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Changes to Medicare Part D Could Cost Taxpayers Billions
Posted By: Brandon Arnold - 03/03/14

Since Medicare Part D’s creation in 2003, National Taxpayers Union has expressed concerns about its impact on the federal budget. The program, which instituted a prescription drug benefit for Medicare, cost $55 billion in 2012 – a hefty price tag, yet much less than original projections that suggested it would saddle taxpayers with a $123 billion burden.

It’s encouraging (and extremely rare) to see a federal program defy the trend and actually come in well below the cost forecasts. Unfortunately, recent actions by the Obama Administration could take Part D in the wrong direction. In approximately 700 pages of text, the Centers for Medicare and Medicaid Services (CMS) has proposed wholesale changes that could reduce options within the program, increase premiums, cancel or significantly alter millions of existing plans, and force taxpayers to shell out more. In fact, a study by the Milliman actuarial firm concluded that Part D would cost an additional $1.6 billion per year if the rules are adopted.

Thankfully, a bipartisan group of 20 Senators led by Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Orrin Hatch (R-UT) recently expressed very strong objections to the proposed rule in a letter to CMS Director Marilyn Tavenner. Similarly, a letter to Director Tavenner from House Ways & Means Chairman Dave Camp (R-MI), House Energy & Commerce Chairman Fred Upton (R-MI), and Senator Hatch asks her to “reject these harmful changes to the Part D program and withdraw this proposed regulation.”

The CMS proposal is yet another example of the Obama Administration’s over-utilization of the rulemaking process.  As strong bipartisan opposition to the rule continues to grow, NTU hopes CMS will be mindful of taxpayers as well as seniors, and abandon it altogether.

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Latest Taxpayer's Tab: FL Special Election & The Belly-Button Tax
Posted By: Michael Tasselmyer - 03/02/14

Tab Insert

Congressman Bill Young passed away last year, meaning that Floridians will have to elect a new Representative on March 11 to finish his term in the House. The three candidates -- David Jolly (R), Lucas Overby (L), and Alex Sink (D) -- have made a lot of promises as they vie for the open seat, but what do their proposals mean for taxpayers?

That's what NTUF's Research and Outreach Manager, Dan Barrett, tried to find out in the report featured in this week's edition of The Taxpayer's Tab. NTUF sifted line-by-line through each candidate's campaign speeches, websites, and debate transcripts to compile a list of proposals they're running on and that could affect the budget, then compared those promises to current or proposed legislation in our BillTally database to come up with each politician's net spending agenda. While no candidate offered much in the way of details, NTUF was able to score some of the proposals and figure out how much each of their agendas could cost:

  • David Jolly: -$60.04 billion
  • Lucas Overby: $191 million
  • Alex Sink: $20.391 billion

Links to a summary as well as the full report are in the Tab's online edition.

Also featured this week:

  • Most Expensive: Senator Barbara Mikulski (D-MD) introduced S. 1086. The Child Care and Development Block Grant Act would reauthorize the eponymous federal program at $1.6 billion above current levels over the next five years.
  • Least Expensive: The "Belly-Button Tax" is a provision within the Affordable Care Act that charges certain group health plans a fee over the next three years in order to stabilize premiums in plans covering higher-risk enrollees. Congressman Pat Tiberi (R-OH) introduced H.R. 3489 in order to repeal that provision and replace it with appropriations $5 billion below current funding.
  • Wildcard: Puerto Rico and the U.S. Virgin Islands are well-known for their rum production. What many don't know is that the government reimburses them for some of the taxes they pay to ship it to the 50 States, through what's known as a "cover over." The rate at which it does so recently fell, so Resident Commissioner Pedro Pierluisi (D-PR) introduced H.R. 3967 to restore the cover over rate to its higher previous levels. The bill is a revenue-only provision and is therefore not counted as a "cost" in the BillTally methodology.

For more, check out The Taxpayer's Tab online.

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(AUDIO) Tax Reform-cast w/ James P. Pinkerton of RATE Coalition - Speaking of Taxpayers, Feb. 28, 2014
Posted By: Douglas Kellogg - 02/28/14

Rep. Dave Camp (R-MI) released his tax reform proposal this week, and the response is still echoing throughout the policy world. James P. Pinkerton, Co-Chair of the RATE Coalition, joins the podcast to discuss the tax reform effort. Plus, the Outrage of the Week!

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Get Ready for Another Round of Internet Sales Tax Brawling
Posted By: Douglas Kellogg - 02/27/14

The Internet Sales Tax debate is about to heat up yet again! Today, NTU attended a briefing organized by Rep. Steve Daines (R-MT) that offered many good reasons to be wary of the Marketplace (un)Fairness Act (MFA). The briefing featured Montana Attorney General Tim Fox, Phil Bond of the WE R HERE Coalition, and R Street’s Andrew Moylan. There will a formal hearing next week and those interests motivated by new revenue, or a business advantage, see this is their chance to make headway in the House.

Fox made clear that the MFA is not so much about e-commerce, as it is about the 31 states unable (or unwilling) to balance their books – at a total of $55 billion in collective deficit – looking for the power to snag more revenue. In this case that revenue would come from out-of-state businesses who they previously had no ability to burden.

The Montana AG said the MFA scheme was like an “illicit drug” and that it would make the federal government a proverbial drug dealer, leading addicted states to more revenue, rather than fiscal responsibility. He also alluded to the possibility of legal action by the states should this scheme move forward.

Andrew Moylan explained the significance of the poll commissioned by NTU and R Street a few months ago (which you can read through HERE). He emphasized that the poll found across the board opposition to an MFA-type Internet Sales Tax scheme, and that people understood the current taxing principles such a policy would destroy.

WE R HERE’s Phil Bond added insight on the plight of small business in this struggle, saying thousands of enterprises would disappear overnight, thanks to 17 cents per dollar of additional compliance costs.

Of the risk of audit from over 10,000 taxing jurisdictions, Bond quipped, “When you get an audit, there’s not an app for that.”

More ominously Bond warned of the unintended consequences of such a broad change in law. For the pro-tax group, the dollar signs flashing in front of them may not come to pass, these taxes on the state level in California and Illinois have fallen woefully short of revenue projections. He also discussed consumers dealing with their state watching what they were buying online because they in essence owned them.

Taxpayers can do more than just hope the House listens to these, and many other, dire consequences of a Marketplace Fairness Act scheme. They can contact their representatives and tell them: we understand what MFA would do, don’t trash my constitutional protection against out-of-state taxing authorities, and don’t destroy the system of interstate competition that has served our country so well.

This remains a long fight, but taxpayers have to stay on their feet and never give up.

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(AUDIO) IRS Wants to Silence Non-Profits, Stimulus-iversary - Speaking of Taxpayers, Feb. 20
Posted By: Douglas Kellogg - 02/24/14

NTU has a new take action petition so that you can tell the IRS to stop their plans to silence non-profit groups. CBO takes the air out of the minimum wage hike push. Plus, NTU's State Affairs Manager Lee Schalk updates us on action around the country; and NTUF's Dan Barrett talks about the stimulus on its 5th anniversary. Plus the Outrage of the Week! 

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Latest Taxpayer's Tab: Made in America
Posted By: Michael Tasselmyer - 02/23/14

Tab Insert

During the opening ceremonies at the 2012 Olympic games in London, the U.S. team wore uniforms designed by fashion icon Ralph Lauren, but which were actually made in China. While the Olympic team sent to Sochi seems to have avoided similar controversy this time around, Senator Sherrod Brown (D-OH) has introduced legislation that would make sure there aren't any "Made in China" tags on the uniforms of federal workers.

Under current law, government agencies that purchase textiles -- say, for TSA or federal prison guards' shirts -- have to buy those that are at least 51 percent American-made. Senator Brown's Wear American Act, introduced as S. 2001 in January, would prohibit them from buying anything less than 100 percent American textiles. Senator Brown claims that doing so would provide an economic boost to domestic producers. NTUF scored the bill as a "no cost" regulatory measure, but it's entirely possible that requiring the government to only purchase completely American-made products could be more expensive than current practice.

Also featured this week is a wrap-up of NTUF's "Cards Against Liberty" table at the International Students For Liberty Conference last weekend. The game was a hit with the attendees and offered some interesting insight into what younger generations think about the pressing issues facing Washington.

In keeping with the Tab's usual legislative focus, we have analysis of H.R. 3984, an early childhood education proposal from Congressman James Himes (D-CT). The Supporting Early Learning Act would establish new grant programs at a cost of $350 million.

The President's stimulus proposals recently turned five years old, but many programs that were supposed to be "temporary" are still receiving funding. An overview is in the Tab this week as well.

You can view the latest issue online here.

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Florida’s Special Election: Taxpayers Need Details
Posted By: Dan Barrett - 02/21/14

With the passing of Congressman Bill Young (R-FL), residents of the 13th Congressional District of Florida have a special election coming up on March 11th to decide who will represent them for the remainder of the 113th Congress. Three candidates are viewed as the frontrunners: former general counsel to Bill Young David Jolly (R), activist and commercial diver Lucas Overby (L), and former Chief Financial Officer of Florida Alex Sink (D). Each candidate offers different general solutions to America’s fiscal ills but few details have been released by any campaign as to what specific policies that he or she would support as Florida’s newest Representative.

National Taxpayers Union Foundation (NTUF) has long been analyzing what candidates would specifically do if elected to federal office. We take the direct quotes and campaign materials of candidates in contentious races and match those statements, goals, and affirmations to show the public what kind of a budget candidates are really calling for. The cost estimates and sources used in the studies are similar to those used in the BillTally project.

Since the election in has a shortened campaign period and because each of the three campaigns supplied few budgetary platform items, NTUF was able to compile a limited number of proposals but was unable to release a full study, such as the special election in New Jersey between now-Senator Cory Booker and former Mayor Steve Lonegan.

Remember, all of the figures highlighted in this post and in our line-by-line analysis of the three candidates are annualized and only include changes in current spending (or outlays). They do not include changes in revenue or costs outside of the federal government. For more information on NTUF’s Methodology, go here.

David Jolly (R) has three (out of ten) quantifiable policies that NTUF was able to score. One would decrease annual spending by $63.9 billion and two would increase outlays by $3.86 billion for a net $60.04 billion reduction in federal expenditures each year. His proposal with the largest impact on the federal budget is to repeal the Affordable Care Act.

  • Index the Minimum Wage: Unknown
  • Prevent National Flood Insurance Premium Rate Hike: $180 million
  • Block Medicaid Expansion Without Federal Guarantee: Unknown
  • Purchase Insurance Across State Lines: Unknown
  • Repeal the Patient Protection and Affordable Care Act: -$63.9 billion (savings)
  • Secure the Border: $3.68 billion
  • Ensure the Military is Properly Equipped: Unknown
  • Fight for Local and Regional Military Installations: Unknown
  • Strengthen America’s Foreign Policy: Unknown
  • Protect Veterans Programs and Funding: Unknown

Lucas Overby (L) has proposed two (out of eight) policy items that NTUF could fiscally score. Combined, they would grow annual federal spending for a total of $191 million. His largest quantifiable measure would extend current federally-subsidized flood insurance premiums by four years.

  • Prevent National Flood Insurance Premium Rate Hike: $180 million
  • Tie Academic Performance with Financial Aid: Unknown
  • Permit States to Decide on Offshore Drilling: Unknown
  • Use Block Grants to Diversify Energy Sources: Unknown
  • Expand Federal Employee Benefits to Domestic Partners: $11 million
  • Reform the Health Care Sector: Unknown
  • Reform the Immigration System: Unknown
  • Revamp America’s Foreign Policy: Unknown

Alex Sink (D) has proposed three (out of nine) measures that NTUF could match with current cost estimates. All three would increase spending by a combined $20.391 billion each year. The largest budget-influencing item she supports is passing the comprehensive immigration reform bill that passed the Senate.

  • Build a Light Rail System in Pinellas County: Unknown
  • Increase the Minimum Wage: Unknown
  • Prevent National Flood Insurance Premium Rate Hike: $180 million
  • Use New Technologies and Streamline Costs: Unknown
  • Expand Federal Employee Benefits to Domestic Partners: $11 million
  • Allow for Prescription Drug Price Negotiation: Unknown
  • Delay Parts of the Patient Protection and Affordable Care Act if Necessary: Unknown
  • Pass Comprehensive Immigration Reform: $20.2 billion
  • Ensure Veterans Access to Benefits and Employment: Unknown

While candidates have a number of conflicting platform items, they all share some common themes or goals. All three would vote to increase current spending by $180 million per year to delay a scheduled rate increase for the National Flood Insurance Program. The lower current rate would be in effect for four years and would allow officials to reexamine the maps and formulas used to determine price levels (more information can be found in a recent edition of The Taxpayer’s Tab). They would also, in varying ways, aim to secure the southern border. Jolly and Sink would use existing methods to do so, using federal resouces, while Overby would seek to utilize state resources. 

Overall, taxpayers should take note of the many and large gaps in each candidates’ agendas. The lack of budgetary details is a concern all Americans have when deciding who to send to their statehouse and Washington, DC. As the days tick down to March 11th, campaigns need to offer taxpayers clear details of what they would do with not only the tax dollars from the 13th District but from all of the Districts in America.

Note: National Taxpayers Union Foundation is a 501(c)3 nonprofit organization. Our research efforts are intended only to educate Americans on how their tax dollars are being or will be spent by those in office, seeking office, or in appointed positions. For more information on NTUF go here.

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Whirlwind Diplomacy: $1.4 Million Flight for 8 Hours On Ground
Posted By: Michael Tasselmyer - 02/21/14

This week, President Obama flew to Toluca, Mexico to meet with Canadian Prime Minister Stephen Harper and Mexican President Enrique Pena Nieto.

The President's schedule was jam-packed, as he not only discussed trade policy between the three neighboring countries, but -- as the Washington Post reports -- he also phoned the Prime Minister of Turkey, commented on domestic minimum wage issues, and publicly responded to ongoing political violence in Venezuela and the Ukrainian capital of Kiev.

In fact, at 9 hours round-trip, the President's flight to and from Washington took longer than the 8 hours he spent on the ground in Mexico. According to the latest estimates available, that comes out to just over $1.4 million worth of Air Force One hourly operating costs, a hefty sum considering less than a business day's worth of time was spent discussing trade policies with the country the President was visiting.

These shorter trips abroad are becoming more common not just for President Obama, but for other recent Chief Executives as well. As NTUF noted in our report on Presidential travel last year, during modern Presidents' first terms, the number of days abroad per trip has decreased during every administration since Jimmy Carter's, even as the total number of trips abroad has increased significantly.

The table below is taken from our report:

travel

While Presidents are generally traveling more than they used to, it appears that long, extended trips are becoming less common.

Next month, President Obama will head to Europe for another whirlwind tour, stopping in five countries in five days: Netherlands, Belgium, Vatican City, Italy, and Saudi Arabia.

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The I.R.S. Proposes One Rule to Silence Us All
Posted By: Douglas Kellogg - 02/20/14

“IRS Reg-134417-13” – it is hard to conceptualize how something tracked by this innocuous looking and thoroughly bureaucratic series of numbers could silence thousands, if not millions, of American voices. But that is the effect bureaucracy has, isn’t it? It turns drastic government overreach into mundane, procedural, and overly worded actions. This proposed rule would cripple the ability of non-profit groups to exercise speech.

It wasn’t enough to unfairly go after Tea Party groups that were applying for non-profit status. The investigation into exactly what went on in that case is still ongoing, but now the IRS has the hubris to pursue existing groups, Tea Party and otherwise – hey, just in case anybody got through!

The list of those affected expands far and wide. Not only are massive numbers of conservative, free-market, and similar organizations opposed (like National Taxpayers Union, Heritage Action, etc.), the American Civil Liberties Union (ACLU) is concerned with the danger of the proposed rule change. Even groups that are involved in simple voter registration drives would be affected.

NTU now has a petition up so you can lend your voice to that chorus of opposition, click HERE.

If the IRS’s targeting of applicants for tax-exempt status was a smart bomb that gave the impression (perhaps correctly) of some political motive behind it, this proposed rule change would look a lot like the carpet bombing equivalent… Sure, there seems to be a general area they are focusing on, but the damage would spread far and wide.

One thing the rule would specifically do is put an organization’s non-profit status at risk should they make any public comment that simply references a candidate (or even just a party in some circumstances) for any office 30 days out of a primary election, or 60 days out of a general election.

The terms the I.R.S. would be looking for as violations have potential to be interpreted very broadly, leaving a lot of power in the hands of the judge – in this case the I.R.S.

A wild potential example could be: if a group has a position on a tax issue on their site permanently, say abolishing a sales tax, and urges citizens to contact public officials in support of doing so. Now, a candidate for such and such is running and has this issue in his platform. If it’s 61 days before Election Day, everything’s fine, if it’s day 59, that could potentially mean the end of that group’s non-profit status.

Because the issue itself can be viewed as characterizing the candidate, and a website is “public communication”, the new I.R.S. rule could very well be taken this far. There could be even more surprising potential applications for this rule, a very unpleasant thought.

Why is this even a concern for the I.R.S., when the Federal Election Commission polices these things, is a very good question brought up by Center for Competitive Politics.

Whatever motivations are behind these power plays may remain shrouded, but their free speech-crushing results and absence of logic should be enough for the growing, bipartisan, opposition to stand on.

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CBO Reports Raising Minimum Wage Would Kill Jobs
Posted By: Nan Swift - 02/19/14

Following through on his State of the Union promise to move ahead with or without Congress, President Obama signed an executive order last week raising the minimum wage for federal contractors from $7.25/hour to $10.10, the same increased rate that Senator Reid (D-NV) keeps threatening to bring up for a vote on the Senate floor

It’s really too bad that the President didn’t wait for the Congressional Budget Office (CBO) to do some number crunching before acting, because contrary to Sen. Reid’s boast that hiking the minimum wage would create “85,000 new jobs,” a CBO report unveiled yesterday confirms minimum wage skeptics worst fears:

Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects (see the table below). As with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million workers. 

In layman’s terms, implementing a $10.10/hour minimum wage would risk losing half a million jobs. The fact that the CBO tempers their estimate with the caveat that it could range from just a few lost jobs up to 1 million jobs should hardly be comforting. Either way the result is the same: hiking the minimum wage is a jobs killer.

Higher unemployment is the last thing our struggling economy needs – doing anything that risks more lost jobs is tantamount to economic malpractice. Rather than relentlessly pursuing policies that flirt with disaster, Senator Reid and the rest of Congress should be focused on reforms that save and create jobs such as repealing the death tax, lowering the corporate tax rate, rolling back burdensome regulations, and even the big one: repealing ObamaCare, which the CBO estimated earlier this month could cut 2.5 million jobs from the economy.

Given the current state of affairs on Capitol Hill, it’s unlikely the House and Senate could successfully implement the above reforms. Still taxpayers can hope that Senator Reid heeds the latest warnings from CBO.

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