As President Obama’s health care reform founders, he and Congressional Democrats are attempting to shift blame to the ‘do-nothing Republicans.’
Democrats need to be reminded that in truth they have no one to blame but themselves for the collapse of their health care agenda.
President-elect Obama promoted a “grand bargain” that would ask all Americans to compromise in the interest of tax reform, health care reform, and entitlement reform.
Everyone’s going to have to give. Everyone’s going to have to have some skin in the game.
Americans were likely willing to give quite a bit for expanded coverage, greater portability, lower costs, and increased transparency. But for all the Progressive talk of ‘shared sacrifice,’ Obamacare promises to secure the interests of the politically connected – by industrial heft or ideological affinity – while taxpaying suburbanites (including many Obama voters) get caught in the crossfire.
Stakeholder industries, threatened with becoming pay-fors, have cut their own bargains.
The pharmaceutical industry has its deal, kicking in $80 billion (a steal compared to the $130 billion Congress hoped to get) to fill the “doughnut hole” in the hope that the 50% branded-drug discount will keep more seniors from switching to cheaper generics.
The American Medical Association has its deal, apparently accepting the public plan it previously rejected and an $18,900 loss per-physician, in return for repeal of the dreaded Sustainable Growth Rate Formula.
Health insurers will swallow additional government regulations in return for the promise of insuring those forced by the individual mandate to purchase coverage.
Even Wal-Mart, the bogey of the unions for its reluctance to provide rich health benefits to its employees, now supports Obamacare, trusting that the legislation will help it to undercut the competition.
And those are just the stakeholders supporting Obamacare out of economic self-interest.
Next up are the standard-issue liberal groups that need to get theirs.
The abortion lobby will benefit through requirements that private insurers and any government plan provide for elective abortions.
Trial lawyers will be protected from medical malpractice reform.
And through pork in the name of wellness, the politicians responsible for Obamacare are attempting to shore up their own reelection.
The business community and liberal interest groups get quite a bit out of this deal. But what about those who are supposedly the beneficiaries of Obamacare? As it turns out, these ordinary middle class citizens will be doing most of the giving.
Channeling President Kennedy, Obamacare asks them to pay all the price and bear every burden.
Elderly citizens face rationed care. In the event of unfunded Medicaid liabilities state tax bills will increase. Republican Finance Committee staff contends that the 5.4% “surtax” will be paid for in large measure by small businesses, the same small businesses that will be hit by an 8% tax if they cannot rewrite the laws of economics and provide health care to their employees without lowering wages (see p. 147, line 14 of the Tri-Committee bill). For the millions ineligible for Medicaid or insurance subsidies, non-compliance with the individual mandate will lead to a tax penalty.
And in Obamacare’s coup de grace, 83 million individuals will lose their private health coverage.
Could this toxic formula have been avoided? Could the middle class have been asked to bear its burden without the accelerated inflation in health care costs and loss of choice associated with Obamacare?
The answer is yes. The President could have demanded that health care benefits be treated as ordinary income. A majority on the Senate Finance Committee would likely support some taxation of benefits as a means of financing reform, while bending the growth curve. Sure, had Obama demanded inclusion of this bipartisan policy, he might have faced some uncomfortable questions about his campaign’s mischaracterization of John McCain’s “Health Insurance Tax.” But some minor embarrassment is not what holds the President back from promoting changes to the tax treatment of health care. The real challenge for Obama is standing up to the unions (and their liberal patrons in the House and Senate), who are among the chief beneficiaries of the inflationary exclusion of employer-provided health care from income.
As he earlier demonstrated with the auto bailouts, crossing the unions – asking them to share in the sacrifices necessary for health care reform – is apparently a bridge too far for the President.
If Obama’s hopes for a “Grand Bargain” collapse less than 9 months into his presidency, he and Congressional Democrats will not be able to pin blame on lack of industry or interest-group support. Rather, it is their own lack of will – their failure to demand real sacrifice from political allies like the unions – that will be the true source of Obamacare’s undoing.
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