Alabama should reject Medicaid expansion
In 2013, Arkansas’s then-Gov. Mike Beebe, Democrat, pushed a non-traditional Medicaid expansion program that gives low-income individuals subsidies to use toward private coverage, rather than enrolling them into Medicaid. The initiative was marketed as a “state-based” plan for reform and one that inserts flexibility and innovation into expansion as outlined under the Affordable Care Act (ACA). Nearly all Republican governors took a firm stand against traditional expansion, but some now perceive Arkansas’s model as a means to receive federal money while distancing themselves from the ACA. Unfortunately, as Arkansas can now attest, Medicaid expansion remains a bad deal for states and cannot truthfully be sold as a fiscally prudent or free market idea. When you get beyond the rhetoric, Arkansas’s expansion has been a disaster. There are (at least) five lessons from Arkansas that Alabama’s leaders should bear in mind as they consider expansion: Describing expansion through waivers as state-based, flexible, or innovative is misleading. Arkansas’s model is a far cry from a block grant and the few concessions offered from Washington are mere window dressing. No state has been granted the work requirements that were promised ad nauseam by governors. No state has been able to assign any meaningful cost-sharing requirements to beneficiaries. And no state has successfully negotiated any eligibility threshold that is more limited than that of the ACA. Additionally, any state-initiated waiver agreed to by the federal government is time-limited, whereas expansion itself goes on forever. Expansion provides a disincentive to work. The population of newly eligible Medicaid recipients is largely made up of those who ought to be in the workforce and states can’t do anything to change that. Estimates for Alabama show that more than 75 percent of the newly eligible would be able-bodied adults with no dependents. Furthermore, states that have expanded Medicaid inevitably create a welfare cliff for these individuals. For those on the cusp of the 138 percent poverty threshold, earning only a few more dollars a year in income kicks them out of Medicaid and into the ACA’s exchange plans that subject them to potentially thousands of dollars more in out of pocket costs. States that expand Medicaid allow thousands of nondisabled, childless adults into the program which puts at risk the Medicaid safety net for truly vulnerable patients and families. States like Arkansas and Alabama already struggle to serve their Medicaid populations. With expansion, the poor and disabled who truly need this healthcare — those who Medicaid was created to serve — will be competing with those who are able-bodied and without dependent children for the time and attention of the state’s limited number of providers. Much like traditional expansion, the private option is driven neither by fiscal responsibility nor free markets. The Government Accountability Office reported that Arkansas’s private option expansion will cost nearly $1 billion more than traditional expansion. Following implementation, Arkansas’s spending was over budget every month for the whole first year until the federal reimbursement cap was raised. That affirms that the Obama administration will recklessly agree to spend whatever it takes to pressure states into expansion. Again, that’s because the federal government — not the state — maintains the real control, and the strict parameters agreed to leave very little room for free market competition. Furthermore, there is zero cost-sharing required for enrollees below the poverty line. While the state is now implementing an optional cost-sharing program for some enrollees, the federal government will not allow non-payers to be disenrolled from the program. Expansion imposes a substantial cost to the state, despite the federal government’s guarantee. Medicaid spending already consumes 35 percent of Alabama’s General Fund. Medicaid costs continue to increase year after year, inevitably siphoning resources away from other budget priorities (the same is true for federal budget priorities like defense spending). Expansion is not a solution to this problem. While the federal government agrees to pay 100 percent of the cost of expansion for the first few years, this reimbursement tapers off to 90 percent in 2020. The 10 percent price tag alone represents millions of dollars, but does not even include the added administrative costs that the state will immediately incur if Medicaid is expanded. To further complicate matters, Congress is already moving to cut the enhanced match for expansion so, in reality, the total cost to the state is immeasurable. Medicaid expansion was bad for Arkansas and there is no reason to believe that Alabama’s experience would be any different. Alabama’s conservative legislators should learn from Arkansas’s mistake and commit to saving their state from a similar disaster. Bryan King is a member of the Arkansas state Senate representing the 5th District. Katherine Robertson is nice president for the Alabama Policy Institute, an independent nonpartisan, nonprofit research and education organization dedicated to the preservation of free markets, limited government and strong families. If you would like to speak with the authors, please email info@alabamapolicy.org or call (205) 870-9900. Reprinted with permission from Alabama Policy Institute.
Climate change plan faces high-profile legal test
The centerpiece of the Obama administration’s effort to tackle climate change is facing a high-profile legal test as a federal appeals court considers a plan that has triggered furious opposition from Republicans, industry figures and coal-reliant states. The U.S. Court of Appeals for the D.C. Circuit hears arguments Thursday in two cases challenging the Environmental Protection Agency’s ambitious proposal to slash carbon pollution from the nation’s coal-fired power plants that is blamed for global warming. The lawsuits — one from a coalition of 15 states and another brought by Murray Energy Corp., the nation’s largest privately held coal mining company — are part of a growing political attack from opponents who say the move is illegal and will kill jobs, cripple demand for coal and drive up electricity prices. The rule proposed by the Environmental Protection Agency last year requires states to cut carbon emissions by 30 percent by 2030. It gives customized targets to each state, leaving it up to them to draw up plans to meet the targets. EPA officials say the rule would protect public health, fight climate change and lower electricity costs by 8 percent by 2030. But a backlash has been building. Last month, Senate Majority Leader Mitch McConnell, R-Ky., sent a letter urging the governors of all 50 states to defy the EPA by refusing to submit the compliance plans. Opponents also are getting support from an unlikely ally, Harvard Law professor Laurence Tribe, an Obama mentor who has infuriated liberals by denouncing the EPA rule as unconstitutional. “Burning the Constitution should not become part of our national energy policy,” Tribe told a House committee last month, representing Peabody Energy Corp., the world’s largest private-sector coal company. At issue before the court is whether the EPA has legal authority for its plan under the Clean Air Act. The agency and environmental advocacy groups have urged the court to throw the cases out as premature, since the agency won’t issue a final rule until this summer. David Doniger, director of the Natural Resources Defense Council’s climate and clean air program, called the lawsuits a ploy “to dress up the political attacks being led by Mitch McConnell in the Senate and others in the House.” But Murray Energy and the states say the court should issue a rare “extraordinary writ” to stop the EPA from taking action beyond its power even before the rule becomes final. “The stakes are so high, and delay will waste enormous amounts of industry, state, and federal resources and result in increased coal-fired power plant retirements that cannot be later remedied,” the company said in court documents. West Virginia and other states argue that the plan is illegal because coal-fired power plants already are regulated under a separate section of the Clean Air Act. They say the law prohibits “double regulation.” The legal debate focuses on dueling provisions added by the House and Senate to the Clean Air Act in 1990. Instead of trying to reach a compromise, Congress included both. The rule’s opponents want EPA to abide by the House language, which says if an industry is already regulated under one section of the law, it can’t be regulated under a different part. The EPA prefers the Senate version, arguing that the agency is only barred from regulating pollutants covered by another section. In this case, the agency says, the law allows it to regulate carbon dioxide, which is not already regulated under a different part of the law. Courts typically defer to an agency’s interpretation when the law is ambiguous. Tribe, the Harvard professor, also is getting a few minutes of time before the court Thursday to argue that the proposal also infringes on the right of states and the role of Congress in violation of the Constitution. All three judges on the panel hearing the case were appointed by Republican presidents. The states challenging the EPA’s proposed rule are Alabama, Alaska, Arkansas, Indiana, Kansas, Kentucky, Louisiana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, West Virginia, Wyoming and Wisconsin. Republished with permission of The Associated Press.
Terri Sewell, Bradley Byrne re-introduce Workforce Development Tax Credit Act
A bipartisan duo of Alabama congressional members — Democratic Rep. Terri Sewell and Republican Rep. Bradley Byrne — is bringing back the Workforce Development Tax Credit Act, H.R. 1781. It would help stimulate employment and increase work-skills development by creating incentives for employers to hire apprentices. “A strong manufacturing sector is crucial for our nation’s economic growth and prosperity,” Sewell said in a news release. “The Workforce Development Tax Credit Act encourages businesses to work with community colleges and universities to develop apprenticeship programs that will lead to more skilled workers. Emphasizing skills training will enable our country to maintain its competitive edge, and help bring more Americans into the middle class. I am proud to sponsor this bill with Bradley Byrne, my friend and fellow Alabamian, and I look forward to its passage.” According to a study by the Washington, D.C.-based Manufacturing Institute, almost 3.5 million U.S. manufacturing jobs will need to be filled during the next decade. If current trends prevail, though, about 2 million of those jobs will go unfilled because of a skilled labor shortage. Sewell and Byrne were joined in supporting their bill to try to stem that tide by Manufacture Alabama, a pro-growth consortium of Alabama’s leading manufacturers. In a Tweet from the group’s @ManufactureAL Twitter account, MA President George Clark issued a statement in praise of the members’ efforts to stimulate activity in the workforce: “I support the Workforce Development Tax Credit Act, as it is in total alignment with the goals of the Alabama Workforce Investment Board and the recommendations made by the Alabama Workforce Council regarding public/private partnerships,” said Clark, who also holds leadership positions on the AWC and AWIB. The bill is also co-sponsored by a number of lawmakers of across the country, including U.S. Rep. Chris Van Hollen, ranking member of the powerful House Budget Committee. “Apprenticeship programs are a critical tool to bridge the skills gap and help employers train and hire workers for jobs that strengthen our economy,” Van Hollen said in a prepared statement. “I am proud to stand with Representatives Sewell and Byrne and support this common-sense approach to incentivize apprenticeships and help connect workers to good-paying jobs in my home state and across the country.”
Pete Sessions welcomes Bradley Byrne to U.S. House Rules Committee
Fairehope U.S. Rep. Bradley Byrne has joined the powerful U.S. House Rules Committee, raising the sophomore representative’s profile as well as the collective clout of Alabama’s congressional delegation. Tuesday was his first day. Alabama Today asked committee Chairman Pete Sessions how Bryne’s first day went. “Our committee works hard on issues that are important to the American people, and I can already tell, from Day One, that Congressman Byrne is ready to roll his sleeves up and dive into these issues,” Session said. “He brings a fresh passion to the Rules Committee, all while keeping in mind what’s important to his folks back home.” In a news release on the appointment, Session expressed pleasure at Byrne’s ascension to the 13-member panel. “I am pleased to welcome my friend and colleague Bradley Byrne to our Committee,” Sessions said. “An accomplished lawyer, local advocate and state senator, Congressman Byrne is deeply devoted to causes he believes in and is willing to work hard on issues in Washington that are important to his constituents in Alabama. “His commitment to a small, conservative federal government and a strong national defense will be an asset to the Speaker’s Committee, and I look forward to working with him,” Sessions said. Byrne was named to the panel by House Speaker John Boehner who praised Byrne, saying he has “distinguished himself as an effective legislator focused on issues that matter to his constituents in Alabama.” Byrne’s Alabama’s 1st Congressional District includes Washington, Mobile, Baldwin, Escambia and Monroe counties, as well as part of Clarke County.
Equal Pay Day and 3 facts about the closing gender gap
Today is Equal Pay Day and the Pew Research Center has compiled some interesting facts about the gender gap: While the White House says that women earn only 77 percent of what their male counterparts earn, the estimate by a Pew Center study done last year puts it at 84 percent. According to them “it would take approximately 40 days, or until the end of February, for women to earn what men had by the end of last year.” Change is coming. Things are looking up for young women. The gap is closing. Millennials are making 93 percent of what their male counterparts are. Among the reasons for the difference is pay? Pew found, “women were more likely to say they had taken career interruptions to care for their family. And their research has shown that these types of interruptions can have an impact on long-term earnings.” For more information visit their website and check out their video on the topic here.
5 things to know about Tax Day: For most, it’s not that bad
Wednesday is the deadline for filing income tax returns, a day long associated with the dread of rushing to fill out complicated forms and, perhaps, making a payment to Uncle Sam. For most, though, it’s not that bad. Aside from the complicated forms, tax season generates $300 billion in tax refunds each year, a significant boost to the U.S. economy. Five things to know about Tax Day: • • • MAJORITY OF TAXPAYERS GET REFUNDS The IRS had received more than 99 million tax returns as of April 3, and about 78 percent of them qualified for refunds. Average refund: $2,815. The IRS expects to process 150 million returns by the end of the tax season. So far, more than 90 percent have been filed online. • • • CHANCES OF GETTING AUDITED SLIM Last year, the IRS conducted the fewest number of tax audits in a decade, and the number could be even lower this year, IRS Commissioner John Koskinen said. Koskinen blames budget cuts. Congress has cut the agency’s budget by $1.2 billion since 2010. The number of audits dropped even as the number of tax returns went up. As a result, fewer than 1 percent of tax returns were audited last year. But rich people beware: Your chances of getting audited go up as your income rises. Last year, the IRS audited 7.5 percent of returns filed by taxpayers making more than $1 million. • • • APRIL 15 ISN’T MUCH OF A DEADLINE IF YOU’RE DUE REFUND The IRS doesn’t like to talk about it, but penalties for filing late federal tax returns apply only to people who owe money. The penalty is a percentage of what you owe. If you owe nothing, there is no penalty. It doesn’t make much sense to file late, though, if you are owed a refund. And beware — if you have unpaid taxes, the late fees add up quickly. The failure-to-file penalty is generally 5 percent of your unpaid tax bill for every month, or part of a month, you are late. It kicks in on April 16. In general, the maximum penalty is 25 percent of your original tax bill. There also is a penalty for failing to pay your tax bill, separate from the penalty for failing to file at all, but it’s much smaller. That’s because the IRS wants you to file a return even if you don’t have enough money to pay your bill. The failure-to-pay penalty is 0.5 percent of your unpaid taxes for every month, or part of a month, you don’t pay. • • • HEALTH LAW MAKES TAXES MORE COMPLICATED FOR SOME This was the first tax season that regular folks grappled with the complicated connections between President Barack Obama‘s health care law and the tax system. For about three-quarters of taxpayers, all they had to do was check a box on their tax return indicating they had health coverage for all of 2014. For the rest, there was some head-scratching. This was the first year uninsured people faced fines collected by the IRS. And those who got tax credits to help pay premiums last year had to file a convoluted new form to show they got the right amount. The Obama administration fumbled when the Department of Health and Human Services sent out tax reporting forms with erroneous information on premiums to hundreds of thousands of people. Officials disclosed the problem and set about correcting the mistakes. • • • LOOKING AHEAD The end of tax filing season doesn’t mean everyone can relax. Tax preparation company H&R Block says many people who received tax credits to help pay for health insurance premiums apparently are unaware that they need to file a return. If they don’t, they may not be able to renew their tax credits this fall for health coverage in 2016. Republished with permission of The Associated Press.
Quick look today in Montgomery: Committee schedules
Full agenda of meetings for today can be found here. Bills of interest: House Calendar: ED&T Room 410 1:30 PM HB 414 Small Business Act, tax credits for small business employers authorized under certain conditions Senate Calendar: ED Room 727 (Revision #2 Agenda Change) 8:30 AM SB 101 Common Core Curriculum Standards, terminated, prior courses of study to be implemented Tomorrow in Montgomery: Regular Session 2015: Day 14 House Convene: 04/16/2015 9:30 AM Senate Convene: 04/16/2015 10:00 AM
Senate approves education budget
The Alabama Senate has approved a nearly $6 billion education budget that includes more money for prekindergarten and additional middle school teachers. Senators unanimously approved the budget Tuesday. It now moves to the House of Representatives. The budget does not include raises for teachers. Budget Chairman Sen. Trip Pittman of Montrose says lawmakers are trying to build up reserves so benefits and other programs can be sustained. An additional $13.5 million for prekindergarten is expected to bring 2,600 more children into the state’s voluntary K-4 program. The education spending plan also does not include a fiscal lifeline that some wanted to throw to the state’s other budget, the perpetually ailing General Fund. Without the influx of money, cuts to General Fund agencies could rise from 11 percent to 15 percent. Republished with permission from The Associated Press.
