Opinion

Reihan Salam

Obamacare’s sliding scales and slippery slopes

Reihan Salam
Jul 8, 2013 18:14 UTC

Last week as Americans celebrated Independence Day, the Obama administration made a pair of big announcements about the Affordable Care Act (ACA), the crown jewel of the president’s domestic policy efforts: two of the ACA’s key enforcement provisions—income verification and a mandate for employers to provide healthcare—are being delayed until 2015. The exchanges will still open and subsidies will flow in 2014, but efforts to ferret out fraud, or for that matter honest mistakes, will be put on hold. Reading between the lines, it seems as though the White House was acknowledging that the health system created by the ACA is unworkable in its current form.

As Eugene Steuerle, a fellow at the Urban Institute, has explained, the ACA establishes a “four-part, nearly-universal, health care system” built around Medicare, Medicaid, employer-sponsored insurance, and the new state-based insurance exchanges. The really confusing thing about our new four-part health system is that the federal subsidies available to households earning the same income can vary dramatically, depending on which part of the health system you find yourself in. As long as you are old or disabled, Medicare treats all comers roughly equally. The federal contribution to Medicaid varies from state to state, but the level of coverage tends to be pretty similar across recipients. Subsidies for employer-sponsored insurance, meanwhile, are much higher for households earning high incomes, and thus paying high taxes, than for less affluent households, while subsidies for the new exchange policies are generous for low-earners and phase out for high-earners. The upshot is that subsidies for many low- and middle-income households are far more generous on the exchanges than they are for employer-sponsored insurance.

Given that the subsidies on the exchanges are more generous than the subsidies for employer-sponsored insurance, the ACA took various steps to contain spending. One of the most important was its employer mandate, which imposed a fine on mid-sized and large employers that failed to provide full-time employees with affordable insurance options. The idea was that the fine would nudge employers to offer affordable insurance options, underwritten by the relatively stingy tax subsidy for employer-sponsored insurance, thus containing the growth of exchange subsidies.

Last Tuesday, however, the Obama administration announced that it would delay enforcement of the employer mandate, for reasons that remain unclear. The White House claims that it needs more time to make the mandate user-friendly, but many outsiders claim that the administration belatedly recognized that the mandate might discourage firms from hiring full-time employees. Regardless, the delay of the employer mandate means that firms won’t be punished for failing to report whether or not they are offering their employees affordable insurance options. This in turn means that the new state-based insurance exchanges won’t be able to verify whether individuals applying for coverage on the exchanges have access to affordable insurance through their employers. 

The ACA also aimed to contain costs through the aforementioned sliding-scale subsidies on the exchanges. The fact that the tax subsidy for employer-sponsored insurance is generally worth much more to the rich than the poor strikes most observers as perverse, and with good reason. So sliding-scale subsidies seem like an improvement. The problem, however, is that sliding-scale subsidies require income verification. And income verification is very difficult in a complex, volatile economy in which income can vary considerably from year to year, and even from month to month. I could use my tax return to apply for subsidies on the basis of my income for last year, but I might need more generous subsidies if my income falls this year or less generous subsidies if my income is higher. This means that the IRS, the agency charged with overseeing income verification, will have to create some kind of appeals process, on top of everything else it has to do. If this strikes you as a train wreck in the making, you are not alone. Now, of course, the Obama administration has announced that it’s not going to worry too much about income verification, at least not until 2015.

Carbon isn’t just America’s problem

Reihan Salam
Jun 28, 2013 20:04 UTC

Canada has 35 million people. Africa has just over 1 billion. But rather remarkably, Canada consumes about as much energy as all of Africa, according to Robert Bryce, a senior fellow at the Manhattan Institute and author of Power Hungry, a provocative look at the global energy industry. As African economies grow, however, it is a safe bet that African energy consumption will grow with it, just as energy consumption has increased in China and India and around the world as hundreds of millions have escaped poverty. And that is the key challenge facing those who hope to do something about carbon emissions, including President Obama.

Despite the fact that less than a third of U.S. voters believe that climate policy ought to be a high priority, according to a Pew survey conducted in January, the president gave a sweeping climate policy address earlier this week. During the 2012 presidential election, Mitt Romney tried to gain traction by claiming that the Obama administration was waging a “war on coal,” a charge the president and his allies adamantly rejected. Yet there is no denying that President Obama has backed regulations that are making it more expensive to extract and burn coal, as Juliet Eilperin recently documented in the Washington Post. The really new development this week is that while the president had been working to make new coal plants unviable, he is now seeking to impose regulations on existing coal plants that will either lead to steep penalty payments or force premature shutdowns.

Though these steps are widely resented in coal country, they are accelerating a trend that has been driven in large part by the collapse in domestic natural gas prices, which in turn has been driven by a technological revolution in the development of shale gas resources. In 2012, the same year Romney and Obama were debating the war on coal, U.S. coal use fell by 12 percent. Not coincidentally, the International Energy Agency has reported that between 2006 and 2011, U.S. carbon emissions had fallen by 7.7 percent, the steepest reduction for any country or region in the world. To some extent, this decrease in emissions reflected a sluggish economy. But it also reflected the shale boom. The president’s war on coal is not without costs, and Republicans, particularly those representing coal states, will fight it vigorously. But for now, at least, it is a war that U.S. energy consumers can afford, and it will contribute to America’s ongoing decarbonization. The deeper challenge for the president and his allies is that while domestic coal use is declining, global coal use is increasing at a stunning pace.

Pushing the immigration debate to the next level

Reihan Salam
Jun 21, 2013 17:08 UTC

It is often said that America is “a nation of immigrants.” But that’s not true in the strictest sense. As of the 2010 Census, the foreign-born share of the U.S. population was 12.9 percent, and so 87.1 percent of Americans that year were native-born non-immigrants. Granted, the nation of immigrants line tends to be used figuratively, to indicate that virtually all Americans come from somewhere else if you go back far enough. That includes the members of the indigenous communities that had settled in what is now the United States many centuries ago, and the descendants of the enslaved Africans who were brought to the Americas against their will. Yet when we use nation of immigrants so loosely, it loses all meaning.

And when you compare the foreign-born share of the U.S. population to other countries, you soon realize that while the absolute number of immigrants living in the U.S. is very large, we’re nowhere near countries like tiny Qatar, where over three-quarters of the population consists of foreign-born individuals, most of whom are guest workers, or Canada, where the foreign-born share is a robust 20.6 percent. The U.S. is roughly in the same ballpark as countries like Germany and Sweden, which have become major destinations for immigrants only in recent decades.

So what would it mean for America’s foreign-born population to dramatically increase in the coming decades? That is the question we ought to be asking ourselves in light of the new Congressional Budget Office analysis of the Senate immigration bill. At first, many observers focused on CBO projecting that because the Senate immigration bill will tend to increase the U.S. working-age population while not increasing the number of retirees, at least not yet, it will tend to increase economic growth, raise tax revenues, and cut the deficit. Over the first decade, the CBO projects that deficits will decrease by $200 billion relative to the current law baseline, while they will decrease by $700 billion over the second decade.

Edward Snowden, model dropout

Reihan Salam
Jun 14, 2013 18:00 UTC

One of the more striking facts about Edward Snowden, the Booz Allen Hamilton contractor who recently disclosed details concerning the National Security Agency’s various domestic surveillance programs, is that he is apparently a successful autodidact. After dropping out of high school, Snowden developed a very rigorous academic curriculum for himself, drawing on community college courses, online education programs and self-directed reading and programming. The fruit of these efforts was a lucrative job with an elite consulting firm, and a top secret clearance that gave him access to a treasure trove of state secrets.

Leaving aside the merits of Snowden’s decision to leak sensitive information to the press, his idiosyncratic educational experience points, however improbably, to a much brighter future for all young Americans, and indeed for anyone around the world hungry for knowledge.

After Snowden emerged on the national scene, a number of observers reacted with surprise, and in some cases dismay, at the fact that a high school dropout had found himself in such a sensitive position. Ralph Peters, a retired U.S. Army officer and New York Post columnist, has made several derisive references to Snowden’s dropout status, calling him, among other things, a “spoiled-brat, dropout Benedict Arnold” who deserves to be executed. David Brooks, writing in the New York Times, suggested that Snowden’s failure to graduate from high school reflected a larger inability to navigate the mediating institutions of civil society, which teach us to make commitments to others and to restrain our passions. Brooks makes an important point. There is a great deal of value in completing high school, as it demonstrates a certain level of discipline and a willingness to work with others.

Absent fathers, not working mothers, limit student achievement

Reihan Salam
Jun 7, 2013 13:34 UTC

At a recent event sponsored by the Washington Post, Phil Bryant, the Republican governor of Mississippi, suggested that one reason for the mediocre performance of American students is that something went wrong when “both parents started working,” and specifically when “mom is in the workplace.” Not surprisingly, Bryant has been roundly condemned for supposedly condemning working mothers. Even at the time of his controversial remarks, however, he was careful to acknowledge that the rise of working mothers “is not a bad thing,” and that parents’ pursuit of careers is “a great American story.” Rather than blame working mothers, he simply observed that “in today’s society parents are just so challenged ‑ not just the mom, but the mom and the dad.” Bryant was trying to make a point, however clumsily, about the struggles working parents face in making time for their children, and his reward for doing so has been opprobrium from people who really ought to have listened to his entire statement.

I have my own objection to Bryant’s remarks, which is that he kept referring to the challenges facing two-parent, two-earner households. These challenges are real, as any harried married parent will tell you. But it is tough to argue that these households aren’t devoting enough time and energy to their children. For one thing, the median income of married-couple households is almost twice that of other households, in part because 59 percent of married-couple households are two-earner households. Money isn’t everything, to be sure, but it is certainly something, and married parents have substantially more of it than single parents.

Moreover, as the economists Garey Ramey and Valerie Ramey of the University of California-San Diego have found, married mothers and fathers spend substantially more time with their children now than they did in the mid-1990s, and this increase has been twice as great for college-educated as it has been for non-college-educated parents. If Bryant is right that making time for your children is important, and I’m pretty sure he is right, parents in two-earner households have been taking this idea to heart for almost 20 years, often at the expense of earning additional income.

Obama’s legacy could be moral rather than political

Reihan Salam
May 24, 2013 16:03 UTC

Barack Obama had high hopes for his second term. In his lofty second inaugural address, he celebrated the virtues of activist government and pledged to redouble his efforts to fight climate change, among other causes dear to American liberals. Yet there is a growing perception that the president’s agenda has stalled. Congressional leaders continue to work toward comprehensive immigration reform legislation, but the Obama administration has mostly taken a hands-off approach. The president devoted several weeks to making the case for more stringent gun regulation, to no avail. Obama’s speech this week recasting the war on terror and drone policy may have been ambitious, but the goals remain thorny and controversial and therefore unlikely to define his presidency. And though he has continued to make the case for substantial tax increases on upper-income Americans, the House GOP remains staunchly opposed. Indeed, conservative anger over Benghazi and IRS targeting of conservative groups has led many Republicans to believe that the president is on the ropes and that they ought to press every advantage.

This raises the question of what kind of legacy President Obama will have. Even if Obama accomplishes nothing between now and the end of his second term, he will have been one of the most consequential presidents in modern American history, for better or for worse. During the 111th Congress, Democratic majorities in the House and Senate passed an unprecedented fiscal stimulus law; the Affordable Care Act; a sweeping student loan overhaul; and the biggest new round of financial regulations since the Great Depression. The president’s re-election victory made it far more likely that these legislative initiatives will endure, even in the face of determined Republican opposition.

But there is something unsatisfying about playing defense, and one imagines that the president, an ambitious and competitive man, longs to do more. One possibility, hinted at in a recent speech, is that Obama might take advantage of his prestige and moral authority to make the case for stronger American families. This need not entail any new legislation, though the president’s conservative critics might welcome that. Rather, it will require a series of firm and consistent moral arguments about what parents, and particularly fathers, owe to their children.

Chris Christie, the Republican Bill Clinton

Reihan Salam
May 15, 2013 17:24 UTC

Chris Christie, the Republican governor of New Jersey, has a lot to be happy about. The recent revelation that he had lap-band surgery to gain control of his weight went about as well as could be expected. A less well-liked public figure might have been mocked for taking an extreme step, but Christie’s self-deprecating wit and what at least seems like unrehearsed genuineness and warmth have served as a shield. Like Bill Clinton in his prime, Christie has a mix of great appetite and great energy that Americans find strangely compelling.

And because there are only two gubernatorial elections in 2013, Christie’s bid for re-election is attracting a good deal of national attention, almost all of which has been positive. A new NBC News/Marist poll, released on Wednesday of last week found that Christie has a 69 percent approval rating, and that he leads his most likely Democratic challenger, State Senator  Barbara Buono, by 60 percent to 28 percent among registered voters. Among likely voters, Christie’s support increases to 62 percent while Buono’s stays the same.

Christie still has to overcome the fact that the New Jersey electorate skews left, as demonstrated by Barack Obama’s crushing 58to-40 percent victory over Mitt Romney in last year’s presidential election. One can imagine Democrats and left-of-center independents deciding they can’t back a self-described conservative for governor, no matter how much they like him personally. Mindful of this danger, Christie has been keen to emphasize his willingness to work across the aisle. In a new campaign advertisement, a narrator with a soothing baritone voice praises the New Jersey governor for “working with Democrats and Republicans, believing that as long as you stick to your principles, compromise isn’t a dirty word.”

The future of Hispanic identity

Reihan Salam
May 6, 2013 18:57 UTC

In an interview with ABC News this past weekend, Bill Richardson, the former governor of New Mexico and a veteran of the Clinton White House, shared his thoughts on Sen. Ted Cruz, a Republican from Texas who has been gaining prominence as a staunch, and sometimes strident, conservative voice. Though Richardson acknowledged that Cruz is “articulate,” he accused the Texas senator of having introduced “a measure of incivility in the political process.” When asked if Cruz “represents most Hispanics with his politics,” Richardson replied that because Cruz is anti-immigration, “I don’t think he should be defined as a Hispanic.”

Regardless of Richardson’s true meaning, he hit a nerve. Bill Richardson and Ted Cruz are both entitled to define themselves as Hispanics, as both have roots in Spanish-speaking countries. Yet both men, like a large and growing number of Hispanics, are of mixed parentage. Richardson is the son of a father who was half-Anglo-American and half-Mexican and a Mexican mother. Ted Cruz is the son of an Irish-American mother and a Cuban immigrant father. And so the Richardson-Cruz kerfuffle gives us an opportunity to think about the future of Hispanic identity.

As of the 2010 Census, Hispanics represented 16.3 percent of the total U.S. population. And in the decades to come, the Census Bureau projects that the Hispanic share of the U.S. population will increase dramatically, from just under one American in six to just under one in three.

A prophetic President Bush

Reihan Salam
Apr 26, 2013 20:59 UTC

This week, various political luminaries gathered in Dallas, Texas, to celebrate the presidency of George W. Bush, who presided over one of the most tumultuous periods in modern American history. Among liberals, Bush is considered a uniquely awful president, having led the United States into the ill-fated invasion and occupation of Iraq and having passed into law deep tax cuts that contributed to America’s present-day fiscal crunch.

Conservatives are more conflicted. Some dismiss him as a big-government conservative who failed to heed the wisdom of Goldwater and Reagan. Others, including many who served in the Bush administration, believe that as time passes, he will be lauded for his achievements. The complicated truth is that for all his flaws, George W. Bush had a better understanding of the challenges facing Republicans than most Obama-era conservatives. His rocky tenure is best understood as a testament to how difficult it will be to modernize the GOP.

Many hero-worshipped Bush during the early days of the war on terror, seeing him as a humble Christian leader who was always willing to take the hard road rather than the easy one. But as the public turned against the Iraq War, and as his efforts on behalf of Social Security reform and immigration reform engendered a fierce political backlash, a growing number of conservatives came to see Bush as an apostate who expanded Medicare and the federal role in education while failing to roll back the growth of government. The Bush administration’s response to the 2008 financial crisis alienated conservatives even further, as the ominously named Troubled Asset Relief Program (TARP), engineered by Treasury Secretary Hank Paulson, struck many as a hardly-any-strings-attached Wall Street bailout. The Tea Party movement arose in no small part as a repudiation of Bush and his fitful efforts to transform the GOP.

Boston and the future of Islam in America

Reihan Salam
Apr 22, 2013 19:19 UTC

One of the central questions surrounding the Boston Marathon bombings is whether they portend a larger wave of terror attacks by homegrown Islamic radicals. The culprits, two brothers of Chechen origin, one of whom was a naturalized U.S. citizen, had both lived in the country for more than a decade. While the older brother is reported to have been sullen, resentful and ill at ease in his adopted country, the younger brother was by all accounts a well-mannered kid, whose main vice was marijuana. Many fear that if these two men could turn viciously against the country that gave them refuge, the same might be true of at least some small number of their co-religionists.

I grew up in a Muslim household in New York City’s polyglot outer boroughs, and the Tsarnaev brothers strike me, in broad outline, as recognizable figures. The younger brother’s Twitter feed, which has attracted wide attention, reads like dispatches from the collective id of at least a quarter of my high school classmates. Also recognizable is the brothers’ lower-middle-class but gentrifying Cambridge milieu, which bears a strong resemblance to the neighborhood in which I was raised. So like many Americans of Muslim origin, I’ve been struggling to understand what exactly went wrong in their heads. How could a “douchebag” and a “stoner” ‑ and here I’m paraphrasing the words of the Tsarnaev brothers’ acquaintances and friends ‑ have committed one of the most gruesome terror attacks in modern American history? We might never have a good answer to this question, and certainly won’t have a good answer anytime soon. But what we can do is get a sense of what we do and don’t know about U.S. Muslims, and what it might mean for our future.

Although I can’t claim to be representative of U.S. Muslims as a whole, my experience leads me to believe that America’s Muslim community will grow more secular over time. My parents are originally from Bangladesh, a Muslim-majority country of 150 million that is currently in the throes of a violent clash over the role of Islam in public life. While Bangladesh has made impressive strides in a number of social indicators in recent decades, its poverty has sent large numbers of migrants to India, the Persian Gulf, Europe, Southeast Asia and, over the past two decades in particular, the United States.

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