Monday, February 25, 2019

The Trump-Kim Summit in Hanoi: How America Can Make History

Peace must be the way forward. And that can only mean a peace treaty.

by Douglas Macgregor
February 25, 2019

For most of their terms in office, Americans Presidents live in a world filled with more hostility than admiration and more abuse than appreciation. However, few, if any presidents have confronted the opposition to change in any form that President Donald Trump encountered. Trump’s controversial reset of American Foreign Policy in Northeast Asia elicited almost universal contempt.

Trump’s detractors inside the beltway insisted that the President had no good military option vis-a-vis North Korea to force it to denuclearize. According to the experts, the only outcome would be a war on the Peninsula that would leave a million Koreans and many, many thousands of Americans and other expatriates dead.

Inside any bureaucracy, civilian or military there is inevitably a sterile infatuation with fixed, inert ideas. But nowhere in American society is there a greater tendency to ignore new facts, especially when they are incongruent with conventional wisdom, than in Washington, DC.

Predictably, Trump’s predecessors viewed North Korea in the static context of the Cold War. It did not occur to them that a weak country —plagued with chronic famine, with fewer than 3 percent of its roads paved, and a gross national product behind Ethiopia—might not live up to the inflated threat picture provided by Washington’s notoriously inaccurate intelligence estimates.

Trump saw things differently. Instead of meekly accepting the intelligence assessments and the testimony of experts, Trump set out to solve the North Korea problem. He began by meeting early in Mara Lago, Florida with President Xi of China and raised the subject of North Korea in private discussion. Trump did not hesitate to express his aversion to the North Korean regime, but he also Trump consistently demonstrated his respect for China and its national security interests.

The outcome of Trump’s meetings with Xi was an understanding that provided the foundation for Beijing’s support to the President in the difficult months leading up to the Singapore Summit. Trump decided that American military power should be an instrument of statecraft, not its determinant. In a statement that the New York Times regarded as a departure from the firm, but measured language of his predecessors, in his first address to the United Nations Trump said, “The United States has great strength and patience, but if it is forced to defend itself or its allies, we will have no choice but to totally destroy North Korea.”

Trump and North Korean leader Kim Jong-un are now set to meet in Hanoi, Vietnam, on February 27 and 28 to build on an agreement they reached during their first summit to pursue complete denuclearization of the Korean Peninsula. How far North Korea will commit to dismantling its nuclear weapons and ballistic missile program is yet to be clarified, but Kim has described the process as irreversible.

In a propaganda shift that is nothing short of titanic in its implications, Kim told his people , “The road to peace is hard and sometimes accompanied by great sacrifices,” the state article stated. “We cannot rest just because the road ahead is too long, and we can’t turn around or retreat just because of trials and obstacles blocking it.”

Kim’s statement which mentioned the word “peace” more than seventy times was published just two weeks before the scheduled summit in Hanoi, Vietnam. Given Kim’s unspoken fear that North Korean society in its Stalinist form is unlikely to survive contact with the free and open society of South Korea, Kim’s statement is far more than a modest gesture.

However, for Kim and South Korean President Moon Jae-in to move decisively forward, a treaty that formally ends the war on the peninsula must be signed. Moon has intimated in the past that Beijing and Pyongyang will not commit to total denuclearization of the Peninsula without a clear renunciation of the use of force to compel regime change. With the peace treaty in place, North Korea will allow the International Atomic Energy Agency (IAEA) to inspect its nuclear, uranium and plutonium enrichment facilities setting the stage for the denuclearization that Washington, Beijing, Seoul, and Pyongyang desire.

Trump’s break with the Cold War past is paying handsome dividends for peace on the Korean Peninsula. It’s vital that the President set the conditions for this event in Hanoi. For Asia, a region of the world that endured long periods of war and destruction after the Japanese invaded China in 1937, the signing of a peace treaty ending the Korean War by all of the participants in that tragic conflict would constitute a turning point in human history as important to world civilization as the collapse of Soviet power in Eastern Europe.
As Margaret Thatcher once told President George Herbert Walker Bush, “ This is no time to dither. ” Trump must seize the moment in Hanoi for the demilitarization of America’s relations with Asia in general, and more specifically, with China and Korea. It is precisely the constructive relationship Trump sought with China, and for that matter, with all nations during his run for the Presidency.

Colonel (ret) Douglas Macgregor is a combat veteran, a PhD and the author of five books. His latest is Margin of Victory , (Naval Institute Press, 2016).

Image: Reuters

Wednesday, February 20, 2019

Tucker Carlson Tonight 2/19/2019

Venezuela in Crisis
Are We Going to Nation Build in Venezuela?

Sunday, February 17, 2019

Of Interest: Why Are These Professional War Peddlers Still Around?

Pundits like Max Boot and Bill Kristol got everything after 9/11 wrong but are still considered "experts."

Max Boot (Credit: U.S. Navy) and Bill Kristol (Credit: Gage Skidmore)

One thing that every late-stage ruling class has in common is a high tolerance for mediocrity. Standards decline, the edges fray, but nobody in charge seems to notice. They’re happy in their sinecures and getting richer. In a culture like this, there’s no penalty for being wrong. The talentless prosper, rising inexorably toward positions of greater power, and breaking things along the way. It happened to the Ottomans. Max Boot is living proof that it’s happening in America.

Boot is a professional foreign policy expert, a job category that doesn’t exist outside of a select number of cities. Boot has degrees from Berkeley and Yale, and is a fellow at the Council on Foreign Relations. He has written a number of books and countless newspaper columns on foreign affairs and military history. The International Institute for Strategic Studies, an influential British think tank, describes Boot as one of the “world’s leading authorities on armed conflict.”

None of this, it turns out, means anything. The professional requirements for being one ofthe world’s Leading Authorities on Armed Conflict do not include relevant experience with armed conflict. Leading authorities on the subject don’t need a track record of wise assessments or accurate predictions. All that’s required are the circular recommendations of fellow credential holders. If other Leading Authorities on Armed Conflict induct you into their ranks, you’re in. That’s good news for Max Boot.

Boot first became famous in the weeks after 9/11 for outlining a response that the Bush administration seemed to read like a script, virtually word for word. While others were debating whether Kandahar or Kabul ought to get the first round of American bombs, Boot was thinking big. In October 2001, he published a piece in The Weekly Standard titled “The Case for American Empire.”

“The September 11 attack was a result of insufficient American involvement and ambition,” Boot wrote. “The solution is to be more expansive in our goals and more assertive in their implementation.” In order to prevent more terror attacks in American cities, Boot called for a series of U.S.-led revolutions around the world, beginning in Afghanistan and moving swiftly to Iraq.

“Once we have deposed Saddam, we can impose an American-led, international regency in Baghdad, to go along with the one in Kabul,” Boot wrote. “To turn Iraq into a beacon of hope for the oppressed peoples of the Middle East: Now that would be a historic war aim. Is this an ambitious agenda? Without a doubt. Does America have the resources to carry it out? Also without a doubt.”

In retrospect, Boot’s words are painful to read, like love letters from a marriage that ended in divorce. Iraq remains a smoldering mess. The Afghan war is still in progress close to 20 years in. For perspective, Napoleon Bonaparte seized control of France, crowned himself emperor, defeated four European coalitions against him, invaded Russia, lost, was defeated and exiled, returned, and was defeated and exiled a second time, all in less time than the United States has spent trying to turn Afghanistan into a stable country.

Things haven’t gone as planned. What’s remarkable is that despite all the failure and waste and deflated expectations, defeats that have stirred self-doubt in the heartiest of men, Boot has remained utterly convinced of the virtue of his original predictions. Certainty is a prerequisite for Leading Authorities on Armed Conflict.

In the spring of 2003, with the war in Iraq under way, Boot began to consider new countries to invade. He quickly identified Syria and Iran as plausible targets, the latter because it was “less than two years” from building a nuclear bomb. North Korea made Boot’s list as well. Then Boot became more ambitious. Saudi Arabia could use a democracy, he decided.

“If the U.S. armed forces made such short work of a hardened goon like Saddam Hussein, imagine what they could do to the soft and sybaritic Saudi royal family,” Boot wrote.

Five years later, in a piece for The Wall Street Journal, Boot advocated for the military occupation of Pakistan and Somalia. The only potential problem, he predicted, was unreasonable public opposition to new wars.

“Ragtag guerrillas have proven dismayingly successful in driving out or neutering international peacekeeping forces,” he wrote. “Think of American and French troops blown up in Beirut in 1983, or the ‘Black Hawk Down’ incident in Somalia in 1993. Too often, when outside states do agree to send troops, they are so fearful of casualties that they impose rules of engagement that preclude meaningful action.”

In other words, the tragedy of foreign wars isn’t that Americans die, but that too few Americans are willing to die. To solve this problem, Boot recommended recruiting foreign mercenaries. “The military would do well today to open its ranks not only to legal immigrants but also to illegal ones,” he wrote in the Los Angeles Times. When foreigners get killed fighting for America, he noted, there’s less political backlash at home.


American forces, documented or not, never occupied Pakistan, but by 2011 Boot had another war in mind. “Qaddafi Must Go,” Boot declared in The Weekly Standard. In Boot’s telling, the Libyan dictator had become a threat to the American homeland. “The only way this crisis will end—the only way we and our allies can achieve our objectives in Libya—is to remove Qaddafi from power. Containment won’t suffice.”

In the end, Gaddafi was removed from power, with ugly and long-lasting consequences. Boot was on to the next invasion. By late 2012, he was once again promoting attacks on Syria and Iran, as he had nine years before. In a piece for The New York Times, Boot laid out “Five Reasons to Intervene in Syria Now.”

Overthrowing the Assad regime, Boot predicted, would “diminish Iran’s influence” in the region, influence that had grown dramatically since the Bush administration took Boot’s advice and overthrew Saddam Hussein, Iran’s most powerful counterbalance. To doubters concerned about a complex new war, Boot promised the Syria intervention could be conducted “with little risk.”

Days later, Boot wrote a separate piece for Commentary magazine calling for American bombing of Iran. It was a busy week, even by the standards of a Leading Authority on Armed Conflict. Boot conceded that “it remains a matter of speculation what Iran would do in the wake of such strikes.” He didn’t seem worried.

Listed in one place, Boot’s many calls for U.S.-led war around the world come off as a parody of mindless warlike noises, something you might write if you got mad at a country while drunk. (“I’ll invade you!!!”) Republicans in Washington didn’t find any of it amusing. They were impressed. Boot became a top foreign policy adviser to John McCain’s presidential campaign in 2008, to Mitt Romney in 2012, and to Marco Rubio in 2016.

Everything changed when Trump won the Republican nomination. Trump had never heard of the International Institute for Strategic Studies. He had no idea Max Boot was a Leading Authority on Armed Conflict. Trump was running against more armed conflicts. He had no interest in invading Pakistan. Boot hated him.

As Trump found himself accused of improper ties to Vladimir Putin, Boot agitated for more aggressive confrontation with Russia. Boot demanded larger weapons shipments to Ukraine. He called for effectively expelling Russia from the global financial system, a move that might be construed as an act of war against a nuclear-armed power. The stakes were high, but with signature aplomb Boot assured readers it was “hard to imagine” the Russian government would react badly to the provocation. Those who disagreed Boot dismissed as “cheerleaders” for Putin and the mullahs in Iran.

Boot’s stock in the Washington foreign policy establishment rose. In 2018, he was hired by The Washington Post as a columnist. The paper’s announcement cited Boot’s “expertise on armed conflict.”

It is possible to isolate the precise moment that Trump permanently alienated the Republican establishment in Washington: February 13, 2016. There was a GOP primary debate that night in Greenville, South Carolina, so every Republican in Washington was watching. Seemingly out of nowhere, Trump articulated something that no party leader had ever said out loud. “We should never have been in Iraq,” Trump announced, his voice rising. “We have destabilized the Middle East.”

Many in the crowd booed, but Trump kept going: “They lied. They said there were weapons of mass destruction. There were none. And they knew there were none.”

Pandemonium seemed to erupt in the hall, and on television. Shocked political analysts declared that the Trump presidential effort had just euthanized itself. Republican voters, they said with certainty, would never accept attacks on policies their party had espoused and carried out.

Republican voters had a different reaction. They understood that adults sometimes change their minds based on evidence. They themselves had come to understand that the Iraq war was a mistake. They appreciated hearing something verboten but true.

Rival Republicans denounced Trump as an apostate. Voters considered him brave.

Trump won the South Carolina primary, and shortly after that, the Republican nomination.

Republicans in Washington never recovered. When Trump attacked the Iraq War and questioned the integrity of the people who planned and promoted it, he was attacking them. They hated him for that.

Some of them became so angry, it distorted their judgment and character.


Bill Kristol is probably the most influential Republican strategist of the post-Reagan era. Born in 1954, Kristol was the second child of the writer Irving Kristol, one of the founders of neoconservatism.

The neoconservatism of Irving Kristol and his friends was jarring to the ossified liberal establishment of the time, but in retrospect it was basically a centrist philosophy: pragmatic, tolerant of a limited welfare state, not rigidly ideological. By the time Bill Kristol got done with it 40 years later, neoconservatism was something else entirely.

Almost from the moment Operation Desert Storm concluded in 1991, Kristol began pushing for the overthrow of Saddam Hussein. In 1997, The Weekly Standard ran a cover story titled “Saddam Must Go.” If the United States didn’t launch a ground invasion of Iraq, the lead editorial warned, the world should “get ready for the day when Saddam has biological and chemical weapons at the tips of missiles aimed at Israel and at American forces in the Gulf.”

After the September 11 attacks, Kristol found a new opening to start a war with Iraq. In November 2001, he and Robert Kagan wrote a piece in The Weekly Standard alleging that Saddam Hussein hosted a training camp for Al Qaeda fighters where terrorists had trained to hijack planes. They suggested that Mohammad Atta, mastermind of the 9/11 attacks, was actively collaborating with Saddam’s intelligence services. On the basis of no evidence, they accused Iraq of fomenting the anthrax attacks on American politicians and news outlets.

Under ordinary circumstances, Bill Kristol would be famous for being wrong. Kristol still goes on television regularly, but it’s not to apologize for the many demonstrably untrue things he’s said about the Middle East, or even to talk about foreign policy. Instead, Kristol goes on TV to attack Donald Trump.

Trump’s election seemed to undo Bill Kristol entirely. He lost his job at The Weekly Standard after more than 20 years, forced out by owners who were panicked about declining readership. He seemed to spend most of his time on Twitter ranting about Trump.

Before long he was ranting about the people who elected Trump. At an American Enterprise Institute panel event in February 2017, Kristol made the case for why immigrants are more impressive than native-born Americans. “Basically if you are in free society, a capitalist society, after two, three, four generations of hard work, everyone becomes kind of decadent, lazy, spoiled, whatever.” Most Americans, Kristol said, “grew up as spoiled kids and so forth.”

In February 2018, Kristol tweeted that he would “take in a heartbeat a group of newly naturalized American citizens over the spoiled native-born know-nothings” who supported Trump.

By the spring of 2018, Kristol was considering a run for president himself. He was still making the case for the invasion of Iraq, as well as pushing for a new war, this time in Syria, and maybe in Lebanon and Iran, too. Like most people in Washington, he’d learned nothing at all.

Tucker Carlson is the host of Fox News’s Tucker Carlson Tonight and author of Ship of Fools: How A Selfish Ruling Class Is Bringing America to the Brink of Revolution (Simon & Schuster). This excerpt is taken from that book.

Monday, February 4, 2019

Greg Penglis Podcast

Action Radio! - Special Guest - Col. Doug Macgregor - Re: The "Wall!"
Broadcast in Politics
February 4, 2019  8:00 am

This is a very special show.  My guest in the second hour is decorated combat veteran Col Doug Macgregor.  He is an author of five books, he has a Ph.D. in international relations, and now has a consulting firm on military and foreign relations concerns.  He has some very strong views on the state of the military, where it needs to go, and how to get there.  We also talked about securing our Southern border, using the military until the Wall is built.  Fascinating discussion with a nationally and internationally known expert.

In the first half hour I describe how the crisis over the Wall, an emergency declaration, and the resulting judicial challenges, could be met by using this challenge as a way to abolish "judicial review," the unconstitutionally seized power by the Judiciary, giving themselves authority over the rest of the government, by "interpreting" the Constitution as they see fit, and then writing law and policy through orders that create national law and policy.  It's all illegal and unconstitutional.

Kevin Derby from talked Florida issues in the second half hour of the show.

Of Interest: How American Citizens Finance $18.5 Billion In Health Care For Unauthorized Immigrants

Feb 26, 2018, 5:06 pm

Chris Conover Contributor
The Apothecary Contributor Group

I recently did an interesting interview with Dan Gorenstein, a health care reporter with station WHYY and NPR’s radio business show Marketplaceon the issue of tax-financed health care for unauthorized immigrants [1]. The piece that aired did not include any of my remarks, but I thought it would be useful to give readers my perspective on this knotty policy question based on both background research I did to prepare for the interview and follow-on research I did in light of the questions posed in the interview.

Current federal policy is to prohibit federal tax funding of health care to unauthorized immigrants through either Medicaid or Obamacare. Nevertheless, rough estimates suggest that the nation’s 3.9 million uninsured immigrants who are unauthorized likely receive about $4.6 billion in health services paid for by federal taxes, $2.8 billion in health services financed by state and local taxpayers, another $3.0 bankrolled through “cost-shifting” i.e., higher payments by insured patients to cover hospital uncompensated care losses, and roughly $1.5 billion in physician charity care. In addition to these amounts, unauthorized immigrants likely benefit from at least $0.9 billion in implicit federal subsidies due to the tax exemption for nonprofit hospitals and another $5.7 billion in tax expenditures from the employer tax exclusion.

All told, Americans cross-subsidize health care for unauthorized immigrants to the tune of $18.5 billion a year . Of this total, federal taxpayers provided $11.2 billion in subsidized care to unauthorized immigrants in 2016 .

In this post, I describe in more detail current policy, current sources of funding for health care of unauthorized immigrants. In a follow-on post, I will offer four independent reasons federal tax funding for such care is a bad idea (that is, a reader need only accept one, not all, in order to conclude we should dispense with such funding).

A map of Mexico purporting to show the country as it was in 1794 is displayed as young immigrants and their supporters rally in support of Deferred Action for Childhood Arrivals (DACA) in Los Angeles, California on September 1, 2017. A decision is expected in coming days on whether US President Trump will end the program by his predecessor, former President Obama, on DACA which has protected some 800,000 undocumented immigrants, also known as Dreamers, since 2012. / AFP PHOTO / FREDERIC J. BROWN (Photo credit should read FREDERIC J. BROWN/AFP/Getty Images)

Current Policy Regarding Federal Funding of Health Care for Undocumented Immigrants

The purported intent of federal policy is to prevent federal tax dollars from being used to fund health care for unauthorized immigrants except in extreme circumstances. Notwithstanding express prohibitions contained in the statutes related to Medicaid and Obamacare, there also are companion federal programs that permit federal funding to be used for health care of unauthorized immigrants indirectly.

Where Use of Federal Dollars to Fund Health Care for UnauthorizedImmigrants is Expressly Prohibited

Medicaid. Under Medicaid and CHIP (Children’s Health Insurance Program), no federal funding may be used to cover unauthorizedimmigrants, except for payment for limited emergency services. Specifically, “Medicaid payments for emergency services may be made on behalf of individuals who are otherwise eligible for Medicaid but for their immigration status. These payments cover costs for emergency care for lawfully present immigrants who remain ineligible for Medicaid as well as undocumented immigrants.”

Moreever, states can and do use state-only Medicaid programs to cover such individuals. For example, California’s Health for All Kids Act provides unauthorized immigrant children with access to coverage through Medi-Cal, the state Medicaid program. Its passage in 2015 made California the largest state to use state-only funding to provide coverage to all children regardless of immigration status; in doing so, it joins New York, Illinois, Massachusetts, Washington, and the District of Columbia.

ACA. Under the ACA, immigrants must be lawfully present to purchase insurance in a Qualified Health Plan, or to be eligible for an Advance Payment for Premium Tax Credit or Cost-Sharing Reduction. Under legislation signed by Governor Jerry Brown in June 2016, California would have been the first state to allow unauthorized immigrants to purchase health plans through its insurance exchange without fear that their information would be shared with other government agencies. The law directed California’s exchange, Covered California, to apply for a State Innovation Waiver to allow people who would be eligible for the exchange if not for their immigration status to purchase California Qualified Health Plans (QHPs), which provide benefits identical to those included in other ACA-compliant QHPs. This policy requires a waiver because it involves an alteration to the original terms of the ACA, which bars the participation of unauthorized immigrants in state exchanges. However, this waiver request was withdrawn on January 18, 2017.

Where Use of Federal Dollars to Fund Health Care for Unauthorized Immigrants is Indirectly Permitted

The ”clear intent” of restrictions embedded in Medicaid and Obamacare is undercut by several end-arounds that allow health care for unauthorized immigrants to be indirectly funded using federal dollars.

Medicaid DSH Payments. First, there is a source of Medicaid financing that indirectly benefits unauthorized immigrants: DSH payments [2]. Kaiser Family Foundation reports “DSH, or “disproportionate share” hospitals are hospitals that serve a large number of Medicaid and low-income uninsured patients…At the facility level, Medicaid DSH payments are limited to 100 percent of the costs incurred for serving Medicaid and uninsured patients that have not been compensated by Medicaid (Medicaid shortfall).” The DSH program simply provides a general subsidy against a hospital’s aggregate uncompensated care losses from uninsured patients. Nothing requires hospitals to back out their spending on uncompensated care for unauthorized immigrants from their aggregate losses; consequently, federal Medicaid funds end up indirectly subsidizing their care even though it would be expressly illegal to pay for their care by making them direct Medicaid recipients.

Medicare DSH Payments. In a similar fashion, although the formula is much more complicated, Medicare also pays hospitals a DSH payment that effectively serves as a general subsidy to offset aggregate uncompensated care losses without making any distinction between uncompensated costs generated by unauthorized immigrants and those generated by American citizens or legal immigrants.

Community Health Centers. Federally qualified health centers provide primary healthcare, dental, mental health and pharmacy services. They treat all comers without concern for immigration status or ability to pay for care.

Tax Exemption. Nonprofit hospitals (and other health facilities) receive tens of billions of dollars annually in benefits from the federal tax exemption including forgone taxes, public charitable contributions, and the value of tax-exempt bond financing. Unauthorized immigrants benefit from this federal largesse.

Employer Tax Exclusion. The employer tax exclusion provides an indirect federal tax subsidy to everyone with employer-sponsored health insurance. Noncitizen immigrants are admittedly less likely to have such coverage than natives, but the differential is less than 10 percentage points after adjusting for the most important demographic/socioeconomic characteristics.

From where I sit (a libertarian-leaning conservative health reformer), current policy makes a lot of sense. It allows states or localities to opt to provide health care for unauthorized immigrants using local tax resources. In a country of 320 million people with deeply divided views on this issue, the federalist approach seems far preferable to trying to adopt a one-size-fits-all policy that forces tens of millions of federal taxpayers to subsidize lawbreakers against their will.

Moreover, my view is that if the intent of federal policy is to prevent taxpayer resources from being used to finance health care for unauthorized immigrants, federal officials have an obligation to be vigilant this does not occur inadvertently and a parallel obligation to be transparent if it does. That was the purpose of my writing an earlier post on this issue 20 months ago.

Current Funding for Health Care of Illegal Immigrants

Uninsured Unauthorized Immigrants. According to Pew Research Center, there were 11.3 million unauthorized immigrants in the U.S. in 2016. Currently, 14% of the uninsured (3.9 million) are unauthorized immigrants who are ineligible for both Medicaid and ACA coverage under federal law. For purposes of discussion, I am going to focus principally on financing health care for unauthorized immigrants who are uninsured since we know that about 70% of care for America’s uninsured is uncompensated, meaning that ultimately it is paid for by society in one way or another.

Specifically, in 2013 (the latest available such figures), America’s uninsured generated $84.9 billion in uncompensated care costs [Table 2] or $1,257 per person who was ever uninsured that year [Table 1]. Of this:
39% was covered by various federal programs (e.g., disproportionate share payments to hospitals);
23% by state and local governments (e.g., via taxpayer support of state and locally owned hospitals);
12% came in the form of physician charity care covered;
25%–was covered by hospitals (arguably by “cost-shifting” i.e., higher charges to privately insured patients that effectively cross-subsidize care for patients who do not pay full freight etc.). An unknown fraction of this stems from EMTALA–the Emergency Treatment and Active Labor Act–a federal law that requires hospitals to treat emergency patients regardless of their ability to pay. EMTALA is an example of “taxation by regulation” insofar as the same outcome might have been achieved by using tax dollars to pay hospitals to treat such patients voluntarily.

Assuming unauthorized immigrants received a pro rata share of such support (i.e., 14%), they account for the $11.9 billion in uncompensated care costs, financed as follows:
$4.6 billion–federal taxpayers
$2.8 billion–state and local taxpayers
$3.0 billion–hospital charity care/bad debts arguably cost-shifted to private patients
$1.5 billion–physician charity care

I recognize these back-of-the-envelope figures are crude, but they are the best estimates I could make given that the recent National Academy of Sciences report The Economic and Fiscal Consequences of Immigration only provides highly aggregated estimates of cost impacts, with no breakdown of how much of these costs can be attributed to health care etc.

Federal Taxpayers. It might puzzle some readers that the federal government is paying for any care for unauthorized immigrants in light of federal policy. This can happen through fraud, to be sure, but as explained earlier, most of this occurs indirectly through various federal programs that fund institutions rather than individuals. These include hospitals (Medicaid/Medicare DSH payments) and community health centers/free clinics.

Hospital Charity Care/Bad Debts. Hospitals with 501(c)(3) status are required to establish written financial assistance policies under Affordable Care Act sections 501(r). As a consequence, there is a cleaner distinction between genuine charity care and bad debts than there was in the past when hospitals adopted very disparate practices about how to treat situations where a patient was not expected to pay (charity care) versus not able to pay (bad debt).

Let me concede that there is only limited evidence that hospitals engage in what’s called “dynamic cost shifting.” That is, if a hospital’s uncompensated care burden rises by $1 million, only some, not all, of that amount can be expected to be recovered by the hospital’s increasing charges to privately insured patients to make up the difference.

That said, hospitals can and do exercise market power, meaning they are able to charge private patients a higher rate than Medicare or Medicaid patients. This practice results in profits from private patients that then are used by the hospital in various ways, including the provision of charitable care.

The point being that if the federal government eliminated whatever payments it now makes for uncompensated care (including that generated by unauthorized immigrants), hospitals hypothetically would not respond by increasing charges to recover part of their increased uncompensated care costs, but instead make adjustments in the form of either spending less on other things or taking steps to discourage unauthorized immigrants from showing up at their doors.

Conversely, if federal, state or local governments were to make hospitals entirely whole regarding their uncompensated care losses to unauthorized immigrants, this would not necessarily benefit hospital patients in the form of lower charges. For these reasons, it is not altogether obvious that these hospital uncompensated care losses are a problem that can be solved by better public policy. Nevertheless they manifestly are a public policy issue from the standpoint of patients concerned about high health costs.

Physician Charity Care. The $1.5 billion in physician charity care represent an average of $1,750 for each of the country’s 855,000 active physicians. According to Medscape’s Physician Compensation Report for 2017, the average physician makes $294,000 a year. Even generously assuming a 60 hour workweek, that’s roughly $100 hourly meaning the average physician devotes 17.5 hours a year to charity care for unauthorized immigrants (less if we assume a higher hourly rate).

Note that physicians, receive no tax benefits for providing charity care; that is, they cannot write off the cost of charity care from their personal or business taxes. Consequently, although physician charity care is an important component of the uncompensated care landscape, in my view, these voluntary donations of time–a longstanding worthy tradition in American medicine–do not pose a public policy concern.

Other Federal Subsidies Benefiting Unauthorized Immigrants

Although it presumably did not arise by a deliberate intent to benefit unauthorized immigrants, current tax policy likely confers an additional $6.6 billion in additional benefits financed by U.S. taxpayers. The tax exemption for nonprofit hospitals (and any other nonprofit health facilities) benefits unauthorized immigrants regardless of their insurance status. The employer tax exclusion benefits unauthorized immigrants who happen to receive employer-provided health benefits.

Tax Exemption. The value of the nonprofit tax exemption to U.S. nonprofit hospitals in 2011 was $24.6 billion, including forgone taxes, public charitable contributions, and the value of tax-exempt bond financing. Assuming that 11.3 million unauthorized immigrants receive a pro rata share of this benefit, they receive roughly $0.9 billion in additional federal subsidies for their hospital care. I could locate no parallel figures for other nonprofit health facilities.

Employer Tax Exclusion. Estimating the size of these tax benefits for unauthorized immigrants is of necessity extremely rough. I could locate no reliable information on the wage distribution of such immigrants, especially among those who obtain employer-provided health benefits. According to Kaiser Family Foundation, “nonelderly lawfully present and unauthorized immigrants are as likely as nonelderly citizens are to live in a family with at least one full-time worker, but they are more likely than citizens are to be low-income, since they often work in low-wage jobs.” More concretely, nearly half (48%) of unauthorized immigrants live in low income families below 200% of the federal poverty level.

That said, as shown earlier, we know that only 3.9 million of unauthorized immigrants are uninsured, leaving 7.7 million with some sort of coverage. No good data exist on what fraction of these obtain non-group health coverage, but Kaiser Family Foundation’s Larry Levitt has said via Twitter that “some are buying non-group, but I’d agree that it’s primarily employer coverage.” Assuming that 86% have employer-provided coverage (which is the identical percentage among all non-elderly adults having private coverage in 2016: Table HIC-2), this would equal 6.6 million unauthorized immigrants with such coverage.

And even if we conservatively assume that such workers obtain the least expensive form of coverage (high deductible health plan with savings option) in an industry most likely to employ such workers (agriculture/mining/construction), the single premium in 2017 would be $5,666 (compared to $6,690 across all plans/industries). If we further conservatively assume all unauthorized workers pay no income taxes and are only liable for payroll taxes, the tax subsidy amounts to 15.3% ($866 per worker) or $5.7 billion for all unauthorized immigrants with such coverage.


When we sum all the figures, including $11.9 billion for the uninsured and another $6.6 billion in tax subsidies, we arrive at a grand total of $18.5 billion in subsidized health care for all unauthorized immigrants in 2016. This amounts to $57 per U.S. resident. The share that concerns me the most–$11.2 billion borne by federal taxpayers–amounts to $34 per U.S. resident. Admittedly, one could argue that since the amounts at stake are so small, this is not an issue worth fighting about. However, it is precisely that sort of thinking that has led us to today’s dismal reality that unfunded liabilities facing Uncle Sam now are roughly $200 trillion and rising.

So even though the dollar stakes are quite small in a federal budget that will spend $4 trillion in the fiscal year that just started, I believe citizens and federal policymakers should stop pressing the Easy button and seriously ponder four important principled arguments against federal tax financing of health care for unauthorized immigrants:
Federal funding is unnecessary
Federal funding is inefficient
Federal funding is unconstitutional
Federal funding is immoral

I will elaborate on these arguments in a subsequent post.

Update #1: February 28, 2018

Twitter user d-dask pointed out that the term I originally used in this piece–undocumented immigrants–is not the same term used by Department of Homeland Security. Even though I used “undocumented immigrants” with the intent that it be viewed as a neutral term, I concluded that using the “official” DHS term was preferable, so have substituted this term throughout.

READ CHRIS’ BOOK, The American Health Economy Illustrated (AEI Press, 2012), available at Amazon and other major retailers or as a pdf at AEI. With generous support from the National Research Initiative at the American Enterprise Institute, an online version complete with downloadable Powerpoint slides and companion spreadsheets has been made available through the Medical Industry Institute’s Open Education Hub at the University of Minnesota.

Follow @ConoverChris on Twitter, and The Apothecary on Facebook. Or, sign up to receive a weekly e-mail digest of articles from The Apothecary.

INVESTORS’ NOTE : The biggest publicly-traded players in Obamacare’s health insurance exchanges are Aetna AET -0.28% (NYSE: AET ), Humana HUM -0.78% (NYSE: HUM), Cigna CI -0.25% (NYSE: CI ), Molina (NYSE: MOH ), WellPoint (NYSE: WLP ), and Centene CNC -2.15%(NYSE: CNC ), in order of the number of uninsured exchange-eligible Americans for whom their plans are available.Footnotes

[1] Mr. Gorenstein’s report was filed earlier this month here.

[2] As detailed by Kaiser Family Foundation (footnote 9), “To qualify as a DSH hospital a hospital must meet two minimum qualifying criteria. The first criterion is that the hospital has at least two obstetricians who have staff privileges at the hospital and who have agreed to provide obstetric services to Medicaid patients (except when the hospital predominantly serves children under 18 years or the hospital does not offer obstetric services to the general public). The second criterion is that the hospital has a Medicaid inpatient utilization rate (MIUR) of at least 1 percent. A hospital is deemed as a DSH if the hospital’s MIUR is at least one standard deviation above the mean MIUR in the state, or if the hospital’s low-income utilization rate exceeds 25 percent.”

[3] The lowest wage earners may be exempt from income taxes, but nevertheless have to pay a combined 15.3% in payroll taxes for Social Security and Medicare; hence the exclusion of these taxes is roughly equivalent to a 15% subsidy from Uncle Sam.

Chris Conover Contributor

Saturday, February 2, 2019

A presentation to the CGSC Class

Logistics University, Fort Lee, VA
January 28, 2019

Some recent pictures

Command and General Staff College
Fort Lee, VA

Tucker Carlson Tonight 2/1/19

Trump Says There's a 'Good Chance' He'll Declare a National Emergency in Order to Build a Border Wall

Retired veteran says U.S. should run, not walk out of Afghanistan

Rising with Krystal & Buck

Ret. Col. Douglas Macgregor warned on Tuesday that the U.S. troops should quickly pull out of Afghanistan, saying the involvement in the country had become a "money pit" for the U.S. government.

The comments come after The New York Times reported that U.S. and Taliban officials have agreed to an initial framework for a peace deal that could lead to the withdrawal of American forces in Afghanistan.

“Whatever the deal is, we should get out — that’s the top priority,” MacGregor told Hill.TV’s Krystal Ball and Buck Sexton on “Rising.”

“We should not walk out of that country, we should run,” he added.

Macgregor, who is credited with helping plan the initial invasion of Iraq, argued that the war in Afghanistan has become a “money pit” for contractors in both Washington and the country alike.

“This has been a money pit that dwarf everything else in the history of the United States," he said.

The veteran said that the U.S. continues to spend billions ever year in Iraq and Afghanistan at a time when President Trump and congressional Democrats remain at an impasse over the president's demand for more than $5 billion for a southern border wall.

"No one seems to be upset about anything other $5 billion for the border wall, that doesn’t make any sense, it’s ridiculous, it’s illogical," Macgregor said.

The Pentagon reported in February that the Afghanistan war alone has costed American taxpayers an estimated $45 billion per year. This includes $13 billion for U.S. forces inside Afghanistan and some $780 million for economic aid for the war-torn region.

Macgregor’s comments come after Acting Secretary of Defense Patrick Shanahan said on Monday that there has been “encouraging progress” in talks with the Taliban.

There is still, however, no concrete plan to withdraw troops from Afghanistan yet.

Last month, Trump signaled that he was seeking to withdraw thousands of U.S. troops from the country in the coming months.

Macgregor said he hopes U.S. officials will remain "realistic" in their negotiations, emphasizing that the Taliban already controls much of the country.

"Whatever we do, we just need to leave,” he told Hill.TV.

—Tess Bonn

Retired colonel warns against US involvement in Venezuela

Rising with Krystal & Buck

Retired U.S. Army Col. Douglas Macgregor on Tuesday warned against military involvement in Venezuela, saying the U.S. has already created “enormous bad blood” in Latin America and caused "refugee flows."

"Whenever we go into these countries in Latin America, we create enormous bad blood and we create refugee flows,” Macgregor told Hill.TV’s Buck Sexton and Krystal Ball during an interview on “Rising.”

Macgregor, who helped launch the 2003 invasion of Iraq, said that Latin America is already “riddled” with organized crime and, any U.S. involvement could make the situation even worse than it already is.

"All of these places are riddled with organized crime and criminality, it’ll get worse if you go into Venezuela,” he said.

Venezuela remains locked in a power struggle as President Nicolas Maduro refuses to give up power.

Last week, President Trump endorsed Juan Guaidó, the president of Venezuela's National Assembly, as the nation's interim president. Several other countries, including Canada and Argentina, followed suit.

The White House told The Associated Press on Monday that “all options are on the table” when it comes to dealing with the escalating political crisis in Venezuela. The statement came after national security adviser John Bolton was spotted holding a yellow notepad during a briefing with the words “5,000 troops to Colombia.” The image later went viral on social media, raising questions about whether the U.S. would seek direct involvement with Colombia's neighbor, Venezuela.

The Trump administration also announced on Monday new sanctions against Venezuela's state-owned oil company, Petroleos de Venezuela, S.A. (PdVSA), in an effort to ramp up pressure on Maduro to step down from office. These sanctions will target an estimates $7 billion in assets and could result in $11 billion in lost sales over the next year.

Even if Guaidó did take over the country, Macgregor predicts only a temporary impact.

The veteran said Venezuela will likely remain a “basket case” for some time, pointing to the current state of the oil and gas industry as a prime example.

"He needs a lot of aid and support to repair the oil and gas industry to get that back on its feet," Macgregor said. "How does all of this happen quickly, I don’t think it does,” he added.

—Tess Bonn

Retired army officer Doug MacGregor discusses emerging withdrawal plan from Afghanistan

Rising with Krystal & Buck