Monday, March 15, 2010

All the phony arguments and process for Obamacare

Now that President Obama has magisterially proclaimed that the "time for talk is over," he is proceeding to fill that supposed vacuum with more and more campaigning. He might have told John McCain that the campaign is over, but he royally reserves the right to campaign endlessly himself.

So what are the arguments besides the Democrats' fanciful claim that they can provide insurance for everyone and still money? Jonah Goldberg exposes how phony these arguments are.
The same week he was hawking competition, choice and less government, Obama backed a new Health Insurance Rate Authority that would do even more to cement big health insurance firms into their new role as government-run utilities.

This latest gambit is of a piece with the White House’s demonization of the health-insurance industry. I have no love for that industry myself, but let’s get some perspective. As of August, the health-insurance industry ranked 86th in terms of profit margins - behind anemic industries such as book publishing (38th) specialty eateries (71st) and home furnishing stores (84th), according to data compiled by the American Enterprise Institute.

Insurance firms account for less than 5 percent of U.S. health-care spending - less than hospitals (31 percent), doctors (21 percent) and medicine (10 percent). But because health-insurance firms are unpopular, Democrats are beating up on them, even though if Democrats are serious about containing costs, the cuts will have to come from those other slices of the pie.
As Philip Klein laid out last week, the Democrats have resorted to a real shell game in order to try and slip this through.
Shortly before midnight on Sunday, Democrats released a 2,309 page health care bill that will start the process of reconciliation -- but don't let that fool you, it's not the actual reconciliation bill with all the changes you've been reading about. Instead, as Rep. Paul Ryan, the ranking Republican member on the Budget Committee, explained to me last week, this is just the "shell" bill -- the vehicle that Democrats need to get moving on health care. Once the bill gets approved (likely Monday), Democrats will send this phantom bill over to the Rules Committee, where it will be stripped, and then they'll insert in all of the actual changes that they've negotiated.

Why all of the theatrics?

Well, under the reconciliation rules in last year's budget, any reconciliation bill would have to have been submitted to the Budget Committee by October 15, 2009. It just so happens that earlier versions of health care legislation cleared the Ways and Means and Education and Labor Committees last year. So Democrats just dusted that legislation off, and are using that as the vehicle to begin the reconciliation process. That's why, for instance, if you look through the 2,309 page bill that was released Sunday night, you'll find a public option, which leadership has indicated would not actually be in the final bill. (Interestingly, the student loan bill is also tacked on at the end.)

Just a "simple up or down vote," remember?
And don't buy all their claims that they are reducing the costs of health care. Those claims are laughable as Paul Ryan explained yesterday. And on top of that, it will cost jobs.
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.

This legislation includes a range of job-killing tax hikes and controls on all Americans -- to fund this new entitlement and to penalize employers and individuals who don't play by Washington's new rules. The CBO said last July that "requiring employers to offer health insurance, or pay a fee if they do not, is likely to reduce employment." The mix of mandates and higher costs will drive Americans into government exchanges, with an ever-enlarging number reliant upon taxpayer subsidies for their care. The architecture is designed to give the government greater control over what kind of insurance is available, how much health care is enough and which treatments are worth paying for.
The Democrats hope that people are so dumb that they won't realize that they're pushing through an expensive plan that piles one new entitlement on top of the other entitlements that we can't pay for. And that people won't mind all the gimmicks that the Democrats are using to squeeze this through.

The WSJ refutes once again the phony claims that the Democrats keep making.
• A new entitlement can "save" money. That was the main thrust of a recent Washington Post op-ed by White House aides Peter Orszag and Nancy-Ann DeParle. The plan "more than meets the president's commitments that health-insurance reform not add a dime to the deficit," they write.

It's true that the Congressional Budget Office estimates that the Senate version of ObamaCare would reduce the deficit by $118 billion over 10 years. But even that number was concocted by budget gimmicks, such as using 10 years of new taxes to fund six years of benefits, as Wisconsin Republican Paul Ryan showed at the White House health summit. Mr. Orszag says this doesn't matter because CBO says the bill will save some $1 trillion in the second decade too.

In fact, CBO is careful to stress that it doesn't really know "because the uncertainties involved are simply too great" over such a long time period. CBO also says that the new entitlement will grow by 8% a year, even as Medicare and Medicaid grow by similar magnitudes and overall federal spending is already at 25% of GDP. If this new entitlement actually "saves" money, it will be the first in history.
This new plan will cost more money and everyone knows this. Few people believe the claims that the administration is making. We realize that they are gaming the CBO estimates so as to get favorable reports even though there is no probability of saving that sort of money.
ObamaCare's real cost-control plan boils down to this: First subsidize coverage so much that costs explode, raise taxes as much as possible to pay for it, and when that isn't enough hand power to an unelected committee to limit treatment and control prices by government order. This is what Democrats are voting for.
If this goes through, and I don't underestimate the power of the Speaker of the House to get what she wants, it will be with us forever. What entitlement have we ever repealed? And people will get used to it. They'll complain, but no matter how Republicans claim that they will repeal it, they won't be able to. And the Democrats realize this and it might be enough to persuade those last wavering Democrats that this is worth it.