Olympia Business Watch

Moore Information Finds Voters Generally Satisfied with Health Care Coverage

Moore information, the Portland-based public opinion research firm, released yesterday  results of a nationwide health care poll. Folks accustomed to the dour reports from the campaign hustings may well find the results counterintuitive.

Our recent survey of voters nationwide found fully 88% of voters are currently covered by health insurance and the vast majority (72%) is satisfied with their coverage. Nonetheless, the majority of voters in the country believe most people in their community lack adequate health insurance coverage. Finally, we explored voter preference for a market driven vs. universal health care plan, and found the market driven plan is preferred by a narrow majority.

Read the complete 3-page memo. The results are similar to a poll of Washington voters that Moore participated in last winter.

Research Council Posts Rainy Day Brief

Today the Washington Research Council published a two-page Policy Brief looking at SJR 8206, the proposed constitutional amendment creating a budget stabilization account (i.e., rainy day fund).

On balance, ... we believe that a constitutional rainy day fund is good fiscal policy and will help Washington weather future economic storms.

AWB supports the amendment.

California Paid Family Leave Expansion Proposed

The California Manufacturers and Technology Association reports that two bills expanding that state's paid family leave program have reached Gov. Schwarzenegger.

After much debate and lobbying, both AB 537 (position letter)  (Sandré Swanson, D-Oakland) and SB 727 (position letter)  (Sheila Kuehl, D-Malibu) reached the Governor's desk for consideration.  If these bills are signed, it will result in the expansion of the California Family Responsibility Act (CFRA) and Paid Family Leave insurance program (PFL).  Both of these bills have the potential to dramatically increase absences at the workplace and be an additional burden on employers.

According to CMTA, AB 537

Amends the California Family Rights Act to expand the definition of family members with a serious medical condition to whom a covered employee may take unpaid leave to attend. Also increases the circumstances under which an employer is responsible for providing protected leave pursuant to the Act by eliminating the age and dependency elements from the definition of “child” and changes the definition of “parent.”

And SB 727

Expands the scope of the family temporary disability insurance program to include grandparents, grandchildren, parents-in-law, and siblings within the definition of "family member," and makes conforming and clarifying changes in provisions relating to family temporary disability compensation.

Washington employers and lawmakers concerned about the evolution of our state's emerging paid family leave program have only to look south to see our future. And so it grows.

Labor's Card-Check Bill Extremely Unpopular

Or so notes Stephen Moore, writing in the Wall Street Journal's Political Diary (subscription req'd).  He notes pollster Tony Fabrizio's finding that 80% of Americans -- enough this day and age to be called a consensus -- disfavors the measure, which would end 60 years of secret ballots in union elections and allow a shop to become unionized if a majority of workers sign cards calling for a union.   It's worth a read:

Union officials are keeping their lips pursed over the fate of their long-desired "card-check" legislation that passed through the House but was stalled in the Senate earlier this year. Democrats have discovered what's good for the unions isn't necessarily good politics for reelecting Democrats to office. Pollster Tony Fabrizio calls it an "80-20" issue -- some 80% of voters are against the forced unionization measure. "It strikes average Americans as unfair," he says.

Called the Worker Free Choice Act, the bill has been high on labor's agenda for years. It would eliminate secret elections for establishing a union at a given workplace. Instead, labor organizers would simply have to persuade a majority of workers to put their signatures on cards calling for the establishment of a union.

Only after Nancy Pelosi corralled all but 12 Democrats -- including almost all her vulnerable freshmen -- to vote for the union measure last spring was she hit with polling results showing just how unpopular the measure was with the wider public. That's why Democrats and even labor leaders at AFL-CIO, who have been agitating for the bill, have kept a low profile of late. Rick Berman, the head of Unionfacts.com, notes that the big labor strategy is to keep quiet now and spring the measure on Congress after the 2008 elections, when the hope Democrats will have won the White House and clinched fatter House and Senate majorities.

"This is a life and death issue for the unions," Mr. Berman says. Labor Department records show that unions generally don't even call for a workplace election unless about 70% of workers sign a card requesting one -- yet unions still lose half the elections they hold at work sites, suggesting many workers feel pressured to sign the cards but vote against the union in a secret ballot when they feel safe from retribution. Mr. Berman's group calculates that the AFL-CIO could double its membership with the new law, generating up to $5 billion in additional union dues, money that could be channeled into supporting Democrats.

If the unions prevail in their card-check powerplay, Mr. Berman predicts it would transform the Congressional dynamics and vote count on a whole litany of issues that labor cares about. "If the card check issue passes," he argues, "it will be the death of tax cuts, school choice, budget reforms, and more." For the left, that makes card-check sound like a political panacea. No wonder Democrats are trying to keep this all under wraps.

Jeb Drove Home the Fundamentals at the Washington Policy Center Dinner

Former Florida Gov. Jeb Bush hit a homer last night at the annual Washington Policy Center dinner in Seattle.  He spoke of the three-legged stool which is the foundation of America---something we need to be constantly reminded of.

First, government should be limited to protecting the health, safety and public welfare.  It should empower people, not constrict them.  Where possible, government should contract to the private sector.  In Florida, jobs were contracted to the private sector creating new tax revenues for the state and saving taxpayers money.

Second, people need to be free to innovate. Innovation drove America to greatness and will drive our competitiveness in the future. 

Third, people need to take responsibility for their actions and for raising and educating their children. America spends billions on our education system. He suggested that school vouchers had the biggest impact on improving Florida's education system because vouchers introduced competition and reinforced measurement.

It was a back-to-the-basics speech----something we need to keep reminding ourselves of each day. 

SCHIP, Yes! SCHIP Expansion, No!

The big health care news this week is the U.S. House of Representatives' reauthorization of the State Children's Health Insurance Program (SCHIP). Unfortunately, the House not only reauthorized the program; it also expanded it way beyond its original intent.

U.S. Secretary of Health and Human Services Mike Leavitt has some useful and insightful comments on this issue:

We all want to see every American insured, and President Bush has proposed a plan to see that everyone is. Congress, instead, is pushing a massive expansion of the State Children's Health Insurance Program (SCHIP) that grows government without helping nearly as many children.

The president's plan, announced last January, would fix our discriminatory tax policy so that every American family received a $15,000 tax break for purchasing health insurance. If Congress acted on the president's plan, nearly 20 million more Americans would have health insurance, according to the independent Lewin Group.

In contrast, ....Congress would more than double government spending on SCHIP and extend the program to families earning as much as $83,000 a year. But their plan would add fewer than 3 million children to SCHIP, and many of the newly eligible children already have private insurance. So instead of insuring nearly 20 million more Americans privately, Congress would spend billions of dollars to move middle-income Americans off private insurance and onto public assistance.

Leavitt goes on to point out that Congress' SCHIP expansion will actually allocate billions of dollars more than is necessary to cover the low income children while allowing states to divert SCHIP dollars from children to adults. Of course, many states see this aspect of Congress' expansion plan as a boon. Nevertheless, if you look at the big picture, it's not hard to see that this would be an immense financial drain on the federal government. Worst of all, the SCHIP expansion is clearly a means of shifting more people out of the private system and into government paid health care - a dangerous direction to go.

Leavitt concludes:

SCHIP is part of the fix for low-income children, and Congress should put politics aside and send the president a clean, temporary extension of the current program. Expanding SCHIP is not the only way or the best way to insure the uninsured. The president's plan is better. It would benefit many more Americans. It would focus SCHIP on the children who need help most. And it would move us more sensibly toward our common goal of every American insured.

Now that the House voted for SCHIP expansion and the Senate appears poised to do the same, there is one bit of hope in the gathering gloom: The House's vote for expansion does not have a veto proof majority, and President Bush says he will veto the legislation. Let's hope he makes good on his threat.

In contrast, ....Congress would more than double government spending on SCHIP and extend the program to families earning as much as $83,000 a year. But their plan would add fewer than 3 million children to SCHIP, and many of the newly eligible children already have private insurance. So instead of insuring nearly 20 million more Americans privately, Congress would spend billions of dollars to move middle-income Americans off private insurance and onto public assistance.

Leavitt goes on to point out that Congress' SCHIP expansion will actually allocate billions of dollars more than is necessary to cover the low income children while allowing states to divert SCHIP dollars from children to adults. Of course, many states see this aspect of Congress' expansion plan as a boon. Nevertheless, if you look at the big picture, it's not hard to see that this would be an immense financial drain on the federal government. Worst of all, the SCHIP expansion is clearly a means of shifting more people out of the private system and into government paid health care - a dangerous direction to go.

Leavitt concludes:

SCHIP is part of the fix for low-income children, and Congress should put politics aside and send the president a clean, temporary extension of the current program. Expanding SCHIP is not the only way or the best way to insure the uninsured. The president's plan is better. It would benefit many more Americans. It would focus SCHIP on the children who need help most. And it would move us more sensibly toward our common goal of every American insured.

Now that the House voted for SCHIP expansion and the Senate appears poised to do the same, there is one bit of hope in the gathering gloom: The House's vote for expansion does not have a veto proof majority, and President Bush says he will veto the legislation. Let's hope he makes good on his threat.

Paid Leave Task Force: Cost a Major Concern

The joint legislative task force set up to figure out how to administer and pay for the state's new paid family leave mandate met yesterday, and took in testimony from the Employment Security Department and the Department of Labor & Industries on the cost of administration.  Brad Shannon covers it for the Olympian here, and Paul Nyhan for the P-I here. 

Our Richard Davis nicely framed the problem confronting the task force in the P-I article:

Essentially, lawmakers created a goal -- paid family leave for new parents -- without establishing how to reach that goal, said Richard Davis, vice president for communications at the Association of Washington Business.

"As in any major new benefit, the details matter greatly," Davis said.

One worry is that if the program is created incorrectly, some workers could wind up with worse leave benefits than they had before the law, Davis added, emphasizing that employers should have flexibility to create leave programs that fit their business and employees.

The detail that mattered the most yesterday was the shocking cost estimates for administering the program.   Brad Shannon's story reports:

A paid family leave program on the drawing boards for Washington state workers might eat up 25 percent of its cost in overhead in its early years, a task force learned Wednesday.

If the state Department of Labor and Industries runs the program, administrative costs could be more than six times the 3.6 percent overhead rate that California recently saw for a similar program started in 2004.

The 25% overhead figure actually understates the matter.  L&I's administrative costs in the start-up years were  more like 35% trending on down to 25% after the program is running for a few years -- and that estimate did not include the cost of collecting money to fund the benefit, nor did it include any amortized costs of initial hardware, software, and programming to set up the program. 

ESD gave its own tentative cost estimate, coming in under L&I on some items, more on others.  But ESD representatives stressed the preliminary nature of their figures.

The fact that bureaucratic overhead alone could eat up almost half the overall cost of administering a social welfare program is indeed shocking, and one of the facts that killed a much more expansive version of the bill in the 2007 session. 

Confronted with no clear cost-effective option for administering this version, some task force members went off in an odd direction:

The task force is trying to decide how to administer the program and by which agency; Democratic Rep. Steve Conway of Tacoma said he thinks a multi-agency approach might work best.

I spent the balance of my public testimony before the task force yesterday trying to explain why that is the wrong approach given that the task force just heard that neither leading contender could administer the program efficiently. 

Giving different chunks of it to both agencies is not going to help.  It would be like cutting a worm in half, only to see the halves grow into two new worms.   

Although the administration decision was left indeterminate, the next big issue confronting the task force is how to fund the program.  Kudos to Senator Keiser for this sentiment:

. . . . [P]aid family leave doesn't have to rely on new taxes, said state Sen. Karen Keiser, D-Kent, co-chairwoman of the task force. The state benefit could be financed with annual budget revenue, though nothing has been decided, she said.

No new taxes -- makes a lot of sense.  Hopefully the question of funding won't be as much of a circus as the question of administration.

And lastly, speaking of clowning around, the meeting took on a bit of a big-top flavor (pictured in the P-I) as representatives of "MomsRising.org," one of the movers behind the bill, interrupted proceedings to hand out little potted cyprus trees to task force members, either as a kind of "thank you" gift for pushing Washington toward this precipice, or to test the ire of the legislative and executive ethics boards. 

This move left me satisfied that I called it several months ago, writing in Washington Business Magazine that "family leave advocates planted the seed," and that "[p]aid family leave is the acorn that, in time, will grow into a mighty oak."  I guess I was only wrong about the species of the tree.

Sichuan Wants More Business

On September 26, Gov. Gregoire met with Sichuan Provincial Committee President Ms. Qin Yuqin and her delegation.  Washington and Sichuan Province in southwest China celebrated 25 years of official relaions.  Shortly after the meeting, State Senators Paull Shin, Pam Roach and Jim Kastama, Rep. Barbara Bailey, and I had lunch with the delegation.  Sichuan is a key Chinese agriculture and minerals providence, is home to 87 million people, and in a geographic area four times larger than Washington state.  During our conversations, the president made it clear she wants to encourage Washington state investments in her province. The Chinese, like early American settlers, want investments moving west.  Among Ms. Qin Yuqin's delegates were Jiao Weixia, director general, Sichuan provincial investment promotion bureau; Ms Wu Yanxiang, Weixia's deputy director; and, Ma Ping, director general Sichuan provincial agricultural machinery bureau.

Often we think of China as one big country.  It has the world's largest population and its land mass is slightly larger than the United States. China has 22 provinces and, like the United States, as you move west, the geographic areas grow larger.

Finually, President Qin Yupin extended an invitation to visit Sichuan and further develop economic ties.  We'll explore the possibilities. 

Romney Takes on Hillary Care 2.0

Mitt Romney has been getting a bad rap in some quarters for a few aspects of his Massachusetts Connector plan that resemble components of Hillary Care 2.0 - notably the individual mandate.  While we at Olympia Business Watch have our concerns about the Massachusetts reforms and believe it foolish for Washington or any other state to try to imitate that program without first seeing how it plays out in the Bay State, we want to set the record straight that Romney's reforms are, indeed, very different from Hillary's plan. In fact, in a Wall Street Journal op-ed (registration required), Gov. Romney does an admirable job of dissecting Hillary's much ballyhooed health care agenda and pointing out exactly what's wrong with it.

Quoting Romney:

Some of the details have changed, but at the heart of Sen. Hillary Clinton's new health-care proposal are the same flaws that sunk her first version. They flow from her distrust of markets, from her distaste for profit-motivated private enterprise, and from her consequent faith that Washington knows best.

... when a sector of the economy is not working as well as it might, you should look to give the people more influence, to unleash competitive forces, and to welcome private ingenuity. The last thing you should do is apply more government.

Specifically, according to Romney, the plan will:

Raise taxes. The new plan is slated to cost $110 billion a year. And to pay for the new entitlement -- a tax hike. That in turn will slow down the economy and make the cost of [Hillary's] system grow even higher.....

Expand government insurance. People who don't obtain insurance through their employer are invited to buy a government-run, Medicare-like plan or enroll in the Federal Employees Health Benefits Program (FEHBP). And so, more Americans will end up in government-run insurance. ...

Impose a national model on everyone. ... But the states are closer to the people, and more responsive to them. ...The senator's plan ... ignores significant differences between people and the needs of the 50 different states. Federalism is the right approach....

Significantly increase the role of the federal government at the expense of free markets. For example, Sen. Clinton proposes the creation of an entirely new government-run Medicare-like program for the uninsured. ...

Leave the mandate problem unsolved. Before you can impose a mandate on employers or individuals to purchase insurance, you need to reform state health insurance markets. Otherwise, policies can be so beefed-up with state mandated coverage and regulation that they are simply unaffordable. Then a mandate is unfair.

Echoing our past criticisms of the Connector project, Romney admits that his Massachusetts reforms were, in part, hampered by the Legislature's insistence on heavy insurance company mandates, but emphasizes the real differences between his approach and that of Sen. Clinton:

... First, we worked to reduce the burdens of regulation. The legislature insisted on more coverage mandates and regulation than I would have liked, but even so, less regulation has resulted in much lower premiums.

Significantly, he rejects the idea of a one-size-fits all approach where all states would copy Massachusetts:

I like the plan I put forward in Massachusetts. But even so, I wouldn't do what Sen. Clinton does -- impose my way on every other state. ... let's keep faith in federalism, in private markets and in individual responsibility.

And I don't think I could put it better.

AWBTV: Discussion with AWB Board Chairs

Richard Davis sits down with AWB Board Chairs Kirk Nelson with Qwest and Brad Carlson with Evergreen Memorial Gardens. They discuss what AWB means to them and how important this organization is to the state business community.

Check out more AWB videos at our YouTubes page at: http://www.youtube.com/AWBorg