Wednesday Roundup: Obamacare and Green Building Standards

Blog postings by the Taxpayers Protection Alliance (TPA) usually focus on one issue.  Today, because there seems to be so much news about a variety of issues, TPA will be highlighting 2 issues, a new report about the Independent Payment Advisory Board (IPAB) that was created by Obamacare and a story in USA Today about the Leadership in Energy and Environmental Design (LEED) green building standard (click here to read an op-ed about LEED by TPA in Real Clear Policy).

Independent Payment Advisory Board (IPAB)

The Hill ran a story today about a report that was released today by the American Action Forum, which is headed by Douglas Holtz-Eakin, former director of the Congressional Budget Office (CBO).  TPA has been long critical of IPAB and has spent the better part of the year talking to taxpayers about the problems with IPAB.

According to the report, “First, given its mission, IPAB’s mandate is too narrow. The board is prohibited from recommending changes that would reduce payments to certain providers before 2020, especially hospitals. Because of directives and restrictions written into the law, reductions achieved by IPAB between 2013 and 2020 are likely to be limited primarily to Medicare Advantage (23percent of total Medicare expenditures), to the Part D prescription drug program (11 percent), and to skilled nursing facility services (5 percent).  That means that reductions will have to come from segments that together represent less than half of overall Medicare spending.”

The report continued, “Second, the IPAB is effectively unaccountable. In practice, the law makes it almost impossible for Congress to reject or modify IPAB’s decisions, even if those decisions override existing laws and protections that Congress passed. As a result, it is not in fact an advisory body, despite its name. The system is set up so that IPAB, rather than Congress and the Department of Health and Human Services (HHS) acting under Congress’ authority, makes policy choices about Medicare.”

And, “Finally, IPAB’s time horizon is too short. IPAB’s cuts have to be achieved in one-year periods. That effectively rules out long-run quality improvements or preventive programs. Instead, IPAB will be forced to focus on reducing reimbursements to providers due to their short-term nature.”

Leadership in Energy and Environmental Design (LEED)

TPA is concerned with the proposed changes to the U.S. Green Building Council’s (USGBC) Leadership in Energy and Environmental Design (LEED) green building standards known as LEEDv4.  The federal government and many state governments have adopted LEED as their green building standard which unnecessarily increases the cost of construction.  The costs of LEED for American taxpayers is exorbitant and this could be addressed by incorporating other green building rating systems to introduce competition to help bring costs down.  A USA Today story today showed a different side of LEED:

“Across the United States, the Green Building Council has helped thousands of developers win tax breaks and grants, charge higher rents, exceed local building restrictions and get expedited permitting by certifying them as ‘green’ under a system that often rewards minor, low-cost steps that have little or no proven environmental benefit, a USA TODAY analysis has found.  The council has certified 13,500 commercial buildings in the U.S. as green and become one of the most influential forces in building design by helping persuade public officials and private builders to follow its rating system, known as LEED.  More than 200 states, cities and federal agencies now require LEED certification for new public buildings, even though they have done little independent and meaningful research into LEED’s effectiveness. LEED can add millions to construction costs while promising to cut utility bills and other expenses.”

The process of LEED certification alone can cost up to $27,000.  That figure does not include special materials or products that might be needed in order to meet the rigid LEED standards or federal and state Davis/Bacon requirements.  Congress passed the Davis-Bacon Act in 1931 to ensure that “prevailing wages” are paid on federal construction projects worth $2,000 or more.