GREENSPAN BOOK CRITICIZES BUSH AND REPUBLICANS FOR LACKING FISCAL DISCIPLINE

From The Wall Street Journal:

In a withering critique of his fellow Republicans, former Federal Reserve Chairman Alan Greenspan says in his memoir that the party to which he has belonged all his life deserved to lose power last year for forsaking its small-government principles.

In "The Age of Turbulence: Adventures in a New World," published by Penguin Press, Mr. Greenspan criticizes both congressional Republicans and President George W. Bush for abandoning fiscal discipline.

Mr. Greenspan, who calls himself a "lifelong libertarian Republican," writes that he advised the White House to veto some bills to curb "out-of-control" spending while the Republicans controlled Congress. He says President Bush's failure to do so "was a major mistake." Republicans in Congress, he writes, "swapped principle for power. They ended up with neither. They deserved to lose."

Mr. Greenspan writes that when President Bush chose Dick Cheney as vice president and Paul O'Neill as treasury secretary -- both colleagues from the Gerald Ford administration, during which Mr. Greenspan was chairman of the Council of Economic Advisers -- he "indulged in a bit of fantasy" that this would be the government that would have resulted if Mr. Ford hadn't lost to Jimmy Carter in 1976. But Mr. Greenspan discovered that in the Bush White House, the "political operation was far more dominant" than in Mr. Ford's. "Little value was placed on rigorous economic policy debate or the weighing of long-term consequences," he writes.

From serving under so many presidents, Mr. Greenspan concludes that there's something abnormal about anyone willing to do what it takes to get the job. Mr. Ford, he writes, "was as close to normal as you get in a president, but he was never elected." The Watergate tapes, he says, show Richard Nixon as "an extremely smart man who is sadly paranoid, misanthropic and cynical." He recalls telling someone who had accused Nixon of anti-Semitism that he "wasn't exclusively anti-Semitic. He was anti-Semitic, anti-Italian, anti-Greek, anti-Slovak. I don't know anybody he was pro."

Ronald Reagan's ability to instantly tap one-liners and anecdotes in support of a particular policy represented an "odd form of intelligence." He describes Bill Clinton as "a fellow information hound" with "a consistent, disciplined focus on long-term economic growth" whose relationship with Monica Lewinsky "made me feel disappointed and sad."

Mr. Greenspan retired in early 2006 after 18 years as chairman of the Federal Reserve. He had served under six presidents as either Fed chairman or adviser. He now runs a private consulting company; his only formal public role is adviser to British Prime Minister Gordon Brown.

PRESIDENT BUSH UNVEILS HEALTH INSURANCE PLAN DETAILS IN STATE OF THE UNION ADDRESS

As expected, President Bush outlined some details of his controversial health insurance plan in last night's State of the Union Address. His plan calls for an end to tax-free premiums in employer-provided health insurance plans, making the premium paid taxable income. To offset some of the tax burden, all taxpayers who either have employer-provided health insurance or purchase their own insurance would receive a deduction of $15,000 for a family plan or $7,500 for an individual. Currently, the average cost of an employer-provided family plan is $11,500, while the average for individual plans is $4,300.

From USA Today:

"For a lot of people, it would be a bonanza," says Joe Antos of American Enterprise Institute. He and other supporters of the plan say it would encourage employers to offer less-generous insurance plans. They say generous plans drive up the cost of health care.

Paul Fronstin of the Employee Benefit Research Institute says the proposal might lead more employers to drop coverage. Some employers might also find that younger, healthier workers would opt out of company plans to buy their own insurance, leaving sicker, more expensive workers behind, he says.

PRESIDENT BUSH PROPOSES HEALTH INSURANCE TAX CHANGES

In his weekly radio address this morning, President Bush said that he wants to change tax codes to make insurance more affordable for the uninsured. From The Wall Street Journal:

"Rising health care costs are making insurance too expensive for millions of our citizens," Mr. Bush said Saturday in his weekly radio address. To remedy the situation without hiking taxes or creating a new entitlement program, he says the tax code can be rewritten to treat health insurance more like home ownership.

"The current tax code encourages home ownership by allowing you to deduct the interest on your mortgage from your taxes," Mr. Bush said. "We can reform the tax code, so that it provides a similar incentive for you to buy health insurance."

Mr. Bush didn't outline the nuts and bolts of his tax-code proposal, but it is expected to include capping some taxpayers' ability to exclude employer-based healthcare benefits from their income, subjecting them to federal income tax. Savings could go toward tax credits for lower-income people who buy health insurance or for state insurance pools.

Altering the tax benefits for employer-provided health care involve far-reaching changes to the tax code affecting millions of taxpayers and companies. Bush's Advisory Panel on Federal Tax Reform proposed in November 2005 to limit the tax benefit for employer-provided health care to $11,500 for families and $5,000 for singles. The recommendation, which has languished with the tax panel's other reform proposals, came after witnesses told the tax panel the existing federal tax subsidies for health insurance were benefiting rich workers while raising insurance prices for the poor and increasing the number of uninsured.