Contempo Magazine Blog

by Dr. Tony Magana

The Texas House of Representatives has become chaotic and disorganized in the final legislative week on the calendar despite several important issues remaining unresolved.

The heart attack of a key Republican Texas House member, Rep. Edmund Kuempel (R-Seguin), and a new markedly less authoritarian Speaker of the Texas State House, Joe Straus (R-San Antonio) has seen the Texas legislature slowed to a crawl in the last week of the allotted legislative calendar.

The Texas Democrats who are only in the minority now by one vote have been using parliamentary maneuvers including “chubbing” which is the maximizing of discussion time on small non-controversial bills to oppose the passage of new Texas Voter ID legislation.

Although the new ID proffer is heavily favored in polls of Texas voters , Democrats contend the measure would discriminate against the elderly and the disadvantaged. Proponents point to the fact that the new requirement matches those set by the Supreme Court in a recent ruling about a similar rule in Indiana while opponents say the absence of real evidence of widespread voter fraud indicates there is no need for the law. See why we support it.

In the meantime important legislation dealing with reducing veteran’s taxes, controlling tuition costs for higher education, windstorm insurance reform, making changes to unemployment insurance that will qualify Texas for stimulus funds, and other things is being held up. Unless Governor Rick Perry calls for a special session when time run outs on June 1^st, there is a chance that many bills that would have otherwise received support will simply die.

Now of course members of both parties are pointing fingers to each other as to primary blame for the near halt in legislative activity. The leader of the House Democratic Caucus, Rep. Jim Dunnam (D-Waco) was quoted by Austin Statesman as saying “I don’t see it as any level of obstructing…. We are fighting for the rights of the people that live in our districts to vote.”. The new Speaker Republican Joe Straus rebuts in the same article “Local and Consent Calendars has been, until this moment, a matter of trust among members, and that trust has been abused here “

For three terms the Speaker of the House was Tom Craddick (R-Midland) who many accused of wielding too much power and influence. The new Speaker promised to bring a change of noninterference into the ”ways” of the House and to let the legislative process proceed naturally without interference. Some Republicans have been demuring that the new Speaker has not engaged enough in acting as intermediary between the conflicting sides and other Representatives complain he has allowed Democrats to to act as temporary Presiding Speaker during heated sessions. Some have also objected that he has not temporarily suspended the rules to change the order of bills to be considered in which so far he has refrained.

Those familiar with Texas politics can remember previous contentious fights of similar or even greater intensity then the current one. Politics is always about compromise because anytime you get 150 members together in the Texas House there can be expected to be some disagreement. What is important for both sides is to make clear first what their positions are and also relatively where that position falls with respect to priority. If those Democrats who feel that Voter ID is so important that they can forgo windstorm insurance or veteran’s benefits they should so state. Similarly such statements of clarity should be also made on the Republican side of the aisle. No side will be able to get everything they want passed.

The election of a clearly less powerful Speaker of the House and the near parity between the Democrats and Republicans has demonstrably changed how business is done at the State House. Texas Insider reports that in committee meetings this week conventional party leaders and chairmen seemed to have less influence on their colleagues and even has this quote anonymously from a Representative “Nobody knows what’s going on and nobody’s in charge.”

When this session is over the likely outcome will be that some very good legislation was never acted upon which could have benefited Texans. Texas voters will look at the record of the members of both parties and decide if they were really acting in the interests of their constituencies with the right priorities or rather were they just trying to play games of oneupmanship. Controversy and debate can make for good government but a great government uses this to forge compromises which will best serve the interests of all.

Thanks for reading Contempo Magazine blog which discusses issues for McAllen, the Rio Grande Valley, and America from a conservative Hispanic point of view. Tony Magaña grew up in McAllen Texas, attended Texas A&M University, served as an officer in Army Reserve, and holds a doctorate from Harvard University. The co-founder of Contempo Magazine has participated in Valley business for over 20 years. He is a member of the National Association of Hispanic Journalists and also writes for the American Daily Review. Follow him on twitter http://twitter.com/contempomagazin

by Dr. Tony Magana

One of the changes coming to the health insurance system of the United States is likely to be a repeal in the unlimited tax deductibility of employer provided health insurance benefits. Both the Republicans and Democrats are proposing modifications to the status quo that has stood since World War II. How these changes are made will drastically effect what type of health care system evolves.

During the 2008 Presidential campaign, Republican candidate, John McCain put forth changing the classic tax deduction from one that allowed employers to deduct the cost of health care from their taxable earnings. His adduced that this keeps the cost of employer based insurance artificially low and that of individual based insurance artificially high. The goal of the McCain plan was to move away from an employer based system to an individual based system where each family could chose their own plan.

The new architecture under McCain would still deduct a portion of the employer coverage but what have provided tax credit’s to families of $5,000 or to individuals of $2,500. Those with high incomes and whose employers paid more than $15,000 in health costs would pay tax taxes on the benefit while those with lower incomes could receive tax credits which they could cash in to buy private insurance.

During his campaign, Barack Obama, opposed removing the tax deductibility of health care benefits granted by employers. Labor unions whose support helped elect President Obama protested any increased taxation on health care benefits which often are the focus of union negotiations with management. The New York Times reported that a split may be occurring more recently between the older manufacturing based union members who tend to have high benefits and the service workers who often have low benefits. In March the President signaled a reversal in his views even though he had ridiculed John McCain for the same thing during the campaign.

Curiously some in business have adopted a similar attitude to organized labor noting that health care benefits are an important means of recruiting and retaining high quality workers and management. The national Chamber of Commerce is officially against removing health cost deductibility.

The Democratic stratagem of creating a public program to compete with the private health insurance system and the Republican blueprint to expand private coverage by subsidizing low income families will both require billions of dollars to fund initially. Without massive increases in primary tax rates or deduction changes there is no way to adequately fund either proposal. The Congressional Budget Office has said the making health benefits fully taxable could raise $246 billion in revenue.

The apparently most influential Democrat in Congress on health care, Senate Finance Chairman Max Baucus (D–MT) says he wants to keep an employer based system with some deductions but will accept limits on deductions rather than the current unlimited status.

Conservative proponents of change like Greg D’Angelo and Robert Moffit, Ph.D., of the Heritage Foundation say that the current system creates a sizable tax penalty for families or individuals who try to buy insurance that is not employer based. The tax deduction as it currently stands is regressive because no help is extended to lower income tax payers and conversely, may drive up the costs of health care benefits as a disincentive to cost controls.

Getting away from employer based plans and allowing families to choose which specific health plan they want instead of their employer would empower Americans with choice. Changing the tax deductibility will allow this be “leveling the playing field” between employer based and non-employer based plans.

This week the Wall Street Journal reported the Republican alternative called the Patients’ Choice Act would eliminate the tax break for employer based health benefits and replace it with a tax credit of $5,700 per family or $2,300 per individual. Lower income families could receive subsidies to help them buy private insurance.

The Democrats are still leaning to keeping some tax deductions at hand to keep employer based health care in place but will tax the benefit for high income earners or if the benefit is considered “particularly generous”.

At this point there is a high certainty that if any health care reform passes in Congress there will be at least some limits on the deductibility of health care benefits provided by employers. This change is compelling since no other source of available funding can be found to help supply coverage for Americans currently without insurance. William G. Gale, Vice President and Director, Economic Studies for the Brookings Institute has said that this adjustment will help cause the non-employer group insurance markets to function. He also notes that that having consumers being more involved in paying the costs of care will help control costs and lead to more “productive expenditures”.

Americans can only benefit if they are given a real choice in deciding which health insurance program in which to participate instead of being limited to a single employer based program or government run single payer system. There are legitimate concerns that if a coexistent public system like an expanded Medicare is set up to compete with the private system while at the same time penalizing the private system with a significant tax penalty this will ultimately exclusively allow the public system to survive.

There is an important distinction between the market-based proposals of conservatives who propose taxing employer based health benefits but make a tax deduction available to workers to purchase insurance either through their employment or separately and the that of the liberal Democrats in Congress says Michael Tanner of the CATO Institute. Under the conservative plan most workers would receive a net tax cut while under the Democratic plan what will result is a $1 trillion dollar tax increase on the middle class.

The old tax deductibility of employer based health care benefits should be changed but how it is changed may make the difference in whether America has a consumer driven program of choice or a government run public system.

Thanks for reading Contempo Magazine blog which discusses issues for McAllen, the Rio Grande Valley, and America from a conservative Hispanic point of view. Tony Magaña grew up in McAllen Texas, attended Texas A&M University, served as an officer in Army Reserve, and holds a doctorate from Harvard University. The co-founder of Contempo Magazine has participated in Valley business for over 20 years. He is a member of the National Association of Hispanic Journalists and also writes for the American Daily Review. Follow him on twitter http://twitter.com/contempomagazin

by Dr. Tony Magana

Congressman Henry Cuellar (D-TX) was instrumental in the passage of legislation to create federal grants for upgrades and repairs to local school districts.

The 21^st Century Green High-Performing Public School Facilities Act (HR 2187) is legislation which will grant authority to the Secretary of Education to make grants to State educational agencies for the modernization, renovation, repair and other purposes.

According to Congressman Henry Cuellar (D-TX) the bill authorizes $6.4 million for school projects to make schools cleaner, more energy efficient, and better learning environments. He says that educational research supports better student achievement as well as improved teacher recruitment and retention with such programs.

The legislation has been criticized by some Republican members including Rep. Howard McKeon because they see it as an attempt to nationalize and regulate school construction and thus “usurp” control from local authorities. They further complain the mandatory compliance with Davis-Bacon wage standards will increase labor costs by approximately 25% and that the bill will siphon funds out the federal pool of funds reserved for disabled students.

The bill was amended from the original form to include requirements for a bipartisan provision coauthored by Congressman Cuellar and Congressman Phil Roe of Tennessee, to allow study of the impact of the bill’s repair and modernization efforts on student performance which addressed a Republican concern.

Congressman Cuellar also coauthored with Congressman Bobby Bright of Alabama, insertion of a set aside 5% of the bill’s overall funding – about $320 million – for areas recovering from a natural disaster or suffering severe economic distress.

Text of the bill specifically states that the funds are a supplement and not meant to supplant the amount of funds available for a project so that the project will necessarily be locally based in initiation and planning.

On May 14, 2009 the measure based the House of Representatives with 149 Republicans joining Democrats in support. Congressman Cuellar says the bill will likely bring $569 million for Texas school improvements.

Many conservatives feel that good infrastructure projects may benefit the economy more than the corporate bailouts. The Congressional Budget Office report estimates that between 2010 and 2013 there would be $6.4 billion in awards and about $100 million for areas hit by Hurricanes Katrina and Rita. A resultant increase in discretionary spending of $33 billion would also occur. The new grant program would be a huge endeavor.

Economic studies have shown that returns on investment are multiplied into increased revenue for states when their population becomes more educated. Texas has consistently had low levels of students reaching college by age 21 and unacceptably high rates of high school dropouts especially for minorities.. There may be some appropriate concern about how the government is going to interfere into local school planning which means this program will require transparency and accountability but overall I think Congressman Cuellar made the right call to support this bill.

Thanks for reading Contempo Magazine blog which discusses issues for McAllen, the Rio Grande Valley, and America from a conservative Hispanic point of view. Tony Magaña grew up in McAllen Texas, attended Texas A&M University, served as an officer in Army Reserve, and holds a doctorate from Harvard University. The co-founder of Contempo Magazine has participated in Valley business for over 20 years. He is a member of the National Association of Hispanic Journalists and also writes for the American Daily Review. Follow him on twitter http://twitter.com/contempomagazin