inflated by counting unpaid “sign ups” — an issue we’ve covered ad nauseam.  The administration claims it doesn’t have access to payment delinquency stats, but that may not be true.  In any case, unless and until the White House releases complete and transparent data, the public will rely on outside estimates and studies to answer core questions.  So I’ll reiterate my question:  How many “new” Obamacare exchange enrollees were previously uninsured?  Laszewski takes a stab an answer, based on anecdotal reports he’s received from industry insiders:

My conversations with carriers suggest that about half of the enrollments come from the ranks of the previously insured. But that is just anecdotal information. I don’t have a hard number.

“Roughly half” is the most generous estimate I’ve seen.  Jonathan Cohn of the liberal New Republic points to data from a small handful of states where Obamacare is working relatively well as cause for hope among the law’s supporters.  But the national picture is murky — and based on three separate independent studies, the overall figures remain weak:

(1) RAND corporation – “A new study from the RAND corporation indicates that only one-third of exchange sign-ups were previously uninsured. The RAND study hasn’t yet been published, but its contents were made available to Noam Levey of the Los Angeles Times. RAND also estimates that 9 million individuals have purchased health plans directly from insurers, outside of the exchanges, but that “the vast majority of these people were previously insured.”

(2) Goldman Sachs – “Goldman Sachs is projecting that only 1 million Obamacare sign-ups will come from previously uninsured Americans. Indeed, it estimates that the number of total signups will be just 4 million — not 6 million, as the administration claims — because ‘HHS figures . . .count all persons who selected an ACA exchange plan regardless of whether or not they have actually completed the enrollment process by paying their premium.’ Goldman Sachs also anticipates that fully 75 percent of all the Obamacare sign-ups will be from people who already had insurance.”

(3) McKinsey – “Of the Obamacare sign-ups, only 27 percent had been previously uninsured in 2013. And of the 27 percent, nearly half had yet to pay a premium. (By contrast, among the 73 percent who had been previously insured, 86 percent had paid).”

American taxpayers have forked over $2 trillion to uproot an existing system with which most Americans were satisfied.  If only a fraction of the law’s “newly” enrolled previously lacked coverage, how many Americans will consider the broader expensive disruption to have been worth it?  Philip Klein notes how badly the White House has whiffed on Congressional Budget Office projections:

According to the Times, which cites a study from Rand Corp., “At least 6 million people have signed up for health coverage on the new marketplaces, about one-third of whom were previously uninsured.” That suggests that two million uninsured Americans gained coverage as a result of the law. Additionally, the article reports, “At least 4.5 million previously uninsured adults have signed up for state Medicaid programs.” So between Medicaid and the private exchanges, that makes 6.5 million previously uninsured Americans who have now gained coverage…But even as recently as February — when analysts knew how many states weren’t going along with the Medicaid expansion and were aware of the early technical glitches facing the rollout of Obamacare — the CBO still projected that the law would reduce the number of uninsured by 13million.

So they missed CBO’s anticipated target by 50 percent.  A new CBS News poll confirms what every other national survey has demonstrated. People dislike Obamacare — including younger Americans:

In an attempt to enroll healthier people into the health are exchanges, the Obama administration has been targeting young adults to sign up, but what do they think of the law? Well, they don’t like it so much. Despite young Americans’ overall support for President Obama (48 percent approve of the job the president is doing)…they are not enthusiastic about the ACA: 42 percent approve of it, but more (50 percent) disapprove — opinions were similar in January. Young Americans’ views on the health care law do not differ much from those who are older.

Millennials are uniquely screwed by the law’s generational wealth transfers.

Tags: CBO, ObamaCare, uninsured

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Video:CBOchiefdidn’tgetmemoObamaCarefixed

Video: CBO chief didn’t get memo ObamaCare fixed health care costs, calls them “fundamental challenge”

posted at 9:21 pm on March 19, 2014 by Mary Katharine Ham

This is Douglas Elmendorf, the guy responsible for evaluating the costs of all the nonsense Congress wants to do, often forced to use the nonsense numbers it provides him and project the effects of innumerable unknowable factors many years into the future for giant programs Congress itself has no idea how it will run or enforce. It’s an unpleasant job, but he’s an admirable, no-nonsense guy with a very knowledgable perspective on the fiscal problems facing this country. Maybe Sen. McCaskill’s been listening to him.

Below, Elmendorf explains what is known as common sense and fact to conservatives but is classified as damn-near traitorous fantasy by liberals. Guys, he argues, there are two major drivers of our fiscal problems and they will shortly be eating up all our resources. Those two things are Social Security and federal health care programs— specifically an expansion thereof, which despite what we’ve been told, is not bringing spending down. If we’re going to change those programs to address these problems, it will be less painful to do it sooner rather than later. Also, debt is bad and not exactly a jobs program.

Loopy, alarmist and reeking of a desire for austerity if you’re a Republican office holder. But what about when the No. 1 numbers guy concedes the obvious about our numbers?

Via CNS News:

“So we have a choice as a society to either scale back those programs relative to what is promised under current law; or to raise tax revenue above its historical average to pay for the expansion of those programs; or to cut back on all other spending even more sharply than we already are,” Elmendorf said.

“And we haven’t actually decided as a society…what we’re going to do. But some combination of those three choices will be needed.”

Elmendorf said there are various ways to proceed: “But they tend to be unpleasant in one way or another, and we have not, as a society, decided how much of that sort of unpleasantness to inflict on whom.” …

Elmendorf said the nation’s main fiscal challenge is not short-term deficits, but “the very high level of debt” over the long term:

“And a high level of debt will ultimately crowd out capital investment and slow accumulation of capital and slow the growth of wages and incomes. It also reduces the flexibility for policymakers to respond to future crises that arise.

“So it’s the high level of debt and the growing deficits in the long-term. The reason why action today would be beneficial is because if you — we want to make changes in programs for retirees or changes in the tax code, it’s better to make those with a warning. One wants to set — one wants to make changes. One wants to set them in motion early, even if their full effect won’t be felt for many years.”

An old profile of intrepid, upstanding nerd, Elmendorf is here.

Tags: CBO, Douglas Elmendorf, health care, Medicare, Social Security

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WhiteHousereleasesFY2015budgetreadout—$2.7

White House releases FY2015 budget readout — $2.7 trillion off from CBO projections

posted at 12:41 pm on March 4, 2014 by Ed Morrissey

The first question to ask is, why bother? Senate Majority Leader Harry Reid and Budget Committee chair Patty Murray have already decided not to produce a budget for FY2015, an announcement that got a bit lost in the Russian invasion of Crimea at the end of last week. Consider this an example of listbox-checking at the White House, and little more. OMB rolled out its eight-page brief this morning of the budget proposal called “Opportunity for All,” which will end up being just as stillborn as Barack Obama’s last four budget proposals.

A Roadmap for Growth, Opportunity, and Fiscal Responsibility: The President’s Budget provides a roadmap for accelerating economic growth, expanding opportunity for all Americans, and ensuring fiscal responsibility. It invests in infrastructure, job training, preschool, and pro-work tax cuts, while reducing deficits through health, tax, and immigration reform.

Builds on Bipartisan Progress: The Budget adheres to the 2015 spending levels agreed to in the Bipartisan Budget Act and shows the choices the President would make at those levels. But it also shows how to build on this progress to realize the nation’s full potential with a fully paid for $56 billion Opportunity, Growth, and Security Initiative, split evenly between defense and non-defense priorities.

If this truly built on “bipartisan progress,” then Reid would rush it through the Senate to put pressure on House Republicans. Murray’s demurral tells us all we need to know about the White House’s “bipartisan” approach on budgeting. The tear sheet is basically a regurgitation of Obama’s continuing demands for “infrastructure” spending as “investments,” which the White House claims will reduce deficits, both in real terms and as a share of the GDP.

Pay attention to the lead set of bullet items, especially transportation:

Stronger Growth and Job Creation:
o Advanced manufacturing – Invests in American innovation and strengthens our manufacturing base, including a national network of 45 manufacturing institutes.
o Research and innovation – Supports ground-breaking research to fight disease, protect the environment, and develop new technologies, and makes permanent the R&D Tax Credit.
o Pro-growth infrastructure – Lays out an ambitious, four-year $302 billion surface transportation reauthorization proposal paid for with transition revenue from pro-growth business tax reform.
o Government reform – Promotes government management that delivers improved services that are more effective, efficient, and supportive of economic growth.

“Transition revenue from pro-growth business tax reform”? That would require the Senate to actually produce a business-tax reform, a possibility that the White House closed by making outgoing Senator Max Baucus the ambassador to China, even though he knew little about his assignment. Until then, he and Orrin Hatch had been working on the Finance Committee to produce an overhaul of the tax code for both businesses and individuals that would have made the US more competitive and tax planning more straightforward. His replacement, Ron Wyden, will have other priorities.

His colleague Barbara Boxer certainly does. The revenue for transportation spending will come from new or higher refinery taxes, Boxer told the American Association of State Highway and Transportation Officials, since higher gas taxes are not politically possible and new mileage taxes are still a ways off. No matter what, though, Boxer pledged to get more funding, because Democrats won’t even consider looking for ways to spend less:

“I don’t see support for raising the gas tax and there is absolutely no way we’re going to cut spending, so it’s going to have to be a creative way to fund this in reality,” Boxer said.

“The administration, you are going to be hearing from them today, is that right? I think you’ll be excited at what they have done on this whole area of transportation,” Boxer told the annual AASHTO Washington Briefing. “They’re looking at tax reform which is certainly one way to make sure we have the funding for six years.”

The Federal Highway Administration has projected that the Highway Trust Fund, supplied by gasoline and diesel fuel taxes, will have to soon alter reimbursements to states for work due to a shortfall. The Congressional Budget Office predicts the Highway Trust Fund could run out of money by August.

Boxer says she’s supportive of new taxes for additional funding.

“Either we’re going to replace the gas tax with another way of funding which I love, which is the fee at the refinery level, I think I may be the only one that likes that idea, so I haven’t seen a groundswell of support for that idea.”

Note too the promise that government “reform” will generate more funds for Obama administration priorities. As far back as 2009, the White House has claimed that they couldn’t find any more spending to cut through reform. When did that change?

Readers probably didn’t need the Washington Post to tell them that Obama’s foreign policy comes from a rich fantasy life — and they won’t need the Post to tell them the same about his economic projections:

President Obama is just out with his newest budget request — which forecasts a dramatic reduction in deficits over the coming decade. The request paints a much rosier debt scenario than a report released by the nonpartisan Congressional Budget Office a month ago. In his budget request, Obama projects public debt as a percentage of gross domestic project falling to 69 percent by 2024, while the CBO has it rising to 79 percent — a difference of 10 percentage points, or roughly $2.7 trillion.

This is largely because Obama assumes the passage of legislation that the CBO doesn’t, and he assumes those laws will generate far more revenue over the next decade. In 2024, the spending/revenue gap (i.e., the annual deficit) in Obama’s budget amounts to 1.6 percent of GDP. CBO’s projected deficit is more than twice that, at 4 percent of GDP.

A $2.7 trillion difference? That’s like an entire year of federal spending … or at least it was during the Bush administration and Republican control of Congress.

Tags: Barack Obama, Barbara Boxer, Budget, CBO, FY2015 budget, spending, taxes, transportation

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Video:“Working9to5″(TheObamaCareRemix)

Video: “Working 9 to 5″ (The ObamaCare Remix)

posted at 7:21 pm on February 21, 2014 by Mary Katharine Ham

It’s a brave new, more liberated work world.

Working 1 to 5
Not trying to be controversial
it’s just I’m home and I’m
watching J.G. Wentworth commercials
Say goodbye full time
and hello to under-employment
Because I’m working fewer hours
than a Flappy Bird high score

Tags: CBO, exchange implementation, ObamaCare, part-time jobs, unemployment

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White House: If anyone’s been hired since 2010, ObamaCare must be awesome, or something

WhiteHouse:Ifanyone’sbeenhiredsince2010,

Quotesoftheday postedat10:41

Quotes of the day

posted at 10:41 pm on February 18, 2014 by Allahpundit

The new Congressional Budget Office (CBO) report finds that 16.5 million workers would get a raise from increasing the minimum wage to $10.10 per hour and this would help millions of hard-working families, reduce poverty, and increase the overall wages going to lower-income households.

On employment, CBO’s central estimate is that raising the minimum wage to $10.10 per hour would lead to a 0.3 percent decrease in employment and CBO acknowledges that the employment impact could be essentially zero. But even these estimates do not reflect the overall consensus view of economists which is that raising the minimum wage has little or no negative effect on employment. For example, seven Nobel Prize winners and more than 600 other economists recently stated that: “In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market.”…

Overall the logic for the finding that raising the minimum wage does not result in large adverse impacts on employment is that paying workers a better wage can improve productivity and thereby reduce unit labor costs. These adjustments, along with others that firms can make, help explain why the increase in the minimum wage need not lead to a reduction in employment. Higher wages lead to lower turnover, reducing the amount employers must spend recruiting and training new employees. Paying workers more can also improve motivation, morale, focus, and health, all of which can make workers more productive. In addition, by reducing absenteeism, higher wages can increase the productivity of coworkers who depend on each other or work in teams. In addition, businesses can adjust in other ways rather than reducing employment (for example, by accepting lower profit margins). CBO’s estimates do not appear to fully reflect the increased emphasis on all of these factors from the recent economics literature.

***

White House economist Jason Furman rejected the Congressional Budget Office’s prediction that a minimum wage increase will cost 500,000 jobs as out of step with the economic consensus.

“This is not a piece of original research into the impact of the minimum wage on employment,” Furman told reporters during a Tuesday afternoon White House call. “It’s completely reasonable to think that it would have zero impact on unemployment,” he said, citing the “highest quality” studies of the question.

The Congressional Budget Office estimated that increasing the minimum wage would cost about 500,000 jobs, a view that another White House economist said reflects an freshman-level understanding of economics that used to be common among economists but has since been abandoned by most professionals.

***

“No matter how the critics spin this report, the CBO made it absolutely clear: raising the minimum wage would lift almost one million Americans out of poverty,” House Democratic Leader Nancy Pelosi wrote in a statement.

For Democrats, the report hit on their income inequality fault line, showing that 16.5 million low-wage workers would see their incomes jump.

“Hard-working Americans deserve a raise, and this new report shows that over 16 million Americans will receive a raise from an increase in the minimum wage,” wrote Senate Majority Leader Harry Reid, D- Nevada, in his own statement.

***

[Liberals] further argue the minimum wage stood above $10 an hour in the 1960s. Raising it to $10.10 an hour would (supposedly) only return it to this previous level.

The Heritage Foundation found this analysis questionable. The most accurate inflation measures show that the minimum wage has never stood much above $8 an hour. So the President actually proposes hiking the minimum wage one-seventh above its all-time high. That would strongly encourage employers to hire fewer less skilled workers. Heritage Foundation analysis concluded that—even accounting for any stimulus effects—the proposed minimum wage hike would cost 300,000 jobs.

The Congressional Budget Office’s new report concurs.

***

“This report confirms what we’ve long known: While helping some, mandating higher wages has real costs, including fewer people working,” Brendan Buck, a spokesman for House Speaker John Boehner, said in a statement. “With unemployment Americans’ top concern, our focus should be creating, not destroying, jobs for those who need them most.”

Senate Minority Whip John Cornyn of Texas concurred.

“The non-partisan Congressional Budget Office confirmed yet again what we know to be true of government overreach in the marketplace: raising the minimum wage would slash jobs and harm an already fragile workforce,” Cornyn said in a statement. “Whether it’s Obamacare, a minimum-wage hike or a trillion-dollar stimulus bill charged to the nation’s credit card, the bottom line is the president’s big-government experiment kills jobs.

***

A new report by the Congressional Budget Office (see this summary by the Washington Examiner’s Joseph Lawler) contradicts several arguments President Obama has advanced as part of his campaign to raise the federal minimum wage to $10.10 per hour…

Obama: “Rais[ing] the federal minimum wage to $10.10 wouldn’t just raise wages for minimum-wage workers, its effect would lift wages for about 28 million Americans.”

The CBO said that 16.5 million workers — not 28 million — would receive a raise if the minimum wage is raised and that “increased earnings for low-wage workers resulting from the higher minimum wage would total $31 billion.” However, this increase would be paired with lower effective earnings “for the people who became jobless because of the minimum-wage increase, for business owners, and for consumers facing higher prices.” Thus, “Once the increases and decreases in income for all workers are taken into account, overall real income would rise by $2 billion.”…

The bottom line is that Obama has presented hiking the minimum wage as a no-brainer that would boost the economy, increase wages and immediately reduce poverty without adverse effects. CBO has estimated that in reality, the action would raise unemployment among lower-income workers, deliver most of its benefits to families living above the poverty level, and have offsetting adverse effects on businesses and consumers. To the extent that it will reduce poverty, according to the CBO, the effect will be less significant and less immediate than what Obama has claimed.

***

Obama presented it as a way to help struggling families: “Americans overwhelmingly agree that no one who works full time should ever have to raise a family in poverty.” That comment provides a misleading picture of who minimum-wage earners are. The White House’s own graph promoting the idea shows that only 26 percent of minimum-wage earners have kids. Thirty percent either have spouses and no kids or are kids themselves.

Raising the minimum wage is not an effective tool against poverty, either. A 2010 study found that state poverty rates were unaffected by minimum-wage increases. It also found that if the minimum wage were raised to $9.50 an hour from $7.25, only 11 percent of the beneficiaries would be people who live in poor households. Forty-two percent would be people living in households making more than three times the poverty line (which means they’re well above the country’s median household income)…

My American Enterprise Institute colleague Michael Strain puts it this way: “Hundreds of thousands of low-skill workers are trying to find a job but can’t. Is it really the right time to raise the cost of hiring and make it harder for businesses to hire them? Some studies say a higher minimum wage will lower employment; some say employment will remain unchanged. Shouldn’t we err on the side of caution?”

***

In an important article in the economic journal Challenge, “A Conservative Case for the Minimum Wage,” Oren Levin-Waldman, professor of public policy at Metropolitan College of New York, offered a similar view and made compelling moral points. Higher pay “increases the autonomy of low-wage workers,” he said, thus advancing “personal freedom” and “a core concept in conservative thought, which is personal responsibility.” This, in turn, means less dependence “on the largesse of others.”

And, as Annie Lowrey argued earlier this month in the New York Times, those who rightly worry about the breakdown of marriage need to remember that “creating good jobs with growing wages at the bottom of the income scale might be the best, if hardest, way to encourage young couples to wed.”

Conservative politicians really need to ask themselves: If they refuse to raise the minimum wage and at the same time insist on cutting health care and wage-support programs, are they not consigning millions more of their fellow citizens to lives of poverty? Most Americans reject this view, and that includes most conservatives who believe in work, family and personal responsibility.

***

Tags: CBO, jobs, minimum wage, obama, unemployment

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WhiteHouse,BigLabor:TheCBOhasno

White House, Big Labor: The CBO has no idea what it’s talking about on minimum wage

posted at 8:41 pm on February 18, 2014 by Erika Johnsen

What else can they say, really? The Democrats have built their entire midterm strategy on an economic populism focused around the minimum wage as a way to both cudgel Republicans and distract from ObamaCare’s woes — it’s much too late to turn back now, not even for a super official, nonpartisan report confirming many of the plan’s negative effects on the job market and those in poverty to which Republicans have been pointing. This one’s getting the White House’s full sugarcoat/whitewash treatment, via the WFB:

A top White House economist says that President Obama’s minimum wage increase will have “zero effect” on employment, despite a CBO report that the proposed hike would likely eliminate 500,000 jobs.

“Our view is that zero is a perfectly reasonable estimate of the impact of raising the minimum wage on employment,” Council of Economic Advisers chairman Jason Furman said on a conference call with reporters shortly after the report came out.

Furman said the CBO was out-of-step with the White House’s views on the proposed 40 percent hike, though he praised the report for highlighting wage boosts that will accompany the hike.

“Sometimes you have respectful disagreement among economists,” he said of the parts of the study that did not confirm White House rhetoric about the $10.10 wage.

“Our view is that zero is a perfectly reasonable estimate of the impact of raising the minimum wage on employment.” …Geez, man — if that’s how you feel, how can you possibly justify stopping at $10.10? Why not $20? Why not a million, and we can all live happily ever after?

And of course, the obligatory Labor reaction, via the WSJ:

Organized labor wasted no time responding to a Congressional Budget Office report that undermines one of unions’ top priorities: raising the federal minimum wage, along with wages in general. …

Richard Trumka, president of union federation AFL-CIO, which is holding its winter meeting in Houston this week to strategize for the year,  immediately challenged the study’s findings and said it echoed false claims by conservatives.

“Every time momentum builds for lifting wages, conservative ideologues say it will cost jobs.  Every time, they’ve been dead wrong,” Mr. Trumka said in a statement emailed during his closed-door meeting with labor leaders in a Hilton hotel ballroom.

“This is more of the same noise,” Mr. Trumka said, adding that conservative economists don’t care about workers.  “Our country is finally poised to lift millions out of poverty and make our country work for the people who work. Let’s raise the wage and we’ll prove the CBO wrong again,” he added.

“Let’s raise the wage and we’ll prove the CBO wrong again”? Is that kind of like, “We have to pass it to find out what’s in it”?

Tags: Big Labor, CBO, Democrats, midterms, minimum wage, White House

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CBO:Raisingtheminimumwageto$10.10an

CBO: Raising the minimum wage to $10.10 an hour could eliminate 500,000 jobs by 2016

posted at 3:21 pm on February 18, 2014 by Allahpundit

I’m treating it as good news. At least 500,000 people won’t have to worry about “job-lock” now.

There’s no problem here that indefinite unemployment benefits can’t solve, my friends.

Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects (see the table below). As with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million workers…

The increased earnings for low-wage workers resulting from the higher minimum wage would total $31 billion, by CBO’s estimate. However, those earnings would not go only to low-income families, because many low-wage workers are not members of low-income families. Just 19 percent of the $31 billion would accrue to families with earnings below the poverty threshold, whereas 29 percent would accrue to families earning more than three times the poverty threshold, CBO estimates.

Moreover, the increased earnings for some workers would be accompanied by reductions in real (inflation-adjusted) income for the people who became jobless because of the minimum-wage increase, for business owners, and for consumers facing higher prices.

So more than 80 percent of the gains in earnings will go to people other than the very poorest, and meanwhile as many as a million people potentially could end up being laid off. When you net out all the income created and lost by this disruption, says CBO, you come up with a modest gain of $2 billion, or about what the feds spend in four hours on a given day. AEI’s Michael Strain visualizes the trade-off this way:

CBO: Raise the min wage by 40%, total employment falls by 0.3%. http://t.co/naTcNhL7cj

— Michael R. Strain (@MichaelRStrain) February 18, 2014

And as icing on the cake, per CBO, while hiking the minimum wage would reduce deficits slightly in the near term, it would have the opposite effect as the timeline gets farther out. I realize there’s an apples-and-oranges element in comparing this to workers voluntarily leaving the labor force under ObamaCare, but put the two together and we’re now looking at three million jobs disappearing from Obama initiatives on top of the many millions that disappeared over the past five years during and after the recession. What exactly is our employment target at this point?

Tags: CBO, job lock, jobs, minimum wage, poverty, unemployment, wage

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