Three Political Predictions for 2012

First. For a number of reasons, just one of which is our coming revenue shortage tsunami, Congress will undertake a massive effort to totally revise/repeal the current internal revenue/income tax law. Which, by virtue of thousands of special interest rulings and amendments over the years, is in tatters – and therefore no longer serves as a reliable source of “income” for the federal government.

However, the primary reason for Congressional action will be their painful realization that they are no longer relevant to the revenue generating process. Stated simply, their powers have been taken away from them, albeit gradually and as a result of their own doing, by taxpayer favorable exemptions and rulings – literally, it’s been revenue “death by a thousand cuts”.

And, if there’s anything our Congress can’t stand – Republican or Democrat – it’s not being relevant!

To “fix” this, I believe they will do a massive review of our tax laws with a view to increasing revenue – this so they can: 1) spend more money [again, making them relevant] without, 2) borrowing so much of it [which subjects them to increasing amounts of criticism]. Net result? Our income taxes will increase and everybody knows it!

Second. “Obamacare” will not unravel as much as many have suggested, even assuming a Republican president and Congress in 2012.

Here’s why:

· Life and health insurance remains essentially an area of state regulation and control.

· Exceptions to this rule have occurred – generally – only when the “insurance industry” decides that they don’t want to cover a particular group of people because they represent higher cost categories, e.g., older people. Hence, we have Medicare, where most of us end up, at age 65, whether we have private health insurance or not.

· Some of the Obamacare provisions, like extending the age of coverage for “dependents” and eliminating/reducing the ability of private companies to refuse coverage for “pre-existing” conditions, have broadbased and bi-partisan support.

· The hard part of Obamacare is enforcement of rules and categories which are intended to keep costs down by requiring everybody to participate – i.e., pay premiums [or penalties for not paying premiums] – whether they want to or not. This will be the source of continuing debate, litigation and legislative action. Example? The recent disclosure that McDonalds, a huge low-wage employer, has been granted an “exemption” from Obamacare participation. These kinds of actions will cause a break down of the basic “universality” of the program.

· Health insurance is like most any other kind of insurance in that it obtains its best efficiencies and economies when more/most/all people participate, and works its “social justice” when it covers those who would otherwise be excluded because they are poor and/or “high risk”.

· However, in order to reach [or even approach] this “balance,”

Obamacare is going to be pulled politically in opposite directions: By [to name a few] young, healthy people who are employed but don’t want to pay health insurance premiums or penalties – even if it makes “actuarial sense” for them to do it. And various categories of employers [like McDonalds] who seek exemption from participating in the system, hence destroying the “large numbers” concepts needed to make universal insurance programs, such as Obamacare, “actuarially sound.”

· In sum, with Obamacare – as in a great many other ambitious undertakings – the “devil is in the details,” and it is the details which will determine whether the program ultimately succeeds or fails. Parts of the program make good sense from the standpoint of “social justice;” however, it may simply be impossible to obtain fair and equitable universal participation – for one reason or another – without a Constitutional Amendment addressing the state-federal relationships and taxing authorities for health insurance.

Third. Information available publically, or almost publically as with various new kinds of Internet supported “social media,” will necessitate a broad-based review of the authorities the government now has [or may need] to monitor such sources for reasons of public safety and/or national security.

In the past, such reviews have focused mainly on who could do these kind inquires and for what reasons. For example, as the result of the Watergate scandal, Congress held extensive hearings in the 70’s resulting in new regulatory and statutory schemes governing the US intelligence community, ostensibly limiting the access they had to information pertaining to “US persons.” Similar limitations have traditionally been in place for the law enforcement community, including requirements to obtain search warrants and other authorizations. These requirements are imposed pursuant to Constitutional limitations and expectations of privacy.

Today, however, thanks to the continuing “information revolution,” traditional definitions no longer seem adequate to address legitimate concerns on all sides, whether involving privacy, national security or law enforcement.

In short, distinctions based on “who’s doing it” may no longer fit in the current information and privacy matrix, nor realistically address security concerns. Nor, do the various categories of information, e.g., “law enforcement” and/or “intelligence” seem to be adequate to address today’s threats to either our security or our privacy.

What’s needed is a comprehensive review of all government information categories, authorities and oversight requirements, regardless of which bureaucratic equities [or Congressional Committee jurisdictions] are affected. Otherwise, the federal government will become even more irrelevant in the information revolution.

This article was originally published in The Cypress Times, Nov. 5, 2011.

Partner & Fellow Blogs