Unexpected Benefits Coming From The Trump Tax Cuts

The Washington Examiner posted an article today about a recent policy change from the Federal Energy Regulatory Commission.

The article reports:

The Federal Energy Regulatory Commission (FERC) issued a proposed rulemaking that would require all publicly-owned utility companies that own transmission lines “to revise” their rates to account for the benefits they received under the tax reform package.

The tax reform bill passed last December cut the corporate tax rate from 35 percent to 21 percent beginning in 2018. A number of states’ energy commissions have already directed the utilities they regulate at the retail level to account for the changes and grant credits to ratepayers.

…FERC also issued a policy statement on Thursday that provided ratemaking guidance for all companies under FERC’s jurisdiction to account for the tax benefits they received. Those companies include public utilities, owners and operators of natural gas and oil pipelines.

FERC also acted on 46 show-cause investigations, directing certain public utilities whose transmission tariffs used a tax rate of 35 percent to reduce their tax rates to 21 percent, or show why they did not need to do so.

As much as I generally don’t like federal regulations, if that is what it takes to pass the tax savings of publicly-owned utility companies on to their customers, then I support the regulations.

 

When Common Sense Meets Health Insurance

On August 14th, Investor’s Business Daily posted an article about the impact that the removing of regulations by the Trump administration has had.

The article reports:

As the Competitive Enterprise Institute noted earlier this year in its “Ten Thousand Commandments” annual report, federal regulations cost a lot more than their stated dollar amount. As of last year, regulation and federal intervention in the economy cost Americans an estimated $1.9 trillion. And that’s one of the lowball estimates out there.

How much is that? It’s the equivalent of a $15,000-per-household tax levied each year in perpetuity. That’s more than the average family spends on food, clothing or transportation. Only housing takes more of the family budget.

If regulation were a nation, and let’s be thankful it’s not, it would be the eighth-largest economy in the world. Regulation even exceeds the IRS’ total take in corporate and individual income tax. That’s how big it is.

Last year, Trump began cutting rules in earnest as soon as he entered office. He slashed the total number of pages in the Federal Register, the government’s regulatory bible, from 95,894 in 2016 to 61,308 pages in 2017. That’s a decline of 36% and the lowest since 1993. This year it will go even lower.

On Friday, Investor’s Business Daily posted an editorial about how removing some regulations has impacted ObamaCare.

The editorial reports:

The leftist Center for American Progress claimed that premiums for ObamaCare’s “benchmark plan” would rocket up 25% next year, due almost entirely to the individual mandate repeal and Trump’s decision to expand access to far less expensive “short term” insurance plans that don’t have to comply with ObamaCare regulations and mandates.

Rates in Pennsylvania, it said, would jump 27%. They were going to climb 28% in Wisconsin. And 29% in Arizona and Nebraska.

All those dire predictions scored widespread news coverage.

But then insurance companies started announcing modest rate requests for 2019, and suddenly ObamaCare was no longer a story.

ObamaCare premiums will rise a mere 0.7% in Pennsylvania, according to the state’s insurance commissioner. They will climb by just 1% in Nebraska. In Wisconsin, they’re expected to drop by 3.5%, and drop by more than 5% in Arizona.

The overall increase this year will be just over 5%, on average, according to ACASignups.net, which is aggressively supportive of ObamaCare.

If that holds true, it will be the lowest increase in premiums since ObamaCare started.

According to data from the Health and Human Services department, premiums in the individual market jumped 25% in 2014, ObamaCare’s first year. They climbed 14% in 2015 and 8% in 2016. In 2017, premiums shot up by 23%. And then another 37% in 2018.

Keep in mind that except for the 2018 rate increase, all those prior hikes were announced when Barack Obama was in the White House and everyone expected Hillary Clinton to become the next president.

Government regulations affect all of us. Most of them simply need to go away.

Good News For American Families

The Washington Examiner posted an article today about changes made to the current federal regulations regarding healthcare insurance.

The article reports:

Last Wednesday, Health and Human Services Secretary Alex Azar announced a finalized rule granting consumers greater access to affordable health insurance policies. Under the new rule, people will be allowed to purchase short-term, limited-duration health insurance plans for periods as long as 12 months. Currently, the maximum period allowed is only three months. Plans can be renewed after the 12-month period, but they cannot extend beyond 36 months.

Short-term health insurance plans are significantly cheaper than most Obamacare plans because they don’t include many of the costly essential health benefits mandated under federal law and because they are sold for a limited duration. These plans do not provide comprehensive coverage, but they are an excellent option for people who are relatively healthy but can’t afford to pay for an outrageously priced Obamacare plan.

This means that a family whose insured member is changing jobs or between jobs can get coverage at a reasonable price. The plans cannot extend for more than three years, but hopefully Congress will find its backbone and totally repeal ObamaCare by then.

The article further states that although premiums under ObamaCare have risen drastically, that is not the entire problem:

Premiums are not the most important cost to consider, however, because some people who purchase health plans through an Obamacare exchange receive large subsidies to help offset their plan’s high premiums. A much more important factor is the high cost of deductibles and other out-of-pocket costs. The average family enrolled in a Silver Plan will pay a maximum of $13,725 for out-of-pocket expenses, with Silver Plan deductibles increasing by 13 percent in just the past year alone.

Working families can’t afford to pay more than $13,000 to cover out-of-pocket expenses. In fact, health insurance this expensive is virtually useless.

The high costs associated with an Obamacare plan are a big reason why the Centers for Medicare and Medicaid Services predicts about 600,000 Americans will sign up for a new short-term health insurance plan next year. By 2022, CMS expects 1.6 million to be enrolled in a short-term plan.

The article concludes:

The healthcare system is failing, and has been for decades. Despite the promises made by former President Barack Obama and the congressional Democrats who passed Obamacare into law, the legislation has only made things worse. Congress needs to pass a bill to repeal and replace Obamacare. But since that has yet to occur, the Trump administration is doing everything it can to help young people and working families gain affordable coverage. It’s great to finally have a presidential administration that’s truly committed to reducing health insurance costs rather than appeasing far-left activists in the Democratic Party.

True.

Ending Government Over Regulation

On Wednesday The Washington Examiner posted an article about the Freedom Caucus’ list of regulations that can be repealed quickly in the Trump Administration.

The article reports:

The incoming chair of the House Freedom Caucus has given President-elect Trump a list of 232 rules and regulations he can repeal on his first day in office.

Rep. Mark Meadows, R-N.C., said on CNN the group of conservative lawmakers came up with a 21-page report to give to Trump that shows their least favorite rules and regulations handed down by the Obama administration. He said it’s an important way to restore balance between the executive and legislative branches.

“The list continues to grow, but we felt like it was important to put together a real working document where they can look at that and make executive branch decisions,” Meadows said.

Meadows said all the regulations listed in the report do not have a possible legislative fix and can’t be repealed under the Congressional Review Act. Republicans in Congress will be working to identify which rules and regulations they need to act on legislatively to repeal.

Because President Obama passed so many regulations through Executive Orders, these regulations can be repealed through Executive Order.

The National Association of Manufacturer’s website includes the following chart showing the cost of federal regulations:

Keep in mind that consumers pay those costs–the company passes them on in the form of higher prices. Repealing unnecessary federal regulations puts more money in the pockets of all Americans.,

How Do Federal Regulations Affect You?

On Wednesday, The Daily Signal posted an article entitled, “The Federal Regulations That Affect Your Thanksgiving Foods.” Federal regulations seem like a remote concept (unless you are trying to run a small business and adhere to them), so I thought this article needed to be shared.

The article reports:

Let us also give thanks that the Obama administration will soon cease, albeit leaving behind more than 21,000 regulations that President Barack Obama’s regulators issued, and which increased regulatory costs by more than $100 billion annually.

The burden of this vast administrative state is crushing America’s entrepreneurial spirit, productivity, and economic growth.

Independent estimates find that total regulatory costs are exceeding $2 trillion annually—more than is collected in income taxes each year.

So what are some of the regulations that impact Thanksgiving?

Turkey. Title 9, Part 381.76, of the Code of Federal Regulations directs turkey inspectors on the proper method of examining a frozen bird, to wit: “If a carcass is frozen, it shall be thoroughly thawed before being opened for examination by the inspector. Each carcass, or all parts comprising such carcass, shall be examined by the inspector, except for parts that are not needed for inspection.”

Cranberries. Title 7, Part 929, establishes a “marketing committee” overseen by the U.S. Department of Agriculture to set quotas on the volume of cranberries shipped to handlers from growers in Massachusetts, Rhode Island, Connecticut, New Jersey, Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long Island, New York. The grower “allotments” help to ensure that the price of cranberries remains artificially high.

Bread/Rolls. Title 21, Part 136, requires anything labeled as “bread” in a bakery to weigh one-half pound or more after cooling. To be legally called a “roll,” each unit must weigh less than one-half pound after cooling.

Potatoes. Title 7, Part 51.1546, dictates the proportion of allowable defects among specific grades of spuds. Potatoes graded as “U.S. No. 1” may not exceed the following tolerances at the point of shipping: 5 percent for external defects, 5 percent for internal defects, and not more than a total of 1 percent for potatoes that are frozen or affected by soft rot or wet breakdown. An entirely different set of tolerances apply to U.S. No. 1 potatoes while en route or upon reaching the destination, while similar standards are also set for “commercial” grade potatoes, “U.S. No. 2” potatoes, and “off-size” potatoes.

The list goes on to include green beans, cornmeal (used in stuffing) and pecans. How did we ever exist when we simply bought produce from local farmers that they grew in the ground and sold? Incidentally, I am on my way to the Farmers’ Market this morning!

We can be thankful that this insanity will be coming to an end.