State of the Union Notes

The State of the Union was about as bland as expected. Bush mispronounced a few words, deflected attention from the defeat in Iraq by focusing on the few successes (at least he didn’t invoke Saddam’s execution…), and proposed a tax cut to people who don’t pay income tax as a solution to the lack of universal health insurance.

Bush’s promised tax cut is a 7,500 deduction. People who lack insurance are mostly in the 15% bracket, but get enough back in the Earned Income Tax Credit that they don’t pay federal income taxes. The lion’s share of the taxes they pay is in FICA and sales taxes.

The education policy he tried advocating was uninteresting enough that when he talked about local control, we switched to mathematical jokes. “I’m more into global stuff,” I said. Then it escalated to “The terrorists’ scheme will not succeed,” “Joint Chiefs of Staff” (think “adjoint sheaves”), “killing fields,” “rings of terrorists,” “free groups of citizens,” and “we will push forward and never pull back.”

The most interesting part wasn’t the address, but the responses to it. Besides being more articulate than the address, Jim Webb’s response was contained such gems as (rough quote) “If the President understands the need for eventual withdrawal, we’ll work with him. If he doesn’t, we’ll show him the way.”

John McCain tried explaining why he supported the surge. What he ended up admitting was that the US strategy in Iraq was a failure. He couldn’t explain why a 21,500 troop surge would help anything, or why the new strategy was materially different from the one he admitted was a failure. He said he trusted General Petraeus and that’s it, more or less.

Hillary Clinton was was asked point-blank if she supported withdrawing. Needless to say, she evaded the question, answering instead with general platitudes about the surge. The only thing she was specific about was that she didn’t like Bush, a position she adopted promptly after Bush’s approval rate fell below 40%.

Barack Obama was a bit more specific. He mentioned something about withdrawing someday, but like Clinton said nothing of substance.


38 Responses to State of the Union Notes

  1. Bushbaptist says:

    Did you watch Nancy’s body language behind BushBoy? Classic!

    Next question – who (or what) are you going to replace him with?? They are all crooks in suits!

  2. Alon Levy says:

    Oh, yeah… it was precious. First of all, she wouldn’t stop blinking. And second, her facial expressions were more fun to watch than anything else during the address except Cheney’s facial expressions.

  3. Bruce says:

    This approach is an improvement, but without a solution.

    Furthermore, even for workers who can take meaningful use of the health insurance deduction, it does not subtract from the FICA base (as you more or less alluded.) The irrational bias in favor of employer-based coverage lives.

    The federal government should treat all purchases of health insurance the same as against wage taxation: exclude it all or exclude none of it, whether self-pay, self-employment or buying it at the job. Identical substantive treatment, regardless of source and regardless of form.

    A decent case can be made that it is the tax-deductibility of health insurance that has promoted much of the artificial increase in costs, thereby more severely screwing those who cannot deduct/exclude their health insurance premiums pre-tax (income AND FICA).

  4. SLC says:

    Re Webbs’ speech

    Attached is a link to the text of Webbs’ speech.

  5. Bruce says:

    I stand corrected. It appears that the purchaser of a family plan would be exempted from the first 15K of FICA taxation on employment income. I am not sure that is actually a non-discriminatory match, but when you are wrong you’re wrong, as I was.

    As someone who does a lot of temporary work and finds it difficult to pay the tax-disfavored COBRA bite when changing from project to project and agency to agency, this would be a marginal benefit to us. On the other hand, it is not a solution to the macro challenges of health coverage in the U.S., particularly for those who are, unlike myself, not white-collar licensed professionals.

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