Congresswoman Terri Sewell (D-Ala.) and Congressman Adrian Smith (R-NE) recently introduced important legislation to rein in the Center for Medicare and Medicaid Innovation (CMMI). This legislation, H.R. 5741, the “Strengthening Innovation in Medicare and Medicaid Act,” is cosponsored by Reps. Tony Cardenas (D-CA), John Shimkus (R-Ill.), Kurt Schrader (D-Ore), and Brad Wenstrup (R-Ohio).

These members should be applauded for introducing this legislation. Additionally, all members of Congress should support and co-sponsor this legislation.

CMMI was created under Obamacare with the goal of increasing efficiency of healthcare programs. The agency was tasked with conducting demonstrations over new health care delivery and payment models in Medicare, Medicaid, and the Children’s Health Insurance Program with the intent of reducing healthcare costs.

However, in its relatively short history, CMMI has pushed demonstrations with little evidence they would result in savings, while strong-arming healthcare providers and patients into participating.

The agency is also not under the normal appropriations process – Obamacare gave CMMI $10 billion every decade in perpetuity. As a result, Congress is limited in its ability to conduct routine, necessary oversight.

H.R. 5741 would help bring much needed oversight to CMMI through the imposition of several guardrails. For instance, the legislation would:

• Require a public notice and comment process for any new demonstration. There are currently no requirements for public input.
• Create a privileged process for Congress to block the implementation of a demonstration within 45 days of a proposed expansion from Phase 1 to Phase 2. 
• Set limitations on any demonstration including requiring a test to be no longer than five years and only as many participants as necessary to obtain a statistically valid sample.
• Allow providers and suppliers to opt-out a demonstration if it would cause undue economic hardship. 
• Require monitoring of the impact any demonstration is having on beneficiaries and health disparities.
   

These reforms are a good first step towards reining in CMMI by providing much needed transparency, congressional oversight and stakeholder engagement. 

On February 5^th, the Maine Heritage Policy Center (MHPC) filed an amicus brief at the U.S. Supreme Court on behalf of Professor Jonathan Reisman in Reisman v. Associated Faculties of the University of Maine. Americans for Tax Reform (ATR) and the Center for Worker Freedom (CWF) were honored to join MHPC and ten other nonprofit organizations in support of the First Amendment rights of state government workers.

The rights of state government workers, like Professor Reisman, are currently being violated. Many of these workers are forced to accept “representation” by labor unions even though they are not members of these organizations, nor do they support them. These unions have control over the workers’ wages, hours and the terms and conditions of employment. The workers are not allowed to negotiate their own terms and conditions of employment with their employer, nor can these workers choose other unions to represent them. This is known as exclusive representation. Exclusive representation or forcing workers to accept the speech of labor unions as their own is a violation of the First Amendment rights of free speech and association. The Reisman case would restore the First Amendment freedoms of these workers by ending exclusive representation.

The Reisman case began in 2018 when the Buckeye Institute filed a complaint with the United States District Court for the District of Maine. Jonathan Reisman, a professor of Economics and Public Policy at the University of Maine at Machias, argued that Maine’s law allowing a union to become the exclusive bargaining representative for public employees violates his First Amendment rights. The court unfortunately dismissed the action, citing the 1977 Supreme Court case Abood v. Detroit Board of Education. Professor Reisman appealed to the First Circuit, and that court affirmed the district court’s decision. Professor Reisman has now filed a petition for certiorari at the U.S. Supreme Court.

Interestingly, Professor Reisman is not the only one challenging exclusive representation. This case is actually one of three cases where the Buckeye Institute is representing state employees who are seeking to end exclusive representation. Kathy Uradnik of Minnesota was the first to challenge exclusive representation after the Supreme Court’s Janus v. AFSCME decision, and Jade Thompson of Ohio is also challenging exclusive representation. In the Uradnik case, the plaintiff is Kathy Uradnik, a professor of political science at St. Cloud State University in Minnesota. Her union, the Inter Faculty Organization, discriminated against nonunion faculty members by forbidding them from joining the Faculty Senate or serving on any faculty search, service or governance committee. This ban reduced their ability to obtain tenure and participate in their University.

Another plaintiff, Jade Thompson, a Spanish teacher in Ohio, also experienced similar discrimination. Her union, the Marietta Education Association, also excluded nonunion members from key committees. In addition, the union required that seniority determine who was fired during layoffs.   

These cases are the next step to protect the rights of workers after the Supreme Court’s 2018 decision in Janus v. AFSCME decision. That case ensured that government workers are not forced to support unions that they have chosen not to join. These cases ensure that government workers are not represented by organizations that they do not support.

ATR and CWF strongly urge the Supreme Court to consider the Reisman case and restore the First Amendment rights of these workers.

Americans for Tax Reform signed a coalition letter alongside other free-market organizations to encourage the Securities and Exchange Commission to abandon its plans to regulate the use of certain financial products and implement additional sales-practice rules between broker-dealers, investment advisors and their clients. The proposed rule will place onerous and unnecessary qualification requirements on American investors before they can freely purchase or sell certain securities openly traded in public markets.

The SEC plans to re-introduce a 2015 Obama era regulation that will inherently restrict investors ability to purchase a specific type of Exchange Traded Fund. Known as “geared” ETFs, these products are “leveraged”, meaning they typically offer investors the opportunity to earn two – three times the daily rate of return of a benchmark like the S&P 500. Like any investment product, they carry some form of risk, paired with the opportunity to earn higher returns. Geared ETFs have been available for investors to own for over 25 years, and are commonly purchased as short-term investments, rather than the buy and hold strategy of investing in government bonds that earn small but steady return from the interest on the bond.

If the SEC moves forward with its proposed regulation, the rule will require broker-dealers to collect detailed personal information. After the information is collected, the broker-dealer is then empowered to determine if their client or perspective client is “capable” of understanding the risks of this product. If the broker-dealers or investment advisors determine clients do not meet this arbitrary “capability” standard, clients and investors will be prohibited from purchasing these funds and denied an opportunity to own products that may help them achieve the higher rates of return they desire.

Furthermore, the recently implemented Regulation Best Interest laws already empower broker-dealers to decide what’s best for their clients, and the implementation of these proposed rules will only further burden investors. If the proposal is implemented in its current form, the SEC will have effectively placed themselves between investors and their trusted brokers or advisors allowing investors to only choose from options the government deems appropriate.

Democrats have wrongly argued that the Tax Cuts and Jobs Act has enabled corporations to avoid paying their taxes. Far-left politicians like Representative Alexandria Ocasio Cortez (D-NY) and self-avowed socialist Bernie Sanders (I-Vt.) have repeatedly raised this point.

Democrats on the Ways and Means Committee are now following this theme with a hearing called “The Disappearing Corporate Income Tax.”

There are two fundamental problems with the Democrat criticism. First, Democrats ignore the many benefits to workers and the economy from the Trump Tax Cuts. Secondly, they ignore the simple reason that some corporations are paying less than the statutory 21 percent rate – the existence of numerous credits and deductions that are designed to promote investment and job creation.

It is also important to note that companies are not using “loopholes” to lower their tax liability. They are following the law exactly as written and are paying state and local taxes as well as payroll taxes – sometimes totaling billions of dollars per year. 

Many of the tax provisions that lower corporations’ effective rates are non-controversial and have bipartisan support. For instance, businesses are currently allowed to immediately deduct the cost of business assets purchased. This provision, known as full business expensing, has been supported by the Obama White House. In fact, as noted in an Obama White House document, expensing is designed to lower the effective tax rate of a business:

“A policy of allowing an immediate deduction (or ‘expensing of investment costs’) has an alternative rationale, which is to lower the effective tax rate on income derived from business investments, and thereby encourage additional demand for capital goods.”

The Organisation for Economic Co-operation and Development (OECD) has recognized that full business expensing increases GDP.  

Similarly, the R&D credit was first created under President Reagan as a temporary provision and was extended by Congress more than a dozen times. It was made permanent in 2015 on a bipartisan basis and was signed into law by President Obama.

In advocating for this provision, the Obama White House noted that every $1 in tax reduction from the R&D credit creates $2 in benefits to the economy and that 80 percent of the credit is directly attributable to salaries of U.S. workers performing U.S. based research.

While the tax cuts did lower the corporate rate from 35 percent to 21 percent, this brought the U.S. rate in line with the rest of the developed world. The U.S. rate is 25.89 percent after accounting for the state corporate tax, while the average rate in the 36-country OECD is 23.52 percent.

This tax cut has also benefited the American economy and workers. Businesses have created 100,000 jobs in 34 of the 38 months that Trump has been President and the unemployment rate has been below 4 percent for 23 consecutive months. Wage growth has been at or above 3 percent for the past 18 months, according to the Bureau of Labor Statistics (BLS).

Americans are also seeing their savings increase. When Donald Trump was elected President, the Dow Jones sat at 18,332. It is now at above 29,000, an increase of more than 60 percent. This stock market growth benefits the 100 million 401(k)s, the 46.4 million households that have an individual retirement account, and the nearly $4 trillion in public pension funds, half of which is invested in stocks. 

This good news is not just anecdotal – there are numerous examples of companies providing increased benefits or pay raises to their employees and of utility companies reducing rates.

Businesses have responded to the tax cuts by creating new employee benefit programs including adoption programs, workforce development programs, and education programs. For example: 

• Walmart and Lowes now provide $5,000 to help cover the cost of adopting a child.
• Express Scripts in Missouri has created a $30 million education fund for their employees’ children.
• Boeing provided $100 million in workforce development programs
• McDonald’s employees who work just 15 hours a week, receive $1,500 worth of tuition assistance every year per year.
   

Companies have also reduced utility bills for Americans across the country. Utility companies in all 50 states are passing on the tax savings in the form of lower rates for customers. This means lower electric bills, lower gas bills, and lower water bills for Americans than if the corporate rate cut had not occurred. For example: 

• Arizona Public Service reduced rates by $119 million for its 2.7 million customers.
• Entergy Louisiana returned $105 million in savings to consumers. 
• Kansas City Power and Light returned $100 million in annual savings to customers.
• Massachusetts-based Unitil gave $1.6 million in rebates to customers.
   

Businesses have increased wages and bonuses to their employees. For example: 

• Wells Fargo raised base wages from $13.50 to $15.00 per hour.
• AT&T provided $1,000 bonuses to 200,000 employees. 
• Cigna raised base wages to $16 per hour.
• Apple provided $2,500 employee bonuses in the form of restricted stock.