Health Alert: War on the Poor

What is the worst feature of the stimulus package and other legislation being considered by Congress? It is the systematic attempt to undermine 25 years of reform of social institutions — reforms designed to liberate the lowest-income families from welfare state programs that trap them and make them perpetual wards of the state.


She Works Hard for the Money

Here are some specifics:

  • Ending the D.C. school voucher program. The city spends more and has worse outcomes than anywhere else in the nation. In taking on the teachers unions and turning things around, Michelle Rhee, chancellor of D.C. public schools, has gained national attention and even drawn praise from Barack Obama. Provisions buried in the stimulus package, however, will send 1,700 children who now attend private schools back to the failing schools from which they previously escaped.
  • Ending the Milwaukee school voucher program. It’s the most successful school voucher program in the country and the teachers unions and many liberals can’t stand it. The stimulus package showers money on Milwaukee for new school buildings — even though existing ones are sitting empty — but prohibits spending a dime of it to support private education.
  • Undermining welfare reform. It’s the most successful public policy reform in modern times — cutting the welfare rolls in half and helping people be responsible, self-supporting citizens. The stimulus bill intentionally encourages states to increase their welfare rolls, undermining successful reforms.
  • Undermining unemployment compensation reform. Over the past several decades, successful state reforms have reduced unemployment and moved people more quickly into new jobs. The stimulus package would reverse some of those gains.
  • Undermining (private) Medicare Advantage plans. These plans give low- and moderate-income seniors access to the same types of plans accessible to every other American. Without them, seniors will have to pay three premiums to three plans (Medicare Part B, Medicare Part D and Medigap) and still not have the coverage younger Americans take for granted. [Read more about the critical role the Medicare Advantage program plays in providing low-income and minority Medicare beneficiaries with access to health care.]
  • Undermining children’s health insurance. Based on estimates of the Congressional Budget Office (CBO), of the 4 million children expected to newly enroll in SCHIP, 2 million will lose their private coverage in the process. The problem: While private insurance gave them access to most doctors and facilities, SCHIP typically pays below-market rates and creates access problems as a consequence.
  • Undermining free labor markets. A labor union has only one real purpose: to monopolize the supply of labor to employers and obtain above-market wages and compensation. This can only work to the extent the union can restrict supply and keep potential competitors out of the market. Through the long history of the labor movement, the people excluded have been disproportionately women and minorities, and they are invariably poorer. Card check, mandatory arbitration and other legislative goals of organized labor will not help those at the bottom of the income ladder.
  • Undermining free trade. The “buy America” provisions of the stimulus package appear to violate international agreements and invite a trade war. These are the very mistakes that made the Great Depression deeper and longer than it would have been otherwise. Protectionism does not help raise the living standards of the poor.
  • Taxing the Poor. Despite a “firm pledge that no family making less than $250,000 a year will see any form of tax increase,” people are now facing the largest tobacco tax increase in history. The Obama administration estimates it will raise $38 billion over the next five years. According to Brad Schiller, a pack-a-day, low-income smoker will lose half of Obama’s “Making Work Pay” stimulus tax cut ($8-$10 a week) in higher cigarette taxes. A two pack-a-day smoker will lose all of the tax cut.

Comments (10)

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  1. Richard Walker says:

    You forgot to mention cap and trade. Even its supporters admit it will disproportionately penalize the poor. See the Wall Street Journal’s editorial on this:

  2. Uwe Reinhardt says:

    I love the viceo clip embedded in this post, John.

    If the lady in the clip works hard, imagine how hard a Wall Street banker making, say $25 million a year must be working crafting and selling credit default swaps — by my reckoning about 1,250 times as hard as the dramatis personae in your clip.

    And yet we have the gall to raises taxes on that poor banker!

    Don’t be too soft on the poor. That lady probably evades taxes by not smoking.



  3. Ftimmins says:

    It seems Mr. Reinhardt misses the point. It is not the Wall Street banker making 25 million using dubious business practices that is being punished. Rather it is the other millions of successful workers and businesspeople who have made honest livings that pay the price of the “stimulus”.

    But I suppose that is what a liberal politician might call “collateral damage” from a noble initiative.

  4. Richard Johnston says:

    Mr. Reinhardt must have been sleeping during the class in principles of economics in which the professor related compensation to creating value. I’ll bet a now-highly-taxed cigar Bill Gates did not work a million times harder than the typical American, yet he deserves every penny he–here comes that word liberals don’t like—earned.

  5. Tom H. says:

    This is consistent with the evidence on private charitable giving. Turns out, conservatives give more to charity than liberals.

    As someone (I forgot who) once said, liberals like the idea of helping people, but they don´t really like the people.

  6. Ray says:

    Libs also like to throw “What would Jesus do,” in the face of those same conservatives who volunteer their time and donate their money to charity.

    FYI – Jesus did not run for office or campaign for government reform. He campaigned to change hearts.

    A person who blames other people for their problems, or forces others to follow their belief system is not free, happy or at peace.

    Gross excess is just that; gross. And there is no excuse for the gross excess on Wall Street. But, it does not justiy gross excess in Washington.

  7. Andy says:

    Thanks John.

  8. Bryan Sheasby says:

    I agree tat Obama is wrong to encourage welfare to grow. However I take sersiou issue with this constant defense of the Tobacco Industry. Smoking is bad and any method to stop it is good. If a carton of cigarettes cost $2,000 because of taxes people would still pay it. However it would not be a tax on the poor. It would be a tax on morons who despite being told not to; continue to smoke like chimney’s and ruin the health care industry and create a drain on the public’s wallets through a need to care for ill smokers.

  9. John FG McMahon says:

    Mr Goodman,

    Whilst I don’t disagree with the thrust of your article I do take issue with :

    “Undermining free labor markets. A labor union has only one real purpose: to monopolize the supply of labor to employers and obtain above-market wages and compensation”

    Unfortunately the power of the union movement has been seriously abused over the years by those hungry for power and influence as well as those militant ideologues who have a political agenda. However the Union movement was formed to free up the children from the coal mines, to protect the children who had their arms broken in order that they can squeeze into chimneys to clean them and above all to provide a fair day’s pay for a honest day’s work. If it wasn’t for the unions then we would not enjoy the privilege of the “eight hour day” – 8 hours for work; 8 hours sleep and 8 hours recreation. There is a place for unions as a counter to the enslavement of workers. One need only to read about “sweat shops” where the legal immigrant and the illegal immigrant is exploited by money hungry bosses to understand the need for workers to have an organization to protect their right to work with dignity and self-respect and to be fairly remunerated.

    John FG McMahon
    Kolonga, State of Queensland

  10. Hiroko says:

    From way out here in the west, Las Vegas NV, home to Harry Reid; I would like to thank KG for standing up for Healthcare for all. If we can keep the Teabagger carept baggers from infiltrating all our districts this healthcare for all my still have a life.