In Case You Missed It Will Oklahoma join the growing number of states that are embracing judicial-selection reform?
Here’s how to fix Oklahoma schools that don’t want to be fixed.
Family structure is a key factor in Oklahoma’s economic growth. http://shar.es/EJvql
http://shar.es/E92ws
http://natl.re/1gkYQXU
This brief video looks back at OCPA’s first 20 years. http://ocpa.us/17e0UQu
Gov. Mary Fallin wants to see return-on-investment data for college degree attainment. Unfortunately, Bloomberg BusinessWeek says for some Oklahoma colleges the ROI is actually negative.
The value of Oklahoma welfare benefits is equal to employment earnings of $10.81 per hour.
In the Tulsa World, Mark A. Stansberry and OCPA’s Brian Bush say America needs America’s energy now more than ever. http://tinyurl.com/kxrvtst
http://newsok.com/article/3877685
By holding the line on spending, Kansas is on a path to phasing out its state income tax.
http://tinyurl.com/8449lm2
Those criticizing Oklahoma’s A-F report cards should be careful what they wish for. Parents may now look at an even more unflattering report card instead.
http://shar.es/Kxqgo
http://globalreportcard.org
PERSPECTIVE OCPA Staff
OCPA Trustees
Brandon Dutcher .................................................. Editor
Blake Arnold • Oklahoma City
Tom H. McCasland III • Duncan
Daryl Woodard • Tulsa
Robert D. Avery • Pawhuska
David McLaughlin • Enid
Daniel J. Zaloudek • Tulsa
Lee J. Baxter • Lawton
Lew Meibergen • Enid
Steve W. Beebe • Duncan
Ronald L. Mercer • Bethany
OCPA Researchers
G.T. Blankenship • Oklahoma City
Lloyd Noble II • Tulsa
Steven J. Anderson, MBA
John A. Brock • Tulsa
Mike O’Neal • Edmond
Clint Colbert .................................................... Office Manager
David R. Brown, M.D. • Oklahoma City
Bill Price • Oklahoma City
Brandon Dutcher ............................. Senior Vice President
Paul A. Cox • Oklahoma City
Patrick T. Rooney • Oklahoma City
Kelly Ferguson ....... Marketing & Development Intern
William Flanagan • Claremore
Melissa Sandefer • Norman
Dacia Harris .............................. Interactive Media Director
Josephine Freede • Oklahoma City
Thomas Schroedter • Tulsa
Ann Felton Gilliland • Oklahoma City
Richard L. Sias • Oklahoma City
John T. Hanes • Oklahoma City
Greg Slavonic • Oklahoma City
Dave Bond ......................... Director of External Relations Brian Bush ..................................... Executive Vice President Michael Carnuccio .................................................... President
Rachel Hays .................................... Development Assistant Cassandra Howard ................................... Executive Liaison
Research Fellow
Tina Dzurisin
Research Associate
Vance Fried, J.D. Research Fellow
Jayson Lusk
Samuel Roberts Noble Distinguished Fellow
Matt Mayer, J.D. Research Fellow
Ralph Harvey • Oklahoma City
John F. Snodgrass • Ardmore
J. Scott Moody, M.A.
Jennie Kleese ............... Development Events Manager
John A. Henry III • Oklahoma City
Charles M. Sublett • Tulsa
Karma Robinson ...... Vice President for Development
Henry F. Kane • Bartlesville
Robert Sullivan • Tulsa
Andrew C. Spiropoulos, J.D.
Mary Santelmann ............................. Operations Assistant
Robert Kane • Tulsa
Lew Ward • Enid
Jonathan Small .............................Vice President for Policy
Gene Love • Lawton
William E. Warnock, Jr. • Tulsa
Research Fellow
Milton Friedman Distinguished Fellow
Wendy P. Warcholik, Ph.D. Research Fellow
Perspective is published monthly by the Oklahoma Council of Public Affairs, Inc. , an independent public policy organization. OCPA formulates and promotes public policy research and analysis consistent with the principles of free enterprise and limited government. The views expressed in Perspective are those of the author, and should not be construed as representing any official position of OCPA or its trustees, researchers, or employees.
John Bolton
Larry Arnn
William F. Buckley Jr.
SAVE THE DATE
George W. Bush
Dinesh D’Souza
Jeb Bush
Mitch Daniels
FREEDOM BANQUET
Artur Davis
Gov. Mike Huckabee November 13, 2013 • Lawton • 7 PM
Jim DeMint
J. Rufus Fears
Steve Forbes
Tommy Franks
John Fund
Newt Gingrich
David Horowitz
Laura Ingraham
Frank Keating
Jeane Kirkpatrick
Art Laffer
Rich Lowry
Ed Meese
Stephen Moore
Peggy Noonan
Marvin Olasky
Sarah Palin
Star Parker
Michael Reagan
Paul Ryan
Joe Sobran
Thomas Stafford
John Stossel
Cal Thomas
Clarence Thomas
Scott Walker
John Walton
J.C. Watts
Allen West
Walter Williams
Past OCPA speakers are pictured above.
Rich
Oklahomans and Obamacare: Where We’ve Been, Where We’re Going The past is prologue and, contra Henry Ford, history is not bunk. History does not seem to indicate that Oklahoma will soon join the ranks of states implementing unsustainable, unfinanced, and unwise variations of Medicaid expansion as envisioned in the president’s health law. Nevertheless, eternal vigilance is the price of liberty. Let’s review Oklahoma’s history with the president’s unpopular health law. Oklahoma voters did their part in 2010, passing State Question 756, the “opt out” amendment which simply amended the state constitution to prohibit any penalty for failure to purchase health insurance, and explicitly stated doctors may continue to accept direct payment for services rendered. That amendment authorized state officials to challenge the federal law. The attorney general—who turned out to be Scott Pruitt, only the second Republican AG in state history (after the sainted OCPA trustee G.T. Blankenship)—has, in the course of events, become the “last man standing” with a “live round” that could put the president’s inaptly named Affordable Care Act (ACA) out of its misery. It is actually difficult to overstate the significance of the path Pruitt and his staff have taken in Pruitt v. Sebelius. Step by steady step, they have advanced nuanced legal arguments focused on the Internal Revenue Service rules aiming to punish large employers (including state and local governments) who balk
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at the Obamacare mandates. Briefs from Pruitt and his staff are complex, but with this succinct legal argument: In states which have not acted to create their own health insurance exchanges, the feds have “no authority under the law to use (exchanges) to offer subsidies and inflict the accompanying taxes.” Commissioner of Insurance John Doak has frequently criticized the antimarket forces unleashed in the president’s health law. He was among the several state-level insurance officials who reiterated that state laws and rules concerning who is and is not authorized to act as insurance agents and brokers should and would be upheld. This shot across the bow of Obama’s good ship of “Navigators” (formerly known as community organizers) came at an opportune moment this summer. Oklahoma’s heroic Green family continues to treat its employees like gold, while declining to join the bandwagon Obamacare tried to get rolling to erode religious liberty. Legal counsel for the Greens’ Hobby Lobby asserted that this summer’s legal ruling allowing the company to keep fighting the law’s abortion mandates meant “the tide has turned” against Obamacare. Gov. Mary Fallin has done her part— rebuffing a $54 million federal grant to pay for creation of an Oklahoma insurance exchange. When she did so, Fallin said Oklahoma would not create a health exchange or authorize Medicaid expansion.
To be sure, two of the governor’s closest allies, consultant Pat McFerron and the State Chamber’s CEO Fred Morgan, have sent nuanced messages that the path might still be open to a warmedover version of Medicaid expansion through Insure Oklahoma—a limited program of premium assistance that is not really a good policy fit with the “single payer” agenda laced throughout the president’s health law. And liberal journalist Arnold Hamilton has speculated that the governor might still flip-flop on Medicaid expansion after the April 2014 filing for reelection, or perhaps after the June 24 primary elections. OCPA distinguished fellow Andrew Spiropoulos believes Oklahomans must remain vigilant. He wrote in the Journal Record, “A relieved Gov. Mary Fallin recently announced that the Obama administration has agreed to wait a year before euthanizing the Insure Oklahoma health insurance program.” So why have the feds given us a reprieve? The administration perceives an opportunity to use our state’s leaders’ support of Insure Oklahoma as a wedge to break Oklahoma’s resistance to the expansion of Medicaid. …What’s the president’s plan? It’s very clever. He will offer to allow us to take all or part of the Medicaid expansion money and use it to expand Insure Oklahoma. The pitch is that we can keep our plan and get the money, too. However, here’s the
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Will Oklahoma Expand Medicaid? In September OCPA played host to more than 750 of our closest friends for the annual meeting of the State Policy Network, the service organization for the nation’s free-market, state-focused think tank community. One of the highlights of the week was hearing from Louisiana Gov. Bobby Jindal. Not only is Gov. Jindal one of the nation’s leading champions of school choice, he has been a vocal critic of the president’s health law. By refusing to go along with the Obamacare Medicaid expansion, he has reduced future federal spending by billions of dolLouisiana Gov. Bobby Jindal speaks on Sept. 24 in lars. Gov. Jindal and Oklahoma’s own Sen. Tom Coburn recently Oklahoma City. co-authored an article which made the case that states should not expand Medicaid. Oklahoma Gov. Mary Fallin has also said no to the Obamacare Medicaid expansion. Curiously, though, it appears the door has been left open. For example, executive-branch officials continue to consider the recommendations in the Leavitt report—which, as my colleague Jonathan Small never tires of repeating, is still Obamacare. Moreover, a consultant for Gov. Fallin’s re-election campaign—who is also a consultant for entities promoting the Obamacare Medicaid expansion—is on the record saying Gov. Fallin “hasn’t slammed the door either. If it were dead on arrival we wouldn’t be taking our time and energy to do this.” All of which causes conservatives to spend time and energy battling the Obamacare Medicaid expansion, while continuing to give liberals hope that Gov. Fallin could, come 2014 or 2015, choose to embrace it. Oklahoma policymakers must continue to stand firm. For as Gov. Jindal says, “This argument over Medicaid expansion is more than a fight about the Left’s desire for a single-payer health care system, it’s more than a fight about dollars and cents, and it’s more than a fight about expanding a program that already delivers subpar outcomes. Rather, the fight over Medicaid expansion is a microcosm of this president’s push towards centralized government control. We are day by day giving up more and more of our freedoms to an ever larger and more powerful government.” —Editor
truth—if we take the deal, it won’t be our plan any longer. … We need to remember that the president isn’t offering to negotiate because he has seen the light. It’s because he feels the heat. Proponents of Medicaid expansion seem unwilling to accept the clear meaning of our now-frequent use of words like sequester, shutdown, and debt ceiling: federal government spending is on an unsustainable path, one that will become more rocky as the
president’s health law is implemented. On pages 6 and 7, U.S. Sen. Tom Coburn and OCPA’s Jonathan Small discuss the history of congressional inability to carry through with commitments for financing to the states. When Obamacare advocates falsely claim we’re “leaving money on the table” in not accepting the federal money, they are also missing the meaning of the current, and permanent, war over the size and scope of government— a fight that will intensify if, somehow,
Obamacare survives. In the end, the president’s health law could still fall due to its fiscal unsustainability, or in one or more of the lawsuits outlined above—or perhaps due to some case or controversy not yet on the scene. The ruling of Chief Justice John Roberts in National Federation of Independent Business v. Sebelius may eventually be seen as a stop-gap that put ACA on life support. Here’s hoping one day the plug will be pulled.
www.ocpathink.org
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Obamacare Medicaid Expansion Wrong for Oklahoma By U.S. Senator Tom Coburn, M.D., and Jonathan Small
Across the country, state policymakers are debating whether or not to implement the Medicaid expansion featured in the Affordable Care Act (Obamacare). So far, Oklahoma’s leaders have declined to expand Medicaid—a reasoned decision that we applaud. However, proponents of Medicaid expansion in our state, such as hospitals and some businesses, argue the law includes “money on the table” for states, since under Obamacare the federal government says it would pay for 90 percent of the expansion population in perpetuity. But a future Congress is not bound by current law; they can simply rewrite
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it. Congress has a history of overpromising funding for states, so it would be folly for states to build their budgets around a promise Congress is unlikely to keep. Consider a policy analogy from education. In 1975, when Congress passed the Individuals with Disabilities Education Act, Uncle Sam promised to pay 40 percent of each state’s costs. However, over the last two decades the federal government has paid less than half of what it originally promised. For the past decade, the shortfall has cost states nearly $175 billion. In Washington, it’s an “open secret” that Congress has to reduce Medicaid outlays. That’s why virtually every
major bipartisan plan includes recommendations to reduce the federal dollars given to states for Medicaid. It’s not like the federal government is exactly flush with cash. According to the Government Accountability Office, total governmental unfunded liabilities tally more than $88 trillion. Even scarier, under generally accepted accounting principles, that number is closer to $124 trillion. In this environment, a clear-eyed view of the future suggests Congress will seek ways to curb Medicaid spending. In addition to Congress writing a check that will bounce, the federal government’s promise to pay 90 cents of every dollar for a Medicaid expansion
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It would be folly for Oklahoma to build its state budget around a promise that Congress is unlikely to keep. obscures real costs to states. This is like Uncle Sam fleecing the states by offering to give them a new product they realistically cannot afford, by offering the first few months for free. The fact is Oklahomans already struggle to pay for the current Medicaid program in our state. According to data from the Oklahoma Health Care Authority, roughly one in four Oklahomans were enrolled in the program last year. When one out of four people are enrolled in Medicaid, state taxes have to be increased on the three remaining individuals outside the program, just to pay for it. Medicaid already pays for two-thirds of births in our state, as well as twothirds of the occupied beds in longterm care facilities (when measured by length of stay). The program’s budget is
already bigger than state spending on all schools and universities combined. The program costs and number of enrollees in Medicaid have grown each year since 1995, and the speed of the program’s growth has exceeded the growth in our state’s population, even through periods of economic growth. Based on last year’s enrollment data, expanding the program could result in nearly one in three Oklahomans on Medicaid. Jagadeesh Gokhale, a member of the Social Security Advisory Board, estimates that could cost Oklahoma taxpayers $1.6 billion the first 10 years. By 2023, he projects Oklahoma’s bill for Medicaid would come in at $6.5 billion annually—a sum equal to the entire state appropriated budget in fiscal year 2012! One important reason not to expand Medicaid in our state is that doing so could threaten access to health care for the people who depend on the program. While SoonerCare has above-average access to providers for patients on the program, nationally, about 40 percent of primary care physicians and about 65 percent of specialists do not even accept Medicaid patients. What good is it to offer Oklahomans health coverage if, in reality, they cannot access care in a timely manner? For too many Medicaid patients in other states, their care is routinely delayed and denied. Before Obamacare, some states already tried expanding Medicaid and nearly bankrupted themselves in the process. The State of Tennessee had
an epically painful experience with its state Medicaid program, TennCare. The program nearly bankrupted the state and thousands of individuals were eventually cut from the rolls. States like Maine and Arizona experienced cost overruns more than double their estimates, resulting in arbitrary program caps that displaced needy patients. Meanwhile, states like California and Illinois had to implement huge tax increases and slash provider reimbursements, leaving their states far less competitive and many patients struggling to see a doctor. The lessons of history and the hard numbers are clear: It is not fiscally responsible or wise to expand a strained entitlement program and rely on federal funding that is unlikely. While it has been tempting for some consultants and lawmakers to try to dress up Medicaid expansion as “program redesign,” it is simply not in our state’s long-term interest to expand Medicaid, whether that’s under the guise of additional federal funding or creative program designs. Given the economic facts, any expansion of Medicaid under the Affordable Care Act would be a step in the wrong direction. Rather than expand Medicaid, policymakers should work to mend Medicaid by pursuing reforms to better manage and coordinate care and promote medical price transparency. This can help create an environment in which the number of our fellow Oklahomans enrolled in Medicaid can be reduced, not increased.
Former OCPA trustee Tom Coburn is a U.S. Senator and a Muskogee physician who has cared for thousands of Medicaid patients. He specializes in family medicine, obstetrics, and the treatment of allergies. Dr. Coburn has personally delivered more than 4,000 babies.
Jonathan Small, C.P.A., is the vice president for policy at OCPA. He previously served as a budget analyst for the Oklahoma Office of State Finance, a fiscal policy analyst and research analyst for the Oklahoma House of Representatives, and as director of government affairs for the Oklahoma Insurance Department.
www.ocpathink.org
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For One Oklahoma Family, School-Choice Scholarship Came as a ‘Gift from God’ By Tina Korbe Dzurisin
For years, Judith and Jacob Suarez prayed to be able to send their four children to Catholic schools. As active parishioners at Saint Eugene Catholic Church in Oklahoma City, they often encountered families whose kids attended private schools— and they couldn’t help but notice the resources available to those students. Meanwhile, their own children— Kevin, 14, Jacob, 13, Jocelyn, 11, and Judith, 9—attended public schools in the Mid-Del school district. They reported mild bullying, and Jocelyn, in particular, fell behind academically. As dearly as they desired an alternative, the couple simply could not afford the cost of Catholic school tuition. Both from Mexico, Mr. and Mrs. Suarez entered the United States legally in the mid-1990s. Mrs. Suarez still barely speaks English. He works for Marianne’s Rentals, a company that rents tents, tables, chairs, tablecloths, and other party equipment. She cleans houses, working as often as jobs are available. Sometimes, that’s twice a week. Sometimes, that’s not at all. “I would see the other kids at Saint Eugene’s, and their opportunities were very different from my children’s,” Mrs. Suarez said in Spanish. “I would pray to God, ‘When will my children have a chance to go to Catholic school?’” In 2011, Gov. Mary Fallin signed into law the Equal Opportunity Education Scholarship Act. The Act effectively encourages private donors to contribute to scholarship funds for students from low-income families by granting 50 percent tax credits for donations up to $2,000 for individuals, $4,000 for married couples filing jointly, and $100,000
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for corporations. Shortly thereafter, the Catholic Foundation of Oklahoma created the Catholic Schools Opportunity Scholarship fund. Donors to the fund qualify for the tax credits. Although she didn’t know it yet, Mrs. Suarez’ prayers had been answered. As the oldest Suarez son prepared to enter high school, the parish priest asked Mr. and Mrs. Suarez whether they would be interested to send him to Bishop McGuinness Catholic High School. He offered direct financial assistance from the parish—and, crucially, suggested that scholarships might be able to fill in any remaining gaps. Encouraged, the Suarez family also met with Mary Dresel, the principal of Saint Philip Neri Catholic Elementary School, to inquire about potential financial aid for their three youngest children, as well. Dresel connected the family to the Catholic Schools Oppor-
tunity Scholarships. Today, all four Suarez children attend Catholic schools. The Suarez family pays $279 a month; scholarships cover the rest. “If we had to pay anything more or extra, we wouldn’t be able to buy any food or pay for our house,” Mrs. Suarez said. The difference in their children can’t be quantified, though. “They wake up happier because the place they’re going to, they like,” Mrs. Suarez said. “They say that there is less bullying and they have learned a lot more. It has made a difference also in me. I’m more comfortable because the principals are very nice and the teachers are, too.” Principal Dresel said the affection goes both ways. “They’re very hard-working—just really, really good people—and the children are wonderful,” she said. “What they desire for their children is just so beautiful. This is what they wanted.” For more information about Oklahoma’s tax-credit scholarship program, visit http:// tinyurl.com/ladkhjx. For more information about scholarshipgranting organizations in Oklahoma, visit the Catholic Foundation of Oklahoma (http://tinyurl.com/lpthygn) or the Diocese of Tulsa (http://tinyurl.com/jwxbrbw).
Tina Korbe Dzurisin is a research associate at OCPA. Formerly, she was a staff writer at The Heritage Foundation and an associate editor at HotAir.com.
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UNCORRECTED PROOF - NOT FOR DISTRIBUTION
Bullied Students Deserve School Choice By Jason Bedrick
We expect our schools to keep our children safe from bullies. But what should parents do when their assigned government school becomes the bully? That’s what happened to the parents of Eileen Parkman, a Hawaiian secondgrader who courageously stood up to several fifth-grade boys who were kicking and stomping a defenseless autistic child as he was curled up in the fetal position. The bullies then set their sights on Eileen, whom they threw to the ground and stepped on. The Maui Autism Center gave her an award for her bravery, but the boys continued to hit and kick her and throw balls at her face on several subsequent occasions. School officials at Kamali’i Elementary in Maui were apparently unable to stop the bullying, so Eileen’s parents decided to pull her out of the dangerous environment. That’s when the school officials became bullies themselves. The Maui News reported: It took Sean Parkman a while to remove Eileen from enrollment at Kamali’i. After the first incident, he was told the situation would be remedied, he said. But when Eileen endured more retaliation, Parkman said he received no help from school officials. He and his mother offered to help serve as school field monitors, but they were turned away, he said. Parkman said school officials told him that if he pulled Eileen from the school, then officials would report him to Child Protective Services because he could be violating school attendance policies. So, he held off. But after taking Eileen to doctors several times after getting beaten,
School choice can mean the world to a child who can escape from her Tormentors and learn in a safe environment. doctors warned Parkman that Eileen was not safe. He then removed her from the school. In other words, the school officials gave the Parkmans an untenable choice: keep your daughter in an unsafe environment, or men with guns might come take your daughter away. After a few trips to the doctors, the Parkmans decided to risk the possibility of the latter rather than have their daughter continue to face the certainty of the former. It’s impossible to know why exactly the school officials behaved as they did—they clammed up when reporters started asking questions—but it would not be surprising if the officials were at least partly motivated by the state’s school funding formula, which allocates money based partially on enrollment. Fewer students mean fewer dollars. If they can’t please parents who want to leave, school officials can threaten them with a parent’s worst nightmare. If Hawaii had had a school choice program, most of the grief following the initial incident could have been avoided. If the school officials knew that the parents had other options, they would have had to remedy the
situation in order to keep Eileen at their school, and they would have had no recourse to threats. Fortunately, the Parkmans had the resources to provide a tutor for their daughter, but many families don’t have that option. Discussions of school choice often revolve around academic performance, but there are other reasons that a family might want to choose another school and bullying is one of them. Unfortunately, this bullying incident is far from unique. Bullying, especially of students with special needs, is abhorrently pervasive. School choice is not a panacea for all the challenges facing our education system, but it can mean the world to a child who can escape from her tormentors and learn in a safe environment. Jason Bedrick (master’s degree in public policy, Harvard University) is a policy analyst with the Cato Institute’s Center for Educational Freedom. His master’s thesis, “Choosing to Learn,” assessed the scholarship tax credit programs operating in eight states, including their impact on student performance, fiscal impact, program design, and popularity.
www.ocpathink.org
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Right to Work Helps Oklahoma Shine By Frank Keating and Brandon Dutcher
When Indiana and, incredibly, Michigan became Right-to-Work (RTW) states in 2012, it was the first year a state had done so since our home state of Oklahoma passed Right to Work in 2001, giving every Oklahoma employee the choice of paying—or not paying—a labor union as a condition of employment. Labor-market freedom is a matter of justice, so we would support it whether or not it spurred economic growth. But for years we made the case, in various publications and public forums—including State of the State addresses, during which Gov. Keating was routinely jeered by union members in the gallery—that Right to Work would boost employment (especially in the manufacturing sector) and stimulate economic activity. A new study from the Fraser Institute, a leading Canadian think tank, suggests this is the case. In “The Implications of US Worker Choice Laws for British Columbia and Ontario,” Benjamin Zycher, Jason Clemens, and Niels Veldhuis looked at the experiences of RTW states, paying particular attention to Oklahoma (the Indiana and Michigan laws are too new to allow for an analysis of economic effects). They say that the scholarly literature on RTW is not conclusive, “but the weight of the evidence is strongly suggestive. … The literature, employing a variety of approaches and data sources, generally finds that RTW states enjoy real annual economic growth rates about 0.8% higher than those characterizing non-RTW states, other factors held constant.” What’s more, a new econometric analysis reported in the Fraser study “finds that RTW laws in the US increase economic growth by about 1.8% and employment by about 1% in the
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states enacting such laws.” (Writing for the American Enterprise Institute blog shortly after President Obama’s reelection, economist Mark J. Perry noted that, since 2009, RTW states created four times as many jobs as forcedunion states—employment growth which, ironically, may have helped Mr. Obama get re-elected.) As for manufacturing in particular, the authors of the Fraser study say “the scholarly literature finds that RTW laws have the effect of increasing manufacturing employment and output. Oklahoma is a particularly interesting case ... The data suggest that the faster manufacturing growth observed in Oklahoma after 2001 was due, to some substantial degree, to the adoption of a RTW policy.” None of this comes as a surprise. What this new research shows, we knew instinctively as we argued for Right to Work in Oklahoma in the late 1990s. Business recruiters often told Gov. Keating that many of their clients simply chose to fly over a non-RTW state when seeking a place to invest and expand. Conversely, for others the presence of a strong RTW law was one of a select few “first principle” requirements, along with limited taxation, a
rigorous education system to assure a strong workforce, and a modern transportation infrastructure. One initial decision would pay dividends in the years that followed. We decided to ask the voters of Oklahoma to enshrine Right to Work as an amendment to our state constitution, ensuring that it could not be easily repealed by a future transient legislative whim. How to convince those voters? Most people have seen the nighttime satellite photos of the Korean peninsula. South of the 38th parallel economically free South Korea glows like a Christmas tree; north of that line, oppressive communist North Korea is abysmally dark. It so happened that photos comparing north Texas and southern Oklahoma offered a similar contrast prior to 2001. Voters got the message: to turn on the economic lights for all of Oklahoma, we needed to cast a ballot for growth and individual liberty. The voters did so, and 12 years later the lights have never gleamed so brightly in Oklahoma.
Frank Keating is president and CEO of the American Bankers Association. He served two terms as the 25th governor of Oklahoma. His 30-year career in law enforcement and public service included stints as an FBI agent; U.S. Attorney and state prosecutor; and Oklahoma House and Senate member. He served Presidents Ronald Reagan and George H.W. Bush in the Treasury, Justice, and Housing departments. Keating also is the author of four award-winning children’s books, biographies of Will Rogers, Theodore Roosevelt, George Washington, and Standing Bear.
Brandon Dutcher (M.A. in public policy, M.A. in journalism, Regent University) is senior vice president at OCPA. He’s the editor of the book Oklahoma Policy Blueprint, which was praised by Nobel Prize-winning economist Milton Friedman as “thorough, well-informed, and highly sophisticated.” His articles have appeared in Investor’s Business Daily, WORLD magazine, Tulsa World, The Oklahoman, and more than 190 newspapers throughout Oklahoma and the U.S.
UNCORRECTED PROOF - NOT FOR DISTRIBUTION
A High-Investment Strategy for Oklahoma Children By Wendy P. Warcholik
We all know someone who is divorced. Most people either have been close to someone journeying through a divorce or have endured the emotionally trying path themselves. While it is exceptionally hard on the husband and wife, what about the children? Where there is the confluence of life challenges and a child’s ability to cope with challenges, the prevailing cultural attitude is “Children are resilient — they’ll be okay.” I very much agree with that statement, but only when those challenges happen in an intact family where the child’s mother and father are present. With 50 percent of marriages ending in divorce, how are the children of these broken unions responding to the great upheaval that divorce inflicts on a family? How are they performing academically and emotionally? Will they be more likely to cohabit and not marry? The real costs associated with divorce include costs measured in terms of government growth, as divorced parents with children outsource ex-
Marriage is the commitment mechanism providing a high-investment strategy for children.
penses to the government in the form of Medicaid, TANF, child welfare, and more. These are expenses that could be paid for and reduced if there were a watchful mother and father in the home. A study by economist Ben Scafidi estimated the taxpayer cost of divorce and unwed childbirth and concluded that divorce and unwed childbearing costs Oklahoma taxpayers $430 million annually. Further, in a National Bureau of Economic Research paper released in September, economists Lundberg and Pollak find that “The poor and less educated are much more likely to rear children in cohabitating relationships. The college educated typically cohabit before marriage, but they marry before conceiving children and their marriages are relatively stable.” Moreover, they find that “Marriage is the commitment mechanism that supports high levels of investment in children and is hence more valuable for parents adopting a high-investment strategy for their children.” State Sen. Rob Standridge (R-Norman), vice chairman of the Senate Health and Human Services Committee, called for an interim study of the effects of divorce on Oklahoma’s economy. He says, “As Oklahoma continues to face budget challenges, and as we look for ways to help our children flourish, it seems wise that this committee take a closer look at what we can do to reverse the trend of unnecessary divorce.” Everyone should want parents to
have a “high-investment strategy” for their children. After all, children who are emotionally well-adjusted, smart, compassionate, and ambitious possess some of the most important traits we want to see in our future entrepreneurs, workers, and leaders. When children come from a twoparent home, the probability is significantly greater that these types of children will emerge. They will also emerge wealthier. Pat Fagan of the Family Research Council, who testified this month at an interim study conducted by Oklahoma House Speaker T.W. Shannon, reports that of those households with children, it is in married, intact households where the median income of $82,270 outstrips that of the next highest household income by 25 percent, or $16,454. The development of no-fault divorce ultimately changes people’s time horizons. When people aren’t forced to prove why a divorce is in the best interest of the man, woman, and child, they no longer think of marriage as a lifetime commitment. As a result, the data show that people are choosing to not even bother marrying despite the overwhelming economic evidence that over their lifetimes, they will be much poorer for not doing so. If we as a culture embrace cohabitation and divorce instead of lifetime marriage, we are upsetting the singular institution (outside of the rule of law) responsible for our moral and durable culture.
OCPA research fellow Wendy P. Warcholik (Ph.D., George Mason University) formerly served as an economist at the U.S. Department of Commerce’s Bureau of Economic Analysis, and was the chief forecasting economist for the Commonwealth of Virginia’s Department of Medical Assistance Services. She is a co-creator (with J. Scott Moody) of the Tax Foundation’s popular “State Business Tax Climate Index.”
www.ocpathink.org
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From Africa to Anadarko, a Story of Love and Markets By Patrick B. McGuigan
This is a story of love, and markets. It is about a family, and a group of doctors. The Berkleys live on a farm in the southwest Oklahoma countryside, between the towns of Chickasha and Anadarko. Mom and Dad are Caucasian. Their adopted children came from Haiti and Africa. Two of the kids, Joshua (age 11, born in Liberia) and Betty (age 9, born in Ghana), needed surgeries earlier this year on herniated navels. That invasive procedure is normally quite expensive, with or without insurance. Betty’s condition was especially severe, with a protruding navel rising several inches from her belly. The Berkleys are part of a MedShare program, in which families pool resources for mutual benefit. For the hernia procedures, however, Mr. and Mrs. Berkley wanted to see if they could afford the operations without dipping into their co-op plan. So, Dad—Danny, age 57—checked around. The procedure would have cost roughly $20,000 (each) at a facility in Chickasha. They heard a big-city hos-
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pital might do it for $28,000-$30,000 each. The local hospitals eventually had quotes ranging from $6,000 to $10,000. That was too much. At the Surgery Center of Oklahoma in Oklahoma City, the price listed online was $3,100. Surgery Center got the business, and the opportunity to meet Joshua and Betty. Danny and the kids went to Oklahoma City to meet Dr. James Totoro, hernia surgery specialist, and a date for the operations was set. On the day before the surgeries last month, the couple learned that physicians at the facility, including co-owner and founder Dr. G. Keith Smith, had decided to do the work at cost. That was $2,600—total for the two. Buy One, Get One (BOGO), and take another $500 off! Joshua and Betty are back with their family, and thriving. Mom Debbie, 55, described the facility’s staff as “respectful to us and to our children. They were kind, generous, and professional.” Three decades ago, Danny and Debbie Berkley had two children of their own before discovering she could not
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CEO’s of large companies have been paying $30,000 for operations for their employees that they could have had for $3,500. bear more biological children. And, they had already adopted four kids. After a successful run in the construction business, making enough income that they might have retired in their 40s, if they had wished, they fulfilled lifelong dreams by entering the missions field. They have served on mission stints in Botswana and other spots in Africa, including South Africa. Along the way they have built their family through a series of adoptions. As evangelicals in this part of the world say, these folks “have a heart” for children with problems. Every child who is now part of their big, happy family has varied issues—and two of them have special needs. Smith and the co-founder of Surgery Center, Dr. Steve Lantier, left the medical mainstream in the 1990s. Determined to establish a market-oriented surgery facility, they were told by colleagues at big hospitals and representatives of big insurers that it would never work. Back in those early days, Smith walked by faith—faith in the market and in human motivations. Today, the Surgery Center of Oklahoma has garnered international attention—touted in the New York Times, in a Reason.tv documentary, and on CNBC, John Stossel’s program on FOX, and elsewhere. Smith recalls, “Our distrust of hospital administrators and the corporate medical world had become so complete that what I now understand to be an entrepreneur’s business calculation
was made assuming that all we had been told was false. This, it turns out, was good judgment on our part.” He knew something was wrong with American health care, but did not know all the details: “One of the first clues that something was wrong was that most insurance companies, in spite of our quality and pricing, avoided dealing with us.” Keith Smith is now both a passionate libertarian and a kind of evangelist for transparent health care pricing—medical service free of both government and insurance company mandates. You could call it cash and carry, or the nearest thing you’ll see to it in modern medicine. His prices run somewhere between one-tenth and one-sixth as expensive as large insurance-oriented hospitals in our region. “Our facility is now frequented by people from all over the country and outside, patients with high deductibles, patients waiting in lines, patients with no insurance whatsoever, and increasingly, patients whose care is paid for directly by the companies for which they work, the ‘self-insured.’ You can imagine the conversations that I’ve had with the CEO’s of large companies
who have been paying $30,000 for operations that they now see could have been obtained for $3500 at our facility.” Dr. Smith is a happy man. You might even call him a happy warrior. Part of his happiness flows from helping people like the Berkleys, including those two children from Africa. Services are delivered and received without middle-men, at a mutually agreeable price, for mutual benefit, and in freedom. Smith is also happy to see his facility becoming a hub for medical tourism— drawing patients from Alaska, Canada, and elsewhere. But happiness does not make Keith Smith a Polyanna. Although his facility delivers medical care “better and cheaper” (as a liberal admirer put it in a blog post), Dr. Smith knows what lies ahead: “The medical price deflation resulting from a new competitive healthcare market poses an incredible threat to the central planners who are counting on the runaway pricing and market chaos resulting from Obamacare, that price ‘crisis’ intentionally created to usher in the sequel to their plan: single payer.”
Patrick McGuigan (M.A. in history, Oklahoma State University) is Oklahoma City bureau chief for Watchdog.org, editor of CapitolBeatOK, associate publisher for The City Sentinel newspaper, and a regular contributor to both Perspective and to News9, the CBS news affiliate in Oklahoma City.
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@OCPAThink 1. OCPA celebrated its 20th birthday in style at the 2013 Liberty Gala with a special guest, former President George W. Bush. U.S. Senator (and former OCPA trustee) Dr. Tom Coburn officially introduced President Bush. 2. Oklahoma Speaker of the House T.W. Shannon (foreground). 3. President Bush delighted the packed ballroom with an hour-long question and answer session. It was a rare opportunity to see our former president in such a relaxed setting. 4. Oklahoma Lt. Governor Todd Lamb entertained the crowd with personal stories from his days as a Secret Service Special Agent during the Bush administration.
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5. OCPA trustee Henry and Ellen Kane, OCPA trustee Bob and Kristin Kane, and Mary Jo and Ben Kimbro enjoy an evening with President Bush. 6. Loyal OCPA supporters Paul and Joan Allen celebrate OCPA’s first 20 years at the Liberty Gala. 7. Oklahoma Corporation Commissioner Patrice Douglas accepted an Energy Visionary award at an energy summit October 17 in Tulsa. The day-long summit was co-hosted by the International Energy Policy Conference, OCPA, and The Energy Advocates. 8. At the energy summit, Kurt Abraham, Steve Higley, William Yeatman, and Joe Craft discuss energy regulations and how policy affects their industry. 9. U.S. Congressman Mike Pompeo (R-KS) delivers the keynote address at the energy summit. Congressman Pompeo serves on the House Energy and Commerce Committee, which oversees energy, health care, manufacturing, and telecommunications.
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QUOTE UNQUOTE “Happy 20th anniversary, OCPA. You’ve helped shape the debate in Oklahoma for a generation. Whether Larry Nichols, executive chairman of Devon Energy working for education reform or fighting Obamacare implementation at the state Jim DeMint, president of The Heritage Foundation “For 20 years, OCPA has level, OCPA is fighting the good fight.” “I appreciate the foundation provided much of the Congressman James Lankford laid by OCPA over the past 20 intellectual heft behind years as the standard bearer common-sense, conservative for conservative Oklahoma Oklahoma principles. They values.” offer new ideas and solutions “Thank you OCPA for 20 great Congressman Jim Bridenstine to complex policy debates years working hard to help and have stayed true to shape conservative public “Few other groups have the their mission of promoting policy in Oklahoma. Here’s knowledge and know-how to free enterprise, liberty, and to many more decades of effect real change at the state individual initiative.” success!” level.” “For 20 years, OCPA’s public policy victories have made a real difference—for the better—in the daily lives of Oklahomans. They have also inspired free-market think tanks throughout the nation.”
Congressman Frank Lucas
“OCPA has been a guardian of Oklahomans’ rights and a champion of economic freedom for the past 20 years.”
Oklahoma House Speaker T.W. Shannon
Governor Mary Fallin