As one early morning report put it, the Senate was marching to passage on Christmas Eve of its version of health overhaul. What does this Democrats-only bill do? What are the consequences?
As it stands today, the health overhaul bill is a hoax. We all may know some part of the litany, but it is worth keeping in mind just how many forms this hoax takes.
The administration promised overhaul would come with not a penny of new taxes for Americans earning under $250,000 a year, later lowering that to $200,000 for individuals.
Estimates now hold that 25 percent of Americans earning under $200,000 will see their taxes go up.
The administration has said repeatedly that if you like your current plan the health overhaul will let you keep it. But the bill includes numerous definitions of care that will act as Federal mandates layered on top of the state mandates that have done so much to drive up health insurance costs.
Insurance plans that dont comply will have to change or close down.
Those that change will be the New Coke of health care. Same label. Different formula. Different taste. Current plans in name only.
The administration insists that the bill will lower the deficit over the next decade. Thats because tax increases will kick in early, benefits much later.
But after the governments planning horizon has expired, the bill will take spending as a proportion of national income permanently beyond the levels reached only in a single year in our history to date the peak year of spending in World War Two.
This will mean not just higher deficits but a fundamental altering of the American economy, with the U.S. embracing the economics of Europe.
Yet among the bills assumptions is that Congress will cut Medicare reimbursement of doctors. Already cuts and slow payments have led to doctors opting out of Medicare in rising numbers.
Is Congress really prepared to impose and stick by cost containment that hollows out the program? If not, even within this decade the Senates deficit projections will prove a hoax.
And with Nebraska now receiving Medicaid cost relief apparently in perpetuity and Louisiana getting something similar, how long will it be before every senator will demand federal absorption of these state budget busters?
And what will that do to the federal deficit? History points where we are going.
As Sally Pipes (one of the nations most astute economists analyzing the health overhaul and president of Pacific Research Institute, which I chair) has noted, in the mid-60s when Medicare was passed it was projected to cost $12 billion in 1990. Well in fact it cost $107 billion. Last year it cost $427 billion; its estimated in 2017 to cost $884 billion.
Today Medicare carries a $73.4 trillion unfunded liability a national debt six times as large as our official nation debt.
If Senate Democrats do not know what this means, they should talk to the Peoples Bank of China. ShanghaiDaily.com reports that on Friday the banks deputy governor told an academic audience that [t]he United States cannot force foreign governments to increase their holdings of Treasuries. Double the holdings? It is definitely impossible.
Senate Democrats clearly do not understand or perhaps even care about nations finances. They are under tremendous, even unprecedented, pressure from the White House and special interests like the thuggish Service Employees International Union.
The only numbers left to move them come from the polls.
Here is where the issue stands today, then. If Democratic senators up for reelection see their numbers tank, one or two may say no.
Which senators? The most likely are those from centrist states:
- Indianas Evan Bayh
- North Dakotas Byron Dorgan, and
- Arkansas Blanche Lincoln
But unless polls make overwhelmingly clear that voters understand the hoax, abhor it, and will remember it on election day eleven months hence, the march of the Senate Democrats will continue and health overhaul will in all likelihood pass Congress in January or early February.
Wooden soldiers on parade.