Goldwater Institute

These days, many supporters of limited government seem concerned that the public isn’t with them on issues like the role of government in society. It’s hard to deny it’s true on some level or on some issues.

But in some fundamental ways, the outlook isn’t so bleak. For instance, the American public still firmly supports the entrepreneur-driven prosperity that free markets can provide. In a February 2013 Rasmussen Reports poll, 86 percent of likely voters believe it is “fair” for those who build very successful companies to get rich from their efforts.

A message that extols the virtues of entrepreneurship can also reach those concerned about people on the lowest rung of the economic ladder. Encouraging entrepreneurship – particularly by lowering the tax and regulatory barriers that inhibit its growth – is a far more effective path to poverty reduction than many government-centered income redistribution programs. As a number of academic studies have shown, poverty declines and personal income growth occurs most rapidly in states that have higher levels of entrepreneurship, even after adjusting for demographic factors and generosity of government welfare programs. Entrepreneurship doesn’t have to be the kind that produces the next Apple or Google, although it can be. Instead, modest entrepreneurial endeavors like a local food truck or hair salon can be, and have proven to be, the path out of poverty for many people.

Entrepreneurship transcends the simple argument that it increases material wealth. There’s a moral component as well. As Arthur Brooks, president of the American Enterprise Institute wrote in the Wall Street Journal recently, “Entrepreneurship should not be extolled as a path to accumulating wealth but as a celebration of everyday men and women who want to build their own lives, whether they start a business and make a lot of money or not.”

Rolling back impediments to people’s ability to enrich themselves both economically and personally through hard work and entrepreneurship is a winning message. Cutting taxes and reducing regulatory burdens aren’t good merely because they help the currently rich. On the contrary, much of the time these policies are worth enacting because they can help the poor and middle class even more. It’s a message that resonates because it’s a principal worth fighting for.

Learn more:

Goldwater Institute: Entrepreneurship is a Key to Poverty Reduction

Wall Street Journal: Republicans and Their Faulty Moral Arithmetic

Rasmussen Reports: 60% Believe Letting Entrepreneurs Get Rich Is Good for Economy

This week the Washington Times ran a story on one of the remaining legal challenges to the federal health care law – a challenge brought under the Constitution’s Origination Clause to the “tax” the law created. Recently, I spoke at the Cato Institute about another ongoing challenge to the law – the Goldwater Institute’s challenge to the Independent Payment Advisory Board (IPAB), a panel of 15 unelected bureaucrats created by the federal law to reduce Medicare costs.

The Institute initially filed its challenge in 2010, and more than two full years later, a federal judge in Arizona upheld IPAB’s expansive powers against our separation-of-powers challenge, declaring that the federal law sets sufficient boundaries to curb IPAB’s authority. The 9th Circuit Court of Appeals will hear our appeal later this year.

Despite the law’s purported limits, IPAB has vast power over the entire health care market to set price controls, levy taxes, and even ration care. In short, IPAB can do virtually anything so long as the Board says its action is somehow “related to the Medicare program.”

There’s little Congress can do to curb the Board’s expansive powers, because IPAB’s proposals automatically become law unless Congress and the President quickly enact a substitute plan with an equal reduction in spending. And except by a 3/5 supermajority of both houses during a short window in 2017, Congress can’t even repeal the Board.

But IPAB is not just independent of Congress. Its decisions can’t be challenged in court, nor are they subject to administrative review. The Board doesn’t have to give the public notice and an opportunity to comment on its proposals. And although IPAB is an executive agency, the President can’t modify its proposals before they’re submitted.

IPAB is contrary to American constitutional government. Our Founders established a federal government of limited powers, separated into three distinct branches. Maintaining this structure is critical to preserving liberty – the legislative, executive, and judicial branches check and balance each other to protect individuals against concentrated power.

IPAB consolidates the powers of every branch of government, but is accountable to none. So long as IPAB remains on the books, an unaccountable bureaucracy will control our health care. And so long as courts refuse to enforce the separation-of-powers doctrine, an unlimited government will stifle our freedoms.

Learn more:

Washington Times: Lawsuit Over Health Care Could Kill 'Obamacare'

Cato Forum: Beyond the Individual Mandate: the Ongoing Legal Challenges to Obamacare

Goldwater Institute: IPAB Lawsuit (Coons v. Geithner)

Republican Study Committee: Organizations Supporting the Repeal of IPAB

There are many reasons for Arizona to reject the Obamacare Medicaid expansion, but one reason which has not gotten the attention it deserves is the increasing possibility that the provider tax being proposed to fund the expansion may be reduced or phased out, leaving Arizona with a bill we cannot afford.

In selling the Medicaid expansion to Arizona, supporters have proposed financing the expansion with a provider tax levied on hospitals. The money generated from the provider tax would then be used by the state to draw down federal matching dollars. The provider tax, however, is by no means a safe and secure funding mechanism.

The Simpson Bowles Commission recommended limiting the provider tax to save $49 billion dollars. President Obama’s FY2012 budget proposed reducing the maximum provider tax from 6% to 3.5% to reduce federal spending by $18.4 billion. Senator Durbin (D-IL) said the provider tax was “a bit of a charade” and Senator Corker (R-TN) has recommended its complete elimination. The nonpartisan Congressional Budget Office has also noted that limiting or eliminating the provider tax would save the government billions of dollars.

In February, House Republicans noted various policy proposals which they would consider as a means of avoiding the sequester–one of these proposals was a decrease in the Medicaid provider tax. This was merely the latest in a series of recent bipartisan attacks on the provider tax.

As Washington’s debt problem grows, the question is not if the federal government will continue to reduce spending beyond the sequestration cuts, but when. If the provider tax is one of the cuts, as it seems increasingly likely to be, Arizona will be left with a very expensive bill. The so-called “circuit breaker” aimed at reducing Medicaid spending by the state if the feds don’t meet their obligations wouldn’t help in this situation because it is to be tied to a separate issue—the federal matching rate for newly eligible Medicaid enrollees.

The Arizona legislature should take note of these recent proposals from Washington and keep in mind that the proposed funding mechanism rests on shaky ground. If Washington eliminates or reduces the Medicaid provider tax, Arizona taxpayers will be left holding the bag. The best answer is to simply say no to the expansion.

Learn more:

Washington Post Editorial: A much-needed Medicaid reform

Kaiser Family Foundation: Issue Brief: Medicaid Financing Issues: Provider Taxes

Politico: Some In GOP want sequester deal

The Arizona Wildcats men’s basketball team is headed to the “Sweet 16” round of the NCAA tournament, having thumped their first two opponents, Belmont and Harvard. USA Today reports that it’s “hard to find flaws” with the Wildcat’s performance in the tourney so far.

All eyes will be on Arizona when they play second-seed Ohio State on Thursday.

But lawmakers around the country have had their eyes on Arizona for the past three months. Policymakers in Florida, Iowa, and Montana introduced bills this year that would create education savings accounts modeled after Arizona’s innovative example.

With the future of children around the country now in the balance, it is critical that Arizona policymakers use their experience with the accounts’ first two years to make sure children are getting a great education.

As a prime example, lawmakers should expand education savings account eligibility to incoming kindergarten students before the session ends. This is a critical move because under current law, children must be attending a public school when they apply for a savings account. By allowing incoming kindergarten students who were assigned to a failing school to apply for an account, parents would not have to send their child to a failing school for a whole year before applying. Children would have the chance at a great education beginning on day 1.

Another proposed revision would allow a university or research organization to gather student data and produce a report on parent and student satisfaction and student achievement for those children that left failing schools to use a savings account (as well as children in military families and adopted children). Arizonans—and now families all over the U.S.—need to know how the nation’s leading education innovation is serving children.

While we cheer on the Wildcats this week, let’s remember that the NCAA tournament comes and goes every year. But children around the country are depending on lawmakers to use every opportunity to give them hope for a better future. Let’s not miss this one.

Learn more:

Goldwater Institute: Education Savings Accounts: A Path to Give All Children an Effective Education and Prepare Them for Life

ChoiceMedia.tv: Florida legislature takes up school choice 2.0

USA Today: Arizona Wildcats rout Harvard Crimson to reach Sweet 16