Quote of the Day
Blessed is he who carries within himself a God, an ideal, and obeys it.
Louis Pasteur
ObamaCare: Last Round at SCOTUS
The third and final day of unprecedented SCOTUS hearings focused on a couple of issues: (1) the Medicaid state mandate and (2) severability.
As you may recall, the 111th Congress basically wrote a check on the back of the states, whom have traditionally split the costs of health care for the poor. The Congressional Democrats wanted to raise the income eligibility for Medicaid unilaterally, forcing states to cover half the cost of newly eligible middle-income households. The states are left with little real choice but to come up with new money from some compensatory combination of higher taxes or painful budget cuts elsewhere (well, in theory I believe that states can opt out of the program, but then they would lose the current federal match, meaning they would have to make up the difference or face politically difficult deep cuts in program funding).
Clearly, the government-run programs, Medicaid and Medicare, are massive failures; the idea that the federal or state governments can micromanage prices and costs in a dynamic sector like health care is delusional. The end result is that government is reimbursing providers overall under fair market costs for services, which is an unsustainable business model. The sheer madness of government trying to micromanage costs results in unintended consequences: for example if products or services are mispriced or are unnecessary but reimbursable. The GOP is talking about decentralizing management to the local/state levels. That's a step in the right direction, although I think we need to vest providers and policyholders in cost containment (e.g., flat pricing models and incentives for maintaining a healthy lifestyle, acting in a proactive, preventive manner, and choosing lower-priced effective providers or prescriptions), consider ways of spinning off functionality on a competitive bid basis to the private sector, and address industry barriers to entry, e.g., various medical personnel licensing. In particular, we need to disentangle any crony relationships between government and providers/vendors or labor.
The severability discussion revolves about whether the Supreme Court overturns the entire ObamaCare law or surgically kills certain aspects of it, e.g., the individual/business mandate. In particular, almost everyone realizes that the mandate is the Achilles heel of ObamaCare. If insurers don't get captive revenue by winning a mandate for healthier people to insure, they are left with no means to cover the the mandated premium-adjusted costs of those with preexisting conditions or existing catastrophic diseases or conditions (unless the government subsidizes these costs, but hypocritical progressives look to obfuscate the costs of mandates by trying to hide them--oh, the OTHER GUY has to pay--businesses, high-income earners, etc.) I find it very difficult to see how anything of ObamaCare survives if the justices rule, as many of us now suspect, the mandate is held to be unconstitutional. If you cut off funding, how does it survive in any viable form? It would be cleaner simply to invalidate the whole law. (I also think it would be a good lesson for future Congresses which abuse the democratic process: the Democrats in the 111th Congress felt given their majority they could force through a partisan law without engaging in meaningful compromise, a clear violation of the spirit and intent of Constitutional restraints, e.g., through the balance of powers.)
There are already questions over how a Supreme Court decision might effect this year's Presidential campaign. Some think that a Supreme Court judgment against Obama will give him the opportunity to say, "We tried to handle things like preexisting conditions, but..." (One obvious thing I predict is that he will unquestionably try to politicize Supreme Court decisions like Citizens United and this court case to argue that he needs to select the next Supreme Court justice.) No, I think an adverse decision will simply confirm the public sentiment against ObamaCare. I believe that the President will pay a price for defying public sentiment in forcing the legislation through on a partisan vote. The issue isn't whether there are some popular benefits in ObamaCare, but the process, the costs, and the bureaucracy.
CATO Institute/Michael Cannon,
"IPAB: ObamaCare's Next Constitutional Hurdle"
Thumbs UP!
May I suggest a subheading? "IPAB: More than Just a Death Panel". The idea that a bare majority of House Democrats passed a bill that imposes a supermajority of Congress to set aside the rules, regulations, taxes, etc. imposed by an unelected, unaccountable board is nothing short of a moral outrage. We already see Congress ceding too much power to, say, the Federal Reserve or the Executive Branch (and heaven help us if the American public reelects a final-term Obama, no longer accountable to the people except through articles of impeachment) The idea that the 111th Congress, which barely passed ObamaCare in the House with a supermajority of Democrats, effectively empowers a Senate Democratic minority a backdoor approach (through proxies on IPAB) to impose their industrial policy agenda, flipping the filibuster on its head--and binds the hands of future Congresses in restricting or even repealing the board?
(Granted, Cannon doesn't himself speak in terms of passive-aggressive, back-door political agendas, but I noticed that the emperor is wearing no clothes. This effectively does to the Executive Branch what the progressives have been doing to the Judicial Branch for years: appointing activist jurists whom are little more than sophistic de facto progressive lawmakers.)
A key reason health insurance by state has become so dysfunctional is because of the ability of special interests to get expensive mandates enacted; the state engages in protectionist practices (which I think is counter to how the Constitution was implemented to encourage a free market among the states, e.g., by limiting taxing authority in interstate commerce) by not allowing residents to opt out of mandates by shopping for "no-frills" or alternative policies across states. (The Democrats routinely dismiss barebones packages as a "race to the bottom", but then have the audacity to complain about the high cost of insurance!) Now the special interests don't have to propagate their agenda across 50 states: they have a centralized point of corruption! All they have to do is convince a publicly unaccountable 15-person (or less) board to issue an edict. Congress' power is reduced to the reactive role of playing Whack a Mole against an authoritarian-by-default gusher of rules, regulations, mandates, pricing decisions, etc. I mean, if the Congress on its own has lacked the political will to stand up to the special interests directly in making necessary reforms (e.g., fraud prevention) under rules of a simple majority, how is it going to come up with a super majority to block IPAB edicts?
You would think that Congress would know by now that statist interventionist policies in the health care sector are part of the problem, not the solution, and the answer to the problems is not to shift from inept republican lawmaking to unaccountable authoritarianism but to privatize the programs, to rollback nonessential regulations and mandates, and to cap any government disbursements to the sector to fiscally sustainable amounts.
I think Cannon's commentary here is one of the most powerful ones I've ever embedded as a guest editorial. Highly recommended.
Political Potpourri
CNN came out with an oddball poll today that showed Romney losing by 10 points to Obama--and Obama's percentage of the vote higher than his approval rating! This is out of touch with reality: in fact, I would argue that that Obama's approval rate will be higher than his percentage of the vote. I think his approval rating reflects a high personal favorable rating, but I think that voters will hold him accountable for a weak economy, unprecedented deficits, unfulfilled expectations and divisive politics (after promising a post-partisan Washington). I fully expect Romney (the presumptive GOP nominee) to inherit essentially all of McCain's votes--46% of the vote. All he needs is 3 to 4 independent or moderate disaffected Obama voters out of 53. I think Obama will have a discouraged base--broken campaign promises, a likely GOP Congress not supportive of his agenda (e.g., immigration), etc. Just think of idealistic college students 4 years ago finding it very difficult to find decent jobs in this economy.
Dick Morris wrote a recent email, pointing out even if Massachusetts and Maine's Senate seats flip to the Dems, a number of seats once thought to be out of reach of the GOP, e.g., Ohio, Wisconsin, Florida, and even Connecticut seem in play. I've seen separate polls (including the McClatchy/Marist) confirming a slight pulling of the GOP away from the Dems in the generic Congressional ballot. We are still almost 7 months until election day, and that can be a lifetime in politics, but a reason I'm mentioning that is because I think that it is highly unlikely that voters will toss out Democratic incumbent Senators in purple states while voting to keep Obama in office. And I also think it's possible you could see something happen to Obama not unlike what happened to Carter in 1980.
Romney continues to hold steady at about 39% of the vote in the Gallup GOP Presidential daily tracking poll. Right now even Rasmussen has Romney behind in a few battleground states, but I think in part that has to do with the bitterly divisive GOP campaign. Romney and Obama have been routinely changing places in the Rasmussen polls. Romney seems to be within striking distance in Pennsylvania, Santorum's home state, and if Romney pulls off a probable hat trick next Tuesday in Wisconsin, Maryland, and DC, I think Romney will get a come-from-behind victory, not unlike his victory in Ohio.
I personally haven't see fresh Maryland polls, but Maryland residents, including many people whom work inside the Beltway, tend to be higher-income and better-educated, and Santorum has routinely underperformed in that demographic. I also think that also holds true for the few GOP voters in the DC area.
My intuition tells me that Romney should get at least 60% of the 98 delegates up next Tuesday, pushing him past the halfway point towards the nomination, somewhere in the range of 630 delegates (of the 1144 needed) and give him the momentum going into a favorable cluster of primaries in late April. The terrain gets a little better for Santorum going into May, but he already faces all but impossible odds in needing to capture over 70% of remaining delegates; we know, for instance, that Santorum isn't going to win delegate-rich California, New York, or Utah, and even if Romney loses a few states, he will still pick up runner up delegates.
Musical Interlude: My Favorite Groups
Little River Band, "Take It Easy On Me"
