Thursday, January 04, 2007

The 100 Hours Rush

WSJ - January 4, 2007

Congratulations to Speaker Nancy Pelosi and her fellow Democrats, who begin their new control of Congress today. They also deserve full marks for paying attention while in the minority, because it's clear Democrats learned a few things from Tom DeLay -- to wit, how to rush through legislation without any minority participation or public debate.

House Democrats plan to pass a pile of legislation in their first 100 hours, bringing the measures quickly to the floor without committee hearings. These are issues they campaigned on last year and that do well in polls at first blush, such as a higher minimum wage, price controls on prescription drugs and "ethics reform." The rush is supposed to show Democratic resolve to get things done, but it's enough to make us wonder if they're afraid that some of their ideas won't hold up under scrutiny.

Take an increase in the federal minimum wage -- to $7.25 an hour in 2009 from $5.15. This was a big hit with Big Labor, and even President Bush has endorsed it in principle. Still, there are negative consequences when the government increases labor costs, and they deserve to be aired, not muffled. No serious economist disputes that a higher wage floor will reduce employment. The debate is only over how many people will lose their jobs. Minorities, low-skilled workers and small businesses get hit hardest, and if a wage hike does less harm this time it will be because in the current tight labor market most employers are already paying above the minimum.

The need for scrutiny is even more compelling on price controls for Medicare prescription drugs. Under the Medicare Part D benefit that took effect last year, private companies negotiate prices. Democrats want to allow the government to deal directly with drug companies. They argue that this would lead to lower prices for medicines, but the more likely outcome is fewer drug choices and price controls.

Democrats point to the Department of Veteran Affairs as a model, but we doubt seniors will like that story when they learn about it. The government already negotiates drug prices directly with the VA. But as Robert Goldberg wrote last month in the Weekly Standard, "Far from negotiating prices, the VA imposes them. Federal law requires companies to sell to the VA at 24% below wholesale price. If they won't, they are banned from selling medicines to Medicaid, Medicare and the public health service."

The VA has created a list of approved drugs for its patients. Companies that don't pay the VA price don't make the list, and a slew of drugs fall into that category. They include Azilect and Tysabri, two of the newest therapies for Parkinson's and multiple sclerosis, respectively. That's what happens when keeping prices down takes priority over getting the best available medicines to patients. Both drugs are available through Medicare Part D, by the way. Maybe Congress ought to debate this.

On ethics reform, Democrats are offering a hodge-podge of good, bad and ridiculous. The good includes earmark reform, if they are really serious in reducing the number and increasing the transparency of the spending process (see below). The ridiculous is a mandate for ethics training for all House employees, which makes us wonder who they're hiring in the first place.

As for the bad, most of the rest of these "reforms" are about controlling the lobbyists, not the Members, which gets it exactly backward. Putting restrictions on the right of citizens to petition government is a strange way of handling ethically challenged politicians. If a Member can be bought with a free lunch or skybox ticket from a lobbyist, he shouldn't be in Congress anyway. And even as they're forgoing lunch, the Members will still be telling corporate lobbyists they'd better ante up that PAC money, or else.

Most slippery is the attempt by Democrats to disguise so-called "pay as you go" budgeting, or paygo, as ethics reform. This is supposed to be a mechanism for reducing the deficit, but in practice it keeps the spending spigots open and makes tax cuts next to impossible. Under paygo, tax cuts must be offset by less spending, but existing entitlement programs that grow automatically every year are exempt from the rules. Under paygo rules, the Bush tax cuts that expire in 2010 have no chance of being extended -- as Democrats well know.

The country spoke loud and clear on behalf of Democrats last November, but we doubt this means it voted for everything on the party's partisan wish list. Attempting to shove these measures through the House without allowing votes on amendments or alternatives isn't the way a confident majority behaves. We guess this is why the Founders created the Senate.

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