Newspaper column: House $15 minimum wage bill would kill jobs

The House this past week passed a bill that would increase the federal minimum wage to $15 an hour by 2025 and phase out the sub-minimum wage currently allowed for tip earners. The vote was 231-199, largely along party lines.

While all three of Nevada’s Democratic representatives put out statements bragging about voting for the Raise the Wage Act and citing how many people in their districts would be eligible for pay hikes under the law, Republican Mark Amodei, who represents Northern Nevada, warned of the many problems that the bill could create and said the only good thing about it is that it is unlikely to pass in the Senate.

“It makes a good campaign ad in certain neighborhoods, I guess,” Amodei said during a conference call on Friday. He said the bill, while it may raise hourly wages for some by 107 percent, others will lose their jobs entirely or have their hours cut. In fact, the Congressional Budget Office (CBO) estimated that somewhere between 1.3 million and 3.7 million would lose their jobs.

Amodei said the bill is especially problematic for Nevada because a third of the workforce is tipped workers. “In a state that has 45 million-plus people a year who come here for the resort industry … they tip people in the housekeeping industry, they tip people in restaurants, they tip people in casinos,” the congressman noted, adding that the current federal minimum wage for tipped workers is $2.13 an hour and the increase to $15 an hour would constitute a 600 percent increase.

“When you say everybody is going to make 15 bucks an hour you’re picking winners and losers,” Amodei said. “Because what do business people do in response to that? They take a look at, first of all they’re going to raise prices, which by the way is kind of that vicious circle — the good news is you’re making more money, the bad news is it costs you more on everything this impacts.”

A Cato Institute analysis in 2012 found that a 10 percent increase in the U.S. minimum wage raises food prices by up to 4 percent. Imagine what 107 percent would do.

Amodei also noted that the National Restaurant Association reports that almost two-thirds of restaurant owners, when faced with higher minimum wage requirements, reduce hours for workers, half eliminated jobs and all raised prices. “So the good news is you’re getting 15 bucks and hour, the bad news is you’re not going to work as many hours,” he said.

Editorial: ObamaCare costs keep soaring

Premiums for ObamaCare-eligible health insurance plans are soaring this year, according to an analysis by the Urban Institute.

The study, sponsored by the Robert Wood Johnson Foundation, found that the lowest priced of the so-called gold plans that cover 80 percent of medical expenses for a 40-year-old non-smoker increased 19 percent nationally this year and 25 percent in Nevada. The lowest cost silver plans for that individual, which covers 70 percent of medical costs, went up 32 percent nationally and 45.6 percent in Nevada. The second lowest priced silver plans jumped 34.3 percent nationally and 48.3 percent in Nevada.

But not to worry, the Nevada Appeal newspaper in Carson City reports that more than 85 percent of the nearly 100,000 Nevadans who are covered by such plans through the Silver State Health Insurance Exchange will not pay much if any of that premium increase because they receive federal subsidies. Guess who pays those federal subsidies? All of us.

The Appeal reports that, according to a recent report by the Congressional Budget Office, the nationwide increase in premiums will cost the taxpayers $10 billion more in subsidies this year.

Of course, a state health exchange executive blamed the premium spikes on “instability in the health insurance market — much of it caused by tactics designed to undermine the Affordable Care Act. That includes the decision to stop paying insurance companies for the Cost Sharing Reduction subsidies mandated by the ACA for consumers making between 138 and 250 percent of the poverty level,” the Appeal explained.

The taxpayers get stuck with the bill either way — subsidize the insurer or subsidize the rate payer. Six of one, a half dozen of the other.

During the debate this past year over those Cost Sharing Reduction subsidies, The Wall Street Journal reported, “In an ironic twist, stopping the subsidies would also wind up costing the federal government more in the end, the (Congressional Budget Office) report said. Higher premiums for mid-priced plans would require the government to pay larger tax credits to consumers to help offset coverage costs. The federal deficit would increase by $194 billion through 2026, the report said.” Instead of paying $7 billion in subsidies to insurers, we are paying $10 billion to ratepayers.

Pay no heed to the fact ObamaCare premiums have been rising sharply since the law was passed in 2010 without a single Republican vote and using dirty tricks devised by Nevada’s own Sen. Harry Reid. According to the website eHealth, from 2013, the year before ObamaCare went into effect, through 2017, health insurance premiums had already increased 140 percent. Forget repeal and replace, just repeal. Remember at the ballot box this fall just who brought us this expensive boondoggle and would vote to keep it.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

Nevadans seem want it both ways with ObamaCare

Nevadans appear to be a bit schizoid when it comes to deciding what to do about ObamaCare, according to an American Medical Association survey released Tuesday.

When asked straightforward whether ObamaCare was a good or bad idea, fully 45 percent say it was a good idea, while 37 percent say it was a bad idea.

But when you get down to whether Congress should change the law as is being currently debated the opinions are more varied:

As you may be aware, in order for the health care legislation passed by the House to become law, the United States Senate must review and pass the legislation. Do you think the U.S. Senate should …

7% Pass the House legislation as is
23% Make minor changes to it and pass it
27% Make major changes to it and pass it
33% NOT pass any part of the House legislation which would mean keeping ObamaCare in place

2% Other.    7% Don’t Know    1% Refused

So, 33 percent say leave it as is, while 57 percent call for some changes.

But when asked about specific changes being proposed, the Nevadans surveyed largely opposed the changes.

They opposed dropping the mandate to buy health insurance but allowing insurers to charge 30 percent higher premiums if they have not had continuous coverage. I wonder how Nevadans would have responded if asked only about the mandate.

They also opposed dropping various federal subsidies and eliminating the ObamaCare requirement that all health plans sold must provide a standard set of government-established benefits, including mental health services, addiction treatment, maternity care and preventive health services with no out-of-pocket costs. No choice.

The exceptions included: providing federal funding for states to cover people with pre-existing conditions through separate high-risk insurance pools; allowing health insurance to be bought across state lines so there is more competition between health insurance companies to provide more options at a cheaper cost; and, change Medicaid from an entitlement program to a federal grant program so federal spending would be cut, and states could decide how to best use federal dollars to cover their low-income population.

Then there is the CBO report:

The Senate bill would increase the number of people who are uninsured by 22 million in 2026 relative to the number under current law, slightly fewer than the increase in the number of uninsured estimated for the House-passed legislation. By 2026, an estimated 49 million people would be uninsured, compared with 28 million who would lack insurance that year under current law.

So, millions might choose to not buy expensive health insurance, whose premiums and deductibles are skyrocketing every year, if they are not coerced into doing so.

The Roberts court said states may not be coerced in following the dictates of Congress, but individuals are not so fortunate.

Meanwhile, many senators, including Nevada’s Dean Heller, seem to be willing to let ObamaCare stand because replacement legislation is either too weak or too stringent. You can’t drive a stake through the heart of a government entitlement when the perfect is the enemy of any improvement.

ObamaCare repeal will not result in people dying in the streets

The Congressional Budget Office is out today with its doom and gloom projections of what would happen if ObamaCare is repealed:

The number of people who are uninsured would increase by 18 million in the first new plan year following enactment of the bill. Later, after the elimination of the ACA’s expansion of Medicaid eligibility and of subsidies for insurance purchased through the ACA marketplaces, that number would increase to 27 million, and then to 32 million in 2026.

B Premiums in the nongroup market (for individual policies purchased through the marketplaces or directly from insurers) would increase by 20 percent to 25 percent—relative to projections under current law—in the first new plan year following enactment. The increase would reach about 50 percent in the year following the elimination of the Medicaid expansion and the marketplace subsidies, and premiums would about double by 2026.

One problem with this is that it is based on a law proposed a year ago that would repeal mandates and penalties under the law, but would leave in place so-called insurance market reforms, such as barring insurers from varying premiums based on an individual’s health care costs, requiring coverage of pre-existing conditions and requiring coverage of things like maternity care.

The CBO itself noted: “The number of people without health insurance would be smaller if, in addition to the changes in H.R. 3762, the insurance market reforms mentioned above were also repealed. In that case, the increase in the number of uninsured people would be about 21 million in the year following the elimination of the Medicaid expansion and marketplace subsidies; that figure would rise to about 23 million in 2026.”
Another problem with the projection is that CBO projections about ObamaCare have been remarkably inaccurate.
For example, the CBO 2010 projection of ObamaCare enrollment in 2016 overshot the mark by 120 percent, according to Forbes, and the CBO projected the Medicaid expansion would be much smaller and less expensive than it really is.
Cato’s Michael Tanner notes that ObamaCare’s health insurance coverage expansion was mostly due to Medicaid expansion and not through subsidies for private insurance.
Having insurance doesn’t necessarily mean having health care.
“There is ample evidence to suggest that Medicaid provides little if any benefit,” Tanner writes. “One notable experiment in Oregon found no improvements in health outcomes from Medicaid enrollment. But regardless, repeal of ObamaCare is unlikely to have any short-term impact on Medicaid.”
Tanner concludes:

The only workable answer is to take otherwise uninsurable people out of the traditional insurance market altogether and subsidize their coverage separately.

This may be done through the expansion and subsidy of state high-risk pools, much the way states handle auto insurance for high-risk drivers. Or sick individuals may be taken out of the insurance system altogether, with their health care paid for through a reformed Medicaid program.

However these changes play out, it’s important to realize that no one is going to have their health insurance suddenly snatched away. Some people may have to get their health care in different ways, and some, who can afford it, may have to pay more.

But the predictions that replacing ObamaCare will mean uninsured Americans dropping dead in the street are worth little more than fake news.

Don’t buy the vision of people dying in the streets.

Ramirez cartoon

Ramirez cartoon

It’ll get worse before it gets better, if it ever does

CBO forecast: “In fiscal year 2016, the federal budget deficit increased, in relation to the size of the economy, for the first time since 2009, according to the Congressional Budget Office’s estimates. If current laws generally remained unchanged, the deficit would grow over the next 10 years, and by 2026 it would be considerably larger than its average over the past 50 years, CBO projects. Debt held by the public would also grow significantly from its already high level.”

Congress needs to allow Nevadans to deduct sales tax from income tax

If the lame duck session of Congress does nothing else, it must pass an extension of the federal income tax deduction for state and local sales taxes.

Currently state and local income taxes are deductible but the sales tax deduction has expired. Seven states have no state income taxes to deduct, leaving the sales tax as the main comparable deduction. And time is running out.

In 2012 the average Nevada tax filer was able to deduct $332 from federal income taxes, according a Pew Charitable Trusts analysis of Internal Revenue Service data.

Without an extension, many Nevadans are basically facing a tax hike come April 15.

We don’t call on Congress to make the sales tax deduction permanent, but merely to fix it now in the name of fairness one more time, then in the Republican-controlled Congress in 2015 there should be real tax reform.

The current hodge-podge of tax deductions and exemptions and breaks and dodges is entirely unfair and inequitable.

The residents of high tax states send less money to Washington per dollar earned than the residents of states with lower taxes. For example, Illinois recently raised its state income tax rate by 2 percentage-points, but since that was deductible from federal income tax, Illinois basically sent the bill to the other 49 states.

Instead of permanently keeping the sales tax deduction, our representatives would better serve their constituents by introducing a bill eliminating the deduction for all state and local taxes — yes, including property taxes — while lowering the federal income tax rate for everyone, including those who don’t qualify for itemized deductions.

Currently, tax filers can choose either the standard deduction or may itemize deductions for certain expenses, including some taxes. The American Jobs Creation Act of 2004 allowed taxpayers who itemize to deduct state and local sales taxes or state and local income taxes. The American Taxpayer Relief Act of 2012 ended the sales tax deduction at the end of 2013.

The Congressional Budget Office has stated, “The deduction for state and local taxes is effectively a federal subsidy to state and local governments; that means the federal government essentially pays a share of people’s state and local taxes. Therefore, the deduction indirectly finances spending by those governments at the expense of other uses of federal revenues.”

In other words, the CBO says, state and local tax deductions largely benefit wealthier taxpayers who can itemize and live in states with high local tax rates.

A quick fix to make sales taxes deductible should be a priority for Nevada’s Washington delegation.

Newspaper column: Delusional candidates would rob Peter to pay Paul

Vice President Joe Biden breezed through Nevada one afternoon earlier this month, stopping long enough to pitch the idea of increasing the federal minimum wage 40 percent from $7.25 an hour to $10.10, saying this would not cost jobs and would pump $19 billion into the nation’s economy.

“All of this is disposable income, and it gets straight into the economy,” Biden said, which is utter Keynesian nonsense because it is nothing more than redistributionism, taking money from some pockets and putting it in others.

President Obama has called for raising the minimum wage. Nevada Sen. Harry Reid has repeatedly championed a higher minimum, though our junior Sen. Dean Heller has voted against it.

It is an issue in some of the four congressional races on the ballot, as recounted in this week’s newspaper column, available online at The Ely Times, the Mesquite Local News and the Elko Daily Free Press.

Bilbray and Heck take opposite stances on raising minimum wage. (R-J photo)

Asked about the minimum wage issue after his Democratic opponent came out in favor of raising it not to $10.10 but to $15, Republican Rep. Joe Heck, whose 3rd Congressional District covers the southernmost reaches of the state, replied, “The last thing our economy needs is another mandate from Washington that will cost us jobs. Raising the minimum wage will not increase jobs, expand opportunity, or be a silver bullet to reduce poverty. Instead, it will cost mainly young and low-skilled workers the chance to get a start in the working world and learn critical job skills that will help them transition to more gainful employment.”

In fact the Congressional Budget Office has estimated that raising the minimum wage to $10.10 could cost a half a million jobs.

But opponent Erin Bilbray told the Las Vegas newspaper, “I believe this will help the economy and make it stronger. I think when you give the middle class money it helps us all.”

In the 4th Congressional District, covering the southern half of rural Nevada and northern Clark County, Democratic incumbent Steven Horsford has supported the $10.10 minimum pay.

“I don’t support continuing to give corporations and billionaires tax subsidies and tax loop holes when we can’t give minimum wage workers — who make $14,500 — a raise,” Horsford said during a debate with Republican opponent Crescent Hardy.

For his part Hardy shrugged off the issue and replied, “To bring it to $10 an hour — it ain’t no big issue.”

In the 1st Congressional District in urban Las Vegas, incumbent Democrat Dina Titus has issued a statement saying, “I believe that everyone deserves the opportunity to earn a decent wage for a hard day’s work, whether they’re a young worker trying to earn money for college or a single mother supporting a family. In short, the minimum wage is about fairness …”

Republican opponent Dr. Annette Teijeiro replied to an inquiry by saying, “The myth of creating a ‘living wage’ by government fiat is just that, a myth. Artificial government mandates do not create prosperity and in some cases create financial ruin.

“As a small business person, I understand that if my payroll budget is tight then the only way to accommodate a mandated government wage increase is to fire enough workers to afford the increase or to increase the cost of the products and/or services I sell. So the end result of a government mandated minimum wage increase are more payroll taxes paid by the employer and the employee, and less workers to be able to pay for this new expense or higher prices to afford the payroll increase costs.”

In the northernmost part of the state, the 2nd Congressional District, Republican incumbent Mark Amodei in 2013 voted against raising the minimum wage to $10.10 and his Democratic opponent apparently has not made an issue of it.

The facts are on the side of the opponents of raising the minimum wage.

James Sherk, a senior policy analyst in labor economics at the Heritage Foundation, told Congress a year ago that every dollar increase in minimum wage really only raises take-home pay by 20 cents once welfare benefits are reduced and taxes are increased, meaning the $10.10 proposal nets only 57 cents an hour. Sherk noted a number of workers would lose their jobs and go from $7.25 to zero.

Then there are the affects on prices for everyone.

Mark Wilson, writing a policy analysis for Cato Institute, reports that a “comprehensive review of more than 20 minimum wage studies looking at price effects found that a 10 percent increase in the U.S. minimum wage raises food prices by up to 4 percent and overall prices by up to 0.4 percent.”

If raising the minimum wage by 40 percent would pump $19 billion into the nation’s economy, image how the economy would purr like a kitten if Social Security checks next year were raised 40 percent instead of a paltry 1.7 percent. We don’t hear anyone calling for that do we?


Harry says the darndest things

Harry Reid and a free agent.

Art Linkletter used to have a feature on his radio show called “Kids Say the Darndest Things” — usually cute and funny.

When Harry Reid says the darndest things, they are seldom cute or funny or even comprehensible.

Take what he said in reply to the Congressional Budget Office projecting that the decline in hours worked due to ObamaCare would amount to the equivalent of 2.5 million full-time jobs by 2024.

According to, he commented:

“We have the CBO report, which rightfully says, that people shouldn’t have job lock. If they — we live in a country where there should be free agency. People can do what they want. And what they’re saying here is — and the fact checkers have already done this — the Republicans talk about losing millions of jobs simply isn’t true. It allows people to get out of a job they’re locked into, because of — they have healthcare in their job.”

So, don’t think of yourself as unemployed. Think of yourself as a free agent — with the emphasis on the free, as in no pay. Free to take that job as a greeter at Wal-Mart.

Here is what the CBO had to say about all those free agents:

“The reduction in CBO’s projections of hours worked represents a decline in the number of full-time-equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024. Although CBO projects that total employment (and compensation) will increase over the coming decade, that increase will be smaller than it would have been in the absence of the ACA. The decline in full-time-equivalent employment stemming from the ACA will consist of some people not being employed at all and other people working fewer hours; however, CBO has not tried to quantify those two components of the overall effect. The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses’ demand for labor, so it will appear almost entirely as a reduction in labor force participation and in hours worked relative to what would have occurred otherwise rather than as an increase in unemployment (that is, more workers seeking but not finding jobs) or underemployment (such as part-time workers who would prefer to work more hours per week).”

Meanwhile, Harry, who should have been made a free agent in 2010 but was saved by the unions who now don’t like ObamaCare either, is telling people that the Democrats will not “pay ransom” to increase the debt ceiling, according to

“Republicans are at it again,” Reid said, then asking, “Why don’t we skip the crisis this time?” and, “Let’s do the right thing and move on.”

But back in 2006, Harry had this darndest thing to say:

Harry protested increasing the debt to $9 trillion, but $17 trillion — no problem. Nothing to see here, move along.

Short-term, long-term … the outlook is not good

Barron’s cover story

While everyone is focused today on whether the government will be shut down tonight — or more precisely who gets the blame for the shutdown — the longer outlook is downright grim.

A couple of week’s ago the Congressional Budget Office reported that between 2009 and 2012, the federal government recorded the largest budget deficits relative to the size of the economy since 1946.

The CBO stated:

“Federal debt held by the public is now about 73 percent of the economy’s annual output, or gross domestic product (GDP). That percentage is higher than at any point in U.S. history except a brief period around World War II, and it is twice the percentage at the end of 2007. If current laws generally remained in place, federal debt held by the public would decline slightly relative to GDP over the next several years, CBO projects. After that, however, growing deficits would ultimately push debt back above its current high level. CBO projects that federal debt held by the public would reach 100 percent of GDP in 2038, 25 years from now, even without accounting for the harmful effects that growing debt would have on the economy. Moreover, debt would be on an upward path relative to the size of the economy, a trend that could not be sustained indefinitely.”

And that’s the good news.

You see the CBO bases its projections on current law. But when it looked at what is really likely to take place — meaning that cuts in spending that are currently in the law are waived, take as an example the annual doc fix in which cuts to Medicare reimbursements are put off — things really go off the chart.

Under that scenario federal debt held by the public would reach about 190 percent of GDP by 2038.

As Barron’s points out (sorry, it is behind a pay wall) that is worse than Greece with its 27 percent unemployment, bloody riots and dismal economic outlook. As the magazine states, it is mostly due to the baby-boom budget boom that is exploding now.

As the CBO stated:

“How long the nation could sustain such growth in federal debt is impossible to predict with any confidence. At some point, investors would begin to doubt the government’s willingness or ability to pay U.S. debt obligations, making it more difficult or more expensive for the government to borrow money. Moreover, even before that point was reached, the high and rising amount of debt that CBO projects under the extended baseline would have significant negative consequences for both the economy and the federal budget …”

CBO Director Douglas Elmendorf said in a press conference:

“Projected spending for Social Security increases relative to GDP in our extended baseline because of the retirement of the baby boom generation which would increase the number of people eligible for the program by more than one-third in just 10 years.

“Spending for the health care programs would increase for three reasons. First, the retirement of the baby boomers. Second, rising costs of health care per person. And third, the expansion of federal support for health insurance for low-income people.”

Hello, ObamaCare.

So, how will this end?

Hans-Hermann Hoppe wrote in his book “Democracy: The God That Failed,” “How in the world can anyone expect that a majority of an increasingly degenerate people accustomed to the ‘right’ to vote should ever voluntarily renounce the opportunity of looting other people’s property? Put this way, one must admit that the prospect of social revolution must indeed be regarded as virtually nil”

Substitute the word “Congress” for “people” and there you have our current situation.

Oh the terrible catastrophe of sequester

Obama’s weekly radio address today:

Doom and gloom is just around the corner. Oceans will rise. Planets will fly out of their orbits, if Congress allows the sequester to take place. Children and senior citizens will be fighting over scraps of garbage in the streets.

This I know for Obama tells me so:

“If the sequester is allowed to go forward, thousands of Americans who work in fields like national security, education or clean energy are likely to be laid off. Firefighters and food inspectors could also find themselves out of work – leaving our communities vulnerable. Programs like Head Start would be cut, and lifesaving research into diseases like cancer and Alzheimer’s could be scaled back. Small businesses could be prevented from getting the resources and support they need to keep their doors open. People with disabilities who are waiting for their benefits could be forced to wait even longer. All our economic progress could be put at risk. …

“Right now, most Members of Congress – including many Republicans – don’t think it’s a good idea to put thousands of jobs at risk and do unnecessary damage to our economy. And yet the current Republican plan puts the burden of avoiding those cuts mainly on seniors and middle-class families. They would rather ask more from the vast majority of Americans and put our recovery at risk than close even a single tax loophole that benefits the wealthy.”

Never mind that clean energy and Head Start have been multibillion-dollar black holes, let’s see just how big those drastic cuts really are.

Dan Mitchell of the Cato Institute has crunched the numbers in that recent CBO report and comes up with a chart that illustrates the depths and breadth of the cuts over the next decade:

After the dreaded sequestration, the federal government expands by $2.4 trillion instead of $2.5 trillion.

Mitchell calls everything Obama says about the consequences of sequestration “utter bunk,” and concludes, “So let’s not just have a sequester. Let’s joyfully embrace it.

As for damaging the economy, The Wall Street Journal recently stated in an editorial titled “The Unscary Sequester” that:

“The most disingenuous White House claim is that the sequester will hurt the economy. Reality check: The cuts amount to about 0.5% of GDP. The theory that any and all government spending is ‘stimulus’ has been put to the test over the last five years, and the result has been the weakest recovery in 75 years and trillion-dollar annual deficits. …

“The sequester will surely require worker furloughs and cutbacks in certain nonpriority services. But most of those layoffs will happen in the Washington, D.C. area, the recession-free region that has boomed during the Obama era.”

Here is Mitchell on CNBC:

Charles Krauthammer has advised the GOP to call Obama’s bluff:

“The Republicans finally have leverage. They should use it. Obama capitalized on the automaticity of the expiring Bush tax cuts to get what he wanted at the fiscal cliff — higher tax rates. Republicans now have automaticity on their side.

“If they do nothing, the $1.2 trillion in cuts go into effect. This is the one time Republicans can get cuts under an administration that has no intent of cutting anything. Get them while you can.”

Everyone bemoans the fact the cuts would be indiscriminate across-the-board. Yes, selective cuts would be better, but there is no chance this Congress can agree on selective cuts. So, take whatever cuts we can get and run with it.