DISCLAIMER: THE FOLLOWING "Cost of Freedom Recap" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Cost of Freedom Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.
Bulls & Bears | Cavuto on Business | Forbes on Fox | Cashin' In
Bulls & Bears
On Saturday December 26, Brenda Buttner was joined by Gary B. Smith, Tobin Smith, Pat Dorsey, Eric Bolling and Julian Epstein.
Will Dems' 'Married' Health Care Bill Cost Under $900 Billion or Over $5 Trillion?
Tobin Smith, NBT Media: There's just no way the compromised health care bill will really cost under $900 billion. I've actually read this bill. Look at the price controls they're trying to put in place, such as limits on administrative costs for running small business or individual health plans; currently, administrative costs for these policies are about 25 percent to 35 percent. Congress wants to cap those costs at 10 percent. If price controls are put in place, these health insurance companies are going out of business. When that happens, that's when Congress can deliver its real plan. Who's going to insure all the Americans who'll lose coverage from health insurance companies going out of business? The U.S. government and U.S. taxpayer. We could easily see the cost of this plan mushroom to $5 trillion.
Julian Epstein, Democratic strategist: Critics of this health care plan have to be living in another world. They've consistently said that the Congressional Budget Office is the Holy Grail when it comes to figuring out what the impact on the deficit will be. The CBO has said the Senate bill will reduce the deficit by over $100 billion - the largest such plan in a generation. The critics say, to get there, the government will have to make major Medicare cuts, service fee cuts, reduce hospital readmissions, etc. and Congress will never do that. But the government has cracked down on wasteful health-care related spending successfully before — namely when President Clinton was in office. So enforcement works.
Gary B. Smith, TheChartman.com: These numbers are totally skewed. Most of the projected 10-year costs don't even kick in until 2014; the back half of the 10-year time frame. The real question here is, what is it all going to cost after 10 years? How about 20 years or 50 years from now? That's the real problem, and the fact very few people are pointing to. Every other major government program where the costs balloons at the back end are basically broke, like Medicare and Social Security. These sorts of programs never come anywhere near their projected budgets.
Eric Bolling, Fox Business Network: There's still time for Congressional members to say, "what about me?" Nebraska, Massachusetts, etc. get huge benefits from this legislation. I wouldn't be surprised if more states didn't try to get their share. But down the road, the costs for this reform are going to far exceed projections. This bill isn't really addressing health care costs. They’re going to continue to go up. As they do, guess who's bearing the brunt of it? Government. Whatever the CBO numbers are, you have to assume costs will rise over the long term. And I don't think the right math has been done to gauge the costs of this legislation.
Pat Dorsey, Morningstar.com: Unfortunately, cost containment has really been an afterthought in this whole process. Containing costs has to be a part of the method in extending coverage. Congress really missed a gigantic opportunity with this reform. It had the political rule to truly reform this massive, complex, critical issue, and whiffed it. We pay too much and get too little in return for our health care. We really need to direct our focus to things like tort reform, fee for service, and core issues that cause us to inefficiently spend all this money for health-related services.
Health Care Battle Delays White House Jobs Plan; Great for Job Market?
Eric Bolling: This will be great for jobs. The more they're delayed, the more jobs are probably going to rebound. This is the healthier way to stimulate job creation. Temporary stimulus for companies to hire won't last once the money is taken away. The jobs being created without help from the government are the ones that'll stick. I hope the day never comes when the White House can actually get a jobs bill passed.
Julian Epstein: This jobs bill shouldn't be delayed. The arguments saying a jobs bill shouldn't be passed are the same sorts of arguments made for why the stimulus plan has been bad. They just aren't true. Before the stimulus, economic growth was at negative 6 percent, Now, we're seeing positive GDP growth. Unemployment is still high, but before the stimulus, we were losing 750,000 jobs a month. That's what President Bush left President Obama with. As a result of the steps the government has taken to help the economy, we're starting to see the beginning of a recovery. If the private sector isn't going to create jobs on hire on its own, then the government needs to help create a short-term solution. Too many Americans are unemployed or underemployed not to.
Tobin Smith: Look at the stimulus, it cost the government an average of $230,000 to create a job. That's government efficiency for you. But the real core issue here is the natural business cycle during economic expansions and recessions. The natural business cycle will create jobs as they're needed. And we cannot forget that the majority of stimulus money hasn't even been spent yet. The thing that really put the zip back in our economy was the Federal Reserve making massive purchases of commercial paper, making financial guarantees, etc.
Pat Dorsey: The jobs bill under discussion really isn’t necessary. The economy is just too large for such a bill to really move the needle. Look at how much we had to spend in the stimulus just for minimal job creation. Right now, job creation really needs to be fairly level. Obviously unemployment is high, and average workweek hours are down. But as the economy improves, employers are going to add hours and more workers.
Gary B. Smith: I actually don’t despise the jobs bill. If you look into it, there are tax breaks for small businesses and potentially on their capital gains taxes. The bill also looks toward modernizing public transportation, which hopefully would include the nation's highway system. The whole infrastructure of the country is broken down and in dire need of repair. My only complaint is the emphasis on green jobs, and I don't like the government picking industries to stimulate.
FAA Spends $5 Million on Atlanta Trip for 3,600 Workers; What?
Gary B. Smith: This whole expenditure is ridiculous. It's not like the FAA employees we're learning about new radar or something. They were learning about new contracts. You do not need to be face to face for this stuff. It's completely possible to have video conferencing for something like this. But this is just another great case of government waste proving government employees somehow thinking they're above the private sector.
Julian Epstein: This isn't like AIG where the government bailed a company out, and then employees went out on some luxury retreat. Government agencies frequently bring large portions of their staff together for conferences. This is typical, and it's also typical in the private sector. Should the government totally stop having conferences?
Tobin Smith: The FAA is just following the lead of government leadership. Just keep spending other people's money for whatever means the government sees fit, and somehow it's good for the country and the economy.