Bush is prepared to veto bill to expand child insurance

WASHINGTON, July 14 — The White House said on Saturday that President Bush would veto a bipartisan plan to expand the Children’s Health Insurance Program, drafted over the last six months by senior members of the Senate Finance Committee.The vow puts Mr. Bush at odds with the Democratic majority in Congress, with a substantial number of Republican lawmakers and with many governors of both parties, who want to expand the popular program to cover some of the nation’s eight million uninsured children.

With regard to my previous post:

The proposal would increase current levels of spending by $35 billion over the next five years, bringing the total to $60 billion. The Congressional Budget Office says the plan would reduce the number of uninsured children by 4.1 million.

The new spending would be financed by an increase in the federal excise tax on tobacco products. The tax on cigarettes would rise to $1 a pack, from the current 39 cents.

This is another example of revenue-raising. Tobacco consumption is very price-inelastic: it takes very large increases in price to affect relatively small changes in the quantity demanded. And the government loves it – one of the reasons why it is so hard to model cigarette consumption/demand is that most of the price is tax. The white house is already referring to this as ‘tax increases’, which is kind of like the way John Kerry voted for tax increases 350 times (remember that piece of idiocy?).

Funnily enough, most smokers die younger and more quickly, so they actually use less health-care resources than the rest of us lingerers. We’re robbing them blind.

What does not change, however, is that in the land of resource-allocation make-believe, the Bush administration will choose to save smokers a little money rather than give health insurance to 4.1m American children. Here’s something else to consider: those 4.1m kids will need care, at some point. That care will need to be paid for. One way or another, you will fund it. How is that not, in practice, a tax on you? Money you think is being taken from you to maintain roads might go towards this instead.

Or, given the difference is about USD45bn, will be used to pay for about an hour of the Iraq War. Here are the governments priorities:

nytimes graphic


2 comments so far

  1. Ian on

    Where is the outrage over sky-high taxes, regulatory costs?

    New Haven (CT) Register
    by Jim Higgins

    (Fair Use excerpts)

    “Reports last week from two nonprofit groups should serve as a wake-up call to Americans to start agitating for tax reform . . .

    “On Monday, the Competitive Enterprise Institute reported that the cost to consumers of complying with federal regulations exceeded $1 trillion in 2006 . . . almost 10 percent of the nation’s gross domestic product. It’s nearly half the amount of government spending.

    “Even more worrisome, the cost of complying with these multitudinous regulations exceeds the amount of individual income tax paid in 2006, about $998 billion, as well as corporate incomes taxes of $277 billion.

    “According to the Washington, DC-based advocacy group [ Americans for Tax Reform ], the average American had to work through July 11 this year just to pay all federal, state and local taxes, as well as regulatory costs including workers’ compensation and unemployment benefits.

    “Congress should take one of two paths: Either cut tax rates and government spending drastically, or adopt the FairTax, an innovative proposal that would involve abolishing the Internal Revenue Service and its income tax and replacing it with a simple national sales tax.”

    Full article here: http://snipr.com/wherestheoutrage


    The U.S. income tax system and the U.S. economy are inter-related, and are in DIRE trouble. If we, the citizens of these United States, do not act aggressively to spread the FairTax plan with family, friends and associates – our “nest eggs” stand to be devastated through a coming economic meltdown (see Kotlikoff interview, below).

    Politicians are putting demogoguery and pandering above responsible governing – and they’re able to do it because Americans do NOT understand – at the “get go” – politicians’ / bankers’ hunger for ever-increasing shares of the working person’s bi-weekly paycheck; Americans do NOT understand the totality of taxes they pay. The FairTax shines the “light of day” on this, putting citizens back in charge to forcefully demand spending reductons.

    YOU AND I MUST ACT to mobilize public opinion, and get the FairTax enacted, because the signs point to a probable devaluation of the dollar (for reissuance of an “Amero” ? – under a U.S.-sovereignty-busting North American Union? http://youtube.com/watch?v=6hiPrsc9g98 )

    [ NOTE: Does this help clarify your understanding of what’s going on globally? a) Bush’s persistence on rewarding illegal immigration? b) the North American Highway now under construction in Texas (to stream cheap labor into the covertly-planned North American Union marketplace designed to compete with 21st-century China market? c) the gradual increase in value of the Chinese yuan by China corresponding to China’s economic growth? (This will result in the dumping of dollar-denominated debt as its manufacturing economy grows stronger – which guarantees devaluing and ushering-in of the Amero.) ]

    Keep in mind, this NAU strategy – supported by the “super-rich” (member-owners of the Fed) – together with their politician buddies who want NOTHING to do with FairTax – runs contrary to simply making the U.S. a “tax free zone” for business under the FairTax. Politicians and bankers lose power when the U.S. is returned to a “savings-driven economy” from a “debt/interest-driven” economy).

    After you consult the Kotlikoff interview (below), contact your local MI FairTax District Director (if you’re a member of your State FairTax organization), or join FairTax.org to learn what you can do to help us first remove politicians’ fingers from our paychecks then put America’s families back in charge of the monies that we send to Washington.


    Read the summary, “Laurence J. Kotlikoff (*) on Long-Term Fiscal Problems in the U.S.,” and download the podcast here: http://taxfoundation.org/news/show/1859.html

    (*) Prof. Laurence Kotlikoff (expert economist, and advocate, of the FairTax plan)

    Powerful “elites” with membership in political and monied-interest “clubs” of Washington depend on keeping you and me uninformed of their plans. It is up to YOU and ME to ACT – and not live in a state of denial – based on what we now know is clearly happening to our financial futures.

    – Ian

  2. zooeygoethe on

    I would caution against flat sales taxes, because they are fundamentally regressive. By the time we build in the fail-safes (for want of a better word so soon after waking up) to ensure some degree of social welfare, general Goods and Services Taxes become no less complicated: although at least the H&R Blocks aren’t making an industry out of it (to be fair).

    The economic costs to consumers are quite high on most regulation – think about subsidies, quotas and tarrifs. In terms of Consumer Surplus, they cost far more than a small sales tax that could be used to pay off the American jobs we’re trying to save.

    Ultimately, it is supposed to come down to our allocative efficiency: the government is (meant to be) raising revenue to perform services that we want them to. We are prepared to pay these opportunity costs for roads, garbage collection, health insurance (?) – but somehow we’ve ended up paying for K street, kick-backs for Big Oil, the staffs ‘needed’ by our ‘leaders’ on Congress.

    I’d love to respond to the immigration and currency stuff but – you’ll love this – I have to go deal with some immigration stuff (it’s okay, I’m degree-qualified. You want me here). And it’s going to cost me a lot of your currency, too…

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