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Thursday, June 15, 2006

Wall Street Journal -- Romney cutting taxes (or trying to at least)

This recent Wall Street Journal article (Subscription required) is titled "States See Strong Revenues, But Few Propose Big Tax Cuts." Well, Gov. Romney is in the minority in a good way on this one since he is mentioned in the piece as being one of the few who is proposing a significant tax cut.

Thus, despite election-year pressures, lawmakers generally are "reluctant to make significant tax cuts," says Raymond C. Scheppach, executive director of the National Governors Association. Harley Duncan, executive director of the Federation of Tax Administrators in Washington, agrees that most tax cuts this year are likely to be "fairly modest."

Some states are weighing substantial tax cuts. In Massachusetts, Republican Gov. Mitt Romney has proposed cutting the state's 5.3% personal income-tax rate to 5.15% in fiscal 2007 and 5% in 2008. The proposal is still pending before the legislature, says spokesman Eric Fehrnstrom. If enacted, these changes would cost the state $132 million in fiscal 2007 and $488 million in 2008, he says. When fully implemented, it would cost the state about $700 million, he adds.

While I dislike the phrase "cost the state" (since it assumes that the government already owns future tax-payer dollars) it is good to see true fiscal conservativism in action. He came in, balanced a $3 billion deficet and now that there is a surplus he sees the wisdom of decreasing the tax burden on the tax payers. We'll see if the democratic state legislature agrees (I'm not holding my breath)


Ron Greiner said...

I don't see how Mitt can be elected after he joined with Senator Kennedy and insisted on RomneyCare. There are just a few insurance companies selling individual health insurance in Mass. The state's Insurance Department website says that the cost for Blue Cross health insurance for a single 25 year old male is $608 a month. In contrast, in Ames, where I'm from, a 25-year-old male can get HSA health insurance from America's oldest health insurance company for $30 a month. Would Mitt make America's oldest health insurance company (Currently in 43 states) illegal in all states and then mandate everybody to buy from the giant monopoly who has lobbyists up the wazoo?

The Tax Free HSA is the Centerpiece of both President Bush's 2006 Domestic Agenda and Republican health care reform. The Tax Free HSA is a cornerstone of the Ownership Society. The oldest HSAs in America are in Iowa. Governor Jeb Bush passed HSAs for Florida state employees and for the Florida poor on Medicaid. I enrolled America's 1st HSA in October 1996. President Bush said, "HSAs have tax free deposits, growth and withdrawals." The besty tax cut is "no taxes" and it's TIME for your HSA. When I enroll a tax payer into a Tax Free HSA I say, "I'm Iowa born - I've come to set you free."

Mitt is not known as the HSA Governor, that's Jeb Bush, sorry. Jeb also has a 66% approval rating in Florida, a must win state for the GOP in 2008. I know all the 2008 Republican candidates positions on health care. If Jeb won't run I like Senator Allen in '08 because he wants to double up the size of the amount of cash that can be stashed away in America's greatest tax dodge - the Tax Free HSA.

Don't you think Mitt was just pandering to Blue Cross, a giant monopoly, and all their lobbyists? Mothers in Boston can't put their children on a health insurance company that the children can keep at a majority age, at standard rates, and move coast to coast as adults if they are diagnosed or hurt as a minor. If Mitt can't help the children of Boston let's don't put the security all of America's children in his hands.

You will have to be better prepared to explain this dangerous RomneyCare if you want to keep supporting Mitt.

Welcome to Iowa.

Code Blue: Mitt's president dream in '08

Vote Republican, President Bush said, "Become empowered with a Tax Free HSA."

Jeff Fuller said...

Rob Griener

I just checked your website and must think that your post is only about trying to further your business interests. I'll leave your comment here because it's a good example of how people will attack a plan that they know little about (but sure have nifty labels for).

You said: "You will have to be better prepared to explain this dangerous RomneyCare if you want to keep supporting Mitt."

I say: "You had better really look at a plan before you label it" (though isn't the latter so much easier?)

Newsflash!! HSAs ARE COMPATIBLE WITH THE NEW MASS HEALTHCARE PLAN!!! Also, if you have $10,000 in a HSA then you do not even have to sign up for health insurance but are "exempt" from this personal "mandate." The HSAs also play a vital role in the newer "catastrophic care" policies that will be high deductible/high co-pay plans aimed at younger healthy people.

To better inform yourself on the plan see the recent cover story from the National Journal . . . found at this link/URL

Is the plan perfect? No, and Romney is up front about this . . . but he found a way to tackle this difficult problem and should be praised for the improvement that he's trying to bring to a sick system.

Below I've pasted in my diary from Red State about the plan and how it is not akin to socialized medicine.
Defending "RomneyCare"--It is NOT Socialized Medicine
By: jjfuller72 · Section: Diaries

Below are two pieces I composed a couple of weeks ago about Massachussett's Governor Mitt Romney's plan requiring all state residents to obtain health insurance. I've been following some of the recent discussions about Romney here and at various blogsites and there are inevitably comments made about how Romney got "socialized medicine" passed in MA. People who make these comments either don't like Romney (maybe they really like another '08 candidate and see Mitt as a threat) or don't know what they are talking about. The plan is nothing like socialized medicine. People who keep claiming that it is are uninformed and just lazily put a dissmissive label this program so that they do not have to think about it.
The original posts can be found at aunches.html:


As a physician, I feel I have a few insights to share about Mitt Romney's "Universal Health Care Plan" signed into Massachusetts law on April 12th, 2006 (which some have dubbed: "RomneyCare").

By way of background see the following links:
The Heritage Foundation's take is quite supportive (granted, they have a vested interest)
Here is a link that links to several other op-ed pieces and are generally favorable (if not celebratory)
If you've got time . . . you can watch Mitt himself giving a 25 minute speech/PowerPoint with a 15 min Q&A session following about his plan (given at The HeritageFoundation)

First off, I preface my remarks by stating that the United States medical care is the best in the world. This is largely because of our free-market system in both clinical care and biomedical research. People are living longer and healthier lives because of innovation, dedication, and the "desire for wealth" which spurs individual and corporate enterprises. I am proud to be part of this system which is unparalleled worldwide.

Romney's plan does not represent "socialized medicine" or even a step down the slippery slope that could lead there . . . no, this is not the road to HillaryCare. Every physician I know cringes at the idea of socialized medicine (for the negative effect it would have on us and our patients--a true "lose-lose"). On the flip side, every physician I've spoken to lately seems very supportive and intrigued by Romney's plan. This is significant, and should allay any fears of this being a stepping stone toward socialized medicine.

The plan is not even a "government takeover" of medicine as some are claiming. There are no new "government insurance plans" to sign up for. The government's involvement is mainly in oversight to ensure that everyone is insured (just like the good old car insurance analogy . . . by the way, is anyone complaining of a "government take over" of the car insurance industry?)

Romney recently rebuffed such claims of "big government" by responding that "making the individual responsible for his own health coverage is a lot more conservative than a permanent program of government handouts to hospitals." Edmund F. Haislmaier stated that "those who want to create a consumer-based health system and deregulate health insurance should view Romney's plan as one of the most promising strategies out there."

Although libertarians may cringe at the government "mandate" that this law institutes what they must realize is that this simply supplants previous mandates. This law appropriately shifts the burden of the uninsured away from the Emergency rooms and hospitals (and indirectly to taxpayers and those facing higher insuracne premiums) to the individuals . . . exactly where it should be (hey, most people don't flinch one bit about plopping down several hundred dollars to have their teeth worked or to get glasses/contacts . . . so why does almost everyone seem convinced that medical care should not have any out-of-pocket expenses?) You see, under COBRA and EMTALA federal laws, ERs and Hospitals ARE CURRENTLY MANDATED to treat all comers for emergency services regardless of their insurance--or lack thereof. More about this later.

Another great aspect of this plan is that it requires even the poor to pay at least something for their healthcare (excluding Medicaid recipients). Romney keeps saying that this plan will eliminate the "free lunch" mentality toward healthcare that many low income earners have. This will also build self-worth and individual accountability as the self-defeating hand-out system will diminish greatly. The private insurance premiums will be subsidized by the government on a sliding-scale for lower-income individuals and the very poorest will still be captured and covered, at least in part, by Medicaid funding.

A fascinating component of the Mass. plan is "The Connector" which came about through Romney's reaching out to the conservative think tank "The Heritage Foundation." This entity will allow the self-employed or part-time workers to obtain the benefit of pre-tax dollar utilization for insurance premiums (a benefit currently reserved for those whose health care coverage is provided by their employers.) In effect, this amounts to a tax-cut/tax-break (true to Republican principles . . . even in the Bluest of Blue states . . . how did Gov. Romney get this done?). In addition, "The Connector" will allow portability of insurance plans as individuals change their employment as well as allowing folks with multiple jobs to pay pre-tax off of multiple paychecks. Slick and practical stuff.

"Where is the accountability built into this system?" you may ask, or "How will this be enforced?" Those who do not obtain insurance will lose out on their state personal tax exemption (among other penalties for individuals and businesses). This straightforward enforcement/incentive program will yield results quickly. People will also be blocked from obtaining/renewing driver's licenses if they cannot provide proof of healthcare insurance.

Some have criticized Governor Romney's veto of the $295/employee fee (per annum) for employers who do not offer insurance for full-time employees. Everyone knew that his veto would be overturned by the legislature and this play of events ended up being a "win-win" for Romney. He can claim to be business friendly and for smaller government (which he honestly is)--while inclusion of the fee gives the plan itself an even better chance of being fiscally successful. If this plan is successful it will bode very well for Romney in 2008.

Will it work? I predict that since people will have insurance they will seek outpatient primary (preventative) care early in their disease course instead of stumbling into emergency rooms on death's door. If this helps keep people out of emergency rooms and hospitals where costs are massive then this will work AND improve the general public health . . . and, not to mention, solve the problem of "the uninsured."

The bigger money-saver, however, will be in getting non-emergent patients out of emergency rooms for their primary care. Uninsured and poor people know that, by law (COBRA & EMTALA) emergency rooms have to see and evaluate them for ANY complaint they may have. My brother is an ER physician and is constantly amazed how the ER system is abused by so many patients . . . like coming in at 3 AM because they've had "the sniffles" for a week.

Governor Romney's response when asked by Chris Matthews on MSNBC's Hardball if such a plan could work for the nation highlights many of these points:

"Well, it will work for Massachusetts, and that's of course the thing that I had to focus on. There are certain aspects of it that I think would work across the country, perhaps better in some states than others. Of course the great thing about federalism is you let a state try it and see how it works before you spread it out.

"But there's some key features and I think this is one of them, which is that we are already spending billions of dollars in our country and in my state, about a billion dollars, giving free care to people who don't have insurance. And the question was, if we took that money and helped them buy insurance, could we have everybody insured; and the answer is yes.

"We don't need new money. We don't need new taxes. We could use the money we're currently spending and get people better health care without having the burden and the cost of the uninsured being borne by everybody else."

By the end of this interview Chris Matthews exclaimed: "God, it sounds wonderful. I'm not supposed to cheer here, but I mean, I think it's wonderful."

So do I.


And here is the follow-up article I posted after the Massachussetts State Congress overrode Romney's Vetos:


A couple of weeks ago, I blogged my opinion of Romney's innovative healthcare initiative signed into Mass law last month. I'm still high on the program, but a few things have me worried as I've continued to follow this evolving saga of state politics . . . one upon which everyone in the nation seems to have an opinion (see the litany of op/ed pieces the day after the bill was signed).

One threat to its success is federal intrusion into state regulation of healthcare insurers. As E.J. Dione Jr. opines in the Washington Post this could seriously sidetrack the Mass plan. This columnist really wants to give the states a chance to work out healthcare solutions--since the federal government has been so weak on the issue for so long.

But what really has me worried about the sustainability of the plan is the fact that the Senate overrode Romney's vetoes in the bill. The veto that gets all the press is the $295 per employee fee for employers that don't provide coverage. That being overridden bothers me on philosophical grounds . . . but doesn't worry me about the long term success of the program--it actually will be another source of funding the plan . . . and it looks like it's gonna need it (keep reading to see why)

The veto override by the Mass Legislature that really worries me is the inclusion of free dental and eyeglass coverage to certain recipients. This is estimated by one source to cost an extra $75 million annually and could be a major drag on the success and sustainability of the whole program. I'm all for good teeth (an obvious sign that I'm American . . . and not European) and seeing well (heck, I'm an ophthalmologist), but come on!
Even as an "Eye M.D." (currently a vitreoretinal fellow supporting family of six . . . so money is tight) who works for a major university system and prescribes eyeglasses on a routine basis, I DON'T EVEN HAVE EYEGLASS COVERAGE! I have been wearing the same eyeglasses for 3.5 years now and the frames were given to me . . . so who knows how old they are. I don't say this to pride myself on frugality, but to prove a point: that I probably would have gotten new glasses every year or so if they had been covered by some plan; but instead, I've made due because it saves me money.

Also, as the prior article says, 60% of employers in Mass don't provide a dental benefit. If the MAJORITY of working people don't have it covered, why should the government feel beholden to provide it? Maybe that's just how things work in that democratic legislature in Massachusetts.

All that being said, I am still optimistic about the potential savings created by keeping people out of expensive ERs and hospitals by earlier intervention and preventative care. Hopefully, this innovative program will save enough money to cover the costs that the Democrats have already added onto it.

So Ron Griener . . . who is the one who should be better prepared on this issue?

Don't blame Romney for the high cost of insurance/healthcare in MA . . . blame the Democratic legislature who over-regulates the insurance companies!!

Ron Greiner said...

Jeff, you ask, "So Ron Greiner...who is the one who should be better prepared on this issue? The answer is; I'm better prepared. Jeff you also say, "I just checked your website and must think that your post is only about trying to further your business interest." Oh really? So I'm just a salesman and I don't really have an opinion. Yes, it is true I enrolled America's first HSA but, to this very day, I have never made a penny on an MSA/HSA, they're FREE. But you are correct that I am licensed, in too many states, and I do know insurance law. So I'm harder to hoze than those Beantonians.

You also say, "As a physician, I feel I have insights to share about Mitt Romney's Universal Health Care Plan....Every physician I've spoken to lately seems very supportive and intrigued by Romney's plan." Personally Jeff, I'm not too impressed with physicians' knowledge on health care reform or health insurance. Just because the HSA will be available means nothing either.

And just because Chriss Matthews, a Democrat, loves Romneys plan, that means nothing again. One thing you can't answer is how much this plan will cost and what are the benefits. Romney passed this plan not knowing how much it will cost to get his so-called "bare bones" coverage. The goal is to strip benefits out of the coverage and get the cost down to $200 a month for a 25-year-old male. I know more about Mitt's plan than you might think. I know Michael Cannon, who is smarter than Chriss Matthews, and he wrote: //Or launching even more direct assaults on economic freedom. Massachusetts Gov. Mitt Romney just signed a bill that requires Bay Staters to buy health insurance under penalty of law. Can we look forward to being greeted at the border with, "Welcome to Massachusetts - your health papers, please"?

The single positive step that Republicans have taken in health policy was almost a mistake. Party leaders attached health savings accounts (HSAs) to the Medicare drug entitlement just to buy off the few ornery conservatives who hated the rest of the package. This year, almost on cue, Chairman Grassley dismissed the idea of expanding HSAs.//

Mitt should have opened up the market in Mass to competition, even if it took 2 terms. By 2008 we will be able to look at the results of RomneyCare before the Ames debate. Maybe you can talk me into it. Good luck.

Election 2008 / May the best man win!

Jason Bonham said...


Good point on tax cuts "costing" the state money.

How about tax cuts "returning" individual wage earner's money? I doubt you will see that written.

nicolaepadigone said...


Hi. My name is Dan, and I am interested in Mr. Romney's run for president. As a generally moderate Mormon (leaning more to the left than to the right), I have been surprised by some of Mr. Romney's actions in Massachusetts (I used to live there), including his creation of a state-wide health coverage. I felt that was a great move at getting someone like me to support him. My question, and forgive me for asking this on this particular post, it was the most recent one, is in regards to religion. From your vantage point in Iowa, how is Mr. Romney perceived by Christian conservatives, the religious kind, the ones who tend to view Mormons as non-Christian? Are they showing any signs that they are willing to accept a Mormon as president of the United States?

Thank you.


Jeff Fuller said...


The vast majority of outspoken Christians that I've met and spoken to about this issue seem to think if the candidate's views acceptable, then the doctrinal beliefs don't matter. He was well received at the Iowa Christian Alliance meeting I attended a few weeks ago. See my earlier posts

I have received a couple of emails and ran into a couple of religious zealots online who state that they could "never vote for a mormon". I think most people realize that this will be a vast minority of people who would vocalize such a believe, in the privacy of a voting booth that may be different. However, I think that Romney will do exceptionally well (a la JFK) at appeasing nearly all voters that he is capable and he will not take orders from SLC.

Thanks for asking . . . it is an interesting question.

nicolaepadigone said...

thank you for answering. :)