Sabotage!

This week's Saturday Kittanning Leader Times presented an editorial so shamelessly crafted to place blame in favor of the editorialists' own prejudices that it scalds. The editorial comments on recent reports that many non-profit co-ops offering a low-cost alternative to traditional medical insurance plans, initially funded by loans provided by the ACA (Obamacare), have shut down or have plans to do so in the near future. The editorial labels this outcome a "fiasco" that provides further evidence the ACA was a poorly-designed law that should be repealed. Trouble is, the editorialist failed to mention the role Rethug legislative extortion played in the debacle. Turns out that in order to negotiate its way out of threatened or real government shutdowns the Obama administration bargained away (or was forced to surrender) much of the funding originally set aside to assist co-ops through the first three years of operation, when they would be expected to operate in the red. As a result, many of the co-ops experiencing funding shortfalls were provided far lower compensation for unfunded payouts than the law originally promised.

Don't expect to find a clear explanation of the problem in very many places though. The conservative media have been all over this story, but hardly a one mentions the role reductions in the "risk corridor" played in the co-op failures. You can find a detailed explanation of what is really going on here.

Analogies can be dangerous, but this one seems to fit. Imagine you were starting a new business, calculated your expected starting and ongoing costs and expected income for the first three years of your new business. Your calculations showed that you could expect to spend about $100,000.00 more than you would realize in revenues over the first three years of operation After that, you expect revenues to increasingly exceed expenses. With that expectation in mind, you go to the bank seeking a business loan. The bank promises you a line of credit up to $100,000.00 for the first three years of your business. You walk out happy. Then, after your first or second year of operation and about $50,000.00 into your credit line you get a call from the bank's lending officer. "Sorry," he says, "but as an austerity measure we will have to cut your line of credit. Basically, we are limiting the amount of credit we can extend to you this year to the amount of loan payments we receive from your competitors who have loans with us. You can expect something in the range of about $7500.00 to be available this year." Yikes! Unless you can cut expenses and raise tons of revenue in a hurry, your business is going down the tubes.

Of course, banks can't get away with such shenanigans (I know; I work for one). On the other hand, since when did House and Senate Rethugs ever think they should be constrained by such silly fantasies as keeping promises? It has been their strategy ever since the ACA passed to undermine it any chance they get and when their efforts succeed in hamstringing the law to yell loudly, "See, we told you it wouldn't work!" These co-op failures are likely to cost taxpayers some 2.5 billion dollars in unrecovered loan losses. Managers of many of the folding co-ops have claimed that if they had received enough of the promised subsidies to remain in operation, next year they would have raised enough revenue to meet expenses. I don't know how much trust to put in such claims, but if even only some of them are right, it seems that cutting down the "risk corridor" payments actually cost the government more in the long run than it would have cost to pay at the originally-promised rates. One more example of Rethugs, in the name of protecting the taxpayers, actually costing us more to get less.

But to focus on the Leader Times editorialists again, it is worth pointing out that their supposed advocacy for the American taxpayer is hypocritical. In a quick Google search for editorials on the ACA by the Tribune-Review (parent paper of the Kittanning Leader Times) editorial staff I turned up five editorials in the last couple of years, all bemoaning the folly and expense of the ACA. Oddly enough, their criticism of the federal government's excessive and wasteful spending habits managed to overlook the F-35 debacle. I won't take much time to rehearse this, but the military has spent almost 15 years on a plan to modernize the branches' fighter aircraft using the Lockheed-Martin F-35. So far, the Pentagon has invested nearly 400 billion dollars on this plane and has yet to get a single one into active military service. No need to go into details on the history here. It's easy enough to find. What isn't so easy to find is evidence of the Tribune-Review's self-vaunted watchdog service on taxpayers' behalf. I turned up exactly one editorial on the F-35, published in August of this year. The editorial recommended that the military consider finding alternatives to the F-35 for at least some of its planned uses. That's nice.

What's really going on here is simple. The ACA is a law designed to help the poor. It is a social welfare program. Therefore, in the doctrine of the Randian psychopaths who lead the Trib's editorial boards, the government spending money on it is bad. In fact, it is so bad that government leaders who spend large sums of taxpayer dollars to sabotage the program are heroes. On the other hand, the F-35 is a military program. Not only that, it is largely contracted out to the patriotic heroes that oversee or work in large private enterprises. Therefore, the government spending money on it is good. It is so good we should overlook the faults of government leaders who waste large sums of taxpayer dollars mismanaging the program.