Saturday, March 27, 2010
[This is the last in a series. You can view the full series on one page here.]
The Congressional Budget Office reports that President Obama’s budgets will push the national debt to 90 percent of Gross National Product. Former CBO director Holtz-Eakin concludes that the health care legislation will raise the deficit by half a trillion more, not reduce deficits as the CBO reported based on Obama administration assumptions. The Treasury Department may lose the AAA rating for U.S. Bonds (here). Foreign creditors are unlikely to keep buying American debt (here).
Something’s got to give. And health care will hardly be exempt from the financial crisis and economic dislocation ahead. The Obama-Democratic health care plan is neither economically viable nor political sustainable in the years ahead.
So where do we go from here?
The Most Pleasant But Least Likely Scenario
The most pleasant, if least likely, scenario is
that the Patient Protection and Affordable Care Act of 2010 will afford
universal health care coverage, ensure quality and secure health care for all
Americans, and reduce the national debt – all at the same time, just as
promised by President Obama, Speaker Pelosi, and Majority Leader Reid. We can all join hands, sing “Kumbaya,”
and skip joyfully into the promised land of milk and honey.
My grim forecasts of burgeoning government, national insolvency, eroding individual freedom, and declining health care – the subjects of my posts all this week – will be shown up as the depressing interjections of a foolish pessmist. But, to quote an Eagles song from the 1970s, “I could be wrong. But I’m not.”
The Most Likely and Most Unsatisfactory Alternative Scenarios
If over the next few years, the costs of the new universal health care entitlements prove to be as high as I anticipate and the savings turn out to be as illusory as I believe, then it is unlikely that Congress will or can allow President Obama’s health care program to proceed to full operation as planned. At the very least, Congress likely will choose to trim back on the more ambitious elements of the Patient Protection and Affordable Care Act of 2010. As the debt piles ever higher and the economy fails to meet its full potential because of competitive from government borrowing and the drag of higher taxes, Congress will conclude that the country simply cannot afford the liberal Democratic dream carried through to a slender congressional majority this past week.
Indeed, if irresponsible spending (see here) leads us to brink of national insolvency, as some western European nations are experiencing and as we have seen at the state level in California, implementation of the program may be truly impossible. After the CBO predicted far higher deficits over the next decade than the White House had been saying, Obama’s own budget director acknowledged that the national debt burden on the economy “would not be sustainable.”
In this event, two alternative options may be presented, neither of them palatable. First, and sadly most likely, Congress will abandon the most expensive of the provisions, that which extends government-run health care to tens of millions of the uninsured. As we’ve seen before, when liberals overreach and put too much faith in government as a solution, whether it be in education, housing, urban planning, or now health care, the most vulnerable in our society suffer the most when the house of cards collapses.
The second of the most likely scenarios is that
we all suffer. As health care
costs continue to rise, and as the government finally is forced to slash
spending to avoid national bankruptcy, we’ll all be left holding the bag on
health care. As Kevin O’Brien writes:
Oh, yes, Obamacare will get a few more people covered. But what “coverage” will mean is merely a place in line to await treatment. That line will grow longer and longer as expenses increase, as care is rationed, as the medical profession shrinks, as the incentives to innovate dry up and blow away, and as a bureaucracy dedicated chiefly to its own growth and preservation shifts the purpose of medicine away from healing and toward the making and enforcement of rules.
If we arrive at 2013 and 2014 without the worst yet having materialized, which is possible, Congress could press forward with full implementation of the new entitlement programs notwithstanding the storm clouds on the horizon. If so, Congress will simply be postponing, and not preventing, a day of reckoning. A massive entitlement program like the Obama-Democratic health care plan, and one that relies on huge federal deficit-spending without strong cost controls, will eventually topple of its own weight. I hope that sensible political leaders in both parties will see the need to make adjustments and corrections before the entire health care system falls apart in fiscal chaos, which could then lead add to a wider economic collapse.
Reclaiming a Lost Opportunity
There is another alternative, in which both parties pull back from the brink, realize that only a moderate bipartisan health care plan can survive, and perform major surgery on the existing legislation.
As part of a campaign strategy, Republicans may get some mileage out of calling for the “Repeal of ObamaCare” (see here, here, and here). But, at least in its crudest form, that’s just not gonna happen. And a move back to a sensible reform isn’t helped by President Obama retort this week to Republicans campaigning against health reform, “my attitude is: Go for it.”
Even when the opposition party is on the upswing and the voters turn against the party in power, it usually takes a couple of election cycles for the majority party to be unseated. And even if Republicans do win a congressional majority this fall, which is probably expecting too much, President Obama would simply veto any legislation that repealed major elements of his fondest legislative initiative. While a Republican majority in Congress would have the power to withhold appropriations to implement key provisions of President Obama’s plan, they would not be able to abolish it altogether (nor should they).
Furthermore, as much as I too hope that we will have new presidential leadership after 2012, the odds remain that President Obama will be re-elected. Most Presidents are re-elected, given the power of the chief executive to remain in the public eye, to attract large crowds impressed by celebrity, and to disperse political goods. Even presidents who are flagging in approval, like President Obama today and President George W. Bush in 2004, are usually able to pull out a re-election. In an election race, popularity is comparative, and the electorate often is willing to tolerate the devil it knows rather than take a chance with the devil it doesn’t. And a resurgent Republican Party in Congress may actually work against whoever becomes the Republican presidential nominee, as the public may wish to maintain divided government by leaving President Obama in place.
Republican leaders already are realizing that a simple repeal is neither in the cards or likely to resound with voters as a strategy. The new GOP slogan is “repeal and replace.” I suggest instead that Republicans promise to “reform the reform.” If they should gain a significant number of seats or even a majority in the fall elections, Republicans in Congress could “reform” the “health care reform” legislation, reshaping and revising key provisions so that the promise of quality health care for all Americans might still be realized, despite the dangers ahead and Democratic blunders in the legislation just passed. But just as the Democrats have created the potential disaster by going it alone, the Republicans can’t go it alone either.So what would a reformed bipartisan reform look like? I hope that Republicans and Democrats who are both idealistic (that is, committed to the common good and to a health care system that promotes the dignity of all persons) and cynical (refusing to believe rosy economic scenarios or accept unbelievable promises of spending programs that save money) might still join together to bring about genuine health care reform that is sensible, that empowers people rather than government, that is economically viable, and that is politically sustainable.
And so we return to the beginning. Yes, as I said in my first post in this series, the real health care reform debate is only now beginning. As much as some might wish, the passage of unrealistic and unsustainable health care legislation has not brought us to a happy conclusion.
Herewith are just a few possibilities that may serve as additions to or substitutions for unworkable or questionable parts of the Obama-Democratic health care act. Some of these ideas may work and some may not, some involve rather radical structural and not merely incremental changes, some may not be popular but might pass muster as part of a broader compromise and because they would hold down health care costs, and all of which have had bipartisan support in the past:
= Replace the employer-provided health care insurance tax rules with a system of refundable tax credits for consumers to buy portable health insurance.
= Rather than insist on a full-comprehensive plan of coverage for everyone, permit consumers to choose low-cost, high-deductible health insurance plans (perhaps with catastrophic expense ceilings), by also retaining an emphasis on health savings accounts to pay those out-of-pocket expenses (which the Obama plan largely discards).
= Revise the insurance “exchanges” provision from a government-run system that creates a fixed, one-size-fits-all menu of insurance options into a private non-profit clearinghouse that allows consumers a more diverse set of insurance choices.
= Establish a sliding scale of co-payment requirements for Medicare and Medicaid – with exemptions for preventive, regular child-check-ups, and certain other types of care – so that users of government-paid health care coverage are also encouraged to make sensible use of health care in the same manner as other consumers who have their own insurance.
= Enact malpractice reforms (which the Democrats avoided at the behest of the trial lawyers special interest group) to address inflated health care costs and defensive use of medicine, as well as bring down malpractice insurance premiums to address the shortage of physicians and allow retired physicians to offer voluntary care to the disadvantaged.
Other bipartisan proposals are available, such as the Healthy Americans Act (see here) sponsored by Democratic Senators Ron Wyden (D-Ore.), Debbie Stabenow (D-Mich.), Ted Kaufman (D-Del.), Mary Landrieu (D-La), and Bill Nelson (D-Fla.); Republican Senators Robert Bennett (R-Utah), Judd Gregg (R-N.H.), Michael Crapo (R-Idaho), and Lindsey Graham (R-S.C.), and Independent Senator Joe Lieberman (I-Conn.).
This true bipartisan proposal includes individual mandates and government-run insurance exchanges, which would not thrill all Republicans but is much less government-weighted than the Obama plan. This proposal includes replacement of the tax-free treatment of employer-provided health care and meaningful tort reform that would not endear it to the hearts of all Democrats. But the elements of this proposal might yet be substituted for the unsustainable provisions in the Obama legislation.
In sum, our work is far from done and some the heaviest lifting may be ahead.