Romney's Individual mandate in Massachusetts

Following up on the revealing Mitt Romney emails regarding the then Massachusetts Governor’s support of the individual health insurance mandate, the Associated Press has a story out today about the only state that does mandates its citizens to have health insurance or pay a tax penalty—Massachusetts.

Under the Seatlepi headline, “ In Mass., individual mandate sparks little outcry”, the story by Steve LeBlanc reads:

              Even with the mandate, the Massachuesetts law remains popular. Two polls taken
              in the past year show more than 60 percent of Massachusetts residents approve of
              the law.

              One reason the mandate has failed to undermine that support is that so few people 
              have had to pay. In 2009, the most recent year for which the state has figures, less
              than 1 percent of residents drew the penalty.

So when is Mitt going to take credit for the one real success he had as Governor?

An email on healthcare reform for the Supreme Court and public

If the GOP conservatives were distraught over the last few days because Mitt Romney selected Michael Leavitt (a supporter of parts of Obamacare) to head his transition team should he win in November, then they will be in full buyer’s remorse after reading today’s story in the Wall Street Journal.

Calling for the full repeal of national healthcare reform has been developed into a reflexive mantra of the Republican Party base.  Mr. Romney is still having difficulty securing the love of conservatives because of his past support in Massachusetts of much of what is in Obamacare including the individual mandate. 

So even while the GOP Presidential nominee calls for total repeal of Obamacare from the stage, Mr. Leavitt’s appointment caused quite a push-back from conservatives and raised their suspicion of Mr. Romney even higher.

But today’s Wall Street Journal story is more than just more fuel for the ABR primary voters (Anybody but Romney); it is an educational opportunity for the public and even the Supreme Court.

In spite of the Romney gubernatorial staff efforts to erase every trace of emails during his term of office in Massachusetts (they had every email on the governor’s office server computer removed and bought 17 hard drives from personal computers owned by the state—so much for transparency), the Wall Street Journal found a Romney cabinet member who obviously couldn’t find the delete button.

The emails obtained by the paper show Governor Romney and his aides as big supporters of the individual mandate within their healthcare reform plan.  Mr. Romney was intimately involved in creating every detail of the plan and pushed the mandate onto reluctant state Democrats.

In one uncovered email a top healthcare aide to Governor Romney wrote, “We must have an individual mandate for any plan to work.”  Mr. Romney himself drafted an opinion editorial to run the day before he signed his healthcare reform legislation.  In that piece Mr. Romney says, “Either the individual pays or the taxpayers pay.  A free ride on government is not libertarian.”

After Governor Romney signed his healthcare reform—individual mandate and all—into law, he sent the same top healthcare aide an email saying (according to the Wall Street Journal story), “Quite a day! … You have made a huge difference, for me and for hundreds of thousands of people who will have healthier and happier lives… Best, Mitt”

That is the message the country and the Supreme Court needs to hear. 

Investigate China's local economic threat

This weekend U.S. and Asian defense officials met in Singapore to discuss Asian-Pacific military security strategy with China dominating much of the conversation.  China has been increasing its military presence in the region and the U.S. has been adding Marines in Australia and Philippines while planning to send more combat ships to the area. 

While Secretary of Defense Leon Panetta says on one hand that a peaceful relationship between our two superpowers is in everybody’s interest, China’s growing military aggressiveness is clearly a big U.S. concern.   

The question is why the Administration and Congress are worried only about a military threat?  The communist Chinese government doesn’t need to destroy our country with weapons and armed forces when it can simply own us. 

I’ve recently blogged (here and here) about my concerns on this issue.   The problem isn’t necessarily the amount of our government debt owned by China.  Typically anyone buying U.S. Treasury notes has a vested interest in our country’s success not collapse. 

But it appears that the Chinese aren’t satisfied with just making money from funding our government.  It is also making significant inroads into capturing important pieces of our business economy. 

And I’m not talking about privately-held Chinese businesses.  That would at least be the free market in operation. 

Chinese government-owned banks are now being allowed to operate in the U.S. to compete with our community banks and credit unions for commercial loans to small businesses.  Chinese government-owned construction companies are winning bidding wars with American businesses for public sector projects across our country.

Small businesses already know how hard it is to compete against big businesses.  Competing against a Chinese business with unlimited government subsidies is impossible.

Last week the Board of Directors of the South Carolina Small Business Chamber decided to launch an exploration into exactly what is the extent of China’s threat—not from warships sailing into the Port of Charleston but to our state’s small businesses and economy. 

New Jersey shows how to deal with Amazon

One of the big fights in the state legislature last year was over Amazon’s offer to build a distribution center in Lexington County (investing $90 million) and hiring 1249 employees.  In exchange the state would not require Amazon to collect sales tax on any purchases from South Carolina customers for five years. 

The South Carolina Small Business Chamber and some other organizations fought hard against this proposal arguing that it would create an unfair competitive advantage for Amazon compared to the state’s other businesses. 

Although we lost this fight, our opposition forced Amazon to sweeten the deal by pledging to invest $125 million and create 2000 jobs.  Unfortunately, our small businesses will be harmed by Amazon’s sweetheart no-sales-tax deal. 

But our state legislators said that they would lose the economic development of Amazon if they didn’t give into its blackmail.  Our elected leaders didn’t agree with us that Amazon was not going to walk away from building the distribution center that was already under construction.

One year later, say hello to New Jersey and this headline in today’s New York Times:

Amazon to Build New Jersey Warehouses and Collect State Tax

That’s right.  New Jersey and Amazon have reached an agreement for the online retail giant to build two distribution centers (an investment of $130 million) and create 1500 new jobs.  PLUS Amazon will start collecting the state’s 7% sales tax on New Jersey customers starting July 2013 that will result in $30 to $40 million more money for that state.  (Amazon failed to get a 22 month reprieve on collecting the sales tax.)

What did New Jersey promise in return for Amazon’s investment, new jobs and sales tax collection?  The same thing that we gave Amazon—tax incentives.

The opponents to the S.C. Amazon deal have been vindicated.  But that’s little consolation for our state’s small businesses that are seeing Amazon steal their sales courtesy of our General Assembly.

Small business survey

A revealing survey of small business owners was released yesterday by U.S. Bank.  The survey was conducted in only 36 states with the over 3200 sample including sole proprietors through businesses with fewer than 100 employees.  Unfortunately the survey also included 3% of businesses with over 100 employees, not my definition of a small business.  

While the survey’s accuracy in reflecting the true composition of all small business owners can be questioned (93% of respondents were white), here are some interesting findings:

·         71% believe that we’re still in a recession

·         69% feel their business is in good or excellent health

·         Which issues are more important today than in the 2008 Presidential election

o   Healthcare/Medicare (65%)

o   Federal Deficit/Debt (64%)

o   Jobs/Unemployment (59%)

o   Energy Costs (56%)

o   Taxes (54%)

It is this last question that I find interesting.  When these same small business owners were then asked what would be the one thing they would do if they were President of the U.S. for one day, here were the top three responses:

·         Lower Taxes/Tax Breaks (20%)

·         Reduce Regulations (17%)

·         Health Insurance Issues (15%)

Obviously there is a disconnect between what these respondents said were their most important issues and what they said they would do as President to help small businesses.  The bottom line is that while these small business owners can identify their concerns, they don’t have good well-thought out responses of how to address those concerns other than the political talking points fed to them daily by Fox News and radio talk shows. 

Lowering taxes and giving tax breaks would seem to be a problem if your major concern was cutting the federal deficit and debt.  While these business owners have been seriously and needlessly frightened at the aspect of Obamacare (60% believed it would have a negative impact on their businesses), they have no clear ideas to offer for doing something about different.

Lastly, regulations weren’t a top concern but yet there were 17% regurgitating the boilerplate anti-regulation call to action.  Good grief.

Worldwide crisis in small business lending

At last week’s annual Small Business Administration’s conference for National Small Business Week, SBA Chief Karen Mills took some questions.  One small business owner said that she received “invaluable support” from one of the SBA’s Small Business Development Centers, which operate in every state.

The lack of credit from banks was a complaint of two small business owners.  The Federal Deposit Insurance Group reports that loan balances to small businesses fell in the first quarter of this year (while loans to big businesses increased).  But it’s even worse for small businesses in other countries.  Headlines say that small business lending from Spain’s crumbling banks is drying up and in England 50 small businesses are failing daily due to lack of lending.

Bank resistance to small business loans and credit has forced countries to look at alternative avenues for access to capital.  China will start allowing small businesses to sell bonds.  Here in the U.S., Congress passed legislation to allow small businesses to seek small private sector investments through crowdfunding.

We don’t know how successful these new alternatives to traditional financial institution lending will be for small businesses.  Crowdfunding is a novel and not understood concept for most small businesses.  So the results of a recent national poll finding that 45% of small business owners not knowing if crowdfunding would be helpful and 53% not thinking it would is no surprise.

However, a few other results of this poll show why crowdfunding and other access to credit avenues for small businesses are important.  Small business owners are still getting most of their lending from a combination of family and friends (71%), personal credit cards (62%) and business credit cards (59%). 

With small businesses creating at least half of the net new jobs in this country, we shouldn’t be letting the vital growth of these real job creators up to the whims of family, friends, and credit card companies.  We need crowdfunding and other alternatives sources of capital if banks won’t or can’t do the job.

Keystone XL Would Raise Gas Prices, Report Finds

The Huffington Post
May 22, 2012

By Lucia Graves

WASHINGTON -- The Natural Resources Defense Council on Tuesday released a report dispelling the myth that the proposed Keystone XL tar sands pipeline would lower gas prices. Rather, the opposite is true, findings show.

On a conference call with reporters on Tuesday, report author and NRDC attorney Anthony Swift called the pipeline's impact on gasoline prices "one of the most misunderstood issues surrounding the proposed Keystone XL," adding that when TransCanada originally proposed the pipeline, they pitched it as a way to increase the cost of oil in the United States, providing increased revenue for Canadian producers. Since then, proponents of the pipeline in the United States have pitched it as a means of decreasing U.S. gasoline prices.

Swift's study examined these two conflicting claims, and findings suggest that the former is the true one. "Our study has found that Keystone XL is likely to both decrease the amount of gasoline in U.S. refineries for domestic markets and increase the cost of producing it, leading to even higher prices at the pump," Swift told reporters.

TransCanada did not immediately return a request for comment.

The report found the pipeline will increase U.S. gasoline prices by three mechanisms, most immediately by reducing the amount of gasoline produced in the United States. The pipeline will divert crude oil from Midwestern refineries, which are designed to produce as much gasoline as possible from a barrel of oil, to Texas Gulf refineries, which are designed to produce as much diesel as possible from a barrel of oil. The result in the immediate to short term will be a decline in gasoline production and an increase in diesel, according to the report.

Other findings in the report include that the pipeline will increase the price of crude oil in the Midwest and Rocky Mountains by over $20 a barrel, increasing the cost of Canadian tar sands by as much as $27 billion annually. These higher crude oil costs are expected to lead to deteriorating financial conditions in Rocky Mountain and Midwestern refineries, which could in turn result in decreased production. That's because if Midwestern refineries are forced to pay a higher price for oil, as East Coast refineries already do, they will be forced to respond by reducing their production and further decreasing U.S. gasoline supplies, according to the report.

These findings come as the House and Senate are in conference to hammer out a final version of the transportation bill. A provision in the House version of the bill would approve the pipeline, overriding President Obama’s rejection of the pipeline application in January, but a similar provision has not, as yet, been included in the Senate's version. The president has promised to veto any measure that includes Keystone XL approval.

 http://www.huffingtonpost.com/2012/05/22/report-keystone-xl-gas-prices_n_1536227.html