Obama political advisor David Axelrod was on ABC This Week and, in response to Senator Scott Brown's GOP weekly address this past weekend (embedded video below), specifically compared the Brown-supported state health insurance bill in Massachusetts to the national bill. This is disingenuous on several levels; basically, the Democrats are raising nearly $500B in new taxes over the coming decade (including Massachusetts businesses and residents) and nearly half a billion in Medicare cuts--not being used to shore up a rapidly receding Medicare trust fund just as we are in the process of phasing in the large baby boomer generation--but to subsidize health care for other Americans. Now of course you can argue that we're just dedicating the mandatory loan from the Medicare reserve to this health care bill, but a loan is a loan is a loan: whether it's public debt or an intergovernmental holding, the Congress is simply deferring the payment of current operational budget deficits--including this new health care entitlement--to the future. I've written recent posts articulating differences between the budget deficit and total debt. What the Democrats are doing is effectively extending a Ponzi scheme, shifting the politically unpopular burden of tax/benefit trade-offs onto future generations. This mountain of debt (internal or external) is getting increasingly unsustainable. Raiding the Medicare cookie jar to fund other people below cost is nothing short of gimmick accounting, hiding operational costs of the program--and I'm really concerned that the costs are significantly understated. If the cuts are excessive, doctors and hospitals may refuse to treat new Medicare patients; already, with underpayment of Medicare and Medicaid, a shrinking private sector insurance sector is having to absorb the differences in "true costs" and these will be passed along to existing health insurance policyholders. But it goes beyond the insufficient payment for medical products and services; expansions in entitlement spending were the focus of certain political deals in the Senate bill, particularly scope creep in Medicaid eligibility. The problem is that half of these costs are picked up by the states, many of which are already struggling to deal with the existing mandates given chronic deficits which must be resolved.
Other glossed-over differences include the new layer of federal health bureaucracy; Massachusetts is working through traditional state regulation. Scott Brown has also noted that the Massachusetts reform might not be feasible in other states (e.g., Texas), given Massachusetts' relatively smaller percentage of uninsured. It's also likely that new federal benefit mandates (benefits, policies, etc.) not already required by individual states would push up health care costs in various other states.
Scott Brown also points out process-related differences: the effort in Massachusetts was bipartisan by design, including cooperation with the Republican governor (Mitt Romney). It did not involve one-off political deals like the Cornhusker Kickback, the Louisiana Purchase, Gator-Aid, or the Union Exemption.
Controlling costs? What costs? (To paraphrase Shakespeare: THAT is the question...) It's clear (although Democrats aren't specifically saying this) that they are referring to the out-of-pocket costs to taxpayers. But throwing subsidies at a problem is sort of a political game of whack-a-mole. Can Democrats simply declare by fiat that people stop aging (correlated with higher health costs)? How can we accommodate millions of newly insured without already exacerbating inflationary factors (e.g., 10-15%), including limited resources of medical personnel? The Democrats are telling the American people, we are going to shield you from the intrinsic high cost drivers of health care; the only way they can do that is to subsidize health insurance and related (e.g., co-payment/other out-of-pocket) costs. But all they are really doing is begging the question... After all, where are the subsidies coming from? Ultimately, the American consumer, through a potpourri of taxes, penalties, and passed-along costs in prices of goods and services. To use a household analogy, the Democrats are simply sweeping the costs under the rug or shoving the mess into closets; the costs are still there, but all you have is window-dressing and the costs spread in a more hidden manner.
Now, of course, the Republicans and conservatives can't control actuarially-based projections, e.g., longer policy lifespans for Medicare patients. But by advocating reforms like interstate marketing of individual coverage and other policies and tax-advantaged business cooperatives, we can see certain economies of scales which would mitigate some of the issues we are now seeing, e.g., larger pools to spread risks in the individual coverage market and exemptions from supplemental, expensive benefit mandates. Progressive Democrats attack industry consolidation, even though it is a predictable result in an effort to wring out redundant costs across operations--and mitigate price increases.
It would be nice, of course, if President Obama actually followed the advice of one of his most prominent supporters, widely-respected investor-billionaire Berkshire Hathaway Chairman/CEO Warren Buffett. Buffet in the linked interview specifically called on Obama to scrap the partisan health care measure and start again, in a bipartisan manner, to attack "costs, costs, costs." Buffett specifically notes there must be a bipartisan buy-in to resolve the difficult problems in dealing with health care costs. Buffett is vague on specifics, but I believe it involves a point I have repeatedly made in past posts: we need to get past the morally hazardous policy of robbing Peter to buy Paul. Ironically, Buffett should be explicitly admonishing the Democrats, whom are engaging in scope creep to increase the number of people under Medicaid, limiting co-payments, etc. There is no sense of shared sacrifice. How did Obama, in his best Solomonic judgment resolve the Senate corrupt deals (i.e., Cornhusker Kickback, etc.)? Easy--we'll give EVERYONE the same deal; controversy over. Unions objecting to Cadillac health plan taxes? Easy--we'll just move the minimum tax bracket for the Cadillac health care plans above what most union members receive. Remember Ms. Canfield, discussed in yesterday's post, whom had dropped her insurance when it reached $9K? (I haven't seen more specific information, but I infer that she may have been in an individual coverage market, typically paid for with after-tax dollars--something that conservatives have been attempting to address with equal protection tax advantages.) Union exemptions basically raised their tax-free status to something like $27K--roughly TWICE the average family policy cost. Obama's concessions, on making the Medicaid "fix" to states universal or raising the taxable level for gold-plated health care coverages, cost the American taxpayer plenty, and sooner or later American taxpayers are going to have to pay that cost. This is no "sacrifice".
Warren Buffett had a different concept in mind: confronting the difficult issues straight on, including the costs associated with inefficient, ineffective utilization of scarce health care resources. Health care consumers need to be fully vested in cost decisions: do you really need that name-brand prescription or can you use a low-cost generic alternative? Do you need to cut out a slow-growing tumor or get a hernia repair, or can you live with the condition with some minor adjustments? Is that blood test really necessary? Do you need an annual mammogram? Can you first go through a screening nurse? What about a penalty for going to an emergency room over issues treatable by a clinic or making an unnecessary trip to see the doctor? What about raising co-pays and deductibles? I'm not saying that Warren Buffett would necessarily agree with these particular examples, but the whole idea is the individual must accept personal responsibility for his or her health and share in a fair share of costs and sacrifice versus passing the buck to future generations.
Deem and Pass? The Pelosi Strategy Becomes Clearer
It was all a little too easy: you had over a handful of pro-life Democrats objecting to abortion language in the Senate bill. Speaker Pelosi needs their votes (or a significant number of them) to reach the magic 216 number. One thing we know for sure: if she had the 216, she would have put it up for a vote already. So she needed the pro-lifers, but the pro-lifers would not agree without a change in the abortion language. Under normal circumstances, the House could modify the revised bill, but with Scott Brown now giving the GOP the filibuster over the Democratic Party Health Care Bill, this avenue is blocked. You have the Senate parliamentarian saying before the bill could go through reconciliation, the House needs to pass the Senate bill and send it to the President. So Pelosi abruptly gives up talks with the pro-lifers--which should have killed the Senate bill. But at the same time the President and House are insisting they have or will have the votes to pass it. It didn't make sense on the surface.
Now we know why; Pelosi has shown her hand. There's an arcane procedure, usually reserved for matters like raising the debt ceiling, which essentially does not require a vote: deem and pass. In essence, the gist is that the House would simply "deem" the Senate bill "passed", and then move on to add changes to the bill (likely with a "wink-and-a-nod" assurances from the Senate Democrats they would agree). Obviously this scheme would only work through a bypass around the Senate filibuster, e.g., budget reconciliation. This could potentially offer pro-life and other wavering Democrats political cover, e.g., "I didn't vote for the Senate bill: I voted to change it." This would be disingenuous, of course, and no district constituents would be fooled by a second, because if you vote for the rule saying to deem it passed, you are, pure and simple, voting for the Senate bill.
I'm not a Constitutional scholar, but I don't think this would be constitutional. The Senate bill would still have to be signed into law by the President. The President can't sign a bill with unilateral House stipulations into law (Article 1 Section 7). That undermines the very integrity of the bill reconciliation process. The Democrats are desperately trying to do everything in their power not to compromise with Republicans, and I don't care how many times they try to justify the use of reconciliation or deem and pass: THE AMERICAN PEOPLE HAVE ALREADY REJECTED THIS BILL, AND DEMOCRATIC ATTEMPTS TO JAM THIS BILL (OR WINDOW-DRESSING TO THIS BILL) DOWN THE NATION'S THROAT WILL BE SEEN AS AN ABUSE OF POWER.
I'm sick and tired of Democrats pushing the envelope when it comes to desperation tactics and sham rationalizations to justify abuse their authority, either in the majority or the minority, trying to justify the routine use of the filibuster based on the block of the Fortas nomination. According to Time, the Fortas nomination was opposed by 22 of 37 GOP minority senators; a filibuster required sufficient Democratic senators. Moreover, Fortas was already a Supreme Court justice (since 1965) at the time of the threatened filibuster; LBJ had nominated him to be Chief Justice. These circumstances were entirely different. Former Majority Leader Robert Byrd (VA-D) specifically had rejected the use of reconciliation to pass the Clinton health care bill; I see fundamentally no reason why it wasn't OK during Clinton's first term, but it is during Obama's first term.
And while I'm criticizing the Democrats, I've heard one claim repeated so many times, I think it's time to notice the emperor is wearing no clothes--i.e., Bush's tax cuts added to the deficit. HELL NO! In fact, federal revenues INCREASED during the Bush Presidency. The deficit issues were not that tax cuts were bad; it was that the GOP-led Congress SPENT TOO MUCH MONEY. But the Democrats don't get a pass on this for being budget hawks. THE DEMOCRATS CONSTANTLY COMPLAINED THE GOP DIDN'T SPEND ENOUGH. The conclusion is inescapable: the deficits would have been far worse under the Democrats, and indeed, the record deficits under fiscal years 2008 through 2010 have happened under a Democratic-controlled Congress.
Political Cartoon
Nate Beeler shows that far from bridging the partisan gap, which Obama promised during his high-sounding rhetoric, Obama is exacerbating by pushing a partisan health care bill, despite recent elections (especially the Scott Brown upset in Massachusetts), willing to use any opaque measure or tactic (e.g., "deem and pass" and reconciliation) to avoid legitimate compromise with the GOP.
Quote of the Day
Talent hits a target no one else can hit; Genius hits a target no one else can see.
Arthur Schopenhauer
Musical Interlude: Summer Songs
Bryan Adams, "Summer of '69"
Bobby Goldsboro, "Summer the First Time"
Seals and Crofts, "Summer Breeze"
Don Henley, "The Boys of Summer"
