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Reclaiming America’s Educational System

Increasingly, the American educational system seems to reject the values that made the United States, and indeed western civilization, successful.  There are numerous educators and educational bureaucrats at all levels who cringe even at the thought of alluding to the unparalleled advances in freedom, government, science, philosophy, the arts, and so much more that characterize the American experience. The latest example of the bizarre influence imposed by university professors on students can be seen in the recent move to exclude American flags at campus events.

It is truly ironic that the same educators that call the loudest for multiculturalism display an extraordinary bias against western civilization, the culture that, more than any other, has displayed tolerance, acceptance, and respect for others. That includes the most important of western traits, the concept of individual liberty, and the equality of all.

In his new book, “Inventing the Individual,” author Larry Siedentop  notes: “Like other cultures, Western culture is founded on shared beliefs.  But in contrast to most others, Western beliefs privilege the idea of equality.  And it is the privileging of equality—of a premise that excludes permanent inequalities of status and ascription of authoritative opinion to any person or group—which underpins the secular state and the idea of fundamental or “natural” rights.”

The U.S. concept of equality does not suggest that all people are the same; each person possesses individual talents, strengths and weaknesses. It does not call for equal outcomes. Those who struggle harder, have talents in demand, or are merely fortunate will always disproportionately prosper. It does refer to the belief that all have the same rights under the law, and that, in the words of the Declaration of Independence, there are “Unalienable right” that can never be denied or reduced.

Individual liberty is an annoying challenge to higher education personnel, who by an overwhelming percentage prefer the collectivist mentality that characterizes socialist regimes. While castigating the wealth created by the free market system they despise, university officials unblushingly hike their tuition rates year after year, making college education a nearly life-long financial burden. Now there are calls for the taxpayers to pay these substantial debts, allowing the same hypocritical university bureaucrats to raise tuition even higher.

Writing in the Chronicle of Higher Education, Sita Slavov writes:

“The liberal bias in academe is pervasive and well documented. For example, Daniel Klein has shown that Democrats outnumber Republicans by at least seven to one in the social sciences and humanities. Stanley Rothman, Robert S. Lichter, and Neil Nevitte have shown that 72 percent of higher-education faculty identify themselves as liberal. Some liberal academics even admit that they would discriminate against conservatives in hiring and peer review…”
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The defection of educators from core American values is neither a tempest in a teapot nor an arcane philosophical debate. An entire generation or more of students is in the process of being alienated from the very culture from which they came.

Americans gasp in astonishment at news reports of young people from middle and upper income families from the U.S. and Europe who run away from home to join ISIS and other despotic movements.  They shouldn’t be so surprised.  Increasingly, from the lowest grammar school grades to the highest levels of graduate schools, students are spoon-fed a steady diet of anti-western propaganda, both from school and Hollywood.  George Washington, who was instrumental in founding a nation built on the concept of freedom, is just an old dead white guy. Che’ Guevara, a murderous thug who helped bring Soviet nukes to Cuba, is a ubiquitous symbol of “cool.”

Those that dissent from the leftist hierarchy are penalized or ghettoized into so-called “free speech zones” designed to prevent the spread of ideas to others.

American constitutional government based on individual rights, that most successful of ideas and institutions, can wither away within a single generation at home. The global consequences will be dire. Without U.S. support, be it military, cultural, economic or otherwise, other western-style governments will not survive. Other governance schemes across the globe—theocratic extremism in the Islamic world, thinly veiled dictatorship in Russia, Communism in China and North Korea, and the numerous bankrupt socialist, strong-man, or ethnocentric regimes elsewhere offer no palatable alternative.

Clearly, it is time that Americans reclaim their educational system.

 

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A World in Chaos

In the short span of the Obama Administration, there has been a vast alteration not only in the international order that was established following the collapse of the Soviet Union, but in the environment that occurred after the end of World War 2. The President’s foreign policy is, essentially, a reversion to the isolationist  concept that followed the First World War. That, of course, did not work out well, as it allowed for the rise of expansionist powers in Germany, Japan, Italy and Russia.

History is, indeed, repeating itself. Russia has invaded Ukraine, and clearly has further designs on other European nations. China has made specious claims on the territory of its neighbors, and has developed a military capable of carrying out its goals. Iran has taken steps to establish hegemony in the Middle East.  Arguably, the global situation as it relates to the United States is considerably worse than that preceding the Second World War, since Russia, China, and Iran have taken steps to establish a military presence in the western hemisphere.

It can be argued that those aggressor nations believed that the combination of substantially diminished American and other western militaries, combined with a White House that clearly sought to disengage from international affairs, provided an opportunity for them to act on their expansionist goals.

The chaotic state of affairs has been noticed even by those observers not generally considered hawkish on international or military concerns.

A clear example comes from Foreign Policy at Brookings.  The organization is commencing what it describes as “a broad research project—‘Order from Chaos’ to understand the challenges to the international order and to develop strategies to deal with them.”

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“This intensification of geopolitics has been accompanied by a return to competition between democracies and autocracies. China’s rise and Russia’s recovery (at least until recently) have generated a new model of “authoritarian capitalism” at a time when the global financial crisis put a dent in the credibility of the Western economic model and the disappointments and consequences of the “Arab Spring” have led many to question the value of promoting liberal democracy. Transnational and global threats also pose deepening challenges to the United States, though also to its geopolitical competitors. Climate change, pandemic disease, and radical Islamic extremism pose shared threats, though as yet common solutions have largely eluded the powers. The digital revolution holds out the promise of a leveled playing field and increased productivity, but its disruptive impact will be felt in every corner of the globe.

“All told, we appear to be at one of history’s pivotal junctures, and again, the response of the United States will be critical. For all the talk of America’s relative decline, the United States retains more capacity than any other power to impact the calculations and policies of others. But America’s competitors are too powerful and their visions too different to imagine that U.S. leadership alone is a sufficient ingredient to maintain the liberal, rules-based international order that now feels so threatened by rising chaos.

“In short, the task is urgent and complicated: how to reinvent the liberal international order in the face of so many centrifugal forces so that it can provide greater stability, peace, prosperity, and freedom; and how to do it in ways that encourage cooperation from other world powers, reduce friction generated by competition with them, and, if necessary, contain or constrain their ability to undermine the order.”

 

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Freedom House Survey: Worldwide Freedom Retreats

Freedom House produces non-partisan and authoritative assessments  of freedom throughout the world.

This year’s edition is notable for its lack of good news. We have excerpted a few brief salient portions of the current report. The full work can be read at the organization’s web site. 

“In a year marked by an explosion of terrorist violence, autocrats’ use of more brutal tactics, and Russia’s invasion and annexation of a neighboring country’s territory, the state of freedom in 2014 worsened significantly in nearly every part of the world.

“For the ninth consecutive year, Freedom in the World, Freedom House’s annual report on the condition of global political rights and civil liberties, showed an overall decline. Indeed, acceptance of democracy as the world’s dominant form of government—and of an international system built on democratic ideals—is under greater threat than at any point in the last 25 years.

“Even after such a long period of mounting pressure on democracy, developments in 2014 were exceptionally grim. The report’s findings show that nearly twice as many countries suffered declines as registered gains, 61 to 33, with the number of gains hitting its lowest point since the nine-year erosion began.

“This pattern held true across geographical regions, with more declines than gains in the Middle East and North Africa, Eurasia, sub-Saharan Africa, Europe, and the Americas, and an even split in Asia-Pacific. Syria, a dictatorship mired in civil war and ethnic division and facing uncontrolled terrorism, received the lowest Freedom in the World country score in over a decade.

“The lack of democratic gains around the world was conspicuous. The one notable exception was Tunisia, which became the first Arab country to achieve the status of Free since Lebanon was gripped by civil war 40 years ago.

“By contrast, a troubling number of large, economically powerful, or regionally influential countries moved backward: Russia, Venezuela, Egypt, Turkey, Thailand, Nigeria, Kenya, and Azerbaijan. Hungary, a European Union member state, also saw a sharp slide in its democratic standards as part of a process that began in 2010.

  • Of the 195 countries assessed, 89 (46 percent) were rated Free, 55 (28 percent) Partly Free, and 51 (26 percent) Not Free. All but one region had more countries with declines than with gains. Asia-Pacific had an even split.
  • In a new and disquieting development, a number of countries lost ground due to state surveillance, restrictions on internet communications, and curbs on personal autonomy.
  • Ratings for the Middle East and North Africa region were the worst in the world, followed by Eurasia. Syria, a dictatorship mired in civil war and ethnic division and facing uncontrolled terrorism, received the lowest Freedom in the World score of any country in over a decade.
  • The Worst of the Worst countries are the Central African Republic, Equatorial Guinea, Eritrea, North Korea, Saudi Arabia, Somalia, Sudan, Syria, Turkmenistan, and Uzbekistan.
  • In China, President Xi Jinping continued to centralize authority and maintain hands-on involvement in policy areas ranging from domestic security to internet management to ethnic relations, emerging as the most powerful Chinese Communist Party leader since Deng Xiaoping. He continued to bolster China’s sweeping maritime territorial claims with armed force and personnel, and while his aggressive anticorruption campaign reached the highest echelons of the party, culminating in the arrest of former security czar Zhou Yongkang, it remained selective and ignored the principles of due process. Moreover, the campaign has been compromised by an intensified crackdown on grassroots anticorruption activists and other elements of civil society, including a series of politically motivated convictions. The government also intensified its persecution of the Uighur community, imposing layers of restriction on Uighurs’ ability to observe their Muslim faith and sentencing activists and journalists to long prison terms…China’s government responded to public discontent with campaigns reminiscent of the Mao era, including televised confessions that have gained prominence under Xi Jinping. The Chinese authorities are also resorting to criminal and administrative detention to restrict activists instead of softer tactics like house arrest or informal interrogations. Both China and Russia have made use of one of the Cold War’s most chilling instruments, the placement of dissidents in psychiatric hospitals.
  • Over the past year… there were signs that authoritarian regimes were beginning to abandon the quasi-democratic camouflage that allowed them to survive and prosper in the post–Cold War world. Again, the most blatant example is Russia’s invasion of Ukraine, whose official justifications included ethnic nationalist, irredentist claims and which quickly drew comparisons to the land grabs of Hitler or Stalin. The move exposed Moscow as a committed enemy of European peace and democratization rather than a would-be strategic partner. Faced with international pressure and the rising potential for domestic discontent, the government expanded its control of the media, stepped up a propaganda campaign to justify its actions and vilify its opponents, and cracked down on independent news outlets, particularly online. Journalists, politicians, and family members who sought to investigate the deaths of Russian servicemen in Ukraine encountered bureaucratic obstruction and trumped-up criminal charges. Regional elections in September were tightly controlled from above, with any coherent opposition eliminated. By the end of the year, Russia’s government was increasingly isolated from the international community and struggling to neutralize anticorruption activists and other domestic critics.

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“While the dramatic gains of the late 20th century have not been reversed, the institutions meant to ensure fair elections, a combative press, checks on state power, and probity in government and commerce are showing wear and tear in the new democracies of Central Europe, Latin America, and Asia. In the Middle East, the potential of the Arab Spring has given way to the chaos and carnage that prevail in Syria, Iraq, Libya, and Yemen, and to a ruthless dictatorship in Egypt. In Africa, the promise of freedom survives, but the dominant trend is one of corruption, internal conflict, terrorism, and ugly campaigns against gay people. Even in the United States, the year’s headlines featured racial strife, a renewed argument over counter-terrorism tactics, and political gridlock.

“There are, some say, few compelling advertisements today for the benefits of democratic government, and few signs that the retreat of open political systems can be reversed. However, several major events during 2014 suggest that this gloomy assessment is off the mark.

“In Ukraine, hundreds of thousands of people rose up to defy a kleptocratic leadership that offered the country a political and economic dead end. Given the choice between a future course patterned on Russian authoritarianism and a path toward Europe and its democratic standards, a clear majority did not hesitate in choosing the option of freedom, even with its uncertainties. The Kremlin has imposed a terrible punishment for this choice, but so far Ukrainians have not wavered in their defiance.

“ In Hong Kong, the student-led Umbrella Movement emerged after the Communist leadership in Beijing announced that contrary to previous commitments and public expectations, elections for chief executive would require candidates to be nominated by a pro-Beijing committee, making universal suffrage a hollow exercise. The controversy epitomized both Beijing’s refusal to countenance the basic tenets of democracy and the ultimate weakness of its legitimacy among the public. It also stood as a powerful reminder that while China’s model of state-driven growth combined with strict political control is attractive to elites in authoritarian settings (and to some in democracies as well), ordinary people, and especially the young, find China’s rejection of freedom profoundly unappealing. Notably, the people of Taiwan, through student protests and local election results during the year, strongly voiced their preference for a future in which popular sovereignty prevails.”

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The President’s flawed defense policy, and Republican complicity

As the President enters into his seventh federal budget era, it is clear that his defense policy can be summarized in a single concept: drain as much funding from national security as possible in order to continue to provide more dollars for his greatly expanded entitlement programs.

To accomplish its goal, the White House has essentially surrendered the safety both of the United States and its allies. Several examples:

  • Budget cuts forced the departure of experienced armed forces personnel,
  • The U.S. Army will soon be reduced to levels below that of North Korea,
  • the U.S. Navy is dwindling from a global defense force to one that is rapidly becoming a mere regional power, (for the first time since WWII ended, no U.S. aircraft carrier is available for regular patrol in the East Pacific.)
  • missile defense programs were cancelled or delayed,
  • key allies have been or are in the process of being alienated,
  • American tanks were withdrawn from Europe,
  • a treaty was signed allowing Russia to gain or retain strategic and conventional nuclear superiority,
  • While every other atomic weapons-bearing nation has modernized extensively, only belated and inadequate updates have been planned for the U.S. nuclear deterrent.

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As noted in recent budget hearings, the Pentagon’s 10-year budget projections have absorbed more than $750 billion in cuts, or more than three-quarters of the trillion-dollar cuts that would be required if sequestration is allowed to run its course. The fiscal year 2016 budget is at a near-historic low, representing about 14 percent of total federal discretionary and nondiscretionary outlays.

The results have been staggeringly dangerous. Moscow has entered into a new era of expansionism, not just in beginning the process of reconstituting the Soviet Empire but in rapidly moving into Latin America, as well as threatening NATO members in Europe.  It has embarked on a vast and costly program to make its armed forces the most modern and best equipped in the world.

China’s unprecedented military buildup and U.S. timidity combined to allow Beijing to steal resources from the Philippines and assert flawed territorial claims against almost all of its neighbors.

North Korea has expanded its nuclear prowess into a force that can threaten any spot on the planet, and Iran is poised to become the dominant power in the Middle East.

The White House’s lessening of sanctions against its nuclear program remains a text-book example of how not to succeed in negotiations. Terrorist forces are moving confidently into Africa. The premature withdrawal from Iraq led directly to the conditions allowing ISIS to flourish, and the impending withdrawal from Afghanistan may lead that region to a similar fate. The U.S. didn’t even respond with force when its own ambassador was assassinated in Benghazi.

Traditionally, Republicans have served to check the impulse of the hard left to divert excessive funds from defense to social welfare programs.  However, despite words of bluster, the Republican leadership continues to adhere to the sequester, which, in response to budget deficits that are largely the results of excessive entitlement spending, slices all programs indiscriminately. They have failed to respond effectively, either by legislation, budgetary means, or public statements to the reckless disregard for national security evidenced by the Obama Administration.  The revolt of several Republican potential presidential candidates may be a long-overdue reality check for the GOP brass.

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Undercutting defense against nuke attack

In the 1980’s,  President Reagan challenged the U.S. scientific community to develop antiballistic missile technologies to defend the nation against a potential nuclear attack. Before fielding a single rocket, the concept proved successful, serving as part of a combination of existing and potential weapons systems that convinced Moscow it could not militarily overtake America.

The technology matured, and is now a reality. But continued underfunding has prevented the full promise of this defensive capability from being developed.  Opposition has been fierce.  Running for office, Barack Obama once demanded that the budget for the program be cut by a greater amount than was actually allocated to it.

Rep. Mike Rogers (R-AL),  Chairman of the Subcommittee on Strategic Forces, has noted that “missile defense is a core mission; it is not a nice to have, it is a must do.”  Rogers noted that for missile defense to become effective, it requires adequate funding.

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The need for this shield has become greater than ever.  Pentagon officials have testified before Congress, noting:

“The threat continues to grow as our potential adversaries acquire a greater number of ballistic missiles, increasing their range, incorporating BMD countermeasures, and making them more complex, survivable, reliable, and accurate. Space-launch activities involve multistage systems that further the development of technologies for intercontinental ballistic missiles (ICBMs). In addition to the Taepo Dong 2 space launch vehicle/ICBM, North Korea is developing and has paraded the KN08 road-mobile ICBM and an intermediate-range ballistic missile (IRBM) capable of 3 reaching Guam and the Aleutian Islands. As part of a series of provocations last year, North Korea conducted multiple short- and medium-range ballistic missile launches and threatened to conduct additional longer-range launches. Today it fields hundreds of Scud and No Dong missiles that can reach U.S. forces forward deployed to the Republic of Korea and Japan. Iran has publicly stated it intends to launch a space launch vehicle as early as this year (2015) that could be capable of intercontinental ballistic missile ranges if configured as such. Iran also has steadily increased its ballistic missile force, deploying next-generation short- and medium-range ballistic missiles (SRBMs and MRBMs) with increasing accuracy and new submunition payloads. Tehran’s overall defense strategy relies on a substantial inventory of theater ballistic missiles capable of striking targets in southeastern Europe. Iran continues to develop more sophisticated missiles and improve the range and accuracy of current missile systems, and it has publicly demonstrated the ability to launch simultaneous salvos of multiple rockets and missiles. Demonstrating it is capable of modifying currently deployed ballistic missile systems, Iran has flight-tested a Fateh-110 ballistic missile in an anti-ship role. By adding a seeker to improve the missile’s accuracy against sea-based targets, Iran could threaten maritime activity throughout the Persian Gulf and Strait of Hormuz.”

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Iran, Yemen rebels in conflict with regional coalition

Fighting between the Iranian-backed Houthis movement against the elected government of Yemen threatens to be the start of a long-feared wider conflict in the Middle East, with Iran and  its client groups supporting the Houthis side and Saudi Arabia, Egypt, Jordan, Morocco, Bahrain, Kuwait, Qatar and the United Arab Emirates assisting the government. Although not in the region, Pakistan and Sudan have supported the effort. Israel has allowed the use of its air space for Saudi air forces to conduct sorties—part of the mainstream Arab states “Operation Decisive Storm”– in Yemen. Russia, which has supplied Iran with nuclear technology and other military assistance, appears to be siding with Iran and the Houthis on the issue. Both nations have called for a halt to the Saudi coalition’s support for the Yemeni government.

Regional governments have long feared the increasing military power and nuclear potential of Iran, as well as that regime’s proclivity to support and profit from radical groups. Washington’s premature withdrawal of U.S. forces from Iraq, its failure to react militarily to the assassination of Ambassador Stevens, the failure to support the “red line” in Syria, the weak American response to ISIS, and the diminishing size of American armed forces in general have unleashed tensions in the Middle East and elsewhere.

A White House Statement https://www.whitehouse.gov/the-press-office/2015/03/25/statement-nsc-spokesperson-bernadette-meehan-situation-yemen delivered by NSC Spokesperson Bernadette Meehan noted:

“The United States strongly condemns ongoing military actions taken by the Houthis against the elected government of Yemen.  These actions have caused widespread instability and chaos that threaten the safety and well-being of all Yemeni citizens. The United States has been in close contact with President Hadi and our regional partners.  In response to the deteriorating security situation, Saudi Arabia, Gulf Cooperation Council (GCC) members, and others will undertake military action to defend Saudi Arabia’s border and to protect Yemen’s legitimate government.  As announced by GCC members earlier tonight, they are taking this action at the request of Yemeni President Abdo Rabbo Mansour Hadi.

“The United States coordinates closely with Saudi Arabia and our GCC partners on issues related to their security and our shared interests.  In support of GCC actions to defend against Houthi violence, President Obama has authorized the provision of logistical and intelligence support to GCC-led military operations.  While U.S. forces are not taking direct military action in Yemen in support of this effort, we are establishing a Joint Planning Cell with Saudi Arabia to coordinate U.S. military and intelligence support.

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“At the same time, the United States continues to closely monitor terrorist threats posed by al-Qa’ida in the Arabian Peninsula and will continue to take action as necessary to disrupt continuing, imminent threats to the United States and our citizens.

 

We strongly urge the Houthis to halt immediately their destabilizing military actions and return to negotiations as part of the political dialogue.  The international community has spoken clearly through the UN Security Council and in other fora that the violent takeover of Yemen by an armed faction is unacceptable and that a legitimate political transition – long sought by the Yemeni people – can be accomplished only through political negotiations and a consensus agreement among all of the parties.”

 

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What is bankrupting Washington?

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Obamacare’s new and increased taxes

As Americans, as families, individuals or small businesses, prepare their tax returns, the burden created by Obamacare becomes increasingly evident.  The Americans for Tax Reform has compiled a comprehensive list of the measure’s 20 new or increased tax hikes, listed by size.

$123 Billion: Surtax on Investment Income (Takes effect Jan. 2013): A new, 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single). This would result in the following top tax rates on investment income:

Capital Gains Dividends Other*
2012 15% 15% 35%
2013+ 23.8% 43.4% 43.4%

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*Other unearned income includes (for surtax purposes) gross income from interest, annuities, royalties, net rents, and passive income in partnerships and Subchapter-S corporations.  It does not include municipal bond interest or life insurance proceeds, since those do not add to gross income.  It does not include active trade or business income, fair market value sales of ownership in pass-through entities, or distributions from retirement plans.  The 3.8% surtax does not apply to non-resident aliens. (Bill: Reconciliation Act; Page: 87-93)

$86 Billion: Hike in Medicare Payroll Tax (Takes effect Jan. 2013): Current law and changes:

First $200,000
($250,000 Married)
Employer/Employee		 All Remaining Wages
Employer/Employee
Current Law 1.45%/1.45%
2.9% self-employed		 1.45%/1.45%
2.9% self-employed
Obamacare Tax Hike 1.45%/1.45%
2.9% self-employed		 1.45%/2.35%
3.8% self-employed

 

Bill: PPACA, Reconciliation Act; Page: 2000-2003; 87-93

 

$65 Billion: Individual Mandate Excise Tax and Employer Mandate Tax (Both taxes take effect Jan. 2014):

Individual: Anyone not buying “qualifying” health insurance as defined by Obama-appointed HHS bureaucrats must pay an income surtax according to the higher of the following

1 Adult 2 Adults 3+ Adults
2014 1% AGI/$95 1% AGI/$190 1% AGI/$285
2015 2% AGI/$325 2% AGI/$650 2% AGI/$975
2016 + 2.5% AGI/$695 2.5% AGI/$1390 2.5% AGI/$2085

 

Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS). Bill: PPACA; Page: 317-337

 

Employer: If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2000 for all full-time employees.  Applies to all employers with 50 or more employees. If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer). Bill: PPACA; Page: 345-346

(Combined score of individual and employer mandate tax penalty: $65 billion)

$60.1 Billion: Tax on Health Insurers (Takes effect Jan. 2014): Annual tax on the industry imposed relative to health insurance premiums collected that year.  Phases in gradually until 2018.  Fully-imposed on firms with $50 million in profits. Bill: PPACA; Page: 1,986-1,993

$32 Billion: Excise Tax on Comprehensive Health Insurance Plans (Takes effect Jan. 2018): Starting in 2018, new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family).  Higher threshold ($11,500 single/$29,450 family) for early retirees and high-risk professions.  CPI +1 percentage point indexed. Bill: PPACA; Page: 1,941-1,956

$23.6 Billion: “Black liquor” tax hike (Took effect in 2010) This is a tax increase on a type of bio-fuel. Bill: Reconciliation Act; Page: 105

$22.2 Billion: Tax on Innovator Drug Companies (Took effect in 2010): $2.3 billion annual tax on the industry imposed relative to share of sales made that year. Bill: PPACA; Page: 1,971-1,980

$20 Billion: Tax on Medical Device Manufacturers (Takes effect Jan. 2013): Medical device manufacturers employ 360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax.  Exempts items retailing for <$100. Bill: PPACA; Page: 1,980-1,986

$15.2 Billion: High Medical Bills Tax (Takes effect Jan 1. 2013): Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI).  The new provision imposes a threshold of 10 percent of AGI. Waived for 65+ taxpayers in 2013-2016 only. Bill: PPACA; Page: 1,994-1,995

$13.2 Billion: Flexible Spending Account Cap – aka “Special Needs Kids Tax” (Takes effect Jan. 2013): Imposes cap on FSAs of $2500 (now unlimited).  Indexed to inflation after 2013. There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.  There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education.  Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center(link is external)) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. Bill: PPACA; Page: 2,388-2,389

$5 Billion: Medicine Cabinet Tax (Took effect Jan. 2011): Americans no longer able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin). Bill: PPACA; Page: 1,957-1,959

$4.5 Billion: Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D (Takes effect Jan. 2013) Bill: PPACA; Page: 1,994

$4.5 Billion: Codification of the “economic substance doctrine” (Took effect in 2010): This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans just because the IRS deems that the action lacks “substance” and is merely intended to reduce taxes owed. Bill: Reconciliation Act; Page: 108-113

$2.7 Billion: Tax on Indoor Tanning Services (Took effect July 1, 2010): New 10 percent excise tax on Americans using indoor tanning salons. Bill: PPACA; Page: 2,397-2,399

$1.4 Billion: HSA Withdrawal Tax Hike (Took effect Jan. 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent. Bill: PPACA; Page: 1,959

$0.6 Billion: $500,000 Annual Executive Compensation Limit for Health Insurance Executives (Takes effect Jan. 2013): Bill: PPACA; Page: 1,995-2,000

$0.4 Billion: Blue Cross/Blue Shield Tax Hike (Took effect in 2010): The special tax deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85 percent or more of premium revenues are spent on clinical services. Bill: PPACA; Page: 2,004

$ Negligible: Excise Tax on Charitable Hospitals (Took effect in 2010): $50,000 per hospital if they fail to meet new “community health assessment needs,” “financial assistance,” and “billing and collection” rules set by HHS. Bill: PPACA; Page: 1,961-1,971

$ Negligible: Employer Reporting of Insurance on W-2 (Took effect in Jan. 2012): Preamble to taxing health benefits on individual tax returns. Bill: PPACA; Page: 1,957

 

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Quick Analysis

U.S. defense spending at crisis point

During the past several years, Washington’s response to the vast and growing threats from Russia, China, Iran, North Korea and Islamic terrorism has been, irrationally, to sharply reduce the defense budget.

Defense Secretary  Ashton B. Carter recently noted  that “DoD’s 10-year budget projections have absorbed more than $750 billion in cuts, or more than three-quarters of the trillion-dollar cuts that would be required if sequestration is allowed to run its course…DoD’s fiscal year 2016 budget is at a near-historic low, representing about 14 percent of total federal discretionary and nondiscretionary outlays.”

In 2010, the total defense budget was $757 billion.  The 2016 budget is approximately $585 billion. Although the President and Congress differ somewhat in the way the funding is provided, the figure for both is essentially similar, and is in keeping with the sequester.

Writing in the Wall Street Journal, Senator John McCain (R-Arizona) and Rep. Mac Thornberry (R-Texas) noted that “We believe that [we] cannot continue to [to defend the nation] within the caps imposed by the 2011 Budget Control Act [sequestration.] They blame both President Obama as well as Republicans who continue to abide by sequestration. “There is no national security basis for sequestration. Within the past year Russia has challenged the postwar order in Europe by invading and annexing the territory of another sovereign nation. A terrorist army that has proclaimed its desire to attack the United States and its allies now controls a vast swath of territory in the heart of the middle east. Iran continues its pursuit of nuclear weapons while expanding its malign influence throughout the region. And China has stepped up its coercive behavior in Asia, backed by its rapid military modernization…Military spending is not to blame for out-of-control deficits and debt.  It is now [at] the lowest [share of federal spending] since before World War 2.
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America’s nuclear arsenal, the only such force among the nuclear powers that has not undergone substantial modernization, has been cut from several thousand two decades ago to just several hundred today. Deployed war heads have been reduced from 9,000 twenty years ago to just 1,600 currently.  For the first time in history, Russia has more strategic nuclear firepower than the America, and a commanding ten to one advantage in tactical weapons.

Key parts of the U.S. defense establishment are at the breaking point, including the Air Force’s Drone fleet, as reported in the Daily Beast which reports that “overworked drone crews have had their leaves cancelled and suffered damage to their careers because they could not attend required professional military education courses.”

The U.S. Army will soon reach its lowest level since before World War 2, leaving a force smaller than North Korea’s. The Navy will be the smallest since World War I, and the Air Force will be at historic lows. The Marine Corps suffers drastic shortfalls in equipment, training and personnel. All this occurs while Russia and China build up their forces to unprecedented levels of size and capability.

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Quick Analysis

Democrat, Republican Party leaders: Out of Touch?

The American political environment may be reaching a mood similar to the 1850’s, when the Republican Party was born, and the Whig Party saw its demise. The policies and practices of the leadership of both Democrat and Republican organizations appear to be drifting away from the beliefs of their membership.

President Obama’s extreme left wing politics, his isolationist and pacifist foreign policy, tolerance towards the Moslem Brotherhood, thinly disguised race baiting, and his anti-U.S. worker advocacy of high taxes, amnesty for illegal immigrants and environmental radicalism disturbs many. Heir apparent Hillary Clinton, co-architect of the utterly failed “reset”with Russia and advocate of “identity” politics is essentially similar in her beliefs.

Several key components of the Democrat formula for electoral success are becoming alienated. Blue collar workers who traditionally tilt towards the Democrats are uncomfortably viewing a landscape in which unemployment remains at a crisis level. Mr. Obama’s hostility towards Israel is beginning to weaken support among Jewish voters. Women are beginning to look askance at the politicization of their children’s education, escalating food prices, and diminished health care.

While Mr. Obama’s popularity as the first black president remains high within inner city voters, his economic and immigration policies have resulted in astronomical rates of unemployment in the black community, as well as the same price hikes that have disturbed all. His personal appeal may not translate into continued overall enthusiasm for other Democrats in 2016.

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Republicans have succeeded when advocating the dominating concepts of strong national defense, low taxes, restrained spending, a strict interpretation of Constitutional rights and procedures, and a more traditional cultural outlook. Many view the GOP’s response to the unprecedented failures of the Obama Administration to be timid and inconsequential, and more concerned with avoiding criticism from the media than in pursuing its beliefs.

There is, indeed, an inexplicable split within the Republican Party between the most vigorous advocates for its traditional positions, frequently identified as theTea Party, and the GOP leadership. Rather than latch onto the enthusiasm of that movement, it has been kept at arms-length. A further split can be observed between those demanding that the dramatic new military threats from Russia, China, Iran and North Korea be met with significant increases in the U.S. defense budget, and those advocating less expensive financing of the Pentagon as part of an overall approach to lowering deficit spending.

Complex election laws make it unlikely that new nationwide parties will spring up. But the organizational and communications abilities derived from new technologies will increasingly allow insurgents to go “over the heads” of party leadership to appeal for support directly from the voters. That same capability will allow temporary coalitions to form in response to specific issues supported by party leaders but opposed by the rank-and-file. In 2000, an unusual coalition of defense hawks, human rights advocates, and union leaders came together unsuccessfully to oppose a trade deal with China, supported by both President Clinton and GOP leaders, that they correctly feared would adversely affect U.S. national security, individual Chinese rights, and the job security of American manufacturing workers. That same opposition could meet with more success today.