Five Best Tuesday Columns

Health care fraud, Elizabeth Warren, and a history of the income tax

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Dana Milbank on Republicans and Solyndra When solar energy company Solyndra collapsed after receiving federal loan guarantees, it became ammunition for Republicans wanting to "discredit most everything the administration seeks to do," writes Dana Milbank in The Washington Post. Milbank says Solyndra has been invoked by Republican legislators arguing against worker-training benefits, autism research, "disaster relief, cancer treatments, you name it: Solyndra has been an argument against them." Yet it was the George W. Bush administration, Milbank reminds us, that first approved federal loan guarantees for Solyndra, and it was many of the now-critical congressmen and senators who voted for it. Obama still "deserves the black eye that Republicans have given him over the half a billion dollars squandered on the company. But the Republican paternity of the program that birthed Solyndra suggests some skepticism is in order when many of those same Republicans use Solyndra as an example of all that is wrong with Obama's governance." Republican House members like Representative David Dreier originally voted for the bill that went out of its way to ensure Solyndra loan guarantees, and now repeatedly condemn Obama's support for the company. Senator Jim Demint said Solyndra shows the "unintended results when our government tries to pick winners and losers." "That's a valid criticism," Milbank says, "but it would be more valid if DeMint hadn't been a supporter of the loan-guarantee legislation in 2005."

Kathleen Sharp on health care fraud Obama's administration plans to cut $320 billion from projected Medicare and Medicaid growth over 10 years. But before policy makers raise premiums and require the elderly to make copayments for care received at home, writes Kathleen Sharp in The New York Times, they should work at recovering money lost from fraud. "According to some estimates, health care fraud is a $250 billion-a-year industry." "[A] hospital chain can buy drugs at a steep discount and then bill Medicare for high sticker prices. Doctors can bill for procedures that never happened, or for drugs that were supplied to them by pharmaceutical companies free of charge, or pharmaceutical companies can promote a drug for risky, unapproved uses." In 2005, a whistleblower exposed Quest Diagnostics, a chain of medical laboratories, of overcharging a California health care program. Quest settled for $241 million. "Andrew Baker, a health care executive who ran a company acquired by Quest, has accused it of overbilling our national Medicare plan by as much as a billion dollars," Sharp writes. The case was thrown out "for technical reasons" but Baker appealed the dismissal. So far, though, the Justice Department hasn't joined the suit. In fact, the Justice Department "had more than 1,300 whistle-blower cases under investigation" at the beginning of the year. Pharmaceutical companies can currently write off the occasional billion dollar settlements the Justice Department does win as "the cost of doing business," she says. "Health care costs are rising toward unsustainable levels," she writes, "But before we start cutting important programs, let's go after the fraudsters."

John Steele Gordon on the history of the income tax Our current federal tax system "is grotesquely complex, often arbitrary, and corrupted by mutual back-scratching between members of Congress and influential lobbyists," writes author John Steele Gordon in The Wall Street Journal. Ironically, it is the result of our historical attempt to fix a tax system from the premodern era that was "grossly biased in favor of the well off." After the Civil War, the government depended largely on tariffs from imports. The taxes protected rich producers of domestic goods and were inherently regressive, demanding a larger percentage of poor peoples' income. In 1894, responding to political pressure, Democrats passed an income tax demanding 2 percent of income from the richest 1 percent of households, but the Supreme Court struck down the law as unconstitutional. President Taft thus imposed a corporate tax as a way to collect taxes from the wealthy while pushing for a constitutional amendment for an income tax, which was ratified in 1913. Woodrow Wilson then quickly passed a regressive income tax. "Unfortunately the corporate income tax, originally intended as only a stopgap measure, was left in place unchanged. As a result, for the last 98 years we have had two completely separate and uncoordinated income taxes." This has allowed the wealthy to "play the two systems against each other." "There has since been a sort of evolutionary arms race, as tax lawyers and accountants came up with ever new ways to game the system, and Congress endlessly added to the tax code to forbid or regulate the new strategies." It has also occasionally allowed some to claim the super-rich like Warren Buffett don't pay their fair share in personal taxes even while Buffett's Berkshire Hathaway paid $5.6 billion in corporate taxes last year. Thus the current system once again "needs a complete overhaul," he writes.

Ann Marlowe on myths about military demographics "[T]he mythology refuses to die," writes Ann Marlowe in The Wall Street Journal. Last week, two well-educated friends noted to her "that those who serve in the U.S. military typically have no other career options. America's soldiers, they said, were poor and black." The friends meant this as a critique of the system, but data shows it to be false. The Heritage Foundation found that 11 percent of military recruits in 2007 came from the poorest fifth of neighborhoods, while 25 percent came from the richest fifth. The claim that the military is disproportionately African American is also wrong, she says. "Whereas blacks comprise 17% of Americans ages 18-39 with high school degrees, they represent only a slightly larger proportion of enlisted soldiers, at 21%," she notes. "Meanwhile, whites were significantly overrepresented among enlisted Army personnel in 2010. While 58% of Americans 18-39 years old are white, 64% of the Army's enlisted men and women are." Meanwhile, Asians and Pacific Islanders, and Hispanics are underrepresented in the service. "The explanation for the former is probably cultural, while for the latter it is a matter of difficulty speaking English." Yet the myth persists, Marlowe supposes, becuase the educated elite aren't often exposed to those in the military. "And it suits the interests of many members of the urban elite to believe that the military they do not join is composed of poor, uneducated victims of an unfair society."

Joanna Weiss on Elizabeth Warren The GOP is characterized by anger these days, "with those Tea Party folks shouting for death at Republican debates," whereas progressives are left wishing their president would act more rageful, writes Joanna Weiss in The Boston Globe. Progressives got their angry voice when a video of Massachusetts Senate candidate Elizabeth Warren went viral last week. "The point Warren makes in the video is hardly new: that even entrepreneurs couldn't do what they do without a government providing infrastructure and public safety. It's the delivery that makes it sing. Warren injects just the right amount of conversationalism and sarcasm." "THAT is how it is done" commented one liberal web site, Weiss notes. Elsewhere, though, the Occupy Wall Street protestors showed how you do not get it done. Protestors wondered why their movement wasn't getting media attention through last week, but it is probably because they overstated their ambitions, saying they wanted to make it a new Tahrir Square when the likelihood (or justification) for that was lacking. "Also, organizers first declared that they would draw 20,000 protesters, but only 1,000 showed up. That's not a media conspiracy. It's math." So Warren, then, has found the better formula for "channeling liberal rage," Weiss says. "Indeed, in a race that's getting national attention, she may have found the perfect medium for her corporate-accountability message... She can be angrier, as a candidate, than Obama can be as president. If her campaign is about ideas, and not about [Republican Senator Scott] Brown per se, then she becomes the de facto national spokeswoman for middle-class angst." She may not win the election, but she doesn't have to because she has found a way to represent a movement without needing "to shriek or climb a flagpole for effect."

This article is from the archive of our partner The Wire.