Federalism Disad



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US Federalism Good: Competiveness



A) Centralization is key to inexpensive health care

Owcharenko, Senior Policy Analyst, Haislmaier, Research Fellow, and Moffit, Ph.D., Director of the Center for Health Policy Studies at The Heritage Foundation, 2006

(Nina, Edmund, and Robert, May 5th, “Competition and Federalism: The Right Remedy for Excessive Health Insurance Regulation”, http://www.heritage.org/Research/HealthCare/wm1060.cfm, Cfbato)

State health insurance markets are often dysfunctional, non-competitive, and dominated by a few large carriers. They offer standardized products that are increasingly unaffordable, and innovation in financing and delivery is officially discouraged. Federal and state policy contributes directly to the problem of dysfunctional markets. At the forefront is the federal tax treatment of health insurance. The federal tax code confines the availability of affordable health insurance to the employer-based market, undercuts the portability of coverage for individuals and families, and fuels health care inflation. It also directly discriminates against individuals who try to buy health insurance on the individual health insurance market. No comprehensive congressional tax reform legislation is pending that would address this failure of federal tax policy. State health insurance regulation is often excessive and undermines the availability of more flexible and affordable options for coverage, particularly for small businesses and their employees. State regulation of health insurance includes authority over underwriting rules, the conditions for sale and access, such as rules requiring guaranteed issue of coverage, and the authority to impose specific benefit mandates that insurers must offer as a condition for selling health insurance in the state. First Principles and Federalism The Constitution authorizes a federal system of national and state governments. The national government makes laws and imposes rules that deal with the general concerns of the Republic, and state governments make laws that address the particular concerns of its citizens. Both the national government and the state governments are each equal and independent within their own spheres of jurisdiction. The federal tax treatment of health insurance is a direct Congressional concern, and Congress, exercising its authority over the federal tax code, should remedy its deficiencies. Health insurance market laws are clearly matters of state concern, except if the commerce for those products crosses state lines. Thus, the real issue before Congress is the question of a national health insurance market. In other words, what steps, if any, should Congress take to set rules governing the sale of health insurance across state lines? Given the diversity of cost and coverage options around the United States, the best and simplest answer to geographically concentrated regulatory excess is open competition. Open competition would allow citizens to shop around for the best coverage and enable individuals and families to get the best value on the basis of price, quality, and benefits. In the absence of reform of the federal tax code, the best way for Congress to compensate for the disadvantages of dysfunctional state insurance markets is to use its constitutional authority to regulate interstate commerce. Congress should create a new openness for health insurance markets, allow individuals and families to buy health coverage across state lines, and promote a national market for health insurance. Thus far, the best available vehicle for such a policy is the “Health Care Choice Act” (S. 1015), sponsored by Senator Jim DeMint (R-SC). This legislation would preserve the primacy of the states in regulating health insurance while giving individual access to coverage available in other states. Such an approach would also encourage states to develop a more consumer-friendly regulatory structure for the purchase of health insurance.


Failure collapses US industrial competitiveness


Anderson, Professor of health policy and management and international health at the Johns Hopkins University Bloomberg School Public Health, professor of medicine at the Johns Hopkins University School of Medicine, director of the Johns Hopkins Center for Hospital Finance and Management and co-director of the Johns Hopkins Program for Medical Technology and Practice Assessment, 2004

(Gerard, “Health Spending and U.S. Economic Competetiveness”, http://www.shrm.org/line/CMS_016465.asp, Cfbato)

The other perspective is that the high level of health spending is adversely affecting U.S. industry. One sector of the economy that appears to be most affected by the level and rates of increase in health care spending is the automotive industry. General Motors, Ford, Delphi, etc. are all providing evidence that some of the decline in the automotive industry can be attributed to health care spending. The most recent data from General Motors suggest that health care benefits add $1,525 to the cost of each car. Cars made in other countries do not have most of this additional cost, and this makes it more difficult for General Motors and other auto manufacturers to compete in the international marketplace. The argument that the global competitive playing field is becoming level and those countries with high-wage and high-fringe benefit costs will have difficulty competing when information and products can be transported quickly and easily across continents contends that the United States with its high wages and high-inflation health care costs will be at a comparative disadvantage in a “flat” world and that what is happening to the auto industry will happen, and is already happening, to other industries.

Federalism Good: Democracy




1) US leadership on federalism is essential to democracy worldwide

David Broder, Washington Post, June 24, 2001, “Lessons On Freedom.”



Even more persistent were the questions about the role the United States would play, under this new administration, in supporting democratic movements around the world. It is sobering to be reminded how often, during the long decades of the Cold War, this country backed (and in some cases, created) undemocratic regimes, simply because we thought military rulers and other autocrats were more reliable allies against communism. The week of the Salzburg Seminar coincided with President Bush's first tour of Europe. He was a target of jokes and ridicule for many of the fellows as the week began. But the coverage of his meetings and, especially, his major address in Poland on his vision of Europe's future and America's role in it, earned him grudging respect, even though it remains uncertain how high a priority human rights and promotion of democracy will have in the Bush foreign policy. Another great lesson for an American reporter is that the struggle to maintain the legitimacy of representative government in the eyes of the public is a worldwide battle. Election turnouts are dropping in almost all the established democracies, so much so that seminar participants seriously discussed the advisability of compulsory voting, before most of them rejected it as smacking too much of authoritarian regimes. Political parties -- which most of us have regarded as essential agents of democracy -- are in decline everywhere. They are viewed by more and more of the national publics as being tied to special interests or locked in increasingly irrelevant or petty rivalries -- anything but effective instruments for tackling current challenges. One large but unresolved question throughout the week: Can you organize and sustain representative government without strong parties? The single most impressive visitor to the seminar was Vaira Vike-Freiberga, the president of Latvia, a woman of Thatcherite determination when it comes to pressing for her country's admission to NATO, but a democrat who has gone through exile four times in her quest for freedom. She is a member of no party, chosen unanimously by a parliament of eight parties, and bolstered by her popular support. But how many such leaders are there? Meantime, even as democracy is tested everywhere from Venezuela to Romania to the Philippines, a new and perhaps tougher accountability examination awaits in the supranational organizations. The European Union has operated so far with a strong council, where each nation has a veto, and a weak parliament, with majority rule. But with its membership seemingly certain to expand, the age-old dilemma of democracy -- majority rule vs. minority and individual rights -- is bound to come to the fore. The principle of federalism will be vital to its success. And, once again, the United States has important lessons to teach. But only if we can keep democracy strong and vital in our own country.
2) and democracy prevents extinction.

Carnegie Commission on Preventing Deadly Conflict, October 1995, “Promoting Democracy in the 1990’s,” http://www.carnegie.org//sub/pubs/deadly/dia95_01.html, accessed on 12/11/99

OTHER THREATS This hardly exhausts the lists of threats to our security and well-being in the coming years and decades. In the former Yugoslavia nationalist aggression tears at the stability of Europe and could easily spread. The flow of illegal drugs intensifies through increasingly powerful international crime syndicates that have made common cause with authoritarian regimes and have utterly corrupted the institutions of tenuous, democratic ones. Nuclear, chemical, and biological weapons continue to proliferate. The very source of life on Earth, the global ecosystem, appears increasingly endangered. Most of these new and unconventional threats to security are associated with or aggravated by the weakness or absence of democracy, with its provisions for legality, accountability, popular sovereignty, and openness. LESSONS OF THE TWENTIETH CENTURY The experience of this century offers important lessons. Countries that govern themselves in a truly democratic fashion do not go to war with one another. They do not aggress against their neighbors to aggrandize themselves or glorify their leaders. Democratic governments do not ethnically "cleanse" their own populations, and they are much less likely to face ethnic insurgency. Democracies do not sponsor terrorism against one another. They do not build weapons of mass destruction to use on or to threaten one another. Democratic countries form more reliable, open, and enduring trading partnerships. In the long run they offer better and more stable climates for investment. They are more environmentally responsible because they must answer to their own citizens, who organize to protest the destruction of their environments. They are better bets to honor international treaties since they value legal obligations and because their openness makes it much more difficult to breach agreements in secret. Precisely because, within their own borders, they respect competition, civil liberties, property rights, and the rule of law, democracies are the only reliable foundation on which a new world order of international security and prosperity can be built.


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