Peek-a-boo: unintended consequences
Silver-loading
The move: House Republicans had tried for years to cut off subsidies that helped low-income Obamacare enrollees with the co-pays, co-insurance and deductibles that come with their health plans. In 2017, Trump finally did it through administrative means after the GOP effort to replace the law fell apart — and he immediately drew intense outcry from Democrats and policy experts who called the move “sabotage.”
The impact: The health exchanges didn’t collapse, as Trump had hoped. Instead, health plans and states quickly figured out a way to claw back the federal dollars they lost: They built the costs of the subsidies into premiums for Obamacare’s benchmark “silver” policies. This meant that premiums for these “silver” plans spiked and as a result, the premium subsidies the government had to pay for low-income enrollees vastly increased. The concept, known as “silver-loading,” grew government subsidizing of the exchanges by upwards of $20 billion per year.
The upshot: While Trump’s moves made Obamacare plans increasingly unaffordable for the unsubsidized, Democrats quickly tamped down their criticisms since it accomplished their goal of significantly boosting funding for Obamacare. The incoming Biden administration isn’t likely to reverse course.
Pandemic incompetence
The move: Despite pressure from Democrats, unions and worker advocates, OSHA refused to set rules for worker safety during the pandemic. Republicans defended the decision by saying the burden on companies struggling to stay afloat amid the recession would be too great. In the absence of a standard, employers have only had to comply with a mix of optional guidelines, able to pick and choose what precautions they take.
The impact: The agency’s backseat approach to workplace safety means Americans still face a dangerously unpredictable range of safety conditions when they show up to work. Though OSHA has cited some companies for coronavirus-related transgressions, many large corporations received meager fines even in cases where workers died from Covid-19. Democrats have attempted to include language mandating an emergency temporary standard in future rounds of pandemic aid — but their efforts have been unsuccessful.
The upshot: One of the first things a Biden administration will likely move to do is instruct OSHA to step up worker safety enforcement — including by enacting an emergency standard and ramping up penalties on violators. Biden’s campaign also pledged to double the number of OSHA investigators to enforce the law and existing standards.
Merging state tax dollars with the needy church
The move: DeVos tweaked a wide range of federal education policies, large and small, to bolster faith-based organizations. She changed regulations, for example, to make it easier for members of religious orders to access federal financial aid and expanded federal Public Service Loan Forgiveness to cover clergy members. And she created new protections for faith-based campus organizations at public universities.
At the K-12 education level, DeVos stopped enforcing a policy that had prohibited religious organizations from providing publicly funded services—such as tutoring, technology and counseling—in private schools. And she opened up federal grants for charter schools to religiously affiliated organizations.
The impact: Many religious education groups praised DeVos’ changes, which she often described as effort to expand religious liberty. “Too many misinterpret the ‘separation of church and state’ as an invitation for government to separate people from their faith,” she said.
The upshot: The Biden administration is expected to move quickly to roll back many of DeVos’ education policies, but it’s not yet clear how the incoming administration will approach her various policy tweaks to promote religious organizations.
Shining a light on the creatures hiding in shell companies
The move: Treasury Secretary Steven Mnuchin personally negotiated the anti-money laundering safeguards with Republicans and Democrats who crafted the deal. The new law would require millions of business entities to report their true owners, puncturing the veil of anonymity that shell companies give to money launderers and tax evaders and making it easier for prosecutors to literally follow the money.
The impact: The information businesses report to the Treasury Department would be accessible to law enforcement agencies that would have an unprecedented tool to investigate shell companies. Banks, which are responsible for policing criminal activity by their customers, would also be able to tap into the database.
The upshot: Criminals will keep finding ways to operate in the shadows. But the new disclosure rules could give law enforcement leverage over their frontmen and may make it harder for bad guys to find lawyers willing to help hide their money because of the new paper trail.
The anti-money laundering law was targeted mainly at terrorists and drug dealers, but it will probably have the unintended consequence of being able to track regular tax cheating rich business people who just hate taxes. This could blow back on people like the ex-president who tries as hard as he can to hide as much as he can. It is reasonable to think that the democrats drafted the law broadly while talking about terrorists and drug dealers, but also wanting to get at crooked business people. This could be a case where conservative ideology blinded the republicans to the true reach of the law they co-drafted with democrats. If that hypothesis is correct, the unintended consequences here are highly beneficial for everyone except people trying to hide their money, some of whom have good reason to hide and some don't.
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