NCPA - National Center for Policy Analysis
NCPA - National Center for Policy Analysis
Barry is a Senior Economist with the National Center for Policy Analysis, one of the most influential think tanks in America today.

The National Center for Policy Analysis (NCPA) is a nonprofit, nonpartisan public policy research organization, established in 1983. The NCPA's goal is to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector. Topics include reforms in health care, taxes, Social Security, welfare, criminal justice, education and environmental regulation.

NCPA Motto - Making Ideas Change the World - reflects the belief that ideas have enormous power to change the course of human events. The NCPA seeks to unleash the power of ideas for positive change by identifying, encouraging, and aggressively marketing the best scholarly research.

Daily Policy Digest

Provided courtesy of: NCPA

Daily Policy Digest

The "Doc Fix" Is In
22 Jul 2016 07:00:58 CDT -

In March 2015, an overwhelming bipartisan majority in Congress voted for the Medicare Access and CHIP Reauthorization Act (MACRA). The so-called "doc fix," a component of MACRA, was an attempt to fix the very flawed method Medicare uses to pay doctors and other health professionals. Unfortunately, MACRA is fiscally irresponsible and increases the federal government's control over how clinicians practice medicine, writes NCPA Senior Fellow John R. Graham:

It is not paid for. Less than 4 percent of the increased spending authorized by MACRA is offset by other government spending cuts, resulting in an estimated $141 billion increase in the accumulated deficit over 10 years and $500 billion over 20 years, thus abandoning budget neutrality, a commitment previously made by both parties.

It significantly increases federal control of the practice of medicine. In line with the ambitions of Obamacare, clinicians will face increasing requirements to comply with federal regulations in order to get paid. These regulations will likely include greater reliance on government-certified Electronic Health Records, which have already proven to frustrate doctors and do nothing to benefit patient care, despite an investment of $30 billion taxpayer dollars.

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Case Study: "Three Friends" and the Texas Wind Industry
21 Jul 2016 07:00:57 CDT -

In recent years, Texas has become the nation's leader in wind energy. In 2014, wind farms in the Lone Star State had the capacity to produce more than 12,000 megawatts of electricity, enough to power 3.3 million homes. But given the unpredictable nature of wind, they produce, on average, only 33.9 percent of their maximum capacity, writes NCPA Research Associate John McDonald.

However, some wind advocates think the nation-wide demand for electric power can be met by transporting electricity produced from renewable sources in remote areas to far-away population centers. Given the results of a recent attempt to connect the three U.S. electrical grids, the demand for renewable energy may be less than they think.

Connecting Electrical Grids. Tres Amigas LLC., literally, "three friends," was founded by a few former energy executives in 2009. Their business plan was to build a transmission station to connect the United States' three electric grids -- the Eastern, Western and Texas grids -- to transport renewable energy across the continent. Tres Amigas' idea is not unreasonable, given that electricity prices vary greatly. For instance, in 2014, electricity prices in Connecticut were 186 percent higher than in New Mexico.

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Why the "Jack of All Trades" Model for Military Aviation Fails
20 Jul 2016 07:00:56 CDT -

Contributing Fellow Chris Wiley writes in NCPA's National Security blog.

Today's federal budget is one of constrained resources.  But the answer to such challenges is not consolidation of weapons systems.

The U.S. military celebrates the diversity of its force in every area except tactical airpower.  The size of our forces makes the U.S. military uniquely capable of having specialized airframes.  For example, a B-52 could theoretically assist ground troops during a firefight, known as Close Air Support (CAS), but its primary mission is and should be Strategic Attack.  True, the maintenance and supply chain costs for multiple airframes can be a challenge, but fielding a force with feigned breadth and hollow depth is foolish.  Forcing these platforms to become 'Jack of All Trades' undermines mission effectiveness.

Our aircraft carriers formerly had as many as four different tactical platforms launching from their decks.  Today, the F/A-18 Hornet remains the only one.  The Hornet is a formidable threat to our adversaries' aircraft, naval fleets and centers of gravity.  However, it becomes a problem when the Navy demands this one aircraft be as proficient as four different airframes.  There exists a very finite amount of money and time to develop and maintain proficiencies for two or three distinctly different mission types.

Recall when the F/A-22 Raptor was sold to Congress in the 1990s as Lockheed Martin's new multi-role, 5th Generation marvel that would perform a new mission: Air Dominance.  Once the funding was assured, the Raptor's designation promptly changed to F-22A - a change to the Attack prefix that the F-15C Eagle community welcomed because it ensured their expertise would remain air-to-air combat.

Their community within the Air Force is recognized as the Jedi Knights of air combat.  I remember briefing and debriefing missions with or against Eagles and walking away with many lessons learned to better fly and teach dogfighting.  But had the F-22 designation remained as initially conceived, it would have added air-to-ground training to F-15C mission and hollowed out their air-to-air mastery.

The Navy fared differently.  The sister service previously boasted a cadre of F-14 Tomcat pilots that rivaled the F-15C Eagle pilots.  Now, the Hornet force must divide its resources among air-to-air, air-to-ground and even air refueling missions due to the retirement of the S-2 Viking.  But just this week, the commander of Air Combat Command (ACC) in testimony before Congress appears to suggest the multi-role F-35 must focus on Air Superiority - the airframe pledged to replace A-10, AV-8B Harrier, F-16, and F-18.  Sadly, the Air Force bought far too few F-22s for their needs, and is now making up for the Raptor shortfall with F-35s.

I fear the Pentagon is beholden to buying the shiny new toy, rather than providing the jets and the people to best support our fellow soldiers and marines.  As a possible solution, our national leaders must communicate to our allies that such mission specialization - equipment, maintainers, and operators - is imperative to maintaining our decided advantage against our enemies.  Many of our fellow NATO members, for instance, do not spend their pledged percentage of GDP on defense although they depend on and train with these American platforms.  Those nations should contribute the shortfall between their actual and required spending directly to the U.S. DoD to offset our country's investment in these critical mission types.

Designing, funding and fielding an airborne Swiss Army knife is possible.  But when the demands on the knife saturate the person wielding it, a swarm of Bowie knives will win the day.

For more on Government Issues:

The Obama Economy and the Shrinking Middle Class
19 Jul 2016 07:00:55 CDT -

NCPA Senior Fellow Thomas Hemphill and co-author Mark J. Perry write for American Enterprise Institute on the state of the middle class under President Obama:

Since President Obama gave his first State of the Union Address, the percentage of Americans who consider themselves "middle class" has fallen from 53 percent in 2009 to 44 percent in 2014 -- the most recent year the Pew Research Center asked this question. Team Obama has not forgotten the "shrinking middle class," as evidenced by the fact that "security for the middle class" is a separate category on the White House website (located under the "Jobs & the Economy: Putting America Back to Work" opening webpage). Yet the President's public polices do not match his rhetoric and concern for the working and middle class in the US: from his continued expansion of the federal regulatory state, to the reduction in economic freedom for entrepreneurs, to a nearly double digit "real" unemployment rate, to a GDP rate that has been less than half the 3 percent growth rate necessary to get the middle class back to work. Those economic realities are all indictments of Obama's policies that have left the average American worse off today than when Obama became president in 2009, and those indictments will be discussed in greater detail below.

Read entire article here.

For more on Economic Issues:

A Bipartisan "Yes" On A Health Care Tax Credit
18 Jul 2016 07:00:54 CDT -

Senior Fellow John R. Graham writes in NCPA's Health blog:

(A version of this Health Alert was published by RealClearHealth.)

Ready for some good news on health reform? Both the presumptive Democratic candidate for President and the Republican majority in the U.S. House of Representatives agree people should be able to spend more money directly on medical care without insurance companies meddling.

Both sides would be shocked to have their respective health reforms described as sharing any common ground. However, identifying this common ground might be necessary if either side wants to fix the worst aspects of Obamacare.

If Republican politicians in Congress want to give people any relief from the burden of Obamacare, they need to be prepared for the possibility they will have to deal with Hillary Clinton''s White House next year.

Speaker Ryan's recently released Better Way health reform plan would offer a refundable tax credit for health care, to anyone who does not have employer-based health benefits. This tax credit would increase with age, but be available regardless of income. It would be a fixed-dollar amount for each age bracket. This is superior to Obamacare for at least two reasons.

First, as a fixed-dollar amount, instead of a proportion of premium (as under Obamacare), the tax credit would reduce insurers' incentives to increase premiums to lay even more health costs on taxpayers (which they appear to have done under Obamacare). If a beneficiary's premium is lower than the amount of the tax credit, the balance can be spent on out-of-pocket health costs (through a Health Savings Account).

Second, it would reduce the job-killing effect of Obamacare's tax credit. Notches and cliffs are terms used to describe the effect of large changes in tax rates over small ranges of income. In a study I wrote in 2015, I described Obamacare's terrible notches and cliffs. A family of four, with two 35-year-old (nonsmoking) parents and two children, earning household income of $31,270, received a tax credit of $8,987 to reduce its Obamacare premium. However, if that family's income went up by just one dollar, its tax credit would have dropped $319. That is an effective marginal income tax rate of $32,000!

The net effect of the increase in income and the decrease in tax credit would not balance until the household income reached $32,097 (at which point the increase in both income and premium is $359). Few would seek to work more hours if it resulted in no net increase in take-home pay. This perverse effect riddles Obamacare's tax credits all the way up to the income cut-off. It may be the most important reason for the stagnation of work among hourly employees.

The House Republican plan would get rid of this problem. However, with some massaging, Hillary Clinton's proposed tax credit would have a similarly beneficial effect. Clinton would offer a tax credit of up to $5,000 per family ($2,500 per individual) for out-of-pocket costs exceeding five percent of income. Like the House Republicans, she offers a fixed-dollar tax credit (although it is a maximum, limited by out-of-pocket costs). Although Clinton's tax credit would adjust with income, it would adjust at a flat rate of five percent. Effectively, this imposes a flat-rate tax, which would not impose an incentive on recipients to decline more work.

The House Republican tax credit would be instead of Obamacare's current tax credit. Clinton's tax credit would be added to Obamacare's tax credit. Adding more costs should be a non-starter. Plus, she would pay for it by hiking other taxes and imposing price controls on medicines that would likely cause capital to flee the research-based pharmaceutical industry.

Nevertheless, the tax credit is a big conceptual step forward for Hillary Clinton. In March, the Congressional Budget Office estimated subsidies in Obamacare's exchanges would be $902 billion over the next ten years. However, only 14 percent of this will cut patients' out-of-pocket costs and even that is processed through insurers, adding administrative costs.

Both House Republicans and Hillary Clinton agree (at least some) of the tax credits subsidizing health care should be spent by patients directly, instead of flowing through insurers. They also agree tax credits should be structured to minimize disincentives to work. House Republicans should never increase Obamacare spending. However, if they could agree with a future President Clinton to restructure the current tax credits so they phase out at a flat rate, and allow patients to use them for out-of-pocket costs as well as premiums, that would be a significantly positive reform to Obamacare.

For more on Health Issues:

Should Dissent Be Allowed in Health Care?
15 Jul 2016 07:00:53 CDT -

Senior Fellow John R. Graham writes in NCPA's Health blog:

An eminent physician has tentatively proposed that published treatment guidelines be accompanied by dissenting expert opinions, much like the U.S. Supreme Court does. Daniel Musher, MD, of Baylor College of Medicine, served on the Advisory Committee on Immunization Practice of the Centers for Disease Control and Prevention, which considered guidelines for a dual vaccine approach for pneumococcal vaccination for adults.

He disagreed strongly with the published recommendation, but was prevented from publishing his opinion alongside the recommendation. Dr. Musher believes the publishing of dissenting opinions is very valuable to the progress of knowledge:

As citizens of the United States, we are as much bound by a 5-4 decision of the High Court as a 9-0 vote (although closely passed decisions are more likely to be overturned in future cases).  Similarly, as practitioners of medicine, until new guidelines are written, we are seriously constrained by, if not actually bound by, existing ones, without regard to the unanimity of opinion in the recommending committee. Nevertheless, there is much to gain from studying dissenting opinions, as was famously shown by the writings of Justices Holmes and Brandeis, many of whose minority opinions, in time, became the law of the land. I propose that the failure to publish differing or dissenting views in medical guidelines presents our profession with an inappropriately monolithic view--one that is studied as gospel by physicians-in-training and forced on practitioners by incorporation into a variety of performance measures.

This seems very reasonable, especially in a time when expert guidelines determine the flow of billions of tax dollars and access to treatment. There was a lot of controversy circa 2009 and 2010, when the Affordable Care Act was passed, about whether women in their 40s would get "free" mammograms every year.

In 2009, the US Preventive Services Task Force issued guidelines recommending annual mammograms for women starting at 50 years, not 40 (as previously recommended). Needless to say, this upset many people. The American Cancer Society maintained its recommendation that preventive screening start at 40, as did the Mayo Clinic. Politicians took note, and made an exception in Obamacare for mammograms, such that the 2009 USPSTF revision was ignored when it came to Obamacare's "free" preventive care. (In January 2016, USPTF maintained its recommendation.)

We are entering a period when access to care will be centrally determined by political appointees who project an inappropriate degree of certainty when they issue their guidelines. They could at least allow dissenting experts the right be heard.

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Health Policy Digest

Provided courtesy of: NCPA

Consumer Driven Health Care

Health Care Reform Tax Will Hurt Franchisees
04 Oct 2011 12:43:58 GMT - When the employer mandates go into effect in 2014, many franchised businesses will be motivated to reduce the number of locations and move workers from full-time to part-time status...


Saving Jobs from Health Reform's Harmful Regulations
04 Oct 2011 12:43:58 GMT - If the rate of health care cost growth had not exceeded general inflation, a typical family would have had $545 more per month in spendable income instead of $95 -- a difference of $5,400 per year...


Does Health Insurance and Seeing the Doctor Keep You Out of the Hospital?
04 Oct 2011 12:43:58 GMT - Gaining health insurance and using more primary care services leads to more hospitalizations as a result of physicians' discretionary decisions regarding aggressive and intensive treatment...


The Case for Competition in Medicare
04 Oct 2011 12:43:58 GMT - A well-functioning marketplace would set in motion the forces needed to transform American medical care into a model of efficient patient-centered care...


Potential Effect of Health Care Reform on Emergency Department Utilization Not Clear
04 Oct 2011 12:43:58 GMT - In 2010, 71 percent of emergency physicians said that they expected emergency department visits to increase due to the implementation of the Affordable Care Act...


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