Trump Should Focus on Replacing Obamacare

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A cornerstone of Trump’s campaign for president was the promise he would repeal and replace Obamacare. And rightly so, because Obamacare is an unmitigated failure. The promise of Obamacare was to provide “patient protection and affordable healthcare” for some 40 million uninsured Americans. The plan has failed on both points.

The saga of Obamacare is a great example of wanting to do the right thing, but going about it the wrong way. Obamacare as we know it came about because President Obama capitulated to the merchants of the devil – the health insurance industry – in order to strike a deal on healthcare reform. The great myth surrounding Obamacare is that it is some type of government provided healthcare coverage like Medicare, but it isn’t. Under Obamacare the government has nothing to do with the type of coverage offered, the quality of the services provided or the cost consumers pay for healthcare; that is all left up to the whims of private health insurance companies.

Obamacare is nothing more than a (clunky, complicated) website that is intended to match-up those who need healthcare coverage with private, for-profit insurance companies looking to sell their policies. The only requirement for insurance companies to market their policies on the “exchange” is that pre-existing conditions are covered and children can be included under the policy until age 25. Beyond that, insurance companies are free to determine the structure of the policies, the provider networks the insured must use, deductibles and the co-pays – the amount the insured must pay out of pocket; and those can run as high as 40 percent of medical charges. Most important, the insurance companies are free to charge any premium they desire and increase those premiums at will. In short, Obamacare has become nothing more than a profitable boondoggle for insurance companies. As usual, the ones left holding the short end of the stick are individuals who most need and can least afford healthcare coverage.

In addition, employers who are mandated to provide employees with healthcare coverage are free to use all sorts of machinations to avoid this responsibility. (For example, hiring employees as part-timers and making sure they work less than 40 hours a week.) This forces the employees to use the Obamacare website and be pillaged by the insurance companies.

Be careful what you wish for …

With a Republican soon to be in the White House, the Republicans in Congress who believe healthcare is a privilege based on the ability to pay, rather than a right of citizenship, are stupid-drunk giddy over the prospect of killing Obamacare, but they need to be careful what they wish for. There may be one problem that could turn their dream into a nightmare. While that Republican soon to be in the White House has savaged Obamacare, he has consistently supported the rights of every American to have healthcare coverage. Over the years Trump has repeatedly praised the concept of universal healthcare.

On 60 Minutes Trump said, “Everybody’s got to be covered. This is an un-Republican thing for me to say because a lot of times they say ‘No, no, the lower 25 percent that can’t afford private.’” He continued, “I am going to take care of everybody. I don’t care if it costs me votes or not.”

On the Larry King Show Trump bluntly proclaimed, “If you can’t take care of your sick in the country, forget it, it’s all over … I believe in universal healthcare.”

In his book The America We Deserve Trump wrote, “We must have universal healthcare … I’m a conservative on most issues but a liberal on this one. We should not hear so many stories of families ruined by healthcare expenses …”

So the Republicans in Congress may be in for a bit of a surprise blowback from their Republican president when it gets down to the nitty-gritty of repealing Obamacare, without offering a reasonable alternative for millions of Americans who lack access to healthcare or don’t have the ability to pay the exorbitant premiums charged by private insurance companies.

What is the alternative that Trump could propose?

If Trump is sincere in his belief that all Americans should have affordable access to basic healthcare services, he could achieve that goal by simply expanding the scope of two healthcare plans already in existence – Medicare and Medicaid. Medicare provides effective and efficient medical care for millions of Americans age 65 and over. Medicaid – a combination of state programs funded by the federal government – provides medical care to millions of low income individuals.

The point is that these two programs have processes and procedures in place and in point of fact are paying for the healthcare provided by hospitals, care givers and doctors for millions of Americans. Patients are free to select any of the 95 percent of hospitals and doctors who accept Medicare payments to provide their care. This is not the government deciding or providing the healthcare, but simply being the “single payer” of the benefits provided by private hospitals and doctors.

So the question is: Why not repeal Obamacare and replace it with the two national healthcare programs already in existence and functioning effectively? There is no need to create an entirely new bureaucracy. The simplest and most direct way to offer basic healthcare to all Americans at affordable costs is to expand and enroll everyone – at all ages – into Medicare or Medicaid.

Of course, this can’t be done with a flip of a switch, but an organized national phase-in of Medicare over time could make it happen. For example, in the first year those 60 to 65 would be eligible for Medicare, then the next phase would include those 50 to 55, and so on until everyone is covered. This would allow for Obamacare to be repealed and phased out at the same pace Medicare is expanded.

This approach could be a win-win for everyone. Trump and the Republicans could fulfill their campaign pledge to repeal Obamacare; Trump could remain consistent in his call for universal healthcare and, most important, all Americans could finally join the millions of citizens of every other industrialized nation in the world for whom basic healthcare is a right of citizenship, not just a privilege for the wealthy.

Trump and the Politics of Minimum Wages

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The issue of raising the federal minimum wage will likely be a hot topic next year. Last increased in 2009, the current federal minimum wage is $7.25 per hour. (That works out to around $15,000 per year, before taxes.) Arguing that any increase in the minimum wage does more harm than good, the Republicans in Congress are lining up to block any attempted increase. The Democrats, believing that an increase in the minimum wage is not only necessary to keep low-paid workers above the poverty line, but that an increase stimulates the economy, are aiming for a $15 per hour minimum.  

With Republicans in full control of Congress, the idea of any increase in the minimum wage seems bleak, but there is one fly in the ointment. The person who will occupy the White House, Republican Donald Trump, has previously indicated a willingness to increase the minimum wage to $10 per hour. Regardless, there will be the same heated arguments, for and against, a higher minimum wage that have been thrown around for almost 80 years.

In 1938 Congress passed the Fair Labor Standards Act. Among other things, the law mandated a federal minimum wage of $.25 per hour, along with a work-week not to exceed 44 hours. The legislation culminated decades of fierce political battle (not unlike the contemporary battle over universal healthcare) pitting business interests, firmly aligned against what they felt was interference with the “free market,” against social interest groups seeking to end the near “slave-like” conditions under which people were forced to work.

Fighting to dragoon the legislation, business interests screeched that the idea of a government mandated “minimum wage” was another step on the road to Socialism that would wipe-out profits, cause higher unemployment and the ruination of Capitalism. President Roosevelt would have none of that when, in “fireside chat” the night before signing the controversial legislation he said, “Don’t let any calamity-howling executive with an income of a $1,000 dollars a day, tell you that wages of $11 a week is going to have a disastrous effect on all American industry.”

Looking back now it’s easy to wonder why there was such a fuss was over a paltry $.25 per hour for work. (It is indicative of how little employers were paying the workers for their labor.) During the almost 80 years since the passage of minimum wage legislation, one might believe that employers have come to accept that it is natural and right to pay workers wages that don’t condemn them to a continuing cycle of poverty. But if you think that, you would be wrong.

Anytime a proposal is put forward to raise the minimum wage, the business community comes together with the same draconian arguments that were used in the 1930’s. Arguments such as: Any increase will put thousands of small companies out of business. Profits will be decimated. Prices will have to be raised and this will drive away business. Thousands of low-paid workers, those intended to be helped by the increase, will lose their jobs.

In the years since it was first enacted, the minimum wage has been increased 22 times, under 12 different presidents. According to the Bureau of Labor statistics there are 78.2 million workers (58 percent of total workforce) paid on an hourly basis, of that number, 2.6 million workers are paid at the current federal minimum of $7.25. This means that an increase in the minimum wage would impact only 3 percent of all hourly paid workers.

So what is all the fuss about?

The most common argument in support of the minimum wage is that it protects the workers at the lowest rung of the socio-economic ladder. These workers, many of whom represent marginalized groups (women, minorities, youth workers, the disabled, and so on), simply don’t have the bargaining power to fight for a minimum living wage without government intervention.

Those who oppose increasing the minimum wage contend that a higher mandated minimum wage actually hurts the lower-paid workers it is intended to benefit. They argue that the increased cost to smaller and marginally successful businesses will force owners to layoff existing employees and prevent them from hiring others; ultimately causing an increase in unemployment.

Another argument against an increased minimum wage is that it will cause inflation. The logic is that if an employer is forced to increase minimum wages from $7.25 per hour to say $10 per hour, the cost will be passed on to customers in the form of higher prices for the same goods and services. The “experts” may be right, but it seems illogical that a marginal pay increase for 2.6 million of the lowest paid workers, out of a total of almost 125 million full-time employees, would be little more than a blip on the inflation scale.  

Those favoring a higher wage argue that increasing the minimum wage will attract a higher quality worker, reduce turnover and actually save the employer the expense of constantly having to find, hire and train new workers. The proponents of a higher minimum wage promote the idea that those receiving increased wages will spend them on goods and services that will in turn stimulate the economy and increase profits.

There have been scores of economic studies that can be taken to “prove” the case for either side of the minimum wage controversy, which means that both sides remain mired in theory, rather than reality.  

I have my own study …

In 1963, when I first started working, the minimum wage was $1.25 per hour. Since that time the minimum wage has been increased 15 times to the current $7.25 per hour. Each time an increase was proposed there were the same old doom-and-gloom arguments that any increase would upend the “balance” of the free market, stifle economic growth, fuel inflation, drive thousands of companies out of business and increase unemployment. And you know what happened? Just the opposite: Employment, profits and the economy have always grown following an increase.   

Yes, there will be a heated debate over minimum wages next year. The Democrats will propose and the Republicans will oppose. What will be different about the debate is that there will be – for the first time – a Republican president who has actual, real-life experience as a successful businessman. Trump has already suggested that for ethical and business reasons he sees a value in increasing the minimum wage. (Not as much as Democrats will propose, but nevertheless an increase.) It will be interesting to see how the Republicans in Congress react to one of their own on the other side of the minimum wage debate.

When it Comes to Trump — Can Everyone Just Chill Out a Bit?

from “If You’re Not Making History, You Are History” by Bob MacDonald

In the 1950s there was a popular television sit-com starring William Bendix called “The Life of Riley.” In the show Bendix played well-intended but blundering Chester A. Riley who worked as a wing riveter at the fictional Cunningham Aircraft plant in California. When life became too confusing or something didn’t go the way he planned, Riley would exclaim in frustration, “What a revoltin’ development this is!”  

It seems that for a lot of people in the country, the recent presidential election victory of Donald Trump has become a “revoltin’ development.” The shock of his election has been intensified because the very idea of Trump winning was dismissed out of hand by almost everyone. Trump was roundly chastised for his crude, vulgar and even racist comments about virtually everyone, but especially against women, minorities, Gays, immigrants, Muslims and the political establishment. But the ferocity of the pushback against Trump since the election evokes images of third-world countries more than it does of the most enduring representative democracy in the history of the world.

Most people reacted to the election of Trump with a sense of astonishment, but for millions of others it triggered anxiety, desperation and even fear. In the aftermath of the election, hundreds of thousands of people have taken to the streets in over a dozen cities to passionately and sometimes violently protest Trump’s election. The media has generally soft-pedaled these protests as simply a right of free expression in a democracy, but you do have to wonder if these demonstrations would have been viewed in the same light, if Trump had lost the election and his supporters had taken to the streets. (It is fair to ask where these passionate protesters were during the election and why they did not support Clinton with such fervor. If they had, certainly the results would have been different.)

Feelings over the top …

The reality is that both Trump supporters and his detractors have overacted to his election. It is as if the country is suffering from a manic-depressive illness, with Trump supporters exhibiting irrational euphoria and Clinton voters writhing in a deep psychotic depression. There is overreaction – especially fanned by the media – to everything Tromp does, or does not do.

It would be best for everyone – especially for the country – if we would all just step back and chill out.

The first thing to remember is that Trump was elected president, not dictator. The subtle beauty of our constitution is that it was purposefully structured to put a governor on the powers of a president. The drafters of the constitution were deeply fearful of a president becoming a despot, so they installed a series of “checks and balances” intended to limit the power of the president. Under the structure of our government, any president has limited power to deliver on the overheated expectations of his supporters or to fully implement policies his detractors fear.  

It’s not as bad as it seems …

To gain some perspective on the political divisions in the country today, we only need to look back at the Viet Nam era. Many are not old enough to remember, but during the Viet Nam War, the nation was politically divided in a way not seen since the Civil War. The disruption, protests, bombings and mob violence of the time make the protests against Trump seem more like a society cotillion ball. During the Viet Nam era there was a feeling that the country was coming apart at the seams and would not survive. But you know what? The country did survive and we were better for it. Trump’s election impact on the country is not nearly as cataclysmic as was the Viet Nam War, and no matter what he does, the country will survive; and maybe be better for it.

One benefit from Trump’s election is that it may shake the complacency of those who have passively accepted the benefits of expanding social rights as an entitlement, rather than a reward for hard work. Fear of Trump (however misplaced it may turn out to be) may be a motivating factor for those progressives, liberals and Democrats who applauded the work of others, but have not been willing to take up the cause with action; much like the conservatives were motivated to form groups such as the Tea Party when Obama was elected.

Trump may not be who you think he is …

The other misnomer may be about Trump himself. Both those who are for and against Trump took his comments in the campaign too literally. The reality is that Trump is more Democrat than he is Republican. In fact, the main criticism of Trump during the Republican primaries was that “he is not a real Republican.” Viewed in the perspective of actions he has taken in the past and what he has proposed, Trump could be considered a political centaur – half Republican and half-Democrat. Ultimately, this may empower Trump to break the gridlock in Washington that has frustrated the people – of both Parties – in this country. Have you noticed that unlike traditional Republican dogma, Trump has proposed increased government spending, rather than reducing it?

The irony is that in the end Trump may stir the ire of Republicans more than Democrats. He campaigned on and proposed extensive infrastructure investment, punishing companies that move jobs overseas, called for a complete overhaul of the tax code; closing tax loopholes for the wealthy, allowing a reduction in taxes for everyone. Trump has favored child tax credits and mandatory paid maternity leave. These are all programs that have been pushed by Obama and the Democrats, but thwarted by Republicans.

As a successful businessman, Trump has shown that he is much more a pragmatist than an ideologue. He is trained by experience and nature to focus on the objective and get it done, no matter what he has to do or who he has to work with. This is the exact opposite mindset exhibited by Republican leaders and of those who have recently inhabited the White House.  

What this all comes down to is that – whether or not he takes advantage of it – Trump has the opportunity to become a change-agent president, the likes of which we have not seen since Teddy Roosevelt and Franklin Roosevelt. The former changed the financial contract between the government and the people, to make financial opportunity more equitable for all. FDR changed the social contract between government and the people to create more protection and security for all. Being a pragmatist not wedded to any political ideology, Trump may become a catalyst that could change the way the government deals with problems. Given the current heated rhetoric and stalemate in governing, it is difficult to be optimistic, but Trump’s scarcity of experience in government and his independence from a fixed ideology could bring back what made America great and that is a pragmatic bipartisan approach to governing.

Trump may become the colossal failure that many expect or he could surprise us by his approach and effectiveness. It certainly would not be the first time that Trump has surprised us. Either way, whether we agree with him or not, he has earned the right to be given a chance to prove us right or wrong. One thing is certain: Our form of government will prevent Trump from being as ineffective as he could be or as effective as he wants to be. And we will survive.