Saturday, November 26, 2016

The Heritage Insider: How to repeal ObamaCare, overtime rule halted, Thanksgiving has a really interesting history, Alberta v. Texas

November 26, 2016



How to repeal ObamaCare. The Department of Labor’s Overtime rule has been suspended. However well intended the rule, it would be really good news for workers if the law is struck down. Thanksgiving has a really interesting history. Both Texas and Alberta enjoyed the energy boom, but only one of those jurisdicitons managed its finances well.


Repealing and replacing ObamaCare will require Congress to give attention to timing and sequencing of the legislative steps. Nina Owcharenko and Edmund Haislmaier write: “For 2017, insurance plans are already set, and the 2017 annual enrollment period will still be underway as the new Congress and Administration take office. At the same time, insurers will be preparing their 2018 plan offerings, which they will need to finalize by May 2017. With respect to the legislative timing, the sequencing is also crucial. Some budget experts have suggested that Congress could take a two-budgets/two-reconciliations approach to enacting repeal-and-replace legislation. The first step would be for Congress to pass a budget for fiscal year (FY) 2017, followed by an FY 2017 reconciliation package that repeals the major budgetary components of Obamacare. The second step would be for Congress to pass a budget for FY 2018, again followed by an FY 2018 reconciliation package that enacts a set of replace components. To ensure a smooth transition between repeal and replacement, Congress (as it did in a previous version of reconciliation) could set the effective dates of provisions so that key elements of current law (such as subsidies) do not expire before their replacement components are in place.” [The Heritage Foundation]

The Department of Labor’s ham-handed attempt to raise wages through regulation has been halted for now. On Tuesday a federal judge for the Eastern District of Texas issued an injunction halting the implementation of the Overtime Rule, which would have taken effect on December 1. The rule would have reclassified about 4 million workers as eligible for overtime pay. In his order, Judge Amos Mazzant, said state plaintiffs would likely succeed on the merits because the rule “ignores completely Congress’s intent by raising the minimum salary threshold such that it supplants the duties test […] [.] [I]f Congress intended the salary requirement to supplant the duties test, then Congress, and not the Department, should make that change.” As Danielle Zaychik has written, employers have lots of ways of offsetting the cost of higher overtime pay, and those moves would be detrimental to the workers the law aims to help. These options include shifting workers from salaries to hourly wages, reducing their hours, and reducing their benefits. [National Center for Policy Analysis]

If the courts do not strike down the overtime rule, it is likely to be particularly damaging to the research programs of institutions of higher education. Ben Gitis and Chad Miller write: “In its fact sheet and guidance on the overtime rule’s impact on higher education the DOL specifically discussed the rule’s impact on postdoctoral researchers. These are generally entry-level academic employees who have earned their Ph.D.’s and are gaining additional training and mentorship in their areas of research. Often they are engaged in research, professional activity, and university public service, but do not have teaching responsibilities. These scholars are crucial to nearly all research universities in the United States. IHEs often base the pay for these employees off the National Institutes of Health (NIH) experience salary scale which has a minimum annual salary of $42,840—$4,636 less than established in DOL’s new rule. Public comments from the University of California, in response to the rule, describe the concerns many research institutions shared. ‘The nature of their research and research training cannot be easily quantified within a typical 40-hour work week. Not only would monitoring their hours to pay overtime be extremely difficult,’ but the nearly five thousand dollars per newly-nonexempted worker will ‘place enormous strain on the University’s budget, likely forcing layoffs and causing delays and disruptions in ongoing research.’” [American Action Forum]

Did you know the Thanksgiving holiday preceded the Pilgrims? Melanie Kirkpatrick talks about her new history, Thanksgiving: The Holiday at the Heart of the American Experience. [The Heritage Foundation]

Texas v. Alberta. Texas and Alberta both enjoyed a boom when energy prices were high, but the two jurisdictions now face a different economic outlooks because of differences in fiscal policy, write Ben Eisen, Steve Lafleur, and Joel Emes: “[T]here was a marked difference between Alberta and Texas in terms of how successfully their governments managed public finances during the 2004–2014 period. Program spending per person in Alberta increased by 49 percent during this timeframe, compared to 37.3 percent in Texas. Further, public sector employment growth was approximately twice as rapid in Alberta (2.6 percent) as in Texas (1.2 percent). The absence of spending discipline in Alberta led to a string of budget deficits, something which did not occur in Texas. As a result, Alberta saw significant erosion in its financial position during this period. In 2006/07, Alberta held net assets representing 12.4 percent of provincial GDP. By 2013/14, provincial net assets had declined to 2.9 percent of GDP. By contrast, Texas saw very little change in its financial asset position during this period. […] Alberta and Texas are now on very different fiscal trajectories, as Texas’ financial position is comparatively strong while Alberta faces a potentially costly and economically damaging run-up in debt.” [Fraser Institute]


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