June 22, 2009

Excuse me Canada did I hear you crying protectionism against the US what a load of #@&*^#@

Surely you jest how can that be by

Melvin J. Howard

As the US tackles its health care issues Canada has yet to admit that they have one. Deniability seems to be the word of the day for Canada’s health care system I hear the word sacred a lot being referred by Canadians to their health care system. As though their health care system they have was somehow ordained by God. It is this illusion that will be the eventual downfall of the system. Canada often attacks the US on a number of issues but health care should not be one of them. Canadians often say we don’t want a two-tier health care system wake up and smell the rubbing alcohol. For those who think that Canada doesn’t have a two-tier healthcare system let me open your eyes. Their second tier is called “The GOOD OL USA”, which is where all the Canadians go when they need urgent healthcare.

You see while America’s politicians have seen the light of health reform. They have now come to understand the health care system, as it is now is unsustainable and dangerous to the economic viability of the country and that change needs to happen now or else. I have yet to stumble upon a Canadian politician that has the guts to say to the Canadian people we have a problem and if we don’t fix it now we are jeopardizing our economic viability. Sure they will say it in private as they have done to me many times but never in public. The only Province that had the nerve to change the status quo was Quebec now you might asks yourself out of all the other Provinces what makes Quebec so unique? It’s simple really separation Quebec can and does use the separation card with Ottawa, and it has been very effective in getting the needs of Quebec met. I just want to point out how different Quebec is from the rest of Canada I am not sure if Quebec is still even apart of Canada I think if it is its only on paper, I jest of course. But in reality as Quebec gets more and more sovereignty just like the one the Supreme Court handed down that Quebec can have private healthcare their independence will grow its inevitable. It seems the Judges in Canada have more of a political will to change the health care system in Canada then the politicians do now fancy that. Where is the backbone are the politicians only concern is to maintain power without rocking the boat. Well congrats job well done nothing accomplished on the health care front as usual. It is shame that the Supreme Court of Canada had to step in for all of the major political parties in Canada and rule in favour for the rights of patient’s and their freedoms in Quebec.

The other provinces have yet to make the same challenge for their patient’s rights and freedoms and I doubt they will. I don’t see any dynamic political leader that has the chutzpah to do it. There was the province of Alberta that was contemplating such a move and was going to violate the Health Act until it got its way. Well that went nowhere I was not surprised if you been doing this as long as I have you tend dismiss political posturing in Canadian politics.

Now lets get to the protectionism issue, for number of months Canada has been crying constantly that the US is using protectionism in its buy America clauses in its stimulus bill that was passed by congress. As a free-trade advocate, I just want to say straight up have you checked your own back yard lately Canada? It is because of your policies that healthcare was outsourced to the US in the first place because political interference destroyed all Canadian competition in the health care field. Let me remind you singling out America is way off base at this time in regards to domestic policy when it comes to trade. I think if you really check you will see from all countries some form of domestic policies that can be misconstrued as protectionist. You have no further to look then to Britain and the Netherlands. For instance, they are forcing banks receiving taxpayer bailouts to start lending at home at the expense of overseas clients. The French are insisting that his nation's automakers move manufacturing jobs home in exchange for a government bailout I am not sure where that went but regardless. The point is this there has never been a time that such financial upheaval has occurred globally all at the same time as this. I think any head of state is going to take care of home base first. To think otherwise is foolish and naïve. The thing is to get all of the trading partners healthy financially and economically at home so they can continue to trade freely abroad, the faster the better.

Then I hear the Provinces are cheering the lets retaliate US procurement for municipal and city contracts song. If that don’t beat all and that’s my polite way of putting it. Let’s take a trip down memory lane Provinces come on don’t be afraid I just want to show you the err of your ways. Few Canadians realize, that provincial governments have for many years opposed any reciprocal trade deal with Washington DC that would prevent them from excluding not only U.S. firms, but also companies from elsewhere in Canada, from bidding on provincial or municipal contracts. In the original free trade negotiations with the US the provinces were adamant that they were not willing to have their procurement, or that of their municipalities, governed by the agreement. So an unusual procurement chapter was put together that applied only to the federal level and even then with some limitation. Then in the WTO negotiations because of the protectionist views of the provinces, Canada was not willing to put sub-national procurement into the agreement. I have to say that move caused a great pain in the ass, especially among some state governments. So the US said screw it lets move on to other free trade agreements, with countries in which sub-national procurement was included.

So what was the end result well companies from those countries can now bid on U.S. procurement projects from which Canada is now excluded that right excluded. You can’t have you cake and eat it to so stop crying. You even had numerous chances to re-negotiate but you passed. I have now come to understand the problem when dealing with Canada. From an international point of view it is really not a country per-say. They do have a central government but it doesn’t have authority over the provinces over matters that are considered part of international trade. Hence my NAFTA proceeding with the Federal Government of Canada and not the Provinces of which the breaches occurred. Under GATS, the federal government is obligated to take reasonable measures as may be available to it to ensure that regional and local governments and authorities observe Canada’s GATS commitments. Under NAFTA, Canada must ensure that all necessary measures are taken to give effect to the provisions of NAFTA, including their observance by provincial and local governments. As I discussed in earlier posts, in the event of any alleged breach of Canada’s obligations under GATS or NAFTA, the federal government is responsible for responding to the allegations and when necessary, for providing compensation in the manner required under Canada’s treaty obligations. So Canada who’s fault is it that you find yourselves in this position? Look in the mirror it is something you brought upon yourselves. Provinces are not even guaranteed access to procurement markets in their own country. It’s all fragmented just like the health care sector there its crazy. Canada’s Medicare system is completely in left field when it comes to the principles of free trade. By establishing a public sector health insurance monopoly, and by regulating who can provide health care services and on what terms, the Canada Health Act and the Medicare system go against the intentions of free trade. So when I hear Canada calling unfair trade practises against the US I just have to chuckle and say really that’s interesting. That is very smug when foreign banks are not allowed to set up shop in Canada or you have a crown corporation that is the only choice for any number of services. Most Americans could not comprehend one telephone company, one gas company, one insurance company, only 5 banks to chose from, depending what part of Canada your in one cable company. I am not even finished but lets just say if you had a problem with either one of those services I just mentioned. Well I am afraid you don’t have much choice that’s it your up the creek and you can only get your paddles from one place.

Americans are brought up on free markets from the moment you’re born on US soil. You get choices that is why the US is called the land of opportunity. The reason for that is if you don’t like a particular service you can go down the street and get a better deal from someone else. Competition breeds the best in the market place monopolies whether they are government or private breeds contempt. All throughout history monopolies were bad for society bottom-line no choices is bad for all societies period. So Canada I am glad to be your escape goat in helping change your protectionism ways in your health care system. It seems you need a bogeyman to do it since your politicians want stand up and state the obvious, which they have stated to me over and over. Of course I will be charging a hefty fee for my services on top of the money you already owe me! So what have we learned boys and girls that people who live in a glass house shouldn’t be throwing stones!

June 07, 2009

President Obama Don't Let Up On Health Reform


Democrats Weigh Health Mandate as Obama Urges Taxing Wealthy 

By Laura Litvan and Ryan Donmoyer

June 7 (Bloomberg) -- President Barack Obama wants Congress to consider taxing the wealthy instead of workers to pay for a health-care overhaul, as House Democrats discuss a plan to require health insurance for most Americans.

The Obama administration stepped up efforts to influence health-care legislation today as advisers David Axelrod and Austan Goolsbee appeared on television talk shows to discuss the issue.

The president is trying to avoid broad-based levies such as a Senate proposal to tax some employer-provided health benefits Axelrod said. Instead he is urging lawmakers to reconsider limiting all tax deductions for Americans in the highest tax brackets.

“He made a very strong case for the proposal that he put on the table, which was to cap deductions for high-income Americans, and he urged them to go back and look at that,” Axelrod said on the CNN’s “State of the Union.” Goolsbee, appearing on “Fox News Sunday,” said Obama is “mindful” about how “ordinary Americans are able to foot the bills” and never proposed taxing employee benefits.

House Democrats are weighing a new proposal in response to Obama’s call for legislation to be enacted by August. An outline of the plan obtained by Bloomberg News would require Americans to have insurance with some exceptions.

It would probably exempt those who can prove they can’t find an affordable policy. There could be a tax penalty for those with adequate financial resources who don’t elect to get insurance, according to the outline.

Group Rates

The outline suggests consumers who have individual health insurance policies that they like could keep them. Still, it says that “by and large” the nation’s market for individually purchased health insurance policies would move to a new federally operated exchange. It would permit both individuals and employees of small firms to buy policies at less expensive group rates.

“States will have the option to run a state exchange but the default will be a national exchange,” according to the outline.

Karen Lightfoot, a spokeswoman for House Energy and Commerce Committee Chairman Henry Waxman, a California Democrat whose panel is working on a proposal, said the document that is circulating is not the official work of the committee.

All House Democrats will be briefed June 9 on the details of a single piece of legislation that three House committees will work on, with the House slated to act by the end of July. The proposal is part of a broader push by Democrats in Congress to complete a revamp of the U.S. health-care system by an early fall timetable set by Obama.

Kennedy’s Approach

In the Senate, health committee chairman Edward Kennedy has an early draft of legislation that also includes a so-called “individual mandate,” and would require all employers to supply health insurance for workers or contribute to the cost of a plan.

Kennedy, a Massachusetts Democrat, would also create a public health plan to compete with private insurers, a priority of Obama’s that is opposed by Republicans, and would bar insurers from limiting coverage.

The effort to overhaul health-care would affect a sector that makes up 17 percent of the U.S. economy. The goal of Democratic supporters is to provide insurance to most of the nation’s 46 million uninsured, and lower the soaring cost of care. A key challenge is the potential impact of legislation on an already rising U.S. budget deficit that may reach $1.8 trillion this year.

Axelrod, speaking on CNN today, said the ultimate goal of legislation is to reduce costs.

“We have to bring down the cost of health care,” he said. “If we do that and make it affordable, people are going to buy it, mandate or no mandate.”

Burdens on Business

Google Inc. Chief Executive Eric Schmidt, speaking on Fox, said reducing costs would also ease burdens on business.

“The only way to really address this is to address the combination of coverage and cost,” Schmidt said. “So anything that the Congress and the president does has to do that. And from my perspective, the sooner the better.”

“You won’t fundamentally solve the problems in business until you solve the problem of spiraling health-care costs, which is driving everybody crazy,” he added.

Lawmakers have a plethora of proposals to raise the hundreds of billions estimated to be needed for an overhaul, including new taxes on soda, beer, and wine, and a partial tax on employer-provided health insurance for the first time. The tax-free nature of employer-provided insurance is the biggest tax expenditure in the federal budget.

Taxing Cap Deductions

Obama’s own proposal would set a 28 percent cap on tax deductions for items such as mortgage interest, investment expenses and charitable gifts for Americans in the two highest tax brackets, which would be 36 percent and 39.6 percent under his proposals. Without the cap, they would be able to deduct 36 cents and 39.6 cents on the dollar for those expenses, respectively.

Obama also proposes new taxes on securities dealers and life insurers, and to raise revenue by prohibiting certain estate-planning techniques.

House Democrats intend, like Kennedy, to include a new government program to provide health-care to a portion of the uninsured who don’t already qualify for Medicare or Medicaid, according to the outline.

While the lawmakers continue working out the details, they intend the new program to operate through the exchange and for both the public program and private insurance policies to have the same basic benefits.

Helping the Poor

House Democrats want to improve the Medicaid health-care system for the poor, including a uniform benefits package and “improved” provider payments. They are weighing whether to add people who are near the poverty level to Medicaid or to provide subsidies to allow them to purchase their own policies.

The plan would place new restrictions on private insurers, including a bar on excluding coverage for those with “pre- existing conditions.”

The legislation would seek to get some cost savings from Medicare and Medicaid, including incentives for doctors to coordinate their care and get bonuses for improving quality, according to the outline.

Check back here for my commentary on trade wars and protectionist attitude in Canadian health care.