Senate Majority Leader Harry Reid released a Senate version of the government health care overhaul, weighing in at a massive 2,074 pages. McClatchy news reports, "The Senate Thursday began what promises to be a bitter, lengthy battle over the future of health care in America, and taxes, abortion, affordability and federal deficits emerged as key flashpoints. Senate Democratic leaders expect the first test vote on their new $848 billion, 2,074-page health care overhaul bill will come on Saturday evening. Although Democrats are likely to get the 60 votes they need to move forward with the debate, the outcome is uncertain."

The Congressional Budget Office reports the bill will cost taxpayers $848 billion over 10 years, imposing a number of new taxes on everything from prescription drugs to Botox. Michael F. Cannon, Cato's director of heath policy studies, says the $848 billion only accounts for part of the federal government's share of the tab:

Private-sector mandates--the legal requirements that individuals and employers purchase health insurance -- accounted for 60 percent of total costs.  That suggests that if the Reid bill's cost to federal and state governments is $1 trillion, then the total cost is probably $2.5 trillion, and Harry Reid — like House Speaker Nancy Pelosi — is hiding $1.5 trillion of the cost of his bill. Without a cost estimate of the private-sector mandates, Reid has not yet satisfied the request made by eight Democratic senators for a "complete CBO score" of the bill 72 hours prior to floor consideration. Fortunately, by law, the CBO must eventually score the private-sector mandates.  When that happens, the CBO will reveal costs that the bills' authors are trying to hide. The House passed its bill without a complete CBO score.  The Senate should not follow suit.

If history is any indicator, says Cato Executive Vice President David Boaz, the costs of the health care overhaul will inevitably spiral out of control:

Just look at the record: In 1967, the House Ways and Means Committee said the entire Medicare program would cost $12 billion in 1990. The actual cost in 1990 was $98 billion. In 1987, Congress projected that Medicaid would make special relief payments to hospitals of less than $1 billion in 1992. The actual cost, just five years after the projection, was $17 billion. Similarly, Medicare's home care benefit was projected in 1988 to cost $4 billion in 1993, but the actual cost — again, just five years after the projection — was $10 billion. The government is running a trillion-dollar annual deficit already, and Congress and the president propose to create a new program that promises to cover millions more people with health insurance, drag currently insured people onto government programs, and save billions of dollars in the process. No wonder levels of trust in government are at record lows.

The Washington Examiner reports, "More than ten percent of the jobs the Obama administration has claimed were 'created or saved' by the $787 billion stimulus package are doubtful or imaginary, according to reports compiled from eleven major newspapers and the Associated Press."

At the height of the debate over the "stimulus" legislation, Cato ran a full-page ad in the New York Times, the Washington Post, the Chicago Tribune, the Los Angeles Times, and other papers, signed by nearly 300 economists against the president's stimulus plan. Cato analysts discussed the plan's waste and consequences on dozens of leading news programs and talk shows.

Writing in the New York Times Online months after the legislation passed, Senior Fellow Jeffrey A. Miron asks, "Did the stimulus work?"

Two elements of the fiscal stimulus — cash-for-clunkers and the $8,000 tax credit for first-time home buyers — probably shifted significant activity from the fourth quarter and beyond to the third quarter because consumers knew these provisions would expire soon. Thus the stimulus plausibly shifted the timing of economic activity without necessarily improving the long-term path.

The case for additional stimulus is weak. If further stimulus occurs, it should focus on changes in policy that make sense independent of the recession. This means reductions in tax rates rather than increases in expenditure.

Budget Analyst Tad DeHaven calls the stimulus "political theater":

The Obama administration will continue to trumpet the number of jobs the stimulus package "created." It will brag that the government's efforts were not only successful, but that they were conducted with unprecedented transparency and accountability. But taxpayers and citizens should not buy into these claims. The stimulus jobs report is simply political theater: a charade intended to maintain public support for, or acquiescence to, Washington's multiplying encroachments.

• Why America leads the world in medical innovation.
• In the past eight months, the unemployment rate has jumped from 7.2 percent to 10.2 percent. Here's why.
• How delayed economic reform in India killed 14.5 million children. More details, here.
• Unintended Consequences: Could government efforts to redesign cities to make them more pedestrian friendly, concentrate jobs in selected areas, and increase mass transit actually raise C02 emission levels?
• Allan Meltzer, professor of political economy at Carnegie Mellon University, keynoted Cato's 27th annual Monetary Conference this week. In a Cato Daily Podcast, Meltzer discusses the diminishing independence of the Federal Reserve.

President Obama continues to deliberate on a new strategy for Afghanistan with his national security team. The President has reportedly been presented with several options, all of which include new U.S. deployments to the region, but has yet to make a final decision. Cato scholars have argued for a narrowing of objectives and a withdrawal of most of the U.S. forces from Afghanistan.

Writing in the Huffington Post, Foreign Policy Analyst Malou Innocent weighs the pros and cons of sending more troops versus pulling out:

For a country the size of Afghanistan, with roughly 31 million people, the Army and Marine Corps counterinsurgency doctrine advises between 620,000 to 775,000 counterinsurgents -- whether native or foreign. Furthermore, typical counterinsurgency missions require such concentrations of forces for a decade or more. Given these realities, we could soon hear cries of "surge," "if only," and "not enough."

Even if the United States and its allies committed themselves to decades of armed nation building, success against al Qaeda would hardly be guaranteed. After all, in the unlikely event that we forged a stable Afghanistan, al Qaeda would simply reposition its presence into other regions of the world.

In a Cato Podcast this week, Senior Fellow Doug Bandow reiterated the proper scope of goals in Afghanistan. "We have to scale back our ambitions," he said. "To put it simply, we need to engage in counterterrorism rather than counterinsurgency. Our goal needs to be that we kill and capture anyone out there that wants to attack America or do us harm. But that doesn't mean trying to build an Afghan state. That doesn't mean trying to create a genuine national government....It means focusing on what really matters to America: Terrorism. And give up the notion that we can create a Western liberal society in Afghanistan. We can't."

Cato experts made the case for withdrawing from the region during a briefing on Capitol Hill this fall. Watch the entire video, here.

In the wake of the tragic shooting in Fort Hood, Texas that left 13 dead and 31 injured, there was a rush of outrage and speculation about how to classify the incident and respond.

Jim Harper, director of information policy studies, lays out the options we have in reacting to such an event:

The country is unpacking the recent shooting at Fort Hood and analyzing the perpetrator intensely. Along with natural shock and curiosity, a principle reason for doing so is to discover what can prevent incidents like this in the future.

When faced with any risk, including rampaging gunmen, there are four options:

• Prevention — the alteration of the target or its circumstances to diminish the risk of the bad thing happening.

• Interdiction — any confrontation with, or influence exerted on, an attacker to eliminate or limit its movement toward causing harm.

• Mitigation — preparation so that, in the event of the bad thing happening, its consequences are reduced.

• Acceptance — a rational alternative often chosen when the threat has low probability, low consequence, or both.

Fort Hood presents the country with a choice: Invest extraordinary efforts in measures that cost a great deal, that invade prized rights, and that don't work? Or show our sorrow to the families and community of Fort Hood and make peace with the grief and tragedy of this incident.

The Berlin Wall fell 20 years ago this month, marking the collapse of Soviet communism. The anniversary is an appropriate time for stocktaking and for seeking to answer a number of questions associated with this historic event, its aftermath, and its continued influence.

• After 20 years, Paul Hollander looks back at why the Berlin Wall fell.

• Nazism and Communism: Why you rarely hear about the atrocities of Soviet communism.

• Imposing "paradise" at gunpoint.

• Flashback to 1990: Why the Soviets fell.

• Fear and Loathing in the Soviet Union: Cato President Ed Crane discusses his trip to the other side of the Iron Curtain in 1982.

• Podcast: Why Russia must confront the criminal nature of its communist past.

President Obama will meet with members of Congress over the weekend to push his health reform agenda.  The House will hold a floor vote on the bill Saturday.

After examining the bill, Cato Senior Fellow Daniel J. Mitchell concludes that the legislation will cause the federal deficit to soar:

Enacting a $1 trillion entitlement program would greatly increase the burden of government spending. In addition, promises of lower deficits are a triumph of hope over experience. Government forecasters have a very poor track record of predicting costs. More realistic assumptions suggest that health legislation could easily push up 10-year deficits by $600 billion.

In a new Cato study, Cato Adjunct Scholar Aaron Yelowitz explains why young adults will bear a disproportionately large share of the legislation's financial burden. Premiums will increase sharply for young people, but will drop for Americans aged 55-years or older. Americans in their twenties could see a 100 percent increase in premiums, writes Yelowitz.

The Berlin Wall fell 20 years ago, marking the collapse of Soviet communism. The anniversary is an appropriate time for stocktaking and for seeking to answer a number of questions associated with this historic event, its aftermath, and its continued influence.

In The Washington Post, Paul Hollander, author of the Cato Policy Analysis, "Reflections on Communism Twenty Years after the Fall of the Berlin Wall," examines why there is so little awareness of the horrors wrought by communism.

There is little public awareness of the large-scale atrocities, killings and human rights violations that occurred in communist states, especially compared with awareness of the Holocaust and Nazism (which led to far fewer deaths).

Political violence under communism had an idealistic origin and a cleansing, purifying objective. Those persecuted and killed were defined as politically and morally corrupt and a danger to a superior social system. The Marxist doctrine of class struggle provided ideological support for mass murder. People were persecuted not for what they did but for belonging to social categories that made them suspect.

For analysis on why communism fell, see research by Cato scholars Tom Palmer and Swami Aiyar. For a review of Cato's role in subverting socialism around the world, see our Cato 25 Report.

• Dump the neocons:  "Republicans should take this opportunity to return to their traditional noninterventionist roots and throw their neoconservative wing under the bus," writes Cato President Ed Crane in the Los Angeles Times.


• Three cheers for divided government: "Since the start of the Cold War, we've had only a dozen years of real fiscal restraint." And guess what? All of them occurred when the White House and Congress were held by different parties.


• Video: The authors of two new Ayn Rand biographies discuss their work and research at a Cato Book Forum.


• Podcast: Why Russia must confront the criminal nature of its communist past.

House Democrats unveiled a 1,990-page health care reform bill on Thursday, which includes a more "moderate" version of the so-called public option. Under this plan, health care providers would be allowed to negotiate reimbursement rates with the federal government. Politico reports that the bill will come to about $2.24 million per word.

Cato health care experts say that you can call it “moderate” all you want: It’s still a first step toward a government-controlled health care. "Regardless of how much lipstick they put on this pig, it still is a government takeover of the health care system that would all but eliminate private insurance and force millions of Americans into a government-run system," writes Senior Fellow Michael D. Tanner.

In a recent Policy Analysis, Michael F. Cannon, Cato director of health policy studies explained why the so-called “public option” won’t be anything like the program that is currently promised:

A full accounting shows that government programs cost more and deliver lower-quality care than private insurance. The central problem with proposals to create a new government program, however, is not that government is less efficient than private insurers, but that government can hide its inefficiencies and draw consumers away from private insurance, despite offering an inferior product.…Congress should reject proposals to create a new government health insurance program — not for the sake of private insurers, who would be subject to unfair competition, but for the sake of American patients, who would be subject to unnecessary morbidity and mortality.

For more, read the case for a market-based approach to health care reform.

Reuters reports, “October has been the deadliest month for U.S. troops in Afghanistan since the start of the war in 2001, Pentagon officials said on Tuesday. The death of eight troops in bomb attacks in southern Afghanistan on Tuesday pushed the October death toll to 53, topping the previous high of 51 deaths in August, officials said.”

Cato Foreign Policy Analyst Malou Innocent comments:

An infusion of 40,000 more troops, as advocated by General Stanley McChrystal, may lead to a reduction in violence in the medium-term. But the elephant in the Pentagon is that the intractable cross-border insurgency will likely outlive the presence of international troops. Honestly, Afghanistan is not a winnable war by any stretch of the imagination.

Innocent recently co-authored a study, “Escaping the 'Graveyard of Empires': An Exit Strategy for Afghanistan" that outlines a plan for the conflict in the region.

• Why new financial regulation will do nothing to stop another economic crisis.
  
• How Washington’s plans may result in even higher executive pay.
  
• The case for allowing insider trading.
  
• Twenty years later: Why the Berlin Wall fell.
  
• Gallup finds libertarians make up 23 percent of the electorate.
  
• In the Washington Post, Nat Hentoff explains why hate-crime legislation is unconstitutional.

In a speech on health care reform in March 2009, President Obama said, "If there is a way of getting this done where we're driving down costs and people are getting health insurance at an affordable rate, and have choice of doctor, have flexibility in terms of their plans, and we could do that entirely through the market, I'd be happy to do it that way….I just want to figure out what works." In a new paper, Cato's Director of Health Policy Studies Michael F. Cannon explains how tearing down regulatory barriers to competition and allowing workers control over their health care dollars would limit costs, expand choice, improve health care quality, and make health coverage more secure.

Writing in Politico, Cannon proposes five ways to cure the health care system:

1. Give Medicare enrollees a voucher (adjusted for their means and health risk) and let them purchase any health plan on the market,

2. Reform the tax treatment of health care with "large" health savings accounts, which would give workers a $9.7 trillion tax cut (without increasing the deficit) and free them to purchase secure coverage that meets their needs,

3. Free consumers and employers to purchase health insurance across state lines (i.e., licensed by other states), which could cover up to one third of the uninsured,

4. Make state-issued clinician licenses portable, which would increase access to care and competition among health plans, and

5. Block-grant Medicaid and the State Children's Health Insurance Program, just as Congress did with welfare.

For more, visit Healthcare.Cato.org.

Under new policy guidelines from the Obama administration, federal drug agents won't pursue medical marijuana users and suppliers as long as they follow state laws. Cato scholar Tim Lynch applauds the move: "This shift in policy is more mindful of the constitutional principle of federalism by allowing the states to try different policy approaches, and it is more respectful of the division of opinion within the medical community about the benefits of marijuana for certain patients. This de-escalation of the drug war is good policy and is long overdue."

Lynch recently co-authored an op-ed with Cato scholar Juan Carlos Hidalgo that called on policymakers to take a note from other countries and move toward drug policy reform:

Drug policy reform is moving even faster abroad. In 2001, Portugal decriminalized all drugs, including cocaine and heroin. Not only has the predicted spike in drug use and a public health crisis failed to materialize, Portugal's drug usage rates compare more favorably than many other European states that have kept up a strict "lock 'em up" approach….We seem to have finally reached a tipping point where the costs of the drug war clearly exceed any perceived benefit. Drug addiction is a problem. But just as alcohol prohibition was a mistaken approach to the problem of alcoholism, so too is the drug war a mistaken approach to drug abuse.

Cato 's April study, Drug Decriminalization in Portugal: Lessons for Creating Fair and Successful Drug Polices, explored the highly successful experiment to decriminalize drugs in Portugal. The study has been featured in Time, the Wall Street Journal, the Economist, and other publications.

• It has been tried before: Why increasing the size of government won't work.

• Senate Judiciary Committee abandons hope of bringing any real change to the Patriot Act. Julian Sanchez in The Nation: "The Obama administration makes vague, reassuring noises about constraining executive power and protecting civil liberties, but then merrily adopts whatever appalling policy George W. Bush put in place."

• Cato v. Heritage on the Patriot Act.

• Video: A heart-breaking story about the failure of the American health care system.

The Senate Finance Committee agreed to move forward on a health care bill that would "require every American to have health insurance,…spend $829 billion over the next decade to finance the biggest expansion of Medicaid in 40 years and…provide federal subsidies to 18 million people who otherwise would be unable to afford coverage. It would tax high-cost health plans, impose new penalties on employers and slash future spending on Medicare, the federal insurance plan for people older than 65."

Writing in the New York Post, Cato health care scholar Michael F. Cannon explains why "This bill would increase the deficit and cost more than $2 trillion over 10 years."

Money for the health care legislation is going to have to come from somewhere, says Cato senior fellow Michael D. Tanner. In an op-ed this week, Tanner explained why Medicare spending will be cut as a result of the health care overhaul:

Depending on which set of accounting measures is used, Medicare is facing unfunded liabilities of $50 trillion to $100 trillion. Yes, that's trillion, with a "T." As a percentage of GDP, Medicare costs are expected to rise from 2.7 percent today to 9.4 percent by 2050. We cannot and will not continue to pay all promised future Medicare benefits. Of course, there are differences about how future cuts would be made and what we should do with the money. Democratic plans to simply plow the money back into a new government health care program, for example, would do nothing to help our long-term fiscal problems. The fact is, no matter what they say, Democrats are going to cut Medicare and so are Republicans.

For an in-depth look at the proposals for health care reform, read Tanner's recent Policy Analysis, Halfway to Where? Answering the Key Questions of Health Care Reform.

The Senate is reviewing the PATRIOT Act, which includes Bush-era surveillance powers set to expire at the end of the year. Writing in the American Prospect, Cato research fellow Julian Sanchez says, "This could be the moment to revise the whole architecture of post-9/11 spying law." There are a number of aspects of the bill that are being examined for reform, including the use of "roving wiretaps," and the "lone-wolf provision." After analyzing the law closely, Sanchez concludes that the Senate must allow these powers to expire.

On "roving wiretaps":

For roving taps, the warrant shows a nexus between the suspected crime and an identified target. Then, as surveillance gets underway, the eavesdroppers can go up on a line once they've got a reasonable belief that the target is "proximate" to a location or communications facility. It stretches that "particularity" requirement a bit, to be sure, but the courts have thus far apparently considered it within bounds. It may help that they're not used with great frequency: Eleven were issued last year, all to state-level investigators, for narcotics and racketeering investigations.

On the "lone wolf provision":

The PATRIOT Act's "lone wolf" provision [authorized]…spying within the United States on any "non-U.S. person" who "engages in international terrorism or activities in preparation therefore," and allowing the statute's definition of an "agent of a foreign power" to apply to suspects who, well, aren't. Justice Department officials say they've never used that power, but they'd like to keep it the arsenal just in case.

As with so many of the post-9/11 intelligence reforms, the lone wolf provision has its genesis in the misguided assumption that every intelligence failure is evidence that investigators need more power.

• Appearing on CNN's The Lou Dobbs Show, Cato legal analyst David Rittgers debates troop build up in Afghanistan
• Why there's no way to enforce a ban on texting while driving.
• How onerous financial rules will only delay economic recovery and dampen long-term growth.
• How to measure the effectiveness of Obama's stimulus plan.
• Why free trade is a boon to the environment.

The Congressional Budget Office released a report Wednesday claiming that the Baucus health care reform bill being debated in the Senate will not increase the federal deficit.

But Cato Director of Health Policy Studies Michael F. Cannon finds that not only would the Baucus bill cost about $2 trillion—more than twice the CBO estimate—but it achieves its "savings" through accounting gimmicks and huge tax increases.  According to Cannon's research, Baucus has "carefully and methodically hidden those facts."

The Baucus bill assumes that Congress will allow the "sustainable growth rate" cuts in Medicare's physician payments to occur beginning in 2012.  Yet Congress has routinely and repeatedly blocked those cuts, making Baucus's assumption preposterous.  The CBO handled the issue delicately, but essentially said, "Sure, provided that the sun rises in the west in 2012, then yes, this bill would reduce the deficit." That means Baucus will come up at least $200 billion short on the revenue side, making his bill a budget-buster. But the worst part is that the Congressional Budget Office's preliminary cost estimate omits the cost of the private sector mandates in the Baucus bill.  In Massachusetts, those costs accounted for 60 percent of the total cost of reform.  That suggests the actual cost of the Baucus bill - $829 billion plus $75 billion plus $33 billion, times 2.5 - is well over $2 trillion.

Writing in the New York Post, Cato scholar Michael D. Tanner explains how Congress cooks the books:

The CBO provides 10- year projections of a bill's cost. But most provisions of the health bill don't take effect until 2014. So the "10-year" cost projection only includes six years of the bill. Plus, the costs ramp up slowly. In its first year, the House bill would only cost about $6 billion; in its first three, less than $100 billion. The big costs are in the final years of the 10-year budget window — and beyond. In fact, over the first 10 years that the House bill would be in existence (2014 to 2024), its costs would be closer to $2.4 trillion. Similarly, the real cost of the Senate bill over 10 years of operation is estimated at $1.5 trillion. Worse, the trajectory of the costs after 10 years rises dramatically — meaning "reform" would cost even more in its second 10 years and beyond.

For more on health care costs, listen to Wednesday's Cato podcast.

Wednesday marked the eighth anniversary of the U.S. invasion of Afghanistan. President Obama has indicated that he may send more troops to the region, a course of action that Cato foreign policy experts have advised against.

In a co-authored article in Foreign Policy, Cato scholar Malou Innocent explains why the U.S. must narrowly define the mission in Afghanistan:

Who is the enemy? What are the objectives? Is counterinsurgency meant to achieve the goal of counterterrorism (beating al Qaeda), state-building (bringing stability and democracy to Afghanistan), or both? What would "victory" in Afghanistan even look like? And how will the war stay won, after the United States leaves? Without knowing the answers to such questions, the United States has no way of determining whether it is succeeding. And as long as it continues to conflate military and state-building objectives, the United States will always appear to be losing. But by focusing on stamping out al Qaeda with a light military footprint and accepting an Islamist government in Afghanistan, the United States has an opportunity for unqualified success.

In a new Cato video, Cato foreign policy experts explain the dire situation.