RUTHFULLY YOURS

The collapse of the American Health Care Act in the House did nothing to change one fundamental reality: Republicans simply don’t have the luxury of failing when it comes to repealing and replacing Obamacare. No other campaign promise has galvanized conservative voters more over the past seven years; failure to keep it will irreparably sever trust and demoralize the grassroots as the 2018 midterms approach.

Given the united Democratic opposition, inside-the-bubble D.C. thinking has made the tug-of-war between Republican moderates and the Freedom Caucus into an impossible zero-sum game. But a viable path for free-market health-care reform still exists — if Republicans in Congress can coalesce around some key ideas, such as pursuing smart insurance deregulation that puts families back in charge, creating a targeted and robust free-market safety net, and unleashing productivity and innovation by unshackling the health-care-delivery system.

Separating Insurance from Redistribution

True insurance spreads the risk of unknown future events and sets premiums individually based on projected claims. Imagine two groups of people, Group A and Group B. Those in Group A have a 5 percent chance of experiencing a severe health episode that generates $100,000 in claims and a 95 percent chance of zero health expenses. Ignoring profit margins — which, despite the wild hyperbole, are quite small — Group A’s annual premiums should equal 5 percent of $100,000, or $5,000. The lucky 95 percent pays the $5,000 premium despite generating no actual expenses. The unlucky 5 percent faces $100,000 in claims, but insurance kicks in to cover the bill. Those in Group B, meanwhile, face a 10 percent chance of experiencing a severe health episode. In a properly functioning insurance market, their annual premiums would be twice as high as Group A’s — $10,000 — because they present twice the risk to insurers.

Unfortunately, the market created by Obamacare does not function properly because the law enacts community-rating restrictions to subsidize the higher-risk Group B at Group A’s expense. In practical terms, Obamacare forces Group A to overpay for insurance so that Group B underpays, subjecting both groups to an individual mandate as a way of preventing Group A from walking away. Essentially, the law taxes the young and healthy to subsidize the old and sick under the pretext of “consumer protection.” This de facto insurance-premium tax is worse than even a typical tax because it destabilizes insurance markets by causing a cascade of rising premiums and fleeing customers, which then forces market consolidation as many insurers follow suit and depart.

The best way to fix this problem, restoring affordability and stability to the health-care sector, is to unleash market competition by stripping away Obamacare’s insurance mandates. But while deregulating insurance markets is likely to win the support of the Freedom Caucus, moderates may worry — not without reason — that removing these “protections” will make insurance unaffordable for people with preexisting conditions, even as it dramatically lowers premiums for the vast majority of Americans. Which means that deregulation of the market can’t be the only feature of any repeal-and-replace proposal.

President Trump on Friday reinforced how serious he is about reforming the regulatory state by nominating Neomi Rao to head the Office of Information and Regulatory Affairs. The OIRA administrator, or “regulatory czar,” is the ultimate policy wonk. Ms. Rao, a respected legal scholar with experience in all three branches of government, is ideally suited to the job.

OIRA, which operates within the president’s Office of Management and Budget, may be the most important office you’ve never heard of. Its staff of fewer than 50 career professionals reviews the regulatory, information-collection and statistical activities of federal agencies. That may not sound exciting, but regulation is one of the most direct and powerful ways by which a president can advance his policies.

President Obama used regulation to get around Congress in pursuit of initiatives on climate change, immigration, worker pay and more. President Trump has promised to reverse those regulations and directed agencies to eliminate two old rules for every new one they issue.

OIRA allows the president to manage the regulatory authority that Congress has delegated to the executive branch. By some estimates regulations cost Americans more than $2 trillion a year, and every president since Reagan has recognized that letting agencies make policy without White House oversight would be like giving them a blank check on their budgets.

The next OIRA administrator will enforce Mr. Trump’s executive order that agencies eliminate costly regulations while identifying those that still provide significant net benefits. That will require principled and pragmatic leadership, and Ms. Rao has the experience, intellect and character for the job. She is an associate professor at George Mason University’s Antonin Scalia Law School, where she founded and directs the Center for the Study of the Administrative State. She directs a committee on regulatory policy for the American Bar Association. In addition to a sharp legal mind, Ms. Rao brings an openness to different perspectives and an ability to manage the competing demands of regulatory policy.

I served as OIRA administrator for the last two years of the George W. Bush administration and, like many others who held the position, consider it one of the best jobs in government. If confirmed, Ms. Rao will be involved in a dizzying range of issues and work with senior appointees across the government to implement important policies that affect people’s daily lives. CONTINUE AT SITE

Republicans left Washington on Friday without a health-care deal, despite renewed negotiations after last month’s fiasco and a burst of White House diplomacy. Perhaps the two-week recess will be a cooling-off period and we hope the House’s factions can agree on a deal. If they can’t, then at least we’ll learn who’s responsible for defeat.

After the Freedom Caucus killed the original health bill in March, the talks resumed, not least for practical and political imperatives. President Trump and Republicans campaigned on repeal and replace, and the President at least wants to keep his word. The ObamaCare exchanges are also fragile and precarious, and consumers harmed by rising premiums and declining choices are likely to blame the party in power.

But the divide between conservatives and centrists hasn’t narrowed. Last week, in part to create the appearance of progress, the House added an amendment on “invisible risk sharing” that would help bring down premiums by absorbing high-cost patients. The compromise was worked out by the Freedom Caucus’s David Schweikert of Arizona and Tom MacArthur of New Jersey, who is more moderate.
These talks are constructive, though the larger question is whether most of the Freedom Caucus members want a bill they can back or are merely trying to shift the blame for failure. They say they’ll support a bill that repeals, or creates a state waiver to avoid, the ObamaCare mandates that prohibit insurers from denying coverage or charging more to patients based on pre-existing conditions. The Freedom Caucus is right that these mandates drive up the cost of insurance, but the moderates understandably don’t want to have a debate about how much to soak the sickest patients.

One reason is that this fight is largely pointless. True, the House bill doesn’t repeal the “community rating” that limits how much premiums can vary among consumers, but it does relax it enough to be effective repeal. Under ObamaCare, the costliest plan can be no more than three times as expensive as the cheapest, known as a 3 to 1 rating band. The House bill moves to a 5 to 1 band, which is above the true cost of care.

The latest disclosures that former Obama national-security adviser Susan Rice may have requested that intelligence agencies reveal or “unmask” those from the Trump team who were surveilled in purportedly normal intelligence gathering — and that such requests may have extended over an apparently considerable period of time — remind us that at some point there is always an accounting.

Rice’s past serial and shameless untruths about the tragic deaths at Benghazi (a 2012 Obama re-election “al-Qaeda on the run” narrative, with a supposedly spontaneous riot over a YouTube video as the cause of the attack) were contextualized by the media and eventually vaporized.

Her sad “honor and distinction” narrative about the Bowe Bergdahl betrayal of his comrades — the infamous purported “prisoner of war” “captured on the battlefield” fabrication — was intended to mask what was otherwise a dishonest and terrible hostage swap for someone who had endangered the lives of his fellow soldiers.

Recently, she has denied all knowledge of what House Intelligence chairman Devin Nunes had been fighting to uncover, and has even tweeted periodically to criticize the purported ethical lapses and unprofessionalism of the Trump administration.

All that is a lot for even the gods to grind. If, as likely, she had access to, or requested, such raw data, and sent it, with names illegally unmasked, to primary players of the Obama administration (e.g., Clapper, Brennan, Rhodes, etc.), that fact would blow up some heretofore denials of any knowledge of such skullduggery and perhaps become the greatest presidential scandal of the last half century.

The Rice revelation might also put into the proper landscape the following:

a) the astounding self-confessionals of Hillary adviser Evelyn Farkas about her frantic efforts to convince Obama operatives to increase intelligence gathering and to leak the information to the press (what gave a former mid-level Department of Defense employee the presumption that she could influence the intelligence operations of the U.S. government?)

, b) the unprecedented eleventh-hour Obama effort to broaden access to classified data to spread and leak such unmasked individuals

, c) the political and media landmines that Representative Nunes (facing “kill the messenger” efforts to kill the message) had to navigate around and the character assassination to which he has been subjected

President Donald Trump said he would nominate Kevin Hassett, an expert in tax policy and one of the most prominent economists at the conservative American Enterprise Institute, to serve as the chairman of the Council of Economic Advisers.

The council’s chairman is generally considered the chief economist of the White House. The White House announced its intent to nominate Mr. Hassett in a statement Friday afternoon.

Mr. Hassett emerged as a candidate for the job several months ago, but his nomination wasn’t confirmed until Friday. The fate of Mr. Trump’s Council of Economic Advisers had been uncertain. How much Mr. Trump cared about advice from academic economists also came into question when he announced that his cabinet would no longer include the council’s chairman, as former President Barack Obama’s had.
An economic advisory council announced during his presidential campaign had included only one Ph.D. economist, Peter Navarro, who has already been appointed to head a trade council for Mr. Trump.

Mr. Hassett, however, has a traditional pedigree for an elite academic economist. He received his doctorate in economics from the University of Pennsylvania, where he wrote a dissertation on applied econometrics–the difficult statistical work that underlies much economic research. He has published on a wide range of topics, with a particular focus on the benefits of tax cuts and the effects of economic uncertainty on business investment.

“He’s not just a standard-issue really good economist, he’s someone who knows how policy works,” said Glenn Hubbard, who chaired the CEA under President George W. Bush and has published research with Mr. Hassett. CONTINUE AT SITE

While news seems to be breaking in every direction, there are two storylines in the continuing saga of allegations about Russian meddling in the 2016 election and Obama-administration spying on Team Trump.

The first, as Victor Davis Hanson has outlined, involves the recusal — at least temporarily — of House Intelligence Committee chairman Devin Nunes. You have to admire the Democrats’ moxie: Having spent months exploiting unauthorized disclosures of classified information to undergird their dark (but thus far unsupported) claims of Trump-campaign collusion in Russia’s machinations, they now force a House Ethics Committee investigation against Nunes based on claims that he “may have made unauthorized disclosures of classified information.”

Nunes vehemently denies the allegation as “entirely false and politically motivated.” Still, had he not stepped aside until the ethics probe was completed, there would have been calls to remove him, which would have put Speaker Paul Ryan in the hot seat. That’s something neither Ryan nor Nunes would want.

More importantly, as Nunes admirably recognized, it would have been a major distraction from the political-spying aspect of the Intelligence Committee investigation. By stepping aside, Nunes will be able to defend himself without derailing the committee’s work. Meanwhile, he has bequeathed leadership of the probe to Representative Mike Conaway (R., Tex.), with assistance from Representatives Trey Gowdy (R., S.C.) and Tom Rooney (R., Fla.). Forge ahead, gents.

The other development involves yet another impulsive outburst from President Trump. During a news conference at which he appeared jointly with Jordan’s King Abdullah II (aside: why do they put Roman numerals after Arabic names?), Trump was asked whether he thought Susan Rice, Obama’s national-security adviser, had committed a crime by unmasking the identities of Trump-team members — i.e., American citizens who were caught up in foreign intelligence collection. He replied, “Do I think? Yes, I think.” Our media-obsessed president further conveyed his sense that the alleged political spying “is one of the big stories of our time.”

Trump detractors pounced. The Washington Post, for example, ran its report under the headline “Susan Rice may have committed a crime, Trump says without providing evidence.” Trump’s latest remark is thus portrayed as a replay of his much-derided March 4 tweets — the ones accusing President Obama of having “my ‘wires tapped’ in Trump Tower.”

Both outbursts were ill considered, but they’re not all that similar. This time, Trump was answering a journalist’s loaded question, not railing on his own. Still, he should have passed — hard as that seems to be for him.

I hope President Trump has not forgotten who elected him and why.

Here is a hint – people inside-the-Beltway did not elect you, Mr. President, and it wasn’t to maintain the status quo.

In fact, despite what you might be hearing, Mr. President, the views of Stephen Bannon are probably closer to those of the people who elected you, than the inside-the-Beltway venomous habitants that are populating your administration in ever increasing numbers.

And, by the way, why is Obama political operative John Koskinen still head of the IRS?

The removal of Bannon from his seat on the National Security Council (NSC) is illustrative, a restoration of the status quo ante and an example that the Trump Administration can benefit from on-the-job training. That is, they have learned the art of inside-the-Beltway media spin, also known to ordinary Americans as disinformation.

Don’t get me wrong, I think the NSC should be non-political, but let’s not kid ourselves. Bannon’s removal was a reaction to the Susan Rice scandal [1], that is, “politicization” of the NSC (and virtually every other element of the Obama Administration), not mission accomplished.

The Trump Administration’s spin claims [2] that Bannon’s appointment to the NSC was temporary, to “de-operationalize” or “de-politicize” Rice’s NSC (are Rice’s people still there?) and, bizarrely, to monitor Trump’s first national security adviser, General Michael Flynn.