“Somewhere between Critical and Too Late to Deal with It”

Following the bankruptcies of Stockton, San Bernardino, and Mammoth Lakes earlier this year, Moody’s says it expects more California municipalities to go insolvent. The credit rating agency notes that more than 10 percent of the state’s cities have declared fiscal crises. 

I’m not sure why so many politicians believe their budgets are exempt from the laws of mathematics. But when you pay out unaffordable benefits to public employees – including lavish pensions found almost nowhere in the private sector – eventually, those costs have to be paid off. Budget tricks, accounting gimmicks, and low-ball cost projections – the methods used by the Obama administration (ObamaCare) and the California Governor’s office (high-speed rail) – can fool people for a while. But in the end, bills have to be paid, one way or another.

What’s disturbing is that in some respects, the main thing that distinguishes the federal government’s budget from those of California’s failing municipalities is simply the scale of the irresponsibility.  

Consider Social Security. In their latest 75-year budget projection, the Social Security trustees estimate the total Social Security shortfall at an unbelievable $134 trillion. Even adjusted for inflation, the figure is $30.5 trillion in today’s dollars, which the Associated Press notes is eight times bigger than the entire 2012 federal budget. 

Social Security trustee Chuck Blahous comments, “To me, urgent doesn’t begin to describe it. . . . I would say we’re somewhere between critical and too late to deal with it.”

A shortfall of trillions of dollars in a single entitlement program is not something our nation can afford. When you combine this shortfall with the trillions in unfunded liabilities in Medicare and Medicaid, and join that with the trillion-dollar deficit the federal government now posts every year, and add that to our current national debt of $16 trillion – you get a level of indebtedness that will shatter the United States.   

Nothing can protect us once we accumulate this kind of ruinous debt – not our military, not our scientists, and not our politicians. The only solution is to make tough decisions to restructure our entitlements today so that we don’t saddle our children with this disastrous debt tomorrow.

Food Shortages in America, Part II

Readers of my blog may remember my warning last year about possible food shortages. Well, CNN is reporting that the worst drought in more than fifty years has pushed up U.S. corn prices 50 percent in the last six weeks, potentially leading to a spike in food prices across the board. While the government can’t do much to make it rain, it can ease the plight of both farmers and consumers by ending policies that make the crisis worse.

One immensely damaging policy is the Renewable Fuel Standard, which requires ethanol to be blended into gasoline. Along with other members of Congress, I have been warning for years that the RFS boosts food prices and suppresses corn production, as a rising share of the corn crop – currently 40 percent – is converted to ethanol. 

In the Ways and Means Committee last year, we helped to cancel the ethanol tax credit. But that is not enough; with price shocks and food shortages looming, we need action now. As more than 100 of my colleagues and I argue in this letter, the Obama administration must immediately ease the ethanol mandate, as it is entitled to do when the RFS stands to inflict severe harm on the economy.

It’s time to admit the truth – the government’s experiment in using food for fuel has failed.     

The Amazing Google Car vs. Scandal-Plagued High-Speed Rail

I recently took a ride in Google’s experimental driverless car. An engineer drove us to a certain spot, then took his hands off the wheel, his feet off the pedals, and flipped a switch. From there, the car drove along a pre-programmed route completely on its own based on radar, GPS, and other data. This incredible vehicle navigated complicated intersections and four-way stop signs without a hitch. It stopped for pedestrians and avoided parked cars on narrow streets while stunned onlookers snapped pictures. According to the engineers, this technology, which they hope to put on the market in the next few years, could significantly reduce road accidents, allow more cars onto the existing road infrastructure, and shorten travel times.

This breakthrough innovation is a testament to the ingenuity of American business. It stands in stark contrast to government planners who have an inexplicable, romantic attachment to trains. Take California’s extravagant high-speed rail project, whose initial cost estimate has already doubled to $68 billion, while many observers forecast a final cost as high as $100 billion. Recall that “green energy” enthusiasts championed China’s high-speed rail system as a model for our own – until a horrific high-speed rail crash in eastern China killed around forty people. That followed a slew of safety scandals and audits that revealed widespread corruption in China’s high-speed rail project. We don’t hear so much about the glories of Chinese railways anymore, but California’s high-speed rail boosters march blindly forward, oblivious to the fact that the state can’t afford it. 

There’s a clear choice here between two visions: investing tens of billions of dollars we don’t have in a train project whose principal model is mired in scandal, corruption, and death, or asking the government to simply get out of the way and let the creative genius of the private sector blaze a trail into the future.

Amid High Unemployment, Team Obama Brags About Government-Created Jobs

Two days ago, the Department of the Interior (DOI) released a report on the “economic contributions” it supposedly made to the nation last year. In an accompanying press release, the department claims it “contributed $18.75 billion to California’s economy in 2011 and supported 117,170 jobs.”

Sadly, $19 billion apparently isn’t enough money to secure a steady water supply for Central Valley farmers. Somehow, deliberately starving Californians of water didn’t make it into the DOI’s press release.

Mind you, the Department’s magnanimous “contribution” to California is just a drop in its giant bucket of government benevolence. Nationwide, the DOI says it “contributed $385 billion to the U.S. economy and supported more than 2 million jobs in 2011.”

Let’s pretend for a minute that the DOI did indeed “support” – whatever that means – more than 2 million jobs last year. This needs to be balanced against all the jobs suppressed by the Obama administration’s self-defeating energy policies. How many potential jobs were lost due to President Obama’s rejection of the Keystone XL pipeline, his continued ban on energy drilling off the California coast and elsewhere, and his crusade to “bankrupt” – in his words – any company that builds a new coal plant?

This is not to mention the doomed jobs that won a last-minute reprieve when Congress rejected Obama’s cap-and-trade scheme – which may still be replaced by equally destructive EPA limits on greenhouse gas emissions from power plants.

And don’t forget about future job losses caused by Obama’s tax policies, including the huge ObamaCare taxes as well as his current drive to raise taxes on Americans making over $200,000, which would crush many small businesses.

Ironically, the smiley-faced DOI report was published just after we learned that U.S. unemployment topped 8 percent for the 41st straight month. It’s hard to believe the economy could be doing this badly when the DOI acts, in its own account, as a miraculous job-creating machine.

My Health-Care Alternative for the Old and Poor

It’s time to move beyond ObamaCare.

Whether it is struck down by the Supreme Court, defunded by Congress, or simply collapses from its unsustainable costs and the impossibly complicated bureaucracy it seeks to impose, ObamaCare won’t work. It will depress the economy, increase the national debt, discourage medical innovation, and erode the quality of healthcare.

The fundamental mistake of ObamaCare’s architects is that they refused to recognize the systemic failure of government-provided healthcare – Medicare and Medicaid had begun malfunctioning long before Nancy Pelosi bribed and bullied Congress into approving Obama’s healthcare bill. Now we need to begin assembling the components of a replacement plan that works better than ObamaCare and more efficiently than the current system.

To that end, I am introducing the Choice in Healthcare Act, which will create a voluntary, 10-year pilot program for a new healthcare delivery system, beginning in June 2013.

Geared toward low-income individuals and seniors, this simple plan will replace participants’ Medicare and Medicaid benefits with roughly equivalent funds put on a debit-style “Medi-choice” card. Participants can then use their card to buy the health insurance of their choice on the open market and to pay for out-of-pocket expenses such as co-payments and deductibles. In succeeding years the card’s funding level will be adjusted for inflation, and any unused funds will roll over to the next year.

This plan will streamline healthcare delivery by replacing hospital insurance, Medigap, prescription drug programs, Medicare, and Medicaid with a simple debit card. Instead of dealing with the notorious restrictions, exclusions, and red tape of government-provided healthcare, participants will be empowered to control their own healthcare and force insurers and providers to compete for their business. Medicare and Medicaid beneficiaries will be freed from these failing, regimented programs, and will gain the same access and choice in healthcare enjoyed by other Americans.

The pilot program would be launched in eight counties in California’s San Joaquin Valley, an impoverished area whose residents are woefully underserved in healthcare. According to a December 2005 Congressional Research Service report, “By a wide range of indicators, the SJV [San Joaquin Valley] is . . . one of the most economically depressed regions of the United States” and is “suffering from high poverty, unemployment, and other adverse social conditions.” The report found that the region had nearly double the percentage of Medicaid participants (22.9 percent) compared with the national average (11.7 percent) and around half the ratio of active doctors (1.4 doctors per 1,000 people in the San Joaquin Valley, compared with 2.3 doctors per 1,000 nationwide).

The valley’s poorer inhabitants are precisely the kind of people whom government-provided healthcare is supposed to help. Yet their access to quality care is severely limited due to myriad restrictions and bureaucratic obstacles. As a result, local hospitals, doctors, and medical professionals have shown enthusiastic support for our plan.

The pilot program’s costs will be minimal, since it will largely redirect today’s inefficient government spending. But its potential rewards are high. It will constitute a voluntary real-life experiment – applying only to those who choose to participate – in using choice and competition to eliminate the waste, inefficiencies, and restrictions of the current system. Best of all, if it works in the difficult conditions of the San Joaquin Valley, it will likely work across the country – with essentially no additional costs.

In fact, if the program is implemented on a large scale, it will have beneficial ripple effects throughout the healthcare sector and the national economy. It will encourage widespread entrepreneurship, innovation, and competition as providers seek to meet the needs of empowered consumers. It will harness the free market to drive reforms that will benefit all Americans, particularly the poorest.

Big, powerful reforms don’t have to be complicated. To improve healthcare, you don’t need a thousand-page bill like ObamaCare that engineers a government takeover of one-sixth of the U.S. economy and criminalizes the failure to buy a health insurance product. The program outlined in the Choice in Healthcare Act could be a crucial part of an affordable, free-market alternative. It deserves a chance to prove its effectiveness in the real world.

This editorial originally appeared in the Wall Street Journal on June 22, 2012. Read the article at: http://online.wsj.com/article/SB10001424052702304765304577479053352812014.html?mod=WSJ_Opinion_LEFTTopOpinion

Press Release: 500 Jobs in Jeopardy While “MoFo” Law Firm Packs-in the Cash

Members of Congress call for quick action by the Obama Administration to save jobs and halt activist judge and former partner at Morrison & Foerster (www.mofo.com)

Washington DC – Congressmen Devin Nunes and Jeff Denham, Majority Whip Kevin McCarthy and Chairman Rob Bishop, Subcommittee on National Parks, Forests and Public Lands, today called on the Obama Administration to act to protect the jobs of backcountry horsemen who are being threatened by a liberal activist judge and a National Park Service decision to delay permits for commercial operators.

“There are approximately 500 jobs hanging in the balance.  The Obama Administration must act swiftly to seek permission from the courts to issue a one year permit to save these small businesses,” said Rep. Devin Nunes.  “I am working with Chairman Bishop and the House Natural Resources Committee in an effort to convince them to do just that.”

A recent federal court decision has resulted in alterations to the permitting process necessary for pack and saddle backcountry horsemen to enter the Sequoia and Kings Canyon National Parks. If commercial operating permits are not granted, backcountry operations will be suspended. Many of these family businesses cannot survive an economic blow of this magnitude. According to the Park Service, Judge Richard Seeborg denied a request to expedite a hearing on issuing permits. 

“The Obama Administration must issue these permits immediately. Issuing the permits would prevent the cancellation of tourism associated with the pack and saddle companies, and the subsequent revenue upon which so many jobs and businesses in this area rely,” said Chairman Bishop.  “Congress clearly intended for these family owned and operated companies to continue at these parks as they have for decades. This is another example of this Administration’s ongoing assault on access to public lands and further illustrates that they will always place radical special interest groups before hard-working Americans.”

“At a time of unacceptably high unemployment rates, refusing to act to save these jobs and preserve access to our public lands is intolerable. I will continue to fight against the Obama Administration's war on western jobs, and instead work for commonsense policies that help create jobs and preserve important access to our national treasures,” said Majority Whip McCarthy.

It is within the Obama Administration’s power to once again seek permission for a one year permit for commercial backcountry horsemen operations.

“Preventing access to federal lands harms small, rural communities that rely on tourism to bring dollars in to the community,” said Rep. Jeff Denham.  “There has been a concerted effort by this Administration to limit access to public lands without due consideration to the impacts on local communities. Federal lands are publicly owned and should be managed in the best interest of the public, not to their detriment.” 

“I don’t agree with the ruling by the newly appointed liberal activist judge. Federal law is clear. Congress intended that backcountry horsemen have access to the park,” said Rep. Nunes.  “The ruling in itself is not an excuse to shut down an entire season of commercial operations.  It defies common sense that officials have so far refused to actively protect jobs.”

This lawsuit, filed in late 2009 by the High Sierra Hikers Association, was bankrolled by Morrison & Foerster a politically connected San Francisco law firm. Judge Richard Seeborg, who presided over the case, is a former partner at Morrison & Foerster. The law firm, better known as “MoFo” as chided by Jay Leno (see video), has contributed more than $100,000 in campaign contributions to liberal Democrat Members of Congress and Secretary of the Interior Ken Salazar.

Law firms such as “MoFo” claim to do this type of legal work “pro bono”.  In this case, “MoFo” who is reported to have a record $930 million in revenue last year, will see a big payday from the federal government as a result of the Equal Access to Justice Act.  This law stipulates that attorney’s fees be reimbursed by the taxpayers in successful cases.

“The conflict of interest in this case is appalling. At a minimum the judge should have recused himself,” said Rep. Nunes.