AEIdeas http://www.aei-ideas.org The public policy blog of the American Enterprise Institute Wed, 30 Jul 2014 14:44:52 +0000 en-US hourly 1 Sorry, the shale revolution won’t save the US economy http://www.aei-ideas.org/2014/07/sorry-the-shale-revolution-wont-save-the-us-economy/ http://www.aei-ideas.org/2014/07/sorry-the-shale-revolution-wont-save-the-us-economy/#comments Wed, 30 Jul 2014 14:34:22 +0000 http://www.aei-ideas.org/?p=134509 read more >]]> Even with an unexpectedly strong second-quarter GDP report, the current economic recovery is the weakest since World War II. Even worse, many long-term forecasts — including those from the Congressional Budget Office, Federal Reserve, and White House — see future growth far slower than the postwar average. But the economy would be even weaker, and those forecasts gloomier, if not for the shale revolution. Here is Goldman Sachs economist Jan Hatzius:

  … we estimate that the overall impact from the increase in US energy supply on real GDP growth is currently in the range of 0.2-0.3pp per year. Most of this is due to the direct effects from increased energy output and drilling activity, while the spillovers to other industries or via lower household energy bills have been more modest.

So, lots of energy industry investment and output. But a sector story rather than a macro story.

1.) Hatzius goes onto note that lower energy prices have not given a significant boost to energy-intensive industries: ” … output in the most energy-intensive manufacturing industries has in fact grown more slowly than in less energy-intensive ones.”

2.) Nor have US energy intensive industries outperformed energy-intensive industries in other countries. And Goldman hasn’t been able to find much evidence for a significant increase in capital spending in energy-intensive industries” other than chemical manufacturing.

3.) As for the potential boost to consumer spending from lower household energy costs, Hatzius points out that energy outlays as a share of disposable income have finally flattened the past few years. Assuming that the shale revolution get full credit, the bank economist guesstimates “the impact on US GDP growth through this channel may have been in the range of 0.05-0.1 percentage point per year.”

Here is Hatzius’s bottom line on the shale revolution’s total economic impact:

Whether this is a large effect or a small effect is probably in the eye of the beholder. Our view is that it is quite sizable when cumulated over a longer period, even if the spillover effects remain limited and more so if they grow. But it is probably not a first-order issue from the perspective of business cycle forecasters or macro investors who are primarily focused on the quarter-to-quarter and year-to-year fluctuations in business activity.

My bottom line is that America’s myriad economic woes will likely not be solved by the shale revolution. This is counter to what I hear from a lot of folks on the right these days. Too many view fracking as a silver bullet solution that will crank up GDP and create kajillions of high-wage jobs. No more New Normal. America can become North Dakota! Actually, it can’t. The Goldman analysis is a needed cautionary note and reality check that while the shale revolution is a wonderful economic tailwind, it probably isn’t a jetstream. Policymakers should make reasonable assumption about economic impacts and not ignore all the other things — from education reform to deregulation — necessary to create a thriving middle class.

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A government that rapes and tortures citizens to find a fistful of drugs is not worthy of our allegiance, obedience or respect http://www.aei-ideas.org/2014/07/a-government-that-rapes-and-tortures-citizens-to-find-a-fistful-of-drugs-is-not-worthy-of-our-allegiance-obedience-or-respect/ http://www.aei-ideas.org/2014/07/a-government-that-rapes-and-tortures-citizens-to-find-a-fistful-of-drugs-is-not-worthy-of-our-allegiance-obedience-or-respect/#comments Wed, 30 Jul 2014 14:30:05 +0000 http://www.aei-ideas.org/?p=134510 read more >]]>

A new video above from Reason.tv (“The Drug War, the Fourth Amendment, and Anal Cavity Searches in New Mexico“) about two cases in New Mexico of the forced medical anal rape of two innocent victims (Timothy Young and David Eckert), both involving unsuccessful forced anal cavity searches for drugs arbitrarily forbidden plants, weeds, and intoxicants.

Here are some insightful comments about David Eckert’s case from Ken White which were featured last November on CD:

What’s terrifying is that a judge who has bought the government’s narrative may decide that the amount of drugs that can be hidden in a man’s rectum justifies detaining him, X-raying him, repeatedly digitally probing him, and despite a total lack of indication he is carrying drugs, sedating him and subjecting him to a colonoscopy.

What’s terrifying is that the Fourth Amendment to the United States Constitution is only as strong as judges allow it to be — and, by extension, only as strong as We the People insist that it must be. We the People are easily frightened into agreeing that the promise of safety outweighs the Fourth Amendment.

I’m not afraid because police officers violated David Eckert’s constitutional rights by raping and torturing him because they thought he might have a trivial amount of drugs. I’m afraid that they might not have violated his rights as defined by the courts, because we have allowed those rights to wither away out of fear and indifference.

The government will continue to act like that until we decide, collectively, that a government that would rape and torture a man to find a fistful of drugs is not worthy of our allegiance, obedience, or respect. The government will continue to act like that until we say “enough.”

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Who’d a-thunk it? Part of the reason that men earn more on average than women is that they work longer hours? http://www.aei-ideas.org/2014/07/whod-a-thunk-it-part-of-the-reason-that-men-earn-more-on-average-than-women-is-that-they-work-longer-hours/ http://www.aei-ideas.org/2014/07/whod-a-thunk-it-part-of-the-reason-that-men-earn-more-on-average-than-women-is-that-they-work-longer-hours/#comments Tue, 29 Jul 2014 22:41:40 +0000 http://www.aei-ideas.org/?p=134506 read more >]]> Here’s the abstract from the paper “Overwork and the Slow Convergence in the Gender Gap in Wages” that appears in the June 2014 issue of the American Sociological Review (by authors Youngjoo Cha, Indiana University; and Kim A. Weeden, Columbia University):

Despite rapid changes in women’s educational attainment and continuous labor force experience, convergence in the gender gap in wages slowed in the 1990s and stalled in the 2000s. Using CPS data from 1979 to 2009, we show that convergence in the gender gap in hourly pay over these three decades was attenuated by the increasing prevalence of “overwork” (defined as working 50 or more hours per week) and the rising hourly wage returns to overwork. Because a greater proportion of men engage in overwork, these changes raised men’s wages relative to women’s and exacerbated the gender wage gap by an estimated 10 percent of the total wage gap. This overwork effect was sufficiently large to offset the wage-equalizing effects of the narrowing gender gap in educational attainment and other forms of human capital. The overwork effect on trends in the gender gap in wages was most pronounced in professional and managerial occupations, where long work hours are especially common and the norm of overwork is deeply embedded in organizational practices and occupational cultures. These results illustrate how new ways of organizing work can perpetuate old forms of gender inequality.

Related: See Bloomberg article “Do ‘Overworked’ High-Earning Men Widen the Gender-Pay Gap?” and Reason article “Study: Rise in ‘Overworked’ Men Helps Explain Gender Wage Gap” by Elizabeth Nolan Brown, who makes the following excellent point:

With this in mind, it makes no sense for the government to try and rectify the wage gap administratively because there is literally no way to account for all the contributing variables—such as this overwork one. How could anyone have predicted that hourly wages for “overworkers” would rise while general wages stagnated? How can bureaucrats possibly correct for cultural expectations? Focusing on the wage gap per se will go nowhere near as far toward closing it as focusing on the culture that creates it can.

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Banter #155: Christina Hoff Sommers http://www.aei-ideas.org/2014/07/banter-155-christina-hoff-sommers/ http://www.aei-ideas.org/2014/07/banter-155-christina-hoff-sommers/#comments Tue, 29 Jul 2014 18:50:41 +0000 http://www.aei-ideas.org/?p=134489 read more >]]> We’re joined this week by the Factual Feminist herself, AEI Resident Scholar Christina Hoff Sommers. We discuss her new YouTube series, The Factual Feminist, and how she decides what topics to tackle each week. We also spend some time discussing Title IX and University of Wisconsin’s Feminist Biology department. You can stream the podcast by heading over to our site, or check us out on iTunes. Enjoy!

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Ayn Rand vs. Paul Ryan http://www.aei-ideas.org/2014/07/ayn-rand-vs-paul-ryan/ http://www.aei-ideas.org/2014/07/ayn-rand-vs-paul-ryan/#comments Tue, 29 Jul 2014 18:17:32 +0000 http://www.aei-ideas.org/?p=134490 read more >]]> The Ayn Rand Institute is disappointed in Paul Ryan. Here the House Budget Chairman goes to all the trouble of rolling out an anti-poverty plan, and he somehow forgets to obliterate the safety net. What gives? Does Ryan remember nothing from the Ayn Rand reading of his youth? Someone delete the “Summa Theologica off his iPad, ASAP!

Here is ARI’s Don Watkins:

If you’re going to have a welfare state, it’s obviously better to have one that minimizes the incentive to stay on welfare, and from what I’ve seen, I suspect that a Ryan welfare state would be marginally less destructive than our current patchwork of so-called anti-poverty programs.

But of course that assumes we should have a welfare state. … The real question is not whether we should have a “safety net” or not. The question is whether we should have a coercive welfare state. What I find offensive about Ryan’s  … whole approach is that it doesn’t regard the rights and well-being of those forced to pay for the welfare state as worthy of much, if any, consideration. Instead, it starts by observing that some people are in need and jumps immediately to the question of what welfare state programs would most help them.

But that’s immoral. Just because there are people out there suffering and Ryan wants to help them doesn’t give him the right to concoct schemes that treat you and me and everyone who pays his own way as a means to Ryan’s supposedly noble ends. What about my goals and priorities? What about my right to pursue happiness? What about yours?

If you’re someone who finds that kind of reasoning — “Taxation is theft!” — appealing and persuasive, then of course you will dislike the Ryan’s anti-poverty plan and the safety net it wishes to reform. I really have no interest in engaging in that sort of dorm-room argument. What I do have an interest in is living in the real world, one where Americans, as a society, have long committed to making sure everyone is fed, sheltered, educated — even if that requires government action and taxpayer dough. The useful questions are ones of determining a limiting principle and sustainable funding. As Yuval Levin has described one conservative approach:

The federal government’s role in the provision of social services should be minimal, and largely limited to helping the states and the institutions of civil society better carry out their missions. It would still have some role as an investor (in infrastructure and education, above all), but this too should be strictly targeted to essential public needs that the private sector would not meet, and block-granted to the states whenever possible. Government at all levels should also look to contract its remaining functions out to the private sector where it can, both to improve efficiency and to avoid harmful conflicts between the government’s obligations to the people it serves and its obligations to the people it employs — conflicts that have been rampant in our time.

And as Arthur Brooks, AEI’s president, puts it:

One of the things, in my view, that we get wrong in the free enterprise movement is this war against the social safety net, which is just insane. The government social safety net for the truly indigent is one of the greatest achievements of our society. And we somehow want to zero out food stamps or something, it’s nuts to want to be doing something like that. We have to declare peace on the safety net.

Perhaps someday ARI and like-minded libertarians will be able to persuade their fellow citizens to think and vote otherwise. But I don’t see that Overton Window opening any decade or generation soon.

Anyway, it is a stubborn fact that the safety net has cut US poverty, material deprivation, in half since the 1960s. Unfortunately in too many cases, poverty is a trap. As the Manhattan Institute’s Scott Winship notes in “Room to Grow,”  ” … upward mobility among young adults who grew up poor is no higher today than it was in the mid-twentieth century.”  That problem is what the Ryan reforms — from welfare to education to prison — mean to address.

Follow James Pethokoukis on Twitter at @JimPethokoukisand AEIdeas at @AEIdeas.

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Are Democrats really much better economic presidents than Republicans? http://www.aei-ideas.org/2014/07/are-democrats-really-much-better-economic-presidents-than-republicans/ http://www.aei-ideas.org/2014/07/are-democrats-really-much-better-economic-presidents-than-republicans/#comments Tue, 29 Jul 2014 16:43:40 +0000 http://www.aei-ideas.org/?p=134476 read more >]]> Democrats rule! For the partisan left, the first sentence of “Presidents and the U.S. Economy: An Econometric Exploration” is probably plenty: “The U.S. economy has grown faster—and scored higher on many other macroeconomic metrics—when the President of the United States is a Democrat rather than a Republican.”

Case closed. Vote Democrat, at least for the big job in the Oval Office.

But the story actually isn’t so straightforward. In their working paper, Princeton economists Alan Blinder and Mark Watson note postwar real GDP growth is 1.8% percentage points higher under Democratic presidents than Republican. Now that’s a pretty big edge over a span when RGDP has averaged 3.3%. Clearly the Dems are doing something right policywise that explains the gap in macroeconomic performance, right?

Not according to Blinder and Watson, who argue half the growth gap is an economic “mystery” while the other half is due to “‘good luck’ with perhaps a touch of ‘good policy.” For instance, Republicans presidencies have been hit harder by nasty oil shocks (particularly Richard Nixon and George W. Bush,) while Democrats have benefited from timely productivity booms (John Kennedy, Bill Clinton). The researchers also find Dems fortunate to enter office with the global economy humming such as in the 1960s (Europe’s postware recovery kicking into gear) and 1990s. Just take a look at the massive good luck of Clinton presidency, as described today by the FT’s Gideon Rachman:

The Soviet Union had collapsed in 1991, just a year before Mr Clinton was first elected. Throughout his eight years as president, there was no serious competitor to the US for the role of global superpower. … The name Osama bin Laden had yet to impinge on the public consciousness. …Mr Clinton’s economic inheritance was similarly golden. The frightening deficits of the Reagan years disappeared in the 1990s, partly because of sensible fiscal decisions taken by President George HW Bush. By the time Mr Clinton took office, the US economy was already recovering strongly. He was the lucky beneficiary of a surge in American productivity, following the transformation of the workplace by computers. With unemployment at just 4 per cent and inflation under control, there was exuberant talk of a “New Economy”. Given this fortunate combination of circumstances, is it any wonder that the president had time for dalliances in the Oval Office?

Indeed, as I argued the other day, given the macro head of steam that the free-market policies of the Reagan era, plus corporate restructuring, gave the 1990s — and add in the fall of the Soviet Union and the Internet boom and declining energy prices — it may have been impossible to mess up that decade. Indeed, there are so many one-off factors that it’s hard to make generalizations. Truman benefited from the immediate postwar boom. Bush II was harmed by the Fed’s 2008 failure, as well as the oil price shock.

One more thing: if you’re going to categorize and judge presidencies, wouldn’t it be better to do so according to policy rather than party? Might not Clinton (free trade, capital-gains tax cuts, balanced budgets) and JFK (a big tax cutter) arguably be considered more presidents of the economic right than, say, Richard Nixon with his wage and price controls, massive regulatory initiatives, and push for a super-easy monetary policy? And don’t forget about big tax hikes by George H.W. Bush.

In a 2008 WSJ piece, investment strategist Donald Luskin noted that since 1948, the total return of the S&P 500 had averaged 16% with a Democrat in the White House and 11% with a Republican. But swap Clinton and JFK for Nixon and Bush I  and you find that the market is up an average of 15% under the GOP and 11% under the Dems.

Anyway, I think it’s fair to say that it matters what hand a president is dealt and how that hand is played.

Follow James Pethokoukis on Twitter at @JimPethokoukisand AEIdeas at @AEIdeas.

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Tuesday morning linkage http://www.aei-ideas.org/2014/07/tuesday-morning-linkage/ http://www.aei-ideas.org/2014/07/tuesday-morning-linkage/#comments Tue, 29 Jul 2014 15:13:38 +0000 http://www.aei-ideas.org/?p=134471 read more >]]> imports1. Chart of the Day – Another Energy Milestone. Through June of this year, net petroleum imports fell below 30% for the first time since 1985, reaching a 29-year low (data here). Note the amazing drop in net oil imports from 60.3% in 2005 to 29.8% this year – completely reversing the 20-year upward trend in just nine years – thanks to the amazing US shale oil revolution.

2. Who-d a-Thunk It? Another day, another cop shoots another dog? And in a related story in Pennsylvania, a cop shot and paralyzed a man over unpaid parking tickets.

3. Great Moments in Government Overreach. Last week, the Michigan Department of Agriculture staged a raid on a small organic farm and food co-op for the “crime” of providing raw milk, butter, cream, and eggs to people who bought shares in the organic dairy. The specific charge? “Selling food without a license,” even though it’s a co-op arrangement where members buy shares. Solution? Force the small farm to dump out 248 gallons of milk, break 100 dozen eggs and destroy an undisclosed amount of fresh cream, butter and cheese, with an estimated value of $5,000.

4. Great Moments in Government Overreach/America Here’s Your Drug War:

From Reason.tv: In October of 2012, Timothy Young was pulled over for failing to use his turn signal in Lordsburg, New Mexico. Following a futile, two-hour search for drugs in his truck, a police officer handcuffed Young and drove him to the Gila Regional Medical Center in Silver City, New Mexico. There, Young was X-rayed and digitally probed without his consent. No contraband was ever found. A few weeks later, Young received a bill from the hospital for “services rendered.” Fortunately, Young sued all parties involved and he recently received a judgment of $925,000 from Hidalgo County.

Update: As Morganovich points out in the first comment, this case is similar to the experience of David Eckert, who was subjected a medical anal rape in a futile search for drugs at the same Gila Regional Medical Center in New Mexico (see CD posts here and here). Like Mr. Young, Mr. Eckert was also billed $6,000 by Gila for “services rendered,” and he was also successful at suing and winning a $1.6 million settlement.

5. Some Drug War Sanity. From the NY Times editorial board – “Repeal Prohibition Again“:

It took 13 years for the United States to come to its senses and end Prohibition, 13 years in which people kept drinking, otherwise law-abiding citizens became criminals and crime syndicates arose and flourished. It has been more than 40 years since Congress passed the current ban on marijuana weeds, inflicting great harm on society just to prohibit a substance far less dangerous than alcohol. The federal government should repeal the ban on marijuana weeds.

6. More Drug War Sanity. Op-ed from yesterday’s NY Times “The Injustice of Marijuana Arrests” by Jesse Wegman:

America’s four-decade war on drugs is responsible for many casualties, but the criminalization of marijuana has been perhaps the most destructive part of that war. The toll can be measured in dollars — billions of which are thrown away each year in the aggressive enforcement of pointless laws. It can be measured in years — whether wasted behind bars or stolen from a child who grows up fatherless. And it can be measured in lives — those damaged if not destroyed by the shockingly harsh consequences that can follow even the most minor offenses.

7. Uber’s Great Expansion. Uber now operates in 90 cities in North America, including four new cities in Michigan: Flint, Grand Rapids, Lansing and Kalamazoo.  (HT: Bob Wright)

8. The Economics of Rotisserie Chicken.  Why are fully cooked rotisserie chickens at grocery stores cheaper (e.g. $7) than buying a raw chicken and roasting it yourself (e.g. $10)? Megan McArdle and Cat Vasko explain.

Technology is Awesome

9. German car parking robot allows for greater use of parking space by up to 60%.

10. 24 Machines That Prove Automation is Beautiful

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Social Security deficit rises again. Ho, hum… http://www.aei-ideas.org/2014/07/social-security-deficit-rises-again-ho-hum/ http://www.aei-ideas.org/2014/07/social-security-deficit-rises-again-ho-hum/#comments Tue, 29 Jul 2014 14:16:00 +0000 http://www.aei-ideas.org/?p=134467 read more >]]> Last week I reported on the CBO’s new projections for Social Security, which show a growing long-term deficit. Today it’s the Social Security Trustees turn, when they released their annual report on the program’s finances. And like the CBO, the Trustees see a worsening picture for Social Security: last year they projected a 75-year deficit of 2.72% of payroll, while this year it’s up to 2.88%. That’s a mere $10.6 trillion in present value for anyone counting, up $1 trillion from a year ago.

Biggs 729While the CBO used to be progressives’ agency of choice with regard to Social Security – check out their projection for 2008 and you’ll know why – I bravely predict that they’ll now reference only the Social Security Trustees figures. It’s not as if the Trustees aren’t projecting a growing shortfall, but under their numbers the shortfall isn’t growing quite as fast. And for people who apparently are trying hard not to do anything to fix Social Security, that’s about the best place to hang your hat.

Follow AEIdeas on Twitter at @AEIdeas.

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Study: Piketty tax plan would boost equality by making rich less rich. But poor would be poorer, too http://www.aei-ideas.org/2014/07/study-piketty-tax-plan/ http://www.aei-ideas.org/2014/07/study-piketty-tax-plan/#comments Mon, 28 Jul 2014 20:31:15 +0000 http://www.aei-ideas.org/?p=134460 read more >]]> Margaret Thatcher once accused a Liberal member of parliament of wishing to have “the poor poorer provided the rich were less rich.” The Iron Lady would probably say much the same to economist and inequality researcher Thomas Piketty after reading the following analysis from the Tax Foundation. The report looks  at the results of Piketty’s suggestion to implement “top income tax rates of 80 percent on income above $5 or $10 million” and “50 or 60 percent on income above about $200,000.” Below are some of the key findings:

*If ordinary income were taxed at the top rates of 80 and 55%, our model estimates that after the economy adjusts, total output (GDP) would be 3.5% lower, wage rates would drop 1.6%, the capital stock would be 7.4% less, and there would be 2.1 million fewer jobs.

*If capital gains and dividends were taxed at the new tax rates along with ordinary income, the economic damage would be much worse. GDP would plunge 18.1% (a loss of $3 trillion dollars annually in terms of today’s GDP), the capital stock would be 42.3% smaller than otherwise, wages would be 14.6% lower, 4.9 million jobs would be lost, and despite the higher tax rates, government revenue would actually fall.

*Although Piketty’s proposed income tax increase may appear to target only upper-income taxpayers, all income groups would suffer from the economic fallout.

*Our model estimates that the after-tax incomes of the poor and middle class would drop about 3% if the higher rates do not apply to capital gains and dividends and about 17% if they do.

The report concludes: “The top individual income tax brackets that Piketty recommends—50 to 60 percent and 80 percent—would have the direct effect of reducing after-tax income inequality in the United States but the indirect effect of making people at all income levels significantly poorer.”

Follow James Pethokoukis on Twitter at @JimPethokoukisand AEIdeas at @AEIdeas.

 

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What we learned about Obamacare July 23-28, 2014 http://www.aei-ideas.org/2014/07/what-we-learned-about-obamacare-july-23-28-2014/ http://www.aei-ideas.org/2014/07/what-we-learned-about-obamacare-july-23-28-2014/#comments Mon, 28 Jul 2014 18:25:04 +0000 http://www.aei-ideas.org/?p=134449 read more >]]> 1.) AEI’s James Capretta writes on “Halbig and its aftermath”:

The court ruled that only state-based exchanges can pay the ACA’s premium credits to insurers on behalf of plan enrollees, meaning that the back-up federal exchange, now used in 36 states, can offer insurance choices to the residents of those states but cannot offer those citizens premium credits to subsidize their selections. If this interpretation were to stand (presumably by being confirmed by the Supreme Court), it would substantially disrupt Obamacare’s on-going implementation. Without the premium credits, many of those who selected insurance through the federal fallback exchange would drop their coverage. Enrollment would fall, adverse selection would ensue, and the individual insurance market would probably collapse in those states….

Some opponents of the law might believe that a favorable court decision on the premium subsidies will be so debilitating that the law will finally collapse altogether. But that seems unlikely, given that the Medicaid expansion will remain in place in half the country, and there will be millions of tax-credit recipients in California and elsewhere still enrolled in subsidized coverage. ACA defenders will almost certainly respond to a new legal setback in the same way they have responded to every other problem the law has faced over the past four years, which is to do whatever is necessary to ensure it survives.

Obamacare is thus likely to limp along on in some fashion, but with serious problems. For instance, states without their own exchanges could probably create a legal workaround by designating the federal exchange as the contractor for a state-run exchange. In states favorably disposed to the ACA, this might allow the payout of premium credits without the headache of building a full-blown state exchange.

2.) Scott Gottlieb looks at the impact of the Circuit Courts’ Obamacare rulings:

3.) “Ease of fake O-Care sign-ups worries GOP,” according to Ferdous Al-Faruque at The Hill:

The House Ways and Means Oversight subcommittee held a hearing Wednesday about an undercover investigation by the GAO that found it was able to sign up 11 out of 12 fake applicants using false citizenship/immigration and income documents…. However, Seto Bagdoyan, acting director of the GAO’s investigative services, said the investigation is too small to draw conclusions that people might be using fake documents to sign up for health insurance and receive federal subsidies…. The Centers for Medicare and Medicaid Services argues it has back-end controls in place to verify information on insurance applications. However, several reports have found problems with the agency’s verification system, and the agency has admitted it is unable to verify many of the applications.

4.) For more on the courts’ recent ACA decisions, read “The stakes beyond the Halbig lawsuit,” “Why Obamacare ruling means more than it seems,” and “Supreme Court likely to settle Obamacare dispute.” Here’s a snippet of the last one:

The Halbig ruling “was a tough decision by some principled judges to make because all the pressures” are to not undermine a law that’s in effect, and to just say, “Who are we as judges to stand in the way of a president who was re-elected?’ ” said Thomas Miller, a senior fellow at the American Enterprise Institute who offered legal advice for the Oklahoma lawsuit. The Halbig judges listened to arguments, looked at the way the law was written, and decided “we’re not supposed to be another legislature which fixes the problems that other people created,” Miller said. “That’s back to Congress and the larger government to get this right in a way which works,” and upholds broader principles and traditions of government regarding the rule of law by a majority through elected representation, he said.

Asked how two circuit courts could reach such differing opinions, Miller, former senior health economist on the congressional Joint Economic Committee, said a judge’s background may shape judicial philosophies…. Miller believes federal attorneys will file motions for a rehearing, and seek a review of the panel’s decision by all 11 members of the D.C. Court of Appeals. But such a review may be unlikely; between 2000 and 2010, only two of every 1,000 cases were reviewed.

5.) AEI’s Scott Gottlieb discusses the maximum cap for the uninsured:

6.) “Federal officials have capped the amount of money scofflaws will be forced to pay if they don’t buy insurance this year at $2,448 per person and $12,240 for a family of five,” reports The Associated Press:

The amount is equal to the national average annual premium for a bronze level health plan. But only those with an income above about a quarter of a million dollars would benefit from the cap. Those making less would still have to pay as much as 1 percent of their annual income. The penalty for the first year starts at $95 per adult or $47.50 per child under 18. The penalty for not buying insurance increases to 2 percent of income or $325, whichever is higher, for 2015. The fines are due when people file their 2014 taxes. The figures, released late Thursday, are important because the White House has only provided theoretical caps in the past…. The uninsured will owe 1/12th of the annual payment for each month they or their dependents don’t have either coverage or an exemption, according to the IRS. Federal researchers predict that about 4 million people, including dependents, could be hit with fines by 2016.

7.) “How risky is it to be uninsured?” asks Chris Conover:

Progressives claim that Obamacare will save lives because being uninsured purportedly increases mortality risk1 from 25 percent to 40 percent. But such statistics are based on cherry-picked evidence. Two recent studies show that the impact of being uninsured on mortality risk is not statistically significant, and there is a great deal of uncertainty in estimates tying being uninsured to higher mortality risk…. The methodological limitations of these four observational studies have been detailed elsewhere. One systematic review of such studies concluded: “The Institute of Medicine’s estimate that lack of insurance leads to 18,000 excess deaths each year is almost certainly incorrect. It is not possible to draw firm causal inferences from the results of observational analyses, but there is little evidence to suggest that extending insurance coverage to all adults would have a large effect on the number of deaths in the United States.” Evidence that being uninsured greatly increases mortality risk is spotty, and certainly not proven beyond a reasonable doubt….

Such a relative risk implies that at any given age, the annual chance of dying is 22 percent higher than for a statistical twin with private coverage. But this is quite similar to some common everyday risks faced by tens of millions of Americans.

Being uninsured is comparable to many everyday risks: Chris Conover

For each uninsured person gaining coverage under Obamacare, we could achieve roughly equivalent or greater mortality reductions by getting an obese person down to normal weight, or getting one smoker to quit.

8.) “O-Care architect provides fodder for court challenges,” says the Hill.

A major architect of ObamaCare is coming under fire for a video where he seems to support the notion the law was worded to push states to create their own health exchanges. In a 2012 Youtube video that gained attention Friday, Jonathan Gruber, a Massachusetts Institute of Technology professor, is heard telling an audience the Federal government was refraining from helping states that have not built their own health exchanges to politically pressure them to do so…. While the cases continue to be fought in court, Gruber’s comments are fodder for opponents who argue the law was intentionally written so states that don’t have their own health exchanges are ineligible for subsidies. Speaking to the New Republic Gruber said he has no recollection of making the comments and called it a mistake.

9.) USA Today adds one more point to The Hill:

But a second speech, this time in the form of audio, surfaced… in which [Jonathan Gruber] makes the same claims before the Jewish Community Center of San Francisco at around the same time. In it, Gruber actively acknowledges that should if states revolt en masse, they’d bring down the law. But, he said, that he had enough faith in democracy to believe that even the states that didn’t like Obamacare would eventually succumb to the ‘ultimate threat’ that ‘if your governor doesn’t set up an exchange, you are losing hundreds of millions of dollars in tax credits to be delivered to your citizens.’ Gruber would like everyone to ignore, not just the plain text of a law that he had a major hand in crafting, but also the plain meaning of his own words explaining why the law was written the way it was – not once, but at least twice.

10.) KHN rounds up the latest on how “Plan renewals, narrow networks draw scrutiny,” saying “Some industry officials say the automatic renewal of some health law insurance plans could have a negative impact on the financial aid that consumers receive. Meanwhile, narrow networks continue to be the subject of backlash.” Articles include “Plan to simplify 2015 health renewals may backfire,” and “Limitations of new health plans rankle some enrollees.” Also check out “Pitfalls emerge in health insurance renewals.”

11.) “States want more time on ACA funds,” according to Politico:

States running their own Obamacare exchanges were supposed to wean themselves off federal funding by the end of this year, but some of them want that Obama administration spigot open a bit longer. The states aren’t asking for the feds to dole out more money on top of the $4.6 billion already dedicated to exchange planning and construction. But they do want to be able to spend their federal exchange grants into 2015 as they grapple with core components of the insurance portals that are balky, unfinished or in disrepair.

The viability of state exchanges became more urgent this week after conflicting court rulings created uncertainty about whether Affordable Care Act subsidies would be available through the federal exchange — or whether the state market would be the only legal route. A POLITICO survey of the 15 state-run exchanges (including Washington, D.C.) found that 11 are thinking about using federal dollars in 2015 — and four of those states have already applied….

States say it’s partly the feds’ fault they need extra time; federal officials caused delays and changed requirements. For instance, states running their own systems still have to get their small business or SHOP exchanges working, but many of the rules and requirements were only released in the last few months. And most state exchanges are still overcoming gaps and glitches in their enrollment systems, which are fueling concerns about how ready they’ll be for another flood of customers signing up in November. Small states, in particular, could be at risk because they simply don’t have as many customers to help pay the tech bills.

12.) “Obamacare: ‘Health care sharing ministries’ increase membership in wake of new law,” writes Tracy Seipal:

Long before Christian groups and Obamacare opponents cheered last month’s Supreme Court ruling that allows many private businesses to stop offering certain types of birth control they find immoral, the 4-year-old law gave its blessing to Americans to opt out of the insurance mandate if they object on religious grounds. So many instead are enrolling in “health care sharing ministries” that spread medical care costs among people of similar beliefs. Participants make monthly contributions to help cover each other’s major health care costs, but forgo coverage for most routine care. Even as many Christian conservatives fight to repeal Obamacare, the obscure provision has quietly been a boon for the ministries.

13.) Watch Thomas Miller talk Halbig v. Burwell on Fox News’ “Special Report”:

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