Commentary Magazine

Topic: Medicare

Finding Out What Is in ObamaCare

11.05.2010 - 10:31 AM

Obama said he is only interested in tweaking ObamaCare. But what if it doesn’t do what it’s supposed to do? What if employers start dumping people from their existing health care, premiums go up, and the cost projections — shockingly! — are proved to have been entirely fraudulent? Well, no never mind as far as the president is concerned. He’s not an evidence man. He didn’t want the generals coming back to tell him more troops were needed in Afghanistan. He doesn’t want to alter his failed approach to the Middle East. And he’s not about to mess with his “historic” achievement.

Obama supporters, and those concerned that there own reputations may be at risk, are rushing forth to defend ObamaCare. However, the facts aren’t on their side. Veronique de Rugy takes issue with former OMB chief Peter Orszag, who declares that it is imperative to keep ObamaCare in order to control health-care costs. But de Rugy says that this is nonsense. Using CBO’s own data, she explains that ObamaCare will leave “the cost curve of federal healthcare spending virtually unchanged over the next 25 years.” In fact, ObamaCare makes things a whole lot worse:

The CBO finds that the effect of the healthcare legislation has been to increase government spending by $3.8 trillion between 2010 and 2020. From 2020 to 2035, federal spending under the two projections [ObamaCare and no ObamaCare] are equal percentages of GDP. If Orszag is arguing that the real cost-containment provisions kick in around 2036, such futuristic projections are simply not worth taking seriously. …

What we can be certain of is that this legislation increases the amount of money taxpayers will be forced by law to pay for health insurance to the tune of $420 billion over the next 10 years. Claims about ObamaCare’s deficit-reduction effects depend on new taxes growing even faster than new spending. Read More

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Time for Conservatives to Get Serious About Fiscal Responsibility

10.19.2010 - 10:37 AM

Tomorrow Prime Minister David Cameron, who heads a coalition government, is expected to announce the results of a Comprehensive Spending Review of all government expenditures — a review that will result in unprecedented cuts. The goal is to slash the budget deficit from over 10 percent of GDP to almost zero in five years — and in the process to (a) reduce the “crowding out” effect of big government, (b) restore market confidence in government finances, and (c) encourage private business to invest and hire people, which will in turn fuel economic growth.

The cuts in public spending will probably exceed anything either Prime Minister Margaret Thatcher or President Reagan ever attempted.

In the past, David Cameron was chided by some American conservatives for being a faux conservative because of his stands on the environment, the National Health Service, and social issues like gay rights (see David Frum’s fine commentary here). But facing the preeminent domestic threat to the West these days — unsustainable budget deficits and the amassing debt – Cameron is wielding a budget axe. Unlike, say, David Stockman, it’s not something Cameron seemed terribly eager to do; he envisioned himself in a different role. But to Cameron’s credit, he is facing reality in a far more responsible manner than the president of the United States, who has made things considerably worse with his spending agenda (President Obama has added $3 trillion to the debt in his first two years in office).

In the end, the truest measure of how serious American conservatives are about governing will be how they address the entitlement crisis. Will they follow the path charted by David Cameron (with the caveat that the UK’s fiscal problems are somewhat different in scope and nature from ours)? Or will they wilt when it comes to reforming entitlement programs by raising the retirement age (for people under 55), tying benefits to prices rather than to wages, means-testing Social Security and Medicare, and turning Medicare into a defined contribution (instead of a defined benefit) program (see here).

Having served in three different administrations, I realize that dealing with entitlements is not an easy task. Republicans need to put forward plans that are gradual, responsible, and prudent. Impaling itself on entitlement reform is not a reasonable demand to make of a political party. Nevertheless, there needs to be a governing strategy that gets America from where we are (an unsustainable fiscal path) to where we need to be (reconfiguring entitlements).

That will need to be done incrementally rather than all at once. But what the Republican Party cannot do is to speak endlessly about the virtues of limited government and the need to cut spending in the abstract — but avoid the hard choices in the particulars. Sooner rather than later, the GOP is going to have to address head on this issue of entitlements (as Representative Paul Ryan has done). Failing to do so would damage its credibility, its cause (conservatism), and its claim that it is serious about fiscal responsibility.

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Surprise: The Tea Party Is Important!

10.15.2010 - 10:20 AM

From ridiculed and ignored to influential. The Tea Party has made it above-the-fold in the New York Times, which accords grudging respect to those it once decried as racists and extremists:

Enough Tea Party-supported candidates are running strongly in competitive and Republican-leaning Congressional races that the movement stands a good chance of establishing a sizeable caucus to push its agenda in the House and the Senate, according to a New York Times analysis.

With a little more than two weeks till Election Day, 33 Tea Party-backed candidates are in tossup races or running in House districts that are solidly or leaning Republican, and 8 stand a good or better chance of winning Senate seats.

While the numbers are relatively small, they could exert outsize influence, putting pressure on Republican leaders to carry out promises to significantly cut spending and taxes, to repeal health care legislation and financial regulations passed this year, and to phase out Social Security and Medicare in favor of personal savings accounts.

And the Tea Party candidates have performed “better than expected” — umm, better than the Gray Lady expected — the report tells us. Yes, there is Christine O’Donnell, but the Times has figured out that there are many more viable Tea Party–backed candidates (e.g., Ron Johnson and Ken Buck). And it must have slipped the reporter’s mind, but that Marco Rubio looks pretty good, too.

This is yet another instance — the surge in Iraq was one of the more egregious examples — in which the media ignored or derided a conservative effort and then discovered that, by gosh (who could have expected it?), it’s pretty darn successful! If the media weren’t so busy telling liberals what they wanted to hear and ignoring conservative politics, they’d be surprised less.

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Flotsam and Jetsam

10.10.2010 - 7:00 AM

Quicker than we imagined: “By 47 to 45 percent, Americans say Obama is a better president than George W. Bush. But that two point margin is down from a 23 point advantage one year ago. ‘Democrats may want to think twice about bringing up former President George W. Bush’s name while campaigning this year,” says CNN Polling Director Keating Holland.’”

Sooner than either imagined: “Embattled Democrats are increasingly turning to former President Bill Clinton to prop up their campaigns in the final weeks before November’s midterm elections. The former president is far and away the biggest draw for the party less than a month out, hitting races in states where Democrats would rather President Obama stay away.”

A White House departure didn’t come fast enough for some. Peter Feaver: “The only thing surprising about Jim Jones’s departure is he survived this long.” His buffoonery was his defining characteristic.

About time that someone started debunking the president’s accusations about “foreign money.” The Gray Lady: “[A] closer examination shows that there is little evidence that what the [Chamber of Commerce] does in collecting overseas dues is improper or even unusual, according to both liberal and conservative election-law lawyers and campaign finance documents. In fact, the controversy over the Chamber of Commerce financing may say more about the Washington spin cycle — where an Internet blog posting can be quickly picked up by like-minded groups and become political fodder for the president himself — than it does about the vagaries of campaign finance.” Actually, it says more about the president’s penchant for telling untruths.

Belatedly, we learn that Jewish-American leaders had serious concerns all along about Obama’s Middle East policy. How brave of them to go public only when Obama’s political standing is in decline.

Democrats finally run out of patience with Jerry Brown and demand that he apologize for a campaign associate who called Meg Whitman a “whore.” Yes, there goes the Golden State. Again.

Much too late, Obama gets around to publicly calling for the release of Chinese dissident and now Nobel Peace Prize winner Liu Xiaobo.

No rush — the Arab League stalls, hoping the Obami might up the bribes incentives for Bibi to extend the settlement moratorium. “Arab countries will give the US one month to find a compromise which can save peace talks between Israel and the Palestinians after negotiations stalled over the issue of Israeli building in West Bank settlements, AFP reported a diplomat at the Arab League meeting in Libya as saying on Friday. The unnamed diplomat said that a resolution to be approved later Friday by the Arab League Follow-up Committee on the peace process calls for the US administration to be given ‘a one month chance to seek the resumption of negotiations, including a halt to settlement [building].’”

Suddenly, David Broder discovers Rob Portman: “Now 54 and a fitness fanatic, Portman has achieved his status by being smart, disciplined and a team player. Business people know he does his homework, and Democrats find him approachable. Except for [Mitch] Daniels, there are few Republicans who have delved as deeply into fiscal and budgetary policy, trade and health care as has Portman, who notably expanded the Office of Management and Budget’s focus on Medicare and Medicaid, even when Bush showed little interest in the issue.”

An overnight sensation: Wisconsin GOP Senate candidate Ron Johnson. “In this year of political surprises, Mr. Johnson inhabits a niche all his own. He emerged from the tea party without being fully of it. … Mr. Johnson says he employs 120 people at a single plant that makes specialized plastics. ‘I’m not some big corporation. I run the type of business [that] is the backbone of our economy, the engine of job creation.’ America’s prosperity stems from its ‘freedoms, the free market,’ Mr. Johnson says. ‘I think people get that.’”

Eventually, we come full circle. Bush administration critic Jack Goldsmith argues we shouldn’t have military tribunals or civil trials. Just lock ‘em up. Sounds good to me.

It took long enough. Jeffrey Goldberg confirms that Matthew Yglesias is an ignoramus when it comes to Israel.

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Lots and Lots of People Will Lose Their Current Coverage

09.30.2010 - 12:00 PM

Obama promised that if you liked your health-care coverage, you could keep it under ObamaCare. But not really. Not remotely close, actually:

McDonald’s Corp. has warned federal regulators that it could drop its health insurance plan for nearly 30,000 hourly restaurant workers unless regulators waive a new requirement of the U.S. health overhaul.

The move is one of the clearest indications that new rules may disrupt workers’ health plans as the law ripples through the real world.

Trade groups representing restaurants and retailers say low-wage employers might halt their coverage if the government doesn’t loosen a requirement for “mini-med” plans, which offer limited benefits to some 1.4 million Americans.

It’s not simply the mini-med plans (which don’t meet the ObamaCare regulation “to spend at least 80% to 85% of its premium revenue on medical care” because of high turnover and administrative costs). ObamaCare is already wreaking havoc throughout the health-care system:

McDonald’s move is the latest indication of possible unintended consequences from the health overhaul. Dozens of companies have taken charges against earnings—totaling more than $1 billion—over a tax change in prescription-drug benefits for retirees.

More recently, insurers have proposed a round of double-digit premium increases and said new coverage mandates in the law are partly to blame. HHS has criticized the proposed increases as unwarranted.

We also learned this week:

Harvard Pilgrim Health Care has notified customers that it will drop its Medicare Advantage health insurance program at the end of the year, forcing 22,000 senior citizens in Massachusetts, New Hampshire, and Maine to seek alternative supplemental coverage.

The decision by Wellesley-based Harvard Pilgrim, the state’s second-largest health insurer, was prompted by a freeze in federal reimbursements and a new requirement that insurers offering the kind of product sold by Harvard Pilgrim — a Medicare Advantage private fee for service plan — form a contracted network of doctors who agree to participate for a negotiated amount of money. Under current rules, patients can seek care from any doctor.

The administration kept promising that the public would like what they found in ObamaCare. However, the more they see, the more they are likely to conclude they were scammed.

UPDATE: HHS Secretary Kathleen Sebelius says the Wall Street Journal’s story is false.  But her denial is suspect: “Sebelius suggested that McDonald’s may in fact get a waiver from HHS that would enable the fast-food giant to continue offering limited benefits plans to its employees. But neither Sebelius nor McDonald’s officials have ruled out the possibility that the company would drop such insurance coverage, which is what the Journal claimed.”

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Want Immediate Certainty and Comfort? Give Me $700 Billion

09.21.2010 - 10:27 AM

In response to Eric Cantor’s Wall Street Journal op-ed calling for current tax rates to be extended for all taxpayers “and most importantly for small businesses and investors,” the White House posted a response on its blog yesterday. Written by its deputy communications director and entitled “No Excuse for Holding Middle Class Tax Cuts Hostage,” the response argued Republicans are preventing Obama from giving “immediate certainty and comfort” to the middle class:

Under the Obama plan, every middle class family would receive the immediate certainty and comfort of knowing their [Bush] tax cuts were permanently extended. … And here’s what [the Republicans] are holding middle class tax relief hostage for: having our nation borrow $700 billion that we can’t afford to provide an average tax cut of $100,000 to millionaires and billionaires.

There is another way to phrase the issue: should $700 billion be transferred from the private economy to the government, or should the government be required to cut spending by $700 billion to allow those who earned it to invest in their businesses and the broader economy? To put it in less subtle terms: should $700 billion be transferred to the organization that runs the post office, has yet to produce a budget for the current year, was unable to forecast accurately the impact of the $787 billion it used for “stimulus,” is already spending too much, and threatens to borrow $700 billion “that we can’t afford” if the private economy won’t cough up the money?

The reference to “millionaires and billionaires” (and the much greater number of non-millionaires who would face significantly higher taxes) is a little like a spendthrift teenager arguing his generous allowance ought to be increased because Dad has the money and won’t miss it. The teenager’s argument is a bit beside the point.

The White House threat to borrow $700 billion more unless its allowance is increased comes on top of the 3.8 percent tax increase inserted into Obama’s health-care legislation earlier this year as a new “Medicare contribution” – one that, as noted here, (1) is not a “contribution,” (2) has nothing to do with Medicare, and (3) was given its misleading name to hide the fact that Obama is currently seeking his second substantial tax increase on investment income.

It is a little unclear who is holding whom hostage in this debate, but the “immediate certainty and comfort” the middle class and others desire may be not Obama’s Chicago-style bargain but rather an end to one-party government seeking more tax increases to support an “unsustainable” level of deficits its own spending has produced.

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The Tea Party’s Challenge

09.20.2010 - 3:43 PM

There is a lot of chatter these days about the effect of the Tea Party movement on American politics. In the short term, the answer is blindingly obvious: It’s a huge boost for Republicans. The energy and enthusiasm the Tea Party movement is generating will work for GOP candidates and against Democratic candidates in almost every race in the country. Democrats are on course to be administered an epic defeat, one that will exceed, perhaps by a sizeable margin, even the one they experienced in 1994.

What the longer-term effects of the Tea Party will be on the GOP and the country is harder to know. The Tea Party is, at this stage in its development, much more of a protest movement than a governing philosophy. There is plenty of talk about “constitutional conservatism” — an encouraging impulse that seeks to ground political efforts in the American tradition — but what that means in practice isn’t always clear. To the extent that we can discern what the fuel is behind the Tea Party movement, it has to do with bringing the deficit and debt under control and checking the size, role, and reach of the federal government.

That is, I think, all for the better. But the Tea Party’s passions need to be channeled in constructive ways, beyond simply electoral politics. It eventually needs to become a force in how we govern the nation. And in this respect, work still remains to be done.

Candidates will tell you that at town-hall meetings Tea Party activists aim their fire against the Department of Education, earmarks, bailouts, and congressional salaries. That’s fine as far as it goes; President Obama increased nondefense discretionary spending by 10 percent for the last half of fiscal year 2009 and another 12 percent for fiscal year 2010. That certainly can be trimmed back. But we all know that the solution to our fiscal crisis can only be found in reforming and cutting entitlements. And here the picture begins to blur a bit.

Take as an example Christine O’Donnell, who is now the toast of many Tea Party supporters and conservatives from coast to coast. Much of her support is based on understandable unhappiness with the man she defeated, Mike Castle. But what do we really know about O’Donnell’s governing philosophy? Well, one thing we do know is that she ran an ad late in the campaign against Castle claiming this: “Keeping ObamaCare and cuts in Medicare: Castle for it, O’Donnell against it.”

The first part of that equation is fine; it’s the second part — the one about cuts in Medicare — that troubles me.

Today an estimated 47.4 million people are enrolled in Medicare, up by 38 percent from 1990. And by 2030, the number is projected to be 80.4 million. And as Representative Paul Ryan points out in “A Roadmap for America ’s Future,” Medicare has an unfunded liability — the excess of projected spending in its programs over the amount of revenue currently estimated to be available for them — of $38 trillion over the next 75 years. In just the next 5 years, by 2014, Medicare’s unfunded liability is projected to grow to $52 trillion. And when Social Security and Medicare are taken together, the total unfunded liability in the next five years will grow to $57 trillion.

Yet when asked in a poll question, “Overall, do you think the benefits from government programs such as Social Security and Medicare are worth the costs of those programs for taxpayers, or are they not worth the costs?” 62 percent of Tea Party respondents answered “worth it” while only 33 percent answered “not worth it.” This won’t do.

Authentic political leadership means confronting the facts as they are, explaining to people the magnitude of the fiscal problems we face, and showing the wisdom and skill to build a political coalition that will begin the hard work of going after weak claims and not just weak clients, to use David Stockman’s formulation.

It won’t be easy. Cutting the deficit and the debt is undemanding and effortless in the abstract; it gets a good deal harder when you begin to talk about raising the retirement age, progressive indexing (meaning linking the initial Social Security benefits of high- and middle-income earners to prices rather than to wages, as is currently the case), and gradually and thoughtfully transitioning toward a means-tested system of benefits in place of the current Social Security and Medicare systems.

Yet this is what the times demand of our political class — and, frankly, it is what the times demand of the citizenry itself. The American people cannot will the end without willing the means to the end. The Tea Party can play a useful and constructive role in all this, I think; but that means it has to be serious about governing, not just spouting vague slogans embracing easy cuts, “constitutional conservatism,” and reciting the failures and evils of “big government.”

In that sense, my concern isn’t that the Tea Party is too conservative; it is that it’s not conservative enough.

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Dems in Fantasyland

09.19.2010 - 8:00 AM

In a Washington Post symposium on the Tea Party, Bob Shrum (who never figured out how to win a presidential race), Kathleen Kennedy Townsend (who lost a gubernatorial race in Maryland), and Donna Brazile (who vouched for Obamanomics) — what, Michael Dukasis wasn’t available to share his political genius? – are in agreement: the Tea Party is great news for Obama. Seriously. Well, are they?

When Shrum writes this sort of hooey, you wonder if he believes it or if he is desperately trying to pep up the disillusioned liberal base:

The Tea Party will prove to be the best thing that’s happened to Barack Obama and the Democrats since, well, Sarah Palin, the media-hyped 2008 vice presidential nominee who turned out to be a bursting bubble, not a lasting bounce, for the McCain campaign.

Raising the bogeywoman of the left, I suppose, suggests he’s in the base-boosting business.

Townsend is practically unintelligible:

So the Tea Party may help the president not only in this election but, most interestingly, with policy. By constantly raising the issue of the long-term deficit, it is forcing a discussion on how we pay for programs such as Social Security and Medicare, which take up a large part of the federal budget. During the Bush years, these questions went unanswered. A drug benefit was given without paying for it. In fact, taxes were cut, creating a $1.3 trillion hole.

Of course, Bush was an amateur on spending compared to Obama; but more to the point, how does focusing on spending help Obama?

Weighing in on the side of sanity, Ed Rogers explains:

The Democrats and some of their media elite allies seem to believe that the Tea Party’s rise has diminished Republican prospects in the midterm elections this fall. In fact, the Tea Party is a big problem for President Obama and his party this year and probably through 2012.

Think of the Tea Partyers as the tip of an iceberg. The visible part. … The much larger, submerged part is the roughly two-thirds of the electorate who think America is headed in the wrong direction, disapprove of Congress and believe the president is handling the economy poorly. The Democrats are about to hit the whole iceberg.

I wonder what Shrum, Brazile, and Townsend will have to say on election day. When the results come in, how will they explain that the Tea Party was really good news for Obama? They’ll no doubt move on to another explanation. Americans are crazy. Or Obama wasn’t liberal enough. It’s always something — except a repudiation of liberalism.

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The Role and Purpose of Government

09.16.2010 - 9:36 AM

On the website e21, Representative Paul Ryan has responded to a column by David Brooks, who in turn was commenting on an op-ed by Ryan and Arthur Brooks, president of the American Enterprise Institute. Charles Murray added his thoughts as well.

The subject they are addressing is the role and purpose of the state in our lives. I would add only a few thoughts to what these razor-sharp minds have written.

The first is this: more than at any point in our lifetime, the sheer cost and size of government matters. We face an entitlement crisis. The level of our deficit and debt are unsustainable. Demographics are working against us rather than in our favor. And the Obama presidency has made our fiscal problems more, not less, acute. Unless we begin to reverse this trend fairly significantly, America will change in deep and lasting ways. We cannot continue on our present course and remain a strong, vibrant society. There is an urgent need, then, to re-limit government simply as a matter of dollars and cents, quite apart from philosophy and the effects the nanny state has on human character and self-reliance.

That said, conservatives also need to engage in a thoroughgoing examination of the core purposes of programs and policies. And in considering how to reform government programs, we need to think in terms of what we want them to do rather than simply how large and costly they are.

Consider four successes by government in the past 20 years: welfare reform; crime reduction (including the transformation of New York City under Mayor Rudy Giuliani); the campaign against illegal drugs in the late 1980s and early 1990s led by William J. Bennett; and the surge in Iraq. In each of these instances, the key to success wasn’t limiting the size of government; in each case, after all, government spending went up, not down. What transformed failure into success was acting smarter, creating the right incentives and disincentives, attacking the problems in a comprehensive way, and thinking in terms of what works.

What we need, then, are policymakers who believe in accountability; who judge results based not on inputs (expenditures, number of caseload workers, police officers, or troops) but outputs (cutting the number of people on welfare, decreasing drug use, reducing crime rates, lowering the number of ethno-sectarian deaths, car bombings, suicide attacks, and terrorist safe havens); who are passionately empirical; and who understand that we need to craft programs so as to take into account human nature and human behavior.

When it comes to entitlement programs, our task is different from, say, an anti-crime strategy. On entitlements, our first priority needs to be cutting costs in order to avoid a fiscal calamity. That will require us to alter the way we think about the basic aims of these programs. And here, I think, is where we eventually need to go: gradually and thoughtfully transitioning toward a means-tested system of benefits in place of the current Social Security and Medicare systems.

All these matters need to be examined in more depth. My hope is that Messrs. Brooks, Ryan, Brooks, and Murray continue to deepen this discussion and, in the process, pull other thoughtful voices into it. They could hardly perform a more useful intellectual and civic role.

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ObamaCare Bending Up the Cost Curve

09.13.2010 - 10:13 AM

During his press conference on Friday, Jake Tapper, ABC’s excellent senior White House correspondent, asked President Obama about a new CMS (Centers for Medicare and Medicaid Services) report that shows that the health-care cost curve is actually bending up — not down, as during the health-care debate Obama had promised it would. In response, Obama said this:

With respect to health care, what I said during the debate is the same thing I’m saying now and it’s the same thing I will say three or four years from now. Bending the cost curve on health care is hard to do. We’ve got hundreds of thousands of providers and doctors and systems and insurers. And what we did was we took every idea out there about how to reduce or at least slow the costs of health care over time.

But I said at the time, it wasn’t going to happen tomorrow, it wasn’t going to happen next year. It took us decades to get into a position where our health care costs were going up 6, 7, 10 percent a year. And so our goal is to slowly bring down those costs. … I haven’t read the entire study. Maybe you have. But if you — if what — the reports are true, what they’re saying is, is that as a consequence of us getting 30 million additional people health care, at the margins that’s going to increase our costs, we knew that. We didn’t think that we were going to cover 30 million people for free, but that the long-term trend in terms of how much the average family is going to be paying for health insurance is going to be improved as a consequence of health care.

And so our goal on health care is, if we can get, instead of health care costs going up 6 percent a year, it’s going up at the level of inflation, maybe just slightly above inflation, we’ve made huge progress.

The president should read the report, which can be found here. It incorporates the effects of health-care reform and estimates annual spending growth to be 0.2 percentage points higher than its February 2010 estimate, increasing from 6.1 percent to 6.3 percent. According to the Wall Street Journal, “The report by federal number-crunchers casts fresh doubt on Democrats’ argument that the health-care law would curb the sharp increase in costs over the long term.”

In 2009, the report reads, national health-care spending, public and private, totaled $2.5 trillion and accounted for 17.3 percent of the economy. The report predicts that health-care spending will rise to $4.6 trillion and account for 19.6 percent of the economy in 2019. By contrast, in February — before the passage of ObamaCare — the same team of government experts, using the same economic and demographic assumptions, predicted that national health-care spending would reach $4.5 trillion, or 19.3 percent of the gross domestic product, in 2019. The report also anticipates a big increase in health-care spending in 2014, when major provisions of the new law, including a requirement for most Americans to have insurance, take effect. From 2013 to 2014, for example, overall health-care spending is expected to increase by 9.2 percent, which is significantly more than the 6.6 percent increase predicted before ObamaCare became law. (For more, see this story.)

Beyond that, the report assumes that the law’s sweeping reduction in Medicare payments to doctors — 30 percent over the next three years — will actually take place. As Grace-Marie Turner points out, “Congress will not let payment rates be reduced to these levels, so health spending will increase further.”

And former CBO director Douglas Holtz-Eakin has written a paper arguing that ObamaCare provides strong incentives for employers to drop employer-sponsored health insurance for as many as 35 million Americans, funneling far more workers into taxpayer-funded health insurance, thereby raising the gross taxpayer cost of the subsidies by roughly $1.4 trillion in the first 10 years.

A core promise of the president’s signature legislative achievement, then, has been exposed as false. And for Obama, in light of the CMS report, to be talking about the cost of health care going up at or just above the level of inflation, which is running below 2 percent this year, is utterly fanciful. Moreover, the American people can be excused if during the health-care debate they didn’t pick up Obama’s warning that “bending the cost curve on health care is hard to do” and that he knew ObamaCare would increase costs in the short run. Those warnings were omitted, for example, in the president’s September 10, 2009 health-care speech to Congress, when Obama claimed that his plan “will slow the growth of health-care costs for our families, our businesses, and our government.” Obama even pointed out that “if we are able to slow the growth of health-care costs by just one-tenth of one percent each year, it will actually reduce the deficit by $4 trillion over the long term.” To reiterate: the new CMS report predicts an annual increase by two-tenths of one percent each year over the status quo — even accepting the Obama administration’s own ludicrously optimistic assumptions. The reality will be a good deal worse than the CMS report anticipates.

This is all of a piece. Claim after claim the president has made — on the stimulus package, on unemployment, on the deficit and the debt, on the “recovery summer,” on ObamaCare, and on so much more — is being shattered by events. The expectations he set were extraordinarily high and his performance so far is inept. That is one reason why Obama and his party will suffer enormous electoral losses seven weeks from now.

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Obama Unplugged — and Unintelligible

09.12.2010 - 9:30 AM

Before Obama’s presser on Friday, Michael Gerson wandered down the memory lane, recalling the 2008 campaign, when Obama’s “message had something to do with unity, healing and national purpose.” No more, he explained: “Obama’s initiatives … are not only unpopular; they have made it impossible for him to maintain the pretense of being a unifying, healing, once-in-a-generation leader. It is the agenda that undermined the idiom. With that image stripped away, Americans found Obama to be a somber, thoughtful, touchy, professorial, conventionally liberal political figure.”

Actually, it’s worse than that. For starters, it is hard to be “thoughtful” when you are touchy and prone to regurgitating leftist talking points. In fact, Obama’s Friday presser was at times rather incoherent — he didn’t change Washington, it’s the GOP’s fault, the stimulus isn’t really a stimulus but it is stimulating, and so forth. He insisted that, all along, he had warned that health-care costs would bend up (What!? When had that spasm of truth telling occurred?), and lamented that he couldn’t close Gitmo because of politics (i.e., there was no public support for it and no one solved the “where do we put them” problem.) At this point, all but the die-hard Obama supporters must be chagrined to find that the only straight answer he can give is on the Ground Zero mosque. (He is fine with it.)

Earlier in the week, it was pretty much the same story. In Thursday’s interview, Obama acknowledged: “If the election is a referendum on are people satisfied about the economy as it currently is, then we’re not going to do well. Because I think everybody feels like this economy needs to do better than it’s been doing.” Yup. And, after all, he said he’d be judged on the economy. That’s what a referendum is, after all — an opportunity for voters to give thumbs up or down on your performance.

Now, he wasn’t exactly taking responsibility for the economic mess. This is Obama, after all. So he insisted, “Well, look. If you’re asking are there mistakes that we made during the course of the last 19 months, I’m sure I make a mistake once a day. If you’re asking have we made the decisions that are the right decisions to move this country forward after a very devastating recession, then the answer is absolutely.” We’re still heading in the right direction, in his book. Unfortunately, he wasn’t asked which mistakes he made.

Even liberals are fed up with the excuses. Bob Herbert writes, “The Democrats are in deep, deep trouble because they have not effectively addressed the overwhelming concern of working men and women: an economy that is too weak to provide the jobs they need to support themselves and their families.” And Arianna Huffington neatly sums up:

[H]e admitted to making unspecified “mistakes,” but insisted, “if you are asking have we made the decisions that are the right decisions to move this country forward after a very devastating recession, then the answer is absolutely.”

Can he really believe that, with unemployment at 9.6 percent, underemployment at 16.7 percent, millions of homes foreclosed, millions more heading to foreclosure, and the middle class under assault?

In any case, this appears to be the administration’s story, and they are sticking to it — come hell or a double-dip recession.

The president’s comments were a continuation of the tack taken by Robert Gibbs who, when asked if the stimulus bill had been too small, offered this jaw-dropper: “I think it makes sense to step back just for a second. … Nobody had, in January of 2009, a sufficient grasp of … what we were facing.”

In other words: who could have known? So much for changing the way Washington works. The Who Could Have Known mindset is at the very heart of the failure of our political system to address our mounting problems.

Even more telling than all that, however, was this nugget on extending the Bush tax cuts:

What I am saying is that if we are going to add to our deficit by $35 billion, $95 billion, $100 billion, $700 billion, if that’s the Republican agenda, then I’ve got a whole bunch of better ways to spend that money.

“That” money is our money. But it sounds really horrid to say “I’ve got a whole bunch of better ways to spend your money.” I’d be curious to know what better ways he has in mind. More billions on another flawed stimulus plan?

There is in his pre-election spin patrol a fundamental “cognitive dissonance,” as the Wall Street Journal editors put it. He feels compelled to toss a few limited tax breaks toward businesses but that hardly makes up for the incessant shin-kicking he delivers (“urging businesses to invest and lend more while attacking them for greed and sending jobs overseas”). The jabs are not merely rhetorical. In addition to the expiration of the Bush tax cuts, the administration has thrown at U.S. employers “a looming increase in capital gains and personal income tax rates, roughly half of which will come from noncorporate business profits; a minimum wage increase to $7.25 an hour from $6.55 in July 2009 when the jobless rate was 9%; the oil drilling moratorium, which has hit hundreds of small energy companies; the new health insurance mandate on employers with more than 50 employees; the new ObamaCare 1099 tax filing requirements; an increase in the death tax rate to 55% next year from zero today; a Medicare payroll tax increase to 3.8% from 2.9% starting in 2013; and compulsory unionism for government contractors and federal construction projects.”

To sum it all up, the voters are going to throw out his fellow Democrats if Americans follow Obama’s advice (hold the Democrats accountable for the economy). Despite control of both the White House and Congress, Obama whines that our problems are traceable to the Republican minority. He won’t concede that there is any connection between the massive burdens heaped on businesses and the paralysis on hiring by shell-shocked employers. And his underlying philosophy is that he knows best how to spend your money. No wonder Democrats don’t want to be seen campaigning with him.

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The Budget Fudge

09.01.2010 - 9:10 AM

In a portion of last night’s speech that rankled many conservatives, Obama pointed the finger at defense spending as the cause of our fiscal woes: “We have spent over a trillion dollars at war, often financed by borrowing from overseas. This, in turn, has short-changed investments in our own people, and contributed to record deficits. For too long, we have put off tough decisions on everything from our manufacturing base to our energy policy to education reform.” This is hooey.

The Washington Post explains:

Federal domestic spending increased a record 16 percent to $3.2 trillion in 2009, the Census Bureau reported Tuesday, largely because of a boost in aid to the unemployed and the huge economic stimulus package enacted to rescue the sinking economy.

The rise in spending was the largest since the Census Bureau began compiling the data in 1983. The Washington region was among the biggest beneficiaries of the government’s spending.

With congressional elections looming this fall, the spike in federal spending has emerged as one of the nation’s most contentious political issues.

Many Republicans accuse President Obama and his Democratic allies of being reckless spenders who are harming the nation’s long-term economic prospects by inflating the deficit.

It doesn’t appear that defense spending is the problem:

Overall, the largest chunk of federal spending – about 46 percent of the $3.2 trillion – went to Medicare, Medicaid and Social Security, entitlement programs that are projected to swell as the population ages.

Pay for federal employees accounted for nearly $300 billion of the spending and nearly half of that went to the Defense Department payroll.

In July, Gary Schmitt debunked the idea that defense spending is driving our deficits:

Right now, Defense’s share of federal outlays—including those for Iraq and Afghanistan—is 18 percent.  That’s the same level it was at during the Clinton years.  In contrast, mandatory spending eats up some 56 percent of federal spending, while discretionary non-defense spending is 19 percent.  Core entitlement spending (Social Security, Medicare, Medicaid) is now double that of defense. And while entitlement spending and debt service will continue to explode, the Pentagon’s share of federal spending will be shrinking to 15 percent within the next few years. While the Obama administration has already cut some $300 billion in defense programs, it has been spending nearly $800 billion to (supposedly) stimulate the economy.

This is yet another example of two Obama traits. First, he makes stuff up. Really, what he said last night is not remotely true no matter how you do the math. And second, he stretches the truth to sustain an ideological preference: he wants to spend more and more on domestic programs, so he’s anxious to trim as much from our defense budget as possible. And to do that, we can’t make open-ended commitments.

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Obama’s Credibility Has Run Out

08.26.2010 - 7:54 AM

Karl Rove’s got this one right:

Mr. Obama’s credibility is crumbling, and for good reason: He and his people are saying things people don’t believe. At the start of his summer of recovery road show, the president flatly asserted that last year’s massive stimulus package had “worked.” Vice President Joe Biden, not to be outdone, promised monthly job gains of up to 500,000 and insisted that the recovery’s pace “continues to increase, not decrease” as stimulus spending was “moving into its highest gear.” …

By overselling the stimulus before its passage in 2009 and exaggerating its benefits with layer upon layer of slippery half-truths in 2010, Mr. Obama has made voters angrier. This is not America’s summer of recovery; it is a summer of economic discontent that will ensure that Democrats take a pounding in the midterm elections.

At some point it had to happen: the collision of reality with Obamian rhetoric — that special brew of buck-passing, economic illiteracy (no, profit isn’t overhead), ad hominem attack, and out and out misrepresentation. As Rove reminds us: “On health care, for example, Mr. Obama continues saying that (a) health-care reform will reduce costs and the deficit, (b) no one who wants to keep existing coverage will lose it, and (c) the law’s cuts in Medicare won’t threaten any senior’s health care. These assertions are laughable.”

Making a clear distinction between campaigning and governing has absolutely baffled and eluded Obama. In a campaign, exaggeration and bumper sticker phrases are often sufficient. A snappy dig at an opponent’s wealth or allies in a debate is regarded as quick-wittedness, rather than as intellectual sloth and a poor substitute for substance. Blather (the oceans haven’t receded in 18 months, I think) is rewarded rather than derided. But as president, what you say actually matters — in wars (the enemy listens to deadlines) and in domestic matters (the markets listen to business-bashing). And what results you obtain in the real world (not the number of enormous bills you jam through on party-line votes) really matter.

You can see why Obama and his party are in a heap of trouble. The question remains whether they will be able after the election to pick themselves up and rescue what remains of his term.

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$4.4 Trillion

08.23.2010 - 8:53 AM

The Wall Street Journal editors remind us:

CBO’s mid-year review largely reinforces the bad news we already knew—to wit, that spending has exploded since Democrats took over Congress in 2007, first with the acquiescence of George W. Bush and then into hyperdrive after Mr. Obama entered the White House.

To appreciate the magnitude of this spending blowout, compare CBO’s budget “baseline” estimate in January 2008 with the baseline it released Thursday. The baseline predicts future spending based on the law at the time. As the nearby chart shows, in a mere 31 months Congress has added more than $4.4 trillion to the 10-year spending baseline. The 2008 and 2009 numbers are actual spending, the others are estimates. As recently as 2005, total federal spending was only $2.47 trillion.

Here’s a plan for the deficit commission: just return to the 2005 level of spending. Civilization as we know it would not end. The government would still deliver essential services and very much more.

True, Bush could have done more to curb spending. But really, there is no comparison between the administrations:

The annual average increase in domestic, nondefense discretionary spending—on the likes of education, food stamps, and things other than Medicaid, Medicare and Social Security—was 6.4% from 1999-2008. Yet in 2009, nondefense discretionary spending rose by 11.2%, and in 2010 it will grow by another 14.7%.

“We should be so lucky” should be the response the next time Obama threatens that the GOP will return us to the Bush era.

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No Isn’t Enough for Republicans

07.26.2010 - 5:14 PM

A story in the Washington Post about the GOP’s growing optimism that its no votes will be sufficient to reclaim control of Congress includes this quote by Representative Tom Cole, a deputy whip in the House:

We’re very comfortable where we’re at; we have very few members who feel endangered. We feel like we are reflecting a broader mood of dissatisfaction. Right now, the American people want us saying no.

The story also reports this:

There has been little public criticism within GOP ranks of the continued opposition. At the same time, some Republicans would like the no votes combined with more discussion of the party’s positive vision. Rep. Paul Ryan (R-Wisc.) said last week that Republicans were reluctant to adopt his comprehensive plan to bring down the federal deficit and reform Social Security and Medicare because “they are talking to their pollsters.”

Representative Cole is correct that the American people want Republicans to say no. It’s hard to come to any other conclusion when you analyze the polling data. But Representative Ryan is correct as well; Republicans need to combine their no votes — which are necessary and admirable — with a sufficiently detailed governing agenda. There are plenty of fine ideas out there — beginning with Ryan’s own plan, a Roadmap for America’s Future. That need not be the only one, by any means.

The danger Republicans face is that of developing a mindset that is defensive and de minimus; that of fearing that in offering up specific, concrete plans, they will open themselves up to criticisms and therefore win fewer House and Senate seats.

That is the perennial fear of politicians, and it needs to be resisted. For one thing, voters are looking for solutions rather than slogans. For another, the point of politics is not simply to gain power but also to govern responsibly once you attain it. Republicans need to have confidence in their ideas and, to the extent possible, win a mandate for them.

When Ronald Reagan ran for president in 1980, he was receiving a lot of counsel in favor of running a relatively content-free campaign. His supply-side agenda, it was said, would make him an enormous target for Jimmy Carter. The math didn’t add up. The public would never accept “voodoo economics.” Reagan wisely ignored that advice, won in a landslide, and — for the most part — governed based on the ideas he ran and won on. He is now considered among our greatest presidents. Reagan helped to transform his party and his nation. So did Margaret Thatcher in Great Britain. So, for that matter, did Abraham Lincoln.

These are the models Republican candidates should look to as they are told by pollsters and campaign advisers to say nothing substantive, to aim low, to play it safe. Republicans should be smart, aim high, and provide a clear alternative to Obamaism. It’s in their self-interest and in the nation’s best interests. Those are two pretty good reasons to do it.

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For Thee but Not for Me

07.14.2010 - 11:25 AM

The reason given by the White House for ignoring the Constitution and giving Dr. Donald Berwick a recess appointment to head Medicare and Medicaid — Republican obstructionism and delay — was transparently phony. Republicans, with only 41 senators, have no power to delay committee hearings, delay the committee vote, or delay the matter being taken up by the whole Senate.  Only then might Republicans be able to delay or obstruct by mounting a filibuster.

What the administration feared, of course, was that Republicans might use the committee hearing and the Senate debate to ask inconvenient questions about ObamaCare and to put that monumental boondoggle back on the front page only a couple of months ahead of the election.

But Byron York at the Washington Examiner reports that the Republicans would also have been asking some inconvenient questions about Dr. Berwick. As has become so characteristic of modern liberalism, Dr. Berwick is a for-thee-but-not-for-me kind of guy. He has gone on record advocating rationing of health care. (“The decision is not whether or not we will ration care — the decision is whether we will ration with our eyes open.”)

But there won’t be any standing in line for Dr. Berwick and his wife, nor will there be denial of treatments deemed too expensive by some bureaucrat. He and his wife will “not have to deal with the anxieties created by limited access to care and the extent of coverage. In a special benefit conferred on him by the board of directors of the Institute for Health Care Improvement, a nonprofit health care charitable organization he created and which he served as chief executive officer, Berwick and his wife will have health coverage ‘from retirement until death.’”

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Robert Gibbs at It Again

07.13.2010 - 9:47 AM

One way in which press secretary Robert Gibbs resembles his boss, the president, is that the weaker the case they have, the more petulant and smug they both become. We saw that behavior play out again yesterday, when Gibbs was asked about the recess appointment of Donald Berwick to head the Centers for Medicare and Medicaid Services, which oversees approximately one third of all health-care spending in the United States.

Dr. Berwick is controversial because he has spoken as a besotted lover of the British health-care system. “I am romantic about the National Health Service,” he said in 2008, referring to the British single-payer system. “I love it.” Dr. Berwick went on to call it “such a seductress” and “a global treasure.” On rationing care, Dr. Berwick said that, “The decision is not whether or not we will ration care — the decision is whether we will ration with our eyes open.” He has argued that one of “the primary functions” of health regulation is “to constrain decentralized, individual decision making” and “to weigh public welfare against the choices of private consumers.” And Dr. Berwick insists that, “any health-care funding plan that is just, equitable, civilized and humane must — must — redistribute wealth from the richer among us to the poorer and less fortunate.” (For a fuller examination of Dr. Berwick’s views, see this and this.)

Now, it may be that Dr. Berwick’s views are reasonable and defensible. It may be that his quotes have been taken out of context. It may even be that Dr. Berwick is the perfect person for this job. That is what hearings are meant to determine. Yet the hearings have been bypassed.

White House communications director Dan Pfeiffer blamed Republicans. “Republicans in Congress have made it clear in recent weeks that they were going to stall the nomination as long as they could, solely to score political points,” Pfeiffer said. “But with the agency facing new responsibilities to protect seniors’ care under the Affordable Care Act, there’s no time to waste with Washington game-playing.”

Like so much of what the Obama administration says, this charge is flat out false. It is not the GOP that is playing games but rather the White House. As ABC’s Jake Tapper reported last week:

Republicans were not delaying or stalling Berwick’s nomination. Indeed, they were eager for his hearing, hoping to assail Berwick’s past statements about health-care rationing and his praise for the British health care system. … speaking not for attribution, Democratic officials say that neither Senate Majority Leader Harry Reid, D-Nev., nor Sen. Max Baucus, D-Mont., the chair of the Senate Finance Committee, were eager for an ugly confirmation fight four months before the midterm elections.

Senator Chuck Grassley, the ranking Republican on the Senate Finance Committee, said that, “The nomination hasn’t been held up by Republicans in Congress and to say otherwise is misleading.” He said he requested that a hearing take place weeks ago, before this recess.

It’s obvious what’s going on here. The Obama administration is afraid to engage in another debate about ObamaCare, having been trounced in the past. The president’s team fears that Dr. Berwick’s comments are both too controversial and too revealing. So Obama decided to skip the nomination hearing. The administration, unable to defend its actions, offers up — in the person of Robert Gibbs — a testy and transparently silly explanation of its position. What Gibbs cannot answer is this: If Dr. Berwick is so qualified, why not have the hearing and, if Republicans in fact attempt to block his nomination, recess appoint him in August? Why not allow Dr. Berwick to explain, in a public setting, what his true views are?

Gibbs, unable to provide a reasonable response to these questions, reverts to behavior that seems to be a second nature to him: condescension, mockery, brittleness. And, of course, he must reach for the requisite straw man (in this instance, portraying his critics as involved in a conspiracy theory).

I imagine there have been more off-putting press secretaries than Mr. Gibbs. I just can’t think of who they might be.

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WEB EXCLUSIVE: A Short History of the Recess Appointment

07.08.2010 - 3:22 PM

President Obama’s recess appointment of Dr. Donald Berwick to be head of the Centers for Medicare & Medicaid Services escalates the abuse of the recess appointment power one step further.

The Constitution gives to the president the power to nominate and, “by and with the Advice and Consent of the Senate,” to appoint high government officials, such as ambassadors, judges of the Supreme Court, and department heads (Art. II, Sec. 2). This is a classic example of the checks and balances the Founding Fathers put into the Constitution to ensure that the power of each branch of government was limited by the powers of the other two branches.

To finish reading this COMMENTARY Web Exclusive, click here.

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Flotsam and Jetsam

07.08.2010 - 7:00 AM

Even Max Baucus is criticizing Obama’s latest recess appointment, Donald Berwick, who is to head the Centers for Medicare & Medicaid Services. Baucus said he was “‘troubled’ that Obama chose to install Berwich without a formal confirmation process. ‘Senate confirmation of presidential appointees is an essential process prescribed by the Constitution that serves as a check on executive power and protects Montanans and all Americans by ensuring that crucial questions are asked of the nominee — and answered,’ Baucus said in a statement.”

Even CNN can’t employ an editor (Octavia Nasr) who bemoans the death of Hezbollah leader Grand Ayatollah Mohammed Hussein Fadlallah. The New York Times dryly reports: “Ms. Nasr, a 20-year veteran of CNN, wrote on Twitter after the cleric died on Sunday, ‘Sad to hear of the passing of Sayyed Mohammed Hussein Fadlallah … One of Hezbollah’s giants I respect a lot.’ Ayatollah Fadlallah routinely denounced Israel and the United States, and supported suicide bombings against Israeli civilians. Ayatollah Fadlallah’s writings and preachings inspired the Dawa Party of Iraq and a generation of militants, including the founders of Hezbollah.”

Even Obama has figured out that direct negotiations are the only viable way to proceed with his “peace process.” The Palestinians are now miffed that their patron is starting to wise up. PLO representative Maen Rashid Areikat: “I hope [Obama's deadline] is not an attempt to pressure the Palestinians that if they don’t move to the direct talks, there will be a resumption of settlement construction in the West Bank.”

Even the “international community” will find it difficult to dispute the IDF’s evidence of Hezbollah in Lebanon. It won’t do anything about it, of course.

Even Democrats must realize that this is not the most transparent administration in history: “The website used to track stimulus spending does not meet the transparency requirements laid out by the administration last year, according to a report from the Government Accountability Office (GAO).”

Even Jewish cheerleaders for Obama have to be a little miffed that he — shocking, I know — isn’t going to Israel anytime soon: “President Barack Obama left the impression he had accepted an invitation to visit Israel, but don’t expect the trip any time soon. During Obama’s relationship-patching meetings at the White House on Tuesday with Israeli Prime Minister Benjamin Netanyahu, the Israeli leader publicly asked the president and first lady Michelle Obama to come. Netanyahu said, ‘It’s about time.’ Obama replied that he looked forward to it.”

Even the ACLU should be upset about the NASA flap. The administrator said of Obama, “He wanted me to find a way to reach out to the Muslim world and engage much more with dominantly Muslim nations to help them feel good about their historic contribution to science, math and engineering.” Charles Lane asked, “[S]ince when is it U.S. government policy to offer or refuse cooperation with various nations based on the religion their people practice? Last time I checked, the Constitution expressly forbid the establishment of religion. How can it be consistent with that mandate and the deeply held political and cultural values that it expresses for the U.S. government to ‘reach out’ to another government because the people it rules are mostly of a particular faith?” A good reason to abolish the ambassadorship to the Organization of the Islamic Conference.

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Obama Deserved This One

06.09.2010 - 8:23 AM

After sneering at Sarah Palin on everything from the death panels (i.e., Medicare rationing) to nuclear policy (Obama is enthralled with START and NPT, renounces nuclear retaliation against NPT signatories if they strike with chemical or biological weapons, and has done precious little to halt Iran and now Burma as they pursue nuclear weapons), Obama got his comeuppance from the former governor, who knows a thing or two about oil spills. She writes:

[A]s a former chief executive, I humbly offer this advice to the President: you must verify. That means you must meet with [BP CEO  Hayward. Demand answers. In the interview today, the President said: “I don’t sit around just talking to experts because this is a college seminar. We talk to these folks because they potentially have the best answers, so I know whose ass to kick.”

Please, sir, for the sake of the Gulf residents, reach out to experts who have experience holding oil companies accountable. I suggested a few weeks ago that you start with Alaska’s Department of Natural Resources, led by Commissioner Tom Irwin. Having worked with Tom and his DNR and AGIA team led by Marty Rutherford, I can vouch for their integrity and expertise in dealing with Big Oil and overseeing its developments. We’ve all lived and worked through the Exxon-Valdez spill. They can help you. Give them a call. Or, what the heck, give me a call.

Ouch. At times like this, you appreciate both her innate political smarts and the degree to which the media vastly overestimated Obama’s.

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