Friendships are typically developed on the ground of common experience and perspective. It should thus be no surprise that — as a Republican until 2006 — I count among my friendships a fair number of Republican and Republican-inclined individuals. Granted, those friendships are based on much more than politics, which is a key reason why these individuals are still my friends.
One of those friends, more so than the others, enjoys challenging my political change of heart. He frequently raises arguments to which I’m compelled to respond; and occasionally, my response requires some homework — as was the case yesterday, when this friend forwarded me a third-party analysis titled, “COBRA Rears Its Ugly Head Again.” That analysis opened thus:
The COBRA subsidy created by the American Recovery and Reinvestment Act of 2009 (“ARRA”) has been extended. The extension applies in the following two ways:
• The maximum period of subsidized premium payments is extended from 9 months to 15 months; and
• The subsidy applies for people who were involuntarily terminated between September 1, 2008 and February 28, 2010 (rather than December 31, 2009).
In forwarding this analysis to me, my friend made several points of his own. I took time this morning to formulate and send a response to those points — and I’ve decided to share my response, below, in the event it helps others who find themselves in a similar situation.
Finally, if this work is helpful to you, perhaps you can return the favor: This same friend argues that the pork doled out to Nebraska — to help secure Sen. Ben Nelson’s yes-vote on his chamber’s health care reform bill — was unprecedented. I believe it was very precedented, including among Republicans, but have not yet had time to research relevant examples, i.e., cases where a 60th (or 58-60th) vote was secured after substantial pork was promised to one or more hesitant Republican Senators. If you have examples (with links to sources) that you can share, please leave them in the comments section of this post.
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RESPONSE TO MY REPUBLICAN FRIEND
You wrote: “These are the types of things that are happening regularly without any thought or understanding of what it means to businesses from an administrative standpoint.”
I’m not sure to what other “types of things” you’re referring, but in this particular case — COBRA — it appears that a new program is not being created; an existing program is being extended by six months, for those laid off during an 18-month (formerly 16-month) window. What else do you suggest as an alternative for people who are downsized and don’t have immediate options for continuing their health insurance uninterrupted until they get a new job?
Sure, this action might create some additional administrative burden on companies, but the laid-off workers are still the ones who pick up the brunt of the premium costs under COBRA, aren’t they?
When I left my former employer to join my current employer nearly seven years ago, COBRA was a critical bridge for our family. I can’t imagine what we would have done without it. Furthermore, mine was a case of a voluntary separation in a reasonably healthy economy with another job in my sights; it was not a downsizing in a highly distressed economy with limited chances of immediate “re-employment.”
Another relevant question: Would the federal government be doing these “types of things” if we weren’t in a depressed jobs market? I doubt it. The COBRA extension was not passed to punish business, but to help laid off workers, who would not have been laid off if we were not in a depressed economy. These “types of things” are situation specific — and (I’d argue) situation justified.
You wrote: “… [the] people who are currently running our government … have never had [a] ‘real job’ in their lives and have no idea of what it takes to run a business.”
What ‘real job’ did Reagan have prior to being elected President? Reagan’s most substantive job was probably Governor of California. Within Obama’s cabinet there are at least four former governors, including …
• Agriculture Secretary Thomas J. Vilsack, the former Governor of Iowa
• Commerce Secretary Gary F. Locke, the former Governor of Washington
• Health and Human Services Secretary Kathleen Sebelius, the former Governor of Kansas (a Republican- leaning state)
• Homeland Security Secretary Janet A. Napolitano, the former Governor of Arizona (another Republican-leaning state)
Consider also that there are multiple members of the current administration who have worked in or held board positions with private sector companies; which is what I assume you mean by “real jobs.” Those with private-sector experience include but are not necessarily limited to …
• Treasury Secretary Timothy F. Geithner, who worked early on in his career for Kissinger Associates, Inc., an international consulting firm founded by Henry Kissinger – and while it’s not private sector, he was also (obviously) president and chief executive officer of the Federal Reserve Bank of New York
• Defense Secretary Robert M. Gates, who was Chairman of the Independent Trustees of The Fidelity Funds, and served on the boards of directors of NACCO Industries, Inc., Brinker International, Inc. and Parker Drilling Company, Inc. – and while it’s not private sector, Gates was also a very successful president of Texas A&M University, the nation’s seventh largest university.
• Interior Secretary Kenneth L. Salazar, who was a farmer for more than three decades; partnered with his family to run “El Rancho Salazar”; and partnered with his wife to run several small businesses, including a Dairy Queen and radio stations.
• Energy Secretary Steven Chu, who worked at the former AT&T Bell Laboratories, among other positions.
• OMB Director Peter R. Orszag, who formed a consulting group called Sebago Associates, which merged into Competition Policy Associates and was bought by FTI Consulting Inc.; he also worked as a consultant for McKinsey & Company
You wrote: “I’ve sat through hours of seminars this year reviewing regulations that require businesses to track all employees who receive workers compensation medical payments and report these to the government if the people are Medicare eligible in order to make sure the government doesn’t double pay. Once again, it’s the responsibility of the business to do this and there are substantial fines and penalties involved if they are not in compliance.”
Are these regulations unique to the Obama administration; or have they been in place longer than that? Regardless, how are these regulations a net negative? Sure, they present an administrative challenge, but we want the government to encourage and enforce steps that help avoid duplication and waste, don’t we? And why should businesses not do their part? Would we prefer the government hire more people, at taxpayer expense, to run these programs, track this data, and generate these reports? I’m not convinced there are perfect nor easy answers, in either case.