The broken promises include his pledge to enact a “net spending cut,” his promise not to raise taxes on anyone making less than $250,000 a year, and his promise not to sign bills without first giving the public five days of notice.

The Congressional Budget Office says that Obama’s proposed budgets will explode the national debt through massive spending increases, increasing the already large deficits left behind by the Bush administration from $4.4 trillion to $9.3 trillion. His record-setting budgets flagrantly violate his promise to propose a “net spending cut.”

Obama broke his campaign promise not to raise taxes on anyone making less than $250,000 a year by signing into law a regressive excise tax increase to expand the SCHIP program, and by proposing a cap-and-trade energy tax that could charge up to $2 trillion, a massive cost that Obama himself has said will be passed “on to consumers,” as well as homeowners and motorists. (In 2008, Obama privately admitted to the San Francisco Chronicle that if he was elected, electricity bills would “skyrocket” under his administration, but it didn’t report that.)

He also broke his promise not to raise taxes by backing health-care bills that would impose a laundry list of new taxes on the middle class, including a tax on uninsured people.  Americans for Tax Reform earlier summarized the tax increases in ObamaCare: an individual mandate tax of $900 per individual or $3800 per family (if you don’t have health insurance); an employer mandate tax of $400 per employee if health coverage is not offered; an “excise tax on high-cost health plans”; a “medicine cabinet tax”; capping Flexible-Spending Accounts (FSA’s); abolishing most HSAs; and increasing tax penalties for HSAs.

The costly cap-and-trade energy bill supported by Obama would lead to big tax increases, administration officials privately have conceded, even though they publicly claim otherwise.  “Officials at the Treasury Department think cap-and-trade legislation would cost taxpayers hundreds of billion in taxes, according to internal documents circulated within the agency and provided to The Washington Times” by CEI.  It could raise household taxes by $1761 per year, equivalent to a 15 percent tax increase.   It would also result in “loss of steel, paper, aluminum, chemical, and cement manufacturing jobs.”  (Obama earlier admitted that “under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”)

Although cap-and-trade backers claim it will cut greenhouse gas emissions, it may perversely increase them and also result in dirtier air, as well as harming forests and water supplies.   It would enrich politically-connected corporations, and result in massive destruction of the world’s forests.   By expanding ethanol subsidies and mandates, it would cause enormous “damage to water supplies, soil health and air quality.” Ethanol subsidies have already resulted in forests being destroyed in the Third World, and by diverting cropland to fuel production away from food production, they have already caused famines that have killed countless people in the world’s poorest countries.

Over and over again, Obama has broken his campaign promise to give the public five days of notice before signing bills into law, including his very first law, the trial-lawyer backed Lilly Ledbetter Fair Pay Act. Obama also repeatedly made false claims about the Supreme Court decision that the Ledbetter law overruled, misstating the facts of that case and how long it gives employees to sue over pay discrimination (the Court did NOT say that employees have to sue even before discovering discrimination).

Obama broke seven campaign promises dealing with transparency and clean government in signing the $800 billion stimulus package, much of whose contents were secret until shortly before Congress voted on it, and whose 1400 pages went unread by most Congressmen who voted on it.  (It repealed welfare reform and contained loads of welfare, pork, and waste, while wiping out jobs in the export sector.)

Obama’s broken promises are part of a larger pattern of dishonesty. Obama claimed his $800 billion stimulus package was needed to avert “irreversible decline.” But the Congressional Budget Office concluded before and after its passage that the stimulus package will actually cut the size of the economy in the long run. Obama’s budgets don’t add up, either, piling up $9.3 trillion in red ink, according to the Congressional Budget Office, a staggering $2.3 trillion more than Obama claimed.

At the Atlantic, Megan McArdle, who voted for Obama, explains how ObamaCare will cost much more than promised — at least $150 billion more.  That’s true even if promised cuts to Medicare included in ObamaCare actually take place — but as McArdle notes, even the head of the Congressional Budget Office “does not think the cuts will take place” (which didn’t stop him from pretending those cuts would occur in giving ObamaCare its original $900 billion price tag).

ObamaCare is based on deceptive accounting that makes Enron look good.  As The Wall Street Journal notes:

“The House disguises hundreds of billions of dollars in additional costs with budget gimmicks. It ‘pays for’ about six years of program with a decade of revenue, with the heaviest costs concentrated in the second five years. The House also pretends Medicare payments to doctors will be cut by 21.5% next year and deeper after that, ’saving’ about $250 billion. ObamaCare will be lucky to cost under $2 trillion over 10 years; it will grow more after that…

“All this is particularly reckless given the unfunded liabilities of Medicare—now north of $37 trillion over 75 years. Mrs. Pelosi wants to steal $426 billion from future Medicare spending to ‘pay for’ universal coverage. While Medicare’s price controls on doctors and hospitals are certain to be tightened, the only cut that is a sure thing in practice is gutting Medicare Advantage to the tune of $170 billion. Democrats loathe this program because it gives one of out five seniors private insurance options.

“As for Medicaid, the House will expand eligibility to everyone below 150% of the poverty level . . . at a cost of $425 billion [to state and federal governments at a time when] when budgets from Albany to Sacramento are in fiscal collapse.  . .

“All told, the House favors $572 billion in new taxes, mostly by imposing a 5.4-percentage-point ’surcharge’ on joint filers earning over $1 million, $500,000 for singles. This tax will raise the top marginal rate to 45% in 2011 from 39.6% when the Bush tax cuts expire—not counting state income taxes and the phase-out of certain deductions and exemptions. . . .Meanwhile, a tax equal to 2.5% of adjusted gross income will also be imposed on some 18 million people who CBO expects still won’t buy insurance in 2019.”

A study by PriceWaterhouseCoopers found that the provisions in the Senate version of ObamaCare would add $1,700 a year to the cost of family coverage in 2013 and $600 for a single person. By 2019, family premiums could be $4,000 higher and individual premiums could be $1,500 higher.

Greg Conko calls the bill “worse than the disease.”  In a recently-released paper, “A Cure Worse than the Disease: Obama Care Won’t Cut Costs, But May Cut Quality,” Conko notes that most of the alleged cost-cutting measures in the Baucus bill merely shift costs from the federal government onto the states or private payers, without reducing long-term health care inflation.  The only measures that could conceivably reduce the annual rate of growth in health care costs would erect government barriers between patients and their doctors, while jeopardizing long-term medical innovation.

Another new study found that provisions contained in the health care reform bills, like guaranteed issue and community rating mandates, would drive up premiums by 50 percent for individual policies and 19 percent for small group plans.

A study from the Independence Institute says that ObamaCare would drive up inflation and medical care costs, while shrinking the economy.

As Conko notes, many states have highly concentrated markets.  In Hawaii, Rhode Island, and Alaska, for example, 95 percent or more of the health insurance market is served by just two insurers.  But Obama and congressional Democrats oppose letting insurers compete across state lines, blocking competition that could make health insurance cheaper.  Other countries with cheaper health insurance permit insurers to compete nationally.

ObamaCare would raise taxes.  It would also explode state and federal budget deficits, and would actually cost $2 trillion — far more than its promised $800 billion price tag.  It contains special-interest pork, like racial preferences.

It contains provisions sought by trial lawyers that will increase medical costs.  Doctors afraid of being wrongly sued for malpractice despite providing good quality care order unnecessary tests (or defensive medicine), which wastes $200 billion annually.

In his health care speech, Obama falsely promised tort-reform pilot projects, as a token gesture to doctors.   But the health care bill he backs does just the opposite, requiring states to repeal existing reforms to their medical malpractice laws if they want federal funds.  For example, they lose money if they do anything to “limit attorneys fees.”

The health care bills backed by Obama and congressional leaders ignore reforms that would help doctors and patients alike, like setting up specialized health courts to rule on malpractice claims instead of having them ruled on by juries that have little understanding of medicine or technology.

In other news, a study by PriceWaterhouseCoopers found that the provisions in the Senate health care “reform” bill sponsored by Sen. Max Baucus (D-Mont.) would add $1,700 a year to the cost of family coverage in 2013 and $600 for a single person. By 2019, family premiums could be $4,000 higher and individual premiums could be $1,500 higher.

CEI’s Greg Conko calls the Baucus bill “worse than the disease.”  In a recently-released paper, “A Cure Worse than the Disease: Obama Care Won’t Cut Costs, But May Cut Quality,” Conko notes that most of the alleged cost-cutting measures in the Baucus bill merely shift costs from the federal government onto the states or private payers, without reducing long-term health care inflation.  The only measures that could conceivably reduce the annual rate of growth in health care costs would erect government barriers between patients and their doctors, while jeopardizing long-term medical innovation.

A new study by the Oliver Wyman consultancy found that provisions contained in the health-care reform bills, like guaranteed issue and community rating mandates, would drive up premiums by 50 percent for individual policies and 19 percent for small group plans.

A study from the Independence Institute says that ObamaCare would drive up inflation and medical-care costs, while shrinking the economy.

As CEI’s Conko notes, many states have highly concentrated markets.  In Hawaii, Rhode Island, and Alaska, for example, 95 percent or more of the health insurance market is served by just two insurers.  But Obama and congressional Democrats oppose letting insurers compete across state lines, blocking competition that could make health insurance cheaper.  Other countries with cheaper health insurance permit insurers to compete nationally.

ObamaCare would raise taxes.  It would also explode state and federal budget deficits, and would actually cost $2 trillion — far more than its promised $800 billion price tag.  It also ignores needed reforms that would actually reduce the costs of health care, like steps to reduce the cost of defensive medicine, which wastes $200 billion annually.  And it contains special-interest pork, like racial preferences.

As I explain in a new Competitive Enterprise Institute paper out today, “A Cure Worse than the Disease: Obama Care Won’t Cut Costs, But May Cut Quality,” most of the alleged cost-cutting measures in the Baucus bill merely shift costs from the federal government onto the states or private payers, without affecting long-term health care inflation.  The only measures that could reduce the annual rate of growth in health care costs would erect government barriers between patients and their doctors, while jeopardizing long-term medical innovation.

Skeptics have made hay arguing that the so-called Sustainable Growth Rate can’t be counted on to cut $245-billion in Medicare spending. But Senate Finance Committee negotiators have designed a Medicare Commission—what the White House previously called an Independent Medicare Advisory Commission—to make similar cuts in physician and hospital payment rates in a more opaque way.

In an April New York Times interview, President Obama suggested that such a group, working outside of “normal political channels,” should guide decisions regarding that “huge driver of cost…the chronically ill and those toward the end of their lives.”  That’s not exactly a death panel roving the country to pull the plug on innocent grandmas who’ve survived past their sell-by dates, but the effects could be equally pernicious.

What the Medicare Commission is likely to do is work with the Patient-Centered Outcomes Research Institute also established by the Baucus bill to incorporate comparative clinical effectiveness recommendations into Medicare and Medicaid payment policies.

In theory, there’s nothing wrong with comparative effectiveness research, or what used to be called evidence-based medicine.  Good research comparing the clinical effectiveness, risks, and benefits of two or more medical treatments can help doctors better understand the likely benefits of the treatments they prescribe and improve the quality of care they deliver.  But patients vary substantially in their individual physiology, their response rates to drugs and surgical procedures, and their willingness to tolerate side effects.  Doctors know this, and they realize that one size definitely does not fit all. That’s why, in practice, evidence-based medicine in the U.S. and abroad has produced incrementally useful information, but has failed to systematically change the practice of medicine.

Generally, we should encourage efforts to eliminate waste and reduce the use of ineffective treatments, especially when we’re talking about public programs and taxpayer money.  But the only way these programs would result in significant savings is if legislation or subsequent implementation tries to force the square peg of comparative effectiveness research results into the round hole of clinical practice by requiring physicians to always pick the treatment deemed best for the average patient.

That’s not just bad for patients in the near term, it would also wreak havoc on long term medical innovation.  If every new medicine were required, immediately upon gaining regulatory approval, to be effective and cheap enough to get the support of bureaucratic bean counters, research on the next generation of treatments for cancer, heart disease, and countless other serious conditions would slow to a snail’s pace.

Get used to the innovative medical treatments that we already have today.  If these programs become part of our health care system, we’ll be seeing a lot fewer treatment innovations tomorrow.

It is true that a handful of states have highly concentrated markets.  In Hawaii, Rhode Island, and Alaska, for example, 95 percent or more of the health insurance market is served by just two insurers.  But, federal intervention would do nothing to address this problem.  After all, insurers are still governed by state competition law, which prohibits anticompetitive practices.

The main benefit insurers get from McCarran-Ferguson is antitrust immunity for sharing the actuarial data on which firms individually base their premiums.  Ordinarily, information sharing of that kind of  would be a big no no, since it suggests pricing collusion.  But, state insurance laws permit it because it helps small insurers gain access to a sufficiently large pool of information to set premiums at an appropriate level.

The only way federal antitrust enforcement could significantly reduce market concentration would be to break up the firms into smaller pieces—think of the dissolution of John D. Rockefeller’s Standard Oil trust, or the break up of AT&T’s local service monopoly into seven regional Baby Bells.  But, as Boston University health economist Austin Frakt  notes:

“Taxpayers will be best served by insurers with sufficient market power to bargain down provider rates, but with not quite enough power to keep the savings (“rents”) for themselves.  … How to balance the power of insurers and providers is far from simple. Many have pointed to the alleged dominant market position of insurers as a substantial source of high health care costs. However, the health economics literature supports the notion that recent increased market power of insurers does not lead toward monopolistic pricing, but rather it provides a counter-balance to the power held by hospitals and provider groups.”  (Hat tip, Tyler Cowen.)

Democrats know this of course.  And, in the end, it’s not clear that they really do intend to repeal McCarran-Ferguson, or if they’re just sending a signal to health insurers and other dissenters that “this is how we deal with people who stand in our way.”  As my wife said yesterday, they’re playing Chicago hard ball now.  They’ll do whatever it takes to win.

Senate Majority Leader Harry Reid admitted that the actual cost will be more like $2 trillion, and health-care experts have given it a similar price tag of more than $2 trillion.

The reason for the lower $829 billion price tag was that the bill’s supporters promised to offset its costs by making massive cuts in Medicare that no one actually expects politicians to follow through on, since Medicare cuts infuriate seniors and doctors.

Year after year, Congress waives “the annual cut in fees paid by Medicare to physicians” mandated by an earlier law. Yet, now, backers of ObamaCare claim they will cut Medicare by much more to finance coverage of the uninsured. The most recent version of ObamaCare drafted by Senator Max Baucus of Montana claims it will also make “$240 billion in cuts to hospitals, home care providers, nursing facilities and hospices.” Based on Congress’s past track record, the chance of this happening is zero.

As economist and former Congressional Budget Office director Douglas Holtz-Eakin notes in the Wall Street Journal, the promised cuts to pay for ObamaCare will not happen: “Congress will not allow doctors to suffer a 24% cut in their Medicare reimbursements. Senate Democrats chose to ignore this reality and rely on the promise of a cut to make their bill add up. Taking note of this fact . . . destroys any pretense of budget balance.”

As Holtz-Eakin notes, some “middle-class families would get hit with a double-digit increase in their marginal tax rate” under this version of ObamaCare.

Moreover, state budget deficits and state taxes will increase under ObamaCare, which outsources costs to the states by requiring states to expand their Medicaid programs for poor people.

Backers of ObamaCare have refused to cut medical costs through tort reform, with Senate Majority Leader Harry Reid saying it will save “only” $54 billion. Yet they justify ObamaCare partly on the alleged need to prevent uninsured people from not paying their medical bills — even though unpaid medical costs are only 2 percent of all medical costs, a small multiple of the amount Reid admits could be saved from tort reform. (Tort reform would cut the wealth of trial lawyers, who are some of the biggest supporters of the Democratic Party.) In reality, tort reform would save far more than $54 billion.

The Pacific Research Institute estimates that just one type of cost that could be reduced through malpractice-lawsuit reform — defensive medicine — costs around $200 billion annually (which is almost as much as France spends annually on health-care for all of its citizens; France has no punitive damages, few lawsuits against doctors, and “loser-pays” rules).

One reform — setting up specialized health tribunals to hear malpractice cases — would be particularly helpful.  Using specialized health courts, rather than continuing to use uninformed juries, would provide more consistent rulings from case to case, eliminate meritless cases, reduce defensive medicine, and more speedily compensate injured people who truly are victimized by doctors’ carelessness. Such tribunals already exist in countries like “Sweden, Denmark, Finland, Iceland and New Zealand.”

Comprehensive tort reform would also reduce lawyers’ wages, resulting in some additional students choosing to go to medical school (where a critical shortage of doctors is projected over the next decade) rather than to law school (there are already too many lawyers, who sometimes can make work for themselves by bringing “creative” lawsuits).  At least two of my law school classmates had already gone to medical school before going to law school (one decided to become a medical malpractice lawyer). At least a dozen that I know of had considered going to medical school instead.  But life is easier as a lawyer, and you don’t get sued as much if you are a lawyer rather than a doctor.   As long as professionals like lawyers get paid a lot, doctors will have to be, too — greater “wage inequality” in the U.S. means that we have to pay doctors more than other countries do to get the same number of people to become doctors.  (The looming shortage of doctors is aggravated by arbitrary restrictions placed on highly-qualified immigrant doctors, who have to repeat their residencies all over again  in the U.S. even if they manage to immigrate to the U.S.)

Another reform opposed by Obama that would make health insurance cheaper would be to let people buy cheaper insurance across state lines, which an antiquated federal law now prevents.  Countries with cheaper health insurance permit national competition among insurers.

Martin Feldstein, one of Obama’s own advisors, has said that Obama’s health-care plan would explode the federal budget deficit and lead to “crippling deficits,” as well as “higher taxes, debt payments, and interest rates” that would cut America’s standard of living.  Feldstein also noted that Obama’s health-care plan would harm people with insurance, and predicted that it would lead to massive tax increases.  Other analysts have predicted that it will drive up medical costs and inflation.

Obama is relying on $2 trillion in imaginary savings to pay for his health care plan.   He is also relying on tax increases, which breaks Obama’s campaign promise not to raise taxes on the middle class.

Fact-checkers say Obama is lying about health-care.  CNN Money says ObamaCare would take away 5 freedoms.

Most of Wall Street came to government asking for a bailout when the government-created housing bubble popped.

The Big Three automakers also went to Washington for largesse when their customers came to prefer Toyotas and Hondas.

Health insurance companies stand to make a killing if Obamacare passes.

T. Boone Pickens and Al Gore would make millions from environmental legislation.

Ludwig von Mises explained the reason for all of this corrupt behavior with a single sentence back in 1949: “It is precisely the fact that the market does not respect vested interests that makes the people concerned ask for government interference.”
-Human Action, 4th Edition, p. 337.

Even the trimmed-down version of Obama’s health-care plan recently announced by a ranking Senator contains lots of tax increases for the middle class (see below).

And the costly cap-and-trade energy legislation passed by the House and supported by Obama would lead to big tax increases in the name of fighting global warming, Administration officials privately have conceded, even though they publicly claim otherwise.  “Officials at the Treasury Department think cap-and-trade legislation would cost taxpayers hundreds of billion in taxes, according to internal documents circulated within the agency and provided to The Washington Times” by CEI.  It would also result in “loss of steel, paper, aluminum, chemical, and cement manufacturing jobs,” as jobs migrate overseas to countries which have fewer environmental protections than the U.S. does.

Obama earlier admitted that “under my plan of a cap and trade system, electricity rates would necessarily skyrocket.” As Obama admitted, that cost would be directly passed “on to consumers” — just the way Herbert Hoover’s excise tax increases were in 1932, aggravating the Great Depression. Although the tax’s supporters claim it will cut greenhouse gas emissions, it may perversely increase them and also result in dirtier air, as well as harming forests and water supplies.

Americans for Tax Reform summarizes the tax increases in the trimmed-down version of ObamaCare revealed by its principal drafter, Senator Max Baucus (D-Montana).  Here is a partial list:

· Individual Mandate Tax.  If you don’t sign up for health insurance, you will have to pay a tax in the following range:

· Employer Mandate Tax. $400 per employee if health coverage is not offered.  Note: this is a huge incentive to drop coverage, as $400 is much less than the average plan cost of $11,000 for families or $5000 for singles (Source: AHIP)

· Excise Tax on High-Cost Health Plans.  New 35% excise tax on health insurance plans to the extent they exceed $21000 in cost ($8000 single)

· Medicine Cabinet Tax.  Americans would no longer be able to purchase over-the-counter medicines with their FSA, HSA, or HRA

· Eliminate tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D

· Report Employer Health Spending on W-2. This is clearly a setup for the easy individual taxation of employer-provided health insurance down the road.

· Cap Flex-Spending Account (FSA) Contributions at $2000. Currently unlimited.

· Backdoor Death of HSAs. By requiring that all plans (besides the few that are grandfathered) provided first-dollar coverage for most services, there would be no HSA-qualifying plans available from the Massachusetts-like exchanges

Many on the left are critical of of health savings accounts and high-deductible health care plans, claiming they reduce consumption of preventive health care and drive up costs in the long-run. Now, leaving aside the dubious-at-best projected cost savings that can be practically realized through increased preventive care (and new research suggests that shifting toward a “preventive care model” will likely increase overall health care expenditures), let’s tie this into the oft-repeated fact that many personal bankruptcies are driven by massive health care bills. But what exactly are these financially-ruinous health care expenditures? Well, routine, expected exams and clinic visits are not the culprits; chronic illnesses and unexpected emergencies are. This is the point of HSAs and HDHPs. You pay out of pocket for normal, relatively low-cost care, and purchase insurance to protect yourself from extremely costly, unexpected catastrophic events. In fact, this is supposed to be the point of insurance.

Unfortunately, the current system incentivizes the purchase of low-deductible policies that cover annual physicals and regular exams, but don’t cover high-cost medical emergencies or conditions.

But for a brief, shining moment, in the mid to late 1970s, Kennedy viewed smaller government as the most compassionate answer in one area of economic life: transportation. Kennedy was the prime mover in Congress behind the airline and trucking deregulation bills that were signed by President Jimmy Carter. He saw the impact of regulation in these industries as protecting entrenched companies from competition, and decided that the liberal, compassionate thing to do was to deregulate to give consumers lower prices and more choices. As the news stories search for all the ways Kennedy’s impact is felt by everyday Americans, one obvious impact is reflected in this headline today on AOL news, “Fall Airfares Starting at $59.”

From the 1930s to the 1970s, the federal government treated interstate airlines as a public utility, setting routes, schedules and fares through the Civil Aeronautics Board. The incumbent carriers had learned to like the system because they were protected from competition on their routes, and the price-setting operated as more of a price floor than a price ceiling. Low-cost carrier Southwest Airlines, which is offering the aforementioned $59 one-way fare and now dominates the airline industry, was confined to intrastate flights within Texas – where the federal government couldn’t reach – for the first eight years after its founding in 1971. (See this tribute to Kennedy today in Southwest Airlines’ blog.)

Some folks may have fond memories of the linen napkins and china plates on airlines in the “good old days” before deregulation when airlines aggressively competed on service because they couldn’t do so on price. But millions of middle-class families and small businesses were locked out of flying because of the high fares and limited service.

Think tanks, academics, and even consumer advocate Ralph Nader began to argue in the 1970s that airline deregulation was a good idea. In addition to problem of high consumer prices, deregulation was also advocated out of a kind of “systemic risk” concern. Railroads such as Penn Central were going bust and being bailed out, and observers feared that airlines would suffer the same fate and cause the same drain on taxpayers if they were not allowed to become competitive and self-sustaining.

But the aviation industry fought against repealing these controls that had long protected it from real competition (And, contrary to popular narrative, this instance of businesses championing regulation out of self-interested motives is not unique. Read Washington Examiner columnist and former CEI Warren T. Brookes Fellow Timothy P. Carney’s brilliant book, The Big Ripoff: How Big Business and Big Government Steal Your Money.). There were other businesses that supported deregulation, notably retailers like Sears that correctly saw that airline and trucking deregulation – which would lower their shipping rates – were part of a package. But the airlines fought hard and had a staunch ally in fighting deregulation in Sen. Howard Cannon (D-Nev.), chairman of the powerful Subcommittee on Aviation of the Senate Commerce Committee.

But deregulation advocates found an ally of their own in Kennedy, who, with the help of young policy aides like now-Supreme Court Justice Stephen Breyer, began to see the egalitarian case for deregulation. Beginning in 1975, Kennedy held hearings on airline and trucking deregulation as chairman of the Senate Judiciary Committee’s Subcommittee on Administrative Practice and Procedure and later the Subcommittee on Antitrust and Monopoly. Kennedy’s opening statement for one of these hearings sounds positively CEI-esque on the detriments of regulation and the benefits of the free market. The senator said, “Regulators all too often encourage or approve unreasonably high prices, inadequate service, and anti-competitive behavior.  The cost of this regulation is always passed on to the consumer.  And that cost is astronomical.”

Scholars Martha Derthick and Paul J. Quirk write in their book The Politics of Deregulation (published by the Brooking Institution – read excerpts here): “Kennedy’s lack of jurisdiction over regulatory legislation may have tended to limit the effect of his activities, but if so this limitation was amply offset by his ability to attract the press and exert pressure on the Senate subcommittees that did have jurisdiction.” The author write that “with Kennedy showing so much interest in pro-competitive regulatory reform, it became very hard for [Cannon] to show none.”

Cannon would hold his own hearings, and in the end, became a co-sponsor of Kennedy’s Airline Deregulation Act of 1978 that passed Congress and was signed by Carter. Kennedy would go on push the Motor Carrier Act of 1980 that deregulated trucking rates and was also signed by Carter. Kennedy would note these deregulatory accomplishments in his base-rousing “Dream Shall Never Die” speech to the Democratic National Convention in 1980, delivered just after he lost the nomination fight to Carter and considered the greatest speech of his career. “While others talked of free enterprise, it was the Democratic Party that acted and we ended excessive regulation in the airline and trucking industry, and we restored competition to the marketplace,” Kennedy intoned. “And I take some satisfaction that this deregulation legislation that I sponsored and passed in the Congress of the United States.”

Kennedy argued in the speech, “The demand of our people in 1980 is not for smaller government or bigger government but for better government.” Deregulation in the airline and trucking sectors, he implied, was an example of “better government.” Open Market bloggers would argue that smaller government is almost always better government, but Kennedy’s pragmatic case for this specific deregulation holds lesson for the regulatory debates of today. As much as deregulation is almost a dirty word and wrongly blamed for the financial crisis, practically no one would really want to go back to the bad old days when Southwest could only offer its low fares in the state of Texas.

CEI President Fred L. Smith Jr. and scholar Braden Cox point out in an entry of The Concise Encyclopedia of Economics that fares on flights have fallen 45 percent in inflation-adjusted terms since airlines were deregulated in 1978. They also cite research by scholars Robert Crandall and Jerry Ellig finding that even when figures are adjusted for changes in quality and amenities, deregulation still saves $19.4 billion per year in passenger costs, and these savings have been passed on to 80 percent of passengers.

The lessons of airline deregulation’s benefits to the common man in terms of lower prices and more choices apply even to issue on which Kennedy was on the other side. Health care consumers would benefit from competition among insurers across state lines, and a federal government bureaucracy that set rates and mandated what insurance companies could and could not cover – even if there were no “public option” – would likely be as bad for consumers as the old Civil Aeronautics Board that Kennedy fought to depower.

And as Smith and Cox pointed out, we should also fight to finish Kennedy’s job of air travel deregulation by allowing foreign carriers to compete on domestic routes and through privatization of airports and air traffic control, which other countries, including ironically Canada, have gone further than the U.S. in achieving. Completing this liberalization would help resolve lingering problems such as flight delays and passengers stuck on the tarmac for an inordinate amount of time, as the private sector could modernize aviation facilities just as the airline industry has adjusted.

In tribute to Senator Kennedy, Open Market urges all legislators to look at his accomplishments in airline and trucking deregulation, and be Kennedy-esque in applying his insights on these issues to the economy at large.

Disclosure: Like million of Americans, I happily fly Southwest Airlines, and I also own shares of its stock.

As Christian Cámara, director of CEI’s Florida Insurance Project, said in the release, “There are a lot of very serious unanswered questions.”

There was one question that was unfortunately left out of the release. Since this is indeed hurricane season and of course a timely issue, the RRM team would like to pose the question here:

Gov. Crist recently claimed that divine intervention has kept hurricanes away from Florida. If this is the case, is the State of Florida taking proper action to appease the various storm gods? What types of sacrifices are being offered to these deities? Are OIR high priests following proper sacrificial rites? What types of objects or animals are being used and what is the cost of these sacrifices to Florida taxpayers? Would you be amenable to privatizing these sacrificial rites?

These are important questions that need to be answered for the sake of the safety of Floridians. These issues may actually be important to those who aren’t Florida homeowners, though, as the horses of Florida may in fact be in danger due to possible sacrifices to the storm gods. Could there be a connection between the recent horse poaching in Florida and these offerings to the storm deities? Could privatization of the insurance market and legalization of the sale of horse meat solve both of these issues?

The Center for Risk, Regulation, and Markets and all those concerned about the citizens and horses of Florida are waiting for your answer, Mr. McCarty.

Professor Natelson says that ObamaCare is unconstitutional because:

“1. It is not based on any enumerated power of Congress, not even on a very expansive reading of the power to regulate interstate commerce.

2. It relies on Excessive Delegation of the type held unconstitutional in Schechter Poultry.

3. It violates Substantive Due Process, and interferes with doctor-patient medical decisions to a vastly greater extent than did the laws declared unconstitutional in Roe v. Wade.

4. It violates the Tenth Amendment by commandeering state governments.”

(However, commenters in response to Professor Natel’s post argue that by the time any challenge to ObamaCare reaches the Supreme Court, Obama will have packed the court with liberal justices who are unsympathetic to such arguments).

The U.S. Commission on Civil Rights has criticized the racial preferences in the health-care bill backed by Obama, saying that they are likely unconstitutional under the Supreme Court’s Adarand decision, which subjected race-based affirmative action to “strict scrutiny” and barred federal racial preferences absent evidence that they are needed to remedy intentional past discrimination by the government. (In cases like Rothe Development Corp. v. Department of Defense and the Western States Paving case, the courts have sometimes struck down federal affirmative-action plans sponsored by liberal lawmakers, citing the Supreme Court’s Adarand decision. ObamaCare goes even further in mandating the use of race than past affirmative action plans.)

Fact checkers say Obama is lying about health care. ObamaCare will cost far more than its predicted trillion-dollar price tag.

One of Obama’s own advisers says the Obama Administration’s health-care plan will harm people with insurance while raising their taxes. Obamacare will take away 5 important freedoms, notes a CNN commentary. It will also destroy many affordable health-care plans while breaking Obama’s campaign promises.

Rep. John Shadegg, a conservative Republican from Arizona, has proposed a bill to allow interstate purchase of health insurance. Blue Cross has fiercely opposed this idea that could introduce more competition. Currently, Blue Cross companies typically have only a handful of competitors in each state.

Property and casualty insurers operate under a similar state-level protectionist arrangement.

CEI adjunct Ned Andrews argues for interstate insurance choice here.

As CNN earlier noted, Obama’s plan would take away “5 freedoms,” including the freedom to choose your doctors, the freedom to choose what’s in your plan, the freedom to keep your existing plan, the freedom to be rewarded for healthy living, and the freedom to choose high-deductible coverage.

Earlier, we described how Obama’s health-care plan would destroy many affordable health-care plans, raise taxes on the middle class, and break Obama’s campaign promises, as well as his recent pledge that “if you like your health care plan, you can keep it.”

House Speaker Nancy Pelosi wants to rush the health-care bill through Congress before most people can even figure out what’s in the bill. That’s how she pushed through Congress the $800 billion stimulus package, which contained hidden provisions that ended welfare reform, and which is now projected to cut the size of the economy “in the long run.” (The stimulus package was supposed to deliver a short-run “jolt” that would quickly lift the economy, but unemployment rose rapidly after its passage, and the package has actually destroyed thousands of jobs in America’s export sector, as well as subsidizing welfare and waste.)

Obama’s planned tax-increases on some health-insurance plans, and abandonment of his campaign pledges about health-care, are part of a long line of broken promises by Obama, such as his pledge to enact a “net spending cut,” which he broke in a big way with proposed budgets that will explode the national debt through $9.3 trillion in massively increased deficit spending.

Obamacare would also apparently restrict resources for end-of-life care for the elderly, and mandate wasteful end-of-life counseling for the elderly (such as lecturing them about the right to hasten their own death by refusing nutrition).

Earlier, the non-partisan Congressional Budget Office gave an honest but “devastating assessment” of the incredibly high cost of the health-care plans backed by Obama, which would cost well over a trillion dollars, to cover just a fraction of the uninsured.

Obama is angry about that truthful conclusion, as well as the CBO’s finding that his wasteful stimulus package will actually reduce the size of the economy “in the long run.” (Obama had claimed that only his stimulus package could save America from “disaster” and “irreversible decline“).

So Obama recently invited CBO Director Douglas Elmendorf, a Democratic appointee, to the White House to pressure him to reduce his cost estimates.

It is doubtful that Obamacare would live up to any of Obama’s claims. His other legislation hasn’t. His stimulus package has been a fiasco, as much of the public now realizes: just 25% say it has helped the economy.

When the Congressional Budget Office announced its cost assessment of the health care bill, Senator Chuck Schumer (D-N.Y.) called the estimate “wacky” and accused the CBO of omitting the savings he inexplicably expected the plan to reap after full implementation. This new statement from the CBO directly counters that claim and casts even further doubt on both the viability of the bill and the credibility of leading Democrats.

Yet, instead of heeding the advice of their own budget analysts, Democratic lawmakers are still charging forward and losing Blue Dog support in the process.  Senate Majority Leader Harry Reid has already acknowledged that the bill will not come to a vote in the Senate until after the recess.  By then, the bill likely will have lost so much support due to increased awareness of what it entails that it will either disappear entirely into obscurity (along with the last of Obama’s invested political capital) or be diluted down into a politically innocuous and much less  economically threatening shell of its former self.

The latter is the safer and more probable option for the administration to choose. Its rush to pass this legislation may be related to its desire to have some major policy accomplishment of which it can boast in time for the 2010 midterm elections, the inevitably disastrous effects of which will not materialize until well afterward.  Obama has a lot riding on this.  Given his rock-star status and his party’s dominance of Congress, Obama will look embarrassingly weak if his prized health care initiative fails to pass.  He and the leaders in Congress must quietly cut away much of the spending from the bill or risk halting their already ebbing momentum.

Senator Jim DeMint (R-S.C.), who compared the prospect of a defeat for Obama on health care to Napoleon’s career-ending battle at Waterloo, may turn out to have been right on the money.  Obama’s victories so far have been enabled by confidence in his personal leadership and still-unfulfilled promises — so if he cannot deliver on the crown jewel of his policy agenda, he will be vulnerable to a catastrophic loss of both the necessary support in Congress and the iconic status that has served him so well until now.

“One of the methods used by statists to destroy capitalism consists in establishing controls that tie a given industry hand and foot, making it unable to solve its problems, then declaring that freedom has failed and stronger controls are necessary.” ~Ayn Rand

Most agree that the US health insurance market is in need of reform. However, there is a wide spectrum of beliefs about what the problems in the market are and the best way to confront them.

Those who believe that the reason premiums are high and insurance is less available than it ought to be due to rampant market freedom, believe that the solution is to create a government insurer that can pick up the slack of the private market. These folks would be wise to examine other insurance markets that have tried similar approaches to insurance “reform.”

Florida’s property insurance market, though they are not exactly comparable, provides a good example of what increased controls and the presence of a government funded entity can do to the insurance market.

Before the 2004/2005 hurricane season Floridians could find relatively affordable property insurance without much effort. Of course, there were a number of residents who could not find insurance or who could not afford the premiums (the cost of living in a region rife with environmental instability). After several large hurricanes, and paying out billions of dollars in claims to Floridian homeowners, insurers tried to raise rates to recover their losses. When they were denied the ability to raise rates as high as they wanted by the FL insurance department insurers began dropping or refused to renew hundreds of thousands of policy holders—leaving them without insurance at all. On top of that, in 2007 FL Governor Charlie Crist froze the rates that Citizens Insurance Co. could charge and set up a state Catastrophe fund (a taxpayer-funded nest-egg) that would bailout the state run insurance company if a bad season exhausted it’s funds—something that became increasingly likely as the rates it charged fell far short of the amount it needed to charge for the risk it was taking on. The fund was also no more than political smoke and mirrors since, like the state run insurance company, it drew money from taxes on the same limited pool—namely the residents of Florida.

After only 5 years in existence in its current form, Citizens Property Insurance, which was originally setup to serve only those residents who could not find or afford insurance in the private market, (much as Obamacare proposes to deal with the millions of uninsured Americans) it has become the largest single insurer in the state. By charging less than the private market and accepting people who could find private insurance, albeit at higher prices, private companies found it increasingly difficult to compete and some chose to leave the state all together. Fewer private companies forced more residents into the under-funded state-run insurance program and increasing the enormous potential liability that now threatens to bankrupt Florida.

Much like Floridian politicians, current proponents of state-run health insurance claim that it will not interfere with the private market; that it will only accept those millions of citizens who cannot find or afford insurance anywhere else. Not only is this assertion untrustworthy (every government program from the Department of Agriculture to the National Flood Insurance Program started small) but it also obscures the real causes of trouble in the  health insurance market. It isn’t because of too much market freedom, but too little. If we really want to solve the “crisis,” to whatever extent there is a crisis, we need to free the market and increase private competition (look to Massachusetts auto insurance market for an example of liberalization increasing availability and decreasing premiums), not undercut it by adding a taxpayer backed government insurer.

As CNN notes, Obama’s plan would take away “5 freedoms,” including the freedom to choose your doctors, the freedom to choose what’s in your plan, the freedom to keep your existing plan, the freedom to be rewarded for healthy living, and the freedom to choose high-deductible coverage.

Obama’s health-care plan is drawing criticism from one of his own advisers, Harvard University’s Martin Feldstein. In the Washington Post, Feldstein warns that “For the 85 percent of Americans who already have health insurance, the Obama health plan is bad news. It means higher taxes, less health care and no protection if they lose their current insurance because of unemployment or early retirement.” Obama’s plan would “cost more than $1 trillion,” and raise the top federal “income-tax rate from 35 percent today to more than 45 percent,” he notes.

Its increase in health-care costs is so obvious that even Democratic governors openly worry that it will explode their states’ Medicaid costs. Conservatives are concerned that it would single out illegal aliens for preferential treatment, because it permits illegal aliens, but not American citizens, to avoid buying health insurance, even though illegal aliens could access government-sponsored health insurance through the so-called “public option,” thanks to its lack of eligibility verification safeguards. Supporters of universal health care coverage like Mickey Kaus worry that it will lead to arbitrary restrictions on health care for people who now have decent health-care coverage.

In 2008, Obama promised not to impose any kind of tax increase on people making less than $250,000 a year: “I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.” (Barack Obama, September 12, 2008, Dover, NH). But millions of people now face direct or indirect tax increases under his plan.

Obama’s plan so obviously would increase the deficit that its supporters are now crafting a tax on health insurance provided to non-union workers. Never mind that Obama’s campaign spent millions of dollars on campaign ads attacking the very idea of taxing health-insurance benefits.

It’s not the first breach of Obama’s campaign pledges to the middle class. Obama earlier broke his promise by signing into law an excise tax increase (the SCHIP tax) paid mainly by the poor, and advocating income tax increases on households that make thousands of dollars less than $250,000 a year. These tax increases are part of a long line of broken promises, such as Obama’s pledge to enact a “net spending cut,” which he flouted with proposed budgets that will explode the national debt through $9.3 trillion in massively increased deficit spending.

Obama also backs a huge cap-and-trade carbon tax that would be borne disproportionately by low-income households. (The cap-and-trade tax was pushed through the House before the text of the bill even became available. The bill was over 1090 pages long and contained special interest giveaways to a legion of big corporations and their lobbyists. At the last minute, 300 more pages were added to the bill that few in Congress had even read, and had to be manually inserted into the existing 1000 pages after the bill was passed, based on guesses about where those pages would fit in. Thus, the bill did not even really exist at the time it was passed). In 2008, Obama privately admitted to San Francisco Chronicle reporter that his cap-and-trade carbon tax would cause people’s electric bills to “skyrocket.” The cap-and-trade bill will cost the economy trillions, while doing little to cut greenhouse gas emissions, since it contains so many special interest giveaways and environmentally-destructive provisions like protections for ethanol, which promotes soil erosion and deforestation. Meanwhile, Obama sabotaged nuclear power, which reduces greenhouse gas emissions, by blocking use of the Yucca Mountain nuclear-waste disposal site after billions of dollars in taxpayer money had already been spent developing it.

The Wall Street Journal explains how the health-care bills backed by Obama would destroy many cheap employer health-care plans by gutting key provisions of the federal ERISA law, which slices through red tape and allows employers to provide economical health-insurance plans on a nationwide basis. The bills would open the floodgates to costly lawsuits against employers that provide health insurance to their employees, and require bureaucratic approval of health-insurance plans before they could go into effect on a national basis. In the absence of ERISA, health insurance plans provided by a national company have to satisfy a bewildering array of conflicting regulations and mandates that differ from state to state, add cost, complexity, and delay to medical care, and balkanize the health-care sector.

Other countries that have cheaper health care do not have local health-insurance regulations, preferring one national regulatory scheme for everyone. My French father-in-law is a communist trade unionist, but it was obvious even to him that he needed private supplemental health insurance to fill the gaps in France’s national health-care system. So he bought a private health insurance policy on the free market that came in handy when he needed continuing care after his quadruple bypass surgery. Supposedly socialist France actually has much less regulation of health insurance than supposedly capitalist America, where insurance is terribly costly in states like New York and New Jersey because of all the regulations and government mandates.

Economists and insurance experts have long proposed ending the federal regulation that allows states to block consumers from buying health-insurance across state lines. Almost every other product can be bought across state lines. But the Obama Administration is rigidly opposed to this reform. In a debate with Sarah Palin, Joe Biden championed this harmful regulation that impoverishes American consumers to reinforce the power of state bureaucrats and the profits of expensive health-insurance providers that benefit by thwarting competition from cheaper out-of-state rivals. So much for fixing what’s wrong with the status quo.

Without the reforms opposed by Obama, we will never get our health care costs down to the levels of other countries, which have enormous cost advantages over the U.S. through things like lower doctor and nurse salaries, less defensive medicine from costly and unwarranted malpractice suits (America uses virtually unguided juries to decide malpractice cases, even though juries are not experts either at seeing through unfounded claims, or at recognizing genuine ones where the doctor was really negligent), and lower drug costs (mostly from those countries’ artificial caps on drug costs, which effectively forces U.S. consumers to pay for the entire world’s R&D costs, and partly from other factors like lower products-liability costs, since the U.S. refuses to preempt even lawsuits against FDA-approved drugs). Liberal lawmakers are seeking to make Obama’s plan even worse and more costly by turning it into a “trial lawyer bonanza.”

Earlier, the non-partisan Congressional Budget Office gave an honest but “devastating assessment” of the incredibly high cost of the health-care plans backed by Obama, which would cost well over a trillion dollars, to cover just 16 million of the more than 40 million uninsured Americans.

Obama is angry about that truthful conclusion, as well as the CBO’s finding that his wasteful stimulus package will actually reduce the size of the economy “in the long run.” (The stimulus package also destroyed thousands of jobs in America’s export sector, and ended welfare reform).

So Obama recently invited CBO Director Douglas Elmendorf, a “Democratic appointee,” to the White House to pressure him to reduce his cost estimates. Earlier, Democratic Senator Majority Leader Harry Reid earlier attacked Elmendorf for reporting the truth about the Administration’s costly health care plans, suggesting that Elmendorf should “run for Congress.” To Reid and Obama, politics comes before truth. But the last thing we need is Enron-style accounting from government accountants.

Obamacare would also restrict resources for end-of-life care for the elderly, and mandate the provision of wasteful end-of-life counseling for the elderly (such as lecturing them about the right to hasten their own death by refusing nutrition).

It is impossible to arrive at the conclusions Obama apparently has reached on health care reform without blanking out reality and ignoring a host of contradictions.  Sure, health care is expensive.  How did it get so costly?  Blank-out.  Whose responsibility is it to provide health insurance?  Blank-out.  Who will pay for this massive overhaul?  Blank-out.  How will this legislation accomplish its stated goals?  Blank-out.  How have similar programs in other countries fared?  Blank-out.  What incentives does government have to provide and maintain quality health care?  Blank-out.  Whose “need” is really served by this behemoth of a bill?  Blank-out.  What does the bill even say?  Blank-out.

Still, even Obama recognizes that time is against him.  With his approval ratings falling, his stimulus package failing, the ugly details of the bill leaking out, and the economy already suffering enough, he knows that it’s now or never.  That is why he is determined to convince the country that without major action by the great and glorious State, health care costs will climb forever, eventually pricing everyone out of affordable care.  Never mind the fact that costs cannot rise out of consumers’ reach without bankrupting service providers.  Blank that out, too.

Former President George W. Bush was roundly criticized for employing the “politics of fear” to expand the police powers of the executive branch.  During his administration, terrorism was the great goblin to be fended off by our benevolent bureaucracy.  If the government did not get greater surveillance and detention powers, it was reasoned, terrorists could execute another massive attack, killing thousands or even millions of Americans.  We were urged to be vigilant and trust increasingly powerful law enforcement authorities to guard against evil outsiders sneaking in and attacking us once again.  Stand with your country, or the terrorists will win.

The politics of fear are even more pronounced under the new administration, and arguably more insidious.  Our sworn enemy during the Bush years at least was tangible and defined, and fighting it was basically a matter of fulfilling one of the few proper functions of government:  defending the homeland.  In the age of Obama, the enemy is privation itself–invisible, yet ever-present; undefined, yet understood and feared by all; not a prescribed province of government activity, yet action on which is demanded and welcomed by a fear-stricken populace.  To fight this enemy, we are presented with an ultimatum:  turn choice in health care over to the government, or risk losing medical coverage for our families.  We are asked to grant the state a new level of authority, the gravity of which is surpassed only by its ambiguity.  A 1,018-page bill, rammed through with little debate and against all informed judgment?  So much for that transparency we were promised.

The urgency Obama conveys in his push for universal health care coverage reflects his own concerns about his dwindling political capital, not the dangers of rising health care costs.  He knows as well as Congress does that the more time we have to examine the bill and consider the veracity of the claims made to justify it, the more likely we are to hold him accountable for the unprecedented and unacceptable power grab this really is.