Tag Archives: Bill Clinton

Despite Trump Intervention, House GOP Still Not Repealing Obamacare

President Trump bragged that he won over many new converts to House Republicans’ “repeal-and-replace” legislation following a Friday meeting with Members of Congress at the White House. After the meeting, House leaders scheduled a vote for later this week on the measure, and introduced provisions implementing the agreement in a managers amendment package late last night.

So what tweaks did Trump promise to Congress members on Friday—and will they improve or detract from the legislation itself?

What Changes Were Announced After The Meeting?

The agreement in principle with the House Members includes several components:

  1. Abortion restrictions for Health Savings Accounts (HSAs): RSC Chairman Mark Walker (R-NC) and other pro-life Members asked for further restrictions on abortion funding. As a result, the agreement eliminates language allowing unspent tax credit dollars to get transferred into Health Savings Accounts, for fear those taxpayer dollars moved into HSAs could be used to cover abortions. However, as I noted recently, many of the other restrictions on taxpayer funding of abortion could well get stripped in the Senate, consistent with past precedent indicating that pro-life riders are incidental in their budgetary impact, and thus subject to the Senate’s “Byrd rule” preventing their inclusion on budget reconciliation.
  2. Prohibiting more states from expanding Medicaid: While this provision has been sold as ensuring no new states would expand Medicaid to able-bodied people, it does not do so—it only ensures that states that decide to expand after March 1 will receive the regular federal match levels for their able-bodied populations (i.e., not the 90-95 percent enhanced match). Neither the bill nor the managers package permanently ends the expansion to able-bodied adults—which the 2015/2016 reconciliation bill did—or ends the enhanced federal match for expansion states until January 2020, nearly three years from now.
  3. Medicaid work requirements: The agreement permits—but does not require—states to impose work requirements, a point of contention between some states and the Obama Administration. However, non-expansion states will have comparatively few beneficiaries on which to impose such requirements. Medicaid programs in non-expansion states consist largely of pregnant women, children, and elderly or disabled beneficiaries, very few of whom would qualify for the work requirements in the first place.

Medicaid: Block Grant vs. Per Capita Cap

The fourth component—allowing states to take their federal payments from a reformed Medicaid program as a block grant, instead of a per capita cap—warrants greater examination. In general, per capita caps have been viewed as a compromise between the current Medicaid program and a straight block grant fixed allotment. In the 1994-95 budget showdown with then-House Speaker Newt Gingrich, President Clinton proposed per capita caps for Medicaid as an alternative to the Republican House’s block grant plan.

A block grant and a per capita cap differ primarily in how the two handle fluctuations in enrollment: the latter adjusts federal matching funds to reflect changes in enrollment, whereas the former does not. Supporters of per capita caps often cite economic recessions as the rationale for considering their approach superior to block grants. Medicaid’s counter-cyclical nature—more people enroll during economic downturns, after losing employer-sponsored coverage—coupled with states’ balanced budget requirements, means that during recessions, states often contend with a “double whammy” of rising Medicaid rolls and declining tax revenues. Medicaid per capita caps would mitigate the effects of the first variable, giving states more latitude during tough economic times.

On the other hand, per capita caps give states a greater incentive to enroll more beneficiaries—and a greater disincentive to scrutinize potentially fraudulent applicants—because every new enrollee means greater revenue for the state (albeit capped per beneficiary).  Most notably, the per capita caps in the House bill grow at a faster rate than the block grant proposal in the managers package—per capita caps would grow at medical inflation, whereas block grants would grow with general inflation.

In general, while conservatives would support block grants to reduce the federal Medicaid commitment and encourage state economies, it remains unlikely that many states would embrace them—because it is not in their fiscal self-interest to do so,because it is not in their fiscal self-interest to do so, particularly given the disparity in the inflation measures in the House language. If true, this language may end up meaning very little.

Will This Be A Good Deal For Americans?

If Medicaid reforms comprised the entirety of the bill, they would likely be worth supporting, despite the complexities associated with the debate between expansion and non-expansion states. The move to per capita caps represents significant entitlement reform, and is consistent with the principles of federalism.

As a repeal bill, however, the measure as currently constituted falls short. The agreement on Friday made zero progress on repealing any other insurance benefit mandates in Obamacare—the primary drivers of higher premiums under the law. That’s one reason why CBO believes premiums will actually rise by 15-20 percent over the next two years. House leadership claims that the mandates must remain in place due to the procedural strictures of budget reconciliation in the Senate. But the inconsistencies in their bill—which repeals one of the mandates, modifies others, and leaves most others fully intact—contradict that rhetoric.

Moreover, by modifying rather than repealing some of the Obamacare mandates, the bill preserves the Washington-centered regulatory structure created by the law, undermining federalism and Tenth Amendment principles.

AHCA Leaves Much To Be Desired

From a fiscal standpoint generally, the bill also leaves much to be desired. It creates at least one new entitlement: refundable tax credits to purchase health insurance. It may create a second new entitlement, this one for insurance companies in the form of a “Patient and State Stability Fund,” totaling $100 billion over 10 years, which insurers will no doubt attempt to renew in a decade’s time. (The bill also does not repeal Obamacare’s risk corridor and reinsurance bailout provisions, allowing them to continue to disburse billions of dollars in claims owed to insurers.)

While CBO claimed the bill would reduce the deficit by $337 billion, the managers amendment goes to great lengths to spend all of that supposed savings—accelerating the repeal of Obamacare’s tax increases, and increasing the inflation measure for some of the per capita caps.

Moreover, it remains unclear whether the “transition” from Obamacare to the new tax credit regime will take place in January 2020 as scheduled. The CBO tables analyzing the bill’s fiscal impact clearly delineated how most of the measure’s spending reductions will hit in fiscal years 2020 and 2021—right in the middle of the presidential election cycle.

AHCA Doesn’t Fully ‘Repeal And Replace’

If President Trump or Republicans in Congress flinch on letting the transition take place as scheduled, the bill’s supposed deficit savings will disappear rapidly. Instead, conservatives could be left with “Obamacare Max”—the House bill actually expands and extends Obamacare insurance subsidies for 2018 and 2019—in perpetuity.

The bill’s lack of full repeal, the premium increases scheduled to take effect over the next two years, and the spending “cliff” hitting in 2020 leave the bill with little natural political constituency to support it. The way in which the bill falls short of repeal—by keeping Medicaid expansion, keeping Obamacare’s insurance regulations, and creating a new entitlement—makes it difficult to support from a policy perspective as well. Friday’s meeting may have brought new concessions at the margins, but it did not alter the bill’s fundamental structure, leaving it short of the repeal conservatives had been promised—and voted for mere months ago.

This post was originally published at The Federalist.

Past as Prologue? A Review of “The System”

A young president promising hope and change takes over the White House. Immediately embarking upon a major health-care initiative, he becomes trapped amidst warring factions in his party in Congress, bickering interest groups, and an angry public, all laying the groundwork for a resounding electoral defeat.

Barack Obama, circa 2009-10? Most definitely. But the same story also applies to Bill Clinton’s first two years in office, a period marked by a health-care debate in 1993-94 that paved the way for the Republican takeover of both houses of Congress.

In their seminal work “The System,” Haynes Johnson and David Broder recount the events of 1993-94 in detail—explaining not just how the Clinton health initiative failed, but also why. Anyone following the debate on Obamacare repeal should take time over the holidays to read “The System” to better understand what may await Congress and Washington next year. After all, why spend time arguing with your in-laws at the holiday table when you can read about people arguing in Congress two decades ago?

Echoes of History

For those following events of the past few years, the Clinton health debate as profiled in “The System” provides interesting echoes between past and present. Here is Karen Ignani of the AFL-CIO, viewed as a single-payer supporter and complaining that insurance companies could still “game the system” under some proposed reforms. Ironic sentiments indeed, as Ignani went on to chair the health insurance industry’s trade association during the Obamacare debate.

There are references to health care becoming a president’s Waterloo—Johnson and Broder attribute that quote to Grover Norquist, years before Sen. Jim DeMint uttered it in 2009. Max Baucus makes an appearance—he opposed in 1994 the employer mandate he included in Obamacare in 2009—as do raucous rallies in the summer of 1994, presaging the Obamacare town halls 15 years later.

Then there are the bigger lessons and themes that helped define the larger debate:

“Events, Dear Boy, Events:” The axiom attributed to Harold Macmillan about leaders being cast adrift by crises out of their control applied to the Clintons’ health-care debate. Foreign crises in Somalia (see “Black Hawk Down”) and Haiti sapped time on the presidential calendar and press attention, and distracted messaging. During the second half of 2009, Obama spent most of his time and energy focused on health care, leading some to conclude he had turned away from solving the economic crisis.

Old Bulls and Power Centers: “The System “spends much more time profiling the chairs of the respective congressional committees—including Dan Rostenkowski at House Ways and Means, John Dingell at House Energy and Commerce, and Patrick Moynihan at Senate Finance—than would have been warranted in 2009-10. While committee chairs held great power in the early 1990s, 15 years later House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid called most of the legislative shots from their leadership offices.

Whereas the House marked up three very different versions of health-care legislation in 1993-94, all three committees started from the same chairman’s mark in 2009. With Speaker Paul Ryan, like John Boehner before him, running a much more diffuse leadership operation than Pelosi’s tightly controlled ship, it remains to be seen whether congressional leaders can drive consensus on both policy strategy and legislative tactics.

The Filibuster: At the beginning of the legislative debate in 1993, Robert Byrd—a guardian of Senate rules and procedures—pleaded for Democrats not to try and enact their health agenda using budget reconciliation procedures to avoid a filibuster. Democrats (begrudgingly) followed his advice in 1993, only to ignore his pleadings 16 years later, using reconciliation to ram through changes to Obamacare. Likewise, what and how Republicans use reconciliation, and Democrats use the filibuster, on health care will doubtless define next year’s Senate debate.

Many Obama White House operatives such as Rahm Emanuel, having lived through the Clinton debate, followed the exact opposite playbook to pass Obamacare.

They used the time between 1993 and 2009 to narrow their policy differences as a party. Rather than debating between a single-payer system and managed competition, most of the political wrangling focused on the narrower issue of a government-run “public option.” Rather than writing a massive, 1,300-page bill and dropping it on Capitol Hill’s lap, they deferred to congressional leaders early on. Rather than bashing special interest groups publicly, they cut “rock-solid deals” behind closed doors to win industry support. While their strategy ultimately led to legislative success, the electoral consequences proved eerily similar.

Lack of Institutional Knowledge

The example of Team Obama aside, Washington and Washingtonians sometimes have short memories. Recently a reporter e-mailed asking me if I knew of someone who used to work on health care issues for Vice President-elect Mike Pence. (Um, have you read my bio…?) Likewise, reporters consider “longtime advisers” those who have worked the issue since the last presidential election. While there is no substitute for experience itself, a robust knowledge of history would come in a close second.

Those who underestimate the task facing congressional Republicans would do well to read “The System.” Having read it for the first time the week of President Obama’s 2009 inauguration, I was less surprised by how that year played out on Capitol Hill than I was surprised by the eerie similarities.

George Santayana’s saying that “Those who cannot remember the past are condemned to repeat it” bears more than a grain of truth. History may not repeat itself exactly, but it does run in cycles. Those who read “The System” now will better understand the cycle about to unfold before us in the year ahead.

This post was originally published at The Federalist.

Bill Clinton’s Right: Obamacare’s Tax on Success Is “Crazy”

Taxes are back in the news on the presidential campaign trail — and this time, the controversy has nothing to do with Donald Trump. While the commentariat have seized on Bill Clinton’s description of Obamacare as “crazy,” it’s important to recognize exactly what he considered so nonsensical: the fact that Obamacare increases already sizeable government-imposed penalties on work, entrepreneurship, and success. Its perverse incentives will leave more Americans stuck in a poverty trap, making Obamacare even more warped than Bill Clinton’s description of the law.

In their full context, Clinton’s comments look more damning of the law, rather than less. Before uttering the “crazy” epithet, his remarks focused on those whose income puts them right above the cutoff line to receive federal subsidies. These people are, in the former president’s words, getting “whacked” because they have succeeded in life and in business:

The current system works fine if you’re eligible for Medicaid if you’re a lower-income working person, if you’re already on Medicare, or if you get enough subsidies on a modest income that you can afford your health care. But the people who are getting killed in this deal are the small businesspeople and individuals who make just a little too much to get in on these subsidies. Why? Because they’re not organized, they don’t have any bargaining power with insurance companies, and they’re getting whacked. So you’ve got this crazy system where all of a sudden 25 million more people have health care, and they’re out there busting it, sometimes 60 hours per week, wind up with their premiums doubled and their coverage cut in half. It is the craziest thing in the world. [Emphasis is mine.]

During the 2012 campaign, Mitt Romney was roundly criticized when he said in an interview,  “I’m not concerned about the very poor. We have a safety net there.” Bill Clinton’s comments emphasized that Obamacare is not concerned about the middle class. It’s not aimed to support those who want to rise in station in life; it actually discourages them from doing so.

And whereas Romney’s 2012 impromptu “gaffe” came in a live television interview, Obamacare represents considered policy — the result of a legislative process of nearly a year and policymaking developed long before that. As I noted in a 2013 Heritage Foundation paper, the law contains numerous subsidy cliffs that create enormous inequities. In some cases, as little as an additional dollar of income could cause the loss of thousands of dollars in premium or cost-sharing subsidies paid by the federal government, or both. “Families facing these kinds of poverty traps may ask the obvious question: If I will lose so much in government benefits by earning additional income, why work?”

The nonpartisan Congressional Budget Office (CBO) has answered that question simply: In many cases, individuals will not work. A 2010 CBO report concluded that “the phaseout of the [insurance] subsidies as income rises will effectively increase marginal tax rates, which will also discourage work.” All told, the nonpartisan budget scorekeepers have concluded that the law will reduce the labor supply by the equivalent of 2 million jobs next year alone.

Obamacare only exacerbated an existing poverty trap identified by scholars on both sides of the political spectrum, including those at the left-of-center Urban Institute. As income rises above the poverty level, government-funded benefits such as Medicaid, food stamps, and the earned-income tax credit phase out or disappear altogether, eroding or eliminating much of the income effect from higher wages. If a single parent with two children can receive nearly $30,000 in government benefits with no earnings, but only about $10,000 in benefits with $35,000 in earnings, many parents may make the calculated decision that the comparatively modest net increase in family income does not justify work. Moreover, both the prior welfare system and Obamacare impose financial penalties on marriage, discouraging one of the best ways for families to rise out of poverty.

It’s ironic that Bill Clinton, the president who signed the largest tax increase in American history, would express such outrage at the way Obamacare raises effective marginal tax rates for the middle class. But for a party that purports to stand for the interests of the poor and working class, Obamacare will only work to perpetuate the cycle of poverty down to future generations. And that is perhaps the craziest idea of all.

This post was originally published at National Review.

The Dirty Little Secret of Hillary Clinton’s Health Plan

On Monday, President Bill Clinton committed a Kinsley gaffe, criticizing Obamacare as “the craziest thing in the world,” whereby small business owners “wind up with their premiums doubled and their coverage cut in half.” In response to her husband’s accurate depiction of Obamacare’s problems, Hillary said on Tuesday: “We got to fix what’s broken and keep what works, . . . We’re going to tackle it and we’re going to fix it.” Secretary Clinton is exactly correct — if by “fix” she means enacting a proposal that could line the pockets of businesses to the tune of nearly a trillion dollars while simultaneously jacking up premiums and deductibles for millions of Americans.

Hillary Clinton’s plan for a new federal tax credit to subsidize out-of-pocket costs for all Americans will encourage businesses to make their health benefits skimpier — raising premiums, co-payments, and deductibles — because they know that the new tax credit will pick up the difference for the hardest-hit families. While Secretary Clinton’s other major health-care proposals (to increase federal subsidies on insurance exchanges and to create a government-run “public option” on them) would apply only to those without employer-based coverage, the out-of-pocket tax credit would apply to both insurance that is employer-based and insurance that is individually purchased.

In analyzing her proposals, the liberal Commonwealth Fund noted that Secretary Clinton’s out-of-pocket tax credit would affect a pool of 177.5 million potentially eligible Americans, which is more than four times as many as those who would be eligible to avail themselves of the government-run “public option.” The broader reach for the tax credit, plus its generous amount (up to $2,500 per individual or $5,000 per family for out-of-pocket spending that exceeds 5 percent of income) creates a sizable cost for the federal government: net spending of $90.3 billion in 2018 alone, according to the Commonwealth analysis. In 2009, President Obama made this pledge to Congress: “The plan I’m proposing will cost around $900 billion over ten years.” But one element alone of Secretary Clinton’s plan will cost at least that much — and probably more than $1 trillion.

The Commonwealth analysis of Clinton’s plan attempts to estimate how much the out-of-pocket tax credit will reduce health-care expenses for middle-class and working-class families. What the Commonwealth researchers did not mention in the report, and instead buried in a technical appendix, is this doozy of an asterisk: “Potentially, this [tax credit] approach gives firms an incentive to increase workers’ premium contributions, so that more workers are eligible to claim the credit.”

The Commonwealth researchers did not even attempt to model the impact of the tax credit on the actual behavior of businesses, claiming that employers might not know their workers’ income or out-of-pocket expenses, and saying they could not make decisions based on incomplete information. Nonsense. Even if businesses decide not to increase employees’ premium contributions, they could jack up deductibles instead. A firm could raise its deductible by $2,500, offer all workers a $1,000 bonus — to help employees whose out-of-pocket costs don’t meet the 5 percent of income threshold to obtain the tax credit, or assist workers’ cash flow until they receive it — and still come out ahead.

Whether by accident or design, the Commonwealth researchers assumed that employers will not respond to incentives — an assumption that belies three years of experience with Obamacare’s exchanges. Thousands of Americans have gamed the law’s special enrollment periods to sign up for coverage outside the annual enrollment window, incurred above-average costs – and then dropped their coverage at above-average rates, un-enrolling after returning to health. And because Section 1412 of the law allows enrollees a three-month grace period before insurers can drop their coverage for non-payment, one insurer found that 21 percent of its customers didn’t bother to pay their premiums last December, because the law effectively said they didn’t have to.

Given the ways in which Americans have gamed Obamacare’s morass of new regulations to create a system of barely functioning insurance exchanges, it beggars belief to think that businesses would not similarly work to maximize profit. According to the Kaiser Family Foundation’s survey of employer-sponsored health plans, only 23 percent of workers face a deductible above $2,000. With the average deductible rising 12 percent last year, firms would now have an even greater incentive to privatize their gains – because the new tax credit would allow them to socialize their workers’ losses by moving them to the federal fisc.

Why would Secretary Clinton propose a costly plan that encourages large businesses to pocket profits while jacking up costs on struggling families? Simple: The plan will make employer coverage less desirable, and it might even make the Obamacare exchanges look attractive by comparison. If liberals’ end goal is to erode employer-provided health coverage and migrate all Americans to government-run exchanges, offering a tax credit that will effectively erode that coverage faster isn’t a bad way to start.

This post was originally published at National Review

Paul Ryan, Donald Trump, and a Return to Congressional Government?

Last week’s announcement by House Speaker Paul Ryan that he will vote for presumptive Republican presidential nominee Donald Trump in November received widespread attention from political commentators. However, few noted the reason behind Mr. Ryan’s public endorsement of Trump: The speaker believes Mr. Trump will effectively cede policy-making authority to Republicans in Congress.

Writing in his hometown Janesville Gazette, the House speaker spent time outlining the agenda he has worked to frame since taking office in September—creating policy teams tasked with formulating an alternative to Obamacare, principles for tax reform, an anti-poverty agenda, and more. Noting that Hillary Clinton likely wouldn’t embrace the principles behind the Republican agenda, “we need a Republican president willing to sign [this agenda] into law,” he said.

Mr. Ryan clearly believes that “the House can be a driver of policy ideas”—in fact, he said as much in his article endorsing Trump. Mr. Ryan justified his endorsement of the businessman as a practical means to enact the agenda he and his fellow House Republicans are developing: “House Republicans are helping shape that Republican vision by offering a bold policy agenda, by offering a better way ahead. Donald Trump can help us make it a reality.”

What Mr. Ryan proposes—and what the speaker believes Mr. Trump has endorsed—would amount to the greatest ceding of a policy agenda from the executive to the legislature in over two decades. The arrangement echoes then-Speaker Newt Gingrich’s Contract with America, which dominated headlines following the 1994 Republican sweep of Congress. For a time, House Republicans so controlled the policy agenda that in April 1995, President Bill Clinton plaintively pleaded in a prime-time television news conference: “I am relevant. The Constitution gives me relevance.”

For all Mr. Trump’s ability to generate headlines or set Twitter alight, Mr. Ryan envisions a scenario where a President Trump, if not entirely irrelevant, would give Republicans in Congress the lead role in formulating a governing agenda. While Mr. Trump has thus far shown little interest in policy nuances, Mr. Ryan’s gambit appears based on the premise that, when and if he takes office, Mr. Trump will continue to outsource most of his agenda to Congressional Republicans. We’ll see if this arrangement will wear well for Speaker Ryan, Republicans in Congress, or Mr. Trump himself.

This post was originally published at the Wall Street Journal’s Think Tank blog.

Democrats’ Obamacare “Fix”

front-page story in Saturday’s Washington Post discussing Republican candidates’ positions on the Affordable Care Act included a curious quote from Rep. Steve Israel, chairman of House Democrats’ campaign committee, who said that Republicans are “promising fixes but won’t be specific.”

Actually, many conservatives have outlined numerous alternatives to Obamacare. Republicans in the House have written at least 200 separate bills showing their ideas on health care, large and small. My own organization, America Next, released its blueprint for health reform earlier this year.

Conversely, the comparatively small universe of “fixes” advocated by supporters of the health legislation omit major fiscal details. Here are three examples:

In a March Politico op-ed, several Democratic senators (and one independent, Sen. Angus King) proposed allowing the broader sale of low-cost, high-deductible health plans, whose availability is currently limited under the ACA. The senators also advocated expanding the law’s tax credits for small business—making them available to more firms and for longer periods—and further diluting the ACA’s employer mandate on businesses, which already has been delayed twice.

Former President Bill Clinton last year called for fixing a provision that disqualifies families for insurance subsidies if one member of the family can get “affordable” health coverage from an employer.

Others have discussed repealing a provision in the law that would slow the growth in premium subsidies beginning in 2019.

Most of these “fixes” come with price tags—and potentially large ones at that. A 2011 study by the Employment Policies Institute found that fixing the affordability definition, as President Clinton proposed, could increase spending by nearly $50 billion per year.

Supporters of the Affordable Care Act suggesting modifications have a duty to explain whether and how any spending increases would be paid for—through tax increases or other spending reductions.  Because proposing new federal spending without a way to pay for it could put Democrats—and taxpayers—in, well, a bit of a fix.

This post was originally published at the Wall Street Journal’s Think Tank blog.

Clinton Tries to Sell Obamacare–But That Dog Won’t Hunt

Earlier today, former President Clinton spoke about Obamacare in Little Rock, reprising his role as “explainer-in-chief” to tell the American people how well Obamacare is working now, and will work when the exchanges launch in just 26 days.

But as Bill Clinton himself might say, that dog won’t hunt. Contrary to his claims, the law is not reducing costs, is causing people to lose their health coverage, and does not provide states with flexibility to implement the measure:

  • President Clinton claimed that the law would make health coverage more affordable. But the law hasn’t met then-Senator Obama’s 2008 campaign promise to reduce premiums by $2,500 per family—not by a country mile. Instead, premiums have gone up for the average employer plan—and the mandates included in Obamacare will raise costs and premiums beginning next year for many families.
  • President Clinton claimed that people who currently have coverage largely wouldn’t be affected by the law. But many Americans are losing coverage—because their plan doesn’t meet new government-imposed standards, or because their insurance company is dropping out of state markets. Many other Americans are being affected by the higher costs of Obamacare, as recent disclosures by firms like UPS and Delta indicate. And multiple unions agree that the law will “destroy the very health and well-being of our members along with millions of other hard-working Americans.”
  • President Clinton claimed that states would have more flexibility to implement the law. But even liberals have admitted that the supposed “flexibility” works only one way—states are allowed only to increase regulations and government involvement, not decrease them.
  • President Clinton claimed that if states don’t expand Medicaid, their tax dollars would go to other states to fund Obamacare’s coverage expansions. That’s just not accurate. If states don’t expand Medicaid, those tax dollars would stay in the federal Treasury—and what’s more, their state budgets would be better for it, because Obamacare will cost state budgets a bundle.

As to Clinton’s claim that those who oppose the law should try to fix it rather than repealing it, President Obama has committed to repeal the sequester—a provision the President himself signed into law. If President Obama believes the sequester is so harmful that it should be repealed—and the Administration is threatening to shut down the federal government if the sequester is not repealed—then why should conservatives abandon their belief that Obamacare is so harmful that it should be repealed?

The answer is simple. Liberals didn’t abandon their belief in a government-centric scheme for health care after President Clinton’s failed effort in the 1990s. Likewise, conservatives should not now abandon their belief—based on all the implementation failures to date—that Obamacare won’t deliver for the American people. It is so unworkable that it should be defunded and repealed.

This post was originally published at the Daily Signal.

Two Math Lessons for President Obama

In his speech to the Democratic National Convention a few weeks ago, President Clinton said that one of the new ideas Democrats brought to Washington was “arithmetic.”  Which is particularly ironic, given two developments associated with yesterday’s updated CBO estimates of the mandate taxes associated with Obamacare:

1. The Administration claimed that the tax increase wouldn’t harm middle-class families because the tax “will only affect people who can afford health care but choose not to buy it.”  But the Congressional Budget Office estimated that 600,000 people with incomes UNDER the federal poverty level – that’s $15,130 for a family of two in 2012 — would pay higher taxes due to the Obamacare mandate.  CBO has also projected that the average premium in the Exchange will be $15,200 per family per year.  Last time I checked, $15,200 was greater than $15,130 — meaning some people may face higher taxes because Obamacare forces them to buy health insurance whose total premium could cost more than their family’s entire income.

2. CBO also admitted that “most of the increase — about 85 percent — in the number of people who are expected to pay the penalty tax [since CBO’s April 2010 estimate] stems from changes in CBO and JCT’s baseline projections since April 2010, including the effects of legislation enacted since that time, [and] changes in the economic outlook, primarily a higher unemployment rate and lower wages and salaries.”  I could be wrong, but I thought it was better for unemployment to be going down, not up, and for wages to be going up rather than down.  In which case a President running for re-election on a slogan of moving “Forward” has in reality moved the American economy backward since CBO made its initial estimates two years ago.

Bill Clinton and Obamacare

President Clinton’s speech made many claims in his 48-minute Democratic National Convention speech last night.  On health care, three in particular stand out for their questionable merit:

“For the last two years, health care spending has grown under 4% for the first time in 50 years.  So are we all better off because President Obama fought for [Obamacare] and passed it?  You bet we are.”

First, President Obama promised that premiums would go down by $2,500 in his first term – so even “only” a 4 percent increase represents a broken promise.  However, even this increase of “only” 4 percent is something about which President Obama should be far from boastful.  Because the definitive analysis on national health spending issued by the non-partisan Medicare actuary made clear the reason for the slowdown: “The latest recession had a dramatic effect on [health care] utilization….Persistently high unemployment, continued loss of private health insurance coverage, and increased cost sharing led some people to forgo care or seek less costly alternatives than they would have otherwise used.”  In other words, spending growth was slower than projected NOT because Obamacare worked, but because the Obama “stimulus” didn’t.

“What the President did was save money by cutting unwarranted subsidies to providers and insurance companies that weren’t making people any healthier.”

Obamacare’s cuts to Medicare Advantage will reduce that program’s enrollment by half and cut plan choices by two-thirds — undermining the President’s promise that those who like their plan will be able to keep it under Obamacare.  Just as important, both the Medicare actuary and the Congressional Budget Office have concluded that some of the law’s biggest Medicare reductions will not be sustainable in the long-term.  The Medicare actuary said the reductions could cause up to 40 percent of hospitals to become unprofitable over the long term — at which point they may have to stop treating Medicare patients.  To follow Clinton’s statement to its logical conclusion, the President believes that 40 percent of Medicare providers going broke, and/or not treating Medicare patients, wouldn’t affect seniors’ health one whit — and that those 40 percent of providers aren’t making seniors any healthier now.

“He add[ed] eight years to the life of the Medicare Trust Fund.  It’s now solvent until 2024.  So President Obama and the Democrats didn’t weaken Medicare, they strengthened it.”

That’s not what the Congressional Budget Office said.  The non-partisan CBO said that the Medicare reductions in Obamacare “will not enhance the ability of the government to pay for future Medicare benefits” — because those savings will be used to fund other unsustainable entitlements.  Even President Obama himself admitted this irrefutable logic in a 2010 interview, when he stated that “You can’t say that you are saving on Medicare and then spending the money twice.”  But if Democrats want to use the Medicare savings provisions to extend the life of the Medicare trust fund — and not to fund the new entitlements created by the law — the Congressional Budget Office previously estimated what the fiscal impact would be:  “A net increase in federal deficits of $260 billion” through 2019.

In his speech last night, President Clinton mentioned that even a broken clock gets the time right twice a day.  However, given the facts above, it’s fairly clear that neither of those two occasions took place during the former President’s speech.

Paul Krugman’s Typical Trifecta

Writing in the New York Times this morning, Paul Krugman’s column hits the usual Krugman-esque notes.  The column, entitled “The Medicare Killers,” is liberal.  As you can tell from its title, the column is hyperbolically over-the-top.  And it’s also flat-out WRONG.  The most obviously false statement is his unequivocal declaration that not a shred of evidence exists that private plans can deliver Medicare benefits more efficiently than the federal government:

Wouldn’t private insurers reduce costs through the magic of the marketplace?  No.  All, and I mean all, the evidence says that public systems like Medicare and Medicaid, which have less bureaucracy than private insurers (if you can’t believe this, you’ve never had to deal with an insurance company) and greater bargaining power, are better than the private sector at controlling costs.

As Bill Clinton might say, the accuracy of that statement depends solely upon what the meaning of the word “all” is.  Because a new study published in the Journal of the American Medical Association just this month found that private plans would “bid an average of 9% below traditional Medicare costs” under a premium support model.  Which might explain why other liberals at the Center for American Progress are now – disingenuously – advancing the exact opposite of Krugman’s argument: that seniors would have to pay more to stay in government-run Medicare.

So either Paul Krugman doesn’t know his facts, or he doesn’t want to know his facts — because he would rather keep making claims about government-run Medicare’s “efficiency” that he knows to be wrong.  Either way, it’s a sad statement that Krugman and his allies would have to stoop so low to defend the indefensible — and unsustainable – status quo.