Public Policy and Governance – Page 286

Dollars and Sense

This morning, I was scheduled to participate in a statehouse rally intended to urge the Governor and General Assembly to exhibit rational behavior, also known as Medicaid expansion under the Affordable Care Act. (Of course, this is Indiana, where rational political behavior can be pretty rare.)

The weather required organizers to reschedule, but I’m posting my prepared remarks, which centered on dollars and sense.

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Many of us have just wished our friends and loved ones a healthy, happy and prosperous New Year. In Indiana, those are going to be elusive goals.

According to a report issued in December by the respected Kaiser Family Foundation, Indiana stands to forego17.3 billion dollars between 2013 and 2022 because we are refusing to follow the lead of surrounding states (including those governed by Republicans) and implementing the ACA’s Medicaid expansion.

Indiana is refusing to accept the federal dollars that would pay for expansion of Medicaid despite the fact that over half a million Hoosiers have lost employer-sponsored coverage since 2000, and despite the fact that Indiana has seen the nation’s largest loss of health insurance coverage for children. More than eighteen percent of Indiana children have lost coverage since 2000.

Let’s talk dollars and sense.

Under the ACA, the federal government will pay 100% of the costs of expanded Medicaid for the first three years and 90% thereafter. Expansion would actually save Hoosier taxpayers money, since some of those federal dollars would pay for services we currently provide.

Since there is no rational reason to forego billions of dollars and deny a quarter of a million Hoosiers access to affordable coverage, some Indiana officeholders have resorted to deliberately misleading their constituents. One legislator recently sent out a survey seeking “input on legislative topics”. The Medicaid question read as follows:

“Currently, one out of six Indiana residents is on Medicaid, or about 1.1 million Hoosiers. Medicaid makes up about 14 percent of the state’s budget. Under the Affordable Care Act (or Obamacare), Indiana can expand Medicaid to cover more uninsured Hoosiers at a projected cost to taxpayers of more than $1.4 billion by 2020. This expansion would allow one in four Indiana residents to enroll in the program. Do you support full Medicaid expansion for Indiana under Obamacare guidelines?”

The question clearly–and dishonestly–implies that Indiana taxpayers would foot the bill for expansion. (Of course, he might get an answer he doesn’t want if he explained that new federal dollars would cover the costs.)

The question we need to ask our Senators and Representatives is pretty simple: Why are you refusing to allow the federal government to pay the entire cost of expanded coverage for three years and 90% thereafter—especially when those dollars you are rejecting would create an estimated 30,000 Hoosier jobs and, according to health economists, would reduce premiums paid by those of us who do have private insurance?

The only response I’ve heard is weak and highly speculative: the federal government might stop paying the full 90% at some future time. But if the feds cut payments, we could cut services, so that excuse just doesn’t pass the smell test.

It’s hard to escape the conclusion that Indiana is leaving 17 billion dollars on the table, leaving more of our citizens uninsured, costing Hoosiers who are insured more money, and refusing to cover Indiana’s most vulnerable children simply because our governor and state legislative leaders will oppose anything and everything proposed by this President, no matter how that opposition affects the citizens they were elected to serve.

Here’s a news flash: you don’t have to like this President—and you don’t have to like the Affordable Care Act—in order to accept billions of federal dollars that will save lives and money and create jobs for the people of Indiana.

Thanks to Governor Pence’s refusal to implement Medicaid expansion, Hoosiers will pay higher state taxes, higher health insurance premiums and higher out-of-pocket expenses. And those costs will fall most heavily on those who can least afford them.

Our politicians may be aiming at President Obama, but the people they are hurting are the Hoosiers who elected them.

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No Free Burgers…

If there’s one thing that conservative and liberal economists agree about, it’s that old bromide about there being no free lunch.

That widget you are manufacturing contains raw materials, its construction takes labor, and its distribution and marketing must be paid for. Your facility and utilities cost money. Those costs–plus some profit–have to be reflected in the price, or you’ll go broke.

You may be able to gain a market advantage by shifting some of your costs to others–we all know of cases where pollution created during production is discharged into the air or water to be paid for by the community at large, rather than by being properly disposed of and the cost of that disposal factored into the product’s sales price–but if it’s a cost of doing business, someone has to pay it.

Market theory assumes that the widget manufacturer will pay all the costs of production, and then pass those costs on to the ultimate consumer, as part of the price.

Increasingly, however, taxpayers are assuming those costs.

Case in point: we are subsidizing the wages of a quarter of the people who have jobs today. A recent study from UC Berkeley and the University of Illinois found that fully 52% of fast-food workers receive public assistance–mostly Medicaid and food stamps–to the tune of $7 billion dollars a year. (McDonald’s workers alone got $1.2 billion of that.) One Wisconsin Wal-Mart costs taxpayers over a million dollars a year.

The United States now has the highest proportion of low-wage workers in the developed world. And as the report noted, every dollar taxpayers spend subsidizing corporations so they can continue paying their workers poverty wages is a dollar not spent on early childhood programs, or schools, or roads, or any other social good.

We need to have a national conversation about who is paying for that burger.

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Pointing Fingers

There is substantial agreement across constituencies that America’s political system is broken. That’s where the agreement ends; who you blame for the dysfunction will depend upon your political orientation and the source and degree of your disgust.

Wherever your finger is pointing, it is becoming increasingly clear that the toxic nature of our politics is threatening to turn off the young people who will be needed if we are ever to improve the system.

A couple of professors recently shared some troubling data in the Washington Post: high school students they had surveyed would rather do anything other than become involved in politics. They don’t want to run for office. They don’t want to be Mayors or Councilors or Governors. Serving as a Member of Congress was their dead-last occupational choice.

As the professors wrote, the fact that they do not want to run for office

“cannot be divorced from their perceptions of the political system. Eighty-five percent of our survey respondents did not think that elected officials want to help people; 79 percent did not consider politicians smart or hard-working; nearly 60 percent believed politicians are dishonest; and fewer than 30 percent said they thought candidates and elected leaders stand up for their convictions.”

There are more than 500,000 elected positions in the U.S. Given the attitudes of these young people, we can only imagine who will run to fill those positions.

As the writers concluded, it’s easy to blame young people for a lack of civic engagement, but this time, “the fault lies with a political system and political figures whose behavior has turned off an entire generation.”

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About That Brain Drain…

Indiana has long suffered from “brain drain”–we have great universities that draw very bright students from around the country (and increasingly, the world), but we don’t keep many of them. In fact, the higher a student’s level of education, the more likely the student is to move away from the state after graduation.

Only about 16 percent of PhD recipients remain in Indiana’s workforce one year after graduation.

There are various reasons advanced for this situation; the nature of Indiana’s job market, the attractions of urban life (with few exceptions, Indiana is a pretty rural state), and the relative absence of other college graduates.

We aren’t the only state with this problem. Michigan, for example, is in a similar situation, and a Michigan legislator has proposed an interesting “fix.”

State Sen. Glenn Anderson, D-Westland, recently introduced SB 408, which offers a tax credit to recent college graduates who choose to stay and work in Michigan. This legislation will make it possible for talented young professionals to earn their livelihood in the state by easing the burden of student debt. The bill offers a tax credit to recent graduates who remain in state that lowers annual payments on student loans.

Student loan debt is increasingly seen as a drag on economic growth, as well as a burden on the indebted individuals. A young person who has to divert a significant percentage of her disposable income to loan repayment isn’t buying a new stove or car or house.

I don’t know whether the numbers in Senator Anderson’s proposal are the right ones, and there may be downsides to his proposal that aren’t immediately apparent.

A tax credit might not be enough to keep graduates in Hoosier cornfields. But it’s an intriguing idea.

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Pursuit of Happiness

Last Sunday’s New York Times ran an op-ed by Arthur Brooks in which he reported the current state of research into that elusive quality we call happiness.

About half of human happiness appears to be “hard-wired”–a genetic inheritance for which we can thank or blame our parents and other forebears. Another forty percent or so apparently comes from relatively evanescent events in our lives–a great new job, an inheritance, divorce ….the sorts of “stuff happens” for good or ill that people post to their Facebook pages.

The remaining 12 percent, Brooks tells us, comes down to four elements: faith, family, community and work.

Actually, while Brooks doesn’t cite it, there is also a fair amount of research suggesting that the first three of those–faith, family and community–are really just surrogates for an underlying data-point: the strength of an individual’s social support system. (It doesn’t matter, for example, what “faith” one cites–the value, and contributor to happiness/contentment, lies in the existence of a supportive congregational community. That need for connection can be met by avowedly secular communities as well as deeply devotional ones.)

It was when he discussed the importance of work that Brooks made a less-appreciated and important observation.

This shouldn’t shock us. Vocation is central to the American ideal, the root of the aphorism that we “live to work” while others “work to live.” Throughout our history, America’s flexible labor markets and dynamic society have given its citizens a unique say over our work — and made our work uniquely relevant to our happiness. When Frederick Douglass rhapsodized about “patient, enduring, honest, unremitting and indefatigable work, into which the whole heart is put,” he struck the bedrock of our culture and character.

Brooks uses the data about the importance of rewarding work to emphasize the role of the free market, and that’s fair enough. Certainly, the ability to choose the work we do is an important element in finding that work meaningful. But I took another, darker lesson from his data.

Americans do indeed measure our self-worth in terms of our jobs. That means that people who are unemployed don’t just face financial challenges–they face the loss of self-respect. Despite “makers and takers” talking points and the deeply-seated scorn displayed by comfortable Americans who are sure that “those people” don’t really want to work, decades of research underscore the humiliation and deep despair of most unemployed workers–especially those who have lost their jobs in economic downturns.

Policymakers give great lip-service to job creation, but regularly ignore evidence that contradicts their pre-existing beliefs about which policies actually create those jobs.

Brooks has done us a service by reminding us that high unemployment doesn’t just run up the bill for unemployment insurance, food stamps, Medicaid and the like. It increases human misery, and makes a mockery of the American Dream.

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