Tuesday, July 21, 2009

The Bysiewicz Report: SustiNet, An Elixir for What Ails You

A new report by Secretary of State Susan Bysiewicz created a useful ripple in Connecticut’s political pond.

According to a brief piece in the Connecticut Post, the report indicates that business failures for the first half of 2009 are up 17%. About 7,000 businesses have closed down. In-migration of new business is also down by 9.6%.

The question is: Will these figures have any appreciable effect on Democratic plans to raise corporation taxes by 30% to meet a prospective deficit of $9 billion?

The decrease in business activity in the state, the most important and portentous datum released this year by the Secretary of State’s office, should be regarded as a fatal arrow in the heel of Connecticut’s wounded economy.

Mrs. Bysiewicz’s commentary piece, printed in the Danbury News Times. followed close on the heels of Gov. Jodi Rell’s veto of House Bill No. 6582, an Act Establishing the Connecticut Healthcare Partnership, and House Bill No. 6600, An Act Concerning the Establishment of the SustiNet Plan.

The consequences of Rell’s veto, Mrs. Bysiewicz wrote were plain for all to see: “A 2007 Report issued by the Health Insurance Policy Council showed that over 52 percent of the uninsured in Connecticut are employees of small businesses and their families. More startling, in the first half of this year, nearly 7,000 businesses in Connecticut have shut their doors, which represents a 17 percent increase in business closures over last year's figure and a new record high for first half of any year since we first started recording these numbers in 2000.”

SustiNet, Mrs. Bysiewicz advised in her column is “the catalyst to reviving our economy, growing companies, adding jobs, and retaining our highly skilled work force.”

Some people, not all of them Milton Friedman conservatives, think the most effective catalyst for reviving a moribund economy is a legislature devoted to cutting unnecessary spending and creating a welcoming climate for new startup businesses by reducing taxes and needless regulations. A 30% increase in corporation taxes would be very discouraging in this regard, a sign posted in neon over the state Capitol saying “No businesses need apply here.”

In a couple of years, Connecticut will have an opportunity to test Mrs. Bysiewicz novel theory that the 17 percent increase in the state’s business closures and its 9.6% loss in new business is attributable chiefly to inadequate and costly insurance coverage, because the Democratic majority in the legislature, by overriding Mrs. Rell’s veto of SustiNet, has just now taken a major step in putting the state on a path towards universal health care.

Programs similar to SustiNet in Massachusetts and Hawaii are seriously stressed because they have been found to be unusually expensive in a contracting market and have not proven to be the magical elixir promoted by Mrs. Bysiewicz in her eupeptic column.

Confronting a massive budget shortfall, Massachusetts lawmakers are cutting from their Commonwealth Care program roughly 30 thousand legal immigrants. The cuts are expected to save $130 million a year. Boston Medical Center, one of the city’s largest metropolitan hospitals, has filed a lawsuit against the state. The medical center claims Massachusetts is shortchanging it by $181 million annually because the state is not adequately covering the costs of Medicaid, Commonwealth Care and the uninsured. Reimbursement rates on the poor have dropped to 64 cents on the dollar.

Commonwealth Care was launched with much fanfare several years ago as a template for state and national universal health care systems. It is now – along with legal immigrants – hobbling towards an legislative emergency room.

The override of Rell SustiNet veto by Democrats who dominate the state legislature will set up a panel to craft outlines for the SustiNet universal health care system; recommendations for implementation are due in January 2011, and the prospective system will take effect in 2012 – plenty of time for second and third thoughts.

If Rell chooses to run on the Republican ticket for governor, Mrs. Bysiewicz will find herself campaigning against a seasoned politician who, perhaps with an eye on Massachusetts’ Commonwealth Care and Connecticut’s crushing $9 billion deficit, the highest per capita debt in the nation, has often enough said that in hard times imprudent spending must give way to hard but prudence decisions.
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