News

Jonathan Decker on December 4, 2019 |

By Jon Decker and Phil Kerpen 

The AARP recently hosted a forum that included Health and Human Services Secretary Alex Azar ostensibly to discuss proposals to lower health care costs. The irony was unmissable. AARP — which until the 1990s was an acronym but now, appropriately, stands for nothing — is crusading for a Nancy Pelosi bill that allegedly combats “unfair pricing,” while AARP itself faces serious legal allegations that it is ripping off seniors by raising the health care costs of its own members.

Sadly, the AARP has become little more than a marketing scam for its big corporate financial sponsors — UnitedHealth and its wholly-owned OptumRx pharmacy business. Doing so has become quite lucrative: Research shows that in 2017, AARP received $627 million from UnitedHealth.

The AARP sells supplemental Medicare plans — including plans with an “AARP-sponsored” branding. However, instead of helping seniors select the plan that is most tailored to their needs or financial resources, the AARP exclusively sells Medigap coverage from UnitedHealth, the nation’s largest health insurer.

Unbeknownst to many purchasing these plans, who are under the misimpression that the AARP is a seniors group, these plans are not always fairly priced — and the AARP receives a 4.95 percent fee for each plan sold.

Recall that when seniors were contacting the AARP 14-to-1 urging the group to oppose Obamacare they instead supported it and received a special carve-out to keep their UnitedHealth gravy train running. In fact, since the law’s passage and implementation, the AARP has received well over $4 billion in “royalties” from UnitedHealth.

The ongoing lawsuit Krukas v. AARP is perhaps the strongest and most direct threat to this cozy arrangement. The plaintiff, Helen Krukas, alleges:

“AARP received ‘a 4.95% commission from every policy sold or renewed,’ id., which ‘constitutes an illegal kickback,’ AARP collects an illegal commission, acts as an unlicensed insurance agent, and materially misrepresents information about the 4.95% charge, all of which constitute violations of the CPPA [Consumer Protection Procedures Act] and common law.”

This is hardly the only area where the AARP lines its own pockets while betraying seniors.

The AARP has emerged as one of the most vocal supporters of House Speaker Nancy Pelosi’s prescription drug plan. This radical bill, which threatens manufacturers with a shocking 95 percent gross-receipts tax if they don’t accept government-set prices, would be devastating for the discovery and development of new cures and therefore terrible for seniors.

Numerous health experts and even the Congressional Budget Office (CBO) have reported the bill would likely restrict the availability of life-saving drugs and stifle investments in new ones in disease areas such as Alzheimer’s, cancer, diabetes and more. According to the leading small biotechnology companies performing cutting edge research, Mrs. Pelosi’s bill would cause a “nuclear winter” by obliterating critical R&D funding.

If the federal government imposes price controls and access restrictions to drugs as Mrs. Pelosi and the AARP now advocate, in the near-term higher profits will flow through to the insurance companies. This is...

Phil Kerpen on November 26, 2019 | Promote Economic Growth, Protect the Free-Market Internet

American Commitment, which has long advocated opening the 5.9GHz band for unlicensed use, strongly supports FCC Chairman Ajit Pai's new proposal to split the band.

"It is a shame that prime spectrum has lain fallow for two decades," American Commitment President Phil Kerpen said. "We therefore couldn't be more enthusiastic about Chairman Pai's proposal to finally open the 45MHz adjacent to current Wi-Fi users for unlicensed use."

"The chairman's proposal meets any potential need for dedicated spectrum for vehicle safety use in the upper 30MHz," Kerpen added. "It would enable wide deployment of promising CV2X technology, while importantly remaining technology-neutral so that the market can continue to innovate."

"Chairman Pai's proposal will bring better, faster Wi-Fi to millions of Americans with substantial economic benefits, while enhancing vehicle safety.  We strongly support the proposal," Kerpen said.

Phil Kerpen on November 26, 2019 | Fix the Tax Code, Unlock American Energy

By Phil Kerpen

In a mad dash to expand all of their favorite "green" cash grabs before the end of the year, House Democrats have published their most bloated smash and grab yet.  They call it the Green Act, but a better name might be the Greed Act.  The bill extends wind and solar subsidies – which we've been promised for decades would be temporary – for yet another five years.  In an effort to gain support from farm states, it revives the biodiesel credit.

Most outrageously, the Green Act cancels the phase-out of the electric vehicle subsidies by tripling the per-manufacturer cap, while also creating a new subsidy for used electric vehicles – despite the fact the original rationale, dependence on foreign oil, is now completely obsolete and ignoring evidence of rampant fraud in the program.

Because no green cash grab would be compete without lavishing taxpayer dollars on the campus left, the bill includes an eye-popping $5 billion in grants for university "environmental justice" programs.  Shameless.

With Nancy Pelosi firmly in control, the Green Act could well pass the House, either by itself or more likely as part of a larger year-end package.  So the real fight looks likely to be in the Senate, where Minority Leader Chuck Schumer can be expected to go to the mat for the electric vehicles subsidies if not the whole package.  In fact, he recently proposed an electric-vehicles-subsidies-meets-cash-for-clunkers on steroids concept that would pay to scrap every internal combustion vehicle in the country in the most brazen display of wealth destruction via central planning ever attempted outside of the Communist Bloc.  So he can be expected, at a minimum, to push hard for the House language on electric vehicles.

That language would triple the cap on subsidies of 200,000 per manufacturer – which has already been reached by Tesla and GM, who of course have unleashed armies of lobbyists to keep the taxpayer largesse flowing – with only a token cut in the credit amount from $7500 to $7000, while creating a new credit of up to $2500 for used electric vehicles.

This program is an almost pure tax break for the rich, and those rich are well represented by their Democratic representatives and senators.  Especially from California, which gets nearly half of all the subsidies dollars, and New York, which ranks second.

The Pacific Research Institute looked at IRS data and found that more than half of the electric car buyers claiming the credit make more than $200,000 per year and nearly 80 percent make more than $100,000. Just 1 percent make $50,000 or less.

Worse, a significant number of the predominantly wealthy people claiming the credit are doing so fraudulently. The Treasury Inspector General found in a new report that 16,510 tax returns claiming "potentially erroneous" electric vehicle tax credits, totaling $73.8 million.  The IRS doesn't check VINs, and it looks like credits have been allowed for ineligible vehicles and that there is a particular problem with leased vehicles, in...

Jonathan Decker on November 21, 2019 | Protect Property Rights

By Jon Decker

Today, Senator Marsha Blackburn (R-TN) introduced long-overdue legislation to protect the rights of artists in the music industry. Under current law, when a performer's song is played on a streaming platform, such as Spotify, or on a satellite radio service, such as SiriusXM, they are entitled to compensation. However, when the same song is played on terrestrial AM or FM radio, the station can simply take the song permission without paying the performer anything.

Broadcasters have always defended this arrangement by arguing that they provide the marketing for music that listeners then go out and buy.  But as the industry has been turned upside down by technology, record and CD sales have plummeted and that argument has become badly outdated.

Senator Blackburn's bill rectifies this by simply requiring broadcasters to receive permission from artists before airing a song – which would allow artists who want the free exposure to get it, while others would choose to negotiate for compensation.

The central opposition to Senator Blackburn's legislation comes from broadcasters who of course want to continue profiting off the labor of others without having to compensate them.

Ironically and hypocritically, the broadcasters are also fighting tooth and nail to prevent reform of the retransmission consent law, which requires cable and satellite operators to compensate the broadcasters for their content – even though it is broadcast free-to-air.

Kudos to Senator Blackburn for standing up for the rights of artists. It's time to end terrestrial radio's free ride and put in a level playing field with competing music services, while giving artists compensation for their work.

 

Phil Kerpen on November 15, 2019 | Protect the Free-Market Internet

By Phil Kerpen

A new Wall Street Journal expose finding that "Google has increasingly re-engineered and interfered with search results to a far greater degree than the company and its executives have acknowledged" is sure to bolster efforts from the company's opponents to break it up or cripple it with regulations.

There is a through-the-looking-glass quality to the debate for those of us who have spent the last 15 years or so in the Net Neutrality wars.

The same players – including Big Tech companies themselves and their surrogates – who have told us for years that only heavy-handed government neutrality regulations can save us from ISPs manipulating traffic and acting as gatekeepers  are now recoiling in horror at the prospect of a neutrality regulation for Big Tech companies that are engaging in precisely such manipulation.

At the same time, many of the people who most strongly opposed Obama's mangled form of net neutrality are now insistent that we repeat the same big government mistakes to address the behavior of Big Tech.

Senator Ted Cruz brought Section 230 – the provision of U.S. law that provides intermediary liability protection to the tech companies – into the scope of the debate by suggesting that limiting such a government-granted benefit could provide a mechanism for conservatives ideologically suspect of regulation to address the perceived thumb these companies had on the scale for Democratic candidates and their liberal allies.

Senator Josh Hawley pushed this idea to an extreme almost shocking from a Republican – a bill requiring certification of political neutrality by federal bureaucrats to retain 230 protection.

Cruz and Hawley understand something too many professional analysts on the right ignore at their peril – the conservative base is nearing a boiling point in its hatred of Big Tech and sees this as a central front in the culture war, not a venue for economic policy subject to ideological constraints.

How, in this context, can we chart a path forward that can satisfy this base anger without betraying free-market principles?

The answer could lie in FCC Chairman Aji Pai's brilliant resolution of the net neutrality issue.  Not only have none of the predicted negative consequences occurred since Pai's more free-market version of net neutrality was enacted, but to the contrary data speeds have risen sharply, investment is up, and there have been no notable episodes of discrimination by ISPs.

The heart of the Pai order is a transparency rule, which replaces heavy-handed regulation with market discipline – in effect, if you want to treat traffic in a non-neutral fashion you can, but you have to explain what you're doing to your customers.

Ironically, the Big Tech companies continue to pursue reimposition of the heavy-handed Obama neutrality regulations on ISPs even as they fend off efforts to similarly regulate themselves or limit their liability protections.

But the success of the Pai order suggests a much more elegant solution: Big Tech should be subject to a transparency rule and, if they do in fact...

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