Here are a couple reasons why I feel this way . . .
1. The plan requires $1 Trillion in new spending. One Trillion dollars of new spending . . . at a time when our budget deficit is expected to be close to $2 Trillion this year and $1.5 Trillion next year and $1 Trillion in 2011. All told, we are projected to rack up 10 Trillion dollars in new debt in the next eight years. That's a lot of beakers, my friends.
Is it just me or does it seem that maybe now might not be the absolute best time to be proposing new Trillion dollar social programs. We are not exactly flush. By the way, we all know that if politicians say something will cost $1 Trillion, it will really cost (at least) twice that. And, as with all entitlement programs ever enacted . . . it will be permanent and it will be very difficult to modify.
2. Tax Plan. The Democrats in the House have a plan to address part of this dilemma. They plan to tax upper income Americans at rates of over 5% on income over a certain threshhold. To pay for half of the Trillion dollar plan. The other half is going to come from "efficiency gains" (whatever the heck that means).
By the way, this plan to pay for health insurance by taxing the top 1% of taxpayers with a surtax is in direct response to polling figures that show that Americans want health insurance reform . . . as long as someone else is paying for it. So, the Democrats took care of that little problem by foisting the bill onto the tiny sliver of America at the top of the income scale. That's leadership for you . . . or at least that's one version of leadership (the kind that doesn't lead, but follows.)
Some people call this plan “progressive”. Somehow, the thinking goes, it is “progressive” to transfer wealth from one group of people (wealthy individuals) to another group of people (less wealthy Americans). Rather than everyone pays their own way and the American people will together use tax receipts to fund various social programs . . . the approach we are flirting with is . . . everyone who can afford it pays their own way . . . and then this tiny minority of taxpayers pays for everyone who can’t. The inherent problem with this approach, besides the obvious one of fairness (why don’t these top tier taxpayers get to keep what they earn? Did they do something wrong, or is our system designed to reward those that produce more economic benefit?) is that this type of thinking pits this tiny minority in the top bracket against everyone else. Not just those that will receive the transfer of wealth, but those in the middle who don’t have to pay for it because the top tier of taxpayers is footing the bill. Why not eat more ice cream if someone else is getting the calories and the fat?
In my view, this is bad public policy. It becomes someone else’s problem to pay for all these decisions in Washingon and that someone is a very small minority of citizenry. Which means that more and more will be piled on to them (because it is politically expedient to do so). That means more surcharges (why not, they can afford it . . . they make so much money.)
And, then, the golden goose stops laying eggs. That’s what has happened in California where 144,000 taxpayers in a state of 38 Million people, pay more than 55% of state income taxes. The home state of Nancy Pelosi and Henry Waxman is very progressive. Then those taxpayers experience economic set-backs and guess what? There is a huge hole in the budget because California was taxing the top brackets so heavily that virtually no one else had to share in the burden. It works until it doesn’t. And when it stops working . . . it stops in a big way.
3. Late last week, the Congressional Budget Office (bipartisan organization funded by Congress to get better (i.e. nonpolitical) numbers on budgets and economic conditions) came out with the conclusion that none (as in not one) of the various health insurance plans being discussed in the House, Senate or White House . . . will actually reduce expenses, contrary to the “party line” coming out of the Obama White House on this issue. As if we needed to be told this.
But the point is an important one. These new spending programs will not be short term pain for long term gain, as we are being sold . . . I mean . . . told. We don’t have to spend now to save later. We have to spend now to . . . spend more later. That is what the CBO has said about these cockamamie plans.
Anyone surprised by this? Didn’t think so.
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Since President Truman, we've always come up with reasons why we can't have healthcare for all, and now is no different. Lots of the same people in DC outraged by the healthcare reform costs said absolutely nothing about the cost of a Trillion plus war of choice in Iraq or the Medicare Part D program that had noticeably absent any way to pay for that $400 billion plan (in fact they made it illegal for the Secretary of the HHS to negotiate volume price with the drug companies-something every private business like GE and others do in the private market).
ReplyDeleteEither healthcare is a priority and value or it's not. If it is, and polls suggest that 70% of Americans believe it is, then we can pussy foot around all day about the cost until reform dies before it's born. The Republicans have absolutely nothing to add on this issue and are scared to death that if Obama delivers, there will be 40 years of Democratic rule in America (just like after FDR (social security) and LBJ ( Medicare/Medicaid).
We are the most advanced and richest society in the world; we are mortal and don't want to die; people need to embrace the fact that we will spend more and more of our resources fighting off death; to think otherwise is absurd.
That said, we need to bend the cost curve. I would put the wood to the managed care companies (health insurance companies) who DO currently ration care everyday, don't manage care or costs, and look for every possible way not to cover sick people. They are processors and should make tiny, tiny margins given the value they contribute to the system.
I would have fair and smart tort reform to reduce needless, costly, defensive medicine. There is ample room between the status quo and draconian caps to have sensible reform that doesn't chill proper tort litigation that has a salutary effect on the practice of medicine. Obama knows this but is not willing to take on the trial lawyers, which is disappointing.
I would very tough on the drug companies (30% of whose research is funded by tax dollars) who sell us drugs at much higher prices than they sell the same drug to people in other countries (largely because they own half the politicians in DC, they get away with it).
Then the Holy Grail is prevention and primary care which is a cultural thing that has no silver bullet but requires each of us to do our part by eating better and exercising (notwithstanding that the leader of the conservative movement-Rush Limbaugh-claims that our healthcare costs go up because of all these crazy people who exercise too much and have knee injuries---I kid you not).
President Obama has been a bit disappointing on healthcare by letting Congress have too large a roll. I would have preferred he took a more Clinton-like approach and sold it directly to the American people and then told his 60 Senators to get on board and promise to give them campaign money and appearances. Then presumably he could have taken a more objective approach less influenced by special interests.
As for paying for the plan, I say have Goldman Sachs pay for it with all the money they made last quarter playing Washington like a fiddle as they manipulated the latest bubble to their advantage. We need real reform on Wall Street.
WoldyJA...did you expect more from the Dumbocrats?? Where does the spend and hope policies end??
ReplyDeleteJim, I may have disagreed with your Goldman piece, but I am 100% behind everything in this post. It is incredibly hubristic to try to push through a program like this in 2009. Clearly, the administration feels that they have to use their political capital NOW or risk never getting it through.
ReplyDeleteI fear that the surcharge on AGI is going to create a real and growing schism between the top producers in society and the rest of the population, as the top producers grow increasingly resentful, and the rest of the population finds it easier and easier to impose more and larger surcharges and taxes. I'm not a huge "Atlas Shrugged" person, but this *feels* like a step in that direction....
I think I reluctantly agree with you on this one. I see the need to make health insurance more affordable and available. I see the need to detach the availability of health insurance from employment. I see the need to create a national “group” though which a larger % of Americans can access negotiated health care. I believe that if these needs were met, the country would be healthier and better off.
ReplyDeleteThe problem, as I see it, is that the President is trying to solve two problems simultaneously. The first problem is tied up with the issues above. The solution to that problem is pretty straightforward: create a new group that people can choose (and pay) to be a part of. The premiums should be market based and should be borne by the participants. The group should be able to negotiate rates from the health care system, just like private insurers do today. Tax policy should be set so that participants and the government are tax neutral on these plans versus private health insurance today. This plan should be portable across employment.
The second problem the President is trying to solve is much more gnarly…some 45 million Americans are un-insured. The system is caring for a large percentage of these people in ERs across the country. This is a very expensive way to deliver health, compounded by the fact that these people – the most exposed – pay rack rates for their health care. That’s right. The poorest among us pay MORE for their medicine, doctor visits and hospital stays. Figuring out how to get economic health care to this sector of our population is a Big Issue, without obvious (to me) solutions.
Unfortunately, the President is mixing up these two issues. Personally, I would like to see the first issue addressed, and then wait a year or two and see how many of the 45 million uninsured take advantage of the solution. Then maybe we would have some visibility to how the second (social) issue could be solved.
So, it seems the "blue dogs" pulled the old good-cop bad-cop bait and switch. Anyone think the ploy will work? Will the Reps be able to counter?
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