Health Care: Not Close to Over
The fat lady hasn’t even started to warm up yet.
The narrow 220-215 victory in the House on Saturday night was a step forward on the road to a government takeover of the health care system. But as close and dramatic as that vote was, that was the easy part. The Senate must still pass its version of reform—which will not be the bill that just passed the House. Nancy Pelosi was, after all, able to lose the votes of 39 moderate Democrats. Harry Reid cannot afford to lose even one. A conference committee must reconcile the two vastly different versions. And then, Pelosi must hold together her 3 vote margin of victory (if it gets that far). Yet several House Democrats who voted for the bill on Saturday said they did so only to “advance the process.” Their vote is far from guaranteed on final passage. And, House liberals are almost certain to be disappointed by the more moderate bill that may emerge from the conference.
Among the more contentious issues:
Individual Mandate: This should’ve been low-hanging fruit. Democrats agreed on a mandate early in the process. But it became increasingly plain that a mandate would hit those with insurance as well as the uninsured — forcing people who are happy with their plan to switch to a different, possibly more expensive plan. With this mandate now being seen as a middle-class tax hike, qualms have developed. The House bill contains a strict mandate, with penalties of 2.5 percent of income backed up by up to five years in jail. The Senate Finance Committee, on the other hand, watered down the mandate’s penalties and delayed the mandates implementation.
Employer Mandate: The House bill also contains an employer mandate, a requirement that all but the smallest employers provide insurance to their workers or pay a penalty tax of up to 8 percent of payroll. The Senate, looking at unemployment rates over 10 percent, seems unlikely to include an employer mandate.
The Public Option: The House included, if not a “robust” public option, at least a semi-robust one. But moderate Democrats in the Senate are clearly not on board. Joe Lieberman (I-CT) says that he will join a Republican filibuster if the public option is included. Harry Reid is trying various permutations: a trigger, an opt-in, an opt-out. But as of now there is not 60 votes for any variation.
The Sheer Cost: Fiscal hawks like Sen. Evan Bayh (D-IN) say they will not support a bill that adds to the deficit or spends too much. But the house bill cost a minimum of $1.2 trillion.
Taxes: The House plan to add a surtax on incomes of $500,000 or more a year has no support in the Senate. At the same time, the Senate plan to slap a 40 percent excise tax on “Cadillac” insurance plans is unacceptable to key Democratic constituencies like labor unions.
Abortion: Conservative Democrats insisted on a strict prohibition on the use of government funds for abortion. The bill could not have passed without the inclusion of that provision. House liberal swallowed hard and voted for the bill, despite what they called “a poison pill” anyway with the expectation that it will be removed later. If the final bill includes the prohibition at least a couple liberals could defect. If it doesn’t, conservative Democrats won’t be on board.
Immigration: The Senate Finance Committee included a provision barring illegal immigrants from purchasing insurance through the government-run Exchange. The House Hispanic Caucus says that if that provision is in the final bill, they will vote against it.
As if these disagreements among Democrats wasn’t bad enough, public opinion is now turning against the bill.
President Obama has called for a bill to be on his desk before Christmas—the latest in a series of deadline that are so far unmet. It is hard to see how Congress can meet this one either. The Senate has not yet received CBO scoring of its bill and is not prepared to even begin debate until next week at the earliest. That debate will last 3-4 weeks minimum, assuming there are 60 votes for cloture. That means, the bill cant’ go to conference committee until mid-December, even if everything breaks the way Harry Reid wants. Privately, Democrats are now suggesting late January, before the State of the Union address, is the best they can do.
The fat lady can go back to sleep—this isn’t over yet.
Disguised Health Care Costs: The $1.5 Trillion Fraud
If House Democrats hold a vote on their health-care overhaul this weekend, they might as well vote to abolish the Congressional Budget Office too.
It would be no more audacious (and much more honest) than the way they have gamed the CBO’s rules to hide $1.5 trillion of the cost of their legislation — which has to be the biggest fiscal obfuscation in the history of American politics.
C/P Politico
Medicare for Everyone?
According to The Hill, House Democrats are considering re-branding their new government-run health insurance program. A “public option” evidently isn’t catchy enough. Now they’re thinking, “Medicare Part E” as in, Medicare for Everyone.
By all means, model a new government program after Medicare, which:
- Drags down the quality of care for all patients, both publicly and privately insured
- Literally kills people by fueling the epidemic of deaths due to medical errors (as many as 100,000 annually)
- Is responsible for the fragmented delivery system about which the Left complains
- Has required one tax increase every four years, still has an unfunded liability approaching $90 trillion, and will therefore be the driving force behind income-tax rates essentially doubling by mid-century
- Has been expanded well beyond its original mission
- Didn’t save a single life in (at least) its first 10 years of operation
- Coerces people to choose it over private insurance
- Restricts enrollees’ freedom to spend their own money on medical care
- Is easily (and persuasively) parodied as a tool of the devil
Pleeeeease don’t throw me into that briar patch.
Filed under: Cato Publications; General; Health, Welfare & Entitlements
House Democrats Choose Dishonesty
I’m not a fan of the House Democrats’ proposed takeover of the health care sector. (If there’s one thing that legislation is not, it’s “reform.”) But at least House Democrats were honest enough to include the cost of the $245 billion bump in Medicare physician payments in their legislation, unlike some committee chairmen I could mention.
Unfortunately, House Democrats have since decided that dishonesty is the better strategy. They, like Senate Democrats, now plan to strip that additional Medicare spending out of health “reform” and enact it separately. (Democrats are already trying to exempt that spending from pay-as-you-go rules, making it easier for them to expand our record federal deficits.) Why enact it separately? Because excising that spending from the “reform” legislation reduces the cost of health “reform”!
But why stop there? Heck, enact all the new spending separately, and the cost of “reform” would plummet! Enact the new Medicaid spending separately, and the cost of “reform” would fall by $438 billion! Do it with the subsidies to private health insurance companies, and the cost of “reform” would plunge by $773 billion! All that would be left of “reform” would be tax increases and Medicare payment cuts. Health “reform” would dramatically reduce federal deficits! Huzzah!
Except it wouldn’t, because at the end of the day Congress would be spending the same amount of money.
The only good news may be this. If this dishonest budget gimmick succeeds, then Congress will have “fixed” Medicare’s physician payments. Absent that “must pass” legislation, the Democrats health care takeover would lose momentum, and would have to stand on its own merit. That would be good for the Republic, though not for the legislation.
(Cross-posted at Politico’s Health Care Arena.)
Filed under: Cato Publications; Health, Welfare & Entitlements
More Health Care Charts!
The U.S. Chamber of Commerce has two charts showing what health care regulation looks like now…
…and what it would look like under the House Democrats’ health care plan:
Back to the Bad Old Days of High Marginal Tax Rates
As Mike Tanner has written, the health care bill means a big tax hike — indeed, a lot of tax hikes. It also means a reversal of one of President Ronald Reagan’s great achievements, bringing down the top marginal income tax rate.
Small-business owners are warning that the economy would suffer under a health care bill proposed by House Democrats, which would drive tax rates for high-income taxpayers to levels not seen since before President Reagan’s tax reform of 1986.
The top federal income tax rate, which Mr. Reagan and a bipartisan Congress lowered from 50 percent to 28 percent, would reach 45 percent in 2011 if Congress and President Obama enact the surtaxes that are part of the health care reform plan that House Democrats announced Tuesday.
Small-business owners, who would take a direct hit from the surtaxes, expressed dismay over the proposal, saying it would force them to curtail hiring and reduce wages amid the worst recession in a generation.
“If they institute a 5 percent surtax on income, it will have a severe impact on small businesses that are already hurting,” said Michael Fredrich, whose Wisconsin company, MCM Composites, molds plastic parts.
“We run maybe three days a week, sometimes four days a week, sometimes zero days,” he said. “I can tell you that at some point, people … running a small business are just going to say, ‘To hell with it.’ “
Individuals tend to focus on their tax burden. After all, our overall tax bill reflects the amount of money we lose as legislators speed about the country allegedly “serving” us while promoting their own political ends.
Marginal tax rates more directly affect decisions on saving, investment, business formation, work effort, job creation, and more. Even politicians not enamored of the “rich,” whatever that term means, should recognize that we all benefit from an economic system which encourages entrepreneurship.
Proponents of big tax hikes might want to recall Aesop’s Fable, The Goose that Laid the Golden Eggs. Wreck the economy, and the health care system will crash too.
Filed under: Health, Welfare & Entitlements; Tax and Budget Policy
The Health Care Reform Bill Will Cost $500 Billion in New Taxes
House Democrats released their 1,018 page health care reform bill, America’s Affordable Health Choices Act of 2009, yesterday.
This bill is a dog’s breakfast of bad ideas paid for by more than $500 billion in new taxes. The reform would impose an individual mandate on individuals, requiring every American to buy a government designed insurance package or pay a new tax equal to 2.5 percent of their income. At a time of rising unemployment, businesses would be required to provide health insurance to workers or pay a new tax equal to 8 percent of workers wages. These new taxes could drive the total cost to taxpayers much higher than the $500 billion in direct taxes in the bill.
In addition, the bill includes a host of new insurance regulations that will drive up the cost of insurance premiums, and a new government-run insurance plan that will “compete” with private insurance. That government-run plan will ultimately force millions of Americans out of their current insurance plan and into the government-run system. This is a health care “reform” under which Americans will pay more for worse care.
To get an idea of what sort of bureaucratic nightmare that would ensue with passage of this bill is illustrated by the Republican Staff of the Joint Economic Committee here.
For regular updates on the reform process as it progresses, check out Cato’s health care Web site.
Mandate for Taxes?
The New York Times reports that House Democrats want to raise money for health care with a $550 billion tax hike on people who produce the most wealth. The Times says,
the proposal is perhaps the clearest expression yet of the mandate that Democrats believe they won last November, when voters expanded Democratic majorities in Congress and sent Barack Obama to the White House.
If Democrats think they won a mandate for huge tax increases — without talking about them — then 2010 ought to be fun.
Cato on Facebook
Cato on Twitter
Cato on YouTube
Cato Tweets