The House Committee on the PPACA agreed to a plan that provides health insurance options to the state’s OPS employees. According to the Department of Management Services, OPS, “Other Personal Services employment is a temporary employer/employee relationship used solely for accomplishing short term or intermittent tasks.”

Simply allowing participation in the state’s group insurance was expected because of the mandate — that is, employers must provide access or pay a fee. Not covering them would cost the state $318 million. However, to provide this benefit would cost somewhere in the $100 million range depending on a number of factors.

On the eve of the Easter holiday weekend, Representative Trujillo presented his plan to a sparsely populated chamber. He called it “a good bill, not a great bill.” His plan goes further than the law in two ways: Family members of OPS employees can receive coverage, and those working part-time will also have an option to join state group insurance.

Representative Wood was vehemently opposed. He said this is “setting a standard not reflected in our society.” It appears that the most troubling concept for him was that part-time workers would get “full-time” benefits.

At the opposite end of the spectrum, Democratic Representative Schwartz was happy to see the state complying with the law but believes the plan’s coverage is still underwhelming. At one point, she referred to the plan as “doing the least possible” to act in accordance with the law.

The bill passed out of the committee with Wood as the only one voting no.

Cleared on a party-line vote — 74-42, HB 7011 would not impact individuals currently participating in the FRS pension plan. The legislation would also preserve death and disability benefits for current and future public sector employees.

“The time has come for pension reform. I am proud of the House’s passage of this reasonable  proposal that will provide savings for Florida’s taxpayers and financial certainty for our state, while most importantly offering future employees a meaningful retirement benefit they control,” stated Speaker Will Weatherford.

In a statement released after the bill’s passage, House Democratic Leader Perry Thurston made the following assessment, “I am disappointed that the Florida House of Representatives today approved legislation, over strong Democratic opposition that will present greater financial risks to public employees and less retirement security.”

The committee agreed that due to the ambiguity of PPACA the Office of Insurance Regulation will temporarily cede the responsibility of monitoring insurance policy rates to the Department of Health and Human Services.

According to Chairman Joe Negron (R-Stuart), with the federal government creating the conditions for rate increases, it only makes sense that the HHS ensure that reasonable rates are being charged.

Lawmakers also agreed that the OIR must still have some authority to protect Florida consumers. Therefore, under the proposed recommendations, the OIR will make sure policy forms are compliant with PPACA, maintain supervision of market conduct, and notify the HHS of their review and supervisory findings.

Sen. Eleanor Sobel (D – Hollywood) praised her colleagues for taking a “moderate” stance.

However, Sen. David Simmons (R – Maitland) referred to the proposal as, “A very rational, reasonable, conservative approach.”

The plan will now move to the Banking and Insurance Committee for further development.

Monday’s meeting, unless members are notified otherwise, marked the end for the Senate Select Committee on PPACA.  Before the meeting’s final adjournment, Republican and Democrat committee members commended Chairman Negron for his leadership on such a complicated issue.

“I would go for another 12 hours and try to break Strom Thurmond’s record, but I have learned there are limits and I have to go take care of one of those right now,” said Paul.

Rubio made another appearance on the floor; this time the Florida Senator drew inspiration from  pop culture — quoting  “The Godfather”, Jay-Z, and Wiz Khalifa.

“That takes me back to another modern day poet by the name of Jay-Z in one of the songs he wrote: ‘It’s funny what seven days can change. It was all good just a week ago.’”

Well, I don’t know if it was all good a week ago, but I can tell you that things have really changed, because if the President was George W. Bush, and this was a question being asked of him, and his response was the silence we’ve gotten, we’d have a very different scenario here tonight except that I actually believe the Senator from Kentucky would be on the floor making the exact same argument he’s making.”

ORIGINAL POST — About four hours into Sen. Rand Paul’s talking filibuster, preventing the confirmation of John Brennan as head of the CIA, Sen. Marco Rubio appeared on the Senate floor and passed along some wisdom to the filibustering Kentuckian.

“I know you’ve been here a while —  let me give you some advice : Keep some water nearby. Trust me.”

Rubio then commended Paul for defending the institutional integrity of the Senate and its legislative obligations.

Prior to his appearance on the floor, Rubio tweeted the following:

“why is it so hard for POTUS to just say NO,it is not constitutional to kill a citizen who is not an imminent threat with a drone on US soil.”

“#RandPaul is asking a legit question of Holder.Why so hard for them to just give straight answer?Almost like they feel it is beneath them.”

Democrat Senator Ron Wyden joined Paul and a handful of his Republican colleagues — making the filibuster bipartisan.

Paul states that the reason for his filibuster is due to the fact that the president has the authority to kill American citizens on American soil with drones.

“I will speak today until the president says, ‘no’ he will not kill you at a café,” declared Paul.

Below are excerpts of his prepared remarks:

…

“This year, we have two priorities to keep our economy growing: first – remove the sales tax on manufacturing equipment, and second – invest in our teachers by providing them a well-deserved pay raise.

“Our Florida Families First budget supports these priorities while maintaining substantial reserves.  This is responsible stewardship of taxpayer money.  …Washington, DC could learn a few budget lessons from Florida. The contrast between our state and the nation’s capital is remarkable.

“Now is not the time to turn back to the legacy of taxing and borrowing that crippled the economy we inherited two years ago. We must stay the course for economic growth and job creation.”

…

“When I first stood before you in 2011, I said, ‘The single most important factor in student learning is the quality of teaching.’

“Since that time, we eliminated teacher tenure. We signed performance pay into law, and it will take effect in 2014.

“Florida’s education system is making tremendous progress, due in large part to our great teachers and the work begun by Governor Bush and many in this legislature.

“Our students and teachers were recently ranked sixth for educational quality; and our fourth-graders scored among the highest in the world on a recent reading evaluation.

“Accountability is working.

“The best way we can build on this progress is to reward our hard-working teachers with a $2,500 pay raise.

“Some say they are afraid that giving raises to all teachers may mean that a teacher doing a bad job gets rewarded. But, thanks to our work, we are now in a better position than ever before to reward good teachers and move bad teachers out of the classroom.

“We don’t want a war on teachers; we want a war on failure.

…

“We came into office saying we wanted to create an environment that would encourage businesses to add 700,000 jobs over 7 years.

“When I took office two years ago, the debate was about whether or not this goal was even possible.

“Now, there is a debate about how to count all the jobs being created, and who should get credit for it. Maybe it is because I am not a politician, but I think this is a great debate to have. It celebrates the fact that our economy is once again creating jobs…And, as Ronald Reagan said, there is no limit to what you can accomplish if you don’t care about who gets the credit.

…

“Two years ago, we began the hard work to get our state’s economy back on track. Today, we know its working.

“We could have chosen a different course. We could have continued to drive up taxes and borrowed to increase spending. That would have been the easy way out.

“California raised their top income tax rate to 13.3 percent – the highest in the nation. But, it isn’t working in California. People are leaving their state and they have the second highest unemployment rate in the country.

“More taxes and more spending aren’t working in New York either. More than 3.4 million New Yorkers fled for other states from 2000 to 2009. Florida was their number one destination.”

In some states, including Florida, the minimum is already higher than the federal figure. But nationwide, the president’s proposal would impose a whopping 24 percent minimum-wage hike on many employers just as they are preparing to cope with the added costs of Obamacare.

The president also wants to put the process on automatic pilot, adjusting wages annually to reflect changes in the cost of living — regardless of the state of the economy.

In his speech, the president touted the wage boost as a way to help families escape poverty. “Tonight,” he said, “let’s declare that, in the wealthiest nation on Earth, no one who works fulltime should have to live in poverty — and raise the federal minimum wage to $9 an hour.”

Yet as Michael Saltsman of the Employment Policies Institute succinctly noted in the Wall Street Journal: “Sixty percent of the people living below the poverty line didn’t work last year. They don’t need a raise; they need a job.”

Multiple studies have shown that only one out of six minimum-wage workers is the sole support of a family. Many are teenagers or young adults still living at home, and many are trainees who will get a raise once they learn the job.

As for those who need a job, whether they’ll get one may depend on how Congress answers some basic questions: Will piling more burdens on employers create jobs? Or will higher labor costs accelerate a trend that’s obvious to every shopper at stores where the customers now perform the role formerly handled by cashiers? Or where fast-food customers serve themselves instead of waiting for a worker to hand them sodas?

These trends, abetted by technology, are no accident. They’re just readily visible signs of employers’ responses to the rising cost of labor. It’s a cost that goes well beyond the worker’s hourly wage. It also includes the employer’s share of Social Security and, in many jobs, the cost of workers’ compensation, unemployment insurance, paid sick leave and, soon, the burgeoning cost of health insurance under Obamacare.

If this wage hike is mandated, expect more symptoms of retrenchment in hiring. Ever get the munchies at an odd hour? You may soon be out of luck. Although many fast-food restaurants expanded their hours in recent years, the better to recoup their fixed costs, they’ll soon need to recalculate.

Those restaurants must ask themselves whether the extra sales they gain by staying open longer will offset the ever-higher cost of labor. For some the answer will be “yes”; for others, “no.” But the public can expect a paring of those marginal hours when only a few diehards wander inside or swerve into the drive-through lane well after midnight. Net effect: fewer jobs — or fewer hours on the clock for those still employed.

Obama’s proposal — and the applause from his party’s side of the aisle — recalls one of the most candid remarks a politician ever made about his own party. It was uttered at a business forum during the presidential primary campaign of 1992, when jobs were a big issue in the race eventually won by Bill Clinton with an assist from Ross Perot.

Candidate Paul Tsongas, a pro-business U.S. senator from Massachusetts, sarcastically summed up his fellow Democrats’ economic philosophy: “We Democrats love jobs. It’s employers we can’t stand.”

Judging by President Obama’s rhetoric, nothing much has changed.

Robert F. Sanchez is the policy director at The James Madison Institute, a nonpartisan Tallahassee-based think tank founded in 1987.

This op-ed first appeared on March 1, 2013,  in the Orlando Sentinel.

Of these effects, only the first is highly visible and, thus, immediately evident. The other effects unfold in succession, but they are less visible and, in the public consciousness, far less linked to the action that caused these subsequent effects, which are often harmful.

It can be argued that the difference between a good and bad economist is the ability to foresee all of the ripple effects of a particular action, not just the immediate impact. Whereas the bad economist takes account of an action’s highly visible immediate effect, the other takes account of all of the effects – both those that are seen, of course, but also of those that can be foreseen.

Now this difference is enormously important because it is almost always true that when an action’s immediate effect is favorable, the subsequent effects can be quite different and, in fact, are sometimes quite harmful.

Thus, as economist Frederic Bastiat has posited, it follows that the bad economist often pursues a small good in the present time that will be followed by a great evil to come while the true economist pursues a greater good to come, at the risk of a small present evil.

Minimum wage laws illustrate this. They are often viewed as moral imperatives. Proponents say they protect unskilled workers from “capitalist exploitation” and guarantee a better quality of life for society’s poorest workers.

Some advocates support an ever-rising minimum wage with a seemingly cogent economic rationale tailored to appeal to small-government conservatives: that it provides added income to workers who might otherwise rely heavily on taxpayer funded government programs.

But this theory is ably discredited by Bastiat, the renowned French political and classical liberal economist. He provides a fuller picture of such well-meaning policies in his essay, “That Which is Seen and Which is not Seen.”

In that essay, he explains the unintended consequences of a minimum wage: that arbitrary wage increases have the effect of increasing unemployment while lowering employer profits – a hit to both sides of the labor equation.

Florida’s state Constitution has a nice-sounding minimum wage provision. It states: “All working Floridians are entitled to be paid a minimum wage that is sufficient to provide a decent and healthy life for them and their families, that protects their employers from unfair low-wage competition, and that does not force them to rely on taxpayers-funded public services in order to avoid economic hardship.”

But public policies based on sentiment often defy economic logic. As Milton Friedman noted, “The real tragedy of minimum wage laws is that they are supported by well-meaning groups who want to reduce poverty. But the people who are hurt the most by higher minimums are the most poverty stricken”

The Florida Constitution’s minimum wage provision came about in 2004, when voters approved a union-sponsored amendment providing for a state minimum wage that even includes a feature not included in the federal minimum wage: automatic annual increases.

Florida’s annual recalculation of its minimum wage is based on changes in the Consumer Price Index. As a result of inflation, the state’s minimum wage for 2013 is $7.79 per hour, which is 11 percent higher than federal minimum wage.

This is price fixing. After all, wages are the literal price that employers are willing to pay for a certain amount of labor. Under an arbitrary system such as a minimum wage, if the benefits to the workers eventually exceed the benefits to the employer, it undermines a healthy financial balance.

As a result, employers are forced to move back toward economic equilibrium. How do they do this? An obvious choice is to use other means to control payroll costs. If there is a floor under the wages, the only alternative for an employer to achieve this is to reduce the size of the workforce.

As one employer after another reaches a similar conclusion, the frequent consequence is that unemployment increases. Business owners will be paying higher wages to their remaining employees while receiving the same amount of labor, the same production rates, and a decrease in profits.

To maintain profitability when the wage floor rises, employers usually respond by eliminating jobs, scaling back hiring, reducing employees’ hours, and reducing benefits. These steps will especially affect young and unskilled workers, who often work in low paying jobs to gain the experience they’ll need to advance in the labor market.

Employers who want to stay in business cannot for long afford hire workers who will not produce enough in value to offset what it costs to employ them. In a market economy, salaries are ostensibly based on the value the workers produce.

For those productive workers whose pay is already above the minimum wage, increasing the minimum wage will have little or no benefit; those workers could, however, suffer the consequences of the arbitrary increase if their employers are forced to trim payroll costs by laying off some of them.

Another of the less immediate and, thus, less visible repercussions of raising the minimum wage is an increase in the cost of producing the same goods and services. This occurs as the ripple effects of the wage increase have an impact on the price of raw materials and other supplies.

Each successive link in the production chain will be forced to transfer the new cost (minimum wage increase) to the next link in the production chain, with the consumer ultimately bearing the brunt of the prices increases – again, paying more for the same products and services.

Rather than legislate policies based on well-meaning sentiments that have harmful economic effects, policymakers should direct their efforts toward improving real economic growth. There are many ways to do this. One of the best ways is to improve labor productivity through education reforms that provide training relevant to the job market.

Understandably, minimum wage increases are always welcomed by their beneficiaries in the labor force. This is mainly because of what of what Bastiat says is the easily “seen” benefit. But often the unseen effects are more tragically compelling in the long run, proving what Harry Hazlitt famously said:  “Real wages comes out of production, not out of government decrees.”

Under this proposed new system, which has been in the planning stages since last April and would take effect July 1 of this year, hospitals would be paid a flat rate for a given type of care rather than reimbursed for their costs.

This new approach relies on Diagnosis Related Group (DRG) guidelines, which suggest what the cost of a given procedure ought to be at hospitals that are well managed, cost conscious, and efficient.

Some of Florida’s hospitals have expressed concern over this change, arguing that it could result in a significant reduction in their Medicaid reimbursements, which are already only a fraction of what private insurance currently pays them for providing the same care.

In a recent presentation to the Senate Appropriations Subcommittee on Health and Human Services, Justin Senior, AHCA’s Deputy Secretary for Medicaid, defended the agency’s plan to convert to a DRG system of payments.

Currently, he noted, hospitals are paid based on their individual costs, and there are wide variations in the amounts paid for the same types of care. To gauge the impact of changing the system, AHCA hired consulting firm MGT of America, Inc. in partnership with Navigant.

Under the new system, hospitals throughout the state would be paid the same amount for providing the same procedures. The DRG bases these payments on the industry averages for specific types of care. The payments increase with the complexity of the procedure.

This DRG system is already widely used in other states and is similar to Medicare’s DRG rate schedule but with adjustments for pediatric care. In addition, certain sections of Florida’s DRG plan also required other types of adjustments, which AHCA has included.

For instance, hospitals serving rural areas are often the only access point for residents seeking care, so it’s imperative that the transition does not adversely affect their financial stability. Therefore, for those situations, payments under the DRG guidelines would be adjusted.

Likewise, the clientele of certain hospitals – especially in urban areas – includes a much larger portion of Medicaid patients than the industry average, so those hospitals may also receive payments that are higher than the DRG guidelines for a particular procedure.

AHCA’s Justin Senior told the senators that the agency recognizes the hospitals’ concerns. One of those concerns: When you’re dealing with a finite sum of money, any adjustment that results in some of the players receiving more means that others will receive less.

Moreover, critics of the change say the DRG system doesn’t sufficiently take into account regional variations in the cost of living. As a result, Miami-area hospitals would not be paid more than, say, Panhandle-area hospitals, despite the differences in the costs that they must cover.

So this conversion, while budget neutral for the state, would not necessarily be neutral in its impact on Florida’s hospitals. Some would receive more money while others would receive less. Medicaid currently accounts for 11 percent of a typical Florida hospital’s budget, so any changes in the Medicaid program are bound to have a substantial impact.

As a result, the Florida Hospital Association (FHA) has unsurprisingly characterized the DRG conversion as problematic, noting that most of the hospitals are currently underpaid by the Medicaid program and that this system may cut the funding even further.

Data on the DRG conversion were not released until December 21, and the hospitals say they haven’t have enough time to run models gauging its impact. They also complain that the tight timetable has effectively precluded them from competently preparing their input for operating under the new system, which includes a complex system of coding each procedure performed.

The FHA has asked for a delay in the transition to the system so that these issues can be addressed. AHCA, however, has argued against a transition period, which would normally be one to three years, and instead is pressing for the new system to be implemented this year.

After the prolonged back-and-forth discussion during the committee hearing, Sen. John Thrasher, R-St. Augustine, seemed to speak for many of his colleagues when he urged AHCA and the hospitals to negotiate.

“Rather than take up the time of this Legislature, and have us worry about who is right and wrong, you guys get in a room and work it out,” Thrasher advised. He added that neither of them would like the result if the Legislature made the decisions on these issues.

Will 2013 be the year when Florida joins the growing list of states enacting “parent trigger laws”? Seven other states – implausibly including union-dominated California – have passed these kinds of laws, which typically empower parents whose children attend a chronically failing school to conduct a vote on whether (and how) to reorganize it.

A year ago school reform advocates in Florida introduced such legislation. Titled the “Parent Empowerment Act,” the bill would have allowed parents to vote for changes in schools that had received an F-rating for three consecutive years under Florida’s grading system, which is based the performance of a school’s pupils on standardized tests.

The options the bill provided for parents included closing and reopening the failing school as a charter school, reassigning its students to schools with higher ratings, or even outsourcing management of the school to one of the private companies that specialize in this field.

More commonly referred to as the “parent trigger bill,” the measure easily passed in the House, where Republicans held an 81-39 majority. However, on the final day of the 2012 legislative session, the bill died in the Senate on a 20-20 tie vote – despite support from Gov. Rick Scott and former Gov. Jeb Bush.

The 2012 version of the bill died when eight of the Senate’s 28 Republicans joined with the Democrats in voting against the bill – a move that many political observers attributed primarily to a buildup of intraparty hostility having more to do with personal rancor than with policy preferences. Only three of those Republicans who voted No on the bill are still in the Senate.

Earlier this month, Sen. Kelli Stargel (R-Lakeland) reintroduced Parent Empowerment, which could take effect as early as July if it passes. The bill was referred to the Senate Appropriations Committee’s education subcommittees and will likely see the floor of the Senate once more.

“When you give parents the opportunity to get involved and do what’s best for their kids, it’s a win,” said Stargel. Even so, the bill is vigorously opposed by the teachers union and, paradoxically, by the Florida Parent Teacher Association, which is often allied with the union.

While supporters of the bill argue that parents should have a more active role in their children’s education, especially those whose children have been assigned to failing schools, opponents claim that the measures currently in place, including No Child Left Behind, are sufficient. Even so, since 2010, seven states — including Louisiana, Mississippi, Ohio and Texas as well as California  – have passed similar legislation.

One source of concern for the teachers union is that the Parent Empowerment Act also gives parents some options if they receive notification that their child has been assigned to a teacher who had received an “underperforming” evaluation for two consecutive years. The alternatives would include reassignment to an on-line teacher rated as “effective” or to a different school that has a proven track record of success.

House Speaker Will Weatherford said he expects the bill to pass once again in the House. Former Governor Bush has been in Florida rallying support for the bill, meeting earlier this month with Speaker Weatherford and Senate President Don Gaetz to discuss education reform.

Now serving as Chairman of the Foundation for Excellence in Education, Bush is credited with leading a vigorous school reform effort during his governorship (1999-2007). The results have been evident as Florida’s ranking in state-to-state comparisons of pupil achievement rose into the top ten after being mired for decades in the middle of the pack.

Committee deliberations on the bill are tentatively scheduled to begin on March 6, the second day of the 2013 legislative session. If a bill reaches Governor Scott’s desk, Florida could well become the eighth state to pass a parent trigger law.

In addition to supporting this reform, Governor Scott is also seeking more money for education in order to give teachers a salary increase after several lean years and to provide a small stipend for supplies so they won’t have to pay out of their own pocket, as many dedicated teachers reportedly have been doing.

If Florida does pass a parent trigger law, however, the Governor – as head of the branch of government assigned the duty of ensuring that the state’s laws are duly executed – may face a new challenge in the form of union opposition.

To appreciate why, this illuminating Wall Street Journal editorial from a year ago illustrates the lengths to which opponents of these kinds of laws will go to prevent the empowerment of parents, whose main involvement in the education of their children is evidently to conduct fund-raising bake sales for their school’s docile PTA — and then to shut up.

Parent-Trigger Warfare

Harassment and altered documents at Desert Trails Elementary.

March 2, 2012

For over a year, teachers unions and their allies have used bureaucratic games and intimidation to fight “parent-trigger” school reform in California. Now comes evidence that they may have falsified documents.

In January, a group of parents in the Mojave Desert town of Adelanto filed petitions to “trigger” changes at their children’s failing elementary school. That’s their right under a 2010 California law, provided the school’s academic conditions are dire enough and a majority of parents support pulling the trigger. Few dispute that Desert Trails Elementary fails its students, yet last week the Adelanto school district ruled that the trigger drive lacks majority support because 97 parents rescinded their original petitions.

But based on interviews we’ve conducted and sworn affidavits we’ve reviewed, it’s clear that many parents were harassed into rescinding.

In the Desert Trails parking lot and at front doors across Adelanto, strangers confronted parents and spread untruths about the trigger drive: that it would force the immediate closure of Desert Trails, for example, or result in the firing of all teachers, or cause certain children to be expelled. Some parents heard the trigger drive was an embezzlement scheme. Others had their immigration status questioned.

Trigger supporters suspect the malign influence of the California Teachers Association. Such bullying fits into its familiar anti-trigger playbook, and the untruth squads (which generally refused to identify themselves) pinpointed parents and ginned up rescissions with amazing efficiency over merely a few days.

At least three Adelanto parents have also signed affidavits swearing that the rescission documents bearing their signatures were doctored before being delivered (in photocopied form) to the district.

“I am absolutely sure,” reads the affidavit of one mother who refused to have her name published for fear of retribution, “that I did not check any of the boxes on the form claiming that I was misled, intimidated or bribed by the Desert Trails Parents Union,” which is the group that supports parent trigger. Yet her form on file with the district makes exactly these claims—a remarkable coincidence given the district’s rule that it would honor rescissions only if they cited such justifications.

We don’t know how many rescissions were falsified; the first two cases came to light only because someone was sloppy enough to file two versions of the same parent’s rescission, one without, and one with, boxes checked. But these cases cast doubt on the whole bunch, and the onus is on the district to prove their validity. Working with pro bono lawyers from Kirkland & Ellis, the parents have called for investigations by the San Bernardino district attorney and sheriff—and soon, before any crucial documents suddenly go missing.

Some 20 other states are considering parent-trigger laws, so Adelanto’s experience is a harbinger. California passed its version precisely to give parents the ability to organize and challenge entrenched union and bureaucratic power. If those powers-that-be can get away with intimidation and tricks to preserve the status quo, then the reform is a farce.