Rep. Tim Murphy Leads Charge Investigating $5.5 Billion in Obamacare Waste

Share on Facebook
Tweet this Story
Pin this Image

Posted by Alexander Hendrie on Tuesday, September 29th, 2015, 3:08 PM PERMALINK

Earlier today, Chairman Tim Murphy (R-Pa.) and the House Energy and Commerce Oversight Subcommittee held a hearing examining Obamacare state exchanges. An investigation into this issue is long overdue, and Chairman Murphy and the Oversight Subcommittee should be applauded for their leadership on this issue.

According to GAO, $5.51 billion in federal funds have been spent on the planning and construction of these exchanges, yet very little oversight has been conducted over the use of these funds. Unsurprisingly, it appears that a large percentage of these funds were wasted. In addition, exchanges across the country have encountered numerous operational difficulties since launch including poor user functionality and lack of scale.

Witnesses from six states - California, Connecticut, Hawaii, Massachusetts, Minnesota, and Oregon – attended the hearing. Combined, these states received over $2 billion in funds.

Illustrating the near-limitless freedom that states received and the absence of federal oversight, only one of the six witnesses could say how much was spent on construction per enrollee. That state, Hawaii spent close to $50,000 according to the witness.

Even though this hearing is a good first step, questions remain regarding the federal government's oversight over state exchanges, particularly now that many exchanges are beginning to encounter fatal operational problems and may soon abandon ship to join the federal exchange.

Chairman Murphy best summed up the situation when he concluded “it was not rainbows and unicorns. It was a mess.”

As has been well documented, many of the exchanges that were called to testify have mismanaged the hundreds of millions of dollars they received:

  • Oregon received $305 million in grants but could not produce a workable website months after launch forcing customers to fax a 20 page document to enroll. Since then, the state has come under investigation over allegations the exchange was run by the Governor’s reelection campaign and decisions were made based on political calculations.


  • Massachusetts was required to upgrade their working exchange due to new Obamacare regulations. But $233 million later, the state broke its system, displacing 300,000 individuals on Medicaid and leaving the state with over $1 billion in costs.


  • California was awarded $1.1 billion in grants, but now faces an $80 million budget deficit for fiscal year 2015-2016. Despite often being referenced as a “successful” exchange, the system has been plagued with enrollment and tax-related errors. In some cases, this has prevented consumers from receiving healthcare for months.


  • Hawaii received $205 million and constructed a workable exchange only for state officials to realize they had no way to pay for day-to-day costs. The exchange is now transitioning to the federal system.

Watch the full hearing below:


Top Comments

Grover Norquist Statement on Carried Interest

Posted by ATR on Tuesday, September 29th, 2015, 11:34 AM PERMALINK

I oppose higher taxes on carried interest capital gains. On principle, capital gains should be taxed as capital gains not at artificially higher rates. In a conversation with a reporter about a world with drastically lower tax rates across the board, my position on carried interest capital gains was taken radically out of context. My point was and is that increasing taxes on carried interest capital gains is a shiny bauble conceived in left-wing academia, is not serious tax policy and is not part of a grown up conversation on tax reform.

More from Americans for Tax Reform

Top Comments


They should be taxed as
ordinary's not like the rich you advocate for actually worked for

Hillary Clinton’s Drug “Affordability” Plan Will Destroy Medical Innovation

Share on Facebook
Tweet this Story
Pin this Image

Posted by Alexander Hendrie on Tuesday, September 29th, 2015, 4:00 AM PERMALINK

Last week, Hillary Clinton released her drug affordability plan, vowing to “demand lower drug costs.” Piggybacking off the public outrage from Turing Pharmaceuticals’ proposed 4,000 per cent increase of drug Daraprim, Hillary’s plan included capping out-of-pocket drug costs at $250 per month and permitted the importation of drugs from other countries where price controls are already in place. 

These two proposals would be a disaster for medical innovation and the drug market. In fact, both have been suggested and rejected time and time again in Congress because they are bad healthcare policy and bad for the free market.

In a tweet, Clinton argued “if the medicine you need costs less in Canada, you should be able to buy it from Canada—or any country that meets our safety standards.” On its face, this probably sounds like a reasonable proposal, but it demonstrates a fundamental misunderstanding of the markets, and the importance of protecting innovation.

If Clinton had her way, consumers would not only be importing medicine, but also the price control of the country of origin. In many countries, price controls give supposedly cheap medicine, yet there is a hidden cost of innovation.

Already, the razor-thin profit margins means there is little left over for drug companies to finance new research and development. This is made worse by the prohibitively high R&D costs – it costs innovators an average of $2.6 billion to develop a new prescription drug, in part due to FDA over-regulation.

In a world of Hillary Clinton-style price controls, companies will be squeezed until they have no money left for innovation. If anything, the 4,000 per cent price increase that so outraged Hillary last week will become more common as drug companies look for ways to make enough revenue to re-invest in new innovations.

This plan may well work in a world of free trade utopia with no market-distorting price controls. But in the real world, her proposal is closer to unilateral disarmament.

Clinton’s other proposal – a price control on drug costs – would artificially lower the price of medicine here in the US. But the same problem exists as her other proposal, it distorts prices and prevents the free market from regulating supply and demand. As a result, the next miracle cure may never get discovered.

Clinton often accuses Republican politicians of being stuck in the past. But under her drug “affordability” plan, medical innovation will be forever stuck in the past for future generations.


Photo Credit: 
Lucas Cobb,

More from Americans for Tax Reform

Top Comments

John Hoge

ATR should be promoting economic liberty and free trade, not crony capitalism. Citizens of a free country should be able to buy medicine wherever they damn well please. Restricting that liberry to advance a corporate agenda is wrong.

Crushing the free market grants tremendous power to drug monopolies, allowing them to set arbitrarily high prices. This monopoly pricing power is frighteningly similar to the government's power to tax. And we all know that ATR Is anti tax. So why the inconsistency?

Puerto Rico Should Adopt Enterprise Zones, Not Austerity Tax Hikes

Share on Facebook
Tweet this Story
Pin this Image

Posted by Ryan Ellis on Monday, September 28th, 2015, 6:25 PM PERMALINK

Puerto Rico is on the verge of a debt-driven collapse in many of its basic governmental structures. This problem is made worse by the fact that Puerto Rican municipalities, unlike mainland cities and counties, have no ability to restructure using federal bankruptcy law.

But Puerto Rico's problems go even deeper. If these issues are to be avoided in the future, the island must transform from a black hole of capital to a magnet for capital.

Some think the solution lies in tax increases. That would be like giving poison to a dying man.

The best way to fix what ails San Juan is to turn the entire island of Puerto Rico into an enterprise zone.

Initially conceived by the late, great Jack Kemp, enterprise zones are pockets of pro-growth nirvana (especially on tax policy) strategically placed inside economic disaster areas.

What might some elements of a Puerto Rican enterprise zone look like?

Business tax rates. The United States has the highest business tax rates in the developed world (35 percent for corporations, and as high as 43.4 percent for unincorporated firms). There's no reason this shouldn't be 15 percent or even lower in Puerto Rico.

Personal tax rates. You can't have Puerto Rican businesses without Puerto Rican jobs. So the best workers should be attracted to the island by a low tax rate on wages (15 percent or less), a FICA tax holiday, or both.

Capital gains. We want to encourage capital into Puerto Rico, and that means investing in start up ventures and other ownership ventures. To encourage this, Puerto Rico should be a capital gains tax free zone. Even more to the point, there should be no "death tax" in Puerto Rico.

Business fixed investment. Capital investment in Puerto Rico also means buying the hard assets which become the capital stock a growing economy needs. That's why Puerto Rico ought to benefit from 100 percent full business expensing for all the computers, machinery, and buildings investors want to deploy. This would move Puerto Rico away from the slow-deduction "depreciation" regime it labors under today.

If this enterprise zone concept, or anything close to it, was put into place, Puerto Rico would become THE place to do business in America.

It may be in the Caribbean, but it would sure start to look and feel a lot like Hong Kong.


Top Comments

Frank Worley

Puerto Rico needs to cut spending before it does anything else. The short, medium and long term problems all revolve around a government that employs far too many people and (as expected) accomplishes little. Once government has been reduced by about 30%, then reduce regulations and start investing in new business.


If the question is how to recover from too much government then the answer is always cutting spending.

The Grover Norquist Show: Donald Trump’s Tax Plan: Pro-Growth and Pro-Simplification

Share on Facebook
Tweet this Story
Pin this Image

Posted by Matthew Benzmiller on Monday, September 28th, 2015, 5:27 PM PERMALINK

Grover Norquist analyses Donald Trump’s newly unveiled tax plan. Trump gives Americans a deal they can’t refuse, almost. With what Grover calls “Ronald Reagan” style growth, the Donald’s plan should give the United States 4 percent a year in economic growth. Trump’s plan is consistent with the Taxpayer Protection Pledge. The plan details four different tax brackets for individuals, lowering capital gains, lowering business taxes, and repealing taxes that were meant to be repealed several generations ago. Grover says that the plan would make us more competitive for business amidst the global market. Norquist even goes as far to say, “Trump’s plan is dead center of Reagan Republican thinking, when it comes to what would create growth in the United States.” To find out more, tune into the episode 35 of the Grover Norquist show, and don’t forget to email, tweet, or leave a comment for Grover to let him know what you think.

Photo Credit: 
Gage Skidmore

More from Americans for Tax Reform

Top Comments


Where was the growth when Bush cut taxes??? Just big deficits and a great recession. Regan also gave his gift of large deficits. If there are no cuts to government that is what you get with reduced tax revenue through cuts, more debt. If you want a great Nation you have to pay for it, it is not done on the cheap.

My political satire, entitled
"Taking the Tea Party Republican Tax Pledge", is on
YouTube. Here is the link

Gary Causer

I guess you'll just have to see......

Go Trump....and hurry!

Yvonne Hooks Harrell

trump does not propose Health Savings Accounts. He proposes to replace obamacare with another Universal Healthcare that most analysts say would be worse.

Congress Set to Investigate Obamacare Waste, Repeal Burdensome Regulations

Share on Facebook
Tweet this Story
Pin this Image

Posted by Alexander Hendrie on Monday, September 28th, 2015, 3:30 PM PERMALINK

After five years of Obamacare, it is clear the law is doing far more harm than good. Of most concern, the law has hiked taxes for Americans families and businesses at least 21 times, including seven that directly hit the middle class. Since the law was passed, billions have been wasted on the construction of barely working healthcare exchanges, premiums and administrative costs have skyrocketed, and confusing regulations have made tax compliance a nightmare.

Fortunately, the Republican controlled Congress is poised to reform to dismantle some of the most damaging provisions of this law, while conducting rigorous oversight over wasted taxpayer dollars.

Earlier today, the House Ways and Means Committee released legislation that would repeal major components of Obamacare through a process known as reconciliation. Specifically, this legislation repeals the employer and individual mandates, the Cadillac tax, and the unnecessary Independent Payment Advisory Board.

Most Obamacare regulations and taxes, like the Cadillac tax have harmed access to affordable healthcare. Even though this tax will not come into effect until 2018, insurers have already begun cutting health benefits in preparation for this onerous law. Some fear that if implemented, the Cadillac tax will cause flexible spending accounts to vanish.

Not only will these reforms be good for taxpayers, they will also be good for the economy. A recent analysis by the Congressional Budget Office and the Joint Committee on Taxation finds that repealing the individual mandate would decrease spending by $311 billion over ten years and reduce the federal deficit by $305 billion over the same window.

The Ways and Means Committee, led by Chairman Paul Ryan (R-Wis.) should be congratulated for taking up this package of reforms.

Others in Congress are taking steps to get to the bottom of the billions that have been wasted during Obamacare’s implementation. Tomorrow, Energy and Commerce Oversight Subcommittee Chairman Tim Murphy (R-Pa.) will hold a hearing examining Obamacare’s state exchanges.

In order to construct these exchanges, the Centers for Medicare and Medicaid Services awarded over $5.5 billion in grants to states, while conducting non-existent levels of oversight. Since then, several state exchanges, including Oregon’s $305 million exchange, have failed. Others remain on the brink of failure, despite millions in federal funds.

An investigation into this waste is long overdue, and Chairman Murphy should be congratulated for taking the lead on getting to the bottom of this egregious waste of taxpayer dollars.

Photo Credit: 
Tony Brooks,

More from Americans for Tax Reform

Top Comments

Tax Hikes Shouldn't Be Part of West Virginia Tax Reform

Share on Facebook
Tweet this Story
Pin this Image

Posted by Matthew Benzmiller on Monday, September 28th, 2015, 11:43 AM PERMALINK

For decades, the West Virginia legislature has budgeted without fiscal restraint or reforms. In 2014, for the first time since 1929, Republicans took control of the House of Delegates and state Senate. Confronted with an overspending problem, some legislators are considering a short-term fix, a tax increase.

Tax revenues are falling, the state budget has used the Rainy Day fund three years in a row, and there is an estimated outstanding $1 billion in repairs for upgrading roads and bridges. The solution that some West Virginia legislators have come up with is a cigarette tax hike on low and middle-income consumers.

Senate minority leader Jeff Kessler, D-Marshall, has criticized the cut in taxes that eliminated grocery taxes, phased out the business franchise tax, and the recent business tax reductions from 2006. Kessler proposed legislation last year that would have raised taxes on cigarettes.

“We need to start investing in our people. If that requires raising some taxes, then that’s the way to go,” Kessler said. According to a Gallup poll, “More than half of smokers earn less than $36,000 per year.” Even worse, over a third of smokers make less than $12,000 a year.

He claims, “things folks want — a qualified, skilled, educated and sober workforce; workforce participation; infrastructure and roads” are at stake if legislation to give tax cuts to big businesses are in the works.” Kessler claims he wants to help blue collar workers, but raising cigarette taxes will hurt those consumers most. 

Even more, cigarette tax hikes rarely meet revenue expectations. Of the 32 state tobacco tax increases that went into effect between 2009 and 2013, only three met or exceeded revenue projections. After cigarette tax hikes, consumers seek out alternative tobacco products that are less expensive or available across state borders in lower taxed states. 

58% of cigarettes smoked in New York, for example, are smuggled from out of the state, according to the Tax Foundation. This also results in decreased tax revenue. 

For decades, as the population has declined and West Virginia has failed to attract new businesses or taxpayers, the government has overspent instead of enacting pro-growth reforms. There absolutely is waste to cut from West Virginian spending but unfortunately there is very little accountability to the budget processes. The State Integrity Investigation gave West Virginia a D- in that category. Taxpayers have to pay for the feckless choices of their representatives according to Kessler’s philosophy on taxes.

“It [lowering taxes] hasn’t worked and no one can show me a place where it has.” Try Arizona, Florida, or Texas for examples Senator Kessler. The correlation between states with lower tax burdens and taxpayers and business migration is quite strong. From income to corporate tax reductions, states that let taxpayers keep more of their income are the bigger beneficiaries of those looking to leave less friendly states. Many governors and legislatures that understand that entrepreneurs bring growth have made their states competitive, tax-wise. It is an act of willingly ignorance for Kessler to deny this.

It’s time for the West Virginia government to get serious, cut spending, lower taxes, and stay out of the pockets of its citizens as much as possible. Some have suggested it may not be the right time for tax reform. In the case of West Virginia, this couldn’t be further from the truth.

Photo Credit: 
O Palsson

More from Americans for Tax Reform

Top Comments

ATR Analysis of Donald Trump Tax Reform Plan

Share on Facebook
Tweet this Story
Pin this Image

Posted by Ryan Ellis on Monday, September 28th, 2015, 11:00 AM PERMALINK

GOP Presidential candidate Donald Trump released details of his tax reform plan today. It features a system with much lower tax rates than current law, and a broadened tax base for high income earners.

“Trump’s plan is certainly consistent with the Taxpayer Protection Pledge,” said Grover Norquist, president of Americans for Tax Reform. “Trump has said he opposes net tax hikes and has made clear that the real problem is spending. This plan is a reform, not a tax hike.”

The plan is not a tax cut, but is rather intended to be revenue neutral under a dynamic score.

Basic elements of the Trump tax plan include:

Carried interest: The plan "ends the current tax treatment of carried interest for speculative partnerships that do not grow businesses or create jobs and are not risking their own capital." Partnerships that do not speculate but rather buy hard assets for the long run will not face a tax increase – for example, private equity firms.

Private equity firms do not speculate, but rather grow businesses and create jobs. Most importantly, private equity partnerships risk their own capital, namely the capital provided by the pension funds, colleges, and charities which invest in them for long term investment returns. These types of investments are vital for workers with traditional pensions, for the colleges Americans send their children to, and for the charities they support.

The carried interest tax hike in the Trump plan is intended to only apply to the type of funds Trump has always said they would apply to: "hedge fund guys." Americans for Tax Reform opposes any change to the tax treatment of carried interest -- including those on hedge fund guys -- but is pleased that the usual target of this left wing ivory tower tax hike proposal--private equity partnerships -- is held harmless in the Trump plan. This is not the case, for example, in Governor Jeb Bush's plan.

As the rest of the GOP field prepares to release their tax plans, they should keep in mind the Left's long term goal to tax ALL capital gains as ordinary income. That's why this carried interest tax hike idea originated in the bowels of leftist academia, and is nearly universally supported by the progressive Left -- it's the camel's nose under the tent toward taxing all capital gains at ordinary rates. Republicans and conservatives should not give aid and comfort to this long term strategy.

ATR has detailed the case against carried interest tax hikes with op-eds in USA Today and Forbes.

Tax rates: Individual tax brackets of 0, 10, 20, and 25 percent (the top rate today is 39.6 percent). The "zero bracket" would apply to married couples' first $50,000 of income (half that for singles).

Capital gains and dividends: By repealing Obamacare's savings surtax, the capital gains and dividends rate is reduced from 23.8 percent today to 20 percent under the Trump plan.

It's also important to note that with a top ordinary income tax rate of 25 percent, the carried interest tax rate hike on "hedge fund guys" is fairly modest, rising from 23.8 percent today to 25 percent under the Trump plan. ATR opposes this tax increase.

Business tax rate: The tax rate on corporate and non-corporate businesses is 15 percent, down from 35 percent today for corporations and 39.6 percent for pass-through firms.

Death Tax: Repealed.

Alternative Minimum Tax (AMT): Repealed.

Marriage Penalty: Repealed.

The plan is intended to be revenue-neutral under a dynamic analysis. In order to make up the remaining lost revenue, the plan features the following major base broadeners:

Deduction phase out: All itemized deductions except for charitable contributions and mortgage interest will be subject to a steeper means-test phaseout than they face under current law.

Deemed repatriation and an end to deferral: An immediate "deemed repatriation" tax of 10 percent is assessed on the $2.5 trillion of U.S. company profits sitting overseas. Going forward, companies would no longer be able to defer U.S. double tax on profits earned overseas. 

According to the OECD, the U.S. business tax rate would fall from highest in the developed world to one of the lowest. When state rates are factored in, the U.S. would face the same tax rate as the United Kingdom, and lower tax rates than trading competitors China, Japan, Canada, Mexico, Germany, and France. We would be far below the developed nation average business marginal tax rate of 25 percent.

The loss of deferral is troubling, but two elements should be kept in mind. First, the new 15 percent tax rate is far lower than the double tax companies face today. Second, businesses will be able to credit against this 15 percent U.S. tax any foreign income tax they have already paid overseas. With one of the lowest tax rates in the developed world, it's very unlikely much if any double taxation will, in fact, occur.

Life insurance tax shelter repealed: Life insurance will no longer be tax-advantaged for high-income taxpayers

Business interest: This deduction will face a phased in cap.

Other deductions and credits: Tax breaks for high-income taxpayers and large firms will also be eliminated, but these are not specified.

No movement to full business expensing: The most disappointing part of the Trump plan is that the tax system would move no closer to full expensing of business fixed investment. Businesses would still be saddled with the complex, distorting, and growth-inhibiting "depreciation" regime where an asset is deducted over several or even many years. Far better would be to move to a full-expensing business cash flow model, where all business inputs including investments are deducted in the year spent. While this is somewhat ameliorated by the far lower tax rates, a lack of progress here is the plan's biggest drawback.

To hear more analysis of Donald Trump's tax plan, listen to the latest podcast of The Grover Norquist Show here.

Photo Credit: 
Gage Skidmore

More from Americans for Tax Reform

Top Comments


dont waste your time with these people, Greg probably doesnt pay his taxes anyways so I dont know what he is complaining about. plus, he just glassed over the whole "business tax rate" which makes USA more competitive and may give the twit a raise, that of course, if he has a job.


I don't think you're getting it…. the wealthy lose loopholes- and middle income earners pay zero or 10% depending on where you define the 'middle'….


So wait a minute. I just heard some Democrat talking head telling everyone 12.00-12.50 an hour is a decent living wage.

That's 25-27,000 a year..........

My in laws live off 25K a year is Social Security.
My parents live off 25K a year in Social Security.

My daughter saved and put herself thru college on 25K a year. Took her 5 years but she did it.

Yeah if you think your going to raise a family on 25K your nuts.... Better get your self a better job. Two income household at 25K each is 50K. Now that is more than doable........

Where do you live and how do you live.... that dictates what 25K will get you.

IN-09 Update: Houchin, Waltz, Pfaff, and Hall Make Written Commitment to Oppose Higher Taxes

Share on Facebook
Tweet this Story
Pin this Image

Posted by Adam Radman on Monday, September 28th, 2015, 10:44 AM PERMALINK

Americans for Tax Reform would like to congratulate state Sen. Erin Houchin, state Sen. Brent Waltzformer radio show host Jim Pfaff, and businessman Robert Hall for signing the Taxpayer Protection Pledge in the race to replace Rep. Todd Young in Indiana's ninth congressional district. Rep. Young is vacating the seat to run for the U.S. Senate. By signing the Pledge, these candidates have made a written commitment to the voters of Indiana to oppose higher taxes.

Only Indiana Attorney General Greg Zoeller has have yet to sign The Taxpayer Protection Pledge in this race. ATR is in the process of reaching out to both campaigns.

The Cook Political Report (requires a subscription) and the Rothenberg/Gonzales Political Report rank this as a safe Republican seat; making the winner of the GOP primary the most likely winner of the general election. 

Indiana holds their primary on May 3, 2016 and ATR will continue to monitor this race and others across the country to help educate voters on what candidates have made the bold decision to sign the Pledge and what candidates have left the door open to higher taxes.

Politicians often run for office saying they won't raise taxes, but then quickly turn their backs on the taxpayer. The idea of the Pledge is simple enough: Make them put their no-new-taxes rhetoric in writing. Until you take tax increases firmly off the table, true and lasting spending restraint is impossible.​

Today the Taxpayer Protection Pledge is offered to every candidate for state and federal office and to all incumbents. Nearly 1,400 elected officials, from state representative to governor to US Senator, have signed the Pledge.

Please check out the Pledge database to see if your current elected officials have signed the Pledge.

Update: This blog post was updated to include Robert Hall as a Taxpayer Protection Pledge signer.

More from Americans for Tax Reform

Top Comments

The Grover Norquist Show: The Jeb Bush Tax Reform Plan

Share on Facebook
Tweet this Story
Pin this Image

Posted by Caroline Anderegg on Thursday, September 24th, 2015, 5:12 PM PERMALINK

In episode 32 of the Grover Norquist Show, ATR president Grover Norquist discusses presidential candidate Jeb Bush’s tax reform plan. He outlines the key factors in Bush’s “pro-growth, tax-cutting” reform plan. The strengths of the Bush tax plan are immediate business expensing, which would reduce the cost of new investment and simplify the tax code; lowering the corporate tax rate to be more competitive; and lowering the individual income tax rates to Reagan-era levels. The plan would put the country on track to achieve four percent economic growth. Listen in to the Grover Norquist Show below to find out the one shortfall in Bush Tax Reform Plan.

For more details on ATR’s initial response to Jeb’s tax plan click here

Photo Credit: 
Gage Skidmore,

More from Americans for Tax Reform

Top Comments