October 15, 1999
Critical Condition
Hard Labor?
Sign Of The Times
Borderline Dispute
Critical Condition
House Ways and Means Health Subcommittee Chairman Rep. Bill Thomas (R-Calif.) told the U.S. Chamber of Commerce Wednesday that the employer-based healthcare system "is fatally flawed" and added that federal efforts to manipulate health coverage through employer-based care creates a "slippery slope to the government running not just health insurance, but the entire health system." Thomas said governmental interference leads to cases in which the business community opposes health plans that are adopted by Congress, such as the "Patients' Bill of Rights" passed last week.
In an August commentary, "Who Should Pick Your Health Plan?", Greg Scandlen examined the absurdity of employer-based care: "I have a great barber. I've tried others, but I keep coming back to the same guy because somehow his haircuts just seem to last longer. And after years of disappointment I finally found an auto mechanic I trust, and there's a plumber I know who always comes through, even on weekends. I'm a lucky man to have such reliable sources of help. All these people are good at what they do, and I wouldn't trade them for anything. But I wouldn't ask them to pick my health care plan. What do they know about health care, or insurance, or about my medical needs? Why would I rely on my barber or mechanic or plumber to choose a health insurance plan for my family? The people who work for these guys must be wondering the same thing: 'Here I am working for a plumber (or a mechanic, or a barber, or the local bank or the Toyota dealer), and he gets to choose my health plan. There's something wrong with this picture.' Indeed there is. In the United States, we've accidentally ended up in a situation where employers choose the health plan for their employees. In some cases, if the employer is big enough, the workers get to pick among several different plans, but in most cases (83 percent) there is no choice at all. Even when there is a choice, it is the boss who chooses the plans the employees get to pick from, but what does he know about health care? Exactly nothing. He's in business to sell cars, fix sinks or give haircuts."
A full "48 percent of U.S. workers report that their employers offer only one health care plan," Sue A. Blevins writes in the Cato Policy Analysis "Restoring Health Freedom: The Case for a Universal Tax Credit for Health Insurance". "Those plans increasingly are health maintenance organizations or other types of managed care with limited options. The main reason for the present situation is that federal tax law favors employer-sponsored health insurance. Employer-sponsored health insurance is fully excluded from taxation, but individually purchased health insurance is not. The result is that individuals have diminished ability to choose their health care plans, providers, and treatments." And furthermore, "today's system of tax breaks only for employer-provided insurance… favors the wealthy. In this country we give American workers and their families very generous tax relief on their medical expenses, but only on two conditions. First, they must obtain their medical care through health insurance. And second, they must obtain their health insurance through their employers. As a result, if one works for a Fortune 500 corporation that provides an all-inclusive first-dollar insurance plan, the worker receives it tax free. But a small business owner, waitress, or truck driver has to pay for health care out of pocket or purchase insurance, and receives no tax break at all," Michael Tanner writes in the Cato Policy Analysis "Medical Savings Accounts: Answering the Critics".
Hard Labor?
U.S. Trade Representative Charlene Barshefsky said Wednesday that the United States will try to schedule discussion of labor and environmental issues at the Seattle meeting of World Trade Organization member nations that begins November 30. The Clinton administration seems to be reacting to the vocal opposition of unions and environmental groups toward the WTO meeting. Barshefsky said that the first working day of the meeting will consist of hearings of nongovernmental organizations like unions and environmentalists by the WTO panel.
Before the WTO meeting commences, the Cato Institute will host a conference on the agenda and on the future of the organization. Seattle and Beyond: The Future of the WTO will take place in Washington, D.C., on November 17. On the WTO's agenda in Seattle will be liberalizing trade in the huge and growing services sector, including banking, insurance, and telecommunications, and reducing barriers and subsidies to trade in the contentious area of agriculture. Manufacturing tariffs, competition policy, antidumping rules, electronic commerce, and environmental and labor issues are all being pushed for inclusion. For both advocates and opponents of trade, the meeting promises to be a galvanizing symbol of America's growing ties to the global economy. The conference, hosted by Cato's Center for Trade Policy Studies, will explore the prospects for the upcoming round, the role of the WTO in promoting global prosperity, and the challenge of building support for free trade at home.
Sign Of The Times
The House Judiciary Committee has passed a Democratic version of digital signature legislation. The bill would create a federal legal framework for accepting electronic signatures in transactions, but states would have the option of entering the Uniform Electronic Transactions Act, a state-led effort on digital signatures, instead of the federal structure. The Democratic measure also would allow states to pass their own exemptions to the UETA. The bill is "a mistake. It will be a serious impediment to doing business on the Internet, if we don't have a uniform standard," Rep. Bob Goodlatte (R-Va.) told reporters.
Solveig Singleton writes about the technology in the Cato Policy Analysis "Encryption Policy for the 21st Century: A Future without Government-Prescribed Key Recovery": "Public key cryptography provides a way for the recipient of a message to identify the sender, a 'digital signature.' The sender encrypts part of the message, the signature, with his or her private key. The recipient decrypts this part with the sender's public key, confirming the sender's identity. Digital signatures will be important to the successful growth of Internet commerce; for example, banks will want to be certain that they are actually communicating with their customers, and the customers will want to be certain that they are communicating with their banks. When both the recipient and the sender are using public key technology, encryption can provide privacy and identity authentication. The sender signs a message with his private key and enciphers the message with the recipient's public key. The recipient deciphers the message with her private key and checks the sender's signature with his public key… Public key cryptography amounts to a revolution in security because it enables computer users to secure and authenticate their communications without revealing their own secret keys. The general cryptographic system can be exposed to public scrutiny, allowing weaknesses to be ferreted out, as long as the key remains secret."
Digital signatures are also discussed in the Cato Policy Report articles "Money in the Electronic Age" and "The Future of Money In the Information Age". In the latter, William Melton, founder and CEO of CyberCash, notes, "If chains of trust are the primary ingredient of liquidity, then the technology of digital signatures and digital certificates is indeed a breakthrough that allows maintenance of ever more subtle, more complex, and yet still reliable chains and domains of trust. The economic impact is to provide greater liquidity. Yet that additional liquidity is provided under the tight feedback loops of the market and thus is, on the whole, noninflationary."
Borderline Dispute
The Immigration and Naturalization Service accidentally issued 20,000 more H1-B visas than allowed under an annual cap set by Congress, AP reports. The visas, which allow highly-skilled workers, especially in the high-tech field, to enter the country, are currently capped at 115,000 per year. Rep. Lamar Smith (R-Texas), who heads the House Judiciary Immigration Subcommittee, excoriated the INS, calling the visa error the "latest self-inflicted wound by the agency's inept management."
But should the visa allowance be so low? The Cato Handbook for Congress states that Congress should "increase permanently the number of H1-B visas and deregulate employment-based immigration to facilitate the entry of skilled immigrants… There are at least two compelling reasons why an employer might wish to hire a foreign national: (1) The individual possesses unique knowledge. High-technology workers are not interchangeable. Workers laid off in one sector of the industry are not necessarily qualified to fill jobs being created in another sector. That is why it is bogus for opponents of a higher H1-B cap to point to layoffs in the high-tech industry as proof that more foreign-born workers are not needed. The skills of the laid-off workers may not match the demands of the new jobs being created. (2) The company is building a global workforce, in which case the individual would work in the United States for two to four years and then be employed by the company overseas. For example, more than 60 percent of Microsoft's sales are now overseas, requiring the company to hire foreign-born workers with special language skills and cultural knowledge." Stephen Moore addressed the H1-B debate in a 1998 commentary, concluding that "Immigration Reform Means More High-Tech Jobs", not less.