“What I’m not willing to do is go back to the days when insurance companies could deny someone coverage because of a pre-existing condition.”
How dare the industry that is defined by assessing and managing risk assess and manage risk.
Topic: insurance
A Surplus of Enemies
A flock of liberal pundits is now trying to convince its members — and us — that losing the House and maybe the Senate is a really good thing for Obama. It’s not because he might moderate his views. Oh no, for in their book, Obama wasn’t radical enough. They suggest he’ll look better because he’ll have an “enemy” — John Boehner.
First, it would be nice if the punditocracy and the president, himself, talked more about the real enemies — Islamic terrorists, mullahs with nuclear ambitions, human-rights abusers, etc. For a gang who whimpered when their “patriotism was questioned” and decried “divisiveness” (i.e., the refusal to capitulate to the Obama agenda), this is rich.
But more important, the president’s problem is hardly a lack of “enemies.” The problem is, he has too many — Republicans, Wall Street, talk-show hosts, 24/7 media outlets, Fox, pollsters, insurance companies, Islamaphobe opponents of the Ground Zero mosque, the Chamber of Commerce, and, ultimately, the voters themselves, who are too irrational and too scared to appreciate his greatness. The “no-blue-states-no-red-states” candidate has morphed into an angry figure who treats opposition as illegitimate and opponents as “enemies.” Or as P.J. O’Rourke said of the Democrats, “They hate our guts.” And now the president can’t hide his feelings.
As Mickey Kaus points out, the growing enemies’ list isn’t helping Obama. Quite the opposite:
It’s amazing that the Blues don’t understand that all BHO’s comments, particularly the “punish your enemies” meme, are on FOX, talk radio, and the Internet. Your trash talk goes right into the other guy’s locker room. … It’s not just that rousing the Dem base also rouses the GOP base (which can hardly be roused more than it already is anyway). It’s that rousing the Dem base alienates the middle.
If he intends to base his last two years on vilifying Republicans, he may succeed — in solidifying the not-Obama, center-right coalition.
Bill Clinton ran circles around the GOP Congress following the 1994 midterm debacle because he was more amiable, flexible, and adroit than his opponents. Whatever his faults, Clinton didn’t hate our guts. He loved being president, and he loved being praised by his fellow citizens. Obama suffers us — first in silence, and now in public. And flexibility has really not been his strong suit. In short, Democrats long for a repeat of post-1994, but they lack the Bill Clinton part of the equation. (Frankly, they also lack the Newt Gingrich villain figure. Whatever their shortcomings, the current GOP leadership generally avoids personal displays of grandiosity and lacks a compulsion to say whatever ludicrously daft thought pops into their heads.)
So for those Democrats licking their chops at the prospect of an Obama-GOP face-off, they might want to reconsider. Isn’t it just as likely Obama will make the Republicans look better than the other way around? He’s sure done that during the midterm campaign.
Time for a Uniter, Not a Divider
Pat Caddell and Douglas Schoen, two Democratic pollsters and consultants, repeatedly have tried to warn their fellow Democrats that they are blowing it — going too far left, passing legislation disliked by the public, and ignoring the issues voters care about most. Now they’re going after Obama for his excessive divisiveness: “Rather than being a unifier, Mr. Obama has divided America on the basis of race, class and partisanship. Moreover, his cynical approach to governance has encouraged his allies to pursue a similar strategy of racially divisive politics on his behalf.”
On race, there was Gatesgate and then the New Black Panther Party scandal. As to the latter, they explain:
On an issue that has gotten much less attention, but is potentially just as divisive, the Justice Department has pointedly refused to prosecute three members of the New Black Panther Party for voter intimidation at the polls on Election Day 2008.
It is the job of the Department of Justice to protect all American voters from voter discrimination and voter intimidation—whether committed by the far right, the far left, or the New Black Panthers. It is unacceptable for the Department of Justice to continue to stonewall on this issue.
No, the case is not “small potatoes’ — it goes to the heart of Obama’s promise to be post-racial and to the essence of what “equal protection” means.
It’s not just racial antagonisms that Obama has exacerbated. As Caddell and Schoen observe, no president in recent memory has played the class-warfare card and maligned private industry as much as Obama. (“He bashes Wall Street and insurance companies whenever convenient to advance his programs, yet he has been eager to accept campaign contributions and negotiate with these very same banks and corporations behind closed doors in order to advance his political agenda.”)
But it is on partisanship that Obama has really excelled. The sneering disrespect for political opponents, the refusal to engage in any genuine give-and-take with the GOP, and his obnoxious vilification of his predecessor have distinguished this White House as the most politically vindictive and obsessive (going even so far as to put political hacks in the center of foreign policy formulation) since Richard Nixon’s.
This is not just a disappointment to his starry-eyed supporters; it’s also politically disastrous for Obama. He’s managed to alienate the great swath of independent voters for whom all this is deeply troubling, if not frightening. The public may be ready for a post-post-partisan and post-post-racial president. Maybe someone who can offer hope and change from the old-style politics of personal destruction.
A Pernicious New Tax, A Disastrous Bill
A friend who works in finance writes:
Just hours before finishing the 2,000-page Dodd-Frank financial reform bill at 5:40am Friday morning, leaders of the Democratic majority snuck in a wholly new, unprecedented, and very damaging tax on U.S.-based institutions that provide critical capital to small and large businesses across the country.
Specifically, a new Financial Stability Oversight Council (will impose an “assessment” on almost all types of financial institutions with more than $50 billion in assets (excluding banks that have deposit insurance, as well as Fannie Mae, Freddie Mac, and other types of “government-sponsored enterprise”) as well as hedge funds that manage more than $10 billion.
Collection of the tax will begin at yet-to-be-determined time prior to September 2012. The funds will be placed in a “Financial Crisis Special Assessment Fund” at Treasury and cannot be removed for 25 years, after which time they will be used to pay down the deficit.
The insidious maneuver is the clearest indication that supporters of the Dodd-Frank bill will gladly sacrifice the growth and prosperity of the U.S. economy if it means they can spitefully “stick it” to U.S. financial institutions one more time. With unemployment figures lingering at recent highs and a growing recognition that previous so-called “stimulus” measures have failed to have a meaningful impact on the U.S. economy, the Democratic majority’s new tax will confiscate nearly $20 billion from institutions that lend money and provide equity capital to all types of businesses — including start-ups, large manufacturers, healthcare providers, and small family-owned businesses.
In its wildest dreams, the government could not conceive of a more anti-stimulative policy: To take $20 billion from the firms whose role it is to allocate money to the fastest growing and most productive, job-creating firms, and have that money lie dormant in a vault at the U.S. Treasury for two-and-a-half decades.
And it gets much worse. The criteria used to determine how much any given firm will owe are so nebulous that it is impossible for a firm to calculate its share of the tax. For instance, included among the sixteen or so factors used to calculate an individual firm’s tax obligation are the following:
- “the nature, scope, and mix of the company’s activities;”
- “the extent and nature of the company’s transactions and relationships with other financial companies;”
- “the amount and nature of the company’s financial assets;”
- “the company’s importance as a source of credit for households, businesses, and State and local governments and as a source of liquidity for the financial system”
- “the company’s importance as a source of credit for low-income, minority, or underserved communities and the impact the failure of such company would have on the availability of credit in such communities;”
- “such other risk-related factors as the Council may determine to be appropriate.”
The uncertainty created by these completely ambiguous factors will invariably lead firms subject to this tax to reserve amounts that are several times what it may ultimately owe. This will keep considerably more than the $20 billion from being put to productive use in the economy. Banks, insurance companies, and investment funds are already hesitant to lend to businesses. The tax will ensure that those capital providers sit indefinitely on the sidelines. Further, the imposition of last minute, middle-of-the-night tax increases make businesses even more apprehensive because they have no idea what government “surprises” lay in the future.
Can it get even worse? Of course. The largest hedge funds have achieved their size because they have demonstrated consistent success over one or more decades. As responsible safe havens of capital, these investment funds attract a disproportionate amount of the money that public and private pension funds dedicate to the hedge fund sector. The Dodd-Frank tax will flow directly from the investors of these hedge funds and punish hundreds of thousands (even millions?) of pensioners.
Similarly, the millions of investors and customers of the companies in the $50+ billion institutions will also feel the pain of the Dodd-Frank tax. Messrs Dodd and Frank seem to believe that you can punish a business without harming the millions of investors, customers and suppliers connected to that business. They suspend disbelief to not recognize that businesses are merely formal collections of people organized to provide services and goods to other people. Punitive measures against corporations do not impact the faceless corporation itself, but the millions of people whose livelihoods revolve around the services and goods provided by the corporation.
The Dodd-Frank tax also comes with exceptionally onerous information sharing obligations that allow regulators to perform on-site inspections and rummage through all of the firm’s books and records. There are no limitations; regulators are allowed to view anything deemed “necessary to determine appropriate risk-based assessments.” These burdensome requirements alone are sufficient to encourage financial institutions to pack up and move overseas.
Putting aside the tax issues for a moment, I see another cynical purpose for the new tax. The initial versions of both the House and Senate bills had bailout funds that would be stacked with money in advance of the next economic crisis. The money would sit patiently (and unproductively) and wait for a future economic crisis, at which time it would be used to support creditors of floundering Too Big To Fail firms. Due to public revulsion of bailouts, these “pre-crisis funds” ($150 billion in the House bill and $50 billion in the Senate bill) were eliminated in the final bill. However, it seems increasingly clear that the new Dodd-Frank tax is merely a clandestine attempt to reinstitute the pre-crisis fund.
The Dodd-Frank tax is being imposed on the exact same collection of businesses that were targeted in the House bill, and the assessments are being calculated based on the exact same criteria in the House and Senate bills. In fact, the only difference between the pre-crisis fund and the Dodd-Frank tax is a line that says the “Fund shall not be used in connection with the liquidation of any financial company under Title II [Orderly Liquidation Authority].”
But if it walks like a duck, swims like a duck, and quacks like a duck…you know the rest. There is no getting around the fact that in both form and substance, the Dodd-Frank tax is the pre-crisis fund’s clone. The meager line about not being used in an orderly liquidation can easily be removed by a future Congress or merely be ignored when the next crisis arrives. Does anyone truly believe that if there’s a pool of money sitting at Treasury, that it won’t be used during an economic crisis? Besides, government funds are fungible and forever being misappropriated. How many times has government dipped previously “untouchable” pools of money, such as Social Security, to pay for a misguided government adventure?
This is noxious and injurious economic policy that will transform the fundamental relationship between business and government. It will transfes billions of productive, job-creating dollars out of the economy, delaying additional growth for years. And it is an insidious bait-and-switch tactic designed to re-insert, when no one is looking, a bailout fund that was previously rejected by the Senate and reviled by the public.
Partners in the Conservative Revival
Both Bill Kristol and Peter Berkowitz have taken up the issue of conservative reform and the respective tasks of wonkish conservative innovators and the grassroots Tea Party movement. The mainstream media like to portray the two groups — the reformers and the Tea Partiers – in opposition in a party civil war (as if Rep. Paul Ryan and Sarah Palin were in competition for the soul of the GOP). But as Kristol and Berkowitz explain, the two aspects of the revived conservative movement are compatible, and each is essential in its own realm.
Kristol reminds us that the Tea Party movement has helped to unnerve and beat back the liberal statists, but that is the beginning and not the end of a conservative resurgence:
We already have a Middle American populist reaction against the government schemes of pointy-headed intellectuals. Barack Obama got the highest percentage of the votes of any Democratic presidential candidate since Lyndon Johnson in 1964; Republicans look to be on track this year to replicate their 47-seat House pick-up in 1966.
What comes next? That’s up to us—especially to us conservatives. We’re not doomed to repeat the pretty miserable political, social, and economic performance of 1967-80. …
Can conservatives develop a program, an agenda, and a governing vision that would, in the words of Federalist 39, vindicate “that honorable determination which animates every votary of freedom, to rest all our political experiments on the capacity of mankind for self-government”?
And Berkowitz provides a helpful review of the history of conservative reform, pointing toward those whose task it will be to provide an alternative to Obamaism:
New Jersey Gov. Chris Christie, Indiana Gov. Mitch Daniels, Louisiana Gov. Bobby Jindal, Mississippi Gov. Haley Barbour and Wisconsin Rep. Paul Ryan are among those officeholders in the process of recovering reform as a conservative virtue. In November, Meg Whitman, the new Republican nominee in California, and Brian Sandoval, the new Republican nominee for governor in Nevada, stand a good chance to join their ranks.
Today’s conservative reformers appreciate that within its limited sphere government should be excellent. Promoting individual responsibility, self-reliance and opportunity requires targeted action, beginning with health-care reform that really controls costs by eliminating barriers on insurance companies operating across state lines and limiting malpractice damages; public-sector reform that reins in unions by reducing benefits and expanding accountability; and education reform that through school-choice programs gives parents, particularly in low income and minority communities, greater control over their children’s education.
None of this is to underestimate or denigrate the intellectual underpinnings of the Tea Party movement. Despite the media indictment (Racists! Know-nothings!), it is perhaps the most wonkish popular uprising we’ve had in the past century. It is the CATO Institute’s dream mass movement — based on self-reliance, limited government, sound money, fiscal discipline, and market economics. Many of the protesters like to carry copies of the Constitution. For every inflammatory hand-painted sign that CNN films, there are dozens quoting James Madison, challenging the “bailout nation,” and contesting the constitutionality of an individual health-care insurance mandate. It’s certainly a step up from “Turn on, tune in, drop out.” But it is not a methodology for governing nor an agenda for what would follow Obamaism. You don’t write legislation in mass gatherings seeking to discredit and upend those in power. And it’s unrealistic and misguided to expect a mass movement to decimate a political agenda, defeat liberal one-party rule, defend itself against incessant media attacks – and come up with a health-care alternative, a scheme for entitlement reform, and proposals to tame the debt. (The latter is the work of Ryan, Daniels, Christie, et. al.)
The media narrative that the conservative movement is riven with conflict is, as is so much else the media spew, a distortion intended to bolster the spirits of the left and paint the right in the most disagreeable light possible. We actually have witnessed a rather effective division of labor on the right, with reformers and Tea Partiers collaborating on common goals. They share a mutual desire to put a stake through the heart of the statist agenda of one-party Democratic rule and to find a better alternative. The first task is well under way; the latter is just beginning.
The Party of Big Drug Companies
Ben Smith spots an ad from the drug companies’ lobby group, “in which the advocacy group Families USA and the drug lobby PhRMA — the latter the deep pockets behind much of media campaign for health care legislation — praise Sen. Harry Reid for his work on … jobs.” As Smith notes, it’s a big smooch for their favorite senator:
Though the ad makes a passing reference to health care, it’s basically the group’s way of saying “thank you” to Reid for pushing the health-care bill to passage.
This isn’t lobbying, technically, but from PhRMA’s perspective, it’s an interesting way to reward a powerful legislator for furthering your corporate interest.
Before the Democrats controlled the White House and Congress, they used to thunder about this sort of thing. Candidate Barack Obama promised to throw the lobbyists out and eliminate the special interests who undermined the “people’s business.” But instead, they rewarded and ensconced those special interests in legislation, and they in turn dearly want to reelect those that doled out the favors. This seems to be a significant weakness in the Democrats’ newest populist campaign rhetoric — they are the ones getting bouquets from insurance companies, banks, and big drug companies. They must think the public won’t notice.
Why Waxman Decided Against a Bully-athon
Daily Caller reports that Rep. Henry Waxman decided against a hearing to excoriate business executives for recording tax losses attributable to ObamaCare. The reason: not only did the companies have a legal obligation to do so (had they not, Sen. Carl Levin would no doubt be hauling them before his committee one day to decry the fraud on the shareholders); they also would have produced some very embarrassing evidence that ObamaCare is going to drive up health-care costs. The report explains:
Most significantly, documents unearthed by the investigation highlight companies that are considering dumping employees from their current health-care plans in the face of new costs from the health-care law. President Obama repeatedly promised his health-care law would let Americans keep their current insurance if they’re happy with it.
A March 3 internal Verizon memo on the impact health-care law said new taxes on insurance companies and health-care equipment manufacturers will be passed onto employers through higher prices.
Facing such increased costs, employers like Verizon “may consider exiting the health-care market and send employees to the exchanges,” the memo says.
Under the law, companies would pay fines for not providing insurance companies coverage. But, the Verizon memo said, the fines would be “modest” compared to providing coverage for employees.
In a March 25 e-mail, John Deere’s director of labor relations, Kenneth Hugh, said, “We ought to look at … denying coverage and just paying the penalty … we would need to figure out which one was more expensive.” John Deere faces a unique situation because of contracts with its unionized workers.
Whether or not companies are being forced to rescind employee coverage, they may need to raise insurance premiums, the documents show.
The top human resources official at Caterpillar said in a March 23 e-mail that the company will need to “figure out what this will cost us and collect that in increased premiums which we will attribute to the legislation”
Oops. Wrong answer. Bag the hearing. It seems that ObamaCare opponents would do well to get one or more of these execs in front of a committee and let them tell the American people what Obama and Waxman won’t — that ObamaCare isn’t going to guarantee they can keep their insurance and it is going to cost them a bundle. Republicans argue that divided government is needed to check Obama’s leftist agenda. As Waxman’s gambit shows, it’s also the only way to achieve congressional oversight.
Obama’s Nastiness Is Not New
The crack Politico reporters have just discovered:
President Barack Obama has lately been getting personal with his political adversaries — singling them out for scorn in speeches, interviews, asides and even in his weekly radio address.
Rather than just going after big groups of bad guys — insurance companies, lobbyists, the media — Obama has adopted a strategy that gives a face to the enemy. By setting himself up against specific opponents, he provides a point of contrast that’s useful in invigorating a base hungry for bare knuckles and bravado — and forces those in the middle to choose between him and his villain du jour.
Uh. Well, actually this has been going on from Day One of the administration. The assault on Rush Limbaugh took place a year ago. And he called the Supreme Court out — with the justices sitting in the House — months ago. In fact, Obama has been vilifying and dismissing Republicans, the Supreme Court, Fox News, the Chamber of Commerce, insurance companies, Wall Street, and Tea Partiers for quite some time.
Well, the Politico reporters say, the president now uses “Mitch McConnell” or “Sarah Palin” by name. It seems to be a distinction without much difference since it was always quite clear whom he was slamming. It does fit the Politico storyline that Obama is somewhat desperate and that this is what politicians do — attack! — when they are in the dumps. But it’s ultimately a false narrative, one that disguises central facets of Obama’s personality: he’s condescending (recall the health-care summit), thin-skinned, dismissive of opponents, and prone to ad hominem and straw-men attacks. That’s nothing new — although it’s nice to see the sycophantic press wake up and take notice.
Obama’s Economic Policy: Crony Capitalism
The so-called financial-reform bills now working their ways through each house of Congress are, like the health-care-reform bill before them, not about reform at all. They do not reform anything. Instead, they make the federal government the major player in a major industry. Just as the health-care-reform bill will transform private insurance companies into the equivalent of public utilities, whose every major decision needs government approval and whose returns on capital are more or less guaranteed, these bills would do the same for big banks and other financial institutions.
President Obama gave a typical speech yesterday in the same room where, a 140 years ago, Abraham Lincoln gave a most untypical speech. Well, perhaps typical for Lincoln: eloquent, tightly reasoned, profound, and consequential in its effect. (As an aside, I have spoken in the Great Hall of Cooper Union myself and had a powerful feeling that I was standing upon holy ground while I did so; Obama, I suspect, felt he was only adding to its sanctity.) Obama’s speech was typical in that it set up straw men, fearlessly knocked them down, assigned blame without evidence, told falsehoods while demanding that others stop lying, and asked for discussion as long as every discussant agrees with him. Everyone else and every other opinion is “illegitimate.”
Wall Street was hardly blameless regarding the financial crisis of 2008 and reforms are necessary to prevent the same things from happening again. Niall Ferguson and Ted Forstmann explain what’s needed in today’s Wall Street Journal. (In a nutshell: moving derivatives trading from back rooms to exchanges and limiting the leverage that banks can use.) The Senate bill wouldn’t do that. Instead it would move most derivatives trading to exchanges but allow the chairman of the Commodity Futures Trading Commission to decide what derivatives can still be traded over the counter. Does anyone see there a hugely empowered federal official (not to mention a golden lobbying opportunity for banks and members of Congress alike)? Is a back room at the CFTC an improvement over a back room at Goldman Sachs?
And Fannie and Freddie? They were at the heart of the mortgage meltdown and political piggy banks that were so badly (and corruptly) regulated that they are likely to cost the taxpayers $400 billion when all is said and done. But neither of these bills even mentions them. Fannie and Freddie are classic examples of crony capitalism, where government and business are in bed together. Obama wants to expand that disastrous model to the likes of JPMorgan Chase and Goldman Sachs.
It is the business of business to take risk and seek profit. It is the business of government to regulate business to ensure that the public interest is not put at risk. That’s exactly what government failed to do before 2008. As Judge Richard Posner put it in his most recent book, The Crisis of Capitalist Democracy, “Calling bankers greedy for taking advantage of profit opportunities created by unsound government policies is like calling rich people greedy for allowing Medicare to reimburse their medical bills.”
The Obama administration’s ruthless pursuit of ever greater concentration of power in Washington — and calling it reform — just keeps getting scarier.
Guess What: ObamaCare Will Make Insurance More Expensive
Ed Morrissey calls our attention to a New York Times article that makes the case that ObamaCare will likely send health-insurance premiums skyrocketing. The Times looks at New York’s state plan:
New York also became one of the few states that require insurers within each region of the state to charge the same rates for the same benefits, regardless of whether people are old or young, male or female, smokers or nonsmokers, high risk or low risk.
Healthy people, in effect, began to subsidize people who needed more health care. The healthier customers soon discovered that the high premiums were not worth it and dropped out of the plans. The pool of insured people shrank to the point where many of them had high health care needs. Without healthier people to spread the risk, their premiums skyrocketed, a phenomenon known in the trade as the “adverse selection death spiral.”
Hmm. Sounds like what happened in Massachusetts, where, lo and behold, insurance costs continued to climb, and, despite an individual mandate, many people chose to pay the fine rather than pay exorbitant insurance premiums. So in New York, the number of insured has dropped to 31,000 from 128,000 as costs soared to more than double the nation’s average.
As the Times explains, “The new federal health care law tries to avoid the death spiral by requiring everyone to have insurance and penalizing those who do not, as well as offering subsidies to low-income customers. But analysts say that provision could prove meaningless if the government does not vigorously enforce the penalties, as insurance companies fear, or if too many people decide it is cheaper to pay the penalty and opt out.”
So we’re going to force individuals to buy more-expensive plans than they might want (the issue Paul Ryan alluded to at the health-care summit), dump them into pools with high-risk patients, and then hope the costs don’t drive healthier customers out, hiking up the costs for the remaining individuals, who will look to the government for ever-increasing subsidies. Remarkable isn’t it, that the Democrats never looked, or cared to look, at the experience of Massachusetts and New York before jamming through their historic legislation? But then they didn’t much care in the end what was in it or how the CBO flimflam scoring was arrived at. What was important is that they had a “win.”
Now that we’re getting a good idea at what they’ve done, it certainly boosts the “repeal and replace” effort. It would seem the responsible thing to do before the entire country winds up like New York or Massachusetts – with sky-high insurance costs and a new budget-busting entitlement, and nothing approximating “universal coverage.”
Flotsam and Jetsam
Not what the Obami were spinning to AIPAC: “Well the Obama administration’s leverage is beginning to sound like ‘hard power’ — brutal even — to get Israel to toe the line. I have no doubt that in President Obama’s eyes, this is the way to promote U.S. interests. As non-objective as I am, I have the impression that it is not only a mistaken policy, but one that isn’t advancing the peace process. In effect, it is making it almost impossible for Palestinian Authority President Mahmoud Abbas to come to the negotiating table, because he has to insist he has no choice but to wait until the conditions that the U.S. is setting are met by Israel before he does,” says Moshe Arens, former Knesset member, defense minister, foreign minister, and ambassador to the United States. (Read the rest of the revealing interview.)
Not what any clear-eyed pro-Israel activist is going to buy from the Obami’s furious spin on their assault on Israel : “‘No crisis. Media reports are wrong. More agreement than disagreement’ inside the administration, regarding how to advance the Middle East peace process. [The administration’s] ‘hand was forced [with regard to] Jerusalem by circumstances during Biden’s trip,’ the source said, referring to the Israeli government’s announcement last month during Vice President Joe Biden’s good-will trip to Israel that it had approved construction of another 1,600 homes to be built in the Ramat Shlomo neighborhood.” This is simply pathetic.
Not what the Democrats were selling us for over a year (from Howard Fineman): “A Democratic senator I can’t name, who reluctantly voted for the health-care bill out of loyalty to his party and his admiration for Barack Obama, privately complained to me that the measure was political folly, in part because of the way it goes into effect: some taxes first, most benefits later, and rate hikes by insurance companies in between.”
Not what the Obami had in mind when they took their victory lap: “President Obama’s overall job approval rating has fallen to an alltime low of 44%, down five points from late March, just before the bill’s passage in the House of Representatives. It is down 24 points since his all-time high last April. 41% now disapprove. . . . When it comes to health care, the President’s approval rating is even lower – and is also a new all-time low. Only 34% approve, while a majority of 55% disapprove.”
Not what you’d expect from the “most transparent administration in history” (unless you didn’t buy the label in the first place): “Rep. Peter King (R-N.Y.), the ranking member of the House Homeland Security Committee, is accusing Deputy National Security Adviser John Brennan of interfering with Congress’s oversight on key intelligence matters. King’s latest frustration came Friday morning when he read news accounts about the new Transportation Security Administration’s (TSA) aviation security measures before being briefed on the program from anyone in the administration.”
Not what “bringing us all together” was supposed to mean: “The perplexing irony of Barack Obama’s presidency is that even as conservatives attack him as a crazed socialist, many on the left are frustrated with what they see as the president’s accommodationist backtracking from campaign promises.”
Not what is going to help the Democrats retain control over the Senate: “The family bank of Democratic Senate candidate Alexi Giannoulias loaned a pair of Chicago crime figures about $20 million during a 14-month period when Giannoulias was a senior loan officer, according to a Tribune examination that provides new details about the bank’s relationship with the convicted felons.”
Not what the Obami and their elite media handmaidens want us to hear (especially from Juan Williams): “There is danger for Democrats in recent attempts to dismiss the tea party movement as violent racists deserving of contempt. Demonizing these folks may energize the Democrats’ left-wing base. But it is a big turnoff to voters who have problems with the Democratic agenda that have nothing to do with racism.”
An Electorate Receptive to “Repeal and Replace”
Yuval Levin explains that ObamaCare is the worst of all health-care reforms — really no health-care reform at all:
In order to gain 60 votes in the Senate last winter, the Democrats were forced to give up on that public insurer, while leaving the other components of their scheme in place. The result is not even a liberal approach to escalating costs but a ticking time bomb: a scheme that will build up pressure in our private insurance system while offering no escape. Rather than reform a system that everyone agrees is unsustainable, it will subsidize that system and compel participation in it — requiring all Americans to pay ever-growing premiums to insurance companies while doing essentially nothing about the underlying causes of those rising costs.
This is why the ideologically honest Left was just as appalled as conservatives by the result. We are herding unwilling customers into the arms of insurers, passing the bill to the taxpayers, and exacerbating the problem at the nub of the health-care-cost problem — consumers do not foot their own bills and have little incentive to spend wisely and monitor costs. Conservatives have further reason to object to the scheme: “It aims to spend a trillion dollars on subsidies to large insurance companies and the expansion of Medicaid, to micromanage the insurance industry in ways likely only to raise premiums further, to cut Medicare benefits without using the money to shore up the program or reduce the deficit, and to raise taxes on employment, investment, and medical research.” In short, there is enough for everyone to hate.
As Levin points out, there is time to act, given the bill’s implementation schedule. (“No significant entitlement benefits will be made available for four years, but some significant taxes and Medicare cuts — as well as regulatory reforms that may begin to push premium prices up, especially in the individual market — will begin before then.”) Although there are some small benefits scheduled this year to entice voters to embrace ObamaCare (e.g., ban on dropping those already insured for pre-existing conditions, requirements to keep twenty-somethings on their parents’ insurance), these are limited and in some cases duplicate existing state regulations. (Moreover, those who already have insurance — some 80 percent of the population — surely are among the most likely voters.) Meanwhile, employers are taking a hit and informing their shareholders and employees of the perils of ObamaCare, and the cost problem that was the rationale for the bill worsens:
Rather than reducing costs, Obamacare will increase national health expenditures by more than $200 billion, according to the Obama administration’s own HHS actuary. Premiums in the individual market will increase by more than 10 percent very quickly, and middle-class families in the new exchanges (where large numbers of Americans who now receive coverage through their employers will find themselves dumped) will be forced to choose from a very limited menu of government-approved plans, the cheapest of which, CBO estimates, will cost more than $12,000.
Throw in a plethora of new taxes and perverse incentives for employers to drop their employees from coverage, and you can see why it is an “unmitigated disaster — for our health care system, for our fiscal future, and for any notion of limited government.” But there is time to rip it up and start again. There is no shortage of market-based alternative plans from conservatives. But first, the existing one must be abandoned before it can do permanent damage to the health-care system and to our economy. That is the rallying cry for conservatives this year and in 2012 — to prevent the wrecking ball before it hits its target and to offer a better alternative. Rarely is there such a stark choice for voters, but there is no fuzzying up the differences between the two sides on this one. Are you for or against a giant new entitlement program? Do you think individuals should be forced to buy insurance plans they don’t want? Is it smart to levy huge new taxes when the economic recovery is stalled? If framed clearly, the “Repeal and Replace” brigade has a compelling position.
The unfolding debate also comes within a certain context, one the Obama administration chooses to ignore. The public has not, contrary to the Left’s expectations, become enamored of big government in the wake of the financial meltdown. To the contrary, the bailouts and stimulus plan have engendered suspicion and contempt. The “Trust us, it’s working!” rhetoric has contributed to the public’s growing unease with governing elites. And the mound of debt has reinforced the public’s suspicion that the White House and Congress are unserious and ill-equipped to address our fiscal train wreck. In other words, the “Repeal and Replace” contingent will be making its case to an electorate already predisposed to accept much of its argument.
Moore’s Dilemma
What’s an anti-capitalism propagandist to do these days? In his movie, Sicko, Michael Moore championed the accomplishments of the Cuban health-care system and cited the Castro regime’s “impressive statistics” in regard to infant mortality. On the other hand, he’s been highly critical of the American plan that will be put in place by the passing of the recent U.S. health-care bill. In an NPR interview, he expressed his frustration as follows:
The larger picture here is that the private insurance companies are still the ones in charge. They’re still going to call the shots. And if anything, they’ve just been given another big handout by the government by guaranteeing customers. I mean, this is really kind of crazy when you think about it.
The problem is that Moore’s health-care idol, Fidel Castro, thinks ObamaCare is great. “We consider health reform to have been an important battle and a success of his (Obama’s) government,” said the dictator (who also thought breeding a line of dwarf cows would feed all of Cuba). Is Moore willing to part company with the benevolent medical genius who once saw fit to incarcerate Cubans with AIDS? Can the communist icon whose own life-threatening illness forced him to get treatment outside of communist Cuba possibly be wrong?
Moore’s dilemma is a beautiful example of the twin delusions of communism. Another country’s state-run system looks great to comfortable, well-fed Americans because they’re far enough away from the hell to buy the snow-job. Communist dictators are kept in the dark in another way. No one is brave enough to give them bad news. Castro doesn’t know from the nuances of ObamaCare because he doesn’t even know from the nuances of CastroCare. All he knows is that the same wave that brought Michael Moore to Cuba to film a flattering movie just brought something called “mandatory coverage” to America. That’s good enough for him. Contrary to Michael Moore, communism demands the shedding of self-criticism — which, even if he doesn’t know it, is probably why he’s such a fan.
Is It Historic if It Never Happens?
As many Republicans are advocating, Karl Rove argues for a repeal-and-replace strategy for ObamaCare. He writes that the content of ObamaCare and the timing of its implementation make Republicans’ job easier:
Democratic hopes that passing health-care reform will help them politically will be unfulfilled because ObamaCare only benefits a small number of people in the short run. Until the massive subsidies to insurance companies fully ramp up in 2017, this bill will be more pain than gain for most Americans.
For example, changes in insurance regulations in 2011 and two new mandates in 2014 that force everyone to buy insurance and require everyone to be charged a similar price regardless of age or health will cause insurance premiums to rise more than they would have otherwise. The 10 million people who have a health savings account will also be hurt starting in 2011. With each passing year after that, they will be able to put less away tax free for medical expenses.
ObamaCare cuts $1.8 billion in support for Medicare Advantage this October, another $5.8 billion in October 2011, and an additional $9.2 billion right before the 2012 presidential election. This will increase premiums and reduce benefits for the 4.5 million people in the program.
Moreover, some of the immediate benefits that Obama promised – such as forcing insurance carriers to keep children on their parents’ insurance plans — seem, well, not to be real. And then there is the impact on the deficit, which will become all the more apparent once the Doc Fix is passed this year. In sum, the public’s strong aversion to the bill is not likely to be diminished by anything they see or learn about it between now and November.
Rove argues: “As voters start to feel the pain of this new program, Republicans will be in a stronger position if they stay in the fight, make a principled case, and lay out a competing vision.” If the Democrats do suffer heavy losses this year, we’ll see just how precarious the “historic” victory is. The great transformation of American society that Obama and his party have attempted to foist on an unwilling public may in fact end before it begins.
Numbers
Steny Hoyer notwithstanding, CBO didn’t actually, finally score the bill. CBO says it “completed a preliminary estimate.” Hoyer, of course, would like to lock down wavering Democrats, but CBO cautions: “Although CBO completed a preliminary review of legislative language prior to its release, the agency has not thoroughly examined the reconciliation proposal to verify its consistency with the previous draft. This estimate is therefore preliminary, pending a review of the language of the reconciliation proposal, as well as further review and refinement of the budgetary projections.” Well, if we aren’t exactly going to vote on the bill, then I guess we don’t exactly need a firm CBO estimate.
But there are some numbers that should alarm the fence-sitters. Rasmussen tells us: “Fifty percent (50%) of U.S. voters say they are less likely to vote for their representative in Congress this November if he or she votes for the health care plan proposed by President Obama and congressional Democrats. … 51% of voters not affiliated with either major party are less likely to support someone who votes for the legislation. Just 32% of unaffiliateds are more likely to vote for someone who supports the bill.”
So you can see why Hoyer is so desperate to grab on to a CBO number, anything, to divert members away from political realities and their own nagging sense that this is all a Ponzi scheme. And if you think there’s any doubt about that, consider this exchange between Obama and Bret Baier, where it becomes obvious what a fiscal flimflam is going on here:
BAIER: The CBO has said specifically that the $500 billion that you say that you’re going to save from Medicare is not being spent in Medicare. That this bill spends it elsewhere outside of Medicare. So you can’t have both.
OBAMA: Right.
BAIER: You either spend it on expenditures or you make Medicare more solvent. So which is it?
OBAMA: Here’s what it does. On the one hand what you’re doing is you’re eliminating insurance subsidies within Medicare that aren’t making anybody healthier but are fattening the profits of insurance companies. Everybody agrees that that is not a wise way to spend money. Now, most of those savings go right back into helping seniors, for example, closing the donut hole.
When the previous Congress passed the prescription drug bill, what they did was they left a situation which after seniors had spent a certain amount of money, suddenly they got no help and they were stuck with the bill. Now that’s a pretty expensive proposition fixing that. It wasn’t paid for at the time that that bill was passed. So that money goes back into Medicare, both to fix the donut hole, lower premiums.
All those things are important, but what’s also happening is each year we’re spending less on Medicare overall and as consequence, that lengthens the trust fund and it’s availability for seniors.
BAIER: Your chief actuary for Medicare said this, that cuts in Medicare: “cannot be simultaneously used to finance other federal outlays and extend the trust fund.” That’s your guy.
OBAMA: No — and what is absolutely true is that this will not solve our whole Medicare problem. We’re still going to have to fix Medicare over the long term.
BAIER: But it’s $38 trillion in the hole.
OBAMA: Absolutely, and that’s the reason that we’re going to have to — that’s the reason I put forward a fiscal commission based on Republicans and Democratic proposals, to make sure that we have a long-term fix for the system. The key is that this proposal doesn’t weaken Medicare, it makes it stronger for seniors currently who are receiving it. It doesn’t solve that big structural problem, Bret. Nobody’s claiming that this piece of legislation is going to solve every problem that’s been there for decades. What it does do is make sure that the trust fund is not going to be going bankrupt in seven years, according to their accounting rules —
BAIER: So you don’t buy —
OBAMA: — and in the meantime —
BAIER: — the CBO or the actuary that you can’t have it both ways?
OBAMA: No —
BAIER: That you can’t spend the money twice?
OBAMA: — no, what is absolutely true and what I do agree with is that you can’t say that you are saving on Medicare and then spend the money twice. What you can say is that we are going to take these savings, put them back to make sure that seniors are getting help on the prescription drug bill instead of that money going to, for example, insurance reform, and —
It’s embarrassing, really. And it’s a reminder of why it’s really hard to get members to vote for something that not even the president can adequately justify as fiscally honest.
The Substance Matters, or It Should
Politico reels off five impediments to passage of ObamaCare (e.g., reconciliation, abortion, Senate-House mistrust) but doesn’t get around to the two biggest problems: it’s a bad, irresponsible bill and the voters hate it. Oh yes, that. This bit of misdirection pleases Democratic leaders, who would like the discussion to be about anything but the substance of what members are being asked to vote on.
Rep. Paul Ryan, however, isn’t playing along. He takes to the Washington Post to explain precisely what’s wrong with the bill:
Through any analytical lens, the legislation will not address the central problem of skyrocketing health-care costs. The Congressional Budget Office estimates that families’ premiums could rise 10 to 13 percent; private-sector actuarial estimates top these already high numbers. The higher costs are driven by federalizing the regulation of insurance, narrowing consumers’ options and reducing competition among providers. The health-care market would be dominated by government programs and the largest insurance companies, operating as de facto government utilities.
Rather than tackle the drivers of health inflation, the legislation chases the ever-increasing premiums with huge new subsidies. Already, Washington has no idea how to pay for the unfunded promises in Medicare, Medicaid and Social Security — and creating this new entitlement would accelerate our path to fiscal ruin. When you strip away the double-counting, expose the hidden costs that must be funded and look at the price tag when the legislation is fully implemented, the claims of deficit reduction are as hollow as claims of cost containment.
In short, the cost-containment problem (otherwise we’ll bankrupt ourselves, the president once threatened) is made worse, dramatically so, by the bill. And when we add on “a range of job-killing tax hikes and controls on all Americans,” you have a truly destructive, ill-conceived piece of legislation. If members think hard about that, rather than the arm-twisting and bravado from the White House, what the leadership is up to will become apparent. They are not, it seems, in the business of passing anything remotely resembling “reform.” They are rather attempting to avoid humiliation and prevent a tidal wave of rage from their liberal base.
That’s small consolation to moderate Democrats, who, in their quieter moments of self-reflection, understand not only that their constituents intensely dislike the bill but also that such aversion is fully justified. It would be one thing to challenge public opinion for a noble and necessary bill; it’s quite another to walk the plank for what Ryan dubs “the Democrats’ health-care train wreck.” All the tricks — reconciliation, voting but not really voting on the Senate bill — are designed to encourage lawmakers to do something many know isn’t wise substantively or politically. If Republicans are smart, they’ll spend the week forcing Democrats to look at their handiwork and reminding them that voters will hold them fully accountable for their mischief.
Band-Aids for Band-Aids for Band-Aids
Out on the health-care stump in Pennsylvania today, President Obama talked up the importance of competitive markets:
He continued, “An insurance broker told Wall Street investors that insurance companies know they will lose customers if they keep raising premiums. But since there’s so little competition in the insurance industry, they’re okay with people being priced out of health insurance because they’ll still make more by raising premiums on the customers they have. And they will keep doing this for as long as they can get away with it.”
Or until someone with common sense allows people to cross state lines to purchase insurance. But that would break the self-replicating chain of big government, so it’s not going to happen.
Here’s what always does happen: Democrats use disasters brought on by regulation to justify further regulation. Restraining insurance companies won’t be the last step in that chain, of course. When government-imposed price caps suck the incentive out for insurance providers, lawmakers will go on TV wielding a report about how underserved the insured have become. This will justify new guidelines for what providers will then have to offer. It never ends.
We saw this with the housing boom and bust. Government-imposed equality of ownership distorted the market. The follow-up disaster demanded — what else? — government-imposed regulation. Wealth redistribution is the gift that keeps on taking.
LIVE BLOG: Let’s Agree — Regulate the Insurers
President Obama has just given us a list of “where we agree” on insurance. His list included the notion that insurance companies can’t drop people, expanding the age limit for children remaining on parental coverage, ending lifetime coverage limits, and the prohibition on denying coverage for pre-existing conditions. The president recently chided Senator Kyl for saying that we don’t want to let Washington choose things as framing the question in a loaded way. Framing the question as Washington vs. the insurance companies, as the president just did, is at least equally loaded.
LIVE BLOG: Sen. Lamar Alexander for the GOP
The Republicans wisely chose Sen. Lamar Alexander to respond. He is polite and restrained but forceful, telling Obama that voters in New Jersey, Virginia, and Massachusetts rejected the approach to health care that Democrats passed last year. He explains that we need to “start from a clean sheet.” He reminds everyone that Obama is seeking to slash Medicare and raise half a trillion in new taxes. He notes that when those taxes are passed through insurance companies, premiums will go up. He is methodically explaining the most objectionable features of Obama’s plan, including the “sweetheart” deals. All in all, a good moment for the GOP.
The Summit to Nowhere? (UPDATED)
This morning Obama, Democrats, and Republicans will gather to discuss an approach to health care — a comprehensive, massive tax-and-spend scheme — that by all accounts is going nowhere and that the public has rejected. A savvy reader asks me, “Isn’t this shining a light on Obama’s own failure?” Well, that may well be the case, for Obama has finally put out a proposal, gathered the players in one room, and gotten the whole country to watch. But unless a dramatic shift in public and congressional opinion occurs, he will not get his bill. Indeed, we now see signs that he realizes this.
This report explains that Obama is preparing an alternative plan to cover 15 million people and do a small fraction of what his ObamaCare scheme envisioned:
It would do that by requiring insurance companies to allow people up to 26 years old to stay on their parents’ health plans, and by modestly expanding two federal-state health programs, Medicaid and the Children’s Health Insurance Program, one person said. The cost to the federal government would be about one-fourth the price tag for the broader effort, which the White House has said would cost about $950 billion over 10 years. …
Such a move would disappoint many Democrats, including Mr. Obama. They have worked for more than a year to pass comprehensive legislation like the plan the president unveiled Monday, which would cover the bulk of the 46 million uninsured people in the U.S., set new rules for health insurers and try to control spiraling health-care costs.
Which leads us back to the central question: why the summit? It seems to have been about as well thought out as the two trips to Copenhagen. But let’s see. Perhaps there’s a devilishly clever plot at work by the Obami to come out victorious. If so, they have certainly concealed it from view.
UPDATE: Obama certainly doesn’t have the public on his side going into this. By a 52 to 39 percent margin, Americans oppose reconciliation to jam health care through. Only 25 percent want a bill similar to the one Obama has proposed to pass, while 25 percent want no more health-care legislation, and 48 percent want the lawmakers to start over. Obama has tried to convince Congress to ignore the voters, but post–Scott Brown, and in an election year, that’s a tall order.
