Problem: As a nation we’re in dangerous debt territory. If we don’t do something quickly and dramatically, we’re headed for some very rough and painful times.
But while it seems the American public senses this on the whole, polls seem to indicate that all the “free” stuff handed out by government is popular with a large percentage of the population. Or said another way, they understand that we have a debt problem, they understand the implications of that problem and they don’t mind spending cuts – just so the spending cuts don’t effect programs they like.
The problem is further compounded by an irresponsible administration which gives the debt problem lip service but submits budgets that exponentially increase the problem:
The president’s recent budget proposal would accelerate America’s descent into a debt crisis. It doubles debt held by the public by the end of his first term and triples it by 2021. It imposes $1.5 trillion in new taxes, with spending that never falls below 23% of the economy. His budget permanently enlarges the size of government. It offers no reforms to save government health and retirement programs, and no leadership.
Both of these facts make it hard for those who would actually like to address the problem of debt before it overwhelms us. That’s because they’ll really get no support politically from the administration, no call to arms and leadership, and the American people are proving to be fickle about the whole process sending very mixed signals.
Well the obvious solution is to find some means of cutting spending to at least the level of revenue and to begin working to pay the debt down in an earnest and timely manner. What isn’t a solution is business as usual but on steroids as proposed by the President. So today, Rep. Paul Ryan (R-WI) introduced the GOP plan to address the problem. Or at least part of the problem. That of out-of-control spending and addressing the debt. How it will play with the American people remains to be seen, but it is both an earnest and timely proposal. It also makes some pretty dramatic cuts which is where you can expect to see the pushback.
For starters, it cuts $6.2 trillion in spending from the president’s budget over the next 10 years, reduces the debt as a percentage of the economy, and puts the nation on a path to actually pay off our national debt. Our proposal brings federal spending to below 20% of gross domestic product (GDP), consistent with the postwar average, and reduces deficits by $4.4 trillion.
But there’s pain in them thar words. And it means things are going to have to be quite different in some areas than they are now. Government is going to have to be rolled back. That is unless we’re partial to a complete collapse of our economy and our currency, hyper inflation and all the good times those developments would bring.
So to specifics in Ryan’s proposal. Addressing welfare in general, he says:
This budget will build upon the historic welfare reforms of the late 1990s by converting the federal share of Medicaid spending into a block grant that lets states create a range of options and gives Medicaid patients access to better care. It proposes similar reforms to the food-stamp program, ending the flawed incentive structure that rewards states for adding to the rolls. Finally, this budget recognizes that the best welfare program is one that ends with a job—it consolidates dozens of duplicative job-training programs into more accessible, accountable career scholarships that will better serve people looking for work.
As we strengthen and improve welfare programs for those who need them, we eliminate welfare for those who don’t. Our budget targets corporate welfare, starting by ending the conservatorship of Fannie Mae and Freddie Mac that is costing taxpayers hundreds of billions of dollars. It gets rid of the permanent Wall Street bailout authority that Congress created last year. And it rolls back expensive handouts for uncompetitive sources of energy, calling instead for a free and open marketplace for energy development, innovation and exploration.
I am quite pleased to see the second paragraph. It is indeed time to eliminate “corporate welfare” and subsidies for favored industries. It also takes on what we would call traditional welfare. And make no mistake about it Medicaid and food stamps are welfare. As for the “perverse incentives” Ryan points too, here’s what they’ve yielded recently:
I’m sure some of that comes with the economic downturn, but it also indicates the effect of the incentives to sign people up for the welfare program.
We can’t afford the level of welfare we’re paying out now – and that included corporate welfare and subsidies. We are a compassionate people, but I end up shaking my head when I hear government officials claiming that people at “4 times the poverty level” need help? Really? So what’s the purpose of the poverty level as a measure and why are we now convinced we have to “help” people well above that level?
Then there are the twin third rails of politics, but areas where dramatic reforms are absolutely necessary to get us on the right fiscal track as a country. And those are Medicare and Social Security. The Ryan plan:
Health and retirement security: This budget’s reforms will protect health and retirement security. This starts with saving Medicare. The open-ended, blank-check nature of the Medicare subsidy threatens the solvency of this critical program and creates inexcusable levels of waste. This budget takes action where others have ducked. But because government should not force people to reorganize their lives, its reforms will not affect those in or near retirement in any way.
Starting in 2022, new Medicare beneficiaries will be enrolled in the same kind of health-care program that members of Congress enjoy. Future Medicare recipients will be able to choose a plan that works best for them from a list of guaranteed coverage options. This is not a voucher program but rather a premium-support model. A Medicare premium-support payment would be paid, by Medicare, to the plan chosen by the beneficiary, subsidizing its cost.
In addition, Medicare will provide increased assistance for lower- income beneficiaries and those with greater health risks. Reform that empowers individuals—with more help for the poor and the sick—will guarantee that Medicare can fulfill the promise of health security for America’s seniors.
I’ve already seen some on the left characterizing this as "privatizing" Medicare. And, of course, as we all know, that’s dangerous as government always does it better – look at the budgets for example. Look at the debt.
In fact, what Ryan is talking about is giving seniors a choice vs. automatically enrolling them in a government insurance program that averages about $60 billion a year in waste, fraud and abuse. There will be a subsidy – probably means tested. Is the the ideal libertarian answer? No. But as I’ve said before, freedom is choice and any legislation that expands that is at least a step in the right direction.
We must also reform Social Security to prevent severe cuts to future benefits. This budget forces policy makers to work together to enact common-sense reforms. The goal of this proposal is to save Social Security for current retirees and strengthen it for future generations by building upon ideas offered by the president’s bipartisan fiscal commission.
Perhaps raise the caps (I gave a certain percentage to my 401k regardless of how much I earned, so doing the same with Social Security doesn’t really bother me. And it will provide increased revenue for the fund. Again, ideal? No, but then I don’t consider either Medicare or Social Security to be “welfare” since most participants have paid into those systems for their entire working life. But there are changes which will have to be made. I don’t favor means testing if the cap is raised. But I do think that a hard look at the retirement age is necessary. My ideal outcome, obviously, would be getting government out of the retirement income business, but that’s not going to happen. So Social Security has to be made self-supporting and not a drain on the budget – as does Medicare.
Budget enforcement: This budget recognizes that it is not enough to change how much government spends. We must also change how government spends. It proposes budget-process reforms—including real, enforceable caps on spending—to make sure government spends and taxes only as much as it needs to fulfill its constitutionally prescribed roles.
If we don’t get some restrictions on government spending, nothing is going to change. Nothing. We’ve watched Congress talk the talk for decades, ala Nancy PAYGO Pelosi. But they ignore their own legislation and policy at will. As Ryan says, there have to be “real, enforceable caps on spending”. I interpret that as “you cannot and will not spend more than you take in”. We’ll see how the Congress interprets that.
Tax reform: This budget would focus on growth by reforming the nation’s outdated tax code, consolidating brackets, lowering tax rates, and assuming top individual and corporate rates of 25%. It maintains a revenue-neutral approach by clearing out a burdensome tangle of deductions and loopholes that distort economic activity and leave some corporations paying no income taxes at all.
Here is something that is going to be as hard to do as entitlement reform. Why? Because the tax system provides Congress with another way to wield its power. But the way it has wielded this power has done precisely what Rep. Ryan points too here – it has “distort[ed] economic activity.” Make the system simple, remove the loopholes, broaden the base (get some more “skin” in the game from those who now don’t pay taxes) and my guess is you’ll not only see an increase in revenue, but a far greater increase in economic activity.
Bottom line: We are in a “you can pay me now or you can pay me later” moment. And if we wait, we’re going to be paying a price we’re just not willing to pay, all because we chose to avoid the pain now. I’m sure the opponents of this proposal are going to call it “extreme” and something that will “hurt the children”. Trust me, if you want to see extreme, put it off until this house of cards collapses. And if you want to avoid “hurting the children”, man up and face the pain now to avoid it later when it really will “hurt the children”.
UPDATE: Chris Edwards at CATO gives his take on the Ryan budget. I’m pretty much agreed with everything Edwards says:
- Ryan doesn’t provide specific Social Security cuts, instead proposing a budget mechanism to force Congress to take action on the program. It is disappointing that his plan doesn’t include common sense reforms such raising the retirement age.
- Ryan finds modest Medicare savings in the short term, but the big savings occur beyond 10 years when his “premium support” reform is fully implemented. I would rather see Ryan’s Medicare reforms kick in sooner, which after all are designed to improve quality and efficiency in the health care system.
- Ryan adopts Obama’s proposed defense (security) savings, but larger cuts are called for. After all, defense spending has doubled over the last decade, even excluding the costs of wars in Iraq and Afghanistan.
- Ryan includes modest cuts to nonsecurity discretionary spending. Larger cuts are needed, including termination of entire agencies. See DownsizingGovernment.org.
- Ryan makes substantial cuts to other entitlements, such as farm subsidies. Bravo!
- Ryan would turn Medicaid and food stamps into block grants. That is an excellent direction for reform, and it would allow Congress to steadily reduce spending and ultimately devolve these programs to the states.
- Ryan would repeal the costly 2010 health care law. Bravo!
Here’s a chart Edwards includes in his post:
I’m a huge supporter of military spending in order to maintain our national security and technological edge, but I find it hard to believe that there aren’t many places where savings could be accrued in “Security”. And I’d also note under the broad “Security” umbrella fall many other programs that could be cut – like the entire TSA. But, in any event, it is an area that should also be looked at with an eye for cutting spending. It would get us to our goal of paying down the debt even sooner and it can be done without jeopardizing our security (cut costs not capability).
UPDATE II: Geoff over at Ace of Spades gives a little context to the Ryan proposal:
Now, where I come from, the “extremes” are on either side of a situation, right?
In this podcast, Bruce, Michael and Dale discuss the possibilities of Revolution, Secession, and Constitutional conventions.
The direct link to the podcast can be found here.
As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2009, they can be accessed through the RSS Archive Feed.
There’s a very interesting but probably little noted piece at Fox News by Dr. C.L. Gray, who is, interestingly enough, the president of Physicians For Reform. His general premise is that while reform is needed in the medical field, what Congress is chasing is not at all the answer. And he uses Medicare as the vehicle to make his point.
I’m sure you remember the story that came out not long ago about the Mayo Clinic deciding not to take anymore Medicare patients. If you’ve been staying abreast, that’s just a very well known clinic doing what a lot of lesser known clinics and doctors have been doing for quite some time. Gray claims that Mayo lost “840 million” caring for medicare patients.
He lays the physician trend away from Medicare to two overall reasons.
The first is simple—the math:
1) For the past decade Medicare consistently paid physicians 20% less than traditional insurance companies for identical service.
2) On January 1, 2010 Washington made hidden cuts to Medicare by altering its billing codes.
3) Medicare will cut physician reimbursement by another 21% on March 1. The CBO said this cut must take place if the Senate healthcare bill was to “reduced the deficit.”
4) Even more, Congress pledged to cut Medicare by yet another $500 billion. Again, the CBO said this additional cut must take place if the Senate healthcare bill was to “reduced the deficit.”
Many physicians were operating at a loss even before this series of massive cuts. In 2008, Mayo Clinic posted an $840 million loss in caring for Medicare patients. No businesses can survive when patient care expenses exceed revenue.
No business can survive operating at a loss, and that’s essentially what has been happening with Medicare prior to “reform”. With more cuts promised by “reform” it becomes a financial “no brainer”. We’re talking about a business decision. To remain a healthy business, and all practices are businesses, that which is causing a loss and overall negative drag on revenue has to be cut out to bring the revenue flow backto positive in order for the business to survive. That’s called a profit – something it would seem the government finds distasteful. But profit is what allows you to serve your clientele with adequate and appropriate staff, treatment and equipment. Mayo made that decision after it surveyed the impact of that particular group of patients on its bottom line and the impact of their removal. Obviously Mayo felt that continuing to serve that group, at the tremendous loss they were suffering, was effecting their overall ability to deliver the finest health care possible to the rest of their patients.
Expect to see more of that if “reform” is passed.
The second reason Gray gives is much less obvious than the first. But it provides just as powerful an incentive to ditch Medicare as does the first:
The second is more ominous—Washington’s increasingly abusive posture toward physicians.
President Obama reflected this attitude last summer. On national television, he stated as fact a surgeon is paid between $30,000 and $50,000 for amputating a patient’s foot.
In reality, a surgeon is paid between $740 and $1,140 to perform this unfortunate, but often life-saving procedure. This reimbursement must cover a pre-operative evaluation the day of surgery, the surgery, and follow-up for 90 days after surgery—not to mention malpractice insurance, salaries for clinic nurses, and clinic overhead. It is frightening to think our president is so wildly misinformed even as he stands on the cusp of overhauling American health care. But it gets worse.
Given massive federal deficits, Washington now faces increasing pressure to cut Medicare spending. One way to do this is to intimidate physicians into under-billing. To do this Washington intends to spend tax payer dollars to ramp up physician audits using Recovery Audit Contractors (RAC audits) to randomly investigate private physician’s Medicare billing.
Gray characterizes the RAC as unqualified bounty hunters and gives examples of his contention. The most egregious example is this:
For example, one patient the auditor alleged the group had “fraudulently” billed for was a man undergoing a chemical stress test. The allegation was the patient should have undergone a cheaper traditional treadmill stress test. The difficulty with this accusation was this man was a double amputee—he had no legs. This made a traditional treadmill test impossible. The auditors clearly were not trained health care professionals—they were bounty hunters. (It is worth noting the investigators are given legal immunity from a countersuit for conducting a “fraudulent investigation.”)
It is a good example because even the layman can appreciate why this particular case is so absurd. However, the doctors in question had to spend money to defend against this allegation of wrong doing. It brings up a critical point. One of the promises of “reform” is it will help remove the insurance company from between you and your physician. But as is obvious here, in a government plan such as Medicare, there is still someone between you and your physician who is no more qualified than some insurance drone.
The point, of course is that the drastically reduced Medicare payments to physicians coupled with increased meddling and second-guessing through RAC has driven doctors to a fish or cut bait point as it pertains to Medicare. They are forced into a business decision which requires them to give their practice a financial physical and cut out the portion which will cause the practice to die if not excised.
It is obviously a tough decision that I’d bet most doctors would prefer not to have to make, but as seen with the Mayo Clinic, they’re being driven to do so. This is the future of medical care if government runs it. Anyone who can’t see the rationing inherent in the “reforms” to Medicare is simply remaining willfully blind to the facts. Government must ration. And physicians must act in their own best self-interest. That means fewer physicians seeing more Medicare patients. The result is inevitable and as usual, the patients are those that will suffer.
While the rest of the nation ponders whether Kanye West is a “jackass” and President Obama was correct in calling him that, I’ve been thinking about why the Democrats and Obama are having such a tough time selling their health care proposals.
Obviously part of the push back by the people has been because of the recession. Common sense says you don’t exacerbate a bad financial situation by adding debt. Nothing anyone has claimed about the “health care savings” reform would bring has resonated with the public. That’s because people don’t believe or trust the rosy estimates that Democrats have used. And of course it hasn’t helped that the CBO has shot down just about every one of their claims as well.
In fact it looks a lot like 1993 all over again according to an ABC/Washington Post poll released today:
Sixteen percent of the respondents to the most recent poll say their health care would improve if the proposed changes are enacted, and 32 percent say their health care will be worse if that happens.
By comparison, the same poll in late September of 1993 found 19 percent saying their health care would improve and 31 percent saying it would get worse.
Even deploying Obama to use his vaunted oratorical skills to turn the tide hasn’t worked according to another poll:
A USA TODAY/Gallup Poll taken after the president’s dramatic address to a joint session of Congress last week shows Americans almost evenly divided over passing a health care bill and inclined to think it would make some of the system’s vexing problems worse, not better.
Six in 10 say Obama’s proposal, if enacted, would not achieve his goals of expanding coverage to nearly all Americans without raising taxes on the middle class or lowering the quality of health care. For the first time, a majority disapprove of the way he’s handling health care policy.
So what’s the problem? Why does public opinion seem so dead set against what Democrats feel is beneficial legislation for all?
Well, what Obama and the Democrats are running up against is the same problem Bill Clinton et. al experienced. People, for the most part, are quite satisfied with the insurance they have and don’t want to chance government messing that up. And they understand that the chance of government messing it up, given how government does most things, is very high.
Although polls have consistently shown that just over half of Americans think the health-care system is in need of reform, a substantial majority say they are satisfied with their own insurance and care. Any hope of change will require their support, according to experts and advocates across the ideological spectrum.
“They are critical,” said Drew E. Altman, president and chief executive of the Kaiser Family Foundation, a nonpartisan health research organization. “This debate will turn on people like this trying to answer the question ‘Will this benefit my family?’ “
Most are concluding it won’t benefit their family and, in fact, may end up being detrimental to them.
Democrats seem to be missing the point that while health care reform is popular, their version of health care reform isn’t. I guess health care reform somewhat resembles porn – the people will know it when they see it. But they’re not seeing it in the proposals the Democrats are offering right now – and that is why there’s this massive push back.
The majority of those opposed do not believe the claims that nothing will change pertaining to their health care. It simply doesn’t makes sense to them that the scope and goals of the change being discussed won’t effect their coverage.
One of President Obama’s biggest challenges this fall will be persuading seniors to accept his healthcare proposals. Many elderly voters are deeply worried about “Obama-care” because they fear that his plans will reduce their coverage and increase their costs. Seniors, in fact, are more opposed to Obama’s healthcare ideas than any other age group.
Of course the irony, as pointed out any number of times, is that most seniors are on a government program. Rarely pointed out is the fact that they have no choice in the matter. Consequently those who love to point this out and crow about how seniors “like” their government insurance never follow that up with the fact that seniors are forced into a system which may or may not have been their first choice.
But that aside, seniors don’t like change. And, they’re smart people who understand that they are the demographic that spends the most on health care. Given that understanding, when the goal of “cutting costs” is put forward as a primary goal of the reform being discussed, they know where those cuts are most likely to be made.
But they have developed a deep skepticism toward Obama’s agenda of expanding the reach and power of Washington. They basically agree with the conservative attack that he is a liberal zealot who wants to inject the government into every nook and cranny of American life—including everyday decisions about the choice of doctors and medical plans, pollsters say. Some seniors specifically fear that the healthcare overhaul will take money away from their cherished Medicare program, and they don’t want to take that risk.
Only 35 percent of people 65 and older approve of Obama’s handling of healthcare, according to a Washington Post/ABC News poll in August …
Their defense of a government medical insurance program for themselves and their skepticism of further government intrusion into our lives isn’t quite as contradictory (or ironic) once you understand the whys and wherefores of the mandatory nature of Medicare. Seniors aren’t interested in more government or the chance that the only insurance available to them will be cut to meet a savings goal.
Those are how the planets are lining up in the health care reform universe. Obama and the Dems aren’t succeeding in convincing the skeptics with their arguments. In fact, as it drags on, more skeptics are being born than believers.
The answer, devoid of politics, seems clear. Stop the process right now, reset the debate and actually have one. Find out what “reform” means to the public and act on that consensus. It may end up merely insuring those without insurance. It may be that and tort reform plus opening up the intra-state private insurance markets and eliminating mandates. Or more. Or less. But what should be clear to both the Democrats and Obama at this point is it is not what they’re offering.
The danger to them (electorally) and to us (reduction of liberty) is they’ll disregard that in the name of politics and ram through something we’ll all regret but find difficult get rid of once passed.
That’s what I fear and it appears that’s what some on the left are prepared to do. They have waited too long and have too much invested politically to back off now.
As I think about last night’s speech by President Obama, two words kept coming to mind: partisan and combative. The speech was highly partisan, even though he gave lip-service to bi-partisanship. And I thought he was needlessly combative – calling people liars and describing those who disagree in less than flattering terms.
It was not his finest hour. Nor was it a particularly good speech. It seemed to go on forever and that is usually a sign that it isn’t holding the attention of the audience.
As I figured, since I was at a loss as to what else he could do, he attempted to repackage the same old proposals that the country has been rejecting and called it “new and improved”. He promised details, but there were scant few. And that was particularly true in his attempt to describe how he’d pay for the mess.
Let’s look at some quotes:
There are now more than thirty million American citizens who cannot get coverage.
I’m wondering what happened to the 17 million “Americans” that Democrats and Obama have consistently claimed were uninsured. Where did the 47 million uninsured go? Is this an acknowledgment that they’ve been purposely pumping the numbers up for quite some time?
Well the time for bickering is over. The time for games has passed. Now is the season for action.
This is what I mean about needlessly combative. Those who attended townhalls and other gatherings to voice their opinions and protest what the Democrats were trying to pass do not consider what they did to be “bickering” nor do they feel they were engaged in “games”. Those gaming this were the Democrats who tried their hardest to pass this monstrosity without the benefit of debate, without anyone being able to read and digest it and without Republican participation.
That is gaming the system. There’s no rush to do this and pretending there is also falls under “gaming”.
My health care proposal has also been attacked by some who oppose reform as a “government takeover” of the entire health care system. As proof, critics point to a provision in our plan that allows the uninsured and small businesses to choose a publicly-sponsored insurance option, administered by the government just like Medicaid or Medicare.
So let me set the record straight. My guiding principle is, and always has been, that consumers do better when there is choice and competition.
But it has never been Obama’s guiding principle – not when he insists that “choice” and “competition” can only be achieved by introducing a government run entity into the mix while declining to consider other options.
Remove the regulation that prohibits health care insurance providers from selling across state lines, remove the mandates that require the insured to buy coverage they don’t want or need and facilitate the removal of health care insurance from under employers into the open market. All of those moves – which would require little in the way of tax dollars and government intrusion – would actually deliver choice and competition while driving insurance costs down.
Now, I have no interest in putting insurance companies out of business. They provide a legitimate service, and employ a lot of our friends and neighbors. I just want to hold them accountable. The insurance reforms that I’ve already mentioned would do just that. But an additional step we can take to keep insurance companies honest is by making a not-for-profit public option available in the insurance exchange. Let me be clear – it would only be an option for those who don’t have insurance. No one would be forced to choose it, and it would not impact those of you who already have insurance. In fact, based on Congressional Budget Office estimates, we believe that less than 5% of Americans would sign up.
And most experts say that 5% would not be enough to keep such a system fiscally sound and it would eventually have to turn to the government for subsidy. Want a real insurance exchange? See my comments above.
That’s why under my plan, individuals will be required to carry basic health insurance – just as most states require you to carry auto insurance. Likewise, businesses will be required to either offer their workers health care, or chip in to help cover the cost of their workers. There will be a hardship waiver for those individuals who still cannot afford coverage, and 95% of all small businesses, because of their size and narrow profit margin, would be exempt from these requirements. But we cannot have large businesses and individuals who can afford coverage game the system by avoiding responsibility to themselves or their employees. Improving our health care system only works if everybody does their part.
Mandatory health insurance – something he said he didn’t believe in during his campaign. So a young person who would prefer to pay for his health care as needed now no longer has a choice.
Key word – choice. Remember Obama’s “guiding principle”. Well he violates it right there. You no longer have a choice. And remember, in the bill now on the House floor, this will involve the IRS fining you if you fail to comply.
Companies are left with no choice as well.
Some of people’s concerns have grown out of bogus claims spread by those whose only agenda is to kill reform at any cost. The best example is the claim, made not just by radio and cable talk show hosts, but prominent politicians, that we plan to set up panels of bureaucrats with the power to kill off senior citizens. Such a charge would be laughable if it weren’t so cynical and irresponsible. It is a lie, plain and simple.
Certainly there are aren’t any literal panels called “death panels” in the pending legislation, but within the structure of the bill (HR 3200) there are certainly plenty of panels which will be determining what constitutes “best care”. The obvious logical argument then says, if they are there to determine what constitutes “best care” and are using the reimbursement mechanism to encourage their recommendations be followed and the refusal to reimburse if they aren’t, then it isn’t at all incorrect to logically conclude that “best care” when it comes to the elderly may conflict with the desired care the family and doctor want to render the patient.
That argument gets to Obama’s claim that he would prevent any bureaucrat, government or insurance, from getting in between you and your doctor.
So is what those are saying about “death-panels” “a lie, plain and simple”? Or is the lie to be found in the entrails of HR 3200 and in the glib assurances of Obama?
As an aside – is a president calling for “civility” really being civil when he calls those who disagree with him liars in a speech before a joint session of Congress?
There are also those who claim that our reform effort will insure illegal immigrants. This, too, is false – the reforms I’m proposing would not apply to those who are here illegally.
See my post on Joe Wilson. He yelled “you lie” for a reason.
To my progressive friends, I would remind you that for decades, the driving idea behind reform has been to end insurance company abuses and make coverage affordable for those without it. The public option is only a means to that end – and we should remain open to other ideas that accomplish our ultimate goal. And to my Republican friends, I say that rather than making wild claims about a government takeover of health care, we should work together to address any legitimate concerns you may have.
Once again the combative and dismissive of the right. This was not a speech that really welcomed Republicans into the process. And, I found it amusing when he tried to imply the Republicans weren’t a part of the process because they’d refused to participate, Republican members of Congress waved the three bills they’ve submitted in the House for all to see.
First, I will not sign a plan that adds one dime to our deficits – either now or in the future. Period. And to prove that I’m serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don’t materialize. Part of the reason I faced a trillion dollar deficit when I walked in the door of the White House is because too many initiatives over the last decade were not paid for – from the Iraq War to tax breaks for the wealthy. I will not make that same mistake with health care.
Second, we’ve estimated that most of this plan can be paid for by finding savings within the existing health care system – a system that is currently full of waste and abuse. Right now, too much of the hard-earned savings and tax dollars we spend on health care doesn’t make us healthier. That’s not my judgment – it’s the judgment of medical professionals across this country. And this is also true when it comes to Medicare and Medicaid.
The stated cost is $900 billion. That’s before the CBO looks at it. But of course the CBO can’t look at it until it is written legislation. But the CBO has already dismissed claims that saving of the amount Obama is claiming can be achieved by “finding savings” in “waste and abuse”.
And isn’t it telling that Obama admits that the system he now runs – Medicare – is “currently full of waste and abuse”. If eliminating fraud and abuse is so easy, one would assume a) there’d be none now or b) he could direct waste and abuse be ended now and those savings accrued immediately.
This is a hand-wave at fiscal responsibility. It is a glib nothing which he can stretch into a claim the cost of his proposal is “covered”.
Also remember that the front end of all these plans are loaded with collections, but no health care reform. Reform doesn’t kick in until 2013 – after Obama hopes to be safely reelected. But in the intervening years, we’ll begin to pay for it. Consequently we’ll have 10 years of money and only 7 or 8 years of reformed health care to pay for in that time frame. That means costs will explode after the 10th year and add to the deficit. Point? His proposal will add heavily to the deficit but not until he’s well out of office.
Knowing seniors were very wary of his plans, and he was losing their support, he attempted to win them back:
In fact, I want to speak directly to America’s seniors for a moment, because Medicare is another issue that’s been subjected to demagoguery and distortion during the course of this debate.
More than four decades ago, this nation stood up for the principle that after a lifetime of hard work, our seniors should not be left to struggle with a pile of medical bills in their later years. That is how Medicare was born. And it remains a sacred trust that must be passed down from one generation to the next. That is why not a dollar of the Medicare trust fund will be used to pay for this plan.
And in his next breath he says:
The only thing this plan would eliminate is the hundreds of billions of dollars in waste and fraud, as well as unwarranted subsidies in Medicare that go to insurance companies – subsidies that do everything to pad their profits and nothing to improve your care. And we will also create an independent commission of doctors and medical experts charged with identifying more waste in the years ahead.
These steps will ensure that you – America’s seniors – get the benefits you’ve been promised. They will ensure that Medicare is there for future generations. And we can use some of the savings to fill the gap in coverage that forces too many seniors to pay thousands of dollars a year out of their own pocket for prescription drugs. That’s what this plan will do for you.
Well, first, Medicare part D is the Medicare prescription drug plan, so I have no idea who all these seniors are paying “thousands of dollars a year” for drugs.
As I recall, what Obama is primarily targeting, though he is very careful not to actually mention it, is doing away with Medicare Advantage.
If you’re wondering what Medicare Advantage plans are, you can read about them here. One of the things Advantage plans pay for is prescription drugs.
And, as the website points out, “In addition, you might have to pay a monthly premium to your Medicare Advantage Plan for the extra benefits that they offer.”
I guess the Advantage plans must be considered one of those “gold-plated” plans.
Also note the promise of yet another bureaucratic panel – so, could continuing care on grandma at some point in time be considered “waste” and a different form of “care” be encouraged? Is it possible that could conflict with what you and your doctor prefer?
Again, nebulous language that can be interpreted and logically extended to mean precisely what Obama denies is in his proposal.
Reducing the waste and inefficiency in Medicare and Medicaid will pay for most of this plan.
This is the oldest claim in politics and the most bald-faced of its lies.
Obama mentioned demonstration projects for tort reform (and I am glad to see tort reform at least on the edge of the table). I’ve got an idea for a real demonstration project – if it is so easy to reduce the “waste and inefficiency” in Medicare and Medicaid, you have 3 years in which to do it. And once you’ve been successful and that success is unequivocally documented, then come back to us and we’ll talk about further reform.
Overall, as mentioned, not his finest speech. In fact, probably one of his poorer speechs. There was a measure of arrogance that was unattractive. There was a feeling that he wasn’t trying to convince but instead dictate. Nothing I heard last night was new. Nothing I heard last night was particularly compelling in terms of making a convincing argument for doing what he contends we must do.
Instead I heard frustration voiced in surly combativeness. That’s not the way to convince your opposition to see things your way. Leadership was again missing in a speech and moment that practically begged for it.
In this podcast, Bruce, Michael, and Dale discuss the furor over the Health Care bill.
The direct link to the podcast can be found here.
The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.
As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2007, they can be accessed through the RSS Archive Feed.