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February 24, 2010

The President’s Health Reform Proposal: More Like $2.5 Trillion

The White House estimates that the President’s Proposal for health care reform would
cost approximately $950 billion over a ten year window. Here, James Capretta explains
why this is unlikely to be the case and how President Obama’s plan would far exceed this
cost estimate.

The President’s Health Reform Proposal: More Like

$2.5 Trillion
Published on February 24, 2010 by James C. Capretta

President Barack Obama released an updated health care reform plan this week. The
Congressional Budget Office (CBO) has not yet had an opportunity to review and assess
this latest offering. However, Administration officials have claimed that it would cost
$950 billion over a decade, is “fully paid for,” and would cut the deficit in the short and
long term.

Each of these claims, which were made also about the House- and Senate-approved bills,
rests on highly questionable assumptions. A closer look at the President’s plan shows
that:

• Its costs are likely to come in well over $1 trillion over 10 years,
• Ten full years of implementation would cost closer to $2.5 trillion, and
• The plan would make the nation’s budget outlook much worse, not better.
The Missing “Doc Fix”

Both the President and congressional leaders have signaled that they will not allow a
scheduled 21 percent reduction in Medicare physician fees to go into effect in 2010 or
later years. But the President did not include a permanent fix in his health care plan.

This is ironic, because the plan includes scores of other Medicare provisions, touching on
just about every possible feature of the program. The only provision seemingly left out of
the package is a long-term fix for physician fees, perhaps Medicare’s most pressing
problem and one that all sides acknowledge must be addressed soon.

Of course, the reason the so-called “doc fix” is not in the President’s plan is cost. The
Administration and Democratic leaders have said they want to pass a physician fee
reform—but in a separate bill that does not provide any offsetting spending reductions or
tax increases. In other words, their “doc fix” solution would require additional federal
borrowing of at least $200 billion over the coming decade.

But it does not matter to taxpayers whether the Democratic health care agenda is passed
in one bill, two, or even three. The total cost is the same. And when a permanent solution
for the “doc fix” is properly included in the accounting of the President’s health care
plan, the total costs are pushed up to at least $1.15 trillion. Moreover, the added spending
is enough to wipe out entirely all of the claimed deficit reduction between now and 2019.

Non-Coverage Spending in the Senate Bill

When the President placed a $900 billion limit on the total amount of spending in the
health care bills, he did not say it was for a “net” number, with tax increases offsetting
part of the cost. Nor did he say it was a limit for only some of the spending in the health
care bills.

In the Senate-passed legislation, CBO said the cost of the coverage expansion would be
$871 billion between 2010 and 2019. The Administration says it has made changes
adding another $75 billion. In addition, the Senate bill included about $90 billion more in
non-coverage spending, not counting closing the “donut hole” in the Medicare drug
benefit, which would add billions more to the cost of the non-coverage provisions of the
bill.

Adding 2020 to the Cost Estimate

Last year, CBO assessed the Democratic health care plans over the 2010–2019 time
period. However, in January, the agency extended its baseline projection out to 2020.
That means that any assessment of the Obama health plan should now go from 2011
through 2020.

Adding one more year to the cost estimate will substantially increase the 10-year price
tag. CBO estimated that the coverage provisions of the Senate-passed health care bill
would cost about $200 billion by 2019. If those costs were to increase by 8 percent each
year, as CBO estimated, that would put the 2020 cost at $216 billion.

The CLASS Act Gimmick

The President’s health care proposal picks up the Community Living Assistance Services
and Supports Act, or CLASS Act, which was in both the House- and Senate-passed bills.
The CLASS Act would stand up an entirely new entitlement program for long-term care
services. Eligible participants would be required to pay premiums well in advance of
receiving any benefit payments.

Consequently, starting this new program from scratch would produce one-time “savings”
from premium collections before any cohort of beneficiaries starts drawing benefits. But
the premium collections would be needed later to liquidate entitlement obligations, which
means the premiums are being double-counted. The premiums are set aside in a fund to
pay future claims, but they are also counted by the bills’ sponsors as an offset for
expanding health coverage. The CLASS Act premiums total $72 billion over 10 years in
the Senate bill.

The True 10-Year Window

The President argues that expeditious enactment of his plan is necessary to provide better
services to the uninsured, but none of the key provisions to expand coverage would go
into effect until 2014. Meanwhile, many of the spending reductions, such as the cut in
Medicare Advantage payment rates, would kick in much earlier, as would the tax
increases. Consequently, the President’s plan has 10 years worth of spending and revenue
“offsets” paying for only seven years worth of spending.

Looking at these bills over a true 10-year window of full implementation reveals much
higher costs. The Senate bill’s provisions—even excluding the “doc fix”—would total
$2.3 trillion over the period 2014–2023, with the coverage provisions fully in place.
[1]Adding the “doc fix,” the Obama team’s admitted $75 billion add-on, at least $90
billion in non-coverage spending, and $72 billion for the CLASS Act, the true 10-year
cost of the President’s plan is almost certainly over $2.5 trillion.

The Certainty of Future of Entitlement Expansions

The President’s plan assumes that the new entitlement spending for coverage expansion
can be held in check with so-called “firewall” provisions. These are the rules that
essentially preclude many tens of millions of individuals from gaining access to premium
subsidies. If an employer offers “qualified” insurance coverage to a worker, the employee
really has no choice but to take it if he wants to avoid paying the penalty for going
uninsured. They could not go into the so-called “exchanges” to get insurance subsidized
with federal tax support.
These firewall rules would create large disparities in the federal subsidies made available
to workers inside and outside the exchanges. Under the Senate-passed bill, a family of
four with an income of $60,000 with employer-sponsored health care (and thus not
qualified for the exchange) would get $4,500 less in federal support than a similar family
inside the exchange would get in 2016.[2]

And, according to CBO, there would be many tens of millions more families outside the
exchange than in it. Today, there are about 127 million Americans under the age of 65
with incomes between 100 and 400 percent of the federal poverty line, but CBO expects
that only about 18 million people will be getting exchange subsidies in 2016.

If the bill is enacted as currently written, pressure would build to treat all Americans
fairly, regardless of where they get their insurance. One way or another, the subsidies
provided to those in the exchanges would be made more widely available, driving the
costs of reform much higher than CBO’s estimates currently indicate.

Highly Questionable Tax Increases and Medicare Cuts

The President proposes to pay for his expensive health care program with a series of tax
increases and Medicare spending cuts. But these tax increases and spending reductions
are far less likely to occur than the entitlement expansions that are promised.

For instance, the President has proposed a new excise tax on “high cost” insurance plans,
but he would not start the tax until 2018, well after any potential second term for his
Administration. Yet he and his aides claim that hundreds of billions of dollars in revenue
will come from this tax in the second decade of the program, thus more than offsetting
the exploding entitlement costs that the bill would provide. But if the President is
unwilling to impose this tax during his term, it is hard to see that another President or
another Congress would be willing to do so later.

Similarly, the President’s plan relies on deep cuts in Medicare payments to hospitals and
other institutional providers. But the chief actuary of the Medicare program has said
repeatedly that these cuts are not realistic because they would push many institutions into
serious financial distress. Still, the Administration claims that hundreds of billions of
dollars from these cuts will materialize from 2020 to 2030, thus justifying its claim of
large deficit reduction during that time. But it is far more likely that the Medicare cuts
and tax increases will never be sustained, even as the entitlement costs from the Obama
plan soar.

Making Matters Worse

The President has said that he wants a health reform bill in large part because it is
necessary to get better control of the federal budget. But his plan has evolved into a large
entitlement expansion effort and not much more. The offsets are unrealistic, and the
entitlement promises will grow with time. If enacted, the President’s health care program
would make a very dire federal budgetary outlook much, much worse.
James C. Capretta served in the Office of Management and Budget (OMB) during the
Bush Administration and is a Fellow in the Economics and Ethics Program of the Ethics
and Public Policy Center.

________________________

References
http://budget.senate.gov/republican/pressarchive/2009-12-22BudgetPerspective.pdf
(February 24, 2010).

[2]Eugene Steurle, “Health Care Reform: Implications of a Two Subsidy System,”

American Enterprise Institute, December 4, 2009, at http://www.aei.org/docLib/Eugene
%20Steuerle-%20AEI%2012-4-09.pdf (February 24, 2010).

__________________________

Other articles by James Capretta

• WebMemo posted February 24, 2010 by James C. Capretta The President’s

Health Reform Proposal: More Like $2.5 Trillion

President Barack Obama released an updated health care reform plan this week.
The Congressional Budget Office (CBO) has not yet had an opportunity to review
and assess this latest offering. However, Administration officials have claimed
that it would cost $950 billion over a decade, is “fully paid for,” and would…
Read more

• WebMemo posted January 14, 2010 by James C. Capretta The Real Budgetary
Impact of the House and Senate Health Bills

President Barack Obama pledged in an address to a joint session of Congress in

September 2009 that any health care bill he signed would cost no more than $900
billion over 10 years and would not worsen the federal budget deficit in the short
or long term.[1] … Read more

• WebMemo posted December 15, 2009 by James C. Capretta Entitlement Reform

Should Precede Health Care Expansion

The Treasury Department expects the U.S. government to bump up against the
statutory limit on federal borrowing sometime near the end of this month.[1]
 Consequently, the Obama Administration is now urging Congress to quickly pass
a debt limit increase of almost $2 trillion. … Read more

• WebMemo posted December 11, 2009 by James C. Capretta The Senate Health
Care Bill's "Firewall" Creates Disparate Subsidies

The Congressional Budget Office's (CBO) recent cost estimate for the Senate
health care bill, sponsored by Senator Majority Leader Harry Reid (D-NV),
creates the impression that Senate Democrats have succeeded in crafting a deficit-
neutral, fiscally responsible legislative package. But it is an illusion. Like its
House-passed counterpart, the… Read more

• WebMemo posted October 30, 2009 by James C. Capretta The Wrong Medicare
Advantage Reform: Cutting Benefits, Limiting Choices, and Increasing Costs

The health care bills currently under active consideration in Congress would
substantially modify the Medicare Advantage (MA) program, imposing deep
benefit cuts to partially offset new non-Medicare entitlement spending while
reducing health plan choices for seniors and bending the cost curve in the wrong
direction. Over 9.9 million… Read more

• WebMemo posted June 22, 2009 by James C. Capretta The Senate Health Care
Bills: $1.5 Trillion Sticker Shock

Taxpayers are in for sticker shock. Key committees in the both the House and
Senate are racing to get health care reform bills to the floors of their respective
chambers over the coming weeks. According to press accounts, however, a key,
unresolved issue is how to pay for the expensive insurance subsidies many in…
Read more

______________________________________________
The President’s Health Care Proposal

By Kisa Smith

Read the summary at: http://www.pdfdownload.org/pdf2html/view_online.php?url=http

%3A%2F%2Fwww.whitehouse.gov%2Fsites%2Fdefault%2Ffiles%2Fsummary-
presidents-proposal.pdf
Read the President’s letter sent to Congressional leaders on March 2, 2010 here:

The White House

Office of the Press Secretary

For Immediate Release

March 02, 2010

Letter to Congressional Leaders on Health Insurance

Reform
Please find below a letter from President Obama to Congressional leaders on moving
forward with health insurance reform legislation.

View the letter as a PDF.

March 2, 2010

Dear Speaker Pelosi, Senator Reid, Senator McConnell, and Representative Boehner:

Thank you again for the time, energy, and preparation you invested in last Thursday’s
bipartisan meeting on health insurance reform. I have always believed that our
legislative process works best when both sides can discuss our differences and common
goals openly and honestly, and I’m very pleased that our meeting at Blair House
offered the American people and their elected representatives a rare opportunity to
explore different health reform proposals in extraordinary depth.

The meeting was a good opportunity to move past the usual rhetoric and sound-bites
that have come to characterize this debate and identify areas on which we agree and
disagree. And one point on which everyone expressed agreement was that the cost of
health care is a large and growing problem that, left untended, threatens families,
businesses and the solvency of our government itself.

I also left convinced that the Republican and Democratic approaches to health care
have more in common than most people think.

For example, we agree on the need to reform our insurance markets. We agree on the
idea of allowing small businesses and individuals who lack insurance to join together
to increase their purchasing power so they can enjoy greater choices and lower prices.
And we agree on the dire need to wring out waste, fraud and abuse and get control of
skyrocketing health care costs.

But there were also important areas of disagreement. There was a fundamental
disagreement about what role the oversight of the health insurance industry should
play in reform. I believe we must insist on some common-sense rules of the road to
hold insurance companies accountable for the decisions they make to raise premiums
and deny coverage. I don’t believe we can afford to leave life-and-death decisions
about health care for America’s families to the discretion of insurance company
executives alone.

No matter how we move forward, there are at least four policy priorities identified by
Republican Members at the meeting that I am exploring. I said throughout this process
that I’d continue to draw on the best ideas from both parties, and I’m open to these
proposals in that spirit:

1. Although the proposal I released last week included a comprehensive set of

initiatives to combat fraud, waste, and abuse, Senator Coburn had an interesting
suggestion that we engage medical professionals to conduct random undercover
investigations of health care providers that receive reimbursements from Medicare,
Medicaid, and other Federal programs.

2. My proposal also included a provision from the Senate health reform bill that
authorizes funding to states for demonstrations of alternatives to resolving medical
malpractice disputes, including health courts. Last Thursday, we discussed the
provision in the bills cosponsored by Senators Coburn and Burr and Representatives
Ryan and Nunes (S. 1099) that provides a similar program of grants to states for
demonstration projects. Senator Enzi offered a similar proposal in a health insurance
reform bill he sponsored in the last Congress. As we discussed, my Administration is
already moving forward in funding demonstration projects through the Department of
Health and Human Services, and Secretary Sebelius will be awarding $23 million for
these grants in the near future. However, in order to advance our shared interest in
incentivizing states to explore what works in this arena, I am open to including an
appropriation of $50 million in my proposal for additional grants. Currently there is
only an authorization, which does not guarantee that the grants will be funded.

3. At the meeting, Senator Grassley raised a concern, shared by many Democrats, that
Medicaid reimbursements to doctors are inadequate in many states, and that if
Medicaid is expanded to cover more people, we should consider increasing doctor
reimbursement. I’m open to exploring ways to address this issue in a fiscally
responsible manner.

4. Senator Barrasso raised a suggestion that we expand Health Savings Accounts

(HSAs). I know many Republicans believe that HSAs, when used in conjunction with
high-deductible health plans, are a good vehicle to encourage more cost-consciousness
in consumers’ use of health care services. I believe that high-deductible health plans
could be offered in the exchange under my proposal, and I’m open to including
language to ensure that is clear. This could help to encourage more people to take
advantage of HSAs.

There are provisions that were added to the legislation that shouldn’t have been.
That’s why my proposal does not include the Medicare Advantage provision,
mentioned by Senator McCain at the meeting, which provided transitional extra
benefits for Florida and other states. My proposal eliminates those payments,
gradually reducing Medicare Advantage payments across the country relative to fee-
for service Medicare in an equitable fashion (page 8). My proposal rewards high-
quality and high-performing plans.

In addition, my proposal eliminates the Nebraska FMAP provision, replacing it with

additional federal financing to all states for the expansion of Medicaid.

Admittedly, there are areas on which Republicans and Democrats don’t agree. While
we all believe that reform must be built around our existing private health insurance
system, I believe that we must hold the insurance industry to clear rules, so they can’t
arbitrarily raise rates or reduce or eliminate coverage. That must be a part of any
serious reform to make it work for the many Americans who have insurance coverage
today, as well as those who don’t.

I also believe that piecemeal reform is not the best way to effectively reduce premiums,
end the exclusion of people with pre-existing conditions or offer Americans the
security of knowing that they will never lose coverage, even if they lose or change jobs.

My ideas have been informed by discussions with Republicans and Democrats, doctors
and nurses, health care experts, and everyday Americans – not just last Thursday, but
over the course of a yearlong dialogue. Both parties agree that the health care status
quo is unsustainable. And both should agree that it’s just not an option to walk away
from the millions of American families and business owners counting on reform.

After decades of trying, we’re closer than we’ve ever been to making health insurance
reform a reality. I look forward to working with you to complete what would be a truly
historic achievement.

Sincerely,

________________________

Click here to read Senate Republican Leader Mitch McConnell’s (R-KY) letter to
President Obama regarding the White House Health Care Summit.

Mar 02 2010
McConnell Calls for ‘Better Way’ on Health Reform
WASHINGTON, D.C. – U.S. Senate Republican Leader Mitch McConnell sent the
following letter to President Obama regarding the White House Health Care Summit.
The text of the letter appears below (a PDF of the signed letter can be downloaded
below):

Mr. President,

Thank you for your letter. Republicans also believe that last week’s health
care summit at Blair House was productive. It provided a forum for the
kind of open and broad-based discussion of ideas that our constituents
have been demanding for months. It should be clear by now that most
Americans oppose the massive health spending bills that Democrats in
Washington have been attempting to push through Congress. Last week’s
summit gave us an opportunity to show our constituents that there is a
better way to proceed with the kind reforms they truly want.

Particularly encouraging was your apparent support at the summit for a

number of commonsense ideas that Republicans have long promoted as a
way of targeting the high cost of health care. All of us agree that cost is
the core problem, and following last week’s summit many of us were
hopeful that these proposals could form the basis for a health care bill that
Americans would actually embrace. Indeed, that’s what many of us
thought the summit was all about: finding areas of agreement upon which
we could build a new bill, since Americans clearly oppose the old ones.

It was with this in mind that we were surprised and disappointed with your
latest proposal to simply paper a few of these commonsense proposals over
an unsalvageable bill. The American people are asking us for step-by-step
reforms that target cost and expand access, not a couple of commonsense
ideas layered over a rewrite of one-sixth of the economy, a massive
expansion of the federal government’s role in their daily lives, and higher
taxes and cuts to Medicare to pay for it. The virtue of the ideas we all
agreed upon at the summit is that they would lower costs and expand
access without requiring these things. That’s the kind of reform
Americans will support.

We respectfully encourage you to consider a new approach to reform, one

that does not cut Medicare to fund a trillion dollar takeover of the health
care system or impose job-killing taxes in the middle of a recession. We
encourage you to join with Democrats and Republicans in Congress in
listening to what the American people have been telling us for more than a
year now. Americans are telling us quite plainly that in order to reform
health care, we should scrap the bills they have already rejected and start
over with commonsense, step-by-step reforms we can all agree on.

We would also ask you to encourage Democrats in Congress to scrap

something else; namely, their last-ditch plan to jam some version of their
original bill through Congress and past the American people by way of the
highly partisan process known as Reconciliation. It should be clear by
now how Americans feel about forcing massive policy changes through
Congress with a back room deal. The fact that Democrats in Congress still
seem intent on this approach suggests that they are completely out of step
with the public. Now is not the time to repeat the same mistakes that
brought us here. It’s time to listen to the people, and start over with
reforms that lower costs.

Sincerely,

Mitch McConnell

____________________________________________________________________

A Piecrust Promise from Pelosi and Reid?

Posted March 8th, 2010 at 11:19am in Family and Religion, Health Care
A piecrust promise is one that is easily made and easily broken. The promise – more a
rumor than anything else – that the U.S. Senate will use the reconciliation process to
adopt a strong ban on abortion funding if the House passes the Senate-approved bill is
flakier than most. Never before in the history of the 34-year abortion funding debate have
pro-life members of Congress approved a bill containing abortion funding on the promise
that a subsequent vote will fix the problem.

The scenario being discussed in the media requires some explanation. The House-passed
version of health care reform includes the blanket provision known as Stupak-Pitts. This
provision applies to all the terms of the House bill, makes the traditional Hyde
Amendment language on abortion (allowing funding only when the life of the mother is
at stake and in instances of rape and incest) permanent, and permits individuals to buy
abortion coverage only as a personally elected and paid for rider on their policy. The
Senate-passed bill, H.R 3590, include numerous mechanisms whereby abortion is either
directly funded, subsidized through the state and federal exchanges created under the bill,
or susceptible to inclusion via interpretations by the Department of Health and Human
Services and the Office of Personnel Management.

Reports have surfaced of a deal whereby the House would approve the Senate bill on a
promise that the abortion language would be fixed in reconciliation. There are at least
two (related) problems with this scenario. First, it would require the U.S. Senate, with a
maximum of 45 votes for strong limits on abortion funding, to approve a permanent pro-
life amendment that meets the stringent standard set by Stupak-Pitts. Second, it would
require Stupak and a cadre of pro-life Democrats that numbers a dozen or more to vote
for a bill that the National Right to Life Committee has described as “the most pro-
abortion single piece of legislation that has ever come to the House floor for a vote, since
Roe v. Wade” and a “career-defining” vote on abortion policy.

In this scenario, members in both chambers execute votes that are the polar opposite of
their actual views and against the desires of their strongest supporters. Both would be
doing so on the basis of promises that no one can predict will be kept. The pro-life House
members are being asked to believe that once the Senate-passed bill is adopted in toto by
the House and signed by President Obama, the Senate, with its pro-abortion majority, will
proceed to enact a permanent abortion funding limitation and other provisions that it did
not deem wise to include in its own bill, which will be the law of the land.

The senators who opposed Stupak-Pitts will be asked to believe that they can return next
year, or at some other distant date, and join with President Obama in repealing the
permanent Stupak-Pitts law and install full federal funding of elective abortion. President
Obama for his part says the bill he supports has no federal funding for abortion, a finesse
at best. Is it credible that the President will proceed in 2011 and 2012 and support repeal
of Stupak-Pitts, a measure that the latest surveys say has as much as 72 percent public
support, as he seeks reelection in 2012?

Senators opposed to Stupak-Pitts have no reason to believe this, and thus pro-life House
Democrats have no reason to believe that the “reconciliation fix” on abortion is anything
more than a piecrust promise. If they were to proceed anyway and vote for H.R. 3590, it
would indeed be “career-defining” for these House members who have so far stood tall
for their, and their constituents’, convictions.

________________________
March 16, 2010

Piecrust Promises: Part Two

Ever since the U.S. Senate voted in December to provide new funding for Federally
Qualified Health Centers in its version of health care reform, analysts have pointed out
that these monies are not covered by the Hyde Amendment, the measure dating from
1976 that sharply limits federal financing of abortion. As a consequence, these new funds
appropriated by the Senate bill, which is now being moved through the House of
Representatives by an extraordinary legislative device, are available without statutory
limit to underwrite elective abortions.
Yesterday the Obama Administration issued a internal memorandum from the
Department of Health and Human Services (HHS) attempting to undercut this conclusion.
The memo states that even in the absence of the statutory prohibition contained in the
Hyde Amendment, longstanding regulations in place at HHS would “prohibit federal
funds from being used for abortion services.” The memo notes that “[t]he president and
Secretary [of HHS Kathleen] Sebelius have repeatedly stated their strong commitment to
ensuring that health insurance reform does not change the status quo on abortion policy.”

The HHS memo has little or no status as a matter of law. It amounts to the issuance of
another promise that legislators and citizens can evaluate on the merits. Because the
regulations cited in the memo would be applied voluntarily by HHS to any funds not
included in a future appropriations measure containing the Hyde Amendment (the FQHC
funds appropriated by the Senate bill cover five full years of spending), HHS would not
be obligated to apply the standards of the Hyde Amendment to these funds. The
flexibility of federal agencies to expand or limit reasonable interpretations of the law has
been demonstrated both in the context of abortion policy in federally funded family
planning clinics and in the Obama administration’s rescission of conscience regulations
last March.

The Obama administration’s argument also relies on a press release from the National
Association of Community Health Centers, which asserted that these centers “do not plan
to, nor are they seeking to, become providers of abortion.” While the release may have
been issued in good faith, it has no policy force with respect to the nation’s 1,250
FQHCs. These centers, moreover, are under intense public scrutiny at a moment of
decision on the President’s “signature” domestic policy issue. It is more instructive to
look to their views when that scrutiny was largely absent.

In 2009 First Lady Michelle Obama paid her first visit to a nonprofit organization in the
nation’s capital – choosing a clinic network called Mary’s Center. The Center is an
FQHC and it focuses on promoting “healthy pregnancies, improv[ing] birth outcomes,
and reduc[ing] infant mortality.” While Mary’s Center does not publicize a policy on
providing abortion, its President/CEO Maria S. Gomez proudly lists on her official
biography her receipt of the 2002 “Champions of Choice” Award from Planned
Parenthood of Washington, D.C., a major area abortion provider. The award is given each
year to an advocate of “choice,” a standard locution for abortion.

More significantly, key personnel from Mary’s Center were participants in a 2001
National Consortium convened by the National Abortion Federation. The Consortium
issued a report titled “Increasing Access to Abortion for Women in Diverse
Communities.” The report issued formal recommendations for policy changes. The
singular domestic policy change: repeal of the Hyde Amendment. The report described
this recommendation as “the universal consensus at the Consortium.” With passage of the
Senate bill and signature by the President, the Consortium will be well on its way to that
goal.
By Arthur Donaven

______________________________________________
March 16, 2010

Morning Bell: Is Now Really the Time To Create a New $2.5 Trillion
Entitlement?

In theory, the federal government has $2.5 trillion stashed away in a nondescript office
building in the sleepy little town of Parkersburg, West Virginia. That is where the
Treasury Department keeps stacks of nonnegotiable Treasury bonds payable to the Social
Security Administration. But as the Associated Press reported yesterday, for the first time
since the 1980s, the federal government will not be adding to that stack. Thanks to an
aging population and slow economy, Social Security will pay out $29 billion more this
year than it takes in. And the Congressional Budget Office reports that after small
surpluses in 2014 and 2015, the program is projected to be in the red from 2016 until
forever.

But what about Al Gore’s Social Security “Lock Box?” Can’t we just spend that $2.5
trillion in the Social Security Trust Fund? As Heritage experts David John and Brian
Reidl explain, since 1939 federal law has required Social Security to “invest” its extra
money in Treasury bonds. Those bonds are really just IOUs from the government to the
government. The feds already spent that $2.5 trillion long ago on programs such as
education, foreign aid and defense. Add the $2.5 trillion Social Security obligation onto
our other obligations and our current national debt stands at $12.5 trillion, or nearly
$42,000 for every man, woman, and child in the country. And it will only get worse
under President Barack Obama’s Budget. It would: 1) borrow 42 cents for each dollar
spent in 2010; 2) leave permanent annual deficits that top $1 trillion as late as 2020; and
3) dump an additional $74,000 per household of debt into the laps of our children and
grandchildren.

Responding to such unsustainable borrowing, Moody’s rating agency announced Monday

that the United States needs to make deep spending cuts or risk losing its AAA credit
rating. From the report: “growth alone will not resolve an increasingly complicated debt
equation. Preserving debt affordability at levels consistent with AAA ratings will
invariably require fiscal adjustments of a magnitude that, in some cases, will test social
cohesion.”

Losing our AAA rating would send interest rates higher, increase our borrowing costs,
and send the percentage of GDP we spend servicing our debt sky rocketing. Bloomberg
adds: “the U.S. will spend more on debt service as a percentage of revenue this year than
any other top-rated country except the U.K., and will be the biggest spender from 2011 to
2013.” The message from Moody’s was clear: the U.S. federal government must change
direction on spending or face economic disaster.
The leftist majorities in Congress and the White House are not listening. Instead of
reining in federal spending and tackling our existing Entitlement crisis, they are locked in
an all out push to create a brand new $2.5 trillion health care entitlement. The President
may say his plan is deficit neutral, but the American people do not believe him. And they
are wise not to. The President tries to pay for his plan with over half a trillion dollars in
Medicare cuts over the next decade. The president’s own Centers for Medicare and
Medicaid Services reports that these cuts would cause one-fifth of all health care
providers to go bankrupt. Congress would never allow those hospitals to go out of
business. Congress will never actually make those Medicare cuts. So already Obamacare
is half a trillion dollars in the red, and we haven’t even tacked on the hundreds of billion
of dollars the doc fix adds on.

Reducing our entitlement obligations is the only way to prevent our nation from
becoming another Greece. We need to: 1) to show these programs’ long-term obligations
in the budget; target these programs to only who that need them; and strengthen personal
responsibility by making it easier for people to build personal retirement savings and use
health care savings accounts. But first we must avoid the fiscal insanity that is
Obamacare.

By Conn Carroll

_____________________________________________________________________

March 16, 2010

Karl Rove: Repealing Obamacare Will Be Easier If Congress Skirts

Normal Process
“Deeming” and “reconciliation” are hardly household words, but for the next week
Americans will come to know them as key procedural maneuvers that could push
Obamacare across the finish line. But while they might deliver a bill to President
Obama’s desk, they will also make it easier to repeal the measure, says former White
House deputy chief of staff Karl Rove.

On the road for his “Courage and Consequence” book tour, Rove chatted with The
Heritage Foundation about Obamacare, his defense of President George W. Bush’s
conservatism, the growth of Tea Parties and anger toward government spending.

Listen to the full 30-minute interview.

Rove, who joined Heritage for the launch of our San Francisco Community Committee
last September, recalled how even in the heart of Speaker Nancy Pelosi’s (D-CA) district,
conservatives were teeming with energy and enthusiasm. Rove will appear at a Heritage
Foundation community committee event in Naples, FL, next week.

During the interview, he did not hold back his criticism of conservatives, particularly
those who took issue with Bush’s support of No Child Left Behind, the Medicare
prescription drug benefit and TARP. He also singled out conservatives, in addition to
congressional Democrats, for the failure of Social Security reform in 2005.

Rove, however, has a positive vibe about the future of conservatism, particularly leaders
such as Reps. Paul Ryan (R-WI) and Kevin McCarthy (R-CA); Sens. Richard Burr (R-
NC), Lamar Alexander (R-TN) and Jon Kyl (R-AZ); and Govs. Tim Pawlenty (R-WI),
Mitch Daniels (R-IN) and Bobby Jindal (R-LA).

What follows is a partial transcript of the interview.

This is crunch time in Congress for Obamacare, and Rove said he was surprised at the
procedural tactics Democrats are willing to use:

“They’re going to use every tool at their disposal, no matter how weird and perverted its
use will be. This idea that they’re going to take a major piece of legislation and use in the
House what’s called deeming … is pretty extraordinary. And then for the Senate to use
budget reconciliation—not to adjust the dials on spending and tax rates on existing law,
but in essence to create new law—is an enormous perversion of the system.”

“If they pass this bill using these procedures, they will come to regret that because the
procedures used to pass it may also be used to repeal it. And if they use 51 votes in the
Senate to make a major substantive change in legislation, that’s going to be a problem.”

Rove also debunked claims by liberals about reconciliation, specifically its use during the
2001 tax cut legislation signed by Bush:
“We used reconciliation on the passage of the tax cuts in 2001. Well, guess what? One-
quarter of Democrats in the Senate were supportive of the tax cuts, so there was
bipartisanship. Reconciliation is generally used as a way to smooth the consideration of
budget and tax measures that are changes in existing law. It was not designed and was
never intended to be used to pass major, dramatic, big, huge, economy-affecting policy
that the Democrats are trying to do in this instance.”

Rove also spoke at length about Bush’s conservatism, specifically programs such as No
Child Left Behind, the Medicare prescription drug benefit and TARP, which have raised
questions about his fiscal conservatism.

His defense of No Child Left Behind:

“[Rep.] John Boehner and [Sen.] Judd Gregg were the two Republicans who worked with
[then-Sen.] Ted Kennedy and [Rep.] George Miller and the administration to put No
Child Left Behind into place. I believe it is conservative legislation. It says states are in
charge. If you get federal money, a state has to have standards. We don’t care what those
standards are; you just have to have standards.”

“The education oligopoly doesn’t like to be held to account. And having standards—
expectations about what children are expected to learn and when they’re expected to
learn it—is a conservative principle. …”

“What’s so odd to me is that a lot of conservatives have come to join with the teacher
unions in objecting to children being tested. … Conservatives should not get in bed with
the teacher unions and give them what they want, which is weakening or an end to a tool
that gives parents and communities a chance to demand success and to blow the whistle
on failure.”

His defense of the Medicare prescription drug benefit:

“We had two competing plans: We had an $800 billion Democratic plan that was
government-run. The government set the formulary. It decided what drugs you got and
set their prices. And it was not paid for. The Republican plan was free-market oriented
and was scored by the CBO at $450 billion, and included other reforms of Medicare and
the creation of health savings accounts.”

“Because it was based on free-market principles, in which private companies competed to

deliver the benefit, guess what? The program is costing one-third less than what CBO
anticipated. … Why? Because it’s based around markets and markets have a wonderful
way of lowering prices and increasing benefit. …”

“It’s the only government-sponsored health program in the history of the country which
has come in under its original estimates. …”
“I understand if a conservative says to me, ‘I think we ought to repeal Medicare and it
ought to be gone. And I, therefore, object to a Medicare prescription drug benefit.’ I
salute them as being consistent. But if Medicare is going to exist, then we need to have
Medicare driven by market forces and we need to have it as modern as possible. …”

“It was a wise decision for conservatives to say, while we have this moment—a
Republican President, a Republican House, a Republican Senate—let us pass a
conservative, market-oriented version of this benefit, rather than allowing them to pass a
much more expensive, much larger, big government, price-fixing form of service.”

On the use of TARP I, supported by Bush, and TARP II, supported by Obama:

“The difference between those two are clear: We have one where a Republican,
conservative president said, I don’t like doing this, but if we’re going to have to do this to
save the economy, we better make certain the taxpayer is protected and at the end of the
day we get made whole and we make money. And we have a Democrat president who
says, I’ve got a big pot of money, let me use it to reward my friends, punish my enemies
and engage in industrial policy.”

What went wrong in the Social Security reform debate of 2005:

“When it came to Social Security reform, we had problems on the left and the right. The
political left in Congress was not the same as thoughtful liberals like [the late Sen.]
Daniel Patrick Moynihan, who said we better repair the safety net before it breaks. We
had no political support among Democrats. …”

“Let’s be candid about this. Republicans applauded when Bush talked about this in the
2000 and 2004 campaigns, and there were a lot of reformers like [Sens.] Elizabeth Dole,
John Sununu and Jim DeMint who got elected to the Congress by talking about this. But
when it came time for the rubber to meet the road in 2005, there was little enthusiasm
among Republicans for taking this up, and particularly striking among some conservative
leaders whom you would’ve thought would’ve understood the special moment we had
and the responsibility we had to save this program, who said, nope, sorry, not going to do
it.”

The role of Tea Party groups:

“I don’t want them to become an adjunct of the Republican Party. I think they are far
more powerful and influential if they remain as they are today, which is a movement that
holds the feet of elected officials in both parties to account for what they do on spending,
deficits, debt and powers of government.”

The best reporter to cover the Bush White House:

“I hate to sound like I’m flacking for my friends at Fox, but the Fox reporters were
always good in that they were tough but fair. I thought also, surprising enough, that Jake
Tapper, who is an ABC reporter, who is a lefty, was nonetheless reasonably fair and
tough. You could count on him to ask you tough questions.”

Rove’s thoughts on those who call Obama a “socialist”:

“We’ve got to be very careful about our language in order not to give our adversaries
cheap shots to make at us, while at the same time making the case against President
Obama and liberal policies. …”

“President Obama wants things to remain in the hands of private owners and operators.
It’s just that he wants them to be subjected to a level of regulation, scrutiny and restraint
by government that would be stifling.”

“We have to remember our target: It’s not our fellow conservatives. Our object here is to
say things and make the case to people whose ears and eyes are open, but who don’t
necessarily view themselves as conservatives.”

How technology is changing politics:

“We need to as a movement avail ourselves of all these channels because they are ways
to reach people, particularly younger people who are otherwise not available to us. Just
remember this, 2008 in the presidential election, it’s the first election in history that more
people said they got their information about the election from the Internet than from local
newspapers.”

By Rob Bluey
______________________________________________

March 16, 2010

The Slaughter Rule: Yet Another Reason Obamacare Would Be

Unconstitutional
As written, the current health care bill before Congress already is guaranteed to face
serious constitutional challenges on enumerated powers, 5th Amendment, racial
discrimination, and unequal state treatment. Now the White House seems determined to
add a whole new reason courts will throw out Obamacare on sight. Director of the
Stanford Constitutional Law Center at Stanford Law School and former-federal judge
Michael McConnell explains:

“To become law—hence eligible for amendment via reconciliation—the Senate health-
care bill must actually be signed into law. The Constitution speaks directly to how that is
done. According to Article I, Section 7, in order for a ‘Bill’ to ‘become a Law,’ it ’shall
have passed the House of Representatives and the Senate’ and be ‘presented to the
President of the United States’ for signature or veto. Unless a bill actually has ‘passed’
both Houses, it cannot be presented to the president and cannot become a law.”

“To be sure, each House of Congress has power to ‘determine the Rules of its
Proceedings.’ Each house can thus determine how much debate to permit, whether to
allow amendments from the floor, and even to require supermajority votes for some types
of proceeding. But House and Senate rules cannot dispense with the bare-bones
requirements of the Constitution. Under Article I, Section 7, passage of one bill cannot be
deemed to be enactment of another.”

“The Slaughter solution attempts to allow the House to pass the Senate bill, plus a bill
amending it, with a single vote. The senators would then vote only on the amendatory
bill. But this means that no single bill will have passed both houses in the same form. As
the Supreme Court wrote in Clinton v. City of New York (1998), a bill containing the
‘exact text’ must be approved by one house; the other house must approve ‘precisely the
same text.’”
“These constitutional rules set forth in Article I are not mere exercises in formalism.
They ensure the democratic accountability of our representatives. Under Section 7, no bill
can become law unless it is put up for public vote by both houses of Congress, and under
Section 5 ‘the Yeas and Nays of the Members of either House on any question . . . shall
be entered on the Journal.’ These requirements enable the people to evaluate whether
their representatives are promoting their interests and the public good. Democratic
leaders have not announced whether they will pursue the Slaughter solution. But the very
purpose of it is to enable members of the House to vote for something without appearing
to do so. The Constitution was drafted to prevent that.”

By Conn Carroll

______________________________________________

March 15, 2010

Health Care Provisions Buried in The Unemployment Benefits Extenders

Bill

Congressional liberals are working overtime. In case you missed it, hidden behind the
non-stop news coverage of the health care debate, the Senate-passed extenders bill
includes several health care provisions that follow the same flawed policies of the big
Stimulus Bill. Once again, these provisions move the health care system in the wrong
direction.

– COBRA or Nothing. The bill would give premium relief only to those unemployed
workers who opt for COBRA coverage. It is well documented that COBRA coverage is
one of the most expensive options available to those who lose their jobs. Workers would
be better served if they were able to decide whether to use this temporary assistance on
COBRA or another more affordable option, including policies available in the individual
market.

– Another Medicaid Bailout. The bill would continue to use federal taxpayer funds to
bailout state Medicaid programs. While state budgets are crippled by Medicaid, the
solution is not to transfer the cost on the federal taxpayers. Instead, Congress should get
serious about Medicaid reform and grant states the flexibility they need to fix the
program.

– More Delay on the Doctor Fix. The bill would delay automatic Medicare
reimbursement cuts to doctors. Cleverly, Congressional leaders removed this costly fix
from their health care overhaul and instead have kicked the can down the road one more
time. This will enable them to say that the health care legislation is deficit neutral. Senate
Congressional leaders should get serious about a permanent fix of the Medicare
reimbursement for doctors once and for all, and find some way to offset its cost, rather
than adding the additional costs to the deficit.

This bill is a good reminder that even if the massive health care overhaul fails, health care
is not dead. Ill-advised health care proposals gain support in different forms, and can be
enacted in bite-sized bits.

By Nina Owcharenko

______________________________________________

March 15, 2010

The Democrats’ Tangled Web

In 2009, Democrats chose to proceed with a health-care bill under the regular order – that
is, they sought to pass the legislation under normal House and Senate rules. They did not
put together a budget reconciliation bill with health care in it, something that could have
passed the Senate with a simple majority vote. They conceded that such an approach
would likely produce a flawed product, as many non-budgetary provisions in a health-
care plan would not survive the reconciliation process. And so they decided to try and
pass a bill without resorting to reconciliation, even though they knew they would need
sixty votes in the Senate to succeed. It worked. They passed a bill in the House in
November, and a somewhat different version in the Senate in December.

Then came Scott Brown. His stunning election to the Senate on January 19 upended the
Democrats’ end-game. They were going to work out the differences between the House
and Senate-passed bills in January and proceed to pass an agreed-upon version in both
chambers as expeditiously as possible. But that plan was contingent on getting sixty votes
again in the Senate. With Brown’s election, Senate Republicans increased their numbers
from forty to forty-one, thus forcing Democrats to find at least one Republican Senator to
support their final bill.

For the past two months, the White House and Democrats in Congress have been
weaving ever-more complicated legislative webs all with the express intent of avoiding at
all costs any need to negotiate with the now slightly enlarged Senate minority. In effect,
what Democratic leaders want to do is – at the very end of the legislative process –
switch from regular order to a reconciliation process in order to avoid having to deal
seriously with any elected Republicans.

But it’s become increasingly clear that the Democratic scheming and maneuvering
necessary to pull off such a high-wire act has created a web of entanglements that could
very well doom passage of the entire effort.

In particular, there now appear to be two huge hurdles standing directly in the way of a
plan to jam a bill through in the coming days.

First, there is the matter of the liberal abortion provisions in the Senate bill. As the
Catholic Bishops conference has noted the Senate-passed bill includes several provisions
that would allow taxpayer funding of elective abortions. Consequently, the Bishops
opposed passage of that bill when it was considered in the Senate, and now oppose its
passage by the House. The problem for House Democrats is that every version of the end-
game they are now considering is predicated on having the House take up the Senate bill
and pass it unchanged for presidential signature.

That is entirely unacceptable to the Catholic Bishops. They oppose House passage of the
Senate’s pro-abortion health bill. Period. And their opposition hasn’t come with
procedural loopholes that would let members off the hook if they promised to pass a fix
separately. That would be fool’s bargain, and the Bishops know it. So pro-life House
Democrats, led by Congressman Bart Stupak, really have no choice here. They can’t
support the Senate bill unless they want to be known for supporting the most pro-abortion
bill ever considered in Congress. Their only real option is to force House leaders to
amend the Senate bill before passing it to include strong restrictions on funding of
abortion. Yes, that would mean the bill would have to go back through the Senate again
before going to the president, but so be it. That’s not the Bishops’ problem. It would
mean the president and the Democrats would have to really negotiate to get some
Republican support, which is of course the norm for sweeping and important legislation.

This post originally appeared at National Review Online.

By James Capretta

______________________________________________

March 15, 2010

Morning Bell: Obamacare at Any Cost

Yesterday the White House circulated a memo by pollster Joel Benenson. It was designed
to create momentum for Obamacare by convincing wayward House Democrats that
support for the President’s plan has been building since the State of the Union. As with
everything else that comes out of the White House on health care these days, the memo is
nothing but pure fantasy.

This Tuesday, Gallup released its latest poll showing that by a 48%-45% margin
Americans would tell their representative in Congress to vote against President Obama’s
health plan. Compare that to the last time Gallup asked the question in January,
Americans supported the President’s plan 49%-46%. That’s a net six point loss in support
for the President’s plan since the State of the Union. That is momentum. Against
Obamacare.

And Gallup isn’t alone. The Associated Press released a poll this week showing that 68%
of Americans believe the President and Congressional Democrats shouldn’t pass their
health care plan without Republican support. “Nothing has been more disconcerting than
to watch Democratic politicians and their media supporters deceive themselves into
believing that the public favors the Democrats’ current health-care plan,” Democratic
pollsters Pat Caddell and Doug Schoen add in today’s Washington Post, “A solid
majority of Americans opposes the massive health-reform plan.”

Yesterday was particularly tough for the President’s plan. First, the White House
underwhelmed the Democratic Caucus in a presentation of the new (still unwritten)
reconciliation bill. Then, the Senate Parliamentarian killed the Democrats favored
procedural path for passage by signaling he would rule that President Obama must sign
the original Senate bill into law before the Senate could act on the President’s new
reconciliation package. Finally, the Associated Press reported that House leaders have
abandoned all hope of finding language to satisfy Rep. Bart Stupak’s (D-MI) concerns
that the Senate bill funds abortion. By the end of the day, the leftist firedoglake site had
dropped its count of committed House Democrats for passage to 189 (Speaker Pelosi
needs 216 for passage).

With the loss of Stupak and his 7-12 member caucus opposed to taxpayer-funded-
abortions, Speaker Pelosi will have to find the remaining dozen plus votes from the ranks
of cost conscious Blue Dog Democrats. For example, Rep. Suzanne Kosmas (D-FL) who
voted against the House bill in the fall explained at the time: “According to the
Congressional Budget Office, the House health care bill will actually increase federal
health care spending over the long term, while proposals being considered by the Senate
would have a net decrease.” But according to a new CBO score of the Senate bill passed
on Christmas Eve (the one with the Cornhusker Kickback), it actually increases health
care spending. And the reconciliation bill only make things worse, since, among other
increased spending measures, President Obama “fixed” the Cornhusker Kickback not by
eliminating the new spending, but by extending it to all 50 states.

With no votes piling up, and “yes” votes materializing, the Democratic plans to shove
Obamacare down the throats of the American people are becoming more and more
desperate. This Monday, the House Budget Committee will begin markup on the new
reconciliation bill even though actual legislative text does not exist for it yet. The
Democrats plan to pass a shell of a bill through the appropriate committees so that the
Rules Committee can then substitute the bill that is being drafted completely behind
closed doors by the White House and Senate and Democrat leaders.

Politico reports that despite the Parliamentarian’s initial verbal ruling, they will press on
with their Slaughter Rule plan to pass the Senate bill without voting on it. NRO’s Yuval
Levin quips: “Democratic leaders should be asking themselves just how they have gotten
to the point that their strategy is to amend a law that doesn’t exist yet by passing a bill
without voting on it.”

But President Obama’s progressive base is way past rational thought when it comes to
health care. They want it passed at any cost. And as George Will pointed out yesterday,
the very essence of progressivism sublimates the democratic process to the rule of experts
in Washington. No one can say if this bill will finally pass, but if it does, it is abundantly
clear that our republican form of government will be permanently damaged by it.

By Conn Carroll

____________________________________________________________________

The House and Senate Bills

The Senate Health Bill can be found here:

http://www.pdfdownload.org/pdf2html/view_online.php?url=http%3A%2F
%2Fdemocrats.senate.gov%2Freform%2Fpatient-protection-affordable-care-act-as-
passed.pdf

(An in-depth look at the Senate Health Bill by Heritage analysts).

http://www.pdfdownload.org/pdf2html/view_online.php?url=http%3A%2F
%2Fs3.amazonaws.com%2Fthf_media%2F2009%2Fpdf%2Fbg_2353.pdf

The House Health Bill can be found here.

(An in-depth look at the House Health Bill by Heritage analysts)

http://www.pdfdownload.org/pdf2html/view_online.php?url=http%3A%2F
%2Fwww.heritage.org%2FResearch%2FHealthCare%2Fupload%2Fwm_2684.pdf

Read about the Key Differences Between the House and Senate Bills

http://www.pdfdownload.org/pdf2html/view_online.php?url=http%3A%2F
%2Fs3.amazonaws.com%2Fthf_media%2F2009%2Fpdf%2Fwm2740.pdf

_____________________________________________________________________

Twelve Anti-Family Gifts from Congress

Published on December 22, 2009 by Kiki Bradley

As Congress wraps up its final business for the year, there are at least a dozen detrimental
policies included in the omnibus spending bill recently signed into law by the President.
Taken as a whole, these policies devalue human life, weaken civil society, and undermine
the family. Unfortunately, these provisions have largely gone unnoticed by the general
public.

The Dirty Dozen

The Fiscal Year 2010 Omnibus Appropriations bill passed by Congress includes a slew
of offensive items:

1. Elimination of abstinence education. Despite polling showing the vast majority

of parents want their children to be taught that abstinence is best,[1] the omnibus
defunds the abstinence-based education program. In its place Congress creates
another condom-based sex education program.
2. Spreading the wealth. The omnibus bill, as well as the other appropriation
measures that have passed this year, represent a fulfillment of President Obama's
promise to "spread the wealth." His 2010 budget reflects a 30 percent increase
over President Bush's last year in office on means-tested welfare programs such
as housing, food stamps, and health care. Unfortunately, these programs do little
or nothing to help recipients move off of the welfare rolls and into jobs where
they can achieve independence and provide for their families.
3. Needle exchange. Tucked into the health portion of the bill is an allowance of
federal taxpayer funds to be used for needle exchange programs whereby drug
addicts can get new needles for turning in used needles. Ostensibly to prevent the
spread of infection, these programs settle for "harm reduction" rather than
overcoming drug addiction. The provision does allow local health agencies and
local law enforcement to "opt-out."
4. Planned Parenthood funding. Despite the country's towering deficit, the
omnibus bill boosts Title X family planning funding by $10 million to $315.5
million. The largest recipient of Title X funds is Planned Parenthood.
5. United Nations Population Fund (UNFPA). Despite its stated mission to
"ensure that every pregnancy is wanted," the UNFPA would receive $5 million
more from U.S. taxpayers to, among other things, support China's mandatory one-
child policy, under which millions of wanted pregnancies have been ended.
6. International family planning. Shortly after his inauguration, President Obama
rescinded the "Mexico City policy," which banned funding to organizations that
promote and/or perform abortion overseas. The omnibus bills would give these
groups an additional $103 million.
7. Limiting free speech. The omnibus bill drops a ban on federal funds being used
to enforce or implement the "Fairness Doctrine." This policy would have the
effect of shutting down conservative talk radio programs.
The section of the bill that funds the District of Columbia includes these disturbing
provisions:

1. Ending the D.C. Scholarship Program. For five years, thousands of D.C.
families have been able to send their children to safe and effective private schools.
But the omnibus bill allows no new entrants into the program--despite a 2009
Department of Education report showing a statistically significant increase in
reading scores for scholarship students.[2]
2. Public funding of abortion. The bill lifts a ban on D.C. using local funds to
promote and fund abortions for District residents.
3. Taxpayer-financed domestic partner benefits. The bill lifts a longstanding ban
on the use of federal taxpayer funds to pay for health care benefits for domestic
partners of D.C. employees. Federal funds would also now be used for domestic
partnership registration.
4. Legalized medical marijuana. The bill gives D.C. the ability to use local funds
to start and implement a medical marijuana program. This comes at a time when,
according to a recent article in the Wall Street Journal, Los Angeles is attempting
to reel in its program. Medical marijuana dispensaries have become one of the
fastest-growing industries in the city, with some 1,000 dispensaries cropping up
since 2004.[3]
5. Needle exchange for drug abusers. A decade-long ban is lifted in the bill to
allow D.C. to use local funds to run a needle exchange program for drug addicts.
Unfortunately, a provision keeping these programs from within 1,000 feet of any
school, day care, or youth center was stripped out in the final bill.

Unwelcome Christmas Gifts

The Christmas season is a time when Americans celebrate life, family, and community.
Unfortunately, the 12 unwelcome Christmas gifts in the omnibus bill, signed into law by
President Obama last week, undermine these pillars of American civil society.

Katherine Bradley is Visiting Fellow in the Richard and Helen DeVos Center for
Religion and Civil Society at The Heritage Foundation.

Show references in this report

[1]See Robert E. Rector, Melissa G. Pardue, and Shannon Martin, "What Do Parents
Want Taught in Sex Education Programs?," Heritage Foundation Backgrounder No.1722,
January 28, 2004, at http://www.heritage.org/Research/Abstinence/bg1722.cfm.

[2]See Dan Lips, "D.C. Opportunity Scholarships Boost Reading Scores, Family
Satisfaction," Heritage Foundation WebMemo No.2396, April 10, 2009, at
http://www.heritage.org/Research/Education/wm2391.cfm.
[3]Tamara Audi, "L.A. Agrees to Limit Medical Marijuana Dispensaries," The Wall
Street Journal, December 9, 2009, at
http://online.wsj.com/article/SB126033084958883141.html (December 19, 2009).

______________________________________________
___________________________________________________________

January 20, 2010

Employer Letter to Pelosi and Reid

On January 19th, 2010, 675 businesses sent a letter to Speaker Pelosi and Leader Reid
asking them to step back from the health care bills they passed and return to the basics of
health reform.

Read the complete letter, Click Here.

http://www.pdfdownload.org/pdf2html/pdf2html.php?url=http%3A%2F
%2Fs3.amazonaws.com%2Fthf_media%2F2010%2Fpdf
%2FConference.011910.pdf&images=yes

January 19, 2010

The Honorable Nancy Pelosi
Speaker
U.S. House of Representatives
Washington, D. C. 20515
The Honorable Harry Reid
Senate Majority Leader
United States Senate
Washington, D.C. 20510
Dear Speaker Pelosi and Leader Reid:
Employers are united with the Members of Congress in both
parties who
understand that ever-rising health care costs are threatening the
viability of U.S.
businesses and job security for millions of Americans.
Collectively, America's
employers provide health coverage to over 170 million
Americans, and we have
a major stake in achieving meaningful reform of our health care
system this year.
We want to help to enact legislation that will:
Bend the cost curve for the overall health care system
Improve the long-term fiscal outlook for federal and state
governments
Produce greater quality and value in our health care system
Help facilitate our long term economic recovery
But not any health reform will do. The final legislative framework
must get the
fundamentals of health reform right.
We, therefore, urge you to not merge the House and Senate
passed bills. Health
care reform is not only about changing the rules for our health
care system, it
also results in restructuring one-sixth of our economy and
comes in the midst of
historic economic turmoil. At no time in this long debate has it
been more
important than now to take a fresh look to make sure that health
reform will
achieve its intended goals. In our view, the most important goals
that negotiators
should focus on are strengthening the employment-based
system, achieving
meaningful reductions in the rate of growth in healthcare costs
and significantly
improving its quality.
Legislation that does not bend the cost curve for both public
and private health
plans is not accomplishing its goal and contradicts the strong
bipartisan
consensus that has driven the case for health care reform.
Legislation limiting
the flexibility and innovation in the private sector to improve
health care quality
would erode parts of the system that are now working.
Therefore, we strongly believe and have consistently stated that
employer
mandates will increase employer and employee costs and limit
the flexibility and
innovation that serves as the foundation of the employer-
sponsored health care
system. Without this flexibility, employers will be prevented
from designing and
offering health plans that best reflect the needs of their
workforce and make
health coverage as affordable as possible for their employees.
Additionally, the final legislation must support the flexibility that
ERISA provides
in the offering of employer-sponsored health insurance
coverage. The existing
rules and regulations governing the administration of these
benefit plans provide
the right level of flexibility so that employers can develop the
coverage that fits
the changing needs of their workforce. Allowing states to
require employers to
comply with varying state or local mandates would further raise
employer costs,
stifle innovation in employer-sponsored coverage and result in
unequal benefits
for employees. We should not disrupt the delicate balance that
ERISA's
regulatory framework provides or risk hurting those who are
highly satisfied
with the health care coverage that they currently receive.
Finally, we need to be sure that any legislation maintains
supportive tax policy
and not undermine employer-sponsored coverage or add to its
costs. In
particular, excise taxes on so-called "high cost" plans without
adequate
recognition of demographic or geographic disparities or the
actuarial value of
benefits, new federal premium taxes, and the taxation of retiree
drug subsidies
are inconsistent with making health care more affordable.
Additionally, we are
deeply concerned about reports of "carving-out" union
negotiated plans because
this merely exacerbates and concentrates the problem on all
other employer-
sponsored plans and the employees and families in them. We
also urge that the
final bill includes a clear safe harbor rule for high deductible
health plan coverage
so that there is no uncertainty about the ability of these
important plans to
continue to be offered alongside health savings accounts
(HSAs). Similarly, we
urge that any limits on contributions to flexible spending
accounts (FSAs) be
increased and then indexed to the medical component of the
CPI to minimize any
possible adverse impact of the limits in both bills to those with
high unreimbursed
medical expenses.
We do look forward to continuing to work with you on achieving
responsible and
practical health care reform legislation and on getting the
fundamentals right for
all Americans. Working together, we can achieve positive reform
that bends the
cost curve and expands access and quality for all Americans.
Sincerely,
3M Company
48HourPrint.com
4T Total Lawn, Inc.
A& B Insurance
A.E. Machine Works, Inc.
ACE Clearwater Enterprises
Ace/Avant Concrete Const. Co., Inc.
Acme Sample
Acu International Supplies, Inc.
Adams, Kvittem-Barr & Assoc. CPAs, LLP
Advance Food Company, Inc.
Advanced Diabetic Solutions
Advantage Benefits Group
Affiliated Bank
Aftershift, Inc.
AGL Resources
Agri-Energy Solutions, Inc.
AH&LA
AIM Engineering, LLC
Air Logistics Corporation
Alamo Cement Company
Albany Area Chamber of Commerce
All State Mfg.
Allegiance Benefit Plan Management, Inc.
Alliance Bank
Allied Photo Chemical
Allison A. Moise DDS, LLC
Aluminum Association
American Architectural Manufacturers Association
American Bakers Association
American Benefits Council
American Business Women's Association
American Council of Engineering Companies
American Electric Power
American Farm Bureau Federation
American Lighting Association
American Rental Association
American Staffing Association
America's Finest Woodworking Team
Ames Chamber of Commerce
Anderson's Fabrication, Inc.
Andrews Chamber of Commerce & CVB
Appalachian Log Structures
Arctic Slope Telephone Association Cooperative
Argyle Chamber of Commerce
Arizona Chamber of Commerce and Industry
Arizona Manufacturers Council
Arizona-New Mexico Cable Communications Association
Arkansas State Chamber of Commerce
Arrow Gear Company
As You Like It Tile
Ascencion Recordings, Inc.
Ascension Center for Women's Health, LLC
Ascension Roofing and Sheet Metal
Asset Profiles
Associated Builders and Contractors
Associated Equipment Distributors
Associated Industries of Florida
Associated Oregon Industries
Association of Washington Business
Aunt Millie's Bakeries
Aureus Advanced Practice, LLC
Aureus Group
Aureus Medical Management Services, LLC
Aureus Nursing, LLC
Aureus Radiology, LLC
AurHomes, LLC
AurStaff
Auto Truck, Inc.
Automotive Aftermarket Association of the Carolinas and Tennessee,
Inc.
Automotive Parts Remanufacturers Association
AutoNation, Inc.
Avaya, Inc.
B&B Trucking, Inc.
Baird & Warner Real Estate
Ball Corporation
Barnes Builders Realty, Inc.
Barracuda Coffee Company
Battle Creek Orthopaedic Clinic
BD Construction, Inc.
BEK Communications Cooperative
Benefits Strategies
Berne Chamber of Commerce
Bill Haeger & Associates
Bismarck-Mandan Chamber of Commerce
Black & Decker Corporation
Black Hills Bentonite, LLC
Blakely Financial
Blount County Chamber of Commerce
Bluegrass Rental
BMB Solutions
Border States Electric
Bottom-Up Home Inspection & Consulting Services, LLC
Bowie Enterprises
BPS Telephone Company
Bradford White Corporation
Braun Industries, Inc.
Brick Industry Association
Brinkman International Group, Inc.
Brooks Manufacturing Co.
Brownwood (TX) Chamber of Commerce
Buffalo Niagara Partnership
Business and Institutional Furniture Manufacturers Association
International
Business Council of New York State
C&A Industries, Inc.
C.F. Jordan Construction
Camden County Chamber of Commerce
Canby Telcom
Capform, Inc.
Capital Financial Group of Walker's Point, Inc.
Carroll County Chamber of Commerce
Carter Machine Company, Inc.
Catawba County Chamber of Commerce
Caterpillar, Inc.
Celebrity Staff
Cement Employers Association
Center for Diagnostic Imaging, Inc.
Central Alarm Signal, Inc.
Central Florida Chapter Associated Builders and Contractors, Inc.
Central Penn Benefits, Inc.
Central Realty
Certified Home Inspection
Certified Inspections
CFRA, LLC
Chad Allan Consulting, LLC
Change Strategists, Inc.
Charleston Metro Chamber of Commerce
Charlotte Chamber of Commerce
Chelsea Self Storage
Chester County Chamber of Business & Industry
Children's Discovery Center
Churchtech, Inc.
CKM Associates
Clark & Associates of Nevada, Inc.
Clean Control Corporation
Climate Systems, Inc.
College Park, Inc.
College Publishing
Collier Well Equipment & Supply
Columbia Montour Chamber of Commerce
Columbus Area Chamber of Commerce
Combustion Services Corporation
Commercial & Industrial Htg. / AC
Community Foundation of West Alabama
Composite Can & Tube Institute
Connecticut Business and Industry Association
Conrad and Dowdell Productions, Inc.
Consulting Aviation Services, Inc.
Cornerstone Home Inspections, LLC
Corporate Health Care Coalition
Councilman Farlow Marlowe & Co, PLLC
Cowboy Consulting Services
CP&E Marketing
Credit Solutions
Credit Union Plus
Creekside Apartments
Cress Funeral & Cremation Service
CTO, Inc.
CULTEC, Inc.
Cummins Label
Cummins, Inc.
Cyber Tech, Inc.
D/A Central, Inc.
D/B/A National Property Inspections
Dakota Central Communications
David Chapman Agency, Inc.
Davison
Deere & Company
Delka's Repair
Desert to Mountain Architecture, LLC
Design the Magic
Destin Area Chamber of Commerce
Detroit Regional Chamber of Commerce
Diakon Logistics
Dick Morrow Enterprises, Inc.
DIGITAL THE FRUTH GROUP
Diversified Services, Inc.
Dixie Printing & Packaging
Don R. Fruchey, Inc.
Don Shrout Insurance Agency, LLC
Don Willis Furniture
Drapery World and Blinds
DTMV Properties
Dublin (OH) Chamber of Commerce
Dundee Internet Services, Inc.
Durcon, Inc.
E&V Engineering
E.A. Fountain Consulting, LLC
Earl Smith Distributing Co.
Echoing Hills Village, Inc.
El Ran, Inc.
Electramatic, Inc.
Electronic Payments Group, Inc.
EMC2, Inc.
Emerson
Employee Benefits Group
Emporia Greensville Chamber of Commerce
Engineering Associates
Executive Management Services, Inc.
Expectec Technology Services
Express Employment Professionals
Express Services, Inc.
Exton Region Chamber of Commerce
F.N. Sheppard & Co.
FACES DaySpa
Fairmont Area Chamber of Commerce
Fairmount Minerals Ltd.
Faspac, LLC
File Management Pros, LLC
Financial Executives International
Financial Investments, Inc.
Finders Emporium
Findley Davies, Inc.
Fire-Dex
Fiskars Properties
Florida Contract Growers, LLC
Flowers 'n' Ferns
Fluid Process Equipment
Flying W Horse Services, Inc.
FocusOne Solutions, LLC
Fond du Lac Association of Commerce
Food Marketing Institute
Forrest Sherer, Inc.
Fort Collins Area Chamber of Commerce
Forward Janesville, Inc.
Fountain-Ferrara & Murphy & Co. CPAs
Freehold Cycle Center, Inc.
G&A Consultants, Inc.
G&G Avionics
Gallup McKinley County Chamber of Commerce
Gemini Fitness & Aquatics Club
General Recovery, Inc.
Georgia Chamber of Commerce
Gifford TV & Electronics
Glas-Col, LLC
Glenwood Telephone Membership Corporation
Global Cold Chain Alliance
Goodin Company
Goodwill Industries of Lubbock, Inc.
Goshen County Chamber of Commerce
Gower And Co. Real Estate
Granbury Chamber of Commerce
Grand Junction Area Chamber of Commerce
Great Lakes Carpet & Tile, Inc.
Great Pacific Chocolate Company
Great Plains Energy
Greater Albuquerque Chamber of Commerce
Greater Brookfield Chamber of Commerce
Greater Chambersburg Chamber of Commerce
Greater Columbus Georgia Chamber of Commerce
Greater Easley Chamber of Commerce
Greater Fresno Area Chamber of Commerce
Greater Hall Chamber of Commerce
Greater Irving-Las Colinas Chamber of Commerce
Greater Killeen Chamber of Commerce
Greater Medina Chamber of Commerce
Greater Sandoval County Chamber of Commerce
Greater Shreveport Chamber of Commerce
Greater Springfield Chamber of Commerce
Green Bay Area Chamber of Commerce
Group Benefits
GTC Technology US, LLC
GTE ENT, LLC
Guada Coma Mechanical
Guthrie Chamber of Commerce
Hamilton Farm Equipment Center, Inc.
Harris Corporation
Harrisburg Regional Chamber & CREDC
Harrison CPA & Consulting, P.C.
Hartman Family Dentistry
Haslet Veterinary Clinic
Health Insurance Consultants, LLC
Henderson Area Chamber of Commerce
HeraCare Inc.
Herold Precision Metals, LLC
Hiler Industries
Hill Country Telephone Cooperative
Hill County Electric & Triangle Communications
Hilliard Area Chamber of Commerce
Hills Flat Lumber
Hilton Woodcliff Lake Hotel
HintonBurdick CPA's & Advisors
Hoerbiger Corporation of America, Inc.
Home Telephone Co.
Honeywell
Hopkins Pontiac GMC
Horry Telephone Cooperative, Inc.
Hospitality Recruiters
HPM, LLC
HR Policy Association
HR Policy Association
HR Resolutions, LLC
HRA Services, Inc.
HRI Associates
HRI Financial, Inc.
Huffmaster Management, Inc.
Hunterdon County Chamber of Commerce
Hurlen Corporation
Huron County Chamber of Commerce
Hydraulic Specialty Co.
ICOR International, Inc.
Illinois Chamber of Commerce
Illinois Manufacturers Association
Illinois Tool Works, Inc.
INDA, Association of the Nonwoven Fabrics Industry
Independent Electrical Contractors, Inc.
Indiana Chamber of Commerce
Indiana Manufacturers Association
Industrial Fasteners Institute
Industrial Minerals Association North America
Industrial Packaging Alliance of North America
Infinite Group, Inc.
Innovative Waste Systems
Insurance Concepts Financial
Intel Corporation
International Academy of Medical Acupuncture, Inc.
International Franchise Association
International Management Systems Corporation
International Paper Co.
Intuition Systems, Inc.
J Micheal Law DDS, PC
J. B. Poss & Associates, Inc.
J.C. Penney Corporation, Inc.
J.E. Johnson, Inc.
Jandrain Benefit Plans
Janssen Service, Inc.
Jasper Engines
J-Con Woodworking
JDH Structural Engineering
Jefferson Chamber of Commerce
Jeffrey Wolk and Co.
Jesco Industries, Inc.
Jessup Engineering, Inc.
Jimmy's Grill, Inc.
John Gray and Sons
Johnson City-Jonesborough-Washington County Chamber of
Commerce
Kadairs
Kalispell Chamber of Commerce
KAMDEN Strategy Group, Inc.
Kankakee Regional Chamber of Commerce
KCI Technologies, Inc.
Keep Liberty Beautiful
Kelly-Moore Paint Co., Inc.
Kercher Industries, Inc.
Kingsport Chamber of Commerce
Kiva Plastics, Inc.
Koons Real Estate Law
L & J Operating, Inc.
L. H. Land Painting Co., Inc.
La Machine Shop, Inc.
Lafarge North America, Inc.
Lake Glass, Inc.
Lake Houston Area Chamber of Commerce
Lance & Co.
Land Specialties Mfg. Co., Inc.
Lang Property Management
Lasco Fittings, Inc.
Laserfab, Inc.
Leavitt Group Benefit Services of Boise
Lebanon Valley Chamber of Commerce
Lifoam Industries
Lincoln Chamber of Commerce
Lipsky Financial Group, Inc.
Litchfield Chamber of Commerce
Lloyd B. Baker & Associates, LLC
Lockton Companies, LLC
Loganville Dialysis Center
Logical Computer Solutions, Inc.
Logistics Consulting
LONCO, Inc.
Lordon Engineering
Loudoun County (VA) Chamber of Commerce
Louisiana Association of Business & Industry
Lynchburg Kawasaki Yamaha, Inc.
Lynchburg Regional Chamber of Commerce
Magnolia Blossom Cafe
Magnolia-Columbia County Chamber of Commerce
Manhattan Chamber of Commerce
Maple Lawn Nursing Home, Inc.
Marathon Oil Corporation
Marietta Area Chamber of Commerce
Marilyn's Natural Foods
Marine & Industrial Hydraulics, Inc.
Martinizing Dry Cleaning
Maurer Management & Properties, Inc.
McAlister's of Tuscaloosa
McCallion Staffing Specialists
McDonald Excavating, Inc.
McKenna & Company, LLC
McNaughton & Gunn, Inc.
Medalist Insurance Group
Meissner Tierney Fisher & Nichols S.C.
Melbourne Regional Chamber of East Central Florida, Inc.
Metal Finishing Co.
Metal Powder Industries Federation
Metal Treating Institute
Metropolitan Milwaukee Association of Commerce
MetroWest Chamber of Commerce
Michigan Chamber of Commerce
Micropub Systems International, Inc.
Mid-Atlantic Hispanic Chamber of Commerce, Inc.
Mid-Plains Rural Telephone Cooperative
Miller Wire Works, Inc.
Milton-Freewater Area Chamber of Commerce
Minneapolis Regional Chamber of Commerce
Minnesota Chamber of Commerce
Mission Auto Connection
Mississippi Lime Company
Missouri Chamber of Commerce and Industry
Mister Sweeper, LP
Miza Foods, Inc.
Modern Metal Processing
Monroe and Associates
Montgomery County Chamber of Commerce
Morris Certified Inspections
Motor & Equipment Manufacturers Association
Mount Joy Chamber of Commerce
Mount Prospect Chamber of Commerce
MTO Clean of Wayne County
Music Go Round
My Good Labor Company
Naperville Area Chamber of Commerce
Napolitano GMAC Real Estate
Natchitoches Area Chamber of Commerce
National Association of Convenience Stores
National Association of Health Underwriters
National Association of Manufacturers
National Association of Wholesaler-Distributors
National Business Group on Health
National Council of Chain Restaurants
National Lumber and Building Material Dealers Association
National Ready Mixed Concrete Association
National Retail Federation
National Roofing Contractors Association
National Rural Electric Cooperative Association
National Teachers Associates Life Insurance Company
National Telecommunications Cooperative Association
Navarre Beach Chamber of Commerce
Nebraska Central Telephone Company
Nebraska Chamber of Commerce & Industry
Nelson Telephone Cooperative
Nevada Manufacturers Association
New Castle Hotels & Resorts
New Jersey Business & Industry Association
New Jersey Chamber of Commerce
New Mexico Association of Commerce & Industry
Non-Ferrous Founders' Society
Norfolk Southern Corporation
North Myrtle Beach Chamber of Commerce
North River ENT, PC
Northeast Pennsylvania Manufacturers and Employers Association
Northrop Grumman Corporation
Northumberland County Chamber of Commerce
Northwest Asphalt, Inc.
Northwest Telephone Cooperative Association
Norwalk Linen Service, Inc.
NPC International, Inc.
NPC, Inc.
NSTAR
NYCO Minerals, Inc.
O. F. Enterprises, LLC
O. F. Mossberg & Sons, Inc.
OBC Publishing Company
OfficeMax Incorporated
Ohio Chamber of Commerce
Oklahoma Lumbermen's Association
Old Stone Church, LLC
OMNI Community Credit Union
One Mesquite, LLC
Oshkosh Chamber of Commerce
Oxford Mining Company, LLC
Packard Industries, Inc.
Palmer Mutual Telephone Company
Panhandle Telephone Cooperative, Inc.
Paragon Global Resources, Inc.
Partner Communications Cooperative
Patrician Furniture
Paulding County Chamber of Commerce
Penn Color, Inc.
Pennsylvania Chamber of Business and Industry
Pennsylvania Manufacturers' Association
Permac Industries
Personnel Management, Inc.
Peters Imports, Inc.
Pfister & Company, Inc.
Piedmont Chamber of Commerce
Pine Drive Telephone Co.
Pine Knob Ski Resort, Inc.
Plains Cotton Cooperative Association
Plastomer Corporation
Plattsburgh-North Country Chamber of Commerce
Pogoda Companies
Poole Janitorial Service
Power Curbers
PowerNotebooks.com
PPEP, Inc.
Practical Employee Solutions
Pratt Ordway Properties
PRESTON LANDS, LLC
Princeton Mining Company, Inc.
Princeton West of Carefree
Printing Industries of America
Pulaski White Rural Telephone Cooperative, Inc.
Quartermaster Shop
Qwest Communications International Inc.
R. Hirt Jr., Co.
RAK Consulting, Inc.
Raleigh Chamber of Commerce
Rappahannock Cellars
Ray Electric
Raytheon Company
Renew Design Group, Inc.
Reno Sparks Chamber of Commerce
Rhode Island Chamber of Commerce Coalition
Rhodes-Joseph & Tobiason Advisors, LLC
Rich Osterman Electric Co., Inc.
Richardson Collision Center LLC
RIE Coatings, Inc.
Roaring Spring Blank Book Co.
Robert Allison Custom Homes LLC
Rochester Business Alliance
Rockwell Automation
Rockwell Collins
RogersLowell Area Chamber of Commerce
ROHM Insurance Agency
Rome Area Chamber of Commerce
Ronnie Martin Realty, Inc.
Rosebud Mining Company
Rothsay Telephone Co.
Rowan County Chamber of Commerce
Rural Telephone
Russellville Steel Company, Inc.
Ruston-Lincoln Chamber of Commerce
RVW, Inc.
Ryder System, Inc.
Sadowski's Health Insurance Specialists
Saint Paul Area Chamber of Commerce
Salisbury Area Chamber of Commerce
Samsel Supply Company
Santa Clara Chamber of Commerce & Convention-Visitors Bureau
Sawmill Creek Vineyards, Inc.
Schafer Agency, Inc.
Schenectady County Chamber of Commerce
Schuylkill Chamber of Commerce
Schweitzer Engineering Laboratories, Inc.
Security Management Consulting
SEEK Careers/Staffing, Inc.
Self-Insurance Institute of America
Seminole Economic Development Corporation
ServiceMaster Clean
SES, LLC
Shark Industries Ltd.
Sheraton Tarrytown Hotel
Sherry Laboratories
Sidwell & Associates
SIGN Lite, Inc.
Signal Metal Industries, Inc.
Signature Technology Group, Inc.
Slattery Enterprises, Inc.
Smith Tree & Landscape Service, Inc.
Smith-Doyle Contractors, Inc.
Smurfit Stone Container Corporation
Snider-Killingsworth Insurance Agency
Snyder's of Hanover
Society of American Florists
Soiltest Farm Consultants, Inc.
SOL, Inc.
Somerset County (PA) Chamber of Commerce
South Carolina Chamber of Commerce
Southern Saratoga County Chamber of Commerce
Southwest Area Manufacturers Association
Spectra Energy
SPI: The Plastics Industry Trade Association
Sports Tutor, Inc.
Springfield (MO) Area Chamber of Commerce
St. Regis Culvert, Inc.
Star Valley Chamber of Commerce
State Farm Insurance
Stephens Insurance Services
Sterling Heights Regional Chamber of Commerce & Industry
Sterling Seismic Services Ltd.
Storm Technologies, Inc.
Strategic Insurance Solutions
Strategic IT Security Solutions
Structural Metals of Kansas City, Inc.
Stuart/Martin County Chamber of Commerce
Sunnyside Automotive, Inc.
Superior Building Supply
SUPERVALU
Supreme Mid Atlantic Corporation
Swantner & Gordon, LLP
Systems Management & Research, Inc.
Tacoma-Pierce County Chamber of Commerce
Tariff Affiliates.com
Tasty Baking Company
TEAM Industries, Inc.
Technology Service Corporation
Tempe Chamber of Commerce
Templeton Coal Company, Inc.
Temporary Accommodations Coordinators
Tennessee Chamber of Commerce & Industry
Terrell County Chamber of Commerce
Texas Association of Business
The Ascension Chamber of Commerce
The Association for Suppliers of Printing, Publishing and Converting
Technologies
The Boeing Company
The Business Council of New York State
The Business Council of Westchester
The Challenge Machinery Company
The Class Act
The Cody
The Council of Insurance Agents & Brokers
The ERISA Industry Committee
The Floor Shoppe, Inc.
The Henry Group
The Lancaster Chamber of Commerce & Industry
The Libman Company
The Mosser Group
The Otsego County Chamber of Commerce
The Ottoville Mutual Telephone Company
The Philpott Rubber Company
The State Chamber of Oklahoma
The Toledo Telephone Co., Inc.
The William H. Miner Agricultural Research Institute
Thibodaux Chamber of Commerce
THOR Investment Management, Inc.
Thurmond Consulting, Inc.
Tidewater Prosthetic Center, Inc.
Toccoa-Stephens County Chamber of Commerce
Top Sail Dental
TRC Global Solutions, Inc.
Tri-County Communications Cooperative, Inc.
Trinity Furniture
TriTech Corporation of America
True companies
Turner & Schoel, Inc.
Tuscaloosa County Park and Recreation Authority
Tuscarora Area Chamber of Commerce
Tyler Construction Group
U.S. Apple Association
U.S. Chamber of Commerce
UHS Insurance Agency
Universal Avionics System Corporation
Universal Health Network
Utah Manufacturers Association
ValerieG, Inc.
Van Horne Co-op Telephone Company
Van Wert Area Chamber of Commerce
Veranda Home Furnishings & Designs
Vermeer Corporation
Vie De France, Yamazaki, Inc.
Villelli Enterprises, Inc.
Virginia Chamber of Commerce
W.W. Grainger, Inc.
Walco Electric Co.
Walton County Chamber of Commerce
Washtenaw Engineering Co., Inc.
Wausau Region Chamber of Commerce
West Side Telecommunications
Western Hose Gasket Company
Western Reserve Bank
Westfield Group
Wichser Services
Williams
Williamsport/Lycoming Chamber of Commerce
Williams-Pyro, Inc.
Willis
Wilsonville Chamber of Commerce
Winds Aloft, LLC
Winona Area Chamber of Commerce
Wisconsin College Planning, LLC
Wisconsin Manufacturers & Commerce
Woods Manufacturing & Machining Company
Xerox Corporation
X-Ray Sales & Service Co.

______________________________________________
January 14, 2010

Republican Governors: Health Care Bills Omit Reform

Twenty Republican governors and governors-elect sent a letter to Congressional leaders

today urging them to refocus and pass “meaningful health care reform, not hastily
prepared partisan legislation which omits reform and saddles American taxpayers for
generations to come.”

“Governors of both parties have said for months how bad this bill is for the states and our
nation,” said RGA Chairman Haley Barbour. “Now is the time for leaders in Congress to
finally listen and restart this process so they can get health care reform right.”

The governors criticized the lack of transparency in the legislative process and called the
current health care bills “a lost opportunity to improve the lives of Americans, create a
sustainable system of health care and help stabilize both our state and national
economies.”

The governors highlighted that the House and Senate bills fail to fix the broken Medicaid
and Medicare systems and instead entitle 15-20 million more people to Medicaid. The
net result of this expansion “will be a significant cost shift to those privately insured
around the country” and will further damage already hurting state budgets.

They also criticized the inflexibility forced upon states in the current bills. The governors
write that the current proposals would eliminate the ability of states to negotiate Medicaid
provider rates and force the states into a one-size-fits-all, federally-designed health
insurance exchange.

Last, the governors urged Congress to take steps to create a system, which “eliminates
red tape, empowers consumers to engage in making good health care decisions in the
private market, and guarantees affordable coverage for patients with preexisting
conditions.”

Full text of the letter can be found by clicking here.

http://www.rga.org/homepage/republican-governors-health-care-bills-omit-reform/

Full text of the letter can be found below:

Dear Senator Reid, Senator McConnell, Speaker Pelosi, and

Representative Boehner:

As governors, we believe the reform of the health care system can be very
beneficial to our nation’s economic future and the well-being of our
citizens; however, the current health care bills are a lost opportunity to
improve the lives of Americans, create a sustainable system of health care
and help stabilize both our state and national economies.

Health care reform should be about fixing our broken Medicaid and
Medicare systems; instead, the current health care bills entitle 15-20
million more people to Medicaid. While providing health care to low
income individuals is important, the net result of this entitlement
expansion will be a significant cost shift to those privately insured around
the country. According to the Congressional Budget Office (CBO), the
unfunded mandate to states and territories is $25 billion; although many
states disagree with that figure. For example, Texas costs are estimated to
be $21 billion over ten years.

The National Association of State Budget Directors (NASBO) has

demonstrated states/territories are in no position to comply with the
maintenance of effort provisions found in the bills or to accept any
increased costs or additional administrative burdens to expand Medicaid.
State general fund expenditures have dropped for the second year in a
row. The December 2009 survey shows that the budget situation faced by
states truly is unprecedented. Many states cannot afford their current
share of the Medicaid program, and they will also have to face a funding
cliff whenever the stimulus-enhanced FMAP dollars are exhausted.
States have already been forced to cut vital services with 30 states cutting
education, 29 states cutting Corrections, and 28 states already cutting
Medicaid.
Current federal proposals would strip the states of our ability to negotiate
Medicaid provider rates, and we believe that states and territories should
be allowed to negotiate Medicaid provider rates as found in current law.
The pending bills cause states and territories to lose money through the
bills’ treatment of the prescription drug rebate provisions. States and
territories also should not be asked to forego a share of the savings from
any new Medicaid rebates collected for the dual eligible population
receiving prescription drugs through the Medicare Part D program.

These bills also impose a one-size-fits all federally-designed health

insurance exchange and the insurance rating rules tie states’ and
territories’ hands. Health insurance exchanges desired by any state
should be state-based and state-designed to ensure maximum state
flexibility to design and operate exchange mechanisms that facilitate the
purchase of insurance. Utah should not be forced to replicate
Massachusetts’ exchange, and vice versa. In the same vein, the health
insurance rating rules should account for the existing variation in state
and territory statutes and the state and territory should retain the authority
to provide oversight and adopt tighter rating bands if necessary.

In order to pay for the bills, the legislation cuts Medicare $571 billion in
the House bill and $466.7 billion in the Senate bill. Also included are far-
reaching massive tax increases which will impact American individuals
and families at all income levels. From employer mandates and taxes on
high-value insurance plans to taxes on both branded and generic drugs
and medical devices, these bills are funded, and thereby the bills’ costs are
lowered, by taking more from taxpayers and reforming the health care
system less. In particular, the Senate’s $6.7 billion insurance premium tax
will be passed directly to consumers and will impose new costs on
Americans who already have coverage. The unfunded mandates to states
likely will require many states to necessarily raise taxes, too.

Although CBO has scored the Senate bill at $842 billion and the House
bill at $1.3 trillion both bills are full of budget gimmicks. The bills delay
spending until the fourth year and exclude the costly “Doc Fix” which
ignores the over $200 billion price tag associated with stopping the
unavoidable cuts to physicians under the Medicare program.

Governors agree we should work to enhance the quality of health care

while making it more affordable and efficient. Unfortunately, the
opportunity to truly lower the cost of care has been lost in the rush to try
to finish health reform. Both CBO and the Chief Actuary of the Centers
for Medicare and Medicaid Services have warned the current legislation
will increase the overall costs of health care. The federal government and
the states should refocus efforts to lowering the cost of care which will in
turn increase coverage, but simply increasing the number of individuals
on the public plans without a plan to improve the public programs for
participants is irresponsible.

At this juncture, small businesses, seniors, states and territories, and

taxpayers have anxiety about Congress’ pending health care legislation
and rightfully so– one-sixth of our GDP is at stake. As Republican
Governors, we believe in a system which eliminates red tape, empowers
consumers to engage in making good health care decisions in the private
market, and guarantees affordable coverage for patients with preexisting
conditions. Missing from this important legislation is real medical liability
reform and provisions which protect seniors’ Medicare benefits and access
to care. Several states have already implemented medical liability reform
with good results; no real medical reform can be accomplished without
tort reform. Instead, premiums are increased and small businesses are
faced with onerous mandates rather than given the power to pool together
and offer health care at lower prices, just as corporations and labor
unions do.

Along with the majority of Americans and as leaders of 20 states and

territories, we are disappointed with the lack of transparency. We urge you
not to circumvent the normal committee process and to conduct an open,
fully-bipartisan negotiation. It is time to slow down and pass meaningful
health care reform, not hastily prepared partisan legislation which omits
reform and saddles American taxpayers for generations to come.

Sincerely,

Governor Bob Riley, Alabama Governor Jan Brewer,

Arizona

Governor Sean Parnell, Alaska Governor Charlie Crist,

Florida

Governor Sonny Perdue, Georgia Governor Felix

Camacho, Guam
Governor Linda Lingle, Hawaii Governor C.L. “Butch”
Otter, Idaho

Governor Mitch Daniels, Indiana Governor Bobby Jindal,

Louisiana

Governor Tim Pawlenty, Minnesota Governor Haley

Barbour, Mississippi

Governor Jim Gibbons, Nevada Governor John Hoeven,

North Dakota

Governor Don Carcieri, Rhode Island Governor Mark

Sanford, South Carolina

Governor Mike Rounds, South Dakota Governor Rick Perry,

Texas

Governor Gary Herbert, Utah Governor-elect Bob

McDonnell, Virginia

• http://www.rga.org/homepage/republican-governors-health-care-bills-omit-
reform/

_____________________________________________________________

Criminalizing Health-Care Freedom: Obamacare

Supporters Would Use the Brute Force of Criminal
Law for Social Engineering
Published on November 20, 2009 by Brian Walsh and Hans Von Spakovsky
The "reformers" in the White House and the House of Representatives have made all too
plain their vision of the federal government's power to coerce individual Americans to
make the "right" health-care choices. The highly partisan bill the House just passed
includes severe penalties for individuals who do not purchase insurance approved by the
federal government. By neatly tucking these penalties into the IRS code, the so-called
reformers have brought them under the tax-enforcement power of the federal
government.

The Congressional Budget Office stated on October 29 that the House bill would
generate $167 billion in revenue from "penalty payments." Individual Americans are
expected to pay $33 billion of these penalties, with employers paying the rest. Former
member of Congress and Heritage Foundation fellow Ernest Istook has concluded that for
this revenue goal to be met, 8 to 14 million individual Americans will have to be fined
over the next ten years, quite an incentive for federal bureaucrats.

Who will be included among those subject to civil and criminal penalties if this provision
becomes law? For starters, any family of four whose combined income in 2016 is above
$102,100 ($88,200 in today's dollars) and that chooses to pay all its medical expenses out
of pocket rather than pay the $15,000 a year that the CBO says will be the lowest-priced
insurance option for families. Also any healthy twentysomething in a city with high costs
of living who chooses to take the risk of going uninsured. And by outlawing the popular
high-deductible plans that are currently among the lowest-cost health-insurance solutions,
the new law would only increase the number of Americans on the rolls of those who
cannot afford insurance. The CBO itself estimates that at least 18 million Americans will
still be uninsured in 2016.

The fact that the penalties for noncompliance are enforceable by criminal prosecution is a
chilling abuse of the prosecutorial power, which Columbia law professor Herbert
Wechsler pointed out 50 years ago is the greatest power that any government uses against
its citizens. Using it to enforce one particular notion of appropriate insurance coverage is
nothing less than a tyrannical assertion of raw government power over the private lives
and economic rights of individual Americans.

How would the penalties work? As a starting point, taxpaying Americans who do not
satisfy the law's insurance requirement would be penalized on their federal income-tax
returns. Their tax burden would be increased by the lesser of (a) the amount the
government decides they should pay for government-mandated health coverage or (b) 2.5
percent of their adjusted income above a filing threshold. An otherwise law-abiding
American who fails to pay this "tax penalty" could be criminally prosecuted and
sentenced to a year in prison if the feds deem his refusal to be a misdemeanor.

Worse, if the feds decide the refusal is felonious, the culprit may spend five years in
federal prison and be fined up to $250,000. You could end up in a cell in Leavenworth
even if you have paid all your family's medical bills yourself.
By transforming a refusal or failure to comply with a government mandate into a federal
tax violation, the "progressives" are using the brute force of criminal law to engage in
social engineering. This represents an oppressive, absolutist view of government power.

What does President Obama think of the criminalization of Americans' economic

choices? He trivialized the issue when he told ABC's Sunlen Miller he didn't think the
question of the appropriateness of possible jail time is the "biggest question" the House
and Senate are facing right now.

We beg to differ.

The idea of imprisoning or fining Americans who don't knuckle under to an

unprecedented government mandate to purchase a particular insurance product should
outrage anyone who believes in the exceptional promises and opportunities afforded by
our basic American freedoms. The idea isn't progressive but highly regressive, the
equivalent of reinstituting debtors' prisons, a punishment Americans eliminated 160 years
ago.

Of course, the prospect of winding up in prison for failing to maintain government-

mandated insurance may be of no personal concern to the president or members of
Congress. They each receive a Cadillac version of health-care coverage funded by those
same American taxpayers who, in the reformers' vision, will be federal criminals if they
have the audacity to make their own decisions about medical insurance.

If the public's objections to this provision grow loud enough, we will undoubtedly be told
that criminal prosecution will be used only against really bad actors. But that same
reasoning was used to justify the law that sent inventor and entrepreneur Krister Evertson
to federal prison for nearly two years. Evertson testified in July at a bipartisan House
hearing investigating the overcriminalization of conduct in America.

In May 2004, FBI agents driving a black Suburban and wearing SWAT gear ran Evertson
off the road near his mother's home in Wasilla, Alaska. When Evertson was face down on
the pavement with automatic weapons trained on him, an FBI agent told him he was
being arrested because he hadn't put a federally mandated sticker on a UPS package.

A jury in federal court in Alaska acquitted Evertson, but the feds weren't finished. They
reached into their bag of over 4,500 federal crimes and found another ridiculous crime
they could use to prosecute him: supposedly "abandoning" hazardous waste (actually
storing, in appropriate containers, valuable materials he was using for the clean-fuel
technology he was developing). A second jury convicted him, and he spent 21 months in
an Oregon federal prison.

Many of the Americans who will surely ignore the government health-insurance mandate
may not wind up in prison. But if noncompliance becomes too widespread, any one of us
could become the example the feds prosecute to make sure the iron hand of the new
Washington is clearly visible to other potential "criminals."
This is Chicago-style hardball, backed by the full power and resources of the U.S.
government. It illustrates both Obamacare supporters' view of the appropriate uses of
governmental power and the lengths to which they are willing to go to force us to do
what they believe is best. It is a view unbefitting a free people.

Unless this paternalistic juggernaut is stopped, Americans will lose some of their most
fundamental freedoms, and the power of the federal government to impose novel
requirements in every facet of our personal lives will have become virtually unlimited.

Brian W. Walsh is Senior Legal Research Fellow in the Center for Legal and Judicial
Studies at The Heritage Foundation. Hans A. von Spakovsky is a visiting Legal scholar at
the Heritage Foundation. He is also a former commissioner on the Federal Election
Commission and counsel to the assistant attorney general for civil rights at the
Department of Justice.

First Appeared in National Review Online

____________________________________________________________________

Cost and Consequences of Government Health-Care

Decision Making
Posted March 11th, 2009 at 12:30pm in Health Care with 32 comments

Several leading European and Canadian health economists, physicians and scholars — in
Washington recently for the Galen Institute’s conference, “Lessons from Abroad for
Health Reform in the US” — met with analysts from the Heritage Foundation and other
conservative think-tank leaders.

They wanted to explain why Americans should be concerned when officials push for
government-controlled, universal health care coverage that includes innocuous-sounding
but largely intrusive and prohibitive health measures.

“We were told single-payer health care would be a true liberation for Canada when they
enacted it 40 years ago, and the opposite has become true,” says Brian Lee Crowley,
president of the Atlantic Institute for Market Studies in Canada.

Not only do Canadians face extraordinary wait times to get specialized treatments (the
average wait time from getting a referral from a general practitioner to receiving a
treatment was 17.3 weeks in 2008), but they also have limited access to new drugs,
thanks in part to the country’s “comparative effectiveness” body known as the Common
Drug Review, says Brett Skinner with the Fraser Institute.
In Switzerland, “compulsory health insurance has moved the objective from being access
to health care and quality of care to largely cost containment measures,” says Dr.
Alphonse Crespo, an orthopedic surgeon who also runs research for the Institut Constant
de Rebecque in Switzerland.

Next door in France, government policies are undermining patients’ choice of care and
the private sector’s involvement in health care delivery. “France is on its way to joining
the nationalized health care system of the United Kingdom,” says Valentin Petkantchin
with the Insitut economique Molinari.

British oncologist Dr. Karol Sikora says greater government control over the health care
system is a bad idea for any industrialized country. “Americans may want some form of
universality in health care, but entities like NICE [Britain’s National Institute for Health
and Clinical Excellence] are nothing more than government-inspired, political rationing
tools,” says Dr. Sikora, who has seen his cancer patients receive newer, more effective
drug treatments over others simply based on their where they live.

“Having seen firsthand over many years just how inhumane this system can be, it is
remarkable that other countries would even consider it,” Dr. Sikora says in his latest
paper presented at the Galen Institute’s conference.

But indeed, Americans could face similar problems in securing high-quality health care
of their choice based on the ongoing efforts in Congress and the Obama administration to
centralize health-care decisions making in Washington. The many well-documented
experiences of patients in countries that are America’s allies and friends certainly attest to
that.

____________________________________________________________________

The Top Ten Healthcare Amendments

Published on March 9, 2010 by Brian Darling

President Obama and Democrats in Congress are readying a procedure known as

reconciliation to railroad Obamacare through Congress. This abuse of process has been
called the Healthcare Nuclear Option, because it’s a way to avoid a filibuster in the
Senate.

Reconciliation was created in the early ’70s to allow Congress to balance the budget with
a mere majority vote. It would allow Obamacare to be fast tracked with no hearings, no
extended debate and no opportunity for members to engage in an honest give-and-take on
changes to the package.

Obamacare is a take-it-or-leave-it proposition. Although most Americans want Congress

to "leave" it, Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-
Nev.) don’t care. Their desire to "take" power means they’ll use every means necessary
to pass it.

It is important for opponents to use every means at their disposal to fight this idea. One of
the few resources that the minority party has is that it can offer unlimited amendments at
the end of the reconciliation process in the Senate and they can be issues that have no
relation whatsoever to health care. All that a senator has to do is offer the non-healthcare
related amendment, then waive the rules of reconciliation that limit the subject matter of
amendments. It is done on most reconciliation measures and is considered a frequently
used procedure to force votes on tough issues.

Liberals need the House to pass the existing Senate-passed version of

Obamacare. That bill includes no public option, does provide federal funding of abortion
and would slap a tax on high-end so-called Cadillac healthcare plans.

Part of the deal would be to follow this bill with a reconciliation measure that would
make some changes to Obamacare that are demanded by House members. If such a bill
comes to the Senate, conservative senators have the right to offer an amendment on any
issue—if he offers the amendment, then makes a motion to waive the budget act, then
demands a roll call vote.

Here are 10 ideas that would greatly complicate the Obamacare debate:

1. Restoring Second Amendment rights to the residents of the District of Columbia:

Sen. John Ensign (R-Nev.) offered an amendment last year to the bill that allowed House
voting rights to the representative of the District of Columbia that would have allowed
D.C. residents to register a handgun. The amendment passed 62-36. This was a means to
codify the D.C. v. Heller Supreme Court decision establishing that the 2nd Amendment is
an individual right.

2. Expedited Supreme Court Review for Individual Mandate: A key to Obamacare is

the mandate that all Americans must purchase health insurance or run afoul of the IRS.
It’s reasonable for senators to offer an amendment providing for immediate Supreme
Court jurisdiction of any state’s challenge to the constitutionality of the federal
government’s law forcing residents of a state to buy a private service offered by private
corporations.

3. Drill Baby Drill: The American people like low gas prices. During the campaign for
President, John McCain (R-Ariz.) received thunderous applause when he lead the chant
"Drill, Baby, Drill." Sen. Jim DeMint (R-S.C.) introduced legislation in 2008 to speed up
drilling by bypassing the Department of Interior leasing process and allowing states to
share in drilling revenues.

4. Permanent Repeal of the Death Tax: Right now the Estate Tax, imposed at death, is
zero. Next year, though, the highest rate shoots up to 55%. Two House members,
Representatives Kevin Brady (R-Tex.) and Mac Thornberry (R-Tex.), have proposed a
permanent repeal.

5. Prevent Same Sex Marriage in D.C.: Gay marriage was recently legalized in the
District of Columbia. Sen. Bob Bennett (R-Utah) has legislation that would guarantee
residents of D.C. the right to vote on whether gay marriage licenses should be issued.

6. Spending Freeze: Congress shouldn’t spend new money this year. Sen. Jim Bunning
(R-Ky.) fought alone to offset a $10 billion package of temporary programs and Congress
refused to offset this meager spending. Well, Senator Jim Inhofe (R-Okla.) has a version
of a congressional spending freeze. The Senate could freeze all spending at fiscal year
2011 levels for the next three years with no waivers for any purpose to prove that it can
live within its means. Lawmakers ought to show a spine and freeze spending right now,
so that Congress does not reach the new debt limit ceiling of $14.3 trillion. Also,
Republicans may want to include language banning earmarks for the year to see if the
recent talk of an earmark ban is serious by Democrat leadership in the House.

7. No More Cash for Cloture: Sen. DeMint offered a rules change at the beginning of
this Congress to ban offering an earmark for a vote. This idea needs to be expanded so
that there are no quid pro quo earmarks for any vote on any issue. Vote buying is
unethical, and lawmakers shouldn’t use taxpayer dollars to create things such as the
"Cornhusker Kickback," inserted into the Senate version of Obamacare for Sen. Ben
Nelson (D-Neb.).

8. End TARP: Sen. John Thune (R-S.D.) offered an amendment last year to end the so-
called Troubled Assets Relief Program. Any discussion on the ending of bailouts would
be welcome to the American people.

9. Prohibiting Global Warming Regulation and Legislation: Congress should prohibit

the Environmental Protection Agency from enacting backdoor global-warming
regulations by amending the Clean Air Act to prevent the Regulation of greenhouse
gases. This administration will block economic growth with a new bureaucratic
regulatory scheme. Furthermore, senators could create a point of order against any
legislation that would raise the price Americans pay for their energy.

10. Terrorist Trials: Congress has the constitutional authority to strip the courts of
jurisdiction to hear certain cases. Conservatives wouldn’t want any American citizens’
right to trial be infringed, but it’s reasonable to strip the courts of jurisdiction to hear the
cases of international terrorist like Khalid Sheikh Mohammed who claims to be the
mastermind of the September 11th act of war.

The Obama Administration is aiming to use reconciliation to steamroll the American

people and to pervert the original intent of the budget reconciliation process. Obamacare
is unpopular and conservatives need to use this reconciliation procedure as an opportunity
to discuss other ideas that are very important and supported by the American people.
_____________________________________________________________________

Beware of Obama's Healthcare Trickery

Published on September 15, 2009 by Ernest Istook

When their direct path is blocked, politicians often resort to chicanery.

That approach is evident in the healthcare debate.

Political tricks like legislative "triggers" and putting a "co-op" label on government-run
insurance are just two of the gimmicks to beware. Another deceptive practice is to claim
a measure is deficit-neutral (or "won't add a dime to the deficit"), then resort to cutesy
book keeping to claim the promise has been kept, when it hasn't.

Trick plays are fun in football, but not in politics. It's real life, not a game.

The trigger

Let's start with the trigger. The gun imagery is apt because it's like being threatened with
a gun at your head. The warning is that unless something happens -- or fails to happen --
the trigger will be pulled.

And it's those who wield the weapon who decide for themselves whether to fire.

So the notion that we won't have a government-run public option for healthcare "unless X
happens" is a way to give more power to those who hold the weapon. Is it unless total
healthcare spending matches some arbitrary number? Unless the number of uninsured
reaches a threshold? Those numbers can be juggled and adjusted to match a political
agenda. The key condition might as well be "unless the sun comes up tomorrow." It's
arbitrary nonsense.

The notion of a trigger is just a cute legislative trick for politicians to shift and dodge
blame for a program they establish.

The co-op

There's nothing wrong with a good private sector co-op, whether it's to buy health
insurance or to run a granary. These groups have a long and good history in America.

But slapping a misleading label on a government program is also a long-time and

dishonorable practice. As The Heritage Foundation's Stuart Butler says, "If it walks like a
duck. . . . And if it has all the characteristics of a public plan option then it is a public
plan option.
"There would be federal legislation to design a new form of national or regional co-op
and set rules for how these would be run. There would be yet another federal board
(presumably with yet another czar) to keep a close eye on them and to make sure they
remember who is in charge. And billions of dollars in federal money to keep them tied to
Washington. In short, a public plan with a co-op veneer."

As concluded in a Heritage report, "Cooperatives must be voluntary, open to individuals

who choose to freely join together without coercion or restraint, and controlled by its
members, not the government; . . . viable on their own and must not receive anti-
competitive government support in any form including assumption of risk, "start-up"
capital, or continuous subsidies to the organization."

Fortunately, some on the left are skeptical about co-ops also. Former Democrat National
Chairman Howard Dean is one such doubter, as is Rep. Pete Stark, D-Calif., who says,
"You might as well talk about unicorns . . . I think this co-op is just a way of ducking the
issue of having the public plan."

Deficit neutral

The Associated Press did a quick article to fact-check Obama's big speech to Congress,
including his claim that his plan "won't add a dime to the deficit."

Obama flunked the test. In fact, because federal bookkeeping is such a mess, politicians
can pick and choose from a variety of budget analyses. If they don't like the version from
the Congressional Budget Office, they can get different numbers from the Government
Accountability Office, or the Office of Management and Budget, or the White House
Council of Economic Advisors. Or they could pick a different arbitrator. Or create a
special group that would give them whatever number they want. Ultimately, they'll find
one to use to claim they've kept a promise about spending.

But here's what the AP story said: ". . . the White House and congressional Democrats
already have shown they're ready to skirt the no-new-deficits pledge. House Democrats
offered a bill that the Congressional Budget Office said would add $220 billion to the
deficit over 10 years. But Democrats and Obama administration officials claimed the bill
actually was deficit-neutral. They said they simply didn't have to count $245 billion of
it."

The notion that government can expand health coverage to provide a greater variety of
treatments, tests, and checkups, extend it to a larger group of people, and not raise costs,
just doesn't pass the common-sense test. Ask anybody in Tennessee, where the TennCare
state program found costs for the first 10 years were triple the projection and wound up
consuming one-third of the state budget.

It reminds me of an e-mail I received that says:

 • "The U.S. Postal Service was established in 1775 -- you have had 234 years to get
it right; it is broke.
• "Social Security was established in 1935 -- you have had 74 years to get it right; it
is broke.
• "Fannie Mae was established in 1938 -- you have had 71 years to get it right; it is
broke.
• "The "war on poverty" started in 1964 -- you have had 45 years to get it right; . . .
it hasn't worked and our entire country is broke.
• "Medicare and Medicaid were established in 1965 -- you've had 44 years to get it
right; they are broke.
• "Freddie Mac was established in 1970 -- you have had 39 years to get it right; it is
broke."

Whether the latest claim is a trigger, a co-op, deficit neutrality, or any other gimmick, the
underlying truth is that our government has a good track record of making promises but
an awful track record of keeping them.

Butler, of The Heritage Foundation, has a simple suggestion for everyone who claims
we're going to save money with a healthcare overhaul: "Bank the savings before you
spend them."

That would be refreshing, to require a government program to prove it works before we

use its projected benefits to justify higher spending right away.

For once, that would not be a gimmick.

______________________________________________

Beyond the Constitution: The Healthcare Bill Violates

the Rule of Law
Posted December 23rd, 2009 at 2:03pm in Health Care with 31 comments

Senator Jim DeMint (R-SC) has pointed observers to a problematic section of the health
care legislation now before the Senate that proposes (in Section 3403) to create an
Independent Medicare Advisory Board. He rightly observes that the bill language makes
it virtually impossible to repeal that part of the legislation, thereby attempting to bind
future Congresses.

DeMint is right about all this, but—having read through the legislation—by my read it is
actually much worse than has been suggested, and much more destructive of the rule of
law and democratic governance.

The purpose of the Independent Medicare Advisory Board is to “reduce the per capita
rate of growth in Medicare spending.” (p. 1001) Its proposals to reduce that spending
“shall not include any recommendation to ration health care, raise revenues or Medicare
beneficiary premiums under section 1818, 1818A, or 1839, increase Medicare beneficiary
cost sharing (including deductibles, coinsurance, and co-payments), or otherwise restrict
benefits or modify eligibility criteria.” (p. 1004) (And the legislation won’t pay for
abortions – yea, right.)

But the Board’s proposals “shall include recommendations to reduce Medicare payments
under parts C and D, such as reductions in direct subsidy payments to Medicare
Advantage and prescription drug plans . . . that are related to administrative expenses
(including profits) for basic coverage.” (Hmmm . . . . Sounds like rather than directly
rationing health care, they just won’t pay for it.)

Setting the rationing questions aside for a moment, what is most disturbing is the process
by which these cost-savings dictates made by an unelected board of experts will be
implemented regardless of the majority opinion of the law-making branch of government.
So much for the rule of law.

This Board—which is appointed by the President, is not required to hold any public
meetings or take any testimony and cannot be disbanded except by a 3/5 vote of Congress
—transmits a legislative proposal that implements its recommendations to the President,
who shall immediately submit such proposal to Congress. (p 1011)

On the day on which the proposal is submitted it shall be introduced in Congress (p 1017)
and referred to the Committee on Finance in the Senate and to the Committee on Energy
and Commerce and the Committee on Ways and Means in the House of Representatives
(p. 1018), despite any standing rules of the Senate (p 1019). If the committee does not act
fast enough, the bill shall be discharged from (ie forced through) that committee (1019).

And then there is this zinger:

It shall not be in order in the Senate or the House of Representatives to consider any bill,
resolution, amendment, or conference report (other than pursuant to this section) that
would repeal or otherwise change the recommendations of the Board” if the bill,
resolution, amendment or report does not satisfy the requirements of the legislation.

And here is DeMint’s troubling discovery (p 1020):

It shall not be in order in the Senate or the House of Representatives to consider any bill,
resolution, amendment, or conference report that would repeal or otherwise change this
subsection” other than by three-fifths of the Members of Congress.

The section then goes on to promulgate the rules of debate in the Senate and House for
considering the legislation, and that if the one House passes the legislation the other
“shall consider the bill introduced in that House through all stages of consideration up to,
but not including, passage.” No more pesky committee mark-ups and amendments.
If there is any doubt that this section of the Healthcare Bill changes the rules of the
Senate and the House in violation of clear constitutional language guaranteeing each
House’s determination of the rules of its proceedings (Article I, Section 5), consider this
Orwellian language (p. 1028):

RULES OF THE SENATE AND HOUSE OFREPRESENTATIVES.—

This subsection and subsection (f)(2) are enacted by Congress—

‘(A) as an exercise of the rulemaking power of the Senate and the House of
Representatives, respectively, and is deemed to be part of the rules of each House,
respectively, but applicable only with respect to the procedure to be followed in that
House in the case of bill under this section, and it supersedes other rules only to the
extent that it is inconsistent with such rules; and

(B) with full recognition of the constitutional right of either House to change the rules (so
far as they relate to the procedure of that House) at any time, in the same manner, and to
the same extent as in the case of any other rule of that House.

Sooo, . . . the Secretary shall not implement the Board’s “recommendations” but only if
Congress follows all these new rules and goes to great length to pass another law.

But wait! Perhaps the bureaucrats can implement the law anyway(p. 1031):

NO AFFECT ON AUTHORITY TO IMPLEMENT CERTAIN PROVISIONS.—

Nothing in paragraph (3) shall be construed to affect the authority of the Secretary to
implement any recommendation contained in a proposal or advisory report under this
section to the extent that the Secretary otherwise has the authority to implement such
recommendation administratively.

Paragraph 3 is the exception under which Congress enacts legislation against the specific
Board recommendation. Given the wide latitude by which bureaucrats wield their
administrative authority, and the looseness of this language, the legislation could be read
to give them a green light to proceed administratively despite congressional disapproval.
And, just to make it clear they mean to rule us, there shall be no administrative or judicial
review of this decision.

It has become commonplace for Congress to pass massive pieces of legislation with little
serious deliberation; it is increasingly an administrative body overseeing a vast array of
bureaucratic policymakers and rule-making bodies. Although the Constitution vests
legislative powers in Congress, the majority of “laws” are promulgated by administrative
agencies in the guise of “regulations”—a form of rule by bureaucrats who are mostly
unaccountable and invisible to the public.

This bureaucracy is so overwhelming that it is unclear whether modern presidents

actually can be held constitutionally responsible for “tak[ing] care that the laws be
faithfully executed.” Presidents now appoint numerous policy “czars”—megabureaucrats
operating outside of the existing cabinet structure—to forward their objectives over the
inertia of their own administrations.

And now, in this new form of administrative governance, unelected and unresponsible
experts who are beyond legislative control and the rule of law will tell us what is good for
us and the rules by which we will shall live our lives.

This legislation is not about health care, but about placing one sixth of the American
economy—and some of the most important and personal decisions in our lives—under
the permanent control of government. This section of the legislation—and the operations
of this Independent Medicare Advisory Board—is a prime example of the autocratic rule
that is increasingly overtaking us.

Tags: IMAC, Obama Health Care Plan, rationing

____________________________________________________________________

The Lesson of State Health-Care Reforms

Posted October 7th, 2009 at 1:49pm in Health Care with 3 comments

Peter Suderman, associate editor for Reason Magazine, has an op-ed in the Wall Street
Journal on the track record of Obamacare like reforms at the state level. The full article is
posted below and as an added service we found all the studies mentioned and provided
links to view them:

Supreme Court Justice Louis Brandeis famously envisioned the states serving as
laboratories, trying “novel social and economic experiments without risk to the rest of the
country.” And on health care, that’s just what they’ve done.

Like participants in a national science fair, state governments have tested variants on
most of the major components of the health-care reform plans currently being considered
in Congress. The results have been dramatically increased premiums in the individual
market, spiraling public health-care costs, and reduced access to care. In other words: The
reforms have failed.

New York is exhibit A. In 1993, the state prohibited insurers from declining to cover
individuals with pre-existing health conditions (“guaranteed issue”). New York also
required insurers to charge those enrolled in their plans the same premium, regardless of
health status, age or sex (“community rating”). The goal was to reduce the number of
uninsured by making health insurance more accessible, particularly to those who don’t
have employer-provided insurance.

It hasn’t worked out very well, according to a Manhattan Institute study released last
month by Stephen T. Parente, a professor of finance at the University of Minnesota and
Tarren Bragdon, CEO of the Maine Heritage Policy Center. In 1994, there were just
under 752,000 individuals enrolled in individual insurance plans, or about 4.7% of the
nonelderly population. This put New York roughly in line with the rest of the U.S.
Today, that percentage has dropped to just 0.2% of the state’s nonelderly. In contrast,
between 1994 and 2007, the total number of people insured in the individual market
across the U.S. rose to 5.5% from 4.5%.

The decline in the number of people enrolled in individual insurance plans, the authors
say, is “attributable largely to a steep increase in premiums” because of the state’s
regulations. Messrs. Parente and Bragdon estimate that repeal of community rating and
guaranteed issue could reduce the price of individual coverage by 42%.

New York’s experience with guaranteed issue and community rating is not unique. In
1996, similar reforms in Washington state preceded massive premium spikes in the
individual market. Some premiums increased as much as 78% in the first three years of
the reforms—or 10 times medical inflation—according to a study presented at the annual
meeting of the Association for Health Services Research in 1999. Other results included a
25% drop in enrollment in the individual market, and a reduction in services offered.
Within four years, for example, none of the state’s major carriers offered individual
insurance plans that included maternity coverage.

A 2008 analysis by Kaiser Permanente’s Patricia Lynch published by Health Affairs

noted that in addition to Washington and New York, the individual insurance markets in
Kentucky, Maine, Massachusetts, New Hampshire, New Jersey and Vermont
“deteriorated” after the enactment of guaranteed issue. Individual insurance became
significantly more expensive and there was no significant decrease in the number of
uninsured.

Supporters of federal health-care reform argue that the problems associated with these
regulations can be addressed with the addition of an individual mandate, which is part of
every ObamaCare bill in Congress. This would require every individual to purchase
health insurance.

Guaranteed issue alone, the argument goes, results in slightly more expensive premiums,
which drives healthier individuals out of the risk pool, which in turn further drives up
premiums. The end result is that many healthy people opt out, leaving a small pool of
sick individuals with very high premiums. An individual mandate, however, would
spread those premium costs across a larger, healthier population, thus keeping premium
costs down.

The experience of Massachusetts, which implemented an individual mandate in 2007,

suggests otherwise. Health-insurance premiums in the Bay State have risen significantly
faster than the national average, according to the Commonwealth Fund, a nonprofit health
foundation. At an average of $13,788, the state’s family plans are now the nation’s most
expensive. Meanwhile, insurance companies are planning additional double-digit hikes,
“prompting many employers to reduce benefits and shift additional costs to workers”
according to the Boston Globe.

And health-care costs have continued to grow rapidly. According to a Rand Corporation
study this year, the growth now exceeds state GDP by 8%. The Boston Globe recently
reported that state health-insurance commissioners are now worried that medical
spending could push both employers and patients into bankruptcy, and may even threaten
the system’s continued existence.

Meanwhile, survey data from the Massachusetts Medical Society indicate that the state’s
primary-care providers are being squeezed. Family doctors report taking fewer new
patients and increases in wait time.

Reform measures in other states have proven to be expensive duds. Maine’s 2003 reform
plan, Dirigo Health, included a government insurance option resembling the public
option included in the House health-care bill. This public plan, “DirigoChoice,” was
supposed to expand care to all 128,000 of Maine’s uninsured by 2009. But according to
the U.S. Census Bureau, the 2007 uninsured rate remained roughly 10%—essentially
unchanged. DirigoChoice’s individual insurance premiums increased by 74% over its
first four years—to $499 a month from $287 a month—according to an analysis of Dirigo
data by the Maine Heritage Policy Center. The cost of DirigoHealth to taxpayers so far
has been $155 million.

Tennessee’s plan for universal coverage, dubbed TennCare, fared even worse in the
1990s. The goal of the state-run public insurance plan was to expand coverage to the
uninsured by reducing waste. But the costs of expanding coverage quickly ballooned. In
2005, facing bankruptcy, the state was forced to cut 170,000 individuals from its
insurance rolls.

Despite these state-level failures, President Barack Obama and congressional Democrats
are pushing forward a slate of similar reforms. Unlike most high-school science fair
participants, they seem unaware that the point of doing experiments is to identify what
actually works. Instead, they’ve identified what doesn’t—and decided to do it again.

____________________________________________________________________

The Slippery Slope of Health-Care Reform

Posted August 27th, 2009 at 12:46pm in Health Care with 1 comments
Writing for the National Review’s blog, The Corner, Heritage’s Mike Franc details at
length the evolution of this summer’s health care debate, what works, what doesn’t and
who to be afraid of: “Beware the modest proposals of extreme leftists.”

Each day brings another twist to the health-care-reform saga. Should the president heed
the braying of his hard-left allies, manipulate Senate procedural rules, and push through a
massive overhaul of our entire health-care system? Or should he scale back the ambition
of the proposals already approved by four congressional committees and settle for a
“modest” set of reforms to protect consumers from the predations of those sinister health-
insurance companies? And, of course, there’s that nettlesome “public plan” option:
Should it stay, or should it go?

On some days the prognosticators see less health reform in our future. According to the
Washington Post, “the outpouring of anger at town hall meetings this month has
fundamentally altered the nature of the debate” and convinced lawmakers such as Iowa
senator Chuck Grassley to “consider drastically scaling back the scope of the effort.”

Even if this should prove true, and the reform effort ultimately gives way to a set of
insurance-market reforms spun as minor tweaks to enhance our health “security,” it will
be crucial for Americans to understand the slippery slope of liberal health-care reform
and why liberals cannot ratchet back their reform ambitions.

Those seemingly modest changes urged by the White House, you see, would
fundamentally alter the terms and conditions under which Americans purchase their
health insurance. Worse, those changes cannot stand alone. They would necessitate a
series of additional changes, each building upon the others so as ultimately to produce
reform every bit as “robust” — and every bit as lethal — as the $2-trillion government
takeover now being so loudly denounced in town halls throughout the nation.

Let me explain.
Start with the three “common-sense consumer protections” trumpeted by President
Obama:

Guaranteed issue: Require health insurers to issue a policy to everyone who walks in the
door, no questions asked, and to guarantee that coverage for life.

Pre-existing conditions: Bar insurers from screening prospective customers for any “pre-
existing” and potentially costly medical conditions.

Community rating: Require insurers to charge all consumers the same premium for their
coverage, regardless of relevant factors such as age, gender, occupation, and, of course,
health status.

Combined with other items on the White House insurance-reform wish list, such as a ban
on “excessive” out-of-pocket expenses and on yearly or lifetime limits on benefits paid,
these mandates would effectively socialize the market for health insurance. Everyone
could get insurance whenever he decided to sign up for it, and at one guaranteed price.
Insurers would become regulated utilities, answering to government-appointed boards
and rate commissions.

Not only would such a system drive up the cost of insurance, it would create classes of
winners and losers. For example, the 55-year-old cholesterol-challenged smoker would
benefit at the expense of the 27-year-old non-smoking vegetarian.

That’s bad enough, but the reforms can’t just stop there. So long as the issuance of
insurance is guaranteed but purchase remains voluntary, many won’t buy coverage until
they absolutely need it. Why, after all, spend hundreds of hard-earned dollars each month
on a product you don’t need right now, when you could be spending that money on a new
car, an upgraded wardrobe, or a nice vacation? Why not wait until the morning before
your surgery to walk through the front door of your local health insurer, demand a policy,
and then run up your medical tab, which your insurer will be required to cover?

Many will try to game the “reformed” system this way. Even liberal reformers admit it.
Otherwise, they would have to deny still-fresh and fully documented history.

After all, several states tried these reforms in the 1990s. And the results were nothing
short of catastrophic. One review of New Jersey’s experience with community rating and
guaranteed issue found “a precipitous decline in enrollment, a corresponding increase in
premiums, and a change in enrollment composition toward older and potentially more
expensive enrollees.”

New York’s community-rating experiment flopped as well. “In the first year,” National
Review’s Ed Rubenstein wrote over a decade ago, “25-year-old males were hit with
premium hikes of over $500, while 55-year-olds paid about $415 less than under the risk-
rated system. Not surprisingly many young people decided to drop their coverage. With
fewer young, healthy policyholders available to subsidize older ones, insurance premiums
skyrocketed . . . ”

Despite these horrible examples, Maine enacted these same insurance rules in 2003. They
have been in effect now for five years and have wrought such havoc that a healthy 30-
year-old male faces a monthly premium of $762 in the individual market. In neighboring
New Hampshire, which shuns community rating and guaranteed issue, similar coverage
costs only $222 a month.

This specter of market meltdown and price spikes will cause the health-insurance lobby
to demand that everyone — everyone — be required to purchase a health plan. They’ll
insist that all those young, healthy consumers must pay premiums into the insurance pool
each month to subsidize the exorbitant bills incurred by us older, paunchier geezers.

Liberal lawmakers are just fine with that. Mandates on individuals and their employers
are the second stage on the liberals’ slope to government-run health care.

But there’s more they must do. You see, some Americans will find the monthly
premiums of their mandated coverage downright unaffordable, eating up a fifth or more
of their take-home pay. A problem, yes, but the libs have a ready answer: government
subsidies.

That’s their preferred way of bringing the cost of these plans down to earth for literally
tens of million of consumers who live from paycheck to paycheck. Is it fiscally
responsible? No. But what Speaker Nancy Pelosi disingenuously said with respect to
another government power grab — the global-warming cap-and-trade bill — aptly
describes the liberal’s view of health-care reform: “There should be no cost to the
consumer. . . . whatever the cost is, the consumer must be held harmless.”

That’s the third stage on our descent down the slippery slope: hundreds of billions of
dollars in subsidies to hold consumers harmless. Of course, many of those consumers are
rooted firmly in the middle class. To “offset” subsidies for the middle class, liberals have
another ready answer: massive, job-destroying tax increases on “the rich” and on small-
business owners.

But we’ve still more downhill terrain to cover. What constitutes an “acceptable” health
plan (to use the paternalistic language contained in the House bill)? Which providers,
health facilities, treatments, and drugs will be covered? What about coverage for certain
diseases and medical conditions? With so much at stake, every interest group in
Washington will spare no expense to get its treatment, medical technology, or
pharmaceutical product included in the laundry list of benefits that insurers will be
required to offer.

Of course, Congress will succumb to the Washington lobbying community and add
dozens of mandated benefits to any government-sanctioned plan. Each mandate, of
course, adds to the cost of coverage, putting further pressure on consumers and on the
taxpayers who will be asked to pony up in order to “offset” these higher costs.

Ultimately, the Left’s “scaled back” version of health-care reform will sprout other
ominous features. For starters, we’ll need armies of federal bureaucrats to draw up and
enforce thousands of pages of new insurance regulations. And then we’ll need some
government muscle to enforce the individual and employer mandates — everything from
penalties, fees, and fines to the use of collection agencies and garnishment of wages. As
candidate Obama himself said: “Without an enforcement mechanism, there is no
mandate. It’s just a political talking point.”

So there we have it: the slippery slope of health reform. Drop the controversial notion of
a public plan. Ask for the voters’ forgiveness. Scale back the ambition, and tone down the
rhetoric. Return with a “constrained” package limited to a few “consumer-friendly”
regulations on insurers. And, before you know it, Mr. Liberal Reformer, you’re back
where you always wanted to be, the proud proponent of a massive legislative and
regulatory overhaul that registers 9.5 on the political Richter Scale.

Beware the modest proposals of extreme leftists.

______________________________________________

Health-Care by Committee
Published on December 31, 2008 by Edwin Feulner, Ph.D.

A camel, they say, is a horse designed by committee. To take the expression further, let's
call it a committee of experts. After all, only "experts" could take something as graceful
as a horse and replace it with something as difficult as a camel.

And that brings us to health care.

During his presidential campaign, President-elect Barack Obama promised to help

uninsured Americans obtain coverage. But, "If you already have health insurance, the
only thing that will change under my plan is that we will lower your premiums," he told
an audience in Canton, Ohio, in October. "If you don't have health insurance, you'll be
able to get the same kind of health insurance that members of Congress give themselves."

Unfortunately, that promise could be undermined by Obama's nominee to be secretary of

Health and Human Services. Former Sen. Tom Daschle advocates creating a "Federal
Health Board" to oversee the one sixth of the American economy that's spent on health
care.
That's a bad idea. Moreover, it directly violates Obama's pledge that Americans will be
able to retain the same kind of coverage--and coverage choices--they have now.

In his recent book "Critical: What We Can Do About the Health-Care Crisis," Daschle
proposes a Federal Health Board that would "help define evidence-based benefits and
lower overall spending by determining which medicines, treatments, and procedures are
most effective and identifying those that do not justify their high price tags." In other
words, an omnipotent board of experts would determine which drugs, tests and medical
treatments will--or will not--be approved for coverage. Patients and their doctors
wouldn't have any say in the matter.

Daschle certainly sounds a different note from his future boss. While Obama insisted
patients would remain in control of decisions regarding their health, the potential HHS
secretary admits, "Doctors and patients might resent any encroachment on their ability to
choose certain treatments." As well they should, since each patient deserves to be treated
as an individual, not as a medical condition.

The former senator writes that even he has some worries. The power of the board he
advocates "is not small, and delegation over health policy decisions rightly raises
concerns," he writes. Still, Daschle supports massive interference in the health care
market, interference that could eventually affect virtually everyone.

There's a better way to cover more Americans.

First, the incoming Obama administration should ask Congress to change the way the tax
code treats health insurance. Today, employees get unlimited tax relief for employer-
provided coverage, but families without coverage through work don't enjoy similar
benefits.

Experts on the left and the right agree this should be changed, by capping the benefit an
employee may deduct and by providing direct assistance, either in the form of a voucher
or a refundable tax credit, to help lower-income workers buy private coverage.

Lawmakers could also expand coverage by exploring something called "auto-

enrollment." There are certainly working Americans who cannot afford to buy health
insurance. But for some, the reason they aren't in a plan is because they never get around
to signing up. Even worse, there are some who figure they can always get care at an
Emergency Room, so having insurance isn't a real concern for them.

If workers were automatically enrolled in their company's health care coverage, and were
required to actively decline coverage if they didn't want it, many more Americans would
have private coverage.

Finally, the federal government should encourage states to experiment with new ways to
cover their citizens. If Washington made it possible, states could restructure programs
and find creative ways to expand insurance. Federalism works, and often generates
innovative ideas that can be applied nationwide.

This New Year begins with "hope" for "change" in Washington and across the country.
The president-elect can and certainly should keep his campaign promise to expand health
insurance coverage -- only by expanding the private insurance market, not by replacing it
with a system designed by politically appointed so-called "experts."

Ed Feulner is president of The Heritage Foundation.

______________________________________________

Would Adam Smith Support Government-Run

Healthcare?
Posted September 30th, 2009 at 10:03am in Health Care with 3 comments

So claimed Senator Jay Rockefeller (D-WV) in the Senate Finance Committee debate on
Tuesday morning. The “public option” would create the “choice” of a new government-
run health insurance plan to “compete” with private insurance in the free market. If Adam
Smith means choice, competition and free markets then he would favor the public option.
Rockefeller went so far as to claim that “Adam Smith would have cooked up this
amendment” establishing the public option. Members of the committee did not see it that
way, and the amendment was defeated. But does Rockefeller seriously think Adam
Smith’s principles are consistent with the government-run healthcare?

This view depends on the patently false idea that competition would be enhanced by the
addition of a new player – the government – in the insurance market. The problem is that
government, by definition, isn’t just another economic player, and will always tend to
want to control markets for its political purposes. That threatens economic as well as
political liberty. (Hmmm . . . isn’t this why we favor free markets in the first place?)

Adam Smith himself long ago debunked the idea that government charters, giving a
corporation exclusive privileges to engage in a particular type of business, enhanced
competition. Far from it, government intervention would prevent competition by
restraining the private market from having true competition in prices, products and free
exchange. Smith lamented the old mercantilist policies of Europe which, like the “public
option” plan, did not allow competition and choice:

The policy of Europe occasions a very important inequality in the whole of the
advantages and disadvantages of the different employments of labour and stock, by
restraining the competition in some employments to a smaller number than might
otherwise be disposed to enter into them.

The exclusive privileges of corporations are the principal means it makes use of for this
purpose. The exclusive privilege of an incorporated trade necessarily restrains the
competition, in the town where it is established, to those who are free of the trade.

Anyone who is remotely familiar with Smith’s ideas, let alone the basic ideas of
introductory market capitalism, knows how implausible Rockefeller’s claim is. Adam
Smith wasn’t there to defend himself in the committee hearing, but we should—not just
for his sake, but for the sake of the liberty he defended and we have long enjoyed.

____________________________________________________________________

Obama's Dubious Health-Care Claims

Published on May 27, 2009 by Robert Moffit, Ph.D.

President Obama may pretend otherwise, but if Congress passes his health-care agenda,
America will be taking a giant leap toward Canadian-style, government-run health care.
And many Americans will find themselves left with no choice but to sign on.
How so? Start with the fact that government already controls almost half of America's
health-care spending. Now consider that the Obama plan would give Washington a broad
and powerful supervisory role over the remainder.

Detailed legislative language hasn't been unveiled yet, but a key feature of the program is
a government-run plan that supposedly would compete with private-sector plans.
Congress would determine the benefits, premiums and co-payments of this plan, as well
as reimbursements for doctors and hospitals and who would be eligible.

Coverage could be offered just to citizens and legal residents who lack employer-based
health care or are ineligible for other government programs, like Medicaid. Or it could
extend to a much broader pool.

Liberals in Congress, especially those who want a Canadian-style, "single-payer" system,

can be expected to push for broad eligibility -- opening the plan to all employees and
their families, starting with small companies and expanding to large ones.

The Lewin Group, a leading econometric firm, estimates such broad eligibility, combined
with artificially low provider-payment rates (based on those of Medicare), would result in
about 119 million Americans' being forced out of private health coverage into the new
government-run plan. That's because many employers would simply drop their own plans
-- leaving their workers little choice but to sign up for the government's package.

So much for the president's repeated promise that you can keep your private health plan if
you like it.

Let's be honest: The idea that Congress is going to create a genuine "level playing field"
for competition between the newly created government health plan and private health
plans is nonsense.

Congress will be the rule-maker, financier, umpire and owner of a team in the
"competition."

For starters, as a wholly owned subsidiary of Congress, the government plan would be
"too big to fail," assuring it periodic taxpayer bailouts and giving it a big edge over the
private sector. If Medicare can run up $38 trillion in unfinanced benefit promises, after
all, then a plan modeled on it (as Senate Finance Committee Chairman Max Baucus
wants) could run up big debt, too -- especially if Congress sets low rates to make it
"affordable."

The president also champions "shared responsibility." That's code for an employer
mandate, whereby employers must either offer a government-approved health-benefits
package or pay a federal tax. The new tax revenues would probably be used to finance
subsidies for coverage in the government health plan.
Employer mandates are sure to erode employer-based health-insurance coverage. That's
because millions of companies would simply pay the tax rather than hassle with or spend
more providing insurance that meets new federal specifications. Million of Americans,
therefore, could find themselves left with no company health coverage.

Chalk up another victory for the congressional "single-payer" caucus.

Finally, congressional liberals can be expected to expand "shared responsibility" to

include an individual mandate to purchase health insurance. If they do, Americans should
check out the penalties imposed for not buying federally approved health insurance. This
will push yet more folks onto the government plan.

Obama says that if you like the health coverage you have today, nothing will change. But
with Washington controlling health care, you may have no choice in the matter.

Robert E. Moffit, Ph.D., is Director of the Center for Health Policy Studies at The
Heritage Foundation.

______________________________________________

The Slippery Slope of Health-Care Reform: For liberal

reformers, modesty is not an option
Published on August 28, 2009 by Michael Franc

Each day brings another twist to the health-care-reform saga. Should the president heed
the braying of his hard-left allies, manipulate Senate procedural rules, and push through a
massive overhaul of our entire health-care system? Or should he scale back the ambition
of the proposals already approved by four congressional committees and settle for a
"modest" set of reforms to protect consumers from the predations of those sinister health-
insurance companies? And, of course, there's that nettlesome "public plan" option:
Should it stay, or should it go?

On some days the prognosticators see less health reform in our future. According to the
Washington Post, "the outpouring of anger at town hall meetings this month has
fundamentally altered the nature of the debate" and convinced lawmakers such as Iowa
senator Chuck Grassley to "consider drastically scaling back the scope of the effort."

Even if this should prove true, and the reform effort ultimately gives way to a set of
insurance-market reforms spun as minor tweaks to enhance our health "security," it will
be crucial for Americans to understand the slippery slope of liberal health-care reform
and why liberals cannot ratchet back their reform ambitions.
Those seemingly modest changes urged by the White House, you see, would
fundamentally alter the terms and conditions under which Americans purchase their
health insurance. Worse, those changes cannot stand alone. They would necessitate a
series of additional changes, each building upon the others so as ultimately to produce
reform every bit as "robust" -- and every bit as lethal -- as the $2-trillion government
takeover now being so loudly denounced in town halls throughout the nation.

Let me explain.

Start with the three "common-sense consumer protections" trumpeted by President

Obama:

• Guaranteed issue: Require health insurers to issue a policy to everyone who walks
in the door, no questions asked, and to guarantee that coverage for life.
• Pre-existing conditions: Bar insurers from screening prospective customers for
any "pre-existing" and potentially costly medical conditions.
• Community rating: Require insurers to charge all consumers the same premium
for their coverage, regardless of relevant factors such as age, gender, occupation,
and, of course, health status.

Combined with other items on the White House insurance-reform wish list, such as a ban
on "excessive" out-of-pocket expenses and on yearly or lifetime limits on benefits paid,
these mandates would effectively socialize the market for health insurance. Everyone
could get insurance whenever he decided to sign up for it, and at one guaranteed price.
Insurers would become regulated utilities, answering to government-appointed boards
and rate commissions.

Not only would such a system drive up the cost of insurance, it would create classes of
winners and losers. For example, the 55-year-old cholesterol-challenged smoker would
benefit at the expense of the 27-year-old non-smoking vegetarian.

That's bad enough, but the reforms can't just stop there. So long as the issuance of
insurance is guaranteed but purchase remains voluntary, many won't buy coverage until
they absolutely need it. Why, after all, spend hundreds of hard-earned dollars each month
on a product you don't need right now, when you could be spending that money on a new
car, an upgraded wardrobe, or a nice vacation? Why not wait until the morning before
your surgery to walk through the front door of your local health insurer, demand a policy,
and then run up your medical tab, which your insurer will be required to cover?

Many will try to game the "reformed" system this way. Even liberal reformers admit it.
Otherwise, they would have to deny still-fresh and fully documented history.

After all, several states tried these reforms in the 1990s. And the results were nothing
short of catastrophic. One review of New Jersey's experience with community rating and
guaranteed issue found "a precipitous decline in enrollment, a corresponding increase in
premiums, and a change in enrollment composition toward older and potentially more
expensive enrollees."

New York's community-rating experiment flopped as well. "In the first year," National
Review's Ed Rubenstein wrote over a decade ago, "25-year-old males were hit with
premium hikes of over $500, while 55-year-olds paid about $415 less than under the risk-
rated system. Not surprisingly many young people decided to drop their coverage. With
fewer young, healthy policyholders available to subsidize older ones, insurance premiums
skyrocketed..."

Despite these horrible examples, Maine enacted these same insurance rules in 2003. They
have been in effect now for five years and have wrought such havoc that a healthy 30-
year-old male faces a monthly premium of $762 in the individual market. In neighboring
New Hampshire, which shuns community rating and guaranteed issue, similar coverage
costs only $222 a month.

This specter of market meltdown and price spikes will cause the health-insurance lobby
to demand that everyone -- everyone -- be required to purchase a health plan. They'll
insist that all those young, healthy consumers must pay premiums into the insurance pool
each month to subsidize the exorbitant bills incurred by us older, paunchier geezers.

Liberal lawmakers are just fine with that. Mandates on individuals and their employers
are the second stage on the liberals' slope to government-run health care.

But there's more they must do. You see, some Americans will find the monthly premiums
of their mandated coverage downright unaffordable, eating up a fifth or more of their
take-home pay. A problem, yes, but the libs have a ready answer: government subsidies.

That's their preferred way of bringing the cost of these plans down to earth for literally
tens of million of consumers who live from paycheck to paycheck. Is it fiscally
responsible? No. But what Speaker Nancy Pelosi disingenuously said with respect to
another government power grab -- the global-warming cap-and-trade bill -- aptly
describes the liberal's view of health-care reform: "There should be no cost to the
consumer ... whatever the cost is, the consumer must be held harmless."

That's the third stage on our descent down the slippery slope: hundreds of billions of
dollars in subsidies to hold consumers harmless. Of course, many of those consumers are
rooted firmly in the middle class. To "offset" subsidies for the middle class, liberals have
another ready answer: massive, job-destroying tax increases on "the rich" and on small-
business owners.

But we've still more downhill terrain to cover. What constitutes an "acceptable" health
plan (to use the paternalistic language contained in the House bill)? Which providers,
health facilities, treatments, and drugs will be covered? What about coverage for certain
diseases and medical conditions? With so much at stake, every interest group in
Washington will spare no expense to get its treatment, medical technology, or
pharmaceutical product included in the laundry list of benefits that insurers will be
required to offer.

Of course, Congress will succumb to the Washington lobbying community and add
dozens of mandated benefits to any government-sanctioned plan. Each mandate, of
course, adds to the cost of coverage, putting further pressure on consumers and on the
taxpayers who will be asked to pony up in order to "offset" these higher costs.

Ultimately, the Left's "scaled back" version of health-care reform will sprout other
ominous features. For starters, we'll need armies of federal bureaucrats to draw up and
enforce thousands of pages of new insurance regulations. And then we'll need some
government muscle to enforce the individual and employer mandates -- everything from
penalties, fees, and fines to the use of collection agencies and garnishment of wages. As
candidate Obama himself said: "Without an enforcement mechanism, there is no
mandate. It's just a political talking point."

So there we have it: the slippery slope of health reform. Drop the controversial notion of
a public plan. Ask for the voters' forgiveness. Scale back the ambition, and tone down the
rhetoric. Return with a "constrained" package limited to a few "consumer-friendly"
regulations on insurers. And, before you know it, Mr. Liberal Reformer, you're back
where you always wanted to be, the proud proponent of a massive legislative and
regulatory overhaul that registers 9.5 on the political Richter Scale.

Beware the modest proposals of extreme leftists.

Mike Franc is Vice President for Government Relations at The Heritage Foundation.

*********

______________________________________________

Johns Hopkins Medicine CEO: Obamacare Will Have

“Catastrophic Effects” on Health-Care Safety-Net
Posted December 7th, 2009 at 2:40pm in Health Care with 13 comments

Dean and CEO of Johns Hopkins Medicine Edward Miller writes in the Wall Street
Journal:

Both the House and Senate health-care reform bills call for a large increase in Medicaid
—about 18 million more people will begin enrolling in Medicaid under the House bill
starting in 2013, Centers for Medicare and Medicaid Services (CMS) Actuary Richard
Foster estimates.
…
A flood of new patients will be seeking health services, many of whom have never seen a
doctor on more than a sporadic basis. Some will also have multiple and costly chronic
conditions. And almost all of them will come from poor or disadvantaged backgrounds.
…
We’ll meet the demands placed on us because serving poor and disadvantaged
populations is part of our century-old mission. But without an understanding by policy
makers of what a large Medicaid expansion actually means, and without delivery-system
reform and adequate risk-adjusted reimbursement the current health-care legislation will
have catastrophic effects on those of us who provide society’s health-care safety-net. In
time, those effects will be felt by all of us.

Read Miller’s entire op-ed here. Or Read the article below.

Abortion, the public option, and the individual and employer mandates are all important
issues in the health care debate. But Miller’s op-ed reminds us that not enough attention
has been paid to the fact that in both the House and Senate bills, almost half of all new
insurance coverage gained through “reform” is actually accomplished through expansion
of Medicaid eligibility requirements. The only reason Medicaid carries such a heavy load
under Obamacare is because the Congressional Budget Office scores it as an inexpensive
way too expand health insurance coverage. But Medicaid does not provide ideal health
care. That is why single payer advocates push for “Medicare for All” not “Medicaid for
All” … which is what Obamacare may actually deliver.
Go here to see a larger, printable PDF of the chart.

______________________________________________
Health Reform Could Harm Medicaid Patients

A vast expansion of the program will impose

unsustainable costs on treatment centers.
By EDWARD MILLER

Baltimore, Md.

Both the House and Senate health-care reform bills call for a large increase in
Medicaid—about 18 million more people will begin enrolling in Medicaid under the
House bill starting in 2013, Centers for Medicare and Medicaid Services (CMS)
Actuary Richard Foster estimates.
We at Johns Hopkins Medicine (JHM) endorse efforts to improve the quality and
reduce the cost of health care. But we also understand all too well the impact a
dramatic expansion of Medicaid will have on us and our state—and likely the
country as a whole.

A flood of new patients will be seeking health services, many of whom have never
seen a doctor on more than a sporadic basis. Some will also have multiple and costly
chronic conditions. And almost all of them will come from poor or disadvantaged
backgrounds.

We know this because we've been caring for Medicaid patients in a managed-care
setting for 14 years, as well as providing world-class care to people from all over the
country and the world. Our experience provides a glimpse of the acute cost bubble
that the health-care system will suffer with the reforms now being proposed.

Like Intermountain Healthcare in Utah, Geisinger Medical Center in Pennsylvania,

and the Mayo Clinic, where, as President Barack Obama notes, "people fly from all
over the world to Rochester, Minnesota in order to get outstanding care," people
also fly from all over the world to obtain care from JHM. But unlike those other
institutions, we also serve a large number of people who can't afford cab fare to the
nearest hospital: poor, disadvantaged individuals, 150,000 of whom are in our
Medicaid managed-care program, Priority Partners.

Priority Partners operates under a capitated system—that is, it receives a set

payment per individual per month from the state. Over time, we've developed the
ability to manage the care of these individuals in a way that is both cost effective
and that provides them with quality care. We've done it by tapping into our
extensive delivery system, which includes four hospitals, a nursing home, the largest
community-based primary care group in Maryland, and much more.

We've hit above-national benchmarks on all clinical quality measures for our
dialysis patients, reduced monthly costs for patients with substance abuse and
highly complex medical needs, and 70% of our patients tell us they're satisfied with
our care. But the learning curve has been costly and steep, and provides a
cautionary tale for what will happen under the health-care reforms currently in
Congress.

The key fact is that for years the state did not cover all the costs our Medicaid
program incurred. As a result of new patients whose costs were not completely
covered by the state, Priority Partners lost $57.2 million from 1997 to 2005.

OpinionJournal Related Stories:

The Worst Bill Ever

Health Costs and History
Max's Mad Mandate
Jeffrey Flier: Health 'Reform' Gets a Failing Grade

We stanched the losses by ensuring that the payment from the state was
appropriately risk adjusted to match the health conditions of our members, and by
investing heavily in primary-care and care-management and disease-management
programs.

Yet this past year the losses began again, because the state expanded the program's
eligibility to 116% of the federal poverty level up from 40%.

So we are struggling with a large group of new patients—about 30,000 people.

Today, like in the late 1990s, a health-care surge is overwhelming our managed-care
system. The capitated rate for the new beneficiaries is not yet risk-adjusted. Priority
Partners has lost a devastating $15 million in just nine months.

In time, we will be able to provide cost-effective, quality care to these new patients.
But it will take years and careful management to, in the administration's phrase,
"bend the cost curve down."

Congress can help, or at least learn from our experience to use the reform
legislation to bend the cost curve if it encourages other states to institute and
appropriately fund capitated systems that allow capable providers to adjust
payments based on risk. There is nothing in the House or Senate legislation that
does that now, even as both bills will expand Medicaid. We believe our example in
Maryland can be replicated around the country. One such concept—the Healthcare
Innovation Zone, currently in the Senate bill—envisions a regional alliance of an
academic medicate center, local hospitals, and physicians that coordinate and
deliver the entire spectrum of patient-centric care in ways that reward quality. The
key is that federal support to states for Medicaid must appropriately adjust rates to
match the risk of providing health care to the group of people who are covered by
Medicaid.

The Senate bill would increase eligibility for Medicaid to those who make 133% or
less of the federal poverty level. The Kaiser Family Foundation reports there are
308,000 people who meet that threshold in Maryland.

Even if only half of those individuals seek Medicaid coverage, such a large
expansion would likely have an excruciating impact on the state's budget. And
Maryland is not alone. According to a Kaiser Foundation survey conducted earlier
this year, three-quarters of the states have expressed concern that expanding
Medicaid could add to their fiscal woes. Already, as Kaiser notes, 33 states cut or
froze payment rates to those who deliver health care to Medicaid patients in fiscal
year 2009; even more states (39) are slated to cut or freeze rates for fiscal year 2010.

We'll meet the demands placed on us because serving poor and disadvantaged
populations is part of our century-old mission. But without an understanding by
policy makers of what a large Medicaid expansion actually means, and without
delivery-system reform and adequate risk-adjusted reimbursement the current
health-care legislation will have catastrophic effects on those of us who provide
society's health-care safety-net. In time, those effects will be felt by all of us.

Dr. Miller is dean and CEO of Johns Hopkins Medicine.

http://online.wsj.com/article/SB10001424052748703939404574567981549184844.html

______________________________________________
Health 'Reform' Gets a Failing Grade

The changes proposed by Congress will require more

draconian measures down the road. Just look at
Massachusetts.
By JEFFREY S. FLIER

As the dean of Harvard Medical School I am frequently asked to comment on the

health-reform debate. I'd give it a failing grade.
Instead of forthrightly dealing with the fundamental problems, discussion is
dominated by rival factions struggling to enact or defeat President Barack Obama's
agenda. The rhetoric on both sides is exaggerated and often deceptive. Those of us
for whom the central issue is health—not politics—have been left in the lurch. And
as controversy heads toward a conclusion in Washington, it appears that the people
who favor the legislation are engaged in collective denial.

Our health-care system suffers from problems of cost, access and quality, and needs
major reform. Tax policy drives employment-based insurance; this begets
overinsurance and drives costs upward while creating inequities for the unemployed
and self-employed. A regulatory morass limits innovation. And deep flaws in
Medicare and Medicaid drive spending without optimizing care.

Speeches and news reports can lead you to believe that proposed congressional
legislation would tackle the problems of cost, access and quality. But that's not true.
The various bills do deal with access by expanding Medicaid and mandating
subsidized insurance at substantial cost—and thus addresses an important social
goal. However, there are no provisions to substantively control the growth of costs
or raise the quality of care. So the overall effort will fail to qualify as reform.

In discussions with dozens of health-care leaders and economists, I find near

unanimity of opinion that, whatever its shape, the final legislation that will emerge
from Congress will markedly accelerate national health-care spending rather than
restrain it. Likewise, nearly all agree that the legislation would do little or nothing to
improve quality or change health-care's dysfunctional delivery system. The system
we have now promotes fragmented care and makes it more difficult than it should
be to assess outcomes and patient satisfaction. The true costs of health care are
disguised, competition based on price and quality are almost impossible, and
patients lose their ability to be the ultimate judges of value.
Worse, currently proposed federal legislation would undermine any potential for
real innovation in insurance and the provision of care. It would do so by
overregulating the health-care system in the service of special interests such as
insurance companies, hospitals, professional organizations and pharmaceutical
companies, rather than the patients who should be our primary concern.

In effect, while the legislation would enhance access to insurance, the trade-off
would be an accelerated crisis of health-care costs and perpetuation of the current
dysfunctional system—now with many more participants. This will make an
eventual solution even more difficult. Ultimately, our capacity to innovate and
develop new therapies would suffer most of all.

There are important lessons to be learned from recent experience with reform in
Massachusetts. Here, insurance mandates similar to those proposed in the federal
legislation succeeded in expanding coverage but—despite initial predictions—
increased total spending.

A "Special Commission on the Health Care Payment System" recently declared that
the Massachusetts health-care payment system must be changed over the next five
years, most likely to one involving "capitated" payments instead of the traditional
fee-for-service system. Capitation means that newly created organizations of
physicians and other health-care providers will be given limited dollars per patient
for all of their care, allowing for shared savings if spending is below the targets.
Unfortunately, the details of this massive change—necessitated by skyrocketing
costs and a desire to improve quality—are completely unspecified by the
commission, although a new Massachusetts state bureaucracy clearly will be
required.

Yet it's entirely unclear how such unspecified changes would impact physician
practices and compensation, hospital organizations and their capacity to invest, and
the ability of patients to receive the kind and quality of care they desire. Similar
challenges would eventually confront the entire country on a more explosive scale if
the current legislation becomes law.

Selling an uncertain and potentially unwelcome outcome such as this to the public
would be a challenging task. It is easier to assert, confidently but disingenuously,
that decreased costs and enhanced quality would result from the current legislation.

So the majority of our representatives may congratulate themselves on reducing the

number of uninsured, while quietly understanding this can only be the first step of a
multiyear process to more drastically change the organization and funding of health
care in America. I have met many people for whom this strategy is conscious and
explicit.

We should not be making public policy in such a crucial area by keeping the
electorate ignorant of the actual road ahead.
Dr. Flier is dean of the Harvard Medical School.

http://online.wsj.com/article/SB100014240527487044318
04574539581994054014.html

______________________________________________
The Worst Bill Ever

Epic new spending and taxes, pricier insurance,

rationed care, dishonest accounting: The Pelosi
health bill has it all.
Speaker Nancy Pelosi has reportedly told fellow Democrats that she's prepared to lose
seats in 2010 if that's what it takes to pass ObamaCare, and little wonder. The health bill
she unwrapped last Thursday, which President Obama hailed as a "critical milestone,"
may well be the worst piece of post-New Deal legislation ever introduced.

In a rational political world, this 1,990-page runaway train would have been derailed
months ago. With spending and debt already at record peacetime levels, the bill creates a
new and probably unrepealable middle-class entitlement that is designed to expand over
time. Taxes will need to rise precipitously, even as ObamaCare so dramatically expands
government control of health care that eventually all medicine will be rationed via
politics.

Yet at this point, Democrats have dumped any pretense of genuine bipartisan "reform"
and moved into the realm of pure power politics as they race against the unpopularity of
their own agenda. The goal is to ram through whatever income-redistribution scheme
they can claim to be "universal coverage." The result will be destructive on every level—
for the health-care system, for the country's fiscal condition, and ultimately for American
freedom and prosperity.
•The spending surge. The Congressional Budget Office figures the House program will
cost $1.055 trillion over a decade, which while far above the $829 billion net cost that
Mrs. Pelosi fed to credulous reporters is still a low-ball estimate. Most of the money goes
into government-run "exchanges" where people earning between 150% and 400% of the
poverty level—that is, up to about $96,000 for a family of four in 2016—could buy
coverage at heavily subsidized rates, tied to income. The government would pay for 93%
of insurance costs for a family making $42,000, 72% for another making $78,000, and so
forth.

At least at first, these benefits would be offered only to those whose employers don't
provide insurance or work for small businesses with 100 or fewer workers. The taxpayer
costs would be far higher if not for this "firewall"—which is sure to cave in when people
see the deal their neighbors are getting on "free" health care. Mrs. Pelosi knows this, like
everyone else in Washington.

Even so, the House disguises hundreds of billions of dollars in additional costs with
budget gimmicks. It "pays for" about six years of program with a decade of revenue, with
the heaviest costs concentrated in the second five years. The House also pretends
Medicare payments to doctors will be cut by 21.5% next year and deeper after that,
"saving" about $250 billion. ObamaCare will be lucky to cost under $2 trillion over 10
years; it will grow more after that.

• Expanding Medicaid, gutting private Medicare. All this is particularly reckless given
the unfunded liabilities of Medicare—now north of $37 trillion over 75 years. Mrs. Pelosi
wants to steal $426 billion from future Medicare spending to "pay for" universal
coverage. While Medicare's price controls on doctors and hospitals are certain to be
tightened, the only cut that is a sure thing in practice is gutting Medicare Advantage to
the tune of $170 billion. Democrats loathe this program because it gives one of out five
seniors private insurance options.

As for Medicaid, the House will expand eligibility to everyone below 150% of the
poverty level, meaning that some 15 million new people will be added to the rolls as
private insurance gets crowded out at a cost of $425 billion. A decade from now more
than a quarter of the population will be on a program originally intended for poor women,
children and the disabled.

Even though the House will assume 91% of the "matching rate" for this joint state-federal
program—up from today's 57%—governors would still be forced to take on $34 billion
in new burdens when budgets from Albany to Sacramento are in fiscal collapse.
Washington's budget will collapse too, if anything like the House bill passes.

• European levels of taxation. All told, the House favors $572 billion in new taxes,
mostly by imposing a 5.4-percentage-point "surcharge" on joint filers earning over $1
million, $500,000 for singles. This tax will raise the top marginal rate to 45% in 2011
from 39.6% when the Bush tax cuts expire—not counting state income taxes and the
phase-out of certain deductions and exemptions. The burden will mostly fall on the small
businesses that have organized as Subchapter S or limited liability corporations, since the
truly wealthy won't have any difficulty sheltering their incomes.

This surtax could hit ever more earners because, like the alternative minimum tax, it isn't
indexed for inflation. Yet it still won't be nearly enough. Even if Congress had
confiscated 100% of the taxable income of people earning over $500,000 in the boom
year of 2006, it would have only raised $1.3 trillion. When Democrats end up soaking the
middle class, perhaps via the European-style value-added tax that Mrs. Pelosi has
endorsed, they'll claim the deficits that they created made them do it.

Under another new tax, businesses would have to surrender 8% of their payroll to
government if they don't offer insurance or pay at least 72.5% of their workers'
premiums, which eat into wages. Such "play or pay" taxes always become "pay or pay"
and will rise over time, with severe consequences for hiring, job creation and ultimately
growth. While the U.S. already has one of the highest corporate income tax rates in the
world, Democrats are on the way to creating a high structural unemployment rate, much
as Europe has done by expanding its welfare states.

Meanwhile, a tax equal to 2.5% of adjusted gross income will also be imposed on some
18 million people who CBO expects still won't buy insurance in 2019. Democrats could
make this penalty even higher, but that is politically unacceptable, or they could make the
subsidies even higher, but that would expose the (already ludicrous) illusion that
ObamaCare will reduce the deficit.

• The insurance takeover. A new "health choices commissioner" will decide what counts
as "essential benefits," which all insurers will have to offer as first-dollar coverage.
Private insurers will also be told how much they are allowed to charge even as they will
have to offer coverage at virtually the same price to anyone who applies, regardless of
health status or medical history.

The cost of insurance, naturally, will skyrocket. The insurer WellPoint estimates based on
its own market data that some premiums in the individual market will triple under these
new burdens. The same is likely to prove true for the employer-sponsored plans that
provide private coverage to about 177 million people today. Over time, the new mandates
will apply to all contracts, including for the large businesses currently given a safe harbor
from bureaucratic tampering under a 1974 law called Erisa.

The political incentive will always be for government to expand benefits and reduce cost-
sharing, trampling any chance of giving individuals financial incentives to economize on
care. Essentially, all insurers will become government contractors, in the business of
fulfilling political demands: There will be no such thing as "private" health insurance.

***

All of this is intentional, even if it isn't explicitly acknowledged. The overriding liberal
ambition is to finish the work began decades ago as the Great Society of converting
health care into a government responsibility. Mr. Obama's own Medicare actuaries
estimate that the federal share of U.S. health dollars will quickly climb beyond 60% from
46% today. One reason Mrs. Pelosi has fought so ferociously against her own Blue Dog
colleagues to include at least a scaled-back "public option" entitlement program is so that
the architecture is in place for future Congresses to expand this share even further.

As Congress's balance sheet drowns in trillions of dollars in new obligations, the political
system will have no choice but to start making cost-minded decisions about which
treatments patients are allowed to receive. Democrats can't regulate their way out of the
reality that we live in a world of finite resources and infinite wants. Once health care is
nationalized, or mostly nationalized, medical rationing is inevitable—especially for the
innovative high-cost technologies and drugs that are the future of medicine.

Mr. Obama rode into office on a wave of "change," but we doubt most voters realized
that the change Democrats had in mind was making health care even more expensive and
rigid than the status quo. Critics will say we are exaggerating, but we believe it is no
stretch to say that Mrs. Pelosi's handiwork ranks with the Smoot-Hawley tariff and FDR's
National Industrial Recovery Act as among the worst bills Congress has ever seriously
contemplated.
http://online.wsj.com/article/SB10001424052748703399204574505423751140690.htm
l

______________________________________________

James Frogue & Elizabeth Noelcke On Healthcare

Fraud is Worse Than You Think
Posted August 12th, 2009 at 10:30am in Health Care with 21 comments

One key area that has been totally ignored in healthcare debate is the jaw-dropping
amount of fraud and abuse in the Medicare and Medicaid programs. We at the Center for
Health Transformation believe that $100 billion a year is a conservative estimate. Our
new book, “Stop Paying the Crooks” outlines examples of that waste and offers dozens of
suggestions on how to fix the problems.

Consider just two examples: In January, 2009 the Government Accountability Office
issued a report that said $32 billion of improper payments were made in the Medicaid
program in 2007. Last year, Senator Charles Grassley of Iowa estimated that there is $60
billion in waste, fraud and abuse in Medicare annually. And now the Obama
Administration and Congressional leaders want to create another government-run
program along the same model.

The Miami Herald reported last summer that Miami-Dade County submitted bills to
Medicare for HIV infusion therapy that were 22 times higher than the rest of the country
combined. There are more home health agencies in Miami Dade as of this spring than in
the entire state of California. When the Office of Inspector General conducted
unannounced visits to 1,581 durable medical equipment supplier in South Florida in
2007, 491 either didn’t exist or were not staffed.

An important step toward real reform is to fight fraud first. A recent Zogby poll asked
Americans what is their preferred way to pay for the modernization of healthcare. The
biggest response, at 88 percent, was “eliminate fraud,” well-ahead of “standardize
administrative forms” at 77 percent and “reduce medical errors,” at 72 percent.

A second poll by Insider Advantage found that the majority of respondents – 61 percent –
felt that Congress should address fraud and abuse in Medicare and Medicaid before
enacting a new government-run plan. Only 27 percent thought the opposite was fine.

And yet the two current bills in the House do nothing to effectively combat fraud. Indeed,
the CBO score of the bill passed out of the House Ways and Means Committee contains
across-the-board zeros in savings from anti-fraud efforts across ten key metrics for the
next decade. It is unfathomable that the current Congressional leadership is so out-of-
touch with reality. Thus far, their efforts represent an enormous missed opportunity to
divert scarce taxpayer dollars away from thieves.

Consider another massive and highly complex industry and how well it fights fraud
relative to health care. The credit card industry handles over $2 trillion a year in billing,
involves 700 million credit cards, millions of vendors, and countless products available
for purchase. Their rate of fraud is below one-tenth of one percent, making fraud in
Medicare and Medicaid at least 100 times higher.

As legislators spend August poring over healthcare legislation constituents and experts
alike it is incumbent on them to take seriously the issue of fraud in our existing programs.
Simple steps that cost virtually nothing to deploy would begin saving billions instantly.
Aggressive use of predictive modeling for payments common in the commercial market,
requiring enhanced coordination of benefits and identification of third party coverage
particularly in Medicaid, and flagging the Medicare ID numbers billing in the highest 1
percent for further scrutiny would be a good start. Simply adding the line “under penalty
of perjury” to CMS form 855 that prospective suppliers to Medicare must fill out would
be a big step in the right direction. Unfortunately, it appears that the people who run
Medicare and Medicaid are pathologically incapable of dealing with fraud and abuse in
any serious way.

We at the Center for Health Transformation continue to actively gather the most
egregious stories of fraud and the most effective actions for eliminating it. It is our hope
that you will join our efforts to ensure that policymakers in Washington and in state
capitals from coast to coast take this issue with the gravity it deserves. Before creating a
new government-run health care program, increasing spending on those we’ve got, or
raising taxes, let’s fight fraud first.

James Frogue is Vice President of the Center for Health Transformation where Elizabeth
Noelcke is the State Project Coordinator. Please visit www.healthtransformation.net for
more anti-fraud action items, as well as information about the latest CHT Press Book,
Stop Paying the Crooks, edited by James Frogue.

The views expressed by guest bloggers on the Foundry do not necessarily reflect the
views of the Heritage Foundation.

______________________________________________

Obama’s Health Plan – Taxes, Taxes Everywhere

Posted February 24th, 2010 at 12:59pm in Entitlements, Health Care with 3 comments

The White House recently released President Obama’s health care reform proposal. The
plan incorporates a mixture of the many tax increases passed by the House and Senate,
hiking taxes by almost $750 billion over ten years. This is on top of $1.3 trillion in other
tax increases the President recently proposed in his 2011 budget. Not that there is ever a
good time to raise taxes, but doing so as the economy is still emerging from a deep
recession is particularly ill-advised and will likely prolong full recovery. Moreover, the
President’s proposal deviates from his stated goal to address the soaring spending and
debt problem the nation faces by piling on massive new spending and taxes.

Payroll tax hikes: Obama accepted the Senate’s plan to break long-held policy by
raising the Hospital Insurance (HI) portion of the payroll tax on high-income earners to
pay for a new and unrelated health care entitlement. He then doubled-down on this
dangerous new precedent by separately applying the HI tax to investment income for the
first time. The tax code already taxes investment too much. Higher taxes still on
dividends, interest and business income increases the cost of capital which will further
depress investment and thus job creation. Ironic to propose this at the very time the
President wants employers to create jobs.

Medicare payroll tax would hit seniors: His proposed tax hike on investment will
hammer seniors particularly hard because their investment income is a major supplement
to their pension and Social Security checks. Seniors also sell assets to raise income, so
raising the tax on capital gains further reduces their resources. Lastly, raising the taxes on
capital income and capital gains will lower asset values. Nearly 30 percent of all stocks
are held in retirement savings plans. Most of the seniors that rely on the income from
these plans for their livelihood are not “fat cat” investors that have been the target of
other populist tax hikes. They are people that spent their working years saving money for
their own retirement in mutual funds, 401(k)s, IRAs, and other savings vehicles. This
would just punish them for a lifetime of careful planning and saving.

Cadillac tax: The President also adopted an excise tax on “Cadillac” health insurance
plans similar to that in the Senate plan. Obama’s proposal would levy a 40% tax on plans
that cost over $10,200 a year for individuals and $27,500 for families, but wouldn’t be
effective until 2018. The delay will no doubt give unions and other favored groups time
to negotiate their way out of the tax through collective bargaining or gain a complete
legislative exemption at some point in the future before the tax kicks in. It also means
delaying political pain. All the same criticisms of the excise tax apply as before. For
example, insurers will embed the tax in the price of their plans. This will hide its cost
from their customers. The tax will also fall heavily on middle and low-income workers
whose taxes President Obama pledged not to increase. The President would have been
better off capping the value of health insurance employers can provide their employees
tax free. This is something that has wide support among policy experts on the right and
the left and would be a real show towards openness to the bipartisan ideas he is
purporting.

Still more taxes: Just like the Senate and the House, his plan incorporates a multitude of
other tax hikes and fees that will go towards paying for the monstrously expensive bill.
Some will raise taxes on people making less than $250,000 a year, breaking a key
campaign pledge. Prime examples include:

• Excise tax on medical device manufacturers;

• Fee on brand name pharmaceuticals;
• 10 percent tax on tanning services;
• Reduce the amount families can place in Flexible Spending Accounts (FSA) and
increase the penalties for non-medical deductions from Health Savings Accounts (HSA);
and
• Higher taxes on health insurance companies and producers of medicine.
Each of these taxes will fall explicitly on those making less than $250,000 or will be
passed down to them. And this is just a sample of the taxes that will hit those making less
than $250,000 in the President’s plan. There are many more. In fact, the mandate on all
individuals to purchase health insurance could also be considered another steep tax hike
on those making less than $250,000.

Bottom Line: There is never a good time to raise taxes, but even the talk of doing so now
continues to cause uncertainty in the economy. Sadly, the President’s plan is no better
than those of the House or Senate: massive new benefits paid for by a myriad of harmful
new taxes. Better to drop this plan and start over. Without crushing new taxes.

http://blog.heritage.org/2010/02/24/obama%E2%80%99s-health-plan-taxes-taxes-
everywhere

______________________________________________

Obama’s Health Plan Has Dangerous New Taxes

Posted February 23rd, 2010 at 6:35pm in Entitlements, Health Care with 20 comments

The health care plan President Obama recently released is mostly a combination of the
different plans passed by the House of Representatives and the Senate. But in one major
way it breaks with long-standing precedent, proposing a fundamental wrong-headed
change to both entitlement policy and tax policy. He proposes for the first time to tax
capital income to support entitlement programs.

Payroll taxes have always applied just to wages and salaries and the revenue those taxes
raise has gone solely to pay for entitlements like Social Security and Medicare. The deal
has always been that we pay payroll taxes during our working years and receive the
benefits they fund after we retire. President Obama’s health care plan would shatter this
compact forever.

The Hospital Insurance (HI) portion of the payroll tax is 2.9 percent on all wages and
salary that is paid half (1.45 percent) by workers and half (the remaining 1.45 percent) by
employers. It is supposed to pay only for the hospital insurance portion of Medicare
benefits that retirees receive. President Obama’s plan adopts this break with long-held
policy and doubles down by further severing the link between HI and Medicare benefits.
Obama’s plan not only increases the HI tax on wages and salaries for high-income
earners similar to the Senate bill, it also applies the HI tax to investment income for the
first time. Obama’s unprecedented plan would levy the current 2.9 percent HI tax on what
the administration obnoxiously refers to as “unearned” income, which includes capital
gains, interest, dividends, annuities, royalties and rents for families earning more than
$250,000 a year ($200,000 for single filers).

Applying the HI tax to investment income would also continue to transform entitlements
and how they are paid for. Using the revenue raised by levying the HI tax on investment
income would open the floodgates for future rate increases to pay for other new spending
programs. Adding a new revenue stream for Congress to tap when it needs more money
is always dangerous and should be resisted at all costs, otherwise expanding government
will be too easy for Congress.

Yet this is likely the reason President Obama wants to levy the HI tax on investment.
Applying the HI tax separately to investment income will forever give Congress yet
another tax to hike whenever it wants to fund a new program. If Congress can raise
payroll taxes easily to pay for any spending it desires, payroll taxes will no longer be
used to pay for entitlements, but as an ATM for Congress to go back each time it needs
more cash.

http://blog.heritage.org/2010/02/23/obama%E2%80%99s-health-plan-has-
dangerous-new-taxes/

____________________________________________________________________

The President Health Proposal: Taxing Investment

Income
Posted February 25th, 2010 at 5:00pm in Health Care with 8 comments
In preparation for today’s bipartisan Health Care Summit, President Obama released his
own version of health care reform earlier this week. The President’s proposal includes
several high-ticket provisions for expanding coverage. Since he has promised time and
again not to raise taxes on the middle-class in order to pay for health care reform, the
President’s bill imposes a Medicare tax on the investment income of high-individuals to
off-set some of the cost of expanding Medicaid and financing other provisions of his
health agenda.

But, as Heritage analysts Karen Campbell and Guinevere Nell explain in a recent paper,
these new taxes would have widespread adverse effects for all Americans, not just the
wealthy that they target. This is partially due to the very nature of a tax:

“A well-established economic regularity is that if you tax something, you get less of it.
For example, policymakers in the Senate recently proposed a tax on “Cadillac” health
insurance plans. The justification was that it would not only generate revenue to help pay
for subsidized insurance but also reduce demand for high-priced premiums, putting
downward pressure on all health insurance premiums.”

The Cadillac health insurance plan tax is intended to reduce the usage of high-cost
insurance plans. Similarly, the President’s proposal’s tax on tanning beds discourages
their use; the same is the case with cigarette taxes. In several instances, taxes are
imposed as punitive measures. So why on earth would the President impose a tax that
would discourage investment, delaying recovery from the current economic downturn?

Moreover, Campbell and Nell lay out several ways in which this tax would hit average
American households hard. First, the tax would reduce overall household wealth of
American families by $274 billion per year. “The value of the investment portfolios of
many households–not just the high-income households that directly pay the tax–are
reduced by the tax on investment income.”
Second, reducing investment would decrease capital in the U.S. economy, which would
reduce potential for economical growth. This affects not only the rate of job creation and
wage increase: it would have a dramatic effect on the ability of the federal government to
borrow money. According to Campbell and Nell, “A lower U.S. economic potential also
harms the ability of the government to borrow, because investors lend to the U.S. based
on the expected potential of the U.S. economy. Thus a lower potential economy puts
upward pressure on government interest rates in order to attract financing for the nation’s
deficit.” Raising government interest rates will add further to the financial burden on
taxpayers.

“Because investment is what drives productivity and economic growth, less investment–
even if only slightly less–leads to lower productivity, slower economic growth, weaker
wages and salaries, and lower household wealth. How much less depends on the
underlying supply and demand for investment.”

President Obama’s health care proposal would expand health coverage—but is the
detriment to the U.S. economy and the burden on the taxpayer worth the cost?

______________________________________________
Gov. Brewer: Arizona Cannot Afford Unconstitutional
ObamaCare
• Posted by Arizona Tea Party on March 18, 2010 at 7:00am

Gov. Brewer Writes Anti-Health Bill Letter

Updated: Wednesday, 17 Mar 2010, 9:50 PM MDT
Published : Wednesday, 17 Mar 2010, 9:47 PM MDT

PHOENIX - Arizona Governor Jan Brewer sent a letter to House Speaker Nancy Pelosi
and Majority Leader Larry Reid Wednesday, challenging the President's health care bill.

She says, "Arizona simply cannot afford the unfunded mandate that will result from this
legislation and outlined the disproportionate impact it will have on Arizona citizens."

She also notes that the expansive health care bill will rob citizens of their individual
liberties and rights.

"By requiring all citizens to purchase health insurance or be penalized, this bill would
impose on the people an unprecedented mandate by the federal government."
________________________

The full letter:

On December 30, 2009, the Attorneys General from several states wrote
you expressing grave concerns about the Senate version of the Patient
Protection and Affordable Care Act (H.R. 3590). Although amendments
have been made to this bill since then, the primary constitutional defects
remain. It is reported that Democratic Congressional leaders intend to
move forward with legislation that uses this bill as its starting point. I
therefore, on behalf of the State of Arizona, join these Attorneys General
and urge you to reject H.R. 3590 and any legislation that contains similar
legal deficiencies.

As Governor and the statutory officer authorized to communicate with

Congress on behalf of the State of Arizona, I have contacted Arizonas
delegation on more than one occasion expressing my serious policy
concerns with H.R. 3590. Last week I wrote President Obama and told
him quite clearly that Arizona simply cannot afford the unfunded mandate
that will result from this legislation and outlined the disproportionate
impact it will have on Arizona citizens.

The devastating impacts of the federal legislation will rob Arizonans of

their rights and pocketbooks alike. One of the core principles of our
nations system of government is the critical balance between the power of
the federal government and the protection of individual liberties. The
constitutional framers granted Congress only certain enumerated powers
and provided that all other powers are reserved to the states or the people
pursuant to the Tenth Amendment.

H.R. 3590 represents a sweeping violation of these fundamental principles

established by the founding fathers. By requiring all citizens to purchase
health insurance or be penalized, this bill would impose on the people an
unprecedented mandate by the federal government. As emphasized by the
non-partisan Congressional Budget Office:

The government has never required people to buy any good or service as a
condition of lawful residence in the United States. This mandate violates
the founders intent to limit the intrusion of the federal government upon
the rights of the individual.
The Commerce Clause is erroneously cited as a legitimate basis for
Congress to impose the requirement to purchase insurance. As you are
aware, the congressional power to regulate commerce is not without
limits. The sole basis for claiming constitutional authority under the
Commerce Clause is seemingly derived by coercing Americans to engage
in commerce through the purchase of insurance and then regulating that
coerced transaction. Even the non-partisan and independent
Congressional Research Service raised serious concerns about the
constitutionality of this proposal, noting that it may very well go beyond
the bounds of the Commerce Clause.

I must also strenuously object to the benefit exchanges the proposed

legislation would impose upon states. H.R. 3590 requires states to either
enact state legislation and regulations to implement these exchanges or be
forced to allow the Secretary of Health and Human Services to take over
and do it for them. This requirement is not a condition to receive federal
funding, but rather an absolute mandate to the states in direct
contravention of the Tenth Amendment.

For the foregoing reasons, I will coordinate with the other State Attorneys
General on behalf of the State of Arizona to challenge H.R. 3590 or any
health care proposal that becomes law with any of the unconstitutional
provisions I have outlined in this letter. Thank you on behalf of the
citizens of Arizona for your consideration of these matters.

Sincerely,
Janice K. Brewer
Governor

*********

http://arizonateaparty.ning.com/profiles/blogs/gov-brewer-arizona-cannot

______________________________________________

An Entitlement Certain to Grow

Posted January 7th, 2010 at 1:14pm in Health Care with 2 comments
One of the main arguments President Barack Obama and other Democrats have made on
behalf of the health care bills that have passed the House and the Senate is that they
would reduce the federal budget deficit in the coming decade and in the years following
as well. Their claim is backed up by the official cost estimates provided by the
Congressional Budget Office that show modest improvements in the budget outlook
through 2019 if the bills become law. But there are important reasons to be very skeptical
that a final health care bill will improve the nation’s budget outlook, both in the short and
the long term.

For starters, neither bill addresses the impending cut in the fees paid to physicians under
the Medicare program. There is bipartisan opposition to these cuts, but the cost of fixing
the problem would exceed $200 billion over 10 years. Consequently, congressional
Democrats aren’t providing a permanent solution in the health care bills; they are in
effect understating the cost of the reform program they have promised to deliver. If the
so-called “doc fix” were included in the accounting, the health care reform effort would
no longer be a deficit reducer at all.

In addition, CBO expects the financing provisions of the bill to produce revenue and
spending reductions that more than offset the growing cost of the new health entitlement
expansions contemplated in the legislation. That would be no small feat, because the
entitlement spending is expected to increase at a very rapid rate indeed, just as Medicare
and Medicaid spending have for more than four decades. By 2019, the Medicaid
expansion and the subsidies for health-insurance premiums in the exchanges are expected
to cost about $200 billion annually, and grow at an eight percent rate every year
thereafter.

On paper, of course, CBO is right. The “pay fors” would grow at an equally rapid rate, as
they are currently written in the bills. But that’s only because they assume key indexing
provisions that function like a tightening of the vise over time.

The House bill includes a new surtax for upper income taxpayers, while the Senate
passed an increase in the Medicare payroll tax for high earners as well as a new excise
tax on high-cost insurance plans. In all instances, the thresholds used to determine tax
liability would be set in ways that capture more taxpayers over time. The threshold for
application of the Medicare payroll tax hike — $200,000 for individuals — would not be
indexed at all to keep up with inflation. Nor would the House-passed income-tax surtax.

Meanwhile, the threshold for what constitutes a “high-cost” insurance plan would be
indexed below expected medical inflation. Consequently, in 10 or 15 years’ time, many
more Americans would find themselves in plans deemed to be unacceptably costly.

CBO also gives both the House and Senate bills credit for substantial savings in the
Medicare program. A large part of that would come from shaving off a half percentage
point every year from the normal Medicare inflation update for hospitals and other
service providers; that annual cut assumes improvements in productivity.
Both the Chief Actuary of the Department of Health and Human Services, as well as
CBO, have essentially raised serious doubts about whether such a perpetual cut in
payment rates can be sustained without leading large numbers of hospitals and other
service suppliers to drop out of the Medicare program, and thus harm beneficiary access
to timely care. Nonetheless, that’s what the House and Senate sponsors of the health
legislation are relying on when they claim their bills will improve the nation’s fiscal
standing.

But even if all of the offsets work out as planned, which is not likely, the House and
Senate bills would still create substantial budgetary risks because of the pressures for
entitlement expansion they would unleash.

Both bills assume the new entitlement spending can be held down with the so-called
“firewall” provisions. These are the rules that essentially preclude individuals from
gaining access to premium subsidies available in the exchanges. If an employer offers
“qualified” insurance coverage to a worker, the employee really has no choice but to take
it if he wants to avoid paying the penalty for going uninsured. But these rules would
create large disparities in the federal subsidies made available to workers inside and
outside the exchanges.

Gene Steuerle of the Urban Institute has calculated that, under the Senate bill, a family of
four with an income of $60,000 with employer-sponsored health care would get $4,500
less in federal support outside of the exchange than a similar family inside the exchange
would get in 2016. And there would be many tens of millions more families outside the
exchange than in it, according to CBO. Today, there are about 127 million Americans
under the age of 65 with incomes between 100 and 400 percent of the federal poverty
line, but CBO expects only about 18 million people will be getting exchange subsidies in
2016.

If enacted as currently written, it’s entirely predictable what would happen next. Pressure
would build to treat all Americans fairly, regardless of where they get their insurance.
One way or another, the subsidies provided to those in the exchanges would be made
more widely available, driving the costs of reform well above the $900 billion limit the
administration has set for the initiative.

The president has said that he wants a health reform bill in large part because it’s
necessary to get better control of the federal budget. But the bills that have been
developed in Congress fall far short of his stated objective. The new entitlement
expansions are certain to occur, followed quickly by irresistible pressure to make them
even more widely available and generous. Meanwhile, Congress would have to show
heroic restraint to allow the tax increases and spending cuts to play out as written. That’s
a recipe for another unfunded federal program.

http://blog.heritage.org/2010/01/07/an-entitlement-certain-to-
grow/
-
_____________________________________________________________

As Heritage experts have pointed out, there are major differences between the Senate and
House Health Reform Bills. The Tri-Committee House Staff recently compiled a
document highlighting the major differences, entitled “House-Senate Comparison of Key
Provisions”, which can be found here.

______________________________________________

JCT Says Obama Health Plan is a $414 Billion Tax

Hike
Posted February 25th, 2010 at 3:43pm in Entitlements, Health Care with 4 comments

President Obama keeps rolling out the tax hikes. In his budget released earlier this month,
excluding the tax hikes he assumed to pay for health care, he called for $1.3 trillion in
higher taxes over the next decade. Now in his recently released health reform plan, he
calls for even more tax increases. Today, the Joint Committee on Taxation (JCT) released
their analysis of the tax increases in the President’s plan. According to the JCT, the plan
will raise taxes by another $414 billion between 2010 and 2019. The taxes the President
Obama proposed hiking are as follows (the year the tax kicks in and the amount the tax
will raise between 2010 and 2019 are in parentheses):

• Require information reporting on payments to corporations (2011

– $17.1 billion)
• Exclusion of unprocessed fuels from the cellulosic biofuel produce
credit (immediately upon passage – $23.9 billion)
• Codify economic substance doctrine and impose penalties for
underpayments (immediately upon passage – $4.9 billion)
• Increase Hospital Insurance portion of the payroll tax and apply
it to investment income for families earning more than $250,000 a
year ($200,000 for single filers) (2012 – $183.6)
• Excise tax on “Cadillac” insurance plans valued at more than
$10,200 for individuals and $27,500 for families (2018 – $32.7
billion)*
• Impose annual fee on manufacturers and importers of branded
drugs (2011 – $33.4 billion)*
• Impose excise tax on manufacturers and importers of medical
devices (2012 – $20 billion)*
 • Impose annual fee on health insurance companies (2014 – $59.5
billion)*
• Excise tax on indoor tanning services (2010 – $2.7 billion)*
• Limit Health Savings Accounts (HSA) (2011 – $5.0 billion)*
• Increase taxes on unqualified distributions from HSAs (2011 –
$1.4 billion)*
• Limit Flexible Spending Accounts (FSA) (2014 – $11.4 billion)*
• Eliminate deduction of expenses allocable to Medicare Part D
subsidy (2012 – $2.6 billion)*
• Limit deductions for medical expenses (2013 – $15.2 billion)*
• Higher taxes on compensation above $500,000 paid to officers,
employees, directors and service providers of covered health
insurance providers (2013 – $0.6 billion)
• Higher taxes on certain health organizations (2010 – $0.4 billion)*

The taxes with the (*) will directly apply, or will be passed on to, families earning less
than $250,000 a year. This is a contradiction of President Obama’s campaign pledge not
to raise taxes on these families.

Almost all of these taxes came out of the separate bills passed by the House of
Representatives and the Senate. The only new tax the President proposed is applying the
Hospital Insurance (HI) portion of the payroll tax to investment income for the first time.
This would be a dangerous break with past precedent and would slow economic growth
at the worst time.

The President’s plan assumes raising $24 billion by excluding paper companies from
taking the celluslosic biofuel producer credit. This credit was only supposed to apply to
producers of biofuels, but a technicality in the law allowed paper companies to qualify.
The Senate already laid claim to this exclusion in their recently passed “jobs” bill. It that
becomes law, policy and germaneness aside, the President will have to conjure up some
more new taxes or spending cuts to pay for his new plan.

The hefty tax increases are a heavy blow to a struggling economy, but they do not come
close to covering the full cost of the President’s plan which will cost more than $1
trillion over ten years. The President has repeatedly insisted that his plan will not increase
the deficit. If that is so, he needs to explain how he will fill the $600 billion shortfall. The
gap could mean even more tax increases are on the way. Unfortunately, such calls are
now commonplace for the President.

http://blog.heritage.org/2010/02/25/the-taxes-just-keep-on-
coming
______________________________________________

Obamacare – The Raw and Undeniable Facts

Posted January 19th, 2010 at 5:30pm in Health Care with 8 comments

Each time a new study or report sheds light on the Obamacare’s true effects on
Americans’ health care, the left fights back with tiresome accusations that the source is
disreputable, partisan or “sides” with the insurance companies, ad nauseum.

How many professional experts are going to have to find fault with the House and Senate
health bills before the Left and their allies in Congress stop repeating the age-old adage:
“Everyone else is crazy, I alone am sane”? The terrible truth, of course, is that these
reports are right.

In study after study, a few things about Obamacare stand out. Both the House and Senate
bills will impose new taxes to pay for health care reform, many of which will affect low
and middle income Americans, not just the rich. Both bills expand coverage by adding
millions of Americans to Medicaid, one of the lowest-quality government health
programs. Despite the President’s promise that “if you like it, you can keep it,” millions
of Americans will lose the private insurance they currently have. And, no matter how you
slice it, neither bill will “bend the cost curve” in health care spending; to the contrary,
both bills increase national health expenditures above official projections under current
law. It’s no surprise, then, that the majority of Americans oppose the big Congressional
health bills , with 57% of Americans believing Obamacare will cause health care costs to
go up, and 52% expecting the quality of care to decrease as well.

Though each study uses different methodology and looks at slightly different things, here
are three different independent reports to show that Americans’ expectations for the
future under Obamacare are correct. The Department of Health And Human Services’
own Office of the Actuary for Centers for Medicare and Medicaid Services (CMS), the
Lewin Group, and the RAND Corporation’s study.

In the following table (a full version, including footnotes and sources, can be found here),
we put these estimates side-by-side so ordinary Americans can judge for themselves who
is and who is not telling the truth about the legislation.

http://blog.heritage.org/2010/01/19/obamacare-the-raw-and-undeniable-facts/

______________________________________________

Effects of the House and Senate Health Care Bills: A

Look at the Estimates
Health Care
heritage.org
Senate Bill -- 10 new taxes raising $398.1 billion in revenue
3
CMS
1

Lewin
2

Number of Americans that remain uninsured

23 million
22 million
Number of newly-insured Americans added to Medicaid
18 million
13.7 million
Percentage of newly insured that will fall into Medicaid
53%
50%
Number of Americans that will lose their current employer-sponsored coverage
17 million
16.1 million
Number of Americans that will pay a penalty for not obtaining insurance
18 million
8.1 million
Total amount of cuts to Medicare
$541 billion
$497 billion
Increase in overall national health spending
$222 billion
$305 billion
Increase in deficit
n/a
$196 billion
House Bill -- 11 new taxes raising $560.5 billion in revenue
3
CMS
1

Lewin
2

Rand
4

Number of Americans that remain uninsured

23 million
19.5 million
24 million
Number of newly-insured Americans added to Medicaid
21 million
11.8 billion
10 million
Percentage of newly insured that will fall into Medicaid
62%
40%
34%
Number of Americans that will lose their current employer-sponsored coverage
12 million
18.1 million
n/a
Number of Americans that will pay a penalty for not obtaining insurance
18 million
10.8 million
n/a
Total amount of cuts to Medicare
$571 billion
$436 billion
n/a
Increase in overall national health spending
$289 billion
$425 billion
n/a
Increase in deficit
n/a
$77 billion
n/a
Notes
1 Estimates are for the 20102019 ten-year window.
2 Estimates pertaining to coverage are for 2011. Estimates of cost impacts are for the 20102019 ten-year
window.
3 Estimates are for the 20102019 ten-year window.
4 Estimates are for the 20102019 ten-year window and are for the initial version of H.R.3962.
Sources: Richard S. Foster, "Estimated Financial Effects of the `Patient Protection and Affordable Care Act
of 2009,' as proposed by the Senate Majority Leader on
November 18, 2009," U.S. Department of Health and Human Services, Centers for Medicare and Medicaid
Services, Office of the Actuary, at http://www.cms.hhs.
gov/ActuarialStudies/05_HealthCareReform.asp#TopOfPage (January 8, 2010), and "Estimated Financial
Effects of the `America's Affordable Health Choices Act of
2009 (H.R.3962)' as Passed by the House on November 7, 2009," U.S. Department of Health and Human
Services, Centers for Medicare and Medicaid Services,
Office of the Actuary, at http://www.cms.hhs.gov/ActuarialStudies/Downloads/HR3962_2009-11-13.pdf
(November 13, 2009); John Sheils and Randy Haught,
the Lewin Group, "Comparing the Cost and Coverage Impacts of the House and Senate Leadership Health
Reform Bills: Long Term Costs for Governments,
Employers, Families, and Providers", at
http://www.lewin.com/content/publications/Lewin_Senate_and_House_Bill_Compared.pdf (December 9,
2009); The Joint
Committee on Taxation, "Estimated Revenue Effects of the Manager's Amendment to the Revenue
Provisions Contained in the `Patient Protection and Affordable
Care Act'", at http://www.jct.gov/publications.html?func=startdown&id=3641 (December 19, 2009), and
"Estimated Revenue Effects of the Revenue Provisions
Contained in H.R.3962, `The Affordable Health Care for America Act,' Scheduled for Consideration by the
House of Representatives", at http://www.jct.gov/
publications.html?func=startdown&id=3633 (November 6, 2009); Elizabeth A. McGlynn, Jeanne S.
Ringel, Federico Girosi for RAND Corporation, "Analysis of the
Affordable Health Care for America Act (H.R. 3962)", at
http://www.rand.org/pubs/research_briefs/2010/RAND_RB9504.pdf (January 15, 2010).
214 Massachusetts Avenue, NE · Washington, DC 20002 · (202) 546-4400 · heritage.org

http://www.pdfdownload.org/pdf2html/pdf2html.php?url=http%3A%2F
%2Fblog.heritage.org%2Fwp-content%2Fuploads
%2Fspecial_health_care_cost_fact_sheet_pdf.pdf&images=yes

______________________________________________

Democrats’ Health Care Plans Come at High Cost to

the Young
Posted January 29th, 2010 at 10:49am in Health Care with 6 comments
Extending health care to the uninsured and those who can’t get coverage for pre-existing
conditions is the epicenter of Democrats’ health care bills, but achieving that goal
requires adding younger, healthier Americans to insurance pools to hold down costs. And
achieving coverage for sicker populations comes at a significant price to young
Americans, according to a recent report by Rea Hederman and Paul Winfree of
Heritage’s Center for Data Analysis.

Two provisions in the bills ensure that those with pre-existing conditions will be able to
get coverage at an affordable cost. ”Guaranteed issue” requires that insurance companies
provide coverage to anyone, regardless of their medical history, and age rating would
entail insurance companies charging older or sick customers no more than twice as much
(three times as much in Senate bill) as they charge younger enrollees. This guarantees
that premiums for the young will increase to subsidize the cost of covering the older and
more sickly population.

Increased premiums would inevitably discourage more youth, not less, from purchasing
insurance. In order to counter this effect, the bills include provisions to ensure that
younger Americans still join the risk pool: an individual mandate to purchase insurance
and subsidies to purchase insurance for low and middle-income singles and families.

But, according to Hederman and Winfree, “Unfortunately, trying to fix one flawed policy
(the rating restrictions and guaranteed issue requirements) by adding another flawed
policy (the mandate and costly subsidies) only makes the policy outcome even worse.”

CDA’s findings echo predictions from the Congressional Budget Office that premiums in
the non-group market will increase as a result of the bills. CDA shows these premiums
increasing 10 to 13 percent. Rather than encouraging younger Americans to purchase
insurance, this will achieve the opposite, thereby increasing premiums for the older and
sicker population who must purchase insurance as younger Americans leave the market.
The individual mandate is intended to force youth into the market, but further CDA
analysis shows that this will not occur. Instead, most youth will opt out, largely because
of the higher premiums that would result from the guaranteed issue and age rating
provisions, but also because the penalty for not purchasing insurance would be
significantly lower than premiums.

For those to whom the individual mandate will apply and who are eligible for the health
exchange, CDA predicts only 12 percent of single uninsured individuals under 35 will
purchase insurance. Only 20 percent of families in the same category would bcome
insured, and of the uninsured that don’t qualify for subsidies in the exchange, only 5
percent are expected to buy insurance. Altogether, CDA finds that greater than 93 percent
of insured households would sooner pay the penalty and than purchase insurance at
higher premiums.

As Hederman and Winfree explain, “this quickly becomes a downward cycle as

insurance costs increase, which will drive out more and more of those who are less costly
to insure. Insurers will have no choice but to raise premiums, as they face paying out far
more in benefits to cover a sicker pool…” Clearly, the consequences of Obamacare are
disadvantageous for everyone.

http://blog.heritage.org/2010/01/29/democrats-health-care-plans-come-at-
high-cost-to-the-young/
______________________________________________

The Crushing Costs of Addressing the Crushing Cost of

Health Care
Posted March 2nd, 2009 at 11:02am in American Leadership, Health Care with 6
comments\

President Obama vows to “address the crushing cost of health care” by, among other
things, “invest[ing] in electronic health records and new technology that will reduce
errors, bring down costs, ensure privacy, and save lives.” Sounds great. Let’s take a quick
trip across the Atlantic to see how that’s worked out for the British.

In two words, not well. In 2002, Tony Blair ordered Britain’s National Health Service to
participate in the National Programme for IT, and thus launched an ambitious attempt to
computerize the entire Service. The initial projected cost: 2.3 billion pounds. It was
widely described as the largest IT project in the history of the world.

Fast forward to late 2008. Costs had risen to a minimum of 12.7 billion pounds, and since
the system was 4 years late – and counting – its final cost, actual full in-service date, and
even whether it would ever work at all remained up in the air. The Financial Times
described it as exhibiting an unhealthy level of ‘Great Leap Forward Syndrome.’

So what went wrong? Where to start. There was the crass malignancy of the
government’s attitude to its suppliers. The official responsible for delivering the system
compared the project to a sled team and failing suppliers to dogs who would be shot and
fed to the survivors to motivate them. A year later, he abruptly quit the project after one
key firm was accused of accounting irregularities and another major contractor dropped
out and threatened to sue the government to escape from the affair.

Then there was the incompetence of the Department of Health. The 2007 ‘competence
review’ of the Department by the Cabinet Office is richly amusing. Of the 12 assessed
areas, the Department got a green light in zero of them. The “Base Choices on Evidence”
area was described, for instance, as an “Urgent Development Area.”

In other words, the Department was pathetically bad at the elementary job of making
decisions based on facts, and equally bad at learning from past errors. The House of
Commons’ Public Accounts Committee produced a 180 page report on the system in
April 2007 listing a similar avalanche of misjudgments: no delivery timetable, no cost
controls, and no cost-benefit analysis.

Above all, there was the faith in the top down model, and the resulting failure to realize
that creating a system linking all doctors, hospitals, and administrators was going to be
immensely expensive and complicated, and that building the system had no necessary
connection to solving substantive problems. The Public Accounts Committee’s report
summed it up by noting that the entire project was afflicted with a worshipful attitude to
IT, which led to the delusion that it would be easy to fix complex social problems and
simultaneously save money by applying large amounts of centralized technology.

All of this led a senior executive at Fujitsu, which at the time had an 896 million pound
contract for the system, to publicly compare it to a camel, a tightrope walker, and a
sinking ship, and to sum up by saying:

It isn’t working, and it isn’t going to work. There is a belief that the national programme
is somehow going to propel transformation in the NHS simply by delivering an IT
system. Nothing could be further from the truth. A vacuum, a chasm, is opening up.

When Gordon Brown appeared before the Commons Liaison Committee two weeks ago,
he was still defending the indefensible. Meanwhile, the chief executive of London’s
Royal Free Hospital described the system’s trial deployment as “incredibly
disappointing” and said it would cost the hospital an addition 10 million pounds a year to
cope with it. In 2007, 91 percent of all doctors opposed it. A later survey found that most
NHS hospitals were simply refusing to implement parts of the system. The Department of
Health’s response was to impose massive fines on any hospital that refused to cooperate
in full.
And then there’s the question of privacy, which Obama raised. Many individual doctors
are refusing to use the system: as one put it, “Any lock that can be opened by 50,000 keys
is not secure.” That’s a wise attitude: in late January, the government came forward with
a proposal, hidden in an obscure corner of the Coroners and Justice Bill, to allow
ministers to “draw up new information-sharing orders that would allow them to release
private data – such as tax returns, personal details or medical records – to any public or
private body.”

Naturally, there will be safeguards. Naturally. But the only defense the government could
make of the proposal was that it would “reduce the number of people who need to be
notified of a death, thereby helping to relieve distress.” That’s right: a vast,
comprehensive medical database is being compiled in Britain, with widespread
information sharing by ministerial order, just so Britons will be spared the pain of
notifying the gas company that their aunt has died. If you believe that, you probably
believe Obama’s proposal will work too.

http://blog.heritage.org/2009/03/02/the-crushing-costs-of-addressing-the-
crushing-cost-of-health-care/
_____________________________________________________________________

The Magical Properties of Socialized Medicine

Posted January 23rd, 2009 at 9:55am in Health Care with 17 comments

Blogging for the AFL-CIO, Mike Hall extols the benefits of socialized medicine,
including: (1) lower heath care costs, and (2) higher health care costs. Here’s how he puts
it:

The incoming Obama administration is developing a comprehensive plan to address a

broad range of health care concerns. The AFL-CIO has not endorsed a specific plan but
has established certain principles that any plan should be built around.

Reform must secure high-quality health care for all; lower the costs that are now crushing
working families and businesses and share responsibility among employers, government
and individuals among other principles.
…
Earlier this week, the California Nurses Association/National Nurses Organizing
Committee (CNA/NNOC), which backs a single-payer, Medicare-for-all health care
reform plan, released a study that says such a plan would not only guarantee health care
for all, but would be a major boost to the nation’s staggering economy.

The study, conducted by the Institute of Health and Socio-Economic Policy, says a
single-payer plan would provide a major stimulus for the U.S. economy by creating 2.6
million new jobs and infusing $317 billion in new business and public revenues, with
another $100 billion in wages into the U.S. economy.
Got that? Socialized medicine will “lower the costs” but also “infuse $317 billion in new
… revenues.” What are those new revenues, other than higher costs for whoever is
paying those revenues?

The California Nurses Association summarized their study as follows:

Medicare for All (Single Payer) Reform Would Be Major Stimulus for Economy with 2.6
Million New Jobs, $317 Billion in Business Revenue, $100 Billion in Wages.

The number of jobs created by a single payer system, expanding and upgrading Medicare
to cover everyone, parallels almost exactly the total job loss in 2008, according to the
findings of a groundbreaking study released today.”

How convenient! Of course, for years the Physicians for a National Health Program
(PNHP) have been telling us we need socialized medicine because it will result in $350
billion in lower health care costs.

Doctors and hospitals must maintain costly administrative staffs to deal with the
bureaucracy. Combined, this needless administration consumes one-third (31 percent) of
Americans’ health dollars.

Single-payer financing is the only way to recapture this wasted money. The potential
savings on paperwork, more than $350 billion per year, are enough to provide
comprehensive coverage to everyone without paying any more than we already do.

That $350 billion saved in paperwork of course means $350 billion in lost jobs for
whoever is doing that paperwork.

So socialized medicine will both create jobs by spending over $300 billion more – and
save money by spending over $300 billion less. Now that’s magic!

UPDATE: The duplicity of the left goes even further than originally believed. Just three
months ago, the same California Nurses Association posted an article by John Geyman of
Physicians for a National Health Program (PNHP), claiming that Medicare for All was a
good idea because it will result in $350 billion in lower health care costs.

So the California Nurses Association is claiming both that “Medicare for All” is good
because it will save $350 billion, and good because it will cost an extra $317 billion. How
it will do both of these is not – and cannot – be explained. But regardless of the predicted
outcome – it’s nationalized health care, so they’re in favor of it.
http://blog.heritage.org/2009/01/23/the-magical-properties-of-socialized-medicine/
______________________________________________

Learn from Britain’s Mistakes: Don’t Centralize Health

Care in Washington
Posted February 2nd, 2010 at 10:45am in Health Care with 1 comments

To understand the dangers of a government takeover of health care, America should

study Britain’s system, which exemplifies the shortcomings of heavily regulated,
nationalized health care. A recent report by Robin Harris of the Heritage Foundation
outlines the deterioration of Britain’s health care system due to years of liberal health
policy marked by heavy concentration of power, higher taxes and the proliferation of
rules and restrictions by the National Health Service (NHS).

The NHS is Britain’s government-run health care system. It acts as a single-payer system
which originated with the nationalization of thousands of Britain’s hospitals. According
to Harris, this “centralized, single-payer health service, free at the point of consumption,
was an ideal prescription for waste, rationing by queues, and inordinate public
expenditure.”

The woes caused by the NHS are multitudinous. As a result of the long waits to receive
care, patients have instead begun to purchase treatment themselves, even going abroad to
receive care. Access and quality of care are low, and rationing of services has led to
discrimination against the elderly. As with any government-run system, more wealthy
citizens have a higher level of mobility within the system, and are more able to obtain a
higher quality of care than others. It is thus that the NHS has led to increased inequality
in care received by Britons.

Since 1997, Prime Ministers Tony Blair and Gordon Brown both significantly increased
NHS spending. However, according to Harris, health care has not significantly improved
due to the spending splurge, and Britain remains well behind other European nations in
measures of quality of care. Clearly, the NHS is a failing institution that has sacrificed the
health and the quality of care received by the people it serves.
The British health care system should serve as a bleak warning for lawmakers pursuing
health care reform. Though congressional Democrats’ proposed legislation would not
impose the same structure of government-run health care as the NHS, the concentration
of control over health benefits and regulatory restrictions on the kinds of insurance
Americans could have would put America on a glide path to a system of national health
insurance, with many of the characteristics of the NHS. A public option, whether explicit
or not, would create an unlevel playing field for insurers which could ultimately put
private insurers out of business. Even without a public option, government regulation of
premiums, insurers’ medical loss ratios, and detailed health benefits packages would give
Washington the ability to manipulate the private insurance industry as it desired.
Increased federal power would put decision-making into the hands of politicians, rather
than the patients and doctors with whom it belongs.

Government control of health care can be avoided with true reform. Without true reform,
and the progressive growth of government control will entail longterm costs. Market
inefficiencies ensue, resulting in less innovation, a decreased focus on increasing value,
fewer consumer choices and control over health providers, waste, and even political
manipulation of the system. European Parliament member Daniel Hannan remarked that
the “US would be making a bad mistake if it adopted the failed model of the U.K.
National Health Service.” Policymakers should heed his advice.

Co-authored by Rick Sherwood.

http://blog.heritage.org/2010/02/02/learn-from-britain%E2%80%99s-mistakes-don
%E2%80%99t-centralize-health-care-in-washington/
______________________________________________

What Obamacare and the NHS Have in Common

Posted December 24th, 2009 at 10:00am in Health Care with 6 comments

As US legislators continue to advance the largest expansion of government control over

health care in the US, many Americans may need some comic relief. Although such
massive consolidation of federal control over health care is by no means a laughing
matter, the following 2-minute clip from a popular BBC Documentary Series “Yes,
Minister” illustrates the ridiculousness of the efforts.

This not an entirely trivial story contrived for political satire; in fact, even early this year,
the 2009 opening to an NHS hospital was canceled until “early 2010” for among other
items not being able to “[control] the heat of the floor in some parts of the hospital.” In
2008, a survey by the (British) Health Care Commission found that roughly 11 million
hospital meals were simply wasted. Moreover, the Taxpayers’ Alliance in England, find
that “misguided directive[s]” lead to a “total waste of NHS resources”, and most
importantly, divert global health care resources “at a time when people are struggling to
get life-saving operations and medication”.

While the US healthcare system is not (yet) the socialized health care system of the
British NHS, Obamacare does continue a massive transfer of regulatory power in the
health care and health insurance markets to the federal government. In the attempt to
bring more equity into the US health care system by granting the federal government
even greater power, even an advanced socialized health care system faces great concerns
of inequality. This is highlighted best by Steve Webb, MP and Liberal Democrat Shadow
Health Secretary, stating of the NHS that “health inequalities still run deeply through our
society. People still face an unfair postcode lottery in accessing health services across the
country, which bears little relation to need. Health needs around the country would be
best met by democratic community bodies giving local people a direct say in the services
they need.”

This underscores the gravity of the current health reform debate in the US where the
federal government has progressively consolidated regulatory and financing power in
health care for the last 30 years. Rather than moving more towards a decentralized system
that many in Britain now want (and polls have shown US voters want) US legislators
want to centralize more of the power in Washington.

http://www.quinnipiac.edu/x1295.xml?ReleaseID=1408

http://blog.heritage.org/2009/12/24/what-obamacare-and-the-nhs-have-in-common/

______________________________________________

Obama Knows Obamacare Increases Government

Control, Right?
Posted February 10th, 2010 at 7:00pm in Health Care with 24 comments
At his impromptu press conference yesterday, President Barack Obama again defended
his health care plan this time claiming:

I don’t know if people noted, because during the health care debate everybody was
saying the President is trying to take over — a government takeover of health care. I
don’t know if anybody noticed that for the first time this year you saw more people
getting health care from government than you did from the private sector — not because
of anything we did, but because more and more people are losing their health care from
their employers. It’s becoming unaffordable. That’s what we’re trying to prevent.

First of all, we definitely noted the Centers for Medicare and Medicaid Services (CMS)
report the President references above. But more importantly, if we are to take the
President at his word, and believe him when he says he wants to prevent a government
takeover of health care, then he should know that his plan is the exact wrong direction to
go.
In a separate report on the Senate health bill issued earlier this year, the CMS projected
that over half (18 million) of the 33 million Americans who would gain health insurance
because of Obamacare, would do so by enrolling in Medicaid … which is a government
run health care program. And another 2 million would enroll in Medicaid for
supplemental coverage.

The President also said yesterday:

We’ve got to control costs, both for families and businesses, but also for our government.
Everybody out there who talks about deficits has to acknowledge that the single biggest
driver of our deficits is health care spending. We cannot deal with our deficits and debt
long term unless we get a handle on that. So that has to be part of a package.

But guess what? According to that same CMS report, Obamacare would increase, not
decrease, U.S. health expenditures by $234 billion by 2019.

President Obama said of his February 25th health care infomercial:

Let’s establish some common facts. Let’s establish what the issues are, what the
problems are, and let’s test out in front of the American people what ideas work and what
ideas don’t. And if we can establish that factual accuracy about how different approaches
would work, then I think we can make some progress.

As the facts above clearly show, if reducing health care spending and stopping the
government take

http://blog.heritage.org/2010/02/10/obama-knows-obamacare-increases-
government-control-right/

______________________________________________

Surgeons Oppose Government Takeover of Health Care

Posted December 2nd, 2009 at 11:30am in Health Care with 0 comments

Yesterday a coalition of 19 surgical organizations representing over 240,000 doctors

nationwide sent a letter to Majority Leader Harry Reid (D-NV), with copies to the entire
U.S. Senate, explaining why they must oppose the Senate’s version of Obamacare.

Read the whole letter here, or skip to their list of specific problems with the bill below the
fold. You’ll see that almost all of their complaints have to do with the tremendous
amount of authority this bill rips away from doctors and patients and transfers to
bureaucrats in Washington DC. Heritage scholar Bob Moffit details just some of the DC
power grab here, and the Washington Examiner’s Susan Ferrechio covers the behemoth
the Department of Health and Human Services would become, here.

The surgeons oppose:

• Establishment and proposed implementation of an Independent

Medicare Advisory Board whose recommendations could become
law without congressional action;
• Mandatory participation in a seriously flawed Physician Quality
Reporting Initiative (PQRI) program with penalties for non-
participation;
• Budget-neutral bonus payments to primary care physicians and
rural general surgeons;
• Creation of a budget-neutral value-based payment modifier which
CMS does not have the capability to implement and places the
provision on an unrealistic and unachievable timeline;
• Requirement that physicians pay an application fee to cover a
background check for participation in Medicare despite already
being obligated to meet considerable requirements of training,
licensure, and board certification;
• Relying solely on the limited recommendations of the United
States Preventive Services Task Force (USPSTF) in determining a
minimum coverage standard for preventive services and
associated cost-sharing protections;
• The so-called “non-discrimination in health care” provision that
would create patient confusion over greatly differing levels of
education, skills and training among health care professionals
while inappropriately interjecting civil rights concepts into state
scope of practice laws;
• The absence of a permanent fix to Medicare’s broken physician
payment system and any meaningful proven medical liability
reforms; and
• The last-minute addition of the excise tax on elective cosmetic
medical procedures. This tax discriminates against women and
the middle class. Experience at the state level has demonstrated
that it is a failed policy which will not result in the projected
revenue. Furthermore, this provision is arbitrary, difficult to
administer, unfairly puts the physician in the role of tax collector,
and raises serious patient confidentiality issues.
http://blog.heritage.org/2009/12/02/surgeons-oppose-government-takeover-of-
health-care/
____________________________________________________________________

Bending the Cost Curve in the Wrong Direction

Posted December 9th, 2009 at 1:20pm in Health Care with 1 comments

This week the Commonwealth Fund released a report purporting to explain, as the title
says, “Why Health Reform Will Bend the Cost Curve.” It is an exercise in pure,
unsubstantiated speculation. They resurrect the long-discredited claim that the bill passed
by the House and a somewhat similar but different bill currently before the Senate would
not only slow the rate of growth in health care spending, but would reduce average family
premiums. Ironically, most of the sources of alleged “cost savings” cited in the report are
due to factors that will actually increase health care spending and/or health insurance
premiums – and which are counted as such by other studies of the effects of proposed
reform.

Even more ironically, they attribute the difference between their conclusions and those of
other studies that show an increase in costs and premiums (by groups such as the CBO
and the CMS Office of the Actuary) as due to the fact that the other studies “rely largely
on peer-reviewed studies utilizing carefully controlled comparison groups,” whereas their
own study is based on a “less formal, but no less important literature that sees the world
very differently.” They also note that front-line physicians see vast amounts of waste due
to misaligned incentives in the current system. However, doing a study less “carefully”
and looking at “the world very differently” will not change the fact that the current
proposals under consideration in Congress would, in the real world, establish a system
with even more drastically misaligned incentives, increasing waste and costs for almost
all categories of patients and providers.

The report concedes that “Extending health insurance coverage to essentially all
Americans would increase medical spending, at least in the short run,” as the previously-
uninsured enjoy greater access to health care. However, they assume that this is almost
offset by reductions in Medicare and Medicaid benefits. According to the CBO report
(Table 3), almost half of the reduction in the number of uninsured is accounted for by an
increase in number covered by Medicaid. So in effect, they are saying we can obtain
coverage for the uninsured by expanding Medicaid, and then pay for it by cutting
Medicaid (and also by cutting Medicare). Somehow, providing health care to some poor
people by taking it away from other poor people and the elderly is supposed to save
money.

Next is a claim that “insurance exchanges … would group individuals and small firms
into larger entities and thus drive down those administrative costs.” This is approximately
the opposite of what these exchanges are designed to do, which is to break up groups so
not everyone with the same small employer has to be in the same health plan. In other
words, it breaks up groups. Also, any savings in administrative costs such as underwriting
would be offset by increases in advertising to influence the choice of customers – and by
the compliance costs associated with the regulations in the new exchanges. Both the
House and Senate bills require insurers to seek regulatory approval individually for both
the benefit package and the premium each health plan they offer – in addition to
complying with existing state laws.

They also claim that: “In many areas of the country, there is little meaningful insurance
competition. … A public option would contribute to this effort.” This claim is
implausible on two counts. First, while there is some evidence of higher premiums due to
limited competition in the large-employer market, the neither the exchanges nor the
public option would be available to large employers. Second, while the exchanges and
the public option would be available to individual purchasers, there is no evidence of a
lack of competition in the individual market. There are over 1,300 companies, including
not-for-profit organizations, currently competing in the individual market; it is hard to
imagine one more playing on a level playing field making much difference.

They also claim that “a requirement that plans devote 85 percent of premiums to medical
care, and authority for states [and in the House bill, the federal government] to review
and reject premium increases. These can be expected to place downward pressure on
administrative costs.” This is precisely backwards. Meeting the 85 percent requirement
can be accomplished by either decreasing administrative costs or increasing medical
costs. With most of their administration managing compliance with federal and state
regulations, there will be little ability to reduce administrative costs. On the other hand, a
plan that finds itself out of compliance with the 85 percent rule can always increase
payments to physicians and hospitals, and increase premiums until the more-or-less fixed
administrative costs fall below 15 percent. As a result the 85 percent rule would bend the
cost curve upward, not downward.

The remainder of the author’s argument consists of a list of new categories of increased
expenditures, together with the claim that all this increased spending will eventually
decrease spending. For most of these, the reverse is true. For example:

• “Pay-for-performance incentives for Medicare providers,” despite

their name, are really extra payments for providing (and
documenting the provision of) specific lists of “recommended”
interventions.
• “Higher reimbursements for preventive care services” and
“increased emphasis on prevention and wellness” may benefit
patients and physicians, but the overwhelming evidence is that it
only rarely saves money and usually increases spending.
• “Increased funding for comparative effectiveness research” will
cost money in the short run, with benefits in the long run that are
purely speculative at best. Furthermore, as the recent controversy
 over the recommended mammogram schedule shows,
government-run programs such as Medicare, Medicaid, and the
proposed “public option” are subject to political pressure, making
them less able to derive cost-saving benefits of such research.
• “An excise tax on high-cost insurance plans (in the Senate bill).”
The Senate bill would impose a 40 percent excise tax on health
premiums in excess of specified thresholds health plans would be
forced to pass these taxes on to those paying the premiums,
making high premiums even higher.. Cutting benefits to lower
premiums could be difficult given a government-mandated benefit
package.

http://blog.heritage.org/2009/12/09/bending-the-cost-curve-in-the-wrong-
direction/

______________________________________________

Charging Obamacare to the Federal Credit Card

Posted January 28th, 2010 at 5:29pm in Ongoing Priorities with 4 comments

Despite the recent focus of Congress and the White House on fiscal responsibility in
federal spending, passing Democrat’s health care agenda will add significantly to, not
reduce, the federal deficit. Pushing Obamacare through Congress would fly directly in the
face of any rhetoric spoken in favor of reducing the deficit.

The necessity for Congress to raise the debt limit has spurred a nationwide conversation
on the enormity of the federal debt and the recklessness of federal spending. Several
proposals have been made within Congress to create commissions to suggest legislation
to deal with the out-of-control budget. Even external organizations have begun to take on
the task of solving America’s impending fiscal crisis. The latest development is the freeze
on discretionary spending that President Obama proposed during his State of the Union
Address.

And yet none of this means anything if spending, especially on entitlements, is not
controlled. Unfortunately, adopting the Senate’s health care bill which would increase
entitlement spending and add tremendously to the deficit. Though the Congressional
Budget Office (CBO) initially reported the Senate health care bill would reduce the
deficit, a more recent report from CBO confirms that, in actuality, the bill would increase
the deficit by more than $200 billion.
The reason for this discrepancy is that the bill “double-counted” savings from Medicare
by claiming that they would both fund other provisions in the bill and increase the
solvency of the Medicare program. Senator Jeff Sessions (R-AL) inquired of CBO to
clarify. CBO responded that if the savings from Medicare are applied back to the
program, the Senate health care bill would add $226 billion to the federal deficit in the
next ten years.

This staggering number is in addition to the other budgetary gimmicks the bill’s authors
employed to make it appear fiscally sound. For example, the removal of the “doc fix”
legislation from the Senate bill. This legislation would permanently repeal the cuts to
physician payment rates under Medicare that Congress already suspends every year.
Pretending these cuts won’t occur is pure fantasy—in reality, they will also add over
$200 billion to the federal deficit between now and 2019.

Democrats also manipulated the spending and savings provisions of the bill in order to
maximize revenue during the first ten year window while minimizing expenditures. New
taxes and other revenue-raising provisions become effective immediately, while
expenditures, like the subsidies for the lower and middle class to purchase health
insurance, would not occur until years later. This creates a convenient spending cushion
to hide the true costliness of the bill.

Finally, though it may seem perverse, the growing unpopularity of health care reform is
causing its price tag to grow as well. First there was the Nebraska deal, where Senate
Majority leaders promised Senator Ben Nelson (D-NE) a sweet Medicaid deal if he
would vote for the bill. Now all the other states want it, too. According to CBO, this
would add $35 billion to the Senate bill.

Then there was the excise tax on high-cost insurance plans, which had unions hopping
mad because many union members would see their health benefits taxed under the plan.
So the Senate Majority cut another deal, exempting unions from the tax until 2018. This
means about $55 billion of lost revenue, which would either have to be made up
elsewhere or—you guessed it—added to the deficit.

Clearly, our elected officials don’t understand the meaning of “spending problem”. With
the amount of United States’ debt held by the public set to reach 100% of the Gross
Domestic Product by 2019, it’s time for Congress to look beyond the ten-year window of
CBO’s cost estimates and acknowledge the threat that deficit spending on health care has
on the fiscal future of America.

http://blog.heritage.org/2010/01/28/charging-obamacare-to-the-federal-
credit-card/

_____________________________________________________________________
The Public Option Threat Still Buried in the Senate Bill
Posted February 4th, 2010 at 3:45pm in Health Care with 2 comments

Most Americans now believe that major health care legislation will not pass this year.
But as Heritage Vice President Stuart Butler explains in The New England Journal
Medicine one seemingly minor proposal in the Senate health care bill could end up
having huge repercussions for our entire health care system:

The Senate legislation contains strong directives to the OPM, requiring it to negotiate
medical-loss ratios (the percentage of premiums that insurers actually spend on medical
care for enrollees), minimum benefits, profit margins, premiums, and “such other terms
and conditions of coverage as are in the interests of enrollees in such plans.” Crucially,
the legislation also specifies that the OPM-administered plans would automatically be
deemed to meet all the requirements for plans to be offered through the health exchanges
created by the legislation.1 This means that OPM-administered plans could in practice
operate free of many of the financial regulations that exchanges might impose on other
plans, allowing the plans to operate under their own OPM-designed regulations.

How might the health care system evolve if this OPM feature were implemented as part
of a modest reform package? Congress rarely gives an agency powers that it does not
intend to be used. It also seems reasonable to assume that the people appointed to
administer the new bureau within the OPM will be more likely to embrace the adversarial
and regulatory philosophy of the leading congressional reformers and the CMS than the
traditional “hands-off” culture of the OPM. Managed by such a transformed agency, the
private plans that were part of an OPM alternative would probably come, over time, to
look more and more like third-party administrators of a federally designed competitor
plan, operating under rules significantly different from those governing competing
private plans. The result in a few years could be functionally indistinguishable from a
public option.

Butler identifies another proposal seen in the House bill that also could spell the death of
private health care. Read his whole article here.

More on the Senate’s OPM provisions, here and here.

______________________________________________

Risking Big Changes with Small Reforms

Posted by NEJM • February 3rd, 2010

Stuart M. Butler, Ph.D.

As the prospects for health care reform ebb and flow by the day, one school of thought
holds that making modest adjustments rather than enacting large-scale reform could help
to avert controversy and command more broad support. Perhaps — but seemingly modest
changes could also unleash huge pressures that would profoundly alter the system’s future
structure and function. Since perceptive lawmakers and congressional staff members
recognize this fact, there may well be bitter debate over the enactment of certain
apparently modest elements of a smaller reform package submitted to Congress.

History shows that changing even seemingly minor features of legislation or

administrative decision making with regard to health care can have major — and
sometimes unintended — consequences for the system’s evolution. For instance, when
President Lyndon Johnson made an apparently minor concession to the American
Medical Association in 1965 by allowing “usual and customary charges” to become the
basis of Medicare payments, he essentially permitted doctors to set their own fees simply
by adding a charge on top of the costs they incurred. This triggered powerful inflationary
pressure that has impeded spending control and frustrated payment reform for many
years. Similarly, rulings exempting fringe benefits from taxation after World War II
created a strong incentive for employers to expand tax-free health insurance relative to
taxable cash compensation for their employees. Economists broadly agree that this move
boosted employer-sponsored insurance in the United States and, unfortunately, blunted
patients’ incentives to seek out cost-effective health care. The current goal of “bending the
cost curve” emerged largely in response to this unintended dynamic.

Design decisions in a pared-down proposal or reconstituted Senate bill are also likely to
create dynamics that will reshape the system in ways unforeseen by many lawmakers.
Consider two possible design elements that might be particularly influential. One is the
alternative to a public option in which the government would offer a menu of nationwide
private insurance plans to be overseen by the federal Office of Personnel Management
(OPM). The shift to this approach was seen as a major setback for supporters of a public
option during the Senate–House negotiations, particularly for those who saw a public
option as a crucial step toward a single-payer system. But proponents of the public option
might not be so disappointed in the long run if this alternative becomes part of a smaller
bill.

The OPM currently administers several nationwide private plans and hundreds of local
plans that are available to about 8 million federal employees and retirees and their
dependents. The cultures in various government agencies are often quite different, and
this can affect the ways in which the agencies operate; whereas the culture at the Centers
for Medicare and Medicaid Services (CMS) might best be described as adversarial, with a
strong focus on rule making and rate setting, the attitude at the OPM is more similar to
that of a large private employer that negotiates benefits with private insurers. OPM
officials conduct these negotiations with private plans in an atmosphere of cordial
cooperation in an effort to provide employees with economical, high-quality benefits. The
OPM actually has considerable latitude and powers to set prices and demand specific
benefit designs. But in practice, it chooses not to fully utilize these powers.

Now imagine that reform legislation is enacted requiring the OPM to administer a set of
private plans designed to achieve what many key leaders in Congress really believe can
be obtained only through a strong public option or a single-payer system. The Senate
legislation contains strong directives to the OPM, requiring it to negotiate medical-loss
ratios (the percentage of premiums that insurers actually spend on medical care for
enrollees), minimum benefits, profit margins, premiums, and “such other terms and
conditions of coverage as are in the interests of enrollees in such plans.” Crucially, the
legislation also specifies that the OPM-administered plans would automatically be
deemed to meet all the requirements for plans to be offered through the health exchanges
created by the legislation.1 This means that OPM-administered plans could in practice
operate free of many of the financial regulations that exchanges might impose on other
plans, allowing the plans to operate under their own OPM-designed regulations.

How might the health care system evolve if this OPM feature were implemented as part
of a modest reform package? Congress rarely gives an agency powers that it does not
intend to be used. It also seems reasonable to assume that the people appointed to
administer the new bureau within the OPM will be more likely to embrace the adversarial
and regulatory philosophy of the leading congressional reformers and the CMS than the
traditional “hands-off” culture of the OPM. Managed by such a transformed agency, the
private plans that were part of an OPM alternative would probably come, over time, to
look more and more like third-party administrators of a federally designed competitor
plan, operating under rules significantly different from those governing competing private
plans. The result in a few years could be functionally indistinguishable from a public
option.
Now consider another design element that might be particularly influential — the broadly
supported idea of health insurance exchanges. The critical design issues are whether the
exchanges would be primarily national or state-based and what the relationship would be
between an exchange and the regulation of insurance. The House legislation would create
a national exchange modeled on the federal employees’ system, whereas the Senate has
opted for a more state-centered approach. This is not a small distinction. Legislation
calling for state exchanges could still set broad national guidelines, such as general
criteria for the provision of consumer information or basic requirements for enrollment
procedures. But a permissive state-led exchange system would trigger significant
variation in the design of exchanges meeting the federal guidelines. This flexibility would
make it easier to incorporate existing exchanges, such as the Health Connector in
Massachusetts or the more recently created Utah Health Exchange. But more important,
the state-centered approach would make it easier for states to be innovators in exchange
design and to link their exchanges more closely with state reforms in insurance regulation
and coverage innovations. Such an approach would therefore improve the likelihood that
we would see both state diversity and continuous evolution in the U.S. health care system,
at least in the private sector.

A national exchange, on the other hand, would increase the probability of evolution
toward a public-utility model of private insurance. A national exchange would reflect the
more regulatory culture of the Department of Health and Human Services and
congressional committees and would thus be more likely to be used in combination with
federal insurance regulation to reshape the private market. As the Commonwealth Fund
observes in its recent analysis of the health care reform bills, the House version’s national
exchange would have stronger regulatory and market power to control insurance
premiums and companies, thanks to the federal government’s ability to negotiate directly
with insurers.2 These features would open up the possibility, if not probability, of a high
degree of price regulation, especially if they were combined with greater standardization
of benefits, restrictions on plan–provider relations, set minimums for medical-loss ratios,
and federal review of premium rates. With these federal powers in place within a national
exchange, insurance would essentially become a regulated utility. Although many people
might applaud that result, it would be very different from the probable result of
establishing state-based exchanges.

Examination of these two “minor” design features — OPM-administered private plans

and the choice of national or state-based exchanges — underscores the complex nature of
health care policymaking. Taking even small steps to improve coverage, it turns out,
involves decisions that could have profound effects on the future of the U.S. health care
system. Thus, it would be unwise to try to rush through a scaled-back bill on the
assumption that minor changes do not require careful scrutiny. It is important to take the
time to think through the implications of any new legislation.

Financial and other disclosures provided by the author are available with the full text of
this article at NEJM.org.

Source Information
From the Heritage Foundation, Washington, DC.

This article (10.1056/NEJMp1001054) was published on February 3, 2010, at NEJM.org.

References

1. Senate-passed Patient Protection and Affordability Act (H.R. 3590) § 1334(a) and
(c) (2009).
2. Collins SR, Davis K, Nicholson JL, Rustgi SD, Nuzum R. The health insurance
provisions of the 2009 congressional health reform bills: implications for
coverage, affordability, and costs. New York: Commonwealth Fund, January
2010. (Accessed February 2, 2010, at
http://www.commonwealthfund.org/Content/Publications/Fund-
Reports/2010/Jan/Health-Insurance-Provisions.aspx.)

http://healthcarereform.nejm.org/?p=2934&query=home

______________________________________________

The Specter of Financial Armageddon — Health Care

and Federal Debt in the United States
Posted by NEJM • March 17th, 2010 •

Michael E. Chernew, Ph.D., Katherine Baicker, Ph.D., and John Hsu, M.D., M.B.A.,
M.S.C.E.

The most important force shaping the U.S. health care system over the coming decades
may well be the federal debt. The government now pays for approximately half of all
health care costs in the United States, and projections of growing federal debt largely
reflect anticipated increases in health care spending. Because federal debt and health care
policy in the United States are so deeply entwined, it is important to understand the basics
of deficits and debt and their implications for health care reform.

The deficit is the gap between expenditures and revenues in any given year ($1.4 trillion
in the United States in 2009), whereas debt is defined as accumulated past deficits, or the
stock of what we owe ($7.5 trillion at the end of 2009).1 Economists distinguish between
two types of deficit: cyclical and structural. Cyclical deficits rise or fall in the short term
in response to economic conditions. In economic downturns, tax revenue falls and
government spending on public programs such as unemployment insurance increases,
leading to larger deficits and higher debt. These deficits are not necessarily a problem:
they can boost economic activity and mitigate economic downturns. When the economy
expands, revenues rise and spending falls, creating a cyclical surplus that, holding all else
constant, can reduce the debt.
In contrast, structural deficits represent an underlying, persistent imbalance between
revenues and expenditures. The United States has a substantial, growing structural deficit,
much of which reflects current and projected increases in federal spending on Medicare
and Medicaid. This federal health care spending amounted to 5% of the gross domestic
product (GDP) and 20% of federal outlays in 2009 and is forecast to reach 12% of the
GDP by 2050.1 Health care spending is thus a key driver of long-term debt. This does not
mean that we cannot run a structural deficit, but deficits must be small enough that debt
grows more slowly than the GDP.

So why does debt matter, and how much is too much? Economists often measure the size
of the debt relative to the overall economy, or the debt-to-GDP ratio. To finance this debt,
the government issues interest-bearing bonds. Doing so imposes several economic costs.
First, interest payments consume an increasing share of income (1.3% of the GDP in
2009, or 5.3% of total federal spending),1 thereby reducing the resources available for
public programs. Second, growing debt can lead to higher interest rates for all borrowers
(government, businesses, and individuals), thus impeding economic growth. Finally, high
debt reduces our capacity to respond to sudden economic shocks and magnifies the
detrimental effects of any deficit.

Economies can bear substantial debt without dire economic consequences, but there is a
limit to how high debt can rise and still be financed without causing serious economic
harm. Economists, however, do not agree on where the threshold lies. The European
Union has set a target debt-to-GDP maximum of 60% for its member countries (although
the table shows that a number of them exceeded this threshold in 20082), but some
economic research suggests that levels approaching 90% can be managed without
substantial economic harm. In 2009, the U.S. debt-to-GDP ratio was 53%, according to
the Congressional Budget Office. Although this figure suggests that we have some short-
term flexibility, our large and increasing structural deficits will push us past the 90% mark
by the end of 2020, absent major policy changes.1
The consequences of high debt levels depend on the treatments that policymakers
prescribe. One approach is generating inflation to erode the value of the debt, but the
adverse economic consequences of this strategy can be severe. Another option is raising
taxes. Taxes reduce economic growth.

Projections made by the Congressional Budget Office in 2007, before the current fiscal
crisis began, suggest that to finance federal spending, the highest federal tax bracket
would have to rise to 92% by 2050, assuming health care spending grows 2.5 percentage
points faster than GDP, which is approximately the historical average.3 A final option is
cutting spending on valued public programs. For Medicare and Medicaid beneficiaries,
this approach could mean large increases in cost sharing, poorer benefits, limited
eligibility, and diminished access. For health care providers, it could mean drastic
reductions in Medicare and Medicaid payments.

Most likely, some combination of tax increases and spending cuts will be needed to avoid
unsustainable debt, but the higher our debt climbs, the more likely it is that we will find
ourselves in an economic crisis and the more painful the unavoidable response will be.
The economic stresses apparent in Greece and in California provide some glimpse into
what such a fiscal Armageddon might bring.

The clear implication for health care reform is that as we evaluate options (or the
possibility of maintaining the status quo), we should focus on the path to a sustainable
fiscal situation rather than on short-run deficits. Growth in health care spending is one of
the primary contributors to increases in debt over the long run, so the long-term strategy
must involve slowing that growth. The current reform proposals incorporate a number of
promising strategies for controlling spending and raising revenue (see Proposed Strategies
for Reducing Health Care Spending4). The impact of these strategies will depend on the
details and the effectiveness of implementation, and no one knows which strategies will
prove successful. Projections suggest that the reform package, including additional
revenues, will reduce the deficit (relative to the unsustainable baseline).

If the entire reform package is required in order to achieve the deficit reduction —
perhaps because of an interaction between expanded coverage and the fiscal effects of
reform or perhaps because expanded coverage is needed to generate sufficient support for
passage — then the fiscal case for reform is much stronger. However, if the provisions for
cost savings and revenue gains can be implemented without expanding coverage, we must
ask whether the money saved should be spent on coverage expansions (or any other
policy goal) or on debt reduction.

The net impact of reform on the deficit should not be the metric of fiscal virtue. If all the
money saved through reductions in future spending on existing health care programs were
devoted to new health care programs, our fiscal situation would be little improved.
Similarly, if other fiscal tools, such as tax increases, are used to cover new programs,
those tools will not be available to achieve broader reductions of the structural deficit.
Thus, although covering the uninsured is a laudable policy goal that would improve
access to health care for many, it would also add substantially to our structural spending
and thus necessitate more draconian fiscal austerity elsewhere.

This does not mean that we should not expand coverage — but rather that we must
evaluate the cost of doing so in the context of the extent to which it will limit our options
to address our broader fiscal imbalances, recognizing that the challenge posed by these
imbalances is Herculean. Even if we halve the gap between the growth in health care
spending and the growth in the GDP, some estimates suggest that our debt-to-GDP ratio
would drop only from 300% to 200% by 2050.5

The goals of health care reform must therefore be addressed in light of our short-term and
long-term fiscal situation. Our current debt is manageable, and we can afford projected
deficits for several years, but our structural deficits place us on a path of debt growth that
is unsustainable, largely because of health care programs. The sooner we start to rein in
health care spending, the less painful the changes may be (since slowing spending now
will help us avoid drastic cuts in the future), and the more time we will have to find the
most effective strategies. Physicians and the health care community must play a strong
role in this process, preparing their practices for the inevitable changes that will come as
we address spending growth and helping to identify clinically informed strategies that
permit quality to improve in an environment of slower spending growth.

Proposed Strategies for Reducing Health Care Spending.

Establish insurance exchanges.

Reduce excessive Medicare payments.

Shift from a volume-based to a value-based payment system in Medicare.

Tax generous insurance plans.

Empower an independent Medicare advisory board.

Address and reduce fraud and abuse within the Medicare program.

Enact malpractice reform.

Invest in information technology and comparative-effectiveness research.

Invest in prevention.

Adapted from Cutler.4

Disclosure forms provided by the authors are available with the full text of this article at
NEJM.org.

Source Information

From the Department of Health Care Policy, Harvard Medical School (M.E.C., J.H.); the
Department of Health Economics, Harvard School of Public Health (K.B.); and the
Mongan Institute for Health Policy, Massachusetts General Hospital and Harvard
Medical School (J.H.) — all in Boston.

This article (10.1056/NEJMp1002873) was published on March 17, 2010, at NEJM.org.

References

1. Letter from Douglas W. Elmendorf, director of the Congressional Budget Office,

to Senator Daniel K. Inouye, March 5, 2010. (Accessed March 15, 2010, at
http://www.cbo.gov/ftpdocs/112xx/doc11231/03-05-apb.pdf.)
2. Organization for Economic Cooperation and Development (OECD). Gross
domestic product. (Accessed March 15, 2010, at http://stats.oecd.org/Index.aspx?
DatasetCode=SNA_TABLE1.)
3. Letter from Peter R. Orszag, director of the Congressional Budget Office, to
Senator Judd Gregg, July 9, 2007. (Accessed March 15, 2010, at
http://www.cbo.gov/ftpdocs/82xx/doc8295/07-09-Financing_Spending.pdf.)
4. Cutler D. Health reform passes the cost test. Wall Street Journal. March 9, 2010.
5. Kogan R, Cox K, Horney J. The long-term fiscal outlook is bleak: restoring fiscal
sustainability will require major changes to programs, revenues, and the nation’s
health care system. Washington, DC: Center on Budget and Policy Priorities,
December 16, 2008.

http://healthcarereform.nejm.org/?p=3170&query=home

______________________________________________

Beware a Public Health Plan in Private Disguise

Posted January 6th, 2010 at 12:34pm in Health Care with 10 comments
In the ongoing attempts of Congress to find an alternative to the “public plan” in health
reform, the Senate bill includes a provision to give the Office of Personnel Management
(OPM), which oversees the Federal Employee Health Benefit Program (FEHBP) a new
role: sponsoring health plans to compete against private health plans in every state in the
nation.

As Kay Cole James, a former director of OPM, points out in a recent op-ed, the FEHBP
works because OPM plays the neutral role of an umpire: federal employees choose the
private plan they like from a wide variety of different plans, all of which compete against
each other to attract the most enrollees. The federal government provides its employees
with a defined contribution towards their health costs, and it doesn’t micromanage their
choices. OPM allows variety and flexibility in the program, and limits its regulatory role
to ensuring consumer protections. Sen. Reid’s proposal would have OPM sponsor new
multi-state plans. OPM would set the premiums for plans it sponsors.

This new role for OPM is the Senate alternative to the House passed “public option”. But
ordinary Americans should be leery of the difference. According to Kay Cole James,
“this arrangement seems to be a “public option” in “private” option disguise… Because
OPM would not merely serve as the umpire overseeing competition among private health
plans. It would also become a health-plan sponsor, fielding its own team of players to
compete against the existing private plans in every state.”

Given this new role, OPM could engineer a crowd out other private insurers in the
market. Furthermore, Section 1334 of the Senate health care bill allocates “such sums as
may be necessary to carry out this section”. If the OPM-sponsored health plans were not
profitable, it is thus conceivable that the taxpayer could end up footing the bill. This,
along with the federal power to set rates and benefits, could easily end up as the public
option that Senate liberals envisioned all along.

Says James, “OPM’s job is to serve the federal civilian work force and its retirees, while
enforcing merit principles in hiring and stopping prohibited personnel practices. It’s not
OPM’s job to compete against private health plans.” The best features of the FEHBP-
broad consumer choice and intense Multi-plan competition, free of heavy regulation and
massive bureaucracy, and governed by approximately 80 pages of statutory text- are
worthy of replication. Giving OPM the power to sponsor “multi-state” health plans in
competition against the private sector is not the same thing.

http://blog.heritage.org/2010/01/06/beware-a-public-health-plan-in-private-
disguise/

______________________________________________

Six Ways the Senate Health Care Bill Raises Health

Care Costs, Kills Jobs, and Weakens the Economy
Posted March 18th, 2010 at 1:55pm in Health Care

On the eve of the House of Representatives push to jam through the misguided and
highly unpopular Senate health care bill, , the President continues to try and convince the
American people that the health care bill would reduce cost while showing his
commitment to creating jobs and improving the economy. The raw facts make it clear
that he cannot keep either of these promises. For example:

• The President claims the health care proposals would reduce health care
spending. The reality is health care spending would increase. According to the
latest Congressional Budget Office report of the Senate bill, health care spending
under the Senate bill would increase by $210 billion over the next 10 years. This
is similar to the results found by the President’s Chief Actuary which estimated an
increase of $222 billion. While CBO predicts spending would decrease in the
second decade, history shows spending rarely, if ever, goes down on government
health programs. Medicare is hurtling toward a financial crisis, and Medicaid is
breaking state budgets.
• The President claims the health care proposals would reduce premiums. The
reality is premiums will go up for many under the Senate bill. The Congressional
Budget Office and the Joint Committee on Taxation have estimated premiums in
the non-group market would be 10 to 13 percent higher in 2016 than they would
be with no bill and cost would likely fall higher on young and healthy families. In
addition, this is before the government specifies and locks into place new federal
benefit mandates that will no doubt further increase premiums for all Americans.
There is little or no experience of government officials reversing these trends.
 • The President claims the health care proposals would cost under a trillion.
But, that figure excludes major health care provisions – like filling the Medicare
“donut hole”, fixing Medicare reimbursement to physicians, and creating a new
long-term entitlement program – pushing the price tag to over $2 trillion. Only in
Washington does spending more money equal saving money.
• The President claims the health care proposals would reduce the deficit.
Unlike CBO’s restricted scope of analysis, the independent analysis by the Lewin
Group estimates that when taken in its entirety, which means accounting for the
expected $200 billion plus boost in Medicare reimbursement for physicians, the
proposal would actually add to the deficit, not reduce it.
• The President claims he is committed to improving jobs and the economy.
Based on his own policies, the opposite is true. The Senate bill would result in
620,000 fewer job opportunities and would increase the national debt by $755
billion through its lethal combination of mandates, taxes, and government
spending. As Heritage analysts have pointed out, “Because investment is what
drives productivity and economic growth, less investment–even if only slightly
less–leads to lower productivity, slower economic growth, weaker wages and
salaries, and lower household wealth.” Even worse, his own proposal to “fix” the
bill adds a new tax on investment income that would result in 115,000 lost job
opportunities and disposable income is estimated to be $17.3 billion less per year
than it otherwise would be.
• The President claims he will “fix” the bill. Although he promised to ensure no
federal funding would be used for abortions and eliminate the repugnant special
deals, House passage of the Senate bill would lock these into place, and they
could only be undone through a highly uncertain reconciliation process to “fix”
the bill in the Senate. Not only is taxpayer funding of abortion not fixed, it is
expanded under the Senate bill. Moreover, the ugly special state deals at the
expense of the taxpayers still remain.

http://blog.heritage.org/2010/03/18/six-ways-the-senate-health-care-bill-
raises-health-care-costs-kills-jobs-and-weakens-the-economy/

______________________________________________

The Senate Health Bill: Budget Gimmicks Galore

Posted November 20th, 2009 at 7:21am in Health Care with 6 comments

Senate Majority Leader Harry Reid unveiled his 2,074 page health care bill with claims
that the massive measure falls under the $900 billion cost threshold promised by the
President.
To put it charitably, the truth is more complicated. The bill depends on budget gimmicks
and unrealistic assumptions and projected savings to reach this goal over the 10 year
budget window.

Consider the four most outrageous “Budget Tricks”. By its construction, the bill:

• Excludes the Costly “Doctor Fix”. Like the House bill, the Senate
bill conveniently ignores the over $200 billion price tag associated
with stopping the unavoidable cuts to physicians under the
Medicare program. Separating the health care bill like this
enables Senator Reid to claim his bill will reduce the deficit.
However, in a letter released today, CBO estimates that
combining the House bill (H.R. 3961) with the “Dr. Fix” bill (H.R.
3962) would actually “add $89 billion to budget deficits over the
2010–2019 period.”
• Manipulates the new CLASS Act. The Senate bill, like the House,
also includes a new government health care program for long
term health insurance, the CLASS Act. The structure of the
CLASS Act has premium collections raising revenues for the
government in the first 10 years, appearing to aid in reducing the
deficit. But the CBO points out that while the CLASS Act would
generate net receipts for the government in the initial years when
premiums would exceed total benefit payments, but would
eventually lead to net outlays when benefits exceed premiums.”
• Delays Costly Benefits. The Senate bill is cleverly designed to
gather revenues (higher taxes, fees, and other offsets) over the full
10 year window but delays paying out the major benefits, like
subsidies, until the last 6 years. So, the 2010-2019 estimate is not a
full cost estimate of all provisions fully implemented and will
certainly add significantly to the true cost of the bill. Moreover, as
with all government programs, they always cost more than
originally promised.
• Depends on Uncertain Cuts to Medicare. The Senate bill depends
on using cuts to Medicare to pay for its $1.2 Trillion coverage
expansion. As explained by the CBO Director:

Adjusting for inflation, Medicare spending per beneficiary under the bill would
increase at an average annual rate of roughly 2 percent during the next two
decades—much less than the roughly 4 percent annual growth rate of the past two
decades.
 These dramatic savings, of course, assume that these spending cuts stay intact. If
the “Dr. Fix” is an illustration, it is highly unlikely that Congress will live up to
the deep cuts it proposes for Medicare. As the first round of cuts get close, a
frenzied team of high powered lobbyists for the health care industry will no doubt
be wearing out shoe leather going door to door in the corridors of Congress.
They’ve been successful just about every time.

Moreover, these cuts include over $118 billion in ‘savings’ resulting from
changes to the highly popular Medicare Advantage plans, a move that will
directly impact the benefits of millions of seniors. In his analysis of the House
bill, where the House of Representatives enacted similar reductions, the Chief
Actuary for the Centers of Medicare and Medicaid Services has confirmed, these
changes will result in “less generous packages” and enrollment “would decrease
by about 64 percent.”

True Costs Unknown

The reality is this Senate bill, like its House counterpart, costs far more than the
President’s $900 billion promise and is more likely to run in the trillions. How is it that a
bill whose purpose is to save money starts out, with careful caveats and unrealistic
assumptions, by spending nearly a trillion dollars?

http://blog.heritage.org/2009/11/20/the-senate-health-bill-the-true-costs-are-unknown/

______________________________________________

The Senate Bill’s Fiscal Madness: Rep. Ryan’s

Damning Indictment
Posted March 5th, 2010 at 2:00pm in Health Care with 3 comments
As Heritage analysts have noted time and again, spending from congressional liberals’
health care proposals would be in the trillions, growing the federal deficit. The President
has proposed a modification of the Senate bill with provisions that would make it even
more expensive. At last week’s Health Care Summit, hosted by the White House, Rep.
Paul Ryan (R-WI) echoed these same concerns over the true cost of the President’s
proposal for health care reform. Thus far, neither the President nor the leaders of
Congress- not one- have responded to Ryan’s indictment:

• Budget Gimmicks Galore: “[W]hat has been placed in front of

[CBO] is a bill that is full of gimmicks and smoke-and-mirrors…
first off, the bill has 10 years of tax increases, about half a trillion
dollars, with 10 years of Medicare cuts, about half a trillion
dollars, to pay for six years of spending…Now, what’s the true 10-
year cost of this bill in 10 years? That’s $2.3 trillion.”
• Double-Counted Savings: “It takes $52 billion in higher Social
Security tax revenues and counts them as offsets. But that’s really
reserved for Social Security. So either we’re double-counting
them or we don’t intend on paying those Social Security
benefits…It takes $72 billion and claims money from the CLASS
Act. That’s the long-term care insurance program. It takes the
money from premiums that are designed for that benefit and
instead counts them as offsets.” Later, Rep. Ryan went on to
point out, “You can’t say that you’re using this money to either
extend Medicare solvency and also offset the cost of this new
program. That’s double counting.”
• Medicare as a Piggy Bank: “Now, when you take a look at the
Medicare cuts, what this bill essentially does — it treats Medicare
like a piggy bank. It raids a half a trillion dollars out of Medicare,
not to shore up Medicare solvency, but to spend on this new
government program…Now, when you take a look at what this
does…as much as 20 percent of Medicare’s providers will either
go out of business or will have to stop seeing Medicare
beneficiaries.”
• Ignoring the Doc Fix: “…[T]he doc fix, according to your
numbers, costs $371 billion. It was in the first iteration of all of
these bills, but because it was a big price tag and it made the score
look bad, made it look like a deficit, that bill was — that provision
was taken out, and it’s been going on in stand-alone legislation.
But ignoring these costs does not remove them from the backs of
taxpayers. Hiding spending does not reduce spending.”
Rep. Ryan’s arguments are reinforced by Heritage research regarding the true cost of the
House and Senate health bills and other reliable sources. As an article in the Wall Street
Journal points out, “No one in the political class has even tried to refute Mr. Ryan’s
arguments, though he made them directly to the President and his allies, no doubt because
they are irrefutable. If Democrats are willing to ignore overwhelming public opposition
to Obamacare and pass it anyway, then what’s a trifling dispute over a couple of trillion
dollars?”

The President and congressional Democrats have recently made quite a show of concern
over the sustainability of current levels of federal spending. Ignoring the fiscal reality of
their health proposals questions the seriousness of their intentions to control spending and
reduce the federal deficit. The prosecution rests.

http://blog.heritage.org/2010/03/05/the-senate-bills-fiscal-madness-rep-ryans-
damning-indictment/

______________________________________________

Left Now Admitting Obamacare Full of Budget

Gimmicks
Posted December 21st, 2009 at 1:27pm in Health Care with 22 comments

President Barack Obama again asserted today that his health care plan would be deficit
neutral chiding: “The argument that opponents are making against this bill does not hold
water.”

But while the President’s most ardent supporters are trying to explain to each other why
the benefits of the bill do not start until 2014, they are openly admitting that Obama’s
deficit busting claims are complete fiction:

The Washington Post’s Ezra Klein: “The delay is a budget trick, an attempt to lower the
10-year cost of the bill at the expense of the very people we’re trying to help.”

Mother Jones‘ Kevin Drum: “I’m pretty sure the 2014 date is mostly due to budget
finagling. This stuff can’t be done overnight, but I’ll bet most of it could be implemented
within 12 months, and it could certainly be implemented within 24.”

Talking Points Memo’s Josh Marshall: “My impression is that some of the delays are
there because it makes the budgetary accounting work better in terms of deficit neutrality.
And I know the Dems would likely lose critical support without being able to show that
the overall bill actually lowers the deficit. But if that’s the main reason, I suspect the
legislative authors may be too clever by half since they may be slitting the bill’s and
perhaps their own throats in the process.”

The conveniently shifted budget window of the bill’s spending benefits is just the tip of
the iceberg when it comes to Obamacare’s deficit spending chicanery. Heritage’s health
care team reports:

The Costly “Doctor Fix.” Every year, because of congressionally created formulas in
Medicare physician payment, Congress must vote to suspend these pre-ordained payment
systems that would automatically cut Medicare payments to physicians. If enacted this
year, these cuts would reduce physician payment rates by 21 percent.

Physicians believe, correctly, that unless there is a fundamental reform of Medicare

payment, many physicians will reduce their Medicare practice or stop seeing new
Medicare patients, thereby reducing the accessibility of Medicare beneficiaries to
physician care. Both the House and the Senate have acknowledged this as part of their
agendas for health care reform.

However, to make their bills appear less costly, the leadership of both houses has
removed the doctor fix and its more than $200 billion price tag from their health care bills
and presented it as a separate bill. This enables Senator Reid to claim that his bill will
reduce the deficit, but the CBO estimates that the House bill (H.R. 3961), combined with
the “doctor fix” bill (H.R. 3962), would “add $89 billion to budget deficits over the 2010-
2019 period.” The Senate bill plays the same shell game, creating the appearance of
deficit reduction by ignoring the inevitable cost of the doctor fix.

The True Costs of the CLASS Act. The Senate bill, like the House bill, includes the
Community Living Assistance Services and Supports (CLASS) Act, which would create
a new government health care program for long-term health insurance. This provision
creates a national insurance trust that would provide benefits for seniors and the disabled
by creating a payment update in Medicare for skilled nursing facilities and home health
care providers.

The CLASS Act is intended to pay for itself with collected premiums. The premiums
would produce positive revenues for the government for the first 10 years, appearing to
reduce the federal deficit during this time. However, as the CBO points out, while “the
program’s cash flows would show net receipts for a number of years, [this would be]
followed by net outlays in subsequent decades.” Thus, the CLASS Act appears self-
sufficient for the first 10 years but starts running a deficit soon thereafter.
…
Unreliable Medicare Cuts. The Senate bill depends on cutting Medicare to pay for its
$1.2 trillion coverage expansion. Concerning the impact on Medicare enrollees, as CBO
Director Doug Elemendorf explained, the bill would require a substantial reduction in the
future growth of per capita beneficiary spending over the next 20 years compared to the
previous 20 years.
Proponents of the Senate legislation claim that Medicare spending reductions would
result in higher efficiencies. But as James C. Capretta, a Fellow at the Ethics and Public
Policy Center, argues, “despite all of the talk of ‘delivery system reform,’ the Senate
Democratic plan would not transform American medicine to make it more efficient.”[16]
The dramatic savings depend on conventional Medicare provider cuts, not on meaningful
Medicare reform. Furthermore, as demonstrated by the ongoing effort to correct the
Medicare physician payment formula, it is unlikely that Congress would allow such deep
cuts to occur in Medicare.

Moreover, these Medicare cuts include more than $100 billion in “savings” from changes
in Medicare Advantage plans, a move that would directly affect the benefits of millions
of seniors. In his analysis of the Senate bill, Foster confirmed that these changes would
result in “less generous packages” and that enrollment “would decrease by about 33
percent.”

______________________________________________

Washington Post: Obamacare “Unsustainable”

Posted December 21st, 2009 at 11:53am in Health Care with 11 comments

The Washington Post editorial board writes on the Community Living Assistance
Services and Supports (CLASS) Act tucked into Obamacare:

But both the Congressional Budget Office and the chief actuary for the Medicare
program have expressed misgivings. The Medicare actuary, Richard S. Foster, cited “a
very serious risk”: Adverse selection — sicker people signing up for the program and the
healthier staying away — “would make the CLASS program unsustainable.” He said that
even beginning premiums would have to be $240 a month. Likewise, CBO director
Douglas W. Elmendorf warned that “the CLASS program could be subject to
considerable financial risk in the future if it were unable to attract a sufficiently healthy
group of enrollees.”

The Washington Post is dead on. Here is how Heritage’s health care team analyzed the
CLASS Act portions of Obamacare:

The True Costs of the CLASS Act. The Senate bill, like the House bill, includes the
Community Living Assistance Services and Supports (CLASS) Act, which would create
a new government health care program for long-term health insurance. This provision
creates a national insurance trust that would provide benefits for seniors and the disabled
by creating a payment update in Medicare for skilled nursing facilities and home health
care providers.

The CLASS Act is intended to pay for itself with collected premiums. The premiums
would produce positive revenues for the government for the first 10 years, appearing to
reduce the federal deficit during this time. However, as the CBO points out, while “the
program’s cash flows would show net receipts for a number of years, [this would be]
followed by net outlays in subsequent decades.”[14] Thus, the CLASS Act appears self-
sufficient for the first 10 years but starts running a deficit soon thereafter.

Read Heritage’s full analysis here. Or below.

_________________________

An Analysis of the Senate Democrats' Health Care Bill

Published on December 18, 2009

Abstract: The Senate health care bill would overhaul the entire health care sector of the
U.S. economy by erecting massive federal controls over private health insurance,
dictating the content of insurance benefit packages and the use of medical treatments,
procedures, and medical devices. It would alter the relationship between the federal
government and the states, transferring massive regulatory power to the federal
government. The bill would also restrict the personal and economic freedom of American
citizens by imposing controversial and unprecedented mandates on businesses and
individuals, including an individual mandate to buy insurance.

The U.S. Senate is locked in an intense floor debate over the Patient Protection and
Affordable Care Act (H.R. 3590), a massive 2,074-page health care bill that would
directly affect every man, woman, and child in the United States. Its enactment would
shape the character and quality of life in America for generations to come.

The Senate bill's complex and sweeping provisions would affect virtually every aspect of
the huge health care sector of the U.S. economy.

• Like the House bill,[1] it would transfer massive regulatory authority from
the states to the federal government and make enormous changes in the
nation's health insurance markets;
• It would dramatically alter the financing and content of employer-provided
and individual health insurance and significantly change Medicare and
Medicaid;
• It would change how hospitals, doctors, and other medical professionals are
paid and how physicians and other medical professionals deliver care; and
• It would impose controversial and unprecedented mandates on businesses
and individuals, including an individual mandate to buy insurance,[2] thus
restricting the personal and economic freedom of American citizens.
In effect, the Senate bill would produce the greatest concentration of political and
economic power over one major sector of the U.S. economy in the nation's history.

It is not surprising that the Senate bill is highly unpopular.[3] For ordinary Americans,
the legislative process has definitely not been a demonstration of the way a law is made
as portrayed in civics textbooks or the kind of rational deliberation envisioned by the
Founding Fathers. Surprising provisions, unintended consequences, and unreliable
assumptions characterize this proposal. Key provisions, such as the provision of a "public
plan" to compete against private health plans, are particularly controversial, and the
Senate leadership is rapidly floating and rejecting new schemes to secure the 60 votes
necessary to end the debate and quickly pass the bill.

Without the benefit of legislative language, hearings, expert testimony, or committee

deliberation and debate, various untested proposals have been floated for press and
popular consumption. Writing of the latest scheme to secure a compromise, the editors of
The Washington Post noted, "The only thing more unsettling than watching legislative
sausage being made is watching it being made on the fly."[4]

Regardless of one's views of the Senate bill, it does not comport with the broad popular
themes articulated by President Barack Obama and the many congressional leaders who
have championed these policies. Contrary to the President's repeated promises to the
American people,[5] the Senate bill, like its House counterpart, would:

• Cause many Americans to lose their current health insurance. The

Congressional Budget Office (CBO) estimates that up to 10 million
Americans would no longer be covered by their employers.[6] Given the bill's
incentives for employers to discontinue job-based coverage, independent
analysts expect the loss of employer-based coverage to be much higher.
• Bend the cost curve up. According to independent analysts and government
actuaries, the bill would substantially increase total health care spending
instead of reducing it as promised. Richard Foster, Chief Actuary of the
Centers for Medicare and Medicaid Services (CMS), recently judged the
projected savings from the Medicare updates as "doubtful" and estimated
that the total national spending on health care would increase.[7]
• Impose many new taxes on middle-class Americans. The Senate bill contains
over a dozen new taxes, including a 40 percent excise tax on high-priced
health plans and special fees and taxes on insurance, drugs, medical devices,
and anyone who violates the new mandates.[8]
• Reduce many seniors' access to Medicare benefits and services. The bill
would reduce Medicare payments by an estimated $493 billion over 10 years,
[9] including payment reductions for Medicare Advantage, hospital care,
home health care, and nursing homes.
• Provide federal funding for abortion. Contrary to the President's clear
statement to Congress and the nation on health care reform,[10] the Senate
bill would provide funding for abortion. The House would prohibit using
 taxpayers' dollars to finance abortion, but a similar amendment to the
Senate bill was tabled without even a floor vote.[11]

Surveys consistently show that the American people clearly want health care reform but
do not support the bills sponsored by the House and Senate leadership. While they want
Congress to enact policies that would increase choice and competition, and thereby help
to control costs and rectify inequities in the health insurance markets, they do not favor a
federal takeover of the health care system. Nor do they want the power to make key
health care decisions transferred from individuals, families, and medical professionals to
government agencies, departments, commissions, and advisory boards.

Much better options are available. Reform of the tax treatment of health insurance is a top
priority. Eliminating the federal tax code's discrimination against workers who do not or
cannot obtain health insurance through the workplace would expand health insurance
coverage; today these persons get no tax relief for the purchase of health insurance
coverage. Removing the legal barriers to individuals and families who wish to buy health
insurance in a state other than their state of residence would also open health insurance
markets to real free-market competition. Promoting state-based health insurance market
reforms, designed by state and not federal officials, could dramatically expand coverage,
cope with adverse selection in the markets, and secure affordable health insurance under
the varying conditions that prevail within the states for the poorest and most vulnerable
members of society.

Beyond these options, if Congress were truly serious about "bending the cost curve
down," it should focus on the huge and growing programs under its direct jurisdiction:
Medicare and Medicaid. This means initiating serious entitlement reform that goes well
beyond modifying administrative payment systems and cutting physician and hospital
reimbursements.

Hiding the True Cost to the Taxpayers

When Senate Majority Leader Harry Reid (D-NV) unveiled his bill, he claimed that the
massive reform package would fall under the $900 billion cost threshold promised by
President Obama. But Senator Max Baucus (D-MT) recently conceded that the real cost
of the bill was much higher: "Just for a second-- health care reform, whether you use a
ten year number or when you start in 2010 or start in 2014, wherever you start at, so it is
still either $1 trillion or it's $2.5 trillion, depending on where you start."[12]

There is a simple reason for this public confusion over cost. The bill uses budget
gimmicks, unrealistic assumptions, and highly unreliable projected savings to stay under
the stated threshold. Among these are four egregious "budget tricks."

The Costly "Doctor Fix." Every year, because of congressionally created formulas in
Medicare physician payment, Congress must vote to suspend these pre-ordained payment
systems that would automatically cut Medicare payments to physicians. If enacted this
year, these cuts would reduce physician payment rates by 21 percent.
Physicians believe, correctly, that unless there is a fundamental reform of Medicare
payment, many physicians will reduce their Medicare practice or stop seeing new
Medicare patients, thereby reducing the accessibility of Medicare beneficiaries to
physician care. Both the House and the Senate have acknowledged this as part of their
agendas for health care reform.

However, to make their bills appear less costly, the leadership of both houses has
removed the doctor fix and its more than $200 billion price tag from their health care bills
and presented it as a separate bill. This enables Senator Reid to claim that his bill will
reduce the deficit, but the CBO estimates that the House bill (H.R. 3961), combined with
the "doctor fix" bill (H.R. 3962), would "add $89 billion to budget deficits over the 2010-
2019 period."[13] The Senate bill plays the same shell game, creating the appearance of
deficit reduction by ignoring the inevitable cost of the doctor fix.

The True Costs of the CLASS Act. The Senate bill, like the House bill, includes the
Community Living Assistance Services and Supports (CLASS) Act, which would create
a new government health care program for long-term health insurance. This provision
creates a national insurance trust that would provide benefits for seniors and the disabled
by creating a payment update in Medicare for skilled nursing facilities and home health
care providers.

The CLASS Act is intended to pay for itself with collected premiums. The premiums
would produce positive revenues for the government for the first 10 years, appearing to
reduce the federal deficit during this time. However, as the CBO points out, while "the
program's cash flows would show net receipts for a number of years, [this would be]
followed by net outlays in subsequent decades."[14] Thus, the CLASS Act appears self-
sufficient for the first 10 years but starts running a deficit soon thereafter.

Delays of Costly Benefits. The Senate health care bill is paid for by newly enacted taxes
and spending cuts. However, to meet President Obama's $900 billion maximum over the
first 10 years, new spending does not begin until years after new taxes and spending cuts
are enacted.

This clever design allows Congress to collect revenues (higher taxes, fees, and other
offsets) for the full 10-year window but pay out the major benefits over only the last six
years. This spending cushion makes the bill appear much less costly than it would if 10
years of spending were included. The true costs of the bill would quickly become
apparent in the second 10 years of enactment. Moreover, as with most government
programs, it will almost certainly cost more than originally promised.

Unreliable Medicare Cuts. The Senate bill depends on cutting Medicare to pay for its
$1.2 trillion coverage expansion. Concerning the impact on Medicare enrollees, as CBO
Director Doug Elemendorf explained, the bill would require a substantial reduction in the
future growth of per capita beneficiary spending over the next 20 years compared to the
previous 20 years. [15]
Proponents of the Senate legislation claim that Medicare spending reductions would
result in higher efficiencies. But as James C. Capretta, a Fellow at the Ethics and Public
Policy Center, argues, "despite all of the talk of 'delivery system reform,' the Senate
Democratic plan would not transform American medicine to make it more efficient."[16]
The dramatic savings depend on conventional Medicare provider cuts, not on meaningful
Medicare reform. Furthermore, as demonstrated by the ongoing effort to correct the
Medicare physician payment formula, it is unlikely that Congress would allow such deep
cuts to occur in Medicare.

Moreover, these Medicare cuts include more than $100 billion in "savings" from changes
in Medicare Advantage plans, a move that would directly affect the benefits of millions
of seniors. In his analysis of the Senate bill, Foster confirmed that these changes would
result in "less generous packages" and that enrollment "would decrease by about 33
percent."[17]

Bending the Cost Curve Up. According the Office of the Actuary, the Senate bill would
increase, not decrease, health care spending by $234 billion between 2010 and 2019.[18]
The Senate bill, like its House counterpart, would cost far more than the President's $900
billion limit, likely running up a tab in the trillions of dollars. Assuming both full funding
and spending over the first 10 years and that both are combined, as Senator Baucus
conceded, the bill would cost $2.5 trillion. Capretta estimates the true cost of the bill at
$4.9 trillion over 20 years.[19]

The devil, as always, is in the details.

First, Senator Reid's bill relies on "bracket creep" to raise taxes to pay for its costs. The
new 40 percent excise tax on high-cost insurance plans is indexed to general inflation
plus 1 percent, which is lower than health care cost inflation.[20] This means that as
health care costs grow, more Americans will pay the tax.

Second, the bill increases the Medicare payroll tax for individuals making $200,000 and
families making $250,000 per year. This tax hike is not indexed to inflation, which means
that inflation will steadily push more middle-class Americans into that tax bracket. Thus,
Senator Reid plans to finance $2.2 trillion of his health care bill by continuously raising
taxes on more and more Americans.

In the second 10 years of enactment, the bill's coverage provisions would cost $3.1
trillion.[21] When the additional Medicare spending for the so-called doctor fix is
included in the calculation, the cost over 20 years would total $4.9 trillion.

Clearly, raising taxes alone will not cover this, so the remainder is expected to be funded
by big cuts in Medicare (assuming they actually occur). The Senate bill would require
raising taxes on middle-class Americans and cutting senior citizens' health benefits by
nearly $5 trillion. As often happens in Washington, D.C., a bill touted for saving money
will end up costing the taxpayers a fortune.
Reducing Personal Freedom and Imposing Mandates

In a remarkable twist in public policy, the Senate bill would use taxes and penalties to
punish uninsured Americans and companies that hire workers from low-income families.

The Individual Mandate. The Senate bill includes an unprecedented act of Congress to
force Americans to buy a commodity: health insurance.[22] The "individual
responsibility" provision in Section 1501 requires anyone who fails to obtain a qualifying
health plan to pay an annual tax penalty of $750 per adult family member and $375 per
child, up to a maximum penalty of $2,250 per family. These penalties would be phased in
from 2014 to 2016 and then indexed for inflation, which means they would likely
increase every year.

Because these new taxes are fixed amounts based on family size, families of the same
size will pay the same amount regardless of income, although the poor may qualify for
exemptions. This is different from the House bill, which would impose a 2.5 percent tax
on modified adjusted gross income above the minimum income at which filing a tax
return is required. A family of two adults and two children is actually worse off under the
Senate bill if they make less than $99,350 per year and worse off under the House bill if
they make more.

The bill provides for only a few exemptions. For example, a person can be exempt if the
lowest available premium for a bare-bones plan, as defined by federal authorities, is more
than 8 percent of one's income. However, this would apply only to those making less than
$28,125 per year.

The Employer Mandate. Sections 1511-1513 of the Senate bill contain an "employer
responsibility" provision that requires companies with more than 50 employees to offer
qualified health plans-- as defined by government bureaucrats--to their full-time
employees or to pay a tax of $750 per full-time employee. Since the penalty is much
cheaper than providing health insurance, employers are likely to just pay the $750 tax.
For employees, however, this means they lose their employer contribution toward their
premium costs.

There is another catch. An employer who offers qualifying insurance must pay a penalty
of $3,000 for every employee from a low-income family who qualifies for and accepts a
premium subsidy in the "health insurance exchange."[23] The employer's total penalty is
capped at $750 times the total number of full-time employees if more than a quarter of
the employees receive the subsidy.

In summary, if a company employs many low-income workers, it can save money by

dropping its health plan and paying the $750-per-employee tax or by reducing as many
employees as possible to working part-time. However, if a company has mostly middle-
income workers, it faces a $3,000-per-year penalty for hiring a worker from a low-
income family who elects the subsidy. Also, this penalty applies to the employee's family
income, not the income that the employee is paid by any particular company.
Therefore, a company would save $3,000 by hiring someone with a working spouse or a
teenager with working parents whose family income is higher instead of a single mother
with three children. Even worse, if one-fourth of its employees qualify for a premium
subsidy based on income and family size, the company would still pay the $750-per-
employee tax whether it offers insurance or not.

The Senate bill would create many perverse incentives that would encourage companies
with many low-income employees to drop their health plans entirely. Unlike the lower-
income workers who would qualify for the subsidies, higher-income workers would have
to obtain coverage on their own with no assistance.[24]

Micromanaging Health Insurance

The Senate bill provides for federal micromanagement of all private health insurance. It
would subject all private health insurance, whether purchased from an insurance
company by employer groups or individuals or provided through an employer or union
self-insured plan, to detailed federal regulation. These "insurance reform" provisions
amount to a de facto nationalization of health insurance, whether or not Congress creates
a government-run health insurance plan. Instead of protecting patients, heavy regulation
will stifle choice and competition in the health insurance market.

Benefit Control. Of particular concern to patients, the U.S. Department of Health and
Human Services (HHS) would decide the details of their health insurance coverage.
Americans recently received a foretaste of what such federal regulation would look like
when the U.S. Preventive Services Task Force downgraded its recommendation for breast
cancer screening (mammography) for women ages 40 to 50 from "B" (recommended) to
"C" (not recommended).

Normally, such recommendations would not create controversy, because until now they
have merely been suggestions to guide providers and health plans, which make their own
decisions for their patients and members. However, the proposed legislation would give
such recommendations the force of law because it would require all plans to provide
coverage (with no patient co-pays) for "items or services that have in effect a rating of 'A'
or 'B' in the current recommendations of the U.S. Preventive Services Task Force."[25]

Thus, a recommendation on a specific medical service by the heretofore obscure HHS

task force would carry the force of law and impose additional costs on insurers and
employer health plans. Conversely, a "C" or "D" rating, such as the recent decision on
breast cancer screening, would give insurers and employers justification to discontinue
coverage.

Cost Impact. Over time, the more specific HHS is in its benefit requirements--driving up
the cost of coverage--the greater the incentive will be for insurers and employers to
control the escalating costs by covering only what federal law requires. The eventual
result will be little to no variation among private health insurance plans and little
variation in cost. At that point, Congress will effectively have nationalized the entire
American health insurance system under HHS supervision without formally setting up
another government-run health insurance program.

A Federally Designed Health Insurance Exchange for the States

The original version of the Senate health bill contained a "public option," a new
government-run health plan to "compete" against private health plans within a federally
designed system of state health insurance exchanges. Recently, the Senate leadership
agreed to remove that provision and replace it with a Medicare expansion--on top of the
Medicaid expansion--and a new health plan option sponsored by the U.S. Office of
Personnel Management (OPM), the federal agency that runs the Federal Employees
Health Benefits Program (FEHBP). Then, in response to political opposition from
"moderate" Senate Democrats, the Senate leadership recently announced that they were
dropping the Medicare expansion.

Mandatory State Health Exchanges. Under Section 1311 of the bill, the Secretary of
Health and Human Services would be required to provide states with grants to establish
American Health Benefit Exchanges. By 2014, states would be required to establish these
exchanges for the purchase of "qualified" health plans. Plans would be qualified only if
they met federal rules governing benefit packages, provider networks, "essential
community providers," quality standards and measures of uniformity of enrollment
procedures, rating systems, outreach, reinsurance and risk adjustment, and a variety of
other requirements.

States could require the qualified health plans to offer additional benefits, which would
make the health plans more expensive, but they could not allow benefit changes that
differ from the federal standards. Administration of the exchanges would have to be
"self-sustaining," so the states would be allowed to impose assessments or fees on health
plans and enrollees to cover the administrative costs.

Section 1321 requires states to implement standards for the health exchanges by 2014. If
a state fails or refuses to implement an exchange in accordance with federal rules, the
HHS Secretary is required to intervene in the state, operate an exchange, and unilaterally
implement the federal standards.

Co-ops. Section 1322 requires the HHS Secretary to award loans and grant monies to
"member-run" nonprofits that offer "qualified health plans." In effect, this would create a
federal "co-op" option. The co-ops would make purchasing decisions but could not fix
provider payment rates. Under the terms of the bill, neither existing private health
insurance companies nor government organizations could set up co-ops. The bill directs
the U.S. Comptroller General to appoint an advisory board to oversee this new program
and provides $6 billion in federal funding for start-up costs.

As Heritage analysts have noted, none of this is necessary. A change in federal tax law
would allow private-sector co-ops to offer health insurance.[26]
A Broken Compromise.Section 1323 of the original version of the bill would have
required the HHS Secretary to create a "community health insurance option" to
participate through the authorized health insurance exchanges.[27] This is the
government-run plan that would compete against private insurance, but states could opt
out of offering the prescribed public health plan in the state-based exchanges.[28]

More recently, Senator Reid has proposed a compromise that would replace this
government-run plan with a couple of private nonprofit health plans sponsored by the
U.S. Office of Personnel Management. According to press accounts, these OPM-
sponsored plans would compete nationwide in the state-based health insurance exchanges
created under the bill just as the recently discarded "public option" would have under the
original version of the bill.

The Senate leadership's OPM proposal is novel. The OPM administers the FEHBP, a
consumer-driven system of hundreds of competing private health plans that serve federal
workers, federal retirees, and their dependents. As the federal paymaster, the OPM
provides federal enrollees with a defined contribution, which they use to purchase the
private plans. The OPM acts as an umpire, enforcing the rules of the market competition.

However, Senator Reid and his colleagues apparently would have the OPM play a much
different role as the sponsor and overseer of "at least two" nonprofit health plans that
would compete against private plans.[29] Presumably, they would compete in the state-
based health insurance exchanges.

Two key issues in this proposal need to be clarified: How would the OPM set premiums
for the two plans, and would these plans be eligible for taxpayer subsidies to cover any
shortfalls? If the OPM could set premiums below market prices to undercut private health
plans and access taxpayer subsidies, then the two nonprofit plans could erode private and
employer-based coverage much as a Medicare-style public plan would.

Briefly, the Senate leadership also promoted and then quickly jettisoned a major
Medicare expansion--expanding eligibility to citizens between the ages of 55 and 64. The
reasons for the Senate leadership's decision to discard the Medicare "buy in" are not hard
to fathom. The proposal was burdened by a number of practical difficulties.

The New York Times reported that the program would have been quickly initiated in 2011
but restricted to individuals, not families. It would have been financed by premiums,
estimated at $7,600 per person and $15,200 per couple.[30] But for many persons in that
age category, such premiums would have been unaffordable without special government
subsidies to offset their costs. This could have added significantly to the cost of the bill.
But without such subsidies, premiums for enrollees could have been higher than those
obtained in private health plans.

Worse, Medicare is already deficient as a health care plan because it does not cover many
needed benefits, such as catastrophic coverage. Nine out of 10 current Medicare
beneficiaries rely on private, employer-based, or supplemental coverage as a "wrap-
around" plan for Medicare. A common concern among health policy analysts was that the
Medicare expansion provision could further erode employment-based coverage among
older workers while adding significantly to Medicare costs.

Federal Control. Beyond the provisions for a "public plan" or its potential substitutes,
the Senate bill sets up a federally designed system of health insurance exchanges
modeled after the provisions of a bill reported out of the Senate Health, Education, Labor,
and Pensions Committee in July. The federal government would control the creation,
design, and operation of health insurance exchanges and, depending on whether states opt
out, enter as a direct competitor against private health plans. While states would become
vehicles of federal health policy, they could pursue independent arrangements in health
insurance only by seeking a "waiver" from federal authorities.

Thus, the Senate health care bill would radically centralize power and control over the
content of health benefits packages and health insurance in Washington. In other words,
the very text of the bill and the powers it would confer on the federal government would,
for all intents and purposes, constitute a "public plan" without even the formal creation of
such an institution.

New Middle-Class Taxes

The Senate bill creates a host of new taxes, totaling $370.2 billion in taxes and another
$36 billion in taxes from the individual mandate penalty over the next 10 years. The
government would start collecting many of these taxes in 2010, even as the economy
continues to struggle.

The most significant is a 0.5 percent increase in the payroll tax on earnings above
$200,000 for individuals and $250,000 for couples filing joint returns. The new tax
provisions would also permanently sever the link between the Medicare payroll tax and
Medicare benefits because the additional revenue would go to the general fund for health
care instead of directly to Medicare payments.

This is a bad decision and represents a major policy shift. It means that Medicare taxes
would no longer be dedicated solely to social insurance and safeguarding Medicare.
Instead, Medicare payroll taxes would be used for other government programs. It is ironic
that congressional liberals have proposed this shift because liberal champions of social
insurance historically have worried about turning social insurance programs into welfare
programs that redistribute wealth. The Senate payroll tax is a giant step down that road of
using social insurance payroll taxes to transfer income.

The Senate bill would also impose an excise tax on "high value" health care plans. This
tax is expected to be almost $150 billion and is very similar to the tax reported earlier out
of the Senate Finance Committee, but it uses a higher threshold level. While the health
benefits packages of corporate plans may be rich, it does not follow that the subscribers
are wealthy. This tax will disproportionately affect middle-income households.
The Senate bill would also impose a host of new taxes on the health insurance industry,
ranging from a tax on branded drugs to a tax on medical devices. These new taxes would
increase medical costs and premiums for individuals regardless of income. They would
only raise the cost of health care because companies would pass these tax increases on to
health care consumers.

The bill has over a dozen new taxes, including:

• A 40 percent excise tax on "high value" health care plans of

$8,500 or more for an individual and $23,000 or more for a couple
($149.1 billion in new taxes over the next 10 years);
• A 0.5 percent hike in the Medicare payroll tax for single earners
over $200,000 and joint earners over $250,000 ($53.8 billion);
• Changes in health savings accounts (HSAs), Archer Medical
Spending Accounts, health flexible spending accounts (FSAs), and
health reimbursement arrangements ($5 billion);
• A $2,500 cap on FSAs in cafeteria plans ($14.6 billion);
• An increase from 10 percent to 20 percent in the penalty for early
non-qualified HSA withdrawals ($1.3 billion);
• A tax on branded drugs ($22.2 billion);
• An annual tax on the health insurers[31] ($60.4 billion);
• A tax on companies that manufacture or import medical devices
($19.3 billion);
• A 0.5 percent excise tax on cosmetic surgery ($5.8 billion over 10
years);
• An increase in the floor of the medical expenses deduction from
7.5 percent of adjusted gross income to 10 percent, except for
seniors, who will stay at 7.5 percent ($15.2 billion);
• Elimination of the Medicare Part D (prescription drug) deduction
($5.4 billion);
• A $500,000 cap on the tax deduction for the salaries of employees
of health insurance companies ($0.6 billion over 10 years)[32];
and
• A mandate on companies with more than 50 employees to provide
health coverage or pay a $750 penalty per employee for those who
obtain coverage through the insurance exchange ($36 billion over
10 years) and a mandate on individuals to obtain coverage or pay
a tax penalty.[33]

Expanding Medicaid and Long-Term Care Entitlements

The Senate health care bill generally follows the earlier versions, which would expand
Medicaid and create a new health care program, the CLASS Act.

More Welfare. The Senate bill expands Medicaid eligibility to all

Americans below 133 percent of the federal poverty level, changing it to a
purely income-based federal entitlement. It also changes the federal
matching rates for different populations and states. For example, Section
2006, a special provision aimed at Louisiana, provides a special "disaster
recovery" match rate for states that have had a major disaster declared. The
CBO estimates that this will increase total Medicaid spending by $25 billion.

Of course, millions of persons at or below 133 percent of the federal poverty

level carry private health insurance. The Senate bill, based on all previous
experience, would further crowd out private health care coverage. It would
also encourage employers to drop coverage for employees that would
qualify for Medicaid after the expansion, compounding this effect.

Less State Authority.States should be alarmed at the aggressive federal

encroachment on state authority over the management of Medicaid. Section
2801 is clearly intended to increase the federal government's direct control
of the program. In addition, states would become vulnerable to federal
lawsuits by individuals under the expanded definition of medical assistance
in Section 2304. This would likely be used to overturn recent federal court
decisions won by states that limit private lawsuits against them.

The Senate makes another major exception to current law governing the
eligibility of immigrants for welfare benefits. Previously, legal immigrants
have been prohibited from receiving public benefits, including Medicaid,
until five years after their date of entry into the United States. The Senate
bill would reverse this, making legal immigrants immediately eligible for the
new federal subsidies upon enactment. This raises an equity issue that has
been overlooked: 60 million U.S. citizens would be excluded from the
generous federal subsidies.

Class-Based Inequity. Instead of expanding high-quality coverage to all,

the Senate bill would create a rigid, two-tiered health care system.
Individuals at the lowest income levels would be forced into Medicaid,
while individuals just above the poverty level would qualify for generous
subsidies worth more than Medicaid on a per capita basis. The Senate bill
further promotes this inequity by giving non-citizens the federal subsidies
that are denied to the lowest-income Americans.
A New Program. The CLASS Act has been included in the Senate bill
despite criticism that it is not fiscally sound over the long term. The CLASS
Act would create a new federal program for long-term health care insurance
to compete against private insurance. Individuals who pay into the program
for five years and experience limitations in their daily activities would
become eligible for cash benefits. These limitations do not meet the current
disability test, which opens the program to abuse. Perhaps more problematic,
according to the CMS, the program is particularly vulnerable to adverse
selection, which would make it "unsustainable."[34]

The CLASS Act also serves as a budget gimmick, enabling the federal
government to collect revenues for five years before paying out any benefits.
As noted, this up-front revenue collection, along with other taxes and fees,
allows the Senate sponsors to claim that the bill is fiscally responsible and
offsets the cost of the Senate bill by $72 billion over the first 10 years. The
problem is that the program's costs will explode when the benefit payouts
start to accumulate. As the CMS has indicated, the program will generate
net costs, not net savings.[35]

Conclusion

The Senate is engaged in a deadly serious debate on a 2,074-page bill that would
overhaul the entire health care sector of the economy, profoundly affecting the personal
lives of 300 million Americans. It would erect massive federal controls over private
health insurance, dictating the content of insurance benefit packages and the use of
medical treatments, procedures, and medical devices.

The bill would also make major changes in payments to doctors, hospitals, and medical
professionals in Medicare, Medicaid, and other programs; establish new federal agencies,
bureaus, and commissions to oversee various aspects of the health care system, including
how physicians and other medical professionals deliver care; and alter the relationship
between the federal government and the states, transferring massive regulatory power to
the federal government while reducing the flexibility of state officials to manage
Medicaid and limiting their capacity to initiate health insurance reforms within their own
states.

The Senate bill would impose enormous costs on the American people, totaling at least
$2.5 trillion for the first 10 years. After the first 10 years, as costs escalated, Congress
would need to impose additional major tax increases and impose major cuts in benefits to
pay for this health care agenda.

The American people want and need health reform, but the Senate bill is clearly not what
they have in mind.
Show references in this report

[1]For an overview of the House-passed bill, see "A Closer Look at the House
Democrats' Health Care Bill," Heritage Foundation WebMemo No. 2684, November 6,
2009, at http://www.heritage.org/Research/HealthCare/wm2684.cfm.

[2]While House Speaker Nancy Pelosi (D-CA) dismissed as unserious a question about
the constitutionality of imposing a health insurance mandate on individuals, the question
is very serious indeed. See Randy Barnett, Nathaniel Stewart, and Todd F. Gaziano,
"Why the Personal Mandate to Buy Health Insurance Is Unprecedented and
Unconstitutional," Heritage Foundation Legal Memorandum No. 49, December 9, 2009,
at http://www.heritage.org/Research/LegalIssues/lm0049.cfm.

[3]The latest CNN poll shows that 61 percent of Americans oppose the bill. See "CNN
Opinion Research Poll," December 10, 2009, at
http://i.a.cnn.net/cnn/2007/images/12/10/rel12a.pdf (December 18, 2009). A new
Rasmussen poll found that only 34 percent of Americans say that passing health care is
better than passing nothing. See "Just 34% Say Passing Health Care Bill Is Better Than
Passing Nothing," December 18, 2009, at
http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/dec
ember_2009/just_34_say_passing_health_care_bill_is_better_than_passing_nothing
(December 18, 2009). Finally, a Galen Institute survey found that key components of the
legislation, particularly the individual mandate, are highly unpopular. See "Galen
Institute Releases Poll Showing Overwhelming Opposition to the Individual Mandate and
Other Key Components of Congressional Health Care Proposal," October 18, 2009, at
http://www.galen.org/component,8/action,show_content/id,71/blog_id,1291/type,33/?
_highlight=survey (December 18, 2009).

[4]Editorial, "Medicare Sausage?"The Washington Post, December 10, 2009, p. A28, at

http://www.washingtonpost.com/wp-
dyn/content/article/2009/12/09/AR2009120903902.html (December 14, 2009).

[5]Barack Obama, "Remarks by the President to a Joint Session of Congress on Health

Care," September 9, 2009, at http://www.whitehouse.gov/the_press_office/Remarks-by-
the-President-to-a-Joint-Session-of-Congress-on-Health-Care (December 15, 2009).

[6]"We estimate that between 9 million and 10 million other people who would be
covered by an employment-based plan under current law would not have an offer of such
coverage under the proposal." Congressional Budget Office staff e-mail to the Office of
Senator Mike Enzi (R-WY), December 7, 2009, at
http://enzi.senate.gov/public/index.cfm?
FuseAction=Files.View&FileStore_id=24239e66-4ab7-4135-8b66-e84c32056c37 and
http://enzi.senate.gov/public/index.cfm?
FuseAction=NewsRoom.NewsReleases&ContentRecord_id=6f4cab2a-802a-23ad-4379-
5430a0a3bb03&Region_id=&Issue_id (December 18, 2009).
[7]Richard S. Foster, "Estimated Financial Effects of the 'Patient Protection and
Affordable Care Act of 2009,' as proposed by the Senate Majority Leader on November
18, 2009," U.S. Department of Health and Human Services, Centers for Medicare and
Medicaid Services, Office of the Actuary, December 10, 2009, pp. 19-20 at
http://src.senate.gov/files/OACTMemorandumonFinancialImpactofPPAA(HR3590)(12-
10-09).pdf (December 14, 2009).

[8]Joint Committee on Taxation, "Estimated Revenue Effects of the Revenue Provisions

Contained in the Patient Protection And Affordable Care Act," November 18, 2009, at
http://jct.gov/publications.html?func=startdown&id=3635. Also, for a discussion of the
taxes proposed in the House and Senate bills, see Curtis S. Dubay, "Taxes Proposed to
Pay for Health Care Reform," Heritage Foundation WebMemo No. 2706, November 20,
2009, at http://www.heritage.org/research/healthcare/wm2706.cfm.

[9]Foster, "Estimated Financial Effects of the 'Patient Protection and Affordable Care Act
of 2009,'" p. 8.

[10]Obama, "Remarks by the President to a Joint Session of Congress on Health Care."

[11]For more discussion, see Chuck Donovan and Robert Moffit, "House Bill Wrong on
Values," Centre Daily Times (State College, Pennsylvania), November 23, 2009.

[12]Senator Max Baucus (D-MT) Remarks on the Senate Floor, December 2, 2009.

[13]Congressional Budget Office, "Information on Medicare's Payments to Physicians

and the Budgetary Effects of H.R. 3961, the Medicare Physicians Payment Reform Act of
2009," November 19, 2009, at
http://www.house.gov/budget_republicans/press/2007/pr20091119cboscore.pdf
(December 14, 2009).

[14]Douglas W. Elmendorf, Congressional Budget Office, letter to Senator Harry Reid,

November 18, 2009, at
http://www.cbo.gov/ftpdocs/107xx/doc10731/Reid_letter_11_18_09.pdf (December 14,
2009).

[15]Congressional Budget Office, "Preliminary Analysis of the Affordable Health Care

for America Act as Introduced in the House of Representatives on October 29," Director's
Blog, October 29, 2009, at http://cboblog.cbo.gov/?p=403 (December 14, 2009).

[16]James C. Capretta, "A $4.9 Trillion Spending Increase," National Review Online,
November 19, 2009, at http://healthcare.nationalreview.com/post/?
q=OTc1MjEzYjI5NzM0M2Y1YjUwNzZhZmVhZGFhYTQxYjI (December 14, 2009).

[17]Foster, "Estimated Financial Effects of the 'Patient Protection and Affordable Care
Act of 2009,'" p. 10.
[18]Ibid., p. 14.

[19]Capretta, "A $4.9 Trillion Spending Increase."

[20]Ibid.

[21]Ibid.

[22]See Barnett et al., "Why the Personal Mandate to Buy Health Insurance Is
Unprecedented and Unconstitutional."

[23]See Sections 1401-1402, Patient Protection and Affordable Care Act of 2009. The
Senate bill provides a generous tax credit and cost-sharing assistances for individuals and
families earning between 100 percent of the federal poverty level (FPL) and 400 percent
FPL. Premiums would be based on percent of income, ranging from a 2 percent cap to a
9.8 percent cap. The cost-sharing assistance would also be income-based.

[24]For a more detailed discussion of this unusual set of problems and the inequities
created under the Senate bill, see Robert A. Book, "How the Senate Health Bill Punishes
Businesses That Hire Low-Income Workers," Heritage Foundation WebMemoNo. 2716,
December 3, 2009, at http://www.heritage.org/research/healthcare/wm2716.cfm, and
James C. Capretta, "The Senate Health Care Bill's Firewall Creates Disparate Subsidies,"
Heritage Foundation WebMemo No 2730, December 11, 2009, at
www.heritage.org/researchy/healthcare/wm2730.cfm.

[25]H.R. 3962 (House Bill), Sections 222(b)(8) and 222(c)(1)(A). Section 1001(1) of the
Senate bill (H.R. 3590) amends the Public Health Services Act, including adding these
provisions as a new Section 2713(a)(1) in the PHSA.

[26]See Edmund F. Haislmaier, "Health Insurance Co-ops: How Congress Could Adopt
the Right Design," Heritage Foundation Backgrounder No. 2290, June 25, 2009, at
http://www.heritage.org/Research/healthcare/bg2290.cfm.

[27]The original version of the bill required the new government-run plan to offer the
"essential" health benefits, as defined by federal authorities, but the states could require
the plan to offer more benefits in states where the plan competed against private plans.
The HHS Secretary would set rates for the government-run plan and be empowered to
negotiate the rates for doctors and hospitals. Under the bill, the rates must not be higher
than the "average" rates paid to doctors and hospitals by the qualified private health
plans. The CBO has estimated that the rates for the government-run health plan would be
higher than private-sector rates for a variety of reasons, including "adverse selection," the
likelihood that the public plan would attract proportionally more older or sicker enrollees.
Congress would provide start-up funding for the government health plan, but premiums
would cover claims, administrative costs, and contingency reserves. The government plan
would be subject to both federal and state solvency and consumer protection laws.
[28]In its initial analysis of the original version of the Senate's "public plan," the CBO
estimated that most Americans would live in states with a government plan. But without
the imposition of Medicare rates to reduce payments to doctors and hospitals well below
those of the private sector and with a low estimated take-up rate (3 million to 4 million
according to an earlier CBO projection), some liberal analysts who championed a "robust
public option" started to question the point of the Senate's "public option" proposal.
Many liberals, such as Representative Anthony Weiner (D-NY), saw the Senate
leadership's recent proposal to expand Medicare to include persons well below the normal
retirement age as a superior way to move toward a single-payer system of national health
insurance, but the Senate leadership, as noted, discarded this option as well.

[29]David M. Herszenhorn and Robert Pear, "High Premiums in Senate Democrats'

Health Plan," The New York Times, December 10, 2009, at
http://www.nytimes.com/2009/12/11/health/policy/11insure.html (December 14, 2009).

[30]Ibid.

[31]This tax would also apply to Medicare Advantage plans and private plans offered in
the FEHBP, meaning that seniors and federal employees would also pay higher taxes. For
a discussion of the special health insurance premium tax, see Edmund F. Haislmaier,
"The Senate Health Bill: Cost of the Insurance Premium Tax to Individuals and
Families," Heritage Foundation Backgrounder No. 2350, December 9, 2009, at
http://www.heritage.org/research/healthcare/bg2350.cfm.

[32]Joint Committee on Taxation, "Estimated Revenue Effects of the Revenue Provisions

Contained in the Patient Protection And Affordable Care Act."

[33]Under the federal tax code, similar employees with similar incomes are treated very
differently in their purchase of health insurance. Those who receive health insurance
through employers get unlimited tax breaks for that purchase; those who obtain health
insurance outside the workplace receive no tax relief. As noted, the Senate bill includes
this strange new provision, which introduces a whole new set of inequities into the health
care system. See Book, "How the Senate Health Bill Punishes Businesses That Hire Low-
Income Workers."

[34]Foster, "Estimated Financial Effects of the 'Patient Protection and Affordable Care
Act of 2009,'" p. 14.

[35]Ibid., p. 13.

http://www.heritage.org/Research/Reports/2009/12/An-
Analysis-of-the-Senate-Democrats-Health-Care-Bill
______________________________________________

Obamacare Increases Unemployment, Insurance

Premiums, Deficit, and Debt
Posted March 17th, 2010 at 10:27am in Health Care with 6 comments

President Barack Obama and congressional leaders claim that the Senate health bill,
which will likely face a vote in the House by the end of the week, will decrease the
deficit and bend the cost curve related to health care spending. However, recent analysis
by The Heritage Foundation’s Center for Data Analysis (CDA) shows that this is far from
true. Instead, the bill’s mandates and numerous new taxes will have tumultuous effects.
Passing Obamacare will come at the expense of the American people as it would grow
the federal debt, increase premiums, and stifle economic growth.

The Senate bill would have disastrous effects on the economy and federal spending.
CDA shows that the bill:

• Increases the federal deficit and national debt. The Congressional Budget
Office shows deficit neutrality for the Senate bill—however, this is
based on static analysis which ignores the effects new taxes and an
individual and employer mandate would have on economic
growth. These provisions would decrease investment in the
economy, resulting in lower wages and salaries. This means less
taxable income, lowering federal revenues and growing the debt.
Increased borrowing puts upward pressure on interest rates
causing some private sector productive investment opportunities
to be foregone. This also increases the interest owed on the
national debt, such that the government would pay, on average,
$20 billion more in interest between 2010 and 2020. By the end of
the decade, CDA estimates the publicly held debt would be $755
billion dollars more than under current law.
• Increases insurance premiums. Mandates in the Senate bill would
require health plans to offer more generous coverage, increasing
the cost of insurance. Increased spending on premiums,
accompanied by increased medical spending, would create
upward pressure on prices. This would further increase
government spending, since offering the current levels of care
covered by Medicaid and the proposed subsidies would cost
significantly more. Another choice would be to ration provider
payments even more severely.

• Increases unemployment. The bill also places new taxes on “the

rich”—or, in more realistic terms, small businesses and those who
create jobs. CDA’s dynamic analysis of the bill shows that an
 average 690,000 jobs per year would be lost due to the effects
described above.

Americans have recently voiced that Congress’ top legislative priority should be restoring
jobs and the economy. Instead, congressional leaders have focused their agenda on
passing the Senate health care bill, which would have the opposite effect of killing jobs
growth, suppressing economic growth, and adding to the nation’s already unsustainable
levels of federal spending.

http://blog.heritage.org/2010/03/17/obamacare-increases-unemployment-
insurance-premiums-deficit-and-debt/

______________________________________________

Health Reform That Breaks the Bank

Posted March 8th, 2010 at 4:00pm in Health Care with 8 comments

During last month’s Blair House health care summit, President Barack Obama was forced
to change the subject after Rep. Paul Ryan(R-WI) Blair House thoroughly refuted the
President’s claim that his health care plan would reduce the deficit. It took over a week
for the White House to respond to Ryan, but last Thursday they finally produced this blog
post by OMB director Peter Orszag followed by a Washington Post op-ed Friday titled:
Health reform that won’t break the bank. Ethics and Public Policy Center fellow James
Capretta responded to the White House that same day at NRO:

Orszag and DeParle start by agreeing with Ryan that delaying the start date of an
entitlement expansion is a tried-and-true budget gimmick, designed to push the full cost
of the additional spending outside of the “budget window” covered by a cost estimate.
But, not to worry, they say. In this instance, it’s not a gimmick because the deficit
reduction from their plan just keeps growing over time. They claim the president’s health
plan would produce deficit reduction of $100 billion over ten years and $1 trillion in the
second decade.

Of course, there’s another reason besides balancing revenue and spending to push the
start of an entitlement back, and that’s to make the ten-year cost look much smaller than
it really is. Recall that the president promised in his address to Congress last September
to deliver a bill that costs only “$900 billion” over a decade. The new entitlements the
Democrats want to create would cost much, much more than $90 billion per year. In fact,
the Congressional Budget Office (CBO) says they will cost about $200 billion per year
by 2019. And so, to get the media to now say his plan costs only “$1 trillion” (what’s
$100 billion among friends!), the administration delays the coverage expansion
provisions until 2014. Never mind that the president also says the uninsured can’t wait a
day longer for the legislation. Once enacted, he would make them wait — for four years.

As Ryan noted, however, once the program did get up and running, costs would soar. The
Senate Budget Committee Republican staff estimates the Senate bill’s cost at $2.3 trillion
over ten years when fully implemented.

In their Post op-ed, Orszag and DeParle do not even attempt to address the many other
points Ryan made which expose the dubious assumptions and sleight of hand behind their
deficit-cutting claims.

For instance, the health-reform bill is filled to the brim with Medicare changes, but the
one Medicare provision the president and the Democrats want to pass separately from the
health bill is the so-called “doc fix,” which would repeal a cut in Medicare physician fees
at a cost of $371 billion over ten years. Of course, splitting their agenda into two or three
bills doesn’t change the total cost. When the “doc fix” is properly included in a tally of
what the president is pushing, all of the supposed deficit reduction vanishes.

Then there’s the double-counting that Ryan exposed. The president’s plan starts up yet
another entitlement program, providing long-term care insurance. Enrollees have to pay
premiums for a number of years before they qualify for any benefits. Consequently, at
startup, there’s a surplus of premium collections — $73 billion over ten years, according
to CBO — because no one qualifies for the benefits yet. The president and his team count
these savings against the cost of health reform — even though the money will be needed
later to pay out long-term-care insurance claims. When this gimmick is taken out of the
accounting, the president’s health proposal goes even deeper into the red.

Over the long-run, the administration’s claim of large-scale deficit reduction hinges on
the dubious assumption that future elected officials will demonstrate more political
courage than those in office today.

For most of last year, the president said that he would “bend the cost-curve” in large part
by imposing a new tax on “high-cost” insurance plans. The tax would hit more and more
middle-class beneficiaries each year because the threshold for determining what
constitutes a “high-cost” plan would grow much more slowly than medical costs. In fact,
after a number of years, virtually all Americans would be in plans at or above the “high-
cost” threshold.

House Democrats and their union allies despise this tax. Last week, the president caved in
to their pressure and pushed the start date of the tax back to 2018, well past the point
when he will have left office. Even so, Orszag and DeParle still claim credit for the
massive revenue hike that would occur in a second decade of implementation. They want
us to believe we can finance a permanent, expensive, and rapidly growing new
entitlement program with a tax the president himself was never willing to collect.

In Medicare, Orszag and DeParle like to highlight so-called “delivery system reforms”
the administration has touted. In the main, these are extremely small-scale initiatives and
pilot programs. CBO says they will amount to virtually no savings. The big Medicare
cuts in the president’s plan come from across-the-board payment-rate reductions. In
particular, the president wants to cut the inflation update for hospitals, nursing homes,
and others by half a percentage point every year, in perpetuity. On paper, this change
produces huge long-run savings. But it does nothing to control the underlying cost of
treating patients. It just pays everyone less, without regard to patient need or quality of
care. The chief actuary of the program has said repeatedly that these cuts are completely
unrealistic for these very reasons. If implemented, he expects they would drive one in
five facilities into serious financial distress. And yet Orszag and DeParle want us to
believe these savings can be counted to finance the president’s massive entitlement
promises.

And massive they are. CBO says the coverage expansion provisions in the Senate-passed
bill would cost about $200 billion by 2019, and that cost would rise 8 percent every year
thereafter.

But even these estimates understate the true cost of Obamacare. The president’s plan, like
the House and Senate bills, would extend generous new insurance subsidies to low- and
moderate-wage workers getting insurance through the new “exchanges.” Workers in job-
based plans would get no additional help. That means two workers with identical incomes
would be treated very differently. Gene Steuerle of the Urban Institute has estimated that,
in 2016, a worker with job-based coverage and a $60,000 income would get $4,500 less
than someone with the same income but health insurance through the exchange. This kind
of inequitable treatment would never last: one way or another, the entitlement would get
extended to everyone in the targeted income range, sending the overall costs of the
program soaring.

The president started off last year by saying he wanted to “bend the cost-curve” even as
he broadened coverage. But after a year of partisan political and legislative maneuvering,
all that’s left is a massive entitlement expansion. The new costs would get piled on top of
the unreformed and unaffordable entitlements already on the books. It’s a budgetary
disaster in the making.
http://blog.heritage.org/2010/03/08/health-reform-that-breaks-the-bank/
____________________________________________________________________

Morning Bell: What the Senate Bill Would Do To

America
Posted March 18th, 2010 at 9:19am in Health Care with 15 comments

Another day, another no-show for the Obamacare reconciliation bill. House Democrats
were quick to shift blame to the Congressional Budget Office (CBO) with Rep. Robert
Andrews telling The Hill that the delay “has been much more technical than substantive.
… It’s not like what tax has to go or what spending has to go.” Which is an interesting
claim, since Politico reported that AFL-CIO President Richard Trumka was summoned to
the White House yesterday afternoon “to discuss a higher-than-expected excise tax on
some health care plans.” In fact, Politico added: “A labor source said Trumka’s meeting
would focus on the entire bill, not just the excise tax question.” Sounds like more than
just technical details are still in flux.

But in reality, none of these discussions really matter. The reconciliation bill being
drafted is nothing more than thin political cover for House Democrats who believe the
Senate bill is terrible public policy but want to please their leadership and the President
by voting for it anyway. As we detailed yesterday, there is no bill but the Senate bill.
Once the House passes the Senate bill, the President will sign it. Game over. It has been
almost three months since the Senate passed their bill in the dead of night on Christmas
Eve. A review of just how terrible it really is, is in order:

New Middle-Class Taxes: Throughout his campaign, President Barack Obama promised
he would not raise taxes on American households making less than $250,000. The Senate
bill shatters that promise. For starters, just look at the reason Trumka went to the White
House yesterday: the excise tax on high-cost health insurance plans. This tax would
overwhelmingly hit middle-class taxpayers. Taxes on prescription drugs, wheel chairs
and other medical devices would also be passed on to all consumers, hitting the lower-
and middle- classes the hardest.

Increased Health Care Costs: The Senate bill manifestly does nothing to bend the
health care cost curve downward. According to the latest CBO report, the Senate bill
would actually increase health care spending by $210 billion over the next 10 years. This
follows a previous report from the President’s own Center for Medicare and Medicaid
Services (CMS) showing the Senate bill would result in $234 billion in additional health
care spending over 10 years.

Increased Health Insurance Premiums: The President initially promised that

Americans would see a $2,500 annual reduction in their family health care costs. But
under the Senate bill, premiums would go up for millions of Americans. In fact,
according to the CBO, estimated premiums in the individual market would be 10–13
percent higher by 2016 than they would be under current law.

Increased Deficits: Despite claiming to be comprehensive health care reform, the Senate
bill does not address the fact that Medicare’s current price-fixing doctor reimbursement
scheme is set to reduce doctor payments by 21% this year. That simply is not going to
happen. Congress will pass that fix separately. If that cost were included, Obamacare is
already $200 billion in the red. Now throw in the fact that the Senate bill is paid for with
another $463 billion in Medicare cuts to health care providers. CMS says if these cuts
occur, one-fifth of all health care providers will face bankruptcy. That simply is not going
to happen. Just like the doctor reimbursement cuts have never happened, the Obamacare
Medicare cuts will never happen. So in reality, Obamacare will add almost $700 billion
to our national deficit in the next ten years alone.

Increases Unemployment and Puts Millions of Americans on Welfare: According to

The Heritage Foundation’s Center for Data Analysis (CDA), a dynamic analysis of the
tax hikes and deficits created by the Senate bill shows that an average 690,000 jobs per
year would be lost if it became law. In addition, over half of all Americans who would
gain health insurance through the bill (18 million out of 33 million) would do so by being
placed on Medicaid, which is a welfare program.

Higher taxes, higher health care costs, higher health insurance premiums, higher deficits,
more unemployment and more Americans on welfare. That is America’s future should
the Senate Obamacare bill become law.

Quick Hits:

• According to the Treasury Department, the National Debt has

increased over $2 trillion over the 421 days since President
Obama took office.
• If the House does pass the Senate bill, dozens of conservative
lawmakers and candidates have signed a pledge to back an effort
to repeal the measure.
• Yesterday Mark Levin posted the complaint his Landmark Legal
Foundation will file in federal court if the House uses the
Slaughter Rule to pass the Senate bill.
• Over half of the Americans who gain health insurance through
the Senate bill will not be able to get their drugs from Washington
state Walgreens, since they announced yesterday that as of April
16th they will not accept any new Medicaid patients.
• According to Gallup, Americans firmly prioritize the economy
over the environment and fewer than half of Democrats now
believe environmental protection is the more important goal.
http://blog.heritage.org/2010/03/18/morning-bell-what-the-senate-bill-would-do-
to-america/

______________________________________________

Health Coverage for All Americans? Not Under the

Senate Health Bill
Posted March 17th, 2010 at 4:30pm in Health Care with 1 comments

As Congressional leaders continue to search for ways to pass the Senate

health bill in the House later this week, Americans continue to be
subjected to dubious rhetoric surrounding the bill’s provisions. The
Senate bill’s supporters claim that their legislation must be made law,
no matter the cost, in order to achieve universal coverage in the United
States. However, even if the Senate bill does pass, this will not be the
case. Despite the fact that the proposed legislation is exorbitantly
expensive, it would still fail to achieve universal health coverage.

According to the Congressional Budget Office (CBO), by 2019, the

legislation would cost (PDF) $196 billion annually and still leave 24
million Americans uninsured.

The fact that 24 million people remain would uninsured with enactment
of the Senate health bill is remarkable. Under current law, there would
be 55 million uninsured Americans in 2019. That means that over 43
percent of the projected uninsured would be unaffected by the
legislation, continuing to go without coverage ten years from now. Yet
according to research by Heritage expert James Capretta, the bill would
cost well over $1 trillion over the next ten years. Capretta shows that
the true ten year cost of the plan is more likely to be close to $1.2
trillion, but even this estimate significantly underestimates the true long
term cost of the plan. Capretta further points out that this estimate
includes ten years of new revenues, but only 6 or 7 years of new
spending, skewing the Congressional Budget Office’s ten-year cost
analysis to make the bill appear less expensive than it really is. He says
that a true ten year estimate would put the price tag closer to $2.3
trillion.

Congressional leaders claim that the cost is justified because the bill
extends health care coverage to 31 million uninsured Americans. It
depends on what one means by “coverage”. Much of the increased
coverage would come in the form of Medicaid expansion, as well as
exchange subsidies. But Medicaid is characterized by low-quality care
and it often fails to meet the health needs of its beneficiaries. According
to recent analysis by Heritage Health Policy Fellow Brian Blase,
Medicaid expansion in Tennessee actually decreased the quality of care
relative to surrounding states that did not expand their own Medicaid
programs. In the four years after expanding Medicaid, Tennessee’s
improvements in general mortality were more than 50 percent lower
than its neighbors. In many states, Medicaid beneficiaries end up in the
hospital emergency rooms because they can’t find a doctor who’ll take
artificially low Medicaid payment rates. Clearly, Medicaid is not a
vehicle for improving the quality of care for millions of Americans. And
coverage without efficient access to medical services is probably not
what ordinary Americans have in mind when it comes to health care
reform.

If the highly unpopular health care legislation is going to cost taxpayers

over $196 billion annually ten years from now, while leaving an
estimated 24 million Americans without coverage, perhaps that is yet
another reason why Congress ought to pause, come to its senses, and
press the re-set button. Americans expect and deserve better.

Rick Sherwood currently is a member of the Young Leaders Program at the Heritage
Foundation. For more information on interning at Heritage, please
visit:http://www.heritage.org/about/departments/ylp.cfm

______________________________________________

Medicaid Expansion Neglects Program’s Current

Failures
Posted March 17th, 2010 at 2:00pm in Health Care with 0 comments

This week, the House is preparing to vote on the Senate-passed health care bill, which
depends on a massive expansion of Medicaid to reduce the number of uninsured.
However, as has become apparent in the months of debate surrounding Democrats’ health
care proposals, all that glitters is not gold—especially in the case of expanding Medicaid,
a low-quality, poorly-functioning federal-state program which fails to meet the needs of
its beneficiaries. Increasing the number of citizens dependent on this program fails to
address its numerous shortcomings, and instead applies them to millions more.

A recent article in the New York Times portrays the plights of current Medicaid
beneficiaries which are slowly becoming the norm. Since Medicaid reimburses doctors
significantly below the cost of providing care, more and more doctors are being forced to
turn patients away. According to Dr. Saed J. Sahouri, “…we’re really losing money on
seeing those patients, not even breaking even. We were starting to lose more and more
money, month after month.”

As it becomes harder for Medicaid beneficiaries to find providers, more and more rely on
emergency room care—in fact, Medicaid enrollees are more likely than even the
uninsured to end up in emergency rooms in lieu of primary care.

As former Heritage analyst Dennis Smith points out, Medicaid spending is demanding a
larger portion of state budgets, squeezing out other state priorities from education to
transportation. This is a trend which is expected to continue in the years ahead.

If the federal government is serious about health care reform, expanding Medicaid is the
worst way to go. Making more Americans dependent on this program may decrease the
number of uninsured, but will do nothing to improve the access and quality issues
plaguing the program. Moreover, federal funding to cover the expansion only offers
states temporary relief and simply shifts these costs to federal taxpayers. Eventually
states (and state taxpayers) will be left to pick up the cost, only intensifying the problems
in the future.

Washington can do better by reforming Medicaid so that it works for those who currently
use it. Heritage analyst Nina Owcharenko outlines what states legislators and Congress
can do to improve the quality of Medicaid:

States … should mainstream some Medicaid enrollees into private coverage and adopt
consumer-directed models to promote personal responsibility and enable individuals to
take control of their health care decisions… federal policymakers should look for ways to
make this process easier and remove obstacles to change.

…Congress should enact key health care initiatives, such as health care tax credits, and
private long-term care incentives that complement Medicaid reform and relieve the
increasing pressures on state Medicaid budgets.

Millions of Americans currently struggle to receive adequate care due to Medicaid’s

inadequacies. Adding more families to these poor performing programs will make these
problems worse.
http://blog.heritage.org/2010/03/17/medicaid-expansion-neglects-program
%E2%80%99s-current-failures/
______________________________________________

Slaughter Solution: Still the Senate Bill

Posted March 17th, 2010 at 12:55pm in Health Care with 6 comments

The House Rules Committee will meet this afternoon to discuss what has been dubbed
the “Slaughter Solution” to passage of the Senate health care bill. The precedent cited by
Rules Chairman Louise Slaughter to justify the proposed maneuver (to “deem” passage
of the Senate Health Care bill when in fact the bill has never been actually “passed”)
simply does not support the planned manipulation of the House rules and may well
violate the US Constitution.

As early as 1933 House rules were interpreted to permit House acceptance of Senate
Amendments in a bill simultaneously with House passage of a Resolution on a separate
matter. But that precedent clearly included House concurrence in (or “passage” of) the
Senate Amendments. The new maneuver planned for this week’s health care bill is not
designed to be an up or down vote on Senate Amendments to a bill or a bill itself. Instead
the proposed Rule will “deem”, or pretend, that a Senate bill that will never have been in
fact “passed”, was instead “deemed” to have been passed.

The United State’s Constitution says:

Every Bill which shall have passed the House of Representatives and the Senate, shall,
before it become a Law, be presented to the President of the United States.
House precedents do allow more that one matter to be “passed” by the same vote. But a
member’s vote in favor of the bill and the other matter is a simultaneous vote on both the
merits and passage of both propositions.

Either the US House has had an actual vote to “pass” a bill, or it has not meet
Constitutional requirements for a bill to become law. The House can not “deem” that a
majority voted for a bill and simultaneously maintain that there was never actually a vote
on the bill.

The House is ultimately the arbiter of its own internal Rules, but it cannot avoid
Constitutional prerequisites for a bill to become law. Parliamentary slight of hand does
not trump the US Constitution.

The Honorable Thomas C. Feeney is Senior Visiting Fellow at The Heritage Foundation.

____________________________________________________________________

Obamacare’s Procedural Fraud on the American

People
Posted March 10th, 2010 at 11:33am in Health Care with 46 comments

The Health Care Nuclear Option is still the stated plan to get Obamacare to the
President’s desk. The latest wrinkle is designed to allow pro-life Democrats to vote for
the Senate’s taxpayer funded abortion language while still claiming they never voted for
taxpayer funded abortions. Don’t be fooled.
First, let’s be clear that the Senate bill allows tax dollars to be used for abortions.
According to Chuck Donovan of The Heritage Foundation, the Senate passed Obamacare
bill funds abortion in several ways, even creating an appropriation for Community Health
Centers that contains no restriction on abortion subsidies. If the Senate version of
Obamacare is passed by the House and sent to the President, then the House has
consented to the federal funding of abortion.

House members have come up with a unique way to structure a vote that attempts to
avoid the House voting on legislation before it goes to the president. First, the House
Budget Committee will report out a reconciliation bill. It is unclear as to whether the
Stupak Amendment will be added. This reconciliation measure would be reported for
consideration by the House of Representatives as a whole.

Speaker Nancy Pelosi (D-CA) would then package the Senate passed Obamacare bill and
the House reconciliation measure into one measure. The House rules committee will
report out a rule that will allow the Senate passed Obamacare bill to pass the House
without a vote. The rule will be self-executing in the sense that the House will have been
deemed to pass the Senate Obamacare bill if the House can muster the votes to pass the
reconciliation measure. The House has used this procedure in the past during a debate
on funding the Global War on Terror and in passing debt limit increases under the
“Gephardt Rule.”

There is a constitutional issue raised by this procedure. Article 1, Section 7, of the

Constitution states in part “Every Bill which shall have passed the House of
Representatives and the Senate, shall, before it becomes a law, be presented to the
President of the United States.” If the House does not vote on a bill, is it considered to
“have passed the House of Representatives?” Don’t expect the Supreme Court to take up
this case, because this is in the realm of a political issue that the Courts tend to want
resolved by the House and Senate through the democratic process. It is a Constitutional
concern and should be discussed by all Americans. If any member of Congress claims to
have not voted for the pro-abortion Senate passed bill, one can point to this provision in
the Constitution to argue the opposite.

Procedurally, this would happen in the following order. The House Rules Committee
would approve this self-executing rule. The House would vote on the rule that allows
this scenario. Then the House will vote on the reconciliation measure. Upon passage of
the reconciliation measure the Senate Obamacare bill will be deemed to have passed the
House and the reconciliation measure will be sent to the Senate. This so called “Deeming
Resolution” is a trick that allows the House to pass a bill they never voted upon.
Therefore, the real vote on the pro-abortion Senate passed bill will be the vote on the rule
to allow this scenario to roll out on the House floor.

One provision that may make the rule is a provision that does not allow the House to
report the Senate passed Obamacare bill to the President until the Senate passes a
reconciliation bill. Bills are enrolled before being sent to the President for his signature
and the House can prevent the enrollment and delivery of Obamacare to the President
until the Senate completes work on the reconciliation measure. Sound complicated? Yes
and it is supposed to so the American people can’t understand that the House is on the
verge of passing an unpopular Obamacare bill, yet they are reserving the right to claim
that they did not vote for the Senate passed bill.

If the liberals in the House can pull off this trick, this would have allowed Senate
Majority Leader Harry Reid (D-NV) to have secretly written the version of Obamacare
going to the President’s desk. Do you remember Harry Reid and the Chamber of
Secrets? Reid merged, without any official proceedings, the Senate HELP and Senate
Finance Committee versions of Obamacare, with his personal additions to the bill
including a Public Option with an opt out for states, in closed door meetings with
political elites. Basically, White House Chief of Staff Rahm Emanuel, HHS Secretary
Kathleen Sebelius, OMB Director Peter Orszag, Senators Harry Reid (D-NV), Max
Baucus (D-MT), Chris Dodd (D-CT) and a few other liberal Senators have rewritten
health care law in secret closed door meetings.

After those meeting the Senate moved to proceed to this bill, without any hearings or
opportunity for public review. During debate in the Senate, Senator Harry Reid crafted a
manager’s package of amendments and added the Cornhusker Kickback for Nebraska, a
Louisiana Purchase and a Gator-Aid earmark. Now the House is preparing to pass this
bill without a vote. The American people should demand that Congress start over. This
secretive and non-transparent procedure is not way to force through Obamacare.

http://blog.heritage.org/2010/03/10/obamacare%E2%80%99s-procedural-
fraud-on-the-american-people/

____________________________________________________________________

Morning Bell: There Is No Bill But the Senate Bill

Posted March 17th, 2010 at 9:23am in Health Care with 48 comments Print This Post

Another day, another poll showing President Barack Obama’s health care plan is wildly
unpopular with the American people. Yesterday NBC News/The Wall Street Journal
released their latest poll showing that the percentage of Americans who believe President
Obama’s health care plan is a bad idea (48%) is at the highest level since they started
asking the question last year. Only 36% of Americans are willing to call the plan a “good
idea” which is up a whole four points from the time when House Rules Committee Chair
Louise Slaughter (D-NY) wrote this about the Senate health plan:
[U]nder the Senate plan, millions of Americans will be forced into private insurance
company plans, which will be subsidized by taxpayers. That alternative will do almost
nothing to reform health care but will be a windfall for insurance companies. …
Supporters of the weak Senate bill say “just pass it — any bill is better than no bill.”

I strongly disagree — a conference report is unlikely to sufficiently bridge the gap

between these two very different bills. It’s time that we draw the line on this weak bill
and ask the Senate to go back to the drawing board. The American people deserve at least
that.

The Senate health bill is so unpopular, even among House Democrats,

that the leftist House leadership is desperately trying to trick the
American people into believing that the House can pass the Senate bill
without voting on it. Hence the Slaughter Rule which would deem the
Senate bill passed at the same time the House would approve a new
reconciliation bill. Speaker Nancy Pelosi (D-CA) was crystal clear on
her motives this week telling a group of leftist bloggers: “It’s more
insider and process-oriented than most people want to know. But I like
it because people don’t have to vote on the Senate bill.”

There is one increasingly glaring problem with Pelosi’s pass-the-bill-without-voting plan:

it is proving impossible to draft that reconciliation bill. The Democrats first promised to
unveil their new bill last Wednesday. Then Thursday. Then Friday. Then Monday. Then
last night. As of this morning, still nothing. Democrats say they are waiting for a score
from the Congressional Budget Office before they release their bill, but there is nothing
stopping them from releasing whatever text they have now and then publicizing the CBO
score when it comes back. But they are not choosing that open and transparent path.

As we reported last week, getting a CBO score consistent with reconciliation is going to
be very difficult. According to House rules, a reconciliation measure must reduce the
deficit by at least $2 billion over five years compared to existing law. In this case,
however, “existing law” would be the yet-to-be-passed Senate bill. And all of the
changes Democrats want to make to the Senate bill (scaling back the tax on high-end
health insurance policies; closing the Medicare D loophole; boosting insurance
subsidies; increasing Medicaid payments; and expanding the Cornhusker Kickback to
all) either increase spending or decrease revenue. Which means the Democrats have to
identify new revenues to make the CBO score work. And as Congressional Quarterly
reported yesterday, Democrats have not yet identified the right pay-fors to game the CBO
right. That is why House Leadership has not unveiled their new bill yet: they can’t figure
out how to pay for it.

Not that it really matters if they ever do. The reconciliation bill is never going to become
law. The Senate will never pass it. They have no reason to. The Senate likes the existing
Senate bill. That’s why it’s called “the Senate bill” … they are the ones who passed it.
The White House also likes the Senate bill. As soon as the House passes it, President
Obama will sign it and then leave for Asia. That’s it. Obamacare will be, as White House
Press Secretary Robert Gibbs promised last Sunday, “the law of the land.” After the
Senate bill is law, what could possibly motivate the White House, let alone the Senate, to
ever pick up the yet-to-be-written House reconciliation bill?

This is why the White House political machine is pulling out all the stops to get the
House to pass the toxic Senate bill. Democratic National Committee Vice Chair Donna
Brazile is actively encouraging primary challenges to Democrats who vote against the
Senate bill. One House Democrat aide tells Politico: “We’re having donors, even donors
outside of our district, that are being called and asked to urge support.” For her part
Speaker Pelosi is relishing the bare knuckle fight telling reporters yesterday: “I never stop
whipping. There’s no beginning, there’s no middle, and there’s no end.” Let’s just hope
her members remember which bill she’s really whipping them on.

Quick Hits:

• Testifying before the House Appropriations Committee, Attorney

General Eric Holder refused to answer whether or not the Obama
administration would read Osama bin Laden his Miranda rights,
insisting that bin Laden would never be taken alive.
• Cash strapped states like Illinois and California are coming hat in
hand to Washington for hundreds of billions of federal taxpayer
dollars in bailouts.
• Homeland Security Secretary Janet Napolitano announced
yesterday the Obama administration will delay the virtual U.S.-
Mexico border fence.
• The Chinese government is setting the foundation for Internet
giant Google to pull out of the country.
• Former-Democrat and current Massachusetts State Treasurer
Timothy Cahill tells The Boston Globe: “If President Obama and
the Democrats repeat the mistake of the health insurance reform
here in Massachusetts on a national level, they will threaten to
wipe out the American economy within four years.”

http://blog.heritage.org/2010/03/17/morning-bell-there-is-no-bill-but-the-
senate-bill/

______________________________________________

Morning Bell: Is Now Really the Time To Create a New

$2.5 Trillion Entitlement?
Posted March 16th, 2010 at 9:31am in Entitlements with 44 comments

In theory, the federal government has $2.5 trillion stashed away in a nondescript office
building in the sleepy little town of Parkersburg, West Virginia. That is where the
Treasury Department keeps stacks of nonnegotiable Treasury bonds payable to the Social
Security Administration. But as the Associated Press reported yesterday, for the first time
since the 1980s, the federal government will not be adding to that stack. Thanks to an
aging population and slow economy, Social Security will pay out $29 billion more this
year than it takes in. And the Congressional Budget Office reports that after small
surpluses in 2014 and 2015, the program is projected to be in the red from 2016 until
forever.

But what about Al Gore’s Social Security “Lock Box?” Can’t we just spend that $2.5
trillion in the Social Security Trust Fund? As Heritage experts David John and Brian
Riedl explain, since 1939 federal law has required Social Security to “invest” its extra
money in Treasury bonds. Those bonds are really just IOUs from the government to the
government. The feds already spent that $2.5 trillion long ago on programs such as
education, foreign aid and defense. Add the $2.5 trillion Social Security obligation onto
our other obligations and our current national debt stands at $12.5 trillion, or nearly
$42,000 for every man, woman, and child in the country. And it will only get worse
under President Barack Obama’s Budget. It would: 1) borrow 42 cents for each dollar
spent in 2010; 2) leave permanent annual deficits that top $1 trillion as late as 2020; and
3) dump an additional $74,000 per household of debt into the laps of our children and
grandchildren.

Responding to such unsustainable borrowing, Moody’s rating agency announced Monday

that the United States needs to make deep spending cuts or risk losing its AAA credit
rating. From the report: “growth alone will not resolve an increasingly complicated debt
equation. Preserving debt affordability at levels consistent with AAA ratings will
invariably require fiscal adjustments of a magnitude that, in some cases, will test social
cohesion.”

Losing our AAA rating would send interest rates higher, increase our borrowing costs,
and send the percentage of GDP we spend servicing our debt sky rocketing. Bloomberg
adds: “the U.S. will spend more on debt service as a percentage of revenue this year than
any other top-rated country except the U.K., and will be the biggest spender from 2011 to
2013.” The message from Moody’s was clear: the U.S. federal government must change
direction on spending or face economic disaster.

The leftist majorities in Congress and the White House are not listening. Instead of
reining in federal spending and tackling our existing Entitlement crisis, they are locked in
an all out push to create a brand new $2.5 trillion health care entitlement. The President
may say his plan is deficit neutral, but the American people do not believe him. And they
are wise not to. The President tries to pay for his plan with over half a trillion dollars in
Medicare cuts over the next decade. The president’s own Centers for Medicare and
Medicaid Services reports that these cuts would cause one-fifth of all
health care providers to go bankrupt. Congress would never allow those
hospitals to go out of business. Congress will never actually make those Medicare cuts.
So already Obamacare is half a trillion dollars in the red, and we haven’t even tacked on
the hundreds of billion of dollars the doc fix adds on.

Reducing our entitlement obligations is the only way to prevent our nation from
becoming another Greece. We need to: 1) to show these programs’ long-term obligations
in the budget; target these programs to only who that need them; and strengthen personal
responsibility by making it easier for people to build personal retirement savings and use
health care savings accounts. But first we must avoid the fiscal insanity that is
Obamacare.

Quick Hits:

• Finance ministers from the 16 nations that use the euro failed to produce a
detailed bailout plan for the $74 billion Greek budget deficit.
• Speaker Nancy Pelosi (D-CA) told leftist bloggers yesterday that the Senate
health bill does contain a public option (18 million more Americans placed
on Medicaid) and said of passing the Senate bill: “Once we kick through this
door, there’ll be more legislation to follow.”
• Speaking of those 18 million Americans Obamacare would place on
Medicaid (a welfare program), The New York Times reports that: “With
states squeezing payments to providers even as the economy fuels explosive
growth in enrollment, [Medicaid] patients are finding it increasingly difficult
to locate doctors and dentists who will accept their coverage.”
• The Los Angeles Department of Water and Power is set to jack their consumer’s
electric bills up between 8.8% and 28.4% in order to pay for a solar plan and a
20% renewable energy mandate.
• According to Gallup, Americans are less worried about each of eight specific
environmental problems than they were a year ago and are worried least about
global warming.

http://blog.heritage.org/2010/03/16/morning-bell-is-now-really-the-time-to-create-a-
new-2-5-trillion-entitlement/

______________________________________________

Morning Bell: What the Senate Bill Would Do To

America
Posted March 18th, 2010 at 9:19am in Health Care with 19 comments
Another day, another no-show for the Obamacare reconciliation bill. House Democrats
were quick to shift blame to the Congressional Budget Office (CBO) with Rep. Robert
Andrews telling The Hill that the delay “has been much more technical than substantive.
… It’s not like what tax has to go or what spending has to go.” Which is an interesting
claim, since Politico reported that AFL-CIO President Richard Trumka was summoned to
the White House yesterday afternoon “to discuss a higher-than-expected excise tax on
some health care plans.” In fact, Politico added: “A labor source said Trumka’s meeting
would focus on the entire bill, not just the excise tax question.” Sounds like more than
just technical details are still in flux.

But in reality, none of these discussions really matter. The reconciliation bill being
drafted is nothing more than thin political cover for House Democrats who believe the
Senate bill is terrible public policy but want to please their leadership and the President
by voting for it anyway. As we detailed yesterday, there is no bill but the Senate bill.
Once the House passes the Senate bill, the President will sign it. Game over. It has been
almost three months since the Senate passed their bill in the dead of night on Christmas
Eve. A review of just how terrible it really is, is in order:

New Middle-Class Taxes: Throughout his campaign, President Barack Obama

promised he would not raise taxes on American households making less than
$250,000. The Senate bill shatters that promise. For starters, just look at the reason
Trumka went to the White House yesterday: the excise tax on high-cost health
insurance plans. This tax would overwhelmingly hit middle-class
taxpayers. Taxes on prescription drugs, wheel chairs and other medical
devices would also be passed on to all consumers, hitting the lower- and
middle- classes the hardest.

Increased Health Care Costs: The Senate bill manifestly does nothing to bend
the health care cost curve downward. According to the latest CBO report, the
Senate bill would actually increase health care spending by $210 billion over the
next 10 years. This follows a previous report from the President’s own Center for
Medicare and Medicaid Services (CMS) showing the Senate bill would result in
$234 billion in additional health care spending over 10 years.

Increased Health Insurance Premiums: The President initially promised that

Americans would see a $2,500 annual reduction in their family health care costs.
But under the Senate bill, premiums would go up for millions of Americans. In fact,
according to the CBO, estimated premiums in the individual market would be 10–13
percent higher by 2016 than they would be under current law.

Increased Deficits: Despite claiming to be comprehensive health care reform, the

Senate bill does not address the fact that Medicare’s current price-fixing doctor
reimbursement scheme is set to reduce doctor payments by 21% this year. That
simply is not going to happen. Congress will pass that fix separately. If that cost
were included, Obamacare is already $200 billion in the red. Now throw in the fact
that the Senate bill is paid for with another $463 billion in Medicare cuts to health
care providers. CMS says if these cuts occur, one-fifth of all health care providers
will face bankruptcy. That simply is not going to happen. Just like the doctor
reimbursement cuts have never happened, the Obamacare Medicare cuts will never
happen. So in reality, Obamacare will add almost $700 billion to our national deficit
in the next ten years alone.

Increases Unemployment and Puts Millions of Americans on Welfare:

According to The Heritage Foundation’s Center for Data Analysis (CDA), a
dynamic analysis of the tax hikes and deficits created by the Senate bill shows that
an average 690,000 jobs per year would be lost if it became law. In addition, over
half of all Americans who would gain health insurance through the bill (18 million
out of 33 million) would do so by being placed on Medicaid, which is a welfare
program.

Higher taxes, higher health care costs, higher health insurance

premiums, higher deficits, more unemployment and more Americans on
welfare. That is America’s future should the Senate Obamacare bill
become law.

Quick Hits:

• According to the Treasury Department, the

National Debt has increased over $2 trillion over
the 421 days since President Obama took office.
• If the House does pass the Senate bill, dozens of conservative lawmakers and
candidates have signed a pledge to back an effort to repeal the measure.
• Yesterday Mark Levin posted the complaint his Landmark Legal Foundation will
file in federal court if the House uses the Slaughter Rule to pass the Senate bill.
• Over half of the Americans who gain health insurance through the Senate bill will
not be able to get their drugs from Washington state Walgreens, since they
announced yesterday that as of April 16th they will not accept any new Medicaid
patients.
• According to Gallup, Americans firmly prioritize the economy over the
environment and fewer than half of Democrats now believe environmental
protection is the more important goal.

http://blog.heritage.org/2010/03/18/morning-bell-what-the-senate-bill-would-do-
to-america/
______________________________________________

Obamacare: It's Not Getting Better

Published on March 15, 2010

The Process

• Deeming Resolution: Step 1 of the latest strategy to get

health care reform across the finish line is to use a
"deeming resolution" to deem the Senate-passed version
of Obamacare passed in the House. House members
would technically never vote on the bill--instead they
would vote on a resolution that deems the bill passed.
This is completely unconstitutional and an all-out attack
on the rule of law.
• Reconciliation: Once the House passes the Senate-
passed bill, step 2 would be for both chambers to then
pass a reconciliation bill with the changes they want.
Reconciliation is a complicated procedure normally used
for budgetary matters and therefore requires only a
simple majority of votes to pass instead of the usual 60. Liberals are trying to use
reconciliation to get around the filibuster in the Senate and put in some last-
minute special provisions that can't pass in the Senate using regular procedure.
• Will It Work? Despite the potential constitutional questions of "deeming" a bill
passed, the Senate Parliamentarian has signaled that the House would have to
pass--and the President would need to sign into law--the Senate version of
Obamacare before a reconciliation bill could be considered in the Senate.
Thus, any changes proposed in reconciliation may never be signed into law.

The Senate Bill (Soon to be in the House)

• The Real Cost: With tricky accounting and budget gimmicks, Obamacare
supporters would like you to believe that the cost of this bill is less than a
trillion dollars. However, this figure excludes items such as the costly but
inevitable "doc fix" and cleverly disguises a new long-term-care entitlement.
Also, it is based on benefits not taking effect until 2014, even though taxes
begin immediately. The true 10-year cost of this bill is at least $2.5 trillion.
• No Stupak Amendment: The Senate bill lacks the Stupak Amendment,
which is designed to protect the new health care legislation from funding or
subsidizing abortions with federal tax dollars. Congressional Democratic
leaders have said they will march on with or without the support of the pro-
life members of their caucus.
• Kickbacks: The Senate bill still contains the "Cornhusker Kickback," the
"Gator-Aid," and the "Louisiana Purchase." The President promises to fix
 these in reconciliation, but there are already moves to backtrack by calling
the "Louisiana Purchase" an emergency and by extending the "Cornhusker
Kickback" to all states. This outlandish spending will make the cost of the
bill skyrocket.
• Increased Medicaid Costs for States: Eventually the states would be
forced to pick up the costs of the largest expansion of the Medicaid program
in history. This unfunded mandate would likely require state tax hikes, more
cuts to Medicaid providers (further lowering the quality of care for those on
the program), or a push by the states to have the federal taxpayers bail them
out once again.
• And Still a Public Option: The Senate bill authorizes the Office of
Personnel Management (OPM), a federal agency that administers the civil
service, to create government-sponsored health plans that would "compete"
against private health plans nationwide. These government-sponsored health
plans would have their premiums, profit margins, and benefit offerings set
by OPM. This holds the potential for creating an un-level playing field
between the government-sponsored health plans and private insurance. It
could also mean that the taxpayers could be liable for making up any
shortfalls incurred by the government-sponsored plans.

A Better Strategy

• Start Over: Go back to the drawing board with a bipartisan group of

lawmakers and consider reform options that lower costs, lower premiums,
and increase competition without increasing federal control.
• Focus on Free-Market Solutions: Tax reform, sensible insurance market
reforms (including allowing Americans to purchase coverage from other
states), meaningful entitlement reform, and letting states take the lead should
be the cornerstones for real reform.

For more information, please visit: http://fixhealthcarepolicy.com/

____________________________________________________________________

The Health Care Summit: A Chance to Start Over and

Get It Right
Published on February 24, 2010 by Nina Owcharenko

Abstract: America's health care system is in need of change, but not change that consists
of overhauling one-sixth of America's economy by centralizing health care decisions in
Washington. The cornerstone provisions of the House and Senate bills, along with the
President's recent recommendations, would put more power in the hands of bureaucrats
and politicians. The legislative process thus far has been characterized by little
transparency or bipartisanship. To be successful, the health care summit must begin by
setting aside the highly unpopular House and Senate bills. Simply adjusting the
magnitude of these proposals or adding new "conservative" provisions does not change
their fundamental direction. Congress and the Administration should instead pursue
bipartisan reform that gives Americans greater personal control of health care decisions.

This week, President Barack Obama is inviting key Members of Congress from both
parties to meet with him, ostensibly in search of a bipartisan agreement on health care
reform.

A real bipartisan agreement should not be a public relations exercise to spread blame for
political failure or a pretext to justify ramming a preordained partisan result through
Congress. Real bipartisan outreach should have taken place at the very beginning of the
Administration, emphasizing key elements of health reform upon which the President,
moderates and conservatives in Congress, and others could have agreed.[1]

If the President is sincere and the summit is going to be successful, it must begin by
setting aside the highly unpopular bills that the House and Senate have developed.
Simply adjusting the magnitude of these proposals or adding new "conservative"
provisions as suggested in the President's latest proposal, does not change their
fundamental direction.

As Yuval Levin has explained, the crucial differences between Congress and the nation at
large are not differences in degree; they are differences in policy direction.[2] Most
Americans want problems in the health insurance markets fixed, but they do not want a
federal takeover of the health care sector of the economy. Regrettably, the cornerstone
elements of these proposals would put more power in the hands of Washington
bureaucrats and politicians.[3] Instead, Congress and the Administration should pursue
bipartisan reforms that give Americans greater personal control of their health care
decisions.

Changing Direction. Clearly, America's health care needs reform. Simply protecting the
status quo ignores the real challenges facing the health care system. Congress therefore
needs to pursue a fresh and more incremental approach to health care reform. This means
taking specific steps that lead health care reform in a direction that is very different from
that embodied in the unpopular House and Senate bills. It is a policy direction that would
give individuals and families, not the government, more control of their health care
decisions.

Specifically, Congress should focus on very specific areas of common agreement:

promoting state innovation, fixing entitlement programs, addressing the tax treatment of
health insurance, and establishing fair rules for insurance.
Real Bipartisanship: The Case for Restoring Public Trust

The simple truth is that the congressional legislation is not only unpopular, but also fails
to meet the standards for health reform that the President himself established at the
inception of the national debate.

The People Have Spoken. The American people have spoken. The health care reform
proposals pending before Congress and endorsed by this Administration are unpopular,
and most Americans feel that Congress should start over.

• 49 percent of the public oppose and 40 percent favor the Obama

health care plan.[4]
• 61 percent of voters believe Congress should drop health care and
focus on jobs and the economy.[5]
• 56 percent of Americans believe Congress should adopt a step-by-
step approach.[6]

Rhetoric Versus Reality. There are many reasons why popular support
for the health care bills has been dropping. One important reason is
that the American people have looked beyond the rhetoric and clearly
understand the consequences of the legislation itself.

The reality is that the bills before Congress produce results that are far
different from the promises upon which the President campaigned and
that he continues to espouse. The contradictions between Presidential
rhetoric and legislative reality are numerous.

• Keeping Your Doctors and Your Health Plan. In his State of the
Union address, the President continued to reiterate that health
care reform would "preserve the right of Americans who have
insurance to keep their doctor and their plan."[7] But millions of
Americans would see their health care coverage change under the
House and Senate bills, including those workers whose employer
drops health care coverage altogether.

The Office of the Actuary at the Centers for Medicare and

Medicaid Services estimates that 17 million fewer people would
have employer-based coverage under the Senate bill and 12
million fewer people would have it under the House bill.[8]
Moreover, the sweeping and complex federal regulation of health
insurance embodied in both the House and Senate bills, like the
establishment of an essential benefits package and cost-sharing
 limitations, puts the federal government in control of health care
services and the delivery of care, guaranteeing that virtually every
health plan will change over time.[9]

• Imposing No New Taxes for Working-Class Americans. In his

State of the Union address, the President spoke about 95 percent
of working families receiving a tax cut. The President also
campaigned on the promise that he would never raise taxes on
those earning less than $250,000. But the health care bills include
numerous new taxes that apply regardless of income.

For example, both bills include an individual mandate that would

penalize millions of Americans, likely young and healthy, for not
buying government-approved coverage.[10] The bills also include
various new taxes and fees on consumer products such as medical
devices; pharmaceuticals; and insurance plans.[11] With regard
to the "Cadillac" plan tax, J. D. Foster, tax economist at The
Heritage Foundation, points out:

Despite being a tax on high-end insurance plans, taxpayers with

incomes of $200,000 or less annually will pay over 85 percent of
the additional tax burden under the excise tax. Thus the tax would
clearly violate President Obama's pledge not to raise taxes on
families with incomes below $250,000.[12]

• Reining in Health Care Costs and Reducing the Deficit. The

President continues to stress that health care reform is necessary
to bend the health care cost curve and bring down premiums and
the deficit. Regrettably, the bills before Congress do not meet that
test. The Chief Actuary at the Center for Medicare and Medicaid
Services has found that health care spending would actually
increase by an estimated $289 billion under the House bill and an
estimated $234 billion under the Senate bill between 2010 and
2019.[13]

Moreover, the Lewin Group found that while some families would
save, others would have to spend more. For example, families with
at least one uninsured family member would face $1,225 in new
health care spending under the Senate bill and $1,308 in new
spending under the House bill.[14] In addition, younger families
 would pay an average of $287 more under the Senate bill and
$376 more under the House bill, and families with low health care
costs (less than $1,000 a year) would face $758 more in spending
under the Senate bill and $811 more under the House bill.[15]

Finally, while some estimates claim that the bills would reduce the
deficit, the Lewin Group found that when taking the bills in their
entirety, which means taking into account the expected billion-
dollar boost in Medicare reimbursement for physicians, the bills
would add to the deficit, not reduce it. When the Medicare
physician payment increase is included, the House bill would add
$77 billion to the deficit by 2019 and $591 billion by 2029, and the
Senate bill would add $196 billion to the deficit by 2019 and $765
billion by 2029.[16]

• Strengthening the Fiscal Health of Medicare. The President

claimed in his State of the Union address that the health care bill
would "strengthen Medicare."[17] The Medicare program does
indeed need strengthening.[18] With an estimated long-term
liability of approximately $38 trillion, it faces a fiscal crisis of
monumental proportions. But instead of focusing on restoring
solvency to Medicare, the bills in Congress would take unproven
savings from Medicare to pay for costly, trillion-dollar non-
Medicare health care coverage initiatives.

In addition, the provision that would dramatically reduce

Medicare payments to Medicare Advantage plans would
jeopardize millions of seniors' existing coverage. The Chief
Actuary of Medicare and Medicaid Services estimates that these
Medicare Advantage changes would "result in less generous
benefit packages" and that enrollment would decline by 64
percent under the House bill and 33 percent in the Senate bill.[19]

• Improving the Economy and Creating Jobs. While the President

tries to pivot toward jobs and the economy, the pending health
care proposals create a serious obstacle to achieving success in
these areas. Both bills would impose an employer mandate,
requiring employers to offer health insurance or pay a fine.
Mandates would not only discourage growth in the economy, but
also undermine job creation. According to Mark Wilson of
 Applied Economic Strategies, "The mandates will cost businesses
at least $49 billion per year and put 5.2 million low-wage workers
at risk of unemployment or reduced working hours."[20]

Moreover, mandates and taxes on business would not only

undermine job creation, but also discourage growth in the
economy, as Heritage analysts point out.[21]

How to Pursue Real Bipartisan Reform

To regain the trust of the American people on health care reform, the President and
Congress should abandon their highly unpopular proposals and focus instead on those
areas where an incremental approach can lead to long-term improvements in the health
care system. Specifically, this means concentrating on:

• State-Based Partnerships, Not Centralized Planning.

Health care reform is needed. Too many people slip through the cracks. However,
health care challenges vary greatly across the country. Some states face high
health care costs, while others face high rates of uninsurance. And the challenges
faced by rural states are different from those faced by urban states. It is difficult to
imagine a federal solution that can address the unique challenges in each state
effectively.

Although the current bills claim to promote state flexibility, the reality is that they
would reduce governors and other elected state officials to mere administrators
for federal dictates. They would take away significant state authority with regard
to regulating insurance products and replace it with a massive, federal one-size-
fits-all health care system.

Instead of depending on a federal one-size-fits-all solution, Congress should

embrace a federal- state partnership that would allow states to develop innovative
ways to address their unique health care challenges. The federal government
should set broad, national goals and then give wide leeway for states to try
different approaches and learn from one another.[22]

There are bipartisan proposals that are based on this vision, including bills
introduced by Representatives Tom Price (R-GA) and Tammy Baldwin (D-WI);
Senators George Voinovich (R-OH) and Jeff Bingaman (D-NM); and Senators
Lindsay Graham (R-SC) and Russ Feingold (D-WI).[23] These proposals contrast
sharply with other state-based approaches in which the federal government sets
explicit requirements and imposes on the states the onerous task of administering
its federal reform.

• Fixing Broken Government Health Programs, Not Expanding Them.

Government at all levels, but mostly at the federal level, already controls almost
half of all American health care spending. Reform should begin with Congress
reforming the flawed programs it already controls rather than overhauling one-
sixth of the national economy.

Giant government-run programs like Medicare and Medicaid are fiscally

unsustainable, leaving those who depend on them most vulnerable to inevitable
reimbursement reductions. As noted, Medicare alone has an almost $38 trillion
unfunded liability,[24] and the rapidly growing Medicaid program is displacing
private coverage for low-income persons and squeezing other state budget
priorities like education, transportation, and public safety.[25]

In addition, these programs are too poorly designed to meet the health care needs
of the growing populations that depend on them. Because of traditional
Medicare's large gaps in coverage, approximately nine out of 10 seniors today
must rely on other sources of coverage -- mostly private, employer-based, or other
forms of supplemental coverage. Compared to private coverage, Medicaid
delivers a poor quality of care. Medicaid enrollees have difficulty securing
primary care doctors, largely because of Medicaid's routinely low administrative
payment rates, and are more likely than even the uninsured to arrive in the
emergency room for non-emergency services.[26]

Instead of fixing the structural problems of these government programs, the giant
House and Senate bills would simply expand them. In fact, the House and Senate
bills would add millions of the uninsured to the Medicaid rolls. Medicaid would
become the single largest platform for expanding coverage. Both bills include a
mandatory Medicaid expansion: 133 percent of the federal poverty level (FPL) in
the Senate bill and 150 percent of FPL in the House bill.

In Senate negotiations, there was even consideration of opening the financially

troubled Medicare program to certain individuals over 55 years of age. There are
many problems with such a proposal: a future demand for generous subsidies, a
further government-stimulated erosion of existing private coverage options, and
the guaranteed exacerbation of Medicare's already enormous fiscal troubles.[27]

Congress needs to get serious about its own fiduciary responsibility for the
government programs under its control. In principle, any savings in Medicare and
Medicaid should go back into those programs and be used for reducing their costs
or, in the case of Medicare, long-term unfunded liabilities, not to finance the
expansion of a new government health program [28]

Beyond that, Congress needs to make broader structural changes that get these
giant government entitlements under control and on a path toward reducing their
obligations. For a start, Congress could take the President's proposal for
competitive bidding in Medicare Advantage and broaden it to include traditional
Medicare, making sure that all Medicare beneficiaries operate on a level playing
 field. Congress should also reverse provisions in the recently enacted economic
stimulus bill that deliberately weaken the ability of governors and state legislators
to manage their Medicaid programs more effectively. In addition, Congress
should favor more state flexibility in Medicaid, not less.

• Tax Fairness, Not More Inequity.

There is broad bipartisan agreement, especially among health care economists and
policy experts, liberals and conservatives alike, that the current tax treatment of
employer-based coverage is inequitable and regressive.[29] Today, individuals
who purchase coverage through their place of work receive an unlimited tax break
on the value of their health care benefits. However, those who purchase coverage
on their own receive no comparable tax break, thus undercutting their access to
affordable and portable health insurance. This flaw in existing tax policy affects
millions of Americans and contributes to unnecessarily high rates of uninsurance.

There is a huge difference between adopting tax reform to change the structure
and efficiency of the health insurance markets and simply increasing taxes to raise
revenue to expand government health programs. Congress, instead of reforming
the federal tax treatment of health insurance, seems determined to raise taxes on
the middle class. In the case of the Senate bill, the Senate would impose a new
excise tax on insurance plans for selling "Cadillac" plans. The structure of the
excise tax would create additional inequities, whether through exemptions or
because of state differences.[30] Moreover, this hidden tax would ultimately be
paid by workers, not insurers or employers.

Ideally, Congress should replace the current tax exclusion with a fairer and more
equitable system of universal tax credits. Short of that, Congress should begin to
realign the tax breaks for work-based health insurance with other tax-preferred
forms of compensation by capping the tax exclusion. As explained by Stuart
Butler, Vice President for Domestic and Economic Policy Studies at The Heritage
Foundation, capping the exclusion is a fairer and more transparent way to help
bring "efficiencies and cost reduction in the health care system over time."[31]

Concurrently, Congress should extend some tax relief for those who purchase
coverage on their own and redirect other health care spending to help low-income
individuals and families purchase private health insurance coverage. Both should
be done in a way that is tax- and spending-neutral. Finally, instead of an employer
mandate, Congress should give employers more choices by allowing them to
contribute to their workers' individual health insurance policies without tax
penalties on either workers or their employers.

• Targeted Insurance Reforms, Not a Federal Takeover.

The current health insurance rules do not work for everyone, but the solution is
not for the federal government to take over private health insurance, determining
 in excruciating detail the benefits that must be offered or the premiums that must
be charged or paid. Congress can correct the gaps in the current system to make
the market work better for those it serves without destroying the market for
others.

The proposals before Congress require a massive imposition of new federal rules
and regulations, such as insurance price controls. They would subject all private
health insurance, whether purchased from an insurance company by employer
groups or individuals or provided through an employer or union self-insured plan,
to detailed federal regulation. These "insurance reform" provisions amount to a de
facto nationalization of health insurance, whether or not Congress creates a
"public" plan. Instead of protecting patients, heavy regulation would stifle choice
and competition in the health insurance market.

There are several reasonable health insurance reforms that could be enacted to
bring stability to the marketplace.[32]

First, Congress should simplify the basic rules for extending preexisting-
condition protections for individuals with credible coverage.

Second, Congress should work with the states to balance providing security for
those with credible coverage with mechanisms for insurers who end up with high-
cost enrollees. In addition, individuals should be able to change insurers without
losing protections. For those without credible coverage, Congress should work
with the states to establish a path for these individuals to gain these protections on
a conditional basis.

Finally, Congress should allow individuals who buy their own health insurance to
purchase coverage from outside their states. This would bothallow consumers to
shop on a national basis for health insurance that best suits their needs and expand
the coverage options available to them.

A New Way Forward

America's health care system is in need of change, but not change that consists of
overhauling one-sixth of America's economy by centralizing health care decisions in
Washington.

If the President and Congress are sincere and the health care summit is going to be a
success, they must set aside these highly unpopular proposals and shift direction by
taking an incremental approach to health care reform: one that puts health care reform on
a path toward empowering individuals and families to control more of the financing and
delivery of health care.

Nina Owcharenko is Deputy Director of the Center for Health Policy Studies at The
Heritage Foundation.
Show references in this report

http://www.heritage.org/Research/Reports/2010/02/The-Health-Care-
Summit-A-Chance-to-Start-Over-and-Get-It-Right
_____________________________________________________________________

What the House Would Have to Swallow in the Senate

Bill
Posted March 8th, 2010 at 5:00pm in Health Care with 23 comments

Amidst all the intense speculation about quickly passing the President’s health care
agenda through the Budget Reconciliation process before the Easter Recess, ordinary
Americans should remember one thing: the House of Representatives must first pass the
2,700-page, $2.5 trillion, Senate health bill. So, the next big step in the national health
care debate is floor action in the House of Representatives, where House Speaker Nancy
Pelosi must round up at least 216 votes.

Heritage analysts have conducted some extensive research and analysis of the provisions
of the giant Senate bill. If the House passes the Senate bill and it goes to the President’s
desk for signature, it then would become the law of the land. For all intents and purposes,
the legislative debate would then be over.

Regardless of Administration or Senate leadership promises to “fix” the new law (the
Senate bill) through the Budget Reconciliation process, there are no guarantees. Any
“fixes”—if they did come about—would have to survive another round of Senate floor
action. So it is worth recalling what the Senate bill would mean for Americans were it to
become law.

• Failure to address the drivers behind rising spending in health

care. The Senate bill attempts to control costs by imposing heavy
new federal regulations and punitive taxes on high-ticket medical
expenditures such as medical devices, prescription drugs, and
high-cost insurance plans. This top-down approach focuses on the
symptoms, rather than the causes, of increasing health spending.
Health insurance premiums, particularly in the individual
market, will go up.
• An individual mandate with disastrous unintended consequences.
To expand coverage, the bill includes guaranteed issue of coverage
combined with an individual mandate. However, rather than
encourage “young invincibles” to carry insurance, the mandate,
which would be less expensive than insurance coverage, would
create incentives for young and healthy adults to pay the penalty
rather than buy and carry a costly health plan. This would
destabilize the insurance market by reducing the spread of risk,
leaving the elderly and sickly in insurance risk pools. Premiums
would thus skyrocket—further discouraging healthy individuals
from obtaining care.
• Stringent federal requirement push private insurers towards
insolvency. The combination of an excise tax on high-cost
insurance plans, a federally-defined minimum medical-loss ratio,
and federally-defined required benefits could push private
insurers to going out of business, should they be incapable of
meeting all three requirements and simultaneously covering the
cost of enrollees’ care. Alternatively, it could mean that health
insurers, “too big to fail”, would become the next big industry
recipients of taxpayer bailouts.
• A public option in disguise. The Senate bill requires the Office of
Personnel Management to establish and manage health plans in
the state exchanges to compete against private health plans. The
bill expands the powers of this federal agency. This could lead to a
de facto public option with federally defined premiums, benefits,
etc: private insurance in name only. Of course, if the government
sponsored health plans do not effectively compete against the
 other plans, it is likely that they will also be eligible for future
federal bailouts at the taxpayers’ expense.
• Government subsidies which penalize marriage. The structure of
the subsidies offered by the Senate bill to purchase insurance are
inequitable, offering more financial assistance to non-married
couples than to a married couple with comparable income. This is
bizarre social policy.
• Trillions in new federal spending, questionable savings.
Congressional liberals claim that their health care proposals are
deficit neutral. In fact, they are based on budgetary gimmicks and
hidden costs. When these are accounted for, the real cost of the
Senate bill skyrockets, further augmented by the implausibility of
the many promised savings in the bill.
• A special Medicaid deal for Nebraska. The Senate bill would force
all federal taxpayers to cover the extra cost of expanding
Medicaid in Nebraska. It is worthy to note that the President’s
proposal would extend the taxpayer subsidies to all states,
increasing the total cost of the bill.
• Expanding Medicaid on the states’ budgets. Though the federal
government would initially cover most of the cost of expanding
Medicaid, states would eventually have to pick up a portion of the
cost. This comes at a time when states are cutting spending in
Medicaid and other areas to accrue savings and avoid increasing
debt. In fact, we show that states could save significantly if they
were to drop their Medicaid programs altogether, which could
become an appealing option after adoption of the Senate bill.
• Encourages employment discrimination. The structure of the
bill’s employer mandate would discourage employers from hiring
workers from low-income families and from offering insurance to
all employees if a large portion of a firm’s workforce consists of
low-income workers.
• Disparate federal assistance for families of comparable income.
The generous subsidies available to purchase insurance in the
exchanges would be available to only a select few of the millions
that fall within the eligible income bracket. This would result in
thousands of dollars in additional federal assistance for some
individuals and little to no assistance for others, regardless of
equal income.
• Taxing families’ health benefits. An excise tax on high-cost
insurance plans is included in the Senate bill with the intention of
 lowering premiums. However, this tax on insurers would be
passed down to the consumer, further raising premiums.
• Numerous new taxes—and not just for the wealthy. President
Obama has promised not to introduce new taxes that would affect
the middle-class, but the Senate bill would impose several new
punitive taxes on to Americans of every financial background.

These policies are all embodied in the Senate health bill. For further analysis of the
Senate bill, click here. Congress should take a different route and start over to do health
care reform right.

http://blog.heritage.org/2010/03/08/what-the-house-would-have-to-swallow-
in-the-senate-bill/

http://fixhealthcarepolicy.com/reality/

______________________________________________

Breaking: Excerpts from Reconciliation Bill

Page 7
TITLE IV—AMENDMENTS TO INTERNAL REVENUE CODE OF 1986

Subtitle A—Shared Responsibility

PART 1—INDIVIDUAL RESPONSIBILITY

Sec. 401. Tax on individuals without acceptable health care coverage.

PART 2—EMPLOYER RESPONSIBILITY

Sec. 411. Election to satisfy health coverage participation requirements.

Sec. 412. Responsibilities of nonelecting employers.

Subtitle B—Credit for Small Business Employee Health Coverage Expenses

Sec. 421. Credit for small business employee health coverage expenses.
Subtitle C—Disclosures to Carry Out Health Insurance
Exchange Subsidies

Sec. 431. Disclosures to carry out health insurance exchange subsidies.

Subtitle D—Other Revenue Provisions

PART 1—GENERAL PROVISIONS

Sec. 441. Surcharge on high income individuals.

Sec. 442. Distributions for medicine qualified only if for prescribed drug or insulin.

Sec. 443. Delay in application of worldwide allocation of interest.

PART 2—PREVENTION OF TAX AVOIDANCE

Sec. 451. Limitation on treaty benefits for certain deductible payments.

Sec. 452. Codification of economic substance doctrine.

Sec. 453. Penalties for underpayments.

Page 8

PART 3—PARITY IN HEALTH BENEFITS

Sec. 461. Certain health related benefits applicable to spouses and dependents
extended to eligible beneficiaries.

1054

19 SEC. 114. NONDISCRIMINATION IN BENEFITS; PARITY IN

20 MENTAL HEALTH AND SUBSTANCE ABUSE
21 DISORDER BENEFITS.

22 (a) NONDISCRIMINATION IN BENEFITS.—A qualified

23 health benefits plan shall comply with standards estab
24 lished by the Commissioner to prohibit discrimination in
25 health benefits or benefit structures for qualified health

1055

1 benefits plans, building from sections 702 of Employee

2 Retirement Income Security Act of 1974, 2702 of the
3 Public Health Service Act, and section 9802 of the Inter
4 nal Revenue Code of 1986.

5 (b) PARITY IN MENTAL HEALTH AND SUBSTANCE

6 ABUSE DISORDER BENEFITS.—To the extent such provi
7 sions are not superceded by or inconsistent with subtitle
8 C, the provisions of section 2705 (other than subsections
9 (a)(1), (a)(2), and (c)) of section 2705 of the Public
10 Health Service Act shall apply to a qualified health bene
11 fits plan, regardless of whether it is offered in the indi
12 vidual or group market, in the same manner as such provi
13 sions apply to health insurance coverage offered in the
14 large group market.

1223

11 TITLE IV—AMENDMENTS TO IN
12 TERNAL REVENUE CODE OF
13 1986

14 Subtitle A—Shared Responsibility

15 PART 1—INDIVIDUAL RESPONSIBILITY

16 SEC. 401. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE

17 HEALTH CARE COVERAGE.

18 (a) IN GENERAL.—Subchapter A of chapter 1 of the

19 Internal Revenue Code of 1986 is amended by adding at
20 the end the following new part:

21 ‘‘PART VIII—HEALTH CARE RELATED TAXES

‘‘SUBPART A. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH

CARE COVERAGE.

22 ‘‘Subpart A—Tax on Individuals Without Acceptable

23 Health Care Coverage

‘‘Sec. 59B. Tax on individuals without acceptable health care coverage.

1224

1 ‘‘SEC. 59B. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE

2 HEALTH CARE COVERAGE.
3 ‘‘(a) TAX IMPOSED.—In the case of any individual
4 who does not meet the requirements of subsection (d) at
5 any time during the taxable year, there is hereby imposed
6 a tax equal to 2.5 percent of the excess of—

7 ‘‘(1) the taxpayer’s modified adjusted gross in

8 come for the taxable year, over

9 ‘‘(2) the amount of gross income specified in

10 section 6012(a)(1) with respect to the taxpayer.

11 ‘‘(b) LIMITATIONS.—

12 ‘‘(1) TAX LIMITED TO AVERAGE PREMIUM.—

13 ‘‘(A) IN GENERAL.—The tax imposed

14 under subsection (a) with respect to any tax
15 payer for any taxable year shall not exceed the
16 applicable national average premium for such
17 taxable year.

18 ‘‘(B) APPLICABLE NATIONAL AVERAGE

19 PREMIUM.—

20 ‘‘(i) IN GENERAL.—For purposes of

21 subparagraph (A), the ‘applicable national
22 average premium’ means, with respect to
23 any taxable year, the average premium (as
24 determined by the Secretary, in coordina
25 tion with the Health Choices Commis
26 sioner) for self-only coverage under a basic

1225

1 plan which is offered in a Health Insur

2 ance Exchange for the calendar year in
3 which such taxable year begins.

4 ‘‘(ii) FAILURE TO PROVIDE COVERAGE

5 FOR MORE THAN ONE INDIVIDUAL.—In the
6 case of any taxpayer who fails to meet the
7 requirements of subsection (e) with respect
8 to more than one individual during the tax
9 able year, clause (i) shall be applied by
10 substituting ‘family coverage’ for ‘self-only
11 coverage’.
12 ‘‘(2) PRORATION FOR PART YEAR FAILURES.—
13 The tax imposed under subsection (a) with respect
14 to any taxpayer for any taxable year shall not exceed
15 the amount which bears the same ratio to the
16 amount of tax so imposed (determined without re
17 gard to this paragraph and after application of para
18 graph (1)) as—

19 ‘‘(A) the aggregate periods during such

20 taxable year for which such individual failed to
21 meet the requirements of subsection (d), bears
22 to

23 ‘‘(B) the entire taxable year.

24 ‘‘(c) EXCEPTIONS.—

1226

1 ‘‘(1) DEPENDENTS.—Subsection (a) shall not

2 apply to any individual for any taxable year if a de
3 duction is allowable under section 151 with respect
4 to such individual to another taxpayer for any tax
5 able year beginning in the same calendar year as
6 such taxable year.

7 ‘‘(2) NONRESIDENT ALIENS.—Subsection (a)

8 shall not apply to any individual who is a non
9 resident alien.

10 ‘‘(3) INDIVIDUALS RESIDING OUTSIDE UNITED

11 STATES.—Any qualified individual (as defined in
12 section 911(d)) (and any qualifying child residing
13 with such individual) shall be treated for purposes of
14 this section as covered by acceptable coverage during
15 the period described in subparagraph (A) or (B) of
16 section 911(d)(1), whichever is applicable.

17 ‘‘(4) INDIVIDUALS RESIDING IN POSSESSIONS

18 OF THE UNITED STATES.—Any individual who is a
19 bona fide resident of any possession of the United
20 States (as determined under section 937(a)) for any
21 taxable year (and any qualifying child residing with
22 such individual) shall be treated for purposes of this
23 section as covered by acceptable coverage during
24 such taxable year.
25 ‘‘(5) RELIGIOUS CONSCIENCE EXEMPTION.—

1227

1 ‘‘(A) IN GENERAL.—Subsection (a) shall

2 not apply to any individual (and any qualifying
3 child residing with such individual) for any pe
4 riod if such individual has in effect an exemp
5 tion which certifies that such individual is a
6 member of a recognized religious sect or divi
7 sion thereof described in section 1402(g)(1) and
8 an adherent of established tenets or teachings
9 of such sect or division as described in such sec
10 tion.

11 ‘‘(B) EXEMPTION.—An application for the

12 exemption described in subparagraph (A) shall
13 be filed with the Secretary at such time and in
14 such form and manner as the Secretary may
15 prescribe. Any such exemption granted by the
16 Secretary shall be effective for such period as
17 the Secretary determines appropriate.

18 ‘‘(d) ACCEPTABLE COVERAGE REQUIREMENT.—

19 ‘‘(1) IN GENERAL.—The requirements of this

20 subsection are met with respect to any individual for
21 any period if such individual (and each qualifying
22 child of such individual) is covered by acceptable
23 coverage at all times during such period.

1228

1 ‘‘(2) ACCEPTABLE COVERAGE.—For purposes

2 of this section, the term ‘acceptable coverage’ means
3 any of the following:

4 ‘‘(A) QUALIFIED HEALTH BENEFITS PLAN

5 COVERAGE.—Coverage under a qualified health
6 benefits plan (as defined in section 100(c) of
7 the America’s Affordable Health Choices Act of
8 2009).

9 ‘‘(B) GRANDFATHERED HEALTH INSUR

10 ANCE COVERAGE; COVERAGE UNDER GRAND
11 FATHERED EMPLOYMENT-BASED HEALTH
12 PLAN.—Coverage under a grandfathered health
13 insurance coverage (as defined in subsection (a)
14 of section 102 of the America’s Affordable
15 Health Choices Act of 2009) or under a current
16 employment-based health plan (within the
17 meaning of subsection (b) of such section).

18 ‘‘(C) MEDICARE.—Coverage under part A

19 of title XVIII of the Social Security Act.

20 ‘‘(D) MEDICAID.—Coverage for medical as

21 sistance under title XIX of the Social Security
22 Act.

23 ‘‘(E) MEMBERS OF THE ARMED FORCES

24 AND DEPENDENTS (INCLUDING TRICARE).—
25 Coverage under chapter 55 of title 10, United

1229

1 States Code, including similar coverage fur

2 nished under section 1781 of title 38 of such
3 Code.

4 ‘‘(F) VA.—Coverage under the veteran’s

5 health care program under chapter 17 of title
6 38, United States Code, but only if the cov
7 erage for the individual involved is determined
8 by the Secretary in coordination with the
9 Health Choices Commissioner to be not less
10 than the level specified by the Secretary of the
11 Treasury, in coordination with the Secretary of
12 Veteran’s Affairs and the Health Choices Com
13 missioner, based on the individual’s priority for
14 services as provided under section 1705(a) of
15 such title.

16 ‘‘(G) OTHER COVERAGE.—Such other

17 health benefits coverage as the Secretary, in co
18 ordination with the Health Choices Commis
19 sioner, recognizes for purposes of this sub
20 section.

21 ‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.—

22 ‘‘(1) QUALIFYING CHILD.—For purposes of this
23 section, the term ‘qualifying child’ has the meaning
24 given such term by section 152(c).

1230

1 ‘‘(2) BASIC PLAN.—For purposes of this sec

2 tion, the term ‘basic plan’ has the meaning given
3 such term under section 100(c) of the America’s Af
4 fordable Health Choices Act of 2009.

5 ‘‘(3) HEALTH INSURANCE EXCHANGE.—For

6 purposes of this section, the term ‘Health Insurance
7 Exchange’ has the meaning given such term under
8 section 100(c) of the America’s Affordable Health
9 Choices Act of 2009, including any State-based
10 health insurance exchange approved for operation
11 under section 208 of such Act.

12 ‘‘(4) FAMILY COVERAGE.—For purposes of this

13 section, the term ‘family coverage’ means any cov
14 erage other than self-only coverage.

15 ‘‘(5) MODIFIED ADJUSTED GROSS INCOME.—

16 For purposes of this section, the term ‘modified ad
17 justed gross income’ means adjusted gross income—

18 ‘‘(A) determined without regard to section

19 911, and

20 ‘‘(B) increased by the amount of interest

21 received or accrued by the taxpayer during the
22 taxable year which is exempt from tax.

23 ‘‘(6) NOT TREATED AS TAX IMPOSED BY THIS

24 CHAPTER FOR CERTAIN PURPOSES.—The tax im
25 posed under this section shall not be treated as tax

1231

1 imposed by this chapter for purposes of determining

2 the amount of any credit under this chapter or for
3 purposes of section 55.

4 ‘‘(f) REGULATIONS.—The Secretary shall prescribe

5 such regulations or other guidance as may be necessary
6 or appropriate to carry out the purposes of this section,
7 including regulations or other guidance (developed in co8
ordination with the Health Choices Commissioner) which
9 provide—

10 ‘‘(1) exemption from the tax imposed under

11 subsection (a) in cases of de minimis lapses of ac12
ceptable coverage, and

13 ‘‘(2) a process for applying for a waiver of the

14 application of subsection (a) in cases of hardship.’’.

15 (b) INFORMATION REPORTING.—

16 (1) IN GENERAL.—Subpart B of part III of

17 subchapter A of chapter 61 of such Code is amended
18 by inserting after section 6050W the following new
19 section:

20 ‘‘SEC. 6050X. RETURNS RELATING TO HEALTH INSURANCE

21 COVERAGE.

22 ‘‘(a) REQUIREMENT OF REPORTING.—Every person

23 who provides acceptable coverage (as defined in section
24 59B(d)) to any individual during any calendar year shall,
25 at such time as the Secretary may prescribe, make the

1232

1 return described in subsection (b) with respect to such in

2 dividual.

3 ‘‘(b) FORM AND MANNER OF RETURNS.—A return

4 is described in this subsection if such return—

5 ‘‘(1) is in such form as the Secretary may pre

6 scribe, and

7 ‘‘(2) contains—

8 ‘‘(A) the name, address, and TIN of the

9 primary insured and the name of each other in
10 dividual obtaining coverage under the policy,
11 ‘‘(B) the period for which each such indi
12 vidual was provided with the coverage referred
13 to in subsection (a), and

14 ‘‘(C) such other information as the Sec

15 retary may require.

16 ‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID

17 UALS WITH RESPECT TO WHOM INFORMATION IS RE
18 QUIRED.—Every person required to make a return under
19 subsection (a) shall furnish to each primary insured whose
20 name is required to be set forth in such return a written
21 statement showing—

22 ‘‘(1) the name and address of the person re

23 quired to make such return and the phone number
24 of the information contact for such person, and

1233

1 ‘‘(2) the information required to be shown on

2 the return with respect to such individual.
3 The written statement required under the preceding sen
4 tence shall be furnished on or before January 31 of the
5 year following the calendar year for which the return
6 under subsection (a) is required to be made.

7 ‘‘(d) COVERAGE PROVIDED BY GOVERNMENTAL

8 UNITS.—In the case of coverage provided by any govern
9 mental unit or any agency or instrumentality thereof, the
10 officer or employee who enters into the agreement to pro
11 vide such coverage (or the person appropriately designated
12 for purposes of this section) shall make the returns and
13 statements required by this section.’’.

14 (2) PENALTY FOR FAILURE TO FILE.—

15 (A) RETURN.—Subparagraph (B) of sec

16 tion 6724(d)(1) of such Code is amended by
17 striking ‘‘or’’ at the end of clause (xxii), by
18 striking ‘‘and’’ at the end of clause (xxiii) and
19 inserting ‘‘or’’, and by adding at the end the
20 following new clause:
21 ‘‘(xxiv) section 6050X (relating to re
22 turns relating to health insurance cov
23 erage), and’’.

24 (B) STATEMENT.—Paragraph (2) of sec

25 tion 6724(d) of such Code is amended by strik

1234

1 ing ‘‘or’’ at the end of subparagraph (EE), by

2 striking the period at the end of subparagraph
3 (FF) and inserting ‘‘, or’’, and by inserting
4 after subparagraph (FF) the following new sub
5 paragraph:

6 ‘‘(GG) section 6050X (relating to returns

7 relating to health insurance coverage).’’.
8 (c) RETURN REQUIREMENT.—Subsection (a) of sec
9 tion 6012 of such Code is amended by inserting after
10 paragraph (9) the following new paragraph:

11 ‘‘(10) Every individual to whom section 59B(a)

12 applies and who fails to meet the requirements of
13 section 59B(d) with respect to such individual or
14 any qualifying child (as defined in section 152(c)) of
15 such individual.’’.

16 (d) CLERICAL AMENDMENTS.—

17 (1) The table of parts for subchapter A of chap

18 ter 1 of the Internal Revenue Code of 1986 is
19 amended by adding at the end the following new
20 item:

‘‘PART VIII. HEALTH CARE RELATED TAXES.’’.

21 (2) The table of sections for subpart B of part

22 III of subchapter A of chapter 61 is amended by
23 adding at the end the following new item:
‘‘Sec. 6050X.Returns relating to health insurance coverage.’’.

1235

1 (e) SECTION 15 NOT TO APPLY.—The amendment

2 made by subsection (a) shall not be treated as a change
3 in a rate of tax for purposes of section 15 of the Internal
4 Revenue Code of 1986.

5 (f) EFFECTIVE DATE.—

6 (1) IN GENERAL.—The amendments made by

7 this section shall apply to taxable years beginning
8 after December 31, 2012.

9 (2) RETURNS.—The amendments made by sub

10 section (b) shall apply to calendar years beginning
11 after December 31, 2012.

1253

13 Subtitle D—Other Revenue

14 Provisions

15 PART 1—GENERAL PROVISIONS

16 SEC. 441. SURCHARGE ON HIGH INCOME INDIVIDUALS.

17 (a) IN GENERAL.—Part VIII of subchapter A of

18 chapter 1 of the Internal Revenue Code of 1986, as added
19 by this title, is amended by adding at the end the following
20 new subpart:

21 ‘‘Subpart B—Surcharge on High Income Individuals

‘‘Sec. 59C.Surcharge on high income individuals.

22 ‘‘SEC. 59C. SURCHARGE ON HIGH INCOME INDIVIDUALS.

23 ‘‘(a) GENERAL RULE.—In the case of a taxpayer

24 other than a corporation, there is hereby imposed (in addi

1254

1 tion to any other tax imposed by this subtitle) a tax equal

2 to—

3 ‘‘(1) 1 percent of so much of the modified ad

4 justed gross income of the taxpayer as exceeds
5 $350,000 but does not exceed $500,000,
6 ‘‘(2) 1.5 percent of so much of the modified ad
7 justed gross income of the taxpayer as exceeds
8 $500,000 but does not exceed $1,000,000, and

9 ‘‘(3) 5.4 percent of so much of the modified ad

10 justed gross income of the taxpayer as exceeds
11 $1,000,000.

12 ‘‘(b) TAXPAYERS NOT MAKING A JOINT RETURN.—

13 In the case of any taxpayer other than a taxpayer making
14 a joint return under section 6013 or a surviving spouse
15 (as defined in section 2(a)), subsection (a) shall be applied
16 by substituting for each of the dollar amounts therein
17 (after any increase determined under subsection (e)) a dol
18 lar amount equal to—

19 ‘‘(1) 50 percent of the dollar amount so in ef

20 fect in the case of a married individual filing a sepa
21 rate return, and

22 ‘‘(2) 80 percent of the dollar amount so in ef

23 fect in any other case.

24 ‘‘(c) ADJUSTMENTS

Complete text of the bill: at:

http://budget.house.gov/doc-library/FY2010/03.15.2010_reconciliation2010.PDF

______________________________________________

December 27, 2009

Is it Unconstitutional to Mandate Health Insurance?

By MARK HALL

Is it unconstitutional to mandate health insurance? It seems

unprecedented to require citizens to purchase insurance simply because they live in the
U.S. (rather than as a condition of driving a car or owning a business, for instance).
Therefore, several credentialed, conservative lawyers think that compulsory health
insurance is unconstitutional. See here and here and here. Their reasoning is
unconvincing and deeply flawed. Since I’m writing in part for a non-legal audience, I’ll
start with some basics and provide a lay explanation. (Go here for a fuller account).

Constitutional attacks fall into two basic categories: (1) lack of federal power (Congress
simply lacks any power to do this under the main body of the Constitution); and (2)
violation of individual rights protected by the “Bill of Rights.” Considering (1), Congress
has ample power and precedent through the Constitution’s “Commerce Clause” to
regulate just about any aspect of the national economy. Health insurance is
quintessentially an economic good. The only possible objection is that mandating its
purchase is not the same as “regulating” its purchase, but a mandate is just a stronger
form of regulation. When Congressional power exists, nothing in law says that stronger
actions are less supported than weaker ones.

An insurance mandate would be enforced through income tax laws, so even if a simple
mandate were not a valid “regulation,” it still could fall easily within Congress’s plenary
power to tax or not tax income. For instance, anyone purchasing insurance could be given
an income tax credit, and those not purchasing could be assessed an income tax penalty.
The only possible constitutional restriction is an archaic provision saying that if Congress
imposes anything that amounts to a “head tax” or “poll tax” (that is, taxing people simply
as people rather than taxing their income), then it must do so uniformly (that is, the same
amount per person). This technical restriction is easily avoided by using income tax laws.
Purists complain that taxes should be proportional to actual income and should not be
used mainly to regulate economic behavior, but our tax code, for better or worse, is
riddled with such regulatory provisions and so they are clearly constitutional.

Arguments about federal authority deal mainly with states’ rights and sovereign power,
but the real basis for opposition is motivated more by sentiments about individual rights -
the notion that government should not use its recognized authority to tell people how to
spend their money. This notion of economic liberty had much greater traction in a prior
era, but it has little basis in modern constitutional law. Eighty years ago, the Supreme
Court used the concept of “substantive due process” to protect individual economic
liberties, but the Court has thoroughly and repeatedly repudiated this body of law since
the 1930s. Today, even Justice Scalia regards substantive due process as an “oxymoron.”

Under both liberal and conservative jurisprudence, the Constitution protects individual
autonomy strongly only when “fundamental rights” are involved. There may be
fundamental rights to decide about medical treatments, but having insurance does not
require anyone to undergo treatment. It only requires them to have a means to pay for any
treatment they might choose to receive. The liberty in question is purely economic and
has none of the strong elements of personal or bodily integrity that invoke Constitutional
protection. In short, there is no fundamental right to be uninsured, and so various
arguments based on the Bill of Rights fall flat. The closest plausible argument is one
based on a federal statute protecting religious liberty, but Congress is Constitutionally
free to override one statute with another.
If Constitutional concerns still remain, the simplest fix (ironically) would be simply to
enact social insurance (as we currently do for Medicare and social security retirement)
but allow people to opt out if they purchase private insurance. Politically, of course, this
is not in the cards, but the fact that social insurance faces none of the alleged
Constitutional infirmities of mandating private insurance points to this basic realization:
Congress is on solid Constitutional ground in expanding health insurance coverage in
essentially any fashion that is politically and socially feasible.

Mark A. Hall, J.D., is the Fred D. & Elizabeth L. Turnage Professor of Law at Wake
Forest University School of Law. He is one of the nation’s leading scholars in the areas
of health care law and policy and medical and bioethics and a frequent contributor to
Health Reform Watch. The author or editor of fifteen books, including Making Medical
Spending Decisions (Oxford University Press), and Health Care Law and Ethics (Aspen),
he is currently engaged in research in the areas of consumer-driven health care,
doctor/patient trust, insurance regulation, and genetics. He has published scholarship in
the law reviews at Berkeley, Chicago, Duke, Michigan, Pennsylvania, and Stanford, and
his articles have been reprinted in a dozen casebooks and anthologies.

Professor Hall also teaches in the MBA program at the Babcock School and is on the
research faculty at Wake Forest’s Medical School. He regularly consults with
government officials, foundations and think tanks about health care public policy issues,
and was recently awarded the American Society of Law, Medicine and Ethics
distinguished teaching award.

http://www.thehealthcareblog.com/the_health_care_blog/2009/12/is-it-
unconstitutional-to-mandate-health-insurance.html

_____________________________________________________________________
March 18, 2010

ObamaCare is Tyranny, Not Legislation

By Janice Shaw Crouse
What we're seeing in Washington, D.C. is not "politics as usual" with the arm twisting
and "horse-trading" that is typical in getting a bill passed; instead, it is ideological
warfare. What Obama, Reid, and Pelosi are doing is not legislating; it is an act of tyranny
-- overturning all the rules and principles of government in a representative democracy.
Attempting to pass the Senate version of ObamaCare in the House under the ironically
named "Slaughter Rule" (to circumvent the objections of the Stupak coalition to taxpayer
funding of abortion) is an exercise in raw power akin to the many acts of judicial tyranny
the American public has endured over the last forty years from judges who have little
regard for the Constitution.
Apparently Obama, Reid, and Pelosi aren't worried about losing control of Congress in
2010 or even the presidency in 2012, because their higher goal is to irrevocably
institutionalize their ideology. Once government control of health care is established,
their leftist principles will be implemented by an unelected bureaucracy that rules without
accountability to the general public, whether or not the Democratic Party is the majority
in Congress or holds the presidency.

Obama, Reid, and Pelosi have learned nothing from history; they are as blind to their own
tyranny as were King George and the British Parliament. They show no comprehension
of the moral outrage that will ignite in this country if they ram through ObamaCare, a bill
that requires taxpayer funding for abortion, usurps an individual's right to choose her own
personal health care options, and saddles the nation with a growing flood of debt which
will drown our children and grandchildren.

Last Friday morning, you could see workers beginning to set up barricades around the
Capitol in preparation for the demonstrations they expect in response to the Democrats'
autocratic actions. They mistakenly think that the Tea Party protests are temporary
flareups that mere barricades can contain, but their legislative and executive tyranny is
unleashing emotions that have the potential to rival the antislavery movement of the Civil
War era and the Civil Rights protests of the 1960s. Having abandoned those
transcendent moral principles upon which this nation was founded for a false ideology of
their own imagining, these people have no understanding of the righteous fury that will
build in this nation when her citizens see their government sanction morally reprehensible
acts.

Leaders across the nation --- nearly half a million strong --- have already signed the
Manhattan Declaration declaring that moral principles take precedence over laws that
ignore the value of human life and individual freedom. These deeply-held religious
beliefs are inviolable, non-negotiable, and protected under the U.S. Constitution.
Thousands of America's Orthodox, Catholic, and evangelical Christian leaders have laid
down a gauntlet: By reaffirming the fundamental truth that life and liberty come not from
man-made laws, but from God, we have joined together "to defend the sanctity of life, the
dignity of marriage as the conjugal union of husband and wife, and the rights of
conscience and religious liberty."

We have, in good faith, expressed our objections and righteous indignation over and over
again, only to be repeatedly rebuffed and ignored. Poll after poll demonstrates that U.S.
citizens are strongly opposed to ObamaCare and its impact on our nation. Yet the
Obama/Reid/Pelosi axis is determined to ignore the will of the people that they were
elected to represent and to dictatorially impose on the nation their ideas of what's best.
They have lived so long in the rarefied air of elitism that they think that the "masses" will
simply accept their "superior wisdom." These unprecedented assaults on basic American
principles compel Manhattan Declaration signers to forcefully mount a defense of human
life, marriage, and religious freedom.
Manhattan Declaration-signers have said that civil disobedience is necessary when faced
with gravely unjust laws requiring submission to other laws that violate our principled
moral beliefs about abortion, marriage, and religious freedom. As the Manhattan
Declaration states, "We will fully and ungrudgingly render to Caesar what is Caesar's.
But under no circumstances will we render to Caesar what is God's."

Janice Shaw Crouse, Ph.D., author of Children at Risk, heads the think-tank for Concerned Women for
America.
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______________________________________________
March 15, 2010

Pelosi and Marx on 'Freedom'

By Ed Kaitz
Nancy Pelosi wants to give birth to a new kind of freedom in America -- the freedom
from being "job-locked."

In an interview with Rachel Maddow Thursday evening, Pelosi asked Americans to

"think" about a bright, new, liberating kind of utopia:

Think of an economy where people could be an artist or a photographer, a writer without

worrying about keeping their day job in order to have health insurance. Or that people
could start a business and be entrepreneurial and take risks, but not be job-locked because
a child has a child has asthma or diabetes or someone in the family is bipolar. You name
it, any condition is job-locking.

Maddow was so overwhelmed and smitten with Pelosi's remarks that she posted the
interview on her website under the following title: "Finally! Pelosi frames health reform
for the win. (Hint: It's about freedom.)"

The problem with Pelosi's remarks, however, is that from hindsight, they are not bright,
new, or liberating. On the contrary, almost identical words were penned over a hundred
years ago by another champion of economic "freedom": Karl Marx. Marx criticized the
private economy because it led to the "renunciation of life and of human needs."

Like Pelosi, Marx was deeply troubled by an economic system that left most people job-
locked and unable to satisfy their "human need" to become more authentic. In other
words, the more you have to work, said Marx, "the less you eat, drink, buy books, go to
the theater or to balls, or to the public house, and the less you think, love, theorize, sing,
paint, fence, etc."
Marx chastised the middle class in England for being "so incurably debased by self-
interest" and thirsty for a "quick profit" that they were incapable of recognizing the
alienation from their true selves. Communist society, then, was the cure that could
liberate us from our false selves and usher in a new kind of creativity and authenticity.
Says Marx:

[C]ommunist society ... regulates the general production and thus makes it possible for
me to do one thing today and another tomorrow, to hunt in the morning, fish in the
afternoon, rear cattle in the evening, criticize after dinner, as the spirit moves me ..."

This kind of sheer lunacy could have been hatched only by an unemployed academic and
journalist like Marx, who, by the way, was supported financially in his authentically job-
liberated struggle against capitalism by his wealthy colleague Friedrich Engels. What's
most disturbing is the number of wild-eyed crusaders, both then and now, who have
fallen for Marx's creative definition of "freedom."

As for that nagging issue of just how "communist society" will "regulate the general
production" after the socialist revolution, Engels had this to say:

The community will have to calculate what it can produce with the means at its disposal;
and in accordance with the relationship of this productive power to the mass of
consumers it will determine how far it has to raise or lower production.

In other words, leave it to the "community" (government) to worry about levels of

production and consumption in order for the newly liberated and formerly "job-locked"
citizens to pursue their lifelong dreams of being artists, writers, or photographers.

Friedrich Hayek wrote about this subtle shift in the word "freedom" over sixty years ago.
He argued that as socialists began coming under fire for promoting servitude and control,
they made the creative decision to harness to their "cart the strongest of all political
motives -- the craving for freedom." For Hayek,

The subtle change in meaning to which the word ‘freedom' was subjected in order that
this argument sound plausible is important. To the great apostles of political freedom the
word had meant freedom from coercion, freedom from the arbitrary power of other men,
release from the ties which left the individual no choice but obedience to the orders of a
superior to whom he was attached.

For the socialists, however, "before man could be truly free, the 'despotism of physical
want' had to be broken, the ‘restraints of the economic system' relaxed." For Hayek, this
new definition of freedom was simply "another name for the old demand for an equal
distribution of wealth."

Hayek asks a fascinating question that each and every American needs to consider before
deciding whether to return any Obamacare-supporting politician to power this fall:
Who can seriously doubt ... that the power which a multi-millionaire, who may be my
neighbor and perhaps my employer, has over me is very much less than that which the
smallest [bureaucrat] possess who wields the coercive power of the state and on whose
discretion it depends whether and how I am to be allowed to live or to work?

Nancy Pelosi's theory of "economic freedom," you see, requires legions of new
bureaucrats wielding the power of the state so that you can be liberated from your
inauthentic, job-locked selves. If we take freedom in its true meaning -- as freedom from
coercion -- we see instantly, however, that indeed, I am less coerced by a neighboring
millionaire than by the tiniest government bureaucrat deciding where and when I can see
a doctor, go to school, or become job-locked.

Years ago, before he died, I asked my father what he liked most about working in the
home-building industry. After having been "job-locked" in the housing industry for over
twenty years, he told me the following: "For me, the best thing of all is seeing a new
family move into one of our homes."

My father wasn't a writer or an artist, but he was a kind, decent, hardworking man who
loved his job and his family. Rather than struggle against the system and neglect his
children like Marx did, my father felt it was part of his job, not the government's, to take
care of his family -- including our health care.

Sounds pretty authentic to me.

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______________________________________________
March 13, 2010

The Big Lie of Health Care Reform

By Robert Gelinas
One-sixth of the U.S. economy is threatened with a takeover by the federal government
on the erroneous rationale that "tens of millions of people in the U.S. are without health
care insurance, and therefore are being denied access to adequate health care." Unjust!
Unfair!

This is, of course, an absolute lie. Nor does some large number of people "die every day
from lack of health insurance coverage." That too is a lie.

Access to the health care providers (professional services) and medicine (products) of the
best health care system in the world is already universal and available to every U.S.
citizen, legal resident, illegal alien, prisoner, detainee, or visitor -- regardless of whether
anyone is covered by any insurance policy or health plan. For heaven's sake, even the
illegal aliens have figured out that anyone who walks into an emergency room is required
by law (EMTALA) to be treated, regardless of the person's ability to pay.

The Big Lie: Without health care insurance, there is no access to health care.

Health care insurance coverage is but one method of paying for health care products and
services. Doctors and hospitals are quite open to accepting cash, checks, or credit cards
for their services rendered and have no problem with getting paid directly -- meaning
they get their money right away, don't have to fill out and file mounds of bureaucratic
paperwork with insurance companies, don't have to worry about what treatments are
approved and reimbursable by the insurance companies, etc.

In fact, when health care is directly paid for by a patient, then issues like preexisting
conditions, escalating premium rates, denied claims, dropped policies, and all of the
regularly lamented shortcomings of the health insurance industry become moot. Case in
point: Elective surgery such as breast augmentation is a medical procedure that isn't
covered by any health insurance, but somehow, there doesn't seem to be any access issues
to the procedure or lack of them occurring.

And yet most people are led to believe that they simply can't afford to pay for their own
health services directly. That's why they purchase health insurance, or their employer
purchases it for them as an employee benefit. Actually, this too is a great
misunderstanding of the problems with respect to health insurance coverage, which are
completely distinct issues from access to actual health care services.

Any form of insurance (home, car, flood, health care, etc.) is nothing more than a
financial instrument used to mitigate an unacceptable potential financial risk. Insurance
doesn't work unless more people are paying into a common pool than are taking money
out of it. The whole idea of insurance coverage is to spread financial risk among many
people so that any one member isn't hit with some catastrophic expense should a major
need occur. But in many respects, most health insurance coverage has been expanded in
scope to become some kind of "Health Services Subscription Club" that pays for many
services that really don't represent unacceptable financial risks by themselves.

Indeed, overpaying beyond an individual's actual needs via insurance premiums is a

viable means to avoid getting hit with major medical expenses. However, that's why they
invented Catastrophic Insurance Policies -- i.e. those cheaper, high-deductible plans that
don't kick in until direct expenses go over a few thousand dollars.

Regardless, even without any kind of health insurance policy whatsoever or ObamaCare,
if someone gets in a car wreck, the ambulance will still respond and take the injured to
the emergency room, where he or she will be treated regardless of ability to pay. It's
already the law.

The whole ObamaCare health care reform debate isn't really about people who already
have health insurance; rather, it's being crafted supposedly for the benefit of all those who
are without coverage and who need it, but can't afford it. Nevertheless, if tomorrow the
government bought health insurance policies for everyone who doesn't have one, that
wouldn't make access to health care services any more available than it already is.

To the contrary, the law of supply and demand dictates that if 30 million or more new
customers are added to a marketplace (the demand) and there is no proportional increase
in the number of service providers (the supply), then prices will go up as service
availability goes down -- which means that the whole system gets worse for everyone,
not better.

The real issue is that there are those who wish to argue that despite all the adverse (if not
catastrophic) consequences of ObamaCare to the system, health care is a "basic human
right" and therefore the basis for a massive new government entitlement program. But
health care isn't an "inalienable right" -- it's a basic human necessity, just like food,
clothing, and shelter. All of these basic human necessities are bought and sold every day
in the free market in the context of the goods and services that they really are.

The simple reality is this: There are those in our society who can afford these necessities,
and there are those in our society who can't. For those who can't afford the basic human
necessity of proper health care -- just like food, clothing, and shelter -- that need becomes
the basis of voluntary charity and aid.

Conversely, the government version of involuntary charity via taxation is called

"welfare." So whether it's private charity or a government welfare program that helps
people buy something they otherwise couldn't afford but need, that's fine. Just recognize
that that's the issue -- not an entitled right, not an access or availability problem, not a
lack of insurance policies.

Now, if making health care more affordable for everyone is really the goal -- to thereby
lower the threshold of who can readily pay for it directly and/or indirectly via an
insurance policy, and thus reduce the necessity of charity and/or welfare for those who
need assistance -- then free-market business forces and scientific and technological
advances, along with increased competition -- not intrusive government forces -- are the
answers.

Consider one mathematical fact: The purchase of 30 million new insurance policies that
cost $5,000 each is only $150 billion, which is a fraction of the real price tag of
ObamaCare.

One can therefore reasonably conclude that ObamaCare isn't really about making health
care more available or affordable to those who need it and can't afford it. It isn't about
lowering insurance costs or reducing the federal deficit. What has been proposed
achieves none of these objectives.

ObamaCare is simply a leviathan of a lie, whose only practical impact for generations to
come will be increased welfare-state dependency on government, greater government
intrusion and control over people's personal lives and privacy, reduced availability of
health care providers as more of them are driven from their professions -- all of which
translates to higher and higher costs, which only accelerates the country's financial death
spiral.

But that's to be expected: Most grandiose plans predicated on lies don't end well.

Robert Gelinas is a technology executive at JPE Inc. Consulting, the publisher of ArcheBooks
Publishing, and the author of The Mustard Seed and five other novels.
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March 11, 2010

Emperor Obama and the Kamikaze House Democrats

By Jeannie DeAngelis
"I am not going on this mission for the Emperor or for the Empire...I am going because I
was ordered to." These words were spoken by one of Japan's first kamikaze pilots,
Lieutenant Yukio Seki, after being compelled to volunteer for a suicide mission. Though
apprehensive, the pilot maintained the insight to comprehend that "Japan's future was
pale if it was forced to kill one of its best pilots."

So it is in Washington, D.C. as a "divine wind" blows through the nation's capital.

Although in the majority, Democrats are experiencing decreased capacity to successfully
wage political war. Disregarding plummeting polls and lost elections, which comprise a
formidable opposing armada amassing on the horizon; Barack Obama remains resolute in
his reluctance to surrender.

During WWII, Takijiro Onishi, Vice-Admiral of the Japanese Navy, faced down a huge
invasion in the Philippines. Anticipating crushing defeat, Onishi requested that the
suicide Thunder God Corps be utilized as a tactic to assure that Japanese bombs made
contact with American warships. Human being-guided, bomb-laden aircraft on a volatile
suicide collision with enemy targets is a tactic that bomb-thrower Obama may employ if
he passes health care reform by detonating the "nuclear option" of reconciliation.

Presently, when it comes to health care reform, the future of the Democrat Party is as pale
as Japan's ability to prevail with a hundred operational aircraft confronted by an
American flotilla. In response, Obama has decided to implement a similar last-ditch effort
in an attempt to "snatch victory from the jaws of defeat." Under the command of Emperor
Obama, and in an attempt to avoid a rout, Democrats are being coercively recruited to
take part in assault death units. What's the mission? Prevail in the president's policy war
-- even if it costs political lives.
For a year now, winning the health care reform battle has been a difficult hit-or-miss
undertaking for Obama. Blue Dog Democrats and conservative Representatives in the
House and Senate, aware that constituents are opposed to the cost and control aspects of
the sweeping health care reform bill, resist supporting Obama's legislation. Thus the war
drags on and on as Democrats portend the scope of defeat. As a result, Emperor Obama
has requested that Democrats transform themselves into health care reform "smart
bombs," sacrificing all for the cause.

"Senator Lamar Alexandar (R-Tenn) said that if Democrats push health care through
under the majority only process known as reconciliation, it will be a 'political kamikaze
mission'." Obviously the senator uses the word "kamikaze" in a "hyperbolic or
metaphorical fashion to refer to non-fatal actions which result in significant loss for the
attacker, such as injury or the end of a career" -- and career-ending it will be!

Yet Obama considers the goal of reforming health care critical enough to warrant the
sacrifice of seats in November, and apparently even the Oval Office in 2012.
Encouraging a pervasive self-slaughter mentality, Obama daily reminds indecisive
liberals that "[t]o maintain a strong presidency, we need to pass the bill."

President Obama pushed wavering House members to OK health-care legislation for his
own political standing and for theirs, as the battle came down to a bare-knuckle brawl for
votes. Obama met with groups of liberal and more conservative Democrats in the White
House to try to assemble a winning coalition.

Well aware that first-term presidents typically suffer party losses, the president continues
to pressure Democrat troops on a mission of self-destruction, saying, "I don't want you to
feel discouraged. I want you to understand that we've got to push that much harder." And
so, Thunder Gods in the House and Senate strap themselves to a poorly constructed bill
resembling a rickety, wooden kamikaze plane, built solely to crash and burn.

Obama demands that Democrats disregard generic ballot poll predictions and constituent
sentiment and willingly sacrifice political life and limb for what is deemed honorable
partisan death. The result: Democrats are presently being subjected to "brutal training"
similar to that of a WWII kamikaze pilot, whose preparation for death was "justified by
the idea that it would instill a soldier's fighting spirit."

Volunteering to "fall on the sword," a nonverbal proclamation has been issued by

Democrats similar to that of 24th kamikaze pilot Commander Seki, who said, "It is better
to die, rather than to live as a coward." Why is the party of Pelosi and Reid responding in
such a dramatic way? Because in an attempt to rouse pusillanimous politicians to make
the ultimate sacrifice, reverberating through the hallowed halls of power, the virtuous
voice of the Speaker of the House can be heard.

Nancy Pelosi, whose seat is not in jeopardy, is of the opinion that "[i]t will take courage
to pass health care." Pelosi posed and answered her own question, saying, "But why are
we here? We're not here just to self-perpetuate our service in Congress ... Time is up, we
really have to go forth."

Emperor Barack contributes further inspiration to Democrats, reluctantly adjusting rising

sun hachimakis on clammy foreheads. Obama claims to "[k]now some ... might feel
discouraged because changing the ways of Washington is hard. It's harder than a lot of
[Democrats] thought it might be. Sometimes [Democrats] feel ... that it's not possible.
You might want to give up." Obama pleaded, "Don't give up."

It is not surprising that discord prevails within Democrat ranks. Japan's special suicide
program was a divisive matter within Japanese military circles as well. Veteran field
commanders considered the notion of one-way death missions a colossal waste of
valuable lives. Nevertheless, many naysayers were eventually convinced because the
kamikaze "sure-hitting attack crafts" delivered "virtually all late war losses." In like
manner, as die-hard Blue Dog ideologues refuse to self-destruct over issues like abortion
language, it is probably only a matter of time before Bart Stupak (D-MI) is persuaded to
relinquish opposition and shout "banzai" on behalf of the Democratic Party.

WWII wound down with the Japanese steadfastly believing that "because they were
fighting for their Emperor God, the Kamikaze would bring them deliverance at the
darkest hour." Twenty-five hundred dead human torpedoes and a lost war later, the
faithful were the misguided ones.

Pausing for a moment from memorizing the inspiring health care bill and slamming back
warm socialist sake while shouting "hissatsu" for the cause -- it would serve Democrats
well to reacquaint themselves with history. "On the eve of the Japanese surrender,
Takijiro Onishi ended his own life, leaving a note of apology to his dead pilots -- their
sacrifice had been in vain." As Election Day draws near, the suicidal harakiri that
Obamacare demands from the Democrat Party will likewise be proven futile, because in
the end -- it's the American people who will win this war.

Author's content: jeannie-ology.com

42 Comments on "Emperor Obama and the Kamikaze House Democrats"

http://www.americanthinker.com/2010/03/emperor_obama_and_the_kamika
ze.html

______________________________________________
Health care reform in Washington meets the Chicago
Way

Reform effort finds its fall guys in Congress

John Kass
http://www.chicagotribune.com/news/columnists/ct-met-kass-0317-
20100316,0,3195139,full.column

Not even three or four pipes full of Hopium could have convinced me that the Congress
of the United States would ever start looking like the Chicago City Council.

But now, with the Chicago Way White House twisting arms for its federal health care
legislation, Democrats in Congress and Chicago aldermen are beginning to share a
remarkable resemblance.

They're starting to look like fall guys.

"The Congress? They're acting like aldermen. Like fall guys. And we know all about fall
guys in the city of Chicago," said Jim Laski, a former Chicago alderman and former
federal inmate who is now a WGN radio talk show host.

Laski was an alderman for years, representing the 23rd Ward on the Southwest Side. We
met centuries ago, when he was a political aide and I was a new reporter.

I felt bad for his family when Laski, who'd climbed to the job of city clerk, was convicted
on corruption charges. But he made the choice to take the money. He admitted taking
$48,000 from a family friend.

He did his time without complaint. He apologized to his family and constituents. And he
learned that in federal custody, one of the most valuable commodities is a pouch of tuna.

"It's the protein. The weightlifters like it," Laski said. "They call it a ‘can' of tuna. As in,
‘You want this, or that, it'll cost two cans.' But it's really a vacuum-packed pouch of tuna.
Why do they call it a can? Don't ask me."

Unlike others who talk about politics, he's actually done it. And as we stood outside the
Tribune Tower on Tuesday after he'd done a show, we didn't discuss the merits of the
president's plan. We were talking about the tactics.

"These congressmen are starting to understand what it's like in Chicago, with the Chicago
guys running the White House. They (the Democrats) have to know they're the fall guys,"
Laski said. "Otherwise, why would they so desperate to keep their fingerprints off the
health care thing?"

Things are looking more Chicago in Washington all the time.

In Chicago, the mayor gets what he wants, and the mayor's friends get what they want.
And the aldermen? They get the ridicule and the blame.
If the president gets what he desires — a health care victory — then Congress will pay
for it in the midterm elections in November, and they know it.

The proof is in that latest congressional trick announced on Tuesday, a ploy so weaselly
that it could have been hatched by Chicago politicians.

House Majority Leader Steny Hoyer of Maryland is now talking about allowing his
members to pass the president's health care package — whatever's in it exactly, no one
really knows — without a direct up-or-down vote on the current bill.

"It's consistent with the rules," Hoyer was quoted as saying on Tuesday. "It's consistent
with former practice."

Consistent with the rules? Perhaps, but it sure isn't what President Barack Obama
promised when he was talking like a reformer.

Democrats in the Congress want to appease the president and his crew, but they don't
want the federal health vote tied to their necks for the November midterm elections. Their
constituents don't want it and they've said so, loudly.

So Democrats in Congress desire a rhetorical out. With the Hoyer plan, they can say they
support the health care package and then tell their constituents they didn't vote for it,
exactly.

Their only trouble is that now, the entire country is watching.

"They've got to do something," Laski said. "The president wants the vote now. He doesn't
want the Congress going back home, talking to their constituents. Their knees are already
wobbling. If you've been in a legislative body, you can see what's going on. They want to
get it done."

But what is it exactly that they want to get done? No one seems to know exactly, except
that it will cost a trillion dollars we don't have, and force an increase in taxes and fees in
years to come. There's talk that Congress will fix the bill, but only after it becomes law.
And if you believe they'll revisit it, then just fill yourself another pipe of Hopium.

"This whole health care thing is Chicago," Laski said.

Except, that in Chicago, the mayor's guy doesn't meet you naked in the shower to twist
your arm. It's just not done.

"But in Chicago, you're an alderman and the mayor's guy comes in your office, drops a
legislative package on your desk, and then says, ‘You vote ‘yes' on this tomorrow, OK?'

"You haven't read it, you really don't know who's going to make a score, there are no real
details, but you're expected to vote for it.
"The same thing with health care in Washington. Who knows what's really in it? Nobody.
But the president's guys tell the congressmen, ‘You vote on this or else.' It's called arm-
twisting but it's really arm-breaking. That's the Chicago Way."

Obviously, this isn't exactly what the president promised while campaigning, promising
to transcend the broken politics of the past.

This is the broken politics of the past.

So get those Hopium pipes ready. It might look like Washington. But after a few puffs,
it'll start looking more Chicago every day.

jskass@tribune.com

_____________________________________________________________

Rigging the Healthcare Debate with Dishonest Numbers

by Dan Mitchell

President Obama and congressional Democrats are claiming that a giant new entitlement
program will reduce red ink. It’s tempting to laugh and dismiss such a preposterous
claim. After all, these are the same people who told us that squandering $787 billion on a
so-called stimulus would create jobs. Unfortunately, the joke’s on us. According to the
“official” scoring estimates on Capitol Hill, Obamacare supposedly will lower the deficit
because taxes are being increased more than spending is being increased (not that this
should matter since America’s fiscal crisis is spending and deficits are merely a
symptom). But these numbers, produced by the Congressional Budget Office and Joint
Committee on Taxation, are highly suspect. I’ve explained elsewhere why the spending
projections from the CBO are grossly flawed, and many other experts have made similar
observations. The same problem exists on the revenue side of the ledger. This video
explains why we should be very skeptical of any numbers produced by the Joint
Committee on Taxation.

http://www.youtube.com/watch?v=Mw7LtVwDCbs&feature=player_embedded

Let’s put this in context by reviewing the supposedly nonpartisan numbers that the JCT
has produced. The Senate bill has big tax increases on insurance companies, medical
device makers, and so-called cadillac health plans. The House plan, meanwhile, largely
relies on higher income tax rates on investors and entrpreneurs. And both bills impose
huge marginal tax rate increases on middle class taxpayers thanks to the phase out of
subsidies, as explained in gruesome detail by my Cato Institue colleage Michael Cannon.
While we don’t know at this point all of the tax increases that might be part of a
reconciliation bill (which House Democrats are demanding in order to modify the Senate
bill), the big implicit marginal tax rate increases on the middle class would become law if
and when the House approves the Senate bill. These higher tax rates, along with the
higher tax rates that are agreed as part of reconciliation, will discourage productive
behavior. And as explained in the video above (as well as in Part I and Part II of the
Laffer Curve series), this will result in less taxable income. This, of course, means that
the JCT revenue estimates are artificially optimistic. Combined with the deeply flawed
spending numbers produced by CBO, this means the road to healthcare disaster is paved
with fraudulent numbers.

P.S. Some people doubtlessly are wondering why Republicans did not fix the problems at
CBO and JCT during the 12 years they controlled Congress. I also wish I knew the
answer to that question.

_____________________________

Obama's Prescription for Low-Wage Workers: High

Implicit Taxes, Higher Premiums
by Michael F. Cannon

Michael F. Cannon is director of health policy studies at the Cato Institute and coauthor
of Healthy Competition: What's Holding Back Health Care and How to Free It.

Published on January 13, 2010

House and Senate Democrats have produced health care legislation whose mandates,
subsidies, tax penalties, and health insurance regulations would penalize work and reward
Americans who refuse to purchase health insurance. As a result, the legislation could trap
many Americans in low-wage jobs and cause even higher health-insurance premiums,
government spending, and taxes than are envisioned in the legislation.

Those mandates and subsidies would impose effective marginal tax rates on low-wage
workers that would average between 53 and 74 percent— and even reach as high as 82
percent—over broad ranges of earned income. By comparison, the wealthiest Americans
would face tax rates no higher than 47.9 percent.

Over smaller ranges of earned income, the legislation would impose effective
marginal tax rates that exceed 100 percent. Families of four would see effective
marginal tax rates as high as 174 percent under the Senate bill and 159 percent
under the House bill. Under the Senate bill, adults starting at $14,560 who earn an
additional $560 would see their total income fall by $200 due to higher taxes and
reduced subsidies. Under the House bill, families of four starting at $43,670 who
earn an additional $1,100 would see their total income fall by $870.
Michael F. Cannon is director of health policy studies at the Cato Institute and
coauthor of Healthy Competition: What's Holding Back Health Care and How to
Free It.

More by Michael F. Cannon

In addition, middle-income workers could save as much as $8,000 per year by dropping
coverage and purchasing health insurance only when sick. Indeed, the legislation
effectively removes any penalty on such behavior by forcing insurers to sell health
insurance to the uninsured at standard premiums when they fall ill. The legislation would
thus encourage "adverse selection"—an unstable situation that would drive insurance
premiums, government spending, and taxes even higher.

Read his POLICY ANALYSIS at :

http://www.cato.org/pubs/pas/html/pa656/pa656index.html

_________________________________________________________________________________

____________________________________________________________________
____________________________________________________________________

Our Man Ken–There He Goes Again!

by Christian Josi

In yet another admirable display of the right kind of Attorney General activism, Virginia
AG Ken Cuccinelli has put House Speaker Nancy Pelosi on notice that what she and
the Democratic leadership are reportedly scheming to pass Health Care ‘reform’ is
not only wrong — it’s unconstitutional.

3.18.10 KConPelosi
Amidst discussion and arguments surrounding health care reform, is the effect passage
will have on the re-election of Democrats in the Fall. The health care reform legislation
currently in front of Congress is so widely unpopular on both sides of the aisle that
Democrats have taken up the idea for a process called, “deem and pass” to get health care
reform passed through.

Deem and pass is a process by which House Democrats will be able to avoid taking
recorded votes on the Senate health care bill. Given the political environment and
discussion within the blogosphere and mainstream media, the motives behind enacting
this process specifically for this bill are highly transparent.

In a letter to the Speaker, above, Cuccinelli wrote, “A bill of this magnitude

should not be passed using this maneuver. As the President noted last
week, the American people are entitled to an up or down vote.” (He’s
not exaggerating when he talks of the “magnitude” of this bill. It’s said
to project up 2.5 trillion dollars in new spending).

“Based upon media interviews and statements which I have seen, you
are considering this approach because it might somehow shield
members of Congress from taking a recorded vote on an
overwhelmingly unpopular Senate bill.”

“Deem and pass,” in this context, is an egregious violation to the democratic process. I
applaud AG Ken Cuccinelli for not only acknowledging this, but also for being willing to
stand against the crazies pursuing it.

http://biggovernment.com/cjosi/2010/03/18/our-man-ken-there-he-goes-again/print/

http://www.docstoc.com/docs/30054514/31810-KConPelosi
_____________________________________________________________________

Sen. Coburn Vows To Block Special Deals for House

Members Who Switch Obamacare Vote from ‘No’
to to ‘Yes’
by Publius

Transcript:

SEN. TOM COBURN (R), OKLAHOMA: I want to send a couple of messages

to my colleagues in the House.
If you voted no and you vote yes, and you lose your election, and you
think any nomination to a federal position isn’t going to be held in the
Senate, I’ve got news for you. It’s going to be held.

Number two is, if you get a deal, a parochial deal for you or your
district, I’ve already instructed my staff and the staff of seven other
senators that we will look at every appropriations bill, at every level, at
every instance, and we will outline it by district, and we will associate
that with the buying of your vote. So, if you think you can cut a deal
now, and it not come out until after the election, I want to tell you that
isn’t going to happen. And be prepared to defend selling your vote in
the House.

http://www.youtube.com/watch?v=bA0EOugizPY

http://biggovernment.com/publius/2010/03/18/sen-coburn-vows-to-block-special-
deals-for-house-members-who-switch-obamacare-vote-from-no-to-to-yes/

_____________________________________________________________

Landmark Legal Foundation to Slaughter House

butchers: Not without a fight; Update: The states’
revolt
By Michelle Malkin • March 17, 2010 05:29 PM
Not without a fight, Deem-o-crats:

Mark R. Levin, president of Landmark Legal Foundation, today issued a warning to the
leadership of the U.S. House of Representatives about the possible use of the so-called
“deem and pass,” “self-executing,” or “Slaughter Rule” to enact H.R. 3590, the
legislative version of President Obama’s healthcare proposal that has been
previously approved by the Senate. If this tactic is employed, Landmark will
immediately sue the President, Attorney General Eric Holder and other relevant
cabinet members to prevent them from instituting this unconstitutional contrivance.

“Landmark has already prepared a lawsuit that will be filed in federal court the
moment the House acts. Such a brazen violation of the core functions of Congress
simply cannot be ignored. Article I, Section 7 of the Constitution is clear respecting
the manner in which a bill becomes law. Members are required to vote on this bill,
not claim they did when they didn’t. The Speaker of the House and her lieutenants
are temporary custodians of congressional authority. They are not empowered to do
permanent violence to our Constitution.”

Read the full draft complaint here.

Related: Republican lawyers warn Democrats of “deem and pass” consequences.

Update: I noted the states’ brewing revolt against Demcare’s individual mandate back in
January.
The revolt continues to spread. Idaho acted today:

Idaho Gov. C.L. “Butch” Otter on Wednesday became the first state chief executive
to sign a measure requiring his attorney general to sue Congress if it passes health
reforms that force residents to buy insurance. Similar legislation is pending in 37
other states nationwide.

________________________

Draft of Complaint For Landmark Legal Foundation below

PAGE 8…Continue from PAGE 7, #30 above :

……Chambers, the federal courts stand aside. When the adopted procedure is no
longer to seek
observance of the commands of the Constitution, as in this case, the self-imposed
limits on
judicial review cannot apply.
31. The courts risk much in not acting in this case. For if the Enrolled Bill Rule were
to block consideration of this deliberate adoption of a procedure to repeal the
Bicameralism
Clause, then the House and Senate will be free to adopt any such procedures in the
future,
assured that they will be immune from judicial review under any and all
circumstances. After
all, if the House can pass a rule that “deems approved” one measure on adoption of
a separate
measure and keep that maneuver from judicial scrutiny, then it, and its companion
Chamber the
Senate, can do anything. There can be no doubt that the day after a ruling in this
case that no
judicial review is permitted, the House and Senate would be free to adopt as
procedures a lineitem
veto through use of multiple enrollments of unitary appropriations bills, deeming
every item
in the bill as a separate bill. See, e.g., Gressman, Observation: Is the Item Veto
Constitutional?,
64 N. Car. L. Rev. 819 (1986). Everything about the House’s action invites chaos:
economic,
political, and constitutional. Under the specific facts presented here, the Congress
has forfeited
any claim to judicial deference.
32. By separate motion, Plaintiffs will ask this Court to expedite consideration of the
threshold issue of the applicability of the Enrolled Bill Rule. If, as Plaintiffs seek,
this Court
determines that it may adjudicate the merits of this Complaint, then Plaintiffs
would accept
immediate certification to the United States Court of Appeals.
33. Plaintiffs seek the protection of this Court, empowered by Article III of the
Constitution to insulate the people of this country from the exercise over them of
powers not
granted to officials acting under color of law in the Executive Branch.
PAGE 9

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs request for expeditious proceedings in this action and that
judgment be entered in their favor and against Defendants as follows:
1. An order declaring the Senate Bill unconstitutional;
2. An order permanently enjoining Defendants, their officers, agents, servants,
employees, and all persons in active concert or participation with them who receive
actual notice
of the injunction, from enforcing the Senate Bill under color of law;
3. Costs of suit, including attorney fees and costs;
4. Declaratory relief consistent with the injunction; and
5. Any other further relief as the Court deems just and appropriate.
Respectfully submitted,
____________________________________
Arthur F. Fergenson
(DC Bar No.:200840)
Ansa Assuncao, LLP
3545 Ellicott Mills Drive
Ellicott City, Maryland 21043
410-370-1139
arthur.fergenson@ansalaw.com
Attorney for Plaintiffs Landmark Legal Foundation
and Mark R. Levin
Of Counsel:
Matthew Meyer
Michael J. O’Neill
Emmett Collazo
Ansa Assuncao, LLP
1600 JFK Blvd., Suite 900
Philadelphia, PA 19103

http://landmarklegal.org

__________________________________________________________________________________

Tuesday, August 18, 2009

Obamacare Is Shredding The Constitution

Rush Limbaugh recently addressed the unconstitutionality of

Obamacare on his radio program, and I think it's absolutely something
we should understand:

The Heritage Foundation today: "Is Obamacare Consistent with Our First
Principles?" And this is a piece from the Heritage Foundation about how all of
this health care is really just unconstitutional. "During one of
Sen. Arlen Specter's (D-PA) early health care townhalls in Lebanon,
Pennsylvania; mother of two Katy Abram told the audience: 'I don't believe this is
just about health care. It's not about TARP. It's not about left and right. This is
about the systematic dismantling of this country. I'm only 35 years-old. I've
never been interested in politics. You have awakened the sleeping
giant.' Abrams is dead on. Our federal government has,
unfortunately, long been drifting away from the limited government
principles first envisioned by our founders. But over the past eleven
months, that drift has turned into an all out sprint towards an
undemocratic, technocratic, leviathan state … a type of government
that our Constitution was specifically designed to prevent.

"As Abram points out, both political parties have been complicit in the
rapid deterioration of our founding principles. It was after all
President Bush who pushed for and signed the Emergency Economic
Stabilization Act of 2008 which created the Troubled Asset Relief
Program (TARP). When the Bush administration submitted their
legislation to Congress we warned: 'From a constitutional standpoint,
the current versions of the legislation are different in scope, and
especially in kind, from almost any federal legislation that has come
before.' Specifically we identified: (1) Congress's enumerated power --
or lack thereof -- to intervene with private markets in the manner
contemplated, (2) the lack of meaningful standards to guide the
extremely broad grant of discretion to the Treasury secretary (the
'legislative delegation' problem), (3) limitations on judicial review
over the exercise of that almost limitless discretion, and (4) related
separation of powers concerns." And they were exactly right.
Congress doesn't have the right constitutionally to intervene in the
private sector the way they are doing and did.

Now, the Heritage Foundation piece here says: "The only thing that truly
surprised us after the legislation's passage was just how quickly our
worst fears were realized. The TARP plan, as sold to Congress, was
never even implemented and, instead, it quickly devolved into a
political slush fund," and there were people that warned that that's
what it was all about in the first place. "Even worse is what is not yet
in the bill, but is desperately wanted by the Obama administration. A
super-empowered Medicare Payment Advisory Commission that is
specifically designed to 'save money in an apolitical, technocratic
way.' The entire purpose of this part of Obamacare would be to take
medical decisions away from patients and vest it in a panel of experts
specifically designed to be completely unaccountable to the American
people. Is this what the Framers of the Constitution had in mind?"

Let me translate this for you. Right now Congress decides on Medicare
payments, how much, where they go, as a matter of legislation. Rahm
Emanuel has said the most important thing in any health
care legislation is transferring that control to the White
House. Obama wants to set up a panel of people, czars that
are not accountable to anybody, that will make these
decisions, and that's where the end-of-life stuff has come
into question and the death panels and all of that. And that
is clearly unconstitutional. The powers delegated by the Constitution to
the federal government are few and defined. Most of the Constitution tells the
government what it cannot do. Obama doesn't like that. So this entire health
care legislation is not even constitutional. We're watching it being shredded
before our eyes.

This is basically the question of whether or not health care is a 'right'

according to the Constitution. Obama and many liberals would say (in
fact, Obama did say this in one of the debates last fall) that it is.
Conservatives would say that it is not. Another good analysis that
addresses this idea can be found at RedState. Excerpts:

[A 'right' is] something the government cannot forbid.

A basic right which is implied but not mentioned in the Constitution is the right
to travel. The government should not interfere in our movement from place to
place. But there is no right to transportation, either to a specific form of
transport or to have any provided, Cash For Clunkers notwithstanding. If there
were, one couldn't pass by a hitchhiker (and they would choke every intersection
demanding that their rights be satisfied).

Similarly, the government should not be able to bar anyone from receiving health
care. That is very different thing from supplying it to everyone, or forcing health
care workers to serve anyone who appears before them.

But in their usual manner, the left have found a way to redefine the word "right"
in this context, from that which the government cannot prevent to that which it
must provide.

That's the key, I think, and something that many Americans seem to
have forgotten. Get that firmly in your head as the foundation of this
argument: a 'right', defined as something the government cannot
prevent, does not equate to something that the government must
provide.

I remember reading another description some time ago (can't

remember where, or I'd cite it) that said a true constitutional right
is something that is granted to all without taking something
away from any. To call health care a 'right' fails that definition,
too, since the masses will be forced to fund via their taxpayer
dollars the 'right' to 'free' health care for others.

RedState also hits on this idea in a larger context:

Like other socialists, Barack Obama believes rights to

include things the government must provide, and it is from
that unfortunate perspective that he was able to give the
clear response that he did. Indeed, positive rights are the
essence of socialism, and cause an insidious mission creep
for an ever-expanding government. Positive rights also lead
inevitably to forcing one citizen, whether driver or
physician, to serve another.

From a reading of the Constitution and an

understanding of how the Founders intended it, the
idea that health care is a 'right' is wholly inaccurate.
The fact that so many Americans even accept that premise shows us
the results of decades of liberal indoctrination in our education system,
and the danger in allowing words to be redefined.

Ultimately, the shredding of the Constitution will only be stopped when

Americans get back to it, understand it, and rely upon it rather than
the redefinition du jour.

http://www.theresmytwocents.com/2009/08/obamacare-is-shredding-
constitution.html

__________________________________________________________________________________
USE RELIGIOUS FREEDOMS TO CHALLENGE
OBAMA CARE
By MICHAEL SAVAGE
(MichaelSavage.com) OBAMA IS PREPARING TO SHOVE
SOCIALIZED MEDICINE DOWN OUR THROATS. AND IN ORDER TO
DO SO, HE’S DECIDED TO BLOW UP THE U.S. SENATE. HE
ANNOUNCED THAT RATHER THAN FOLLOW THE RULES OF THE
U.S. SENATE, WHICH REQUIRE 60 VOTES TO END DEBATE ON
ANY ISSUE, THE DEMONCATS WILL USE A METHOD CALLED
"RECONCILIATION" TO PASS THE BILL WITH ONLY 51 SENATE
VOTES. OBAMA HAS DECIDED TO USE THE NUCLEAR OPTION TO
FORCE HIS WILL ON THE AMERICAN PEOPLE. NOW YOU KNOW
THAT THE DEMONCATS ATTACKED THIS SAME METHOD WHEN
THEY THOUGHT THE REPUBLICANS WERE GOING TO USE IT IN
2005. BUT THAT DOESN’T MATTER TO THEM BECAUSE THEY’RE
IN POWER NOW.

ON TOP OF THAT HE’S GOING TO MAKE YOUNG PEOPLE WHO

DON’T NEED HEALTH INSURANCE PAY TO SUPPORT ILLEGAL
ALIENS WHO DON’T PAY FOR HEALTHCARE AT ALL. MAYBE
YOU DON’T KNOW THIS, BUT MAKING INDIVIDUAL AMERICANS
BUY HEALTH INSURANCE IS UNCONSTITUTIONAL. IT’S TRUE
THAT ARTICLE I, SECTION 8 OF THE CONSITUTION GIVES
CONGRESS THE POWER TO REGULATE INTERSTATE COMMERCE.
BUT IN ORDER FOR THIS TO APPLY, CONGRESS MUST BE
REGULATING SOME KIND OF ECONOMIC ACTIVITY. BUT A
HEALTHCARE MANDATE DOESN’T REGULATE ANY SORT OF
"ACTIVITY.” JUST BEING AN AMERICAN WOULD TRIGGER IT.

THIS ISN’T THE FIRST TIME THAT BIG GOVERNMENT HAS TRIED
TO FORCE NONSENSICAL AND DRACONIAN REGULATION ON
THE AMERICAN PEOPLE. THIS WAS FRANKLIN ROOSEVELT’S
APPROACH IN THE 1930s UNDER HIS SOCIALIST “NEW DEAL”
PROGRAM. BUT HIS DICTATORIAL SCHEMES CAME INTO
CONFLICT WITH FOUR JEWISH BROTHERS IN NEW YORK, THE
SCHECHTER BROTHERS WHO RAN TWO KOSHER BUTCHER
SHOPS IN BROOKLYN.
ROOSEVELT CREATED THE NATIONAL RECOVERY
ADMINISTRATION (NRA) DURING THE DEPRESSION TO
SOCIALIZE AMERICA. IT DREW UP ALL KINDS OF DETAILED
CODES FOR INDIVIDUAL INDUSTRIES, TELLING HOW FIRMS HAD
TO DO THEIR BUSINESS. THE SCHECHTER BROTHERS, THE
KOSHER BUTCHERS FROM BROOKLYN, FELL UNDER RULES
WHICH SAID CUSTOMERS COULD BUY A WHOLE OR HALF COOP
OF CHICKENS, BUT COULDN’T MAKE A SELECTION OF
PARTICULAR BIRDS. THIS WAS IN CONFLICT WITH JEWISH
KOSHER LAWS, WHICH REQUIRED THE REMOVAL OF
UNHEALTHY ANIMALS FROM THE STOCK. IT WAS A VIOLATION
OF THEIR RELIGIOUS FREEDOM. BUT THE COURTS FOUND THE
SCHECHTER BROTHERS GUILTY OF ALLOWING THEIR
CUSTOMERS TO BUY INDIVIDUAL CHICKENS INSTEAD OF
WHOLE COOPS AND THEY ALL SERVED JAIL TIME.

BUT ON APPEAL, THE CASE MADE IT TO THE SUPREME COURT,

WHERE THEY FOUND IN FAVOR OF THE SCHECHTER BROTHERS
BY A UNANIMOUS DECSION. THE COURT HELD THAT FDR’S
REGULATIONS WERE IN EXCESS OF CONGRESSIONAL POWER
UNDER THE COMMERCE CLAUSE OF THE CONSTITUTION AND
INVALIDATED THEM. SPEAKING TO AIDES OF ROOSEVELT,
JUSTICE LOUIS BRANDEIS REMARKED THAT, “THIS IS THE END
OF THIS BUSINESS OF CENTRALIZATION, AND I WANT YOU TO
GO BACK AND TELL THE PRESIDENT THAT WE'RE NOT GOING
TO LET THIS GOVERNMENT CENTRALIZE EVERYTHING.” THE
SAME MESSAGE SHOULD BE SENT TO OBAMA.

IT’S INTERESTING TO NOTE THAT IN THE CASE OF THE

SCHECHTER BROTHERS, GOVERNMENT REGULATION CAME
INTO CONFLICT WITH JEWISH DIETARY LAWS. IF THEIR
LAWYERS HAD TAKEN ANOTHER TACK, THEY PROBABLY
COULD HAVE WON ON THE BASIS THAT THEIR RELIGIOUS
FREEDOM WAS BEING VIOLATED. BUT THIS TIME AROUND,
OBAMA THE DICTATOR HAS MADE RELIGIOUS EXEMPTIONS
FOR HEALTHCARE INSURANCE. THE AMISH WON’T BE
REQUIRED TO BUY HEALTH INSURANCE. CHRISTIAN
SCIENTISTS WON’T BE REQUIRED TO BUY IT, AS MODERN
MEDICAL CARE VIOLATES THEIR RELIGIOUS CONVICTIONS.

SO HERE’S MY SUGGESTION: IF THEY CAN MAKE EXCEPTIONS

FOR THESE RELIGIOUS GROUPS, LET’S FIND OTHER RELIGIOUS
GROUPS THAT THEY’LL HAVE TO FIND EXCEPTIONS FOR UNTIL
THERE ARE SO MANY PEOPLE EXEMPTED FROM THE SYSTEM,
THAT THEY WON’T POSSIBLY BE ABLE TO PAY FOR IT. LET’S
THINK ABOUT THE POSSIBILITIES:

• WILL RELIGIOUS JEWS BE FORCED TO PAY FOR MEDICAL

CARE ON SATURDAY, THE JEWISH SABBATH, ON WHICH
THEY’RE NOT ALLOWED TO RECEIVE MEDICAL CARE?

• WILL OBAMA CARE PAY FOR RELIGIOUS CIRCUMCISION IN

JEWISH FAMILIES?

• DEVOUT MUSLIMS ARE NOT SUPPOSED TO BE IN THE

PRESENCE OF ALCOHOL? DOES THIS MEAN THEY WON’T BE
ABLE TO PARTICIPATE IN AN OBAMA CARE PROGRAM
WHICH COVERS ALCOHOL SWABS?

THE POSSIBILITIES ARE ENDLESS. WHAT OTHER RELIGIOUS

EXEMPTIONS DO YOU THINK YOU MIGHT BE ABLE TO USE TO
AVOID OBAMA’S SOCIALIZED MEDICINE PLAN?

AMERICA MUST ACT QUICKLY ON THIS, BECAUSE OBAMA IS

SHOVING THIS THROUGH THE SENATE AS WE SPEAK. OBAMA’S
NUCLEAR OPTION FLIES IN THE FACE OF OVER 200 YEARS OF
SENATE TRADITION. REQUIRING ONLY 51 VOTES INSTEAD OF 60
FLIES IN THE FACE OF THE INTENT OF THE CONSTITUTION.
WHEN THE FOUNDERS DESIGNED THE LEGISLATIVE BRANCH OF
THE GOVERNMENT, THEY MADE THE HOUSE OF
REPRESENTATIVES THE BODY THAT WAS MEANT TO BE
DIRECTLY AND IMMEDIATELY RESPONSIVE TO THE VOTERS.
THAT’S WHY THEY HAVE SHORT, TWO-YEAR TERMS. THAT’S
WHY THEY REPRESENT SMALL DISTRICTS AND HAVE A MORE
DIRECT RELATIONSHIP TO THE VOTERS.

THE SENATE, ON THE OTHER HAND, WAS DESIGNED TO BE A

MODERATING INFLUENCE ON THE PASSIONS OF THE
ELECTORATE. THAT’S WHY THEY HAVE SIX-YEAR TERMS,
LONGER THAN THAT OF THE PRESIDENT, SO THEY COULD
WEATHER THE STORMS OF A POPULACE STIRRED UP BY A
POTENTIAL DICTATOR. THAT’S WHY THEY REPRESENT ENTIRE
STATES INSTEAD OF JUST DISTRICTS. UNTIL THE EARLY 20TH
CENTURY, SENATORS WEREN’T EVEN ELECTED DIRECTLY BY
THE VOTERS.

EVEN GEORGE WASHINGTON UNDERSTOOD THAT THE SENATE

WAS MEANT TO ACT AS A BULWARK AGAINST THE ACTIONS OF
THOSE WHO WOULD TRY TO QUICKLY IMPOSE THEIR WILL ON
THE NATION. IN A LEGENDARY CONVERSATION, THOMAS
JEFFERSON HAD RETURNED FROM FRANCE AND WAS
BREAKFASTING WITH WASHINGTON AS THE CONSTITUTION
WAS BEING CREATED. JEFFERSON ASKED WASHINGTON WHY
HE AGREED TO HAVE A SENATE. “WHY,” SAID WASHINGTON,
“DID YOU JUST NOW POUR THAT COFFEE INTO YOUR CUP
BEFORE DRINKING IT?” “TO COOL IT,” SAID JEFFERSON; “MY
THROAT IS NOT MADE OF BRASS.” “EVEN SO,” SAID
WASHINGTON, “WE POUR OUR LEGISLATION INTO THE
SENATORIAL CUP TO COOL IT.”
THAT IS WHAT THE U.S. SENATE WAS DESIGNED TO DO – STOP
BABY DICTATORS LIKE OBAMA FROM RUNNING TOO HOT AND
PUSHING THROUGH THEIR RADICAL AGENDAS BEFORE THE
PEOPLE OF THE UNITED STATES HAD A CHANCE TO
UNDERSTAND WHAT WAS GOING ON. BUT OBAMA HAS
DECIDED TO BLOW UP OVER 200 YEARS OF SENATE TRADITION,
BLOW UP THE INTENT OF GEORGE WASHINGTON AND THOMAS
JEFFERSON, AND BLOW UP THE ESSENCE OF THE
CONSTITUTION IN ORDER TO PASS SOCIALIZED MEDICINE WITH
THE NUCLEAR OPTION.

YOU HAVE TO UNDERSTAND THAT THIS COULD BE MORE THAN

JUST A DEFEAT FOR CONSERVATIVES OR REPUBLICANS. IF
OBAMA SUCCEEDS IN DROPPING HIS BOMB, IT WILL DESTROY
THE VERY CORE OF THE CONSTITUTION. IT’S AN ATTACK
AGAINST EVERYTHING GUARANTEED BY THE BILL OF RIGHTS,
EVEN THOSE CHERISHED BY LIBERALS. BECAUSE IF OBAMA
CAN DESTROY ONE PART OF THE CONSTITUTION, HE CAN
DESTROY ANY PART OF IT. AND DON’T THINK FOR A MINUTE
THAT SOCIALIZED MEDICINE WILL BE THE LAST STOP ON THE
TRAIN BOUND FOR PERDITION. © 2010 SPI
 Protect freedom of speech! Support the Savage Legal Fund.

http://www.michaelsavage.wnd.com/index.php?
fa=PAGE.view&pageId=10406
____________________________________________________________________

Comments

Obamacare: Cooked Books You Can Believe In

by Deroy Murdock
03/13/2010

Wouldn’t it be nice if you could use a $100 bill to buy groceries and then
deposit that same Benjamin in the bank to help pay your monthly credit card
statement? Regular Americans would call this either magic or fraud.
Washington Democrats call this “health care reform.”

ObamaCare rests upon such double counting. It repeatedly shanghais

taxpayer funds for Obama’s plan while simultaneously shielding that same
money for Medicare, Social Security, and other programs. Such chicanery
may explain why only 32 percent of adults support ObamaCare, according to
a new Investor’s Business Daily/TIPP survey.

“You can’t count a dollar twice,” Senator Charles Grassley (R – Iowa)

observed at President Obama’s February 25 reform summit. “Common sense
tells you that. You don’t even have to have an accountant tell you that.”

Team Obama clearly ignores Grassley. They should not count a dollar twice,
and yet they do.
The health care reform bill that Senate Democrats passed last Christmas
Eve, for instance, would drain $464.6 billion from Medicare’s coffers to
underwrite ObamaCare.

However, if “these Medicare cuts are improving the solvency of Medicare,”

Congressman Paul Ryan (R – Wisconsin) explained, “then you can’t use that
money to spend on the creation of another government program.” Ryan, the
House Budget Committee’s top Republican, said on February 28’s Fox
News Sunday: “You can’t count it both for paying benefits and reducing the
deficit.”

The non-partisan Congressional Budget Office (CBO) likewise warned last

December 23 that ObamaCare’s putative savings “would be received by the
government only once, so they cannot be set aside to pay for future
Medicare spending and, at the same time, pay for current spending on other
parts of the legislation or on other programs…”

The Senate’s ObamaCare bill would take $52 billion in anticipated Social
Security revenues and divert them to offset ObamaCare’s overall net cost.
But wait: Those who have been promised future Social Security payments
expect those $52 billion to be available to prevent their pension checks from
bouncing.

This bill also includes something called Community Living Services and
Support. This “CLASS Act” would offer long-term-care insurance with
premiums invoiced immediately, but with benefits commencing in 2016. In
the interim, CBO expects a $72 billion surplus to accumulate. Congressional
Democrats already have dedicated that sum to counterbalance and, thus,
lower ObamaCare’s perceived cost. But the Treasury will need those same
$72 billion to finance the CLASS Act’s medical services. So, which is it?

Senate Budget Committee Chairman Kent Conrad (D – North Dakota)

described this scam in the Washington Post as “a Ponzi scheme of the first
order, the kind of thing that Bernie Madoff would have been proud of.”

Conrad is right. At its core, ObamaCare relies on Madoff-style accounting.

The convicted swindler routinely took cash belonging to one group of
investors and used it to pay off a different set of stakeholders. When the
investors requested their money, it already was gone.
Future retirees similarly will demand their Medicare benefits. But much of
that money already will have been swiped for ObamaCare. And that’s when
this double counting will sparkle in all its crooked splendor.

So what would un-cooking ObamaCare’s books do to its price tag?

CBO says the Senate bill would reduce the federal deficit by $132 billion in
its first 10 years. Rep. Ryan disputes this figure without blaming CBO. Like
a scale that dutifully measures something as weighing 12 ounces, whether
gold or lead, CBO loyally accepts the assumptions in the bills it analyzes, no
matter their luster.

“If you take all the double counting out of the bill,” Ryan told Fox News
Sunday’s Chris Wallace, “this thing has a $460 billion deficit in the first 10
years, a $1.4 trillion deficit in the second 10 years.”

President Obama claims his proposal “does not add one dime to the deficit.”
In truth, ObamaCare just keeps the red ink coming. And it does so as
deviously as possible.

Mr. Murdock, a New York-based commentator to HUMAN EVENTS, is a columnist with

the Scripps Howard News Service and a media fellow with the Hoover Institution on
War, Revolution and Peace at Stanford University.

http://www.humanevents.com/article.php?id=36018

_____________________________________________________________

Comments

Obamacare vs. the United States Constitution

by Deroy Murdock
02/15/2010

Public support for ObamaCare legislation is dismal. According to a February

2 – 3 Fox News/Opinion Dynamics poll, among 900 registered voters
surveyed, only 23 percent want it enacted. Fully 70 percent disagree. Among
them, 47 percent would start over, and 23 percent would do nothing.
(Margin of error: +/- 3 percent.)

Nonetheless, ObamaCare is like a quietly rumbling volcano -- dormant, but

not yet dead. President Obama and Washington Democrats oscillate between
tears over their stalled pet project and cheers that “We’re moving forward,”
as Obama recently chirped. The White House’s February 25 bipartisan
healthcare summit is a sulfurous puff of smoke that should worry
ObamaCare opponents.

Consequently, those who want to stop this ruinous measure should keep
highlighting its shortcomings until this initiative is extinct.

Consider, then, that ObamaCare flunks the first test of any potential federal
law: It is not constitutional. ObamaCare critics deem the individual mandate
unconstitutional, since Congress lacks the power to force Americans to buy
anything, especially health insurance they wisely or foolishly may not want.

Congress’ legitimate power to regulate interstate commerce has been

stretched like saltwater taffy. “It is one thing, however, for Congress to
regulate economic activity in which individuals choose to engage; it is
another to require that individuals engage in such activity,” Senator Orrin
Hatch (R – Utah), former Ohio Secretary of State J. Kenneth Blackwell, and
the American Civil Rights Union’s Kenneth Klukowski observed in the
January 2 Wall Street Journal. “That is not a difference in degree, but instead
a difference in kind.”

Beyond this lies another problem. The individual mandate would be

enforced by penalizing Americans $495 or 0.5 percent of Adjusted Gross
Income, whichever is higher, if they do not acquire health insurance by
2014. Two years later, that fine would rise to 2 percent of AGI, equal to
$640 today. Anticipated fines total some $15 billion.

The IRS would collect these payments and require Americans to certify on
their tax returns that they carry health coverage. This represents a “direct”
tax on U.S. citizens, based solely on the status of living in America. This is
not a tax on income. It is not an excise tax either, since there is no tax on any
transaction; if one refuses to purchase insurance, there is no transaction on
which to slap an excise tax.

As Senator John Ensign (R – Nevada) told his colleagues on the Senate

floor: “Anything we have ever done, somebody actually had to have an
action before we could tax or regulate it.”

“Without precedent, Congress is attempting to punish the non-purchase of a

private product,” says Robert Levy, senior fellow for constitutional studies
at the Cato Institute, which he chairs. “That would be an intolerable affront
to the Constitution and personal autonomy.”

Nonetheless, the individual mandate’s IRS enforcement scheme operates, in

essence, as a tax. The hitch is that Article I, Section 8 of the U.S.
Constitution states: “The Congress shall have Power To lay and collect
Taxes, Duties, Imposts and Excises.” Section 9 adds that “No Capitation, or
other direct, Tax shall be laid, unless in Proportion to the Census or
Enumeration herein before directed to be taken.”

A penalty collected via the IRS would be a direct tax on individuals,

independent of anything reflected in the Census or tied to enumeration of
citizens among the states. As such, the individual mandate’s enforcement
mechanism would fail Constitutional scrutiny. And a mandate without
enforcement is just a suggestion.

If ObamaCare somehow re-erupts into active status, it likely would rely on

this ultimately toothless individual suggestion, which many Americans
gladly would ignore. Without Washington’s capacity to pressure Americans
into submission, the number of participants in ObamaCare likely would fall
well below projections, and this entire, glorious experiment would implode.

One of the most compelling arguments against ObamaCare is that it is self-

defeatingly unconstitutional. That is yet another reason why this menacing
monster must be silenced.

Mr. Murdock, a New York-based commentator to HUMAN EVENTS, is a columnist with

the Scripps Howard News Service and a media fellow with the Hoover Institution on
War, Revolution and Peace at Stanford University.

http://www.humanevents.com/article.php?id=35612
______________________________________________

State's Rights could trump ObamaCare

Posted by Michael Laprarie

Published: March 13, 2010 - 9:58 AM

Earlier this week, the Oklahoma House of Representatives passed House Joint Resolution
1054, by Reps. Mike Ritze and Mike Reynolds, tentatively titled the "Freedom of
Healthcare Choice Act":

Modeled after similar legislation from Arizona, the resolution is a

proposed constitutional amendment allowing citizens of the state to opt out
of a federal health care plan. If the resolution is passed and the
amendment is voted into the Oklahoma Constitution, it would prohibit any
law or rule from directly or indirectly compelling a person or employer to
participate in any health care system, allowing both the individual and the
health care provider to do business without penalties or fines and allow
citizens to maintain private health insurance.

As the above quote indicates, several states including Arizona, Maryland, Idaho,
Missouri, Virginia, and Texas have introduced measures that would amend state
constitutions to stop a presumed Federal health care mandate.

At the heart of the issue is the Tenth Amendment to the US Constitution:

"The powers not delegated to the United States by the Constitution, nor
prohibited by it to the States, are reserved to the States respectively, or to
the people." Opponents of a Federal health care mandate have already
vowed to challenge the constitutionality of any Federal healthcare law that
contains such a provision, stating that such a mandate goes far beyond the
enumerated powers given to the Federal government by the Constitution.
The various state healthcare freedom amendments are simply an attempt to
further extend this argument.

Sadly we live in an era where proponents of an increasingly powerful Federal

government have largely succeeded in turning the phrase "state's rights" into a
euphemism for "racism." Because big government liberals portray themselves as the
champions of progress and justice, they always view any attempt to oppose bigger
government as a de facto defense of greed, injustice, and white power.
Of course any mandate by the Federal government that would force citizens to buy
anything under penalty of law is simply outrageous, and deserves to be challenged on the
merits of individual freedom alone. However, we should expect proponents of a Federal
health care mandate to once again characterize exemption amendments by individual
states as "racism," most probably by resorting to their standard "women, minorities
hardest hit" argument.

Even though completely undoing ObamaCare (if it is signed into law) may be difficult for
a new Republican Congress in 2011, we should at least be thankful that our Constitution
provides a number of effective ways for individual citizens and states to challenge the
enormous Federal government power grabs attempted by the Obama Administration and
the Democrats.

____________________________________________________________________

[Jonathan Adler, August 22, 2009 at 6:50pm] Trackbacks

Is ObamaCare Unconstitutional?
David Rivkin and Lee Casey argue that a federal mandate requiring all individuals to
obtain health insurance would lie beyond the scope of Congress' enumerated powers.
Specifically, they argue that neither the power to "regulate commerce among the several
states" nor the taxing and spending power could support such an all-encompassing
mandate. Here is a taste of their argument:

Although the Supreme Court has interpreted Congress's commerce power expansively,
this type of mandate would not pass muster even under the most aggressive commerce
clause cases. In Wickard v. Filburn (1942), the court upheld a federal law regulating the
national wheat markets. The law was drawn so broadly that wheat grown for
consumption on individual farms also was regulated. Even though this rule reached
purely local (rather than interstate) activity, the court reasoned that the consumption of
homegrown wheat by individual farms would, in the aggregate, have a substantial
economic effect on interstate commerce, and so was within Congress's reach.

The court reaffirmed this rationale in 2005 in Gonzales v. Raich, when it validated
Congress's authority to regulate the home cultivation of marijuana for personal use. In
doing so, however, the justices emphasized that — as in the wheat case — "the activities
regulated by the [Controlled Substances Act] are quintessentially economic." That simply
would not be true with regard to an individual health insurance mandate.

The otherwise uninsured would be required to buy coverage, not because they were even
tangentially engaged in the "production, distribution or consumption of commodities,"
but for no other reason than that people without health insurance exist. The federal
government does not have the power to regulate Americans simply because they are
there. Significantly, in two key cases, United States v. Lopez (1995) and United States v.
Morrison (2000), the Supreme Court specifically rejected the proposition that the
commerce clause allowed Congress to regulate noneconomic activities merely because,
through a chain of causal effects, they might have an economic impact. These decisions
reflect judicial recognition that the commerce clause is not infinitely elastic and that, by
enumerating its powers, the framers denied Congress the type of general police power
that is freely exercised by the states.

As much as I oppose the various health care reforms promoted by the Obama
Administration and current Congressional leadership (and as much as I would like to see
a more restrictive commerce clause jurisprudence), I do not find this argument
particularly convincing. While I agree that the recent commerce clause cases hold that
Congress may not regulate noneconomic activity, as such, they also state that Congress
may reach otherwise unregulable conduct as part of an overarching regulatory scheme,
where the regulation of such conduct is necessary and proper to the success of such
scheme. In this case, the overall scheme would involve the regulation of "commerce" as
the Supreme Court has defined it for several decades, as it would involve the regulation
of health care markets. And the success of such a regulatory scheme would depend upon
requiring all to participate. (Among other things, if health care reform requires insurers to
issue insurance to all comers, and prohibits refusals for pre-existing conditions, then a
mandate is necessary to prevent opportunistic behavior by individuals who simply wait to
purchase insurance until they get sick.)

Jack Balkin is similarly unconvinced. I generally agree with his bottom line, but would
question some of his argument as well. First, he chides Rivkin and Casey for making an
argument that would effectively invalidate the New Deal. I am not sure this is true. While
some post-1937 programs might be at risk, one might also distinguish Wickard on the
grounds that it involved a commodity sold in interstate commerce (wheat), whereas
health insurance is a service. One might also argue that there is a difference between
seeking to control the conditions of any commodity sale (its price, quantity, etc.) and
mandating that a sale take place. This line would be similar to that embraced in some
New Deal commerce clause cases that upheld federal regulations setting conditions on
the manufacture of goods sold in interstate commerce while ostensibly leaving the
manufacture of goods not sold in interstate markets untouched. If I recall correctly, this
line was maintained until Maryland v. Wirtz in 1968. So while The Rivkin-Casey
argument is aggressive, I don't think it would completely overturn the New Deal.

Balkin also chides Rivkin and Casey for citing Bailey v. Drexel Furniture, "a case from
the Lochner Era," to make their case. Well, like it or not, Bailey has never been expressly
overturned, and I think there's a good reason for that. In Bailey, the Court held that
Congress could not use the taxing power to regulate behavior that would otherwise lie
beyond the scope of the federal government's other enumerated powers. This may well be
true. The problem with Bailey, then, is not its view of the taxing power, but rather the
Bailey court's restrained view of the federal commerce power. What makes Bailey and
other cases largely irrelevant today is that there is so little that the federal government
seeks to tax that it cannot otherwise regulate. I'd also note that it is not as if the Court is
averse to relying upon other cases with Lochner-era pedigrees. Indeed, Meyer v.
Nebraska and Pierce v. Society of Sisters are still good law, and each is closer kin to
Lochner than Bailey, as they relied upon Lochner's substantive due process rationale.

Speaking of substantive due process, there may be other constitutional problems arising
from national health care reform — but not of the enumerated powers variety. While the
federal government may be able to require national health insurance coverage, could it
require all individuals to purchase plans that cover certain procedures? What if the
guidelines for acceptable plans include contraception, abortion, and certain types of end-
of-life care? Could the federal government require devout Catholics to purchase such
plans for themselves? Insofar as a new federal entitlement and regulatory scheme
severely limits the ability of individuals to make fundamental health-related choices for
themselves without undue federal interference, might it also run up against Griswold,
Cruzan, etc.? So long as individuals retain a choice of health care providers such
concerns may be quite marginal, but were a "public plan" to become a de facto single-
payer plan, the constitutional issue could grow. If limitations on abortion procedures must
contain a health exception in order to be constitutional under Casey, would this
complicate efforts to control costs by excluding some potentially life-saving treatments
under s single-payer system? Of course, these sorts of arguments are more likely to come
from libertarians than conservatives, as the latter may be uncomfortable with expanding
the scope of the Court's fundamental rights jurisprudence.

UPDATE: Calvin Massey adds his thoughts here.

________________________

Is Obama Care Unconstitutional? - Part Deux:

David Rivkin and Lee Casey are back on the WSJ editorial page, arguing once again that
current health care proposals are unconstitutional. Specifically, they argue that an
"individual mandate" would exceed the scope of Congressional power under current
precedent. Further, they argue that this limitation cannot be avoided by using the taxing
power to impose a tax on those who fail to purchase a qualifying health care plan.

As with their last effort in this vein, I am unconvinced. I agree with them that an
individual mandate would, in many respects, "expand the federal government’s authority
over individual Americans to an unprecedented degree," but I disagree that such a
mandate would be unconstitutional under current precedent, particularly if adopted as
part of a comprehensive health care reform plan.

There is a strong temptation to believe that every onerous or oppressive government

policy is unconstitutional Were it only so. Even were the federal government confined to
those powers expressly enumerated in the text, it would retain ample ability to enact
many bad ideas into law, and current precedent is far more permissive. Opponents of
current health care reform proposals should defeat them the old fashioned way, through
the political process, and not depend upon salvation from the courts.

____________________________________________________________________

Randy Barnett, September 18, 2009 at 12:17pm] Trackbacks

Is Mandatory Health Insurance Unconstitutional?
: In the The Politico's Arena, we are debating Rivkin and Casey's Wall Street Journal Op-
ed that Jonathan notes below. While my take on this issue differs somewhat from his, in
my contribution (here), I respond to this rather catty post by Washington & Lee law
professor Timothy Stoltzfus Jost. This is what I wrote:
OK, let's be old fashioned and start with what the Constitution says. After the Preamble,
the very first sentence of the Constitution says "All legislative powers herein granted
shall be vested in a Congress of the United States. . . ." And again the Necessary and
Proper Clause gives Congress the power "To make all laws which shall be necessary and
proper for carrying into execution the foregoing powers, and all other powers vested by
this Constitution in the government of the United States, or in any department or officer
thereof." The Tenth Amendment is not required to see that Congressional power must be
found somewhere in the document.("Tenthers"? What's next? "Firsters"? "Necessary and
Proper Clausers"?Enough with the derogatory labels, already.) So where in the document
is the power to mandate that individuals buy health insurance?

The power "to regulate commerce . . . . among the several states"? This clause was
designed to deprive states of their powers under the Articles to erect trade barriers to
commerce among the several states. It accomplished this by giving Congress the
exclusive power over interstate sales and transport of goods (subject to the requirement
that its regulations be both "necessary and proper"). It did not reach activities that were
neither commerce, nor interstate. The business of providing health insurance is now an
entirely intrastate activity. Reduce...

The "spending power"? There is no such enumerated power. There is only the
enumerated power to tax. Laws spending tax revenues are authorized, again, if they are
"necessary and proper for carrying into execution the foregoing powers." So we return to
the previous issue: what enumerated end or object is Congress spending money to
accomplish?

But following the text of the Constitution is so Eighteenth Century. Professor Jost tells us
that "a basic principle of our constitutional system for the last two centuries has been that
the Supreme Court is the ultimate authority on the Constitution, and the Constitution the
Court now recognizes would permit Congress to adopt health care reform." So the
Supreme Court gets to rewrite the written Constitution as we go along.

Never mind Dred Scott, Plessy, Korematsu and other not-so-famous Supreme Court
"mistakes." The Constitution was what the Supreme Court said it was--until it changed its
mind. And the Supreme Court has certainly not limited either the enumerated commerce
power or the implied spending power to the original meaning of the text.

Fine. But has the the Constitution of the Supreme Court been extended to include
mandating that individuals buy insurance? Professor Jost admits "the absence of a clear
precedent." Really! So what has the Supreme Court's Constitution told us about the
Commerce Clause Power? Professor Jost cites the medical marijuana case of Gonzales v.
Raich.

As Angel Raich's lawyer, who argued the case in the Supreme Court, I think the Court
erred (6-3) in reading the interstate commerce power broadly enough to allow Congress
to prohibit you from growing a plant in your back yard for your own consumption. By all
accounts, however, this is the most far reaching interpretation of the Commerce Power
ever adopted by a majority, exceeding the reach of the past champion, Wickard v.
Filburn. But even the six Justices in the majority did not say that Congress had the power
to mandate you grow a plant in your back yard. Do you think a majority would find that
power today?

Perhaps. But under Professor Jost's approach to constitutional law, we must await the
Supreme Court's ruling before we know what "the Constitution" requires or prohibits.
Until then, the Supreme Court's First Amendment still gives even "two former Bush
officials" the right to publish their opinion that the written Constitution delegates to
Congress no such power, provided of course they are not trying to influence the outcome
of a federal election. Maybe a bare majority will decide this matter by reviewing the text.
Stranger things have happened. After all, without any precedent standing in their way, a
majority of the Supreme Court decided to follow the original meaning of the text of the
Second Amendment in DC. v. Heller.

And when we are done examining Congress's power to mandate that you buy a particular
service--or pay a fine, er "tax"--we can then consider its power to restrict the exercise of a
person's fundamental right to preserve his or her life.

http://volokh.com/archives/archive_2009_09_13-2009_09_19.shtml#1253290664
____________________________________________________________________

Post from John McSherry's Blog:

Obama Care is Unconstitutional

Obama Care is Unconstitutional

The following presentation supports the fact that Obama’s Health Care bill, H.R. 3200, or
any other Health Care yet undisclosed, is Unconstitutional.
Obama’s collection of thugs; ACLU, SEIU, AARP, ACORN, Progress for America are
entities of the
Democratic Party, thus do not represent any governmental agency, (i.e.) Executive,
Legislative or Judicial. According to the 1st. 4th and 10th Amendments, free speech
represents a universal privilege free from oppression by any political or governmental
entity and only the States and the People have the right to delegate powers, not the
federal government.
Article 1, Section 8 mentions “general welfare” which means “the state of doing well,
especially in
respect to good fortune, happiness, well-being, or prosperity.” The following quote was
from the
Webster’s Dictionary. The founding fathers saw welfare as the respect of human
existence beyond that
of colonial oppression.
To assume that welfare implies a monetary subsidy, only applies to charitable
contributions, efforts of the church to help the poor and disadvantaged and non-profit
organizations. Welfare as a monetary entitlement was initiated in the 1930s with
Roosevelt's so-called New Deal, but was never intended to become a subsidy allowance
built upon generational dependence. What is prosperity or happiness when it is not you
generating that happiness or prosperity? Welfare implies work or a force to produce
welfare for others, not to use welfare without recognizing it must be returned.
Social Security, Medicare and Medicaid are federal programs which fund retirement and
minimal
medical attention to individuals over the age of 65. Medicare is optional for those who
have other
insurance. The federal government also provides minimal care to military veterans and
Native Americans. Unfortunately, the federal government has failed in its ability to
“provide the general welfare” to our senior American citizens by bankrupting Social
Security, Medicare, Medicaid and Welfare in all forms of entitlement to the
disadvantaged. So if the advocates persist on focusing on the Constitutional clause on
Welfare, then you know why the Constitution only sites the States and the People as
delegates of power. The founding fathers realized that if the British Crown failed as a
Parliamentary Power, so to would any federal power as written in the Constitution.
Politics is not part of any governmental “Chain of Command”, but represents an abusive
coercion
where the federal government confiscates individual freedoms, to dictate instead of
representing.
The monumental hypocrisy is a federal dictatorial power offering health care while
holding its citizens on total contempt and rebuke.
Governments only survive off the resources from its citizens, where markets, trade and
finances
represent taxable assets; in return, the government ensures security and encouragement to
its citizens to
grow in prosperity. Obama’s Health Care Bill, H.R. 3200 neither offers prosperity or
medical attention
when the citizens are un-employed, discouraged or trivialized.
H.R. 3200, no where in the bill does it mention "R&D" (research and development) or
medical
improvements. That means all federal patents or royalties from federal patents will be
confiscated from the corporations who discovered them.
H.R. 3200, page 28, cost sharing means “rationed care” for all its citizens. As the
economy collapses, any health care will be non-existent based on available resources
beyond what the federal government can pay.
H.R. 3200, page 41, the Health Choices Administrator is appointed by the President. As
part of the Health Choices Administrator, there are some 9-10 other bureaucracies which
require both funding and staffing which represents a monumental burden, yet does not
represent any benefit to general health or welfare to the people. Is there any guarantee
that the Health Choices Administrator will follow H.R. 3200 without bias, discrimination
or prejudice? No guarantee.
H.R. 3200 page 93 paragraph A, B, C - GRIEVANCE AND COMPLAINT
MECHANISMS. It appears that any grievance is instant termination of services as per
paragraph C (i). If the Federal government has the ability to terminate service, as
similarly on page 425 with end of life services, then is this a representative government
or a dictatorship?
The Public Option is “No Option” where the Socialist forces within the federal
government
can determine who lives and who dies based on the democrats view of a “Living
Constitution”.
Charlie Wilson, the congressional representative of Ohio’s 6th District believes in
Obama’s
Czars, the tyrannical ploy of health care, wholesale murder of parental counseling and
abortion,
and every other socialistic initiative about to be presented to Congress.
Obama care is Unconstitutional, period. When the Constitutional is dissolved by
Congress,
then they can do whatever, but until that point, the Constitution stands. Charlie Wilson,
would you
commit to dissolving the America’s Constitution?
John W. McSherry – Grays’ Plutonium
USN (Retired)
Appalachia Ohio 6th District

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ObamaCare to “Rip This Nation to Pieces”

Posted by Brian Darling (Profile)

Monday, March 8th at 9:00PM EST

Congressman Eric Massa (D-NY) gave us a glimpse into the inner workings
of the House Democrat Caucus. Massa voted against ObamaCare when it
came up in the House last year. He alleged on a New York radio station that
he is being forced out of Congress because of his stance on ObamaCare.
Aside from the validity of the allegations against him, Massa gives us a
glimpse into a fight within the Democrat Caucus on the political viability of
the President’s health care reform proposal. Massa shows us that there are
some Democrats pleading with Speaker Pelosi (D-Ca) to back away from
ObamaCare.

According to Politico:

Rep. Eric Massa (D-N.Y.) says the House ethics committee is investigating
him for inappropriate comments he made to a male staffer on New Year’s
Eve — and that he’s the victim of a power play by Democratic leaders who
want him out of Congress because he’s a “no” vote on health care reform.

If this is true and Democrat Leaders are forcing Massa out of Congress to
help pass ObamaCare, this something that should be investigated by the
House Ethics Committee. When did Democrat Leadership know about the
allegations against Massa? Was the timing of the disclosure of the
allegations part of a plan to help pass ObamaCare? Massa claims that the
Democrat Leadership will “stop at nothing” to get what they want. More
Politico:

And this administration and this House leadership have said, quote-unquote,
they will stop at nothing to pass this health care bill.

Were they willing to force a member out of Congress to pass ObamaCare?

Much of this story came from a radio broadcast of Massa on WKPQ (TH to
Brietbart.tv). Massa claims that one pressure point that Dems used was to
have union leaders threaten him to vote for ObamaCare or get no union
money.
I have had union leaders tell me point blank we are not going to contribute
to your campaign unless you vote for this health care bill. Is that or is that
not a bribe?

I don’t know. It seems unethical. The promise of campaign contributions

for a vote for health care may be considered a quid pro quo bribe under
current law. A bigger question is whether this threat was made at the behest
of Members of Congress or Obama Administration officials. Massa alleges
that Democrats have lost their way. They railed against Republicans for
using strong arm tactics to pass bills, like the Medicare Prescription Drug
Benefit, yet now they are engaging in unethical behavior to pass health care
reform.

The leadership of the Democratic party have become exactly what they said
they were running against they have become exactly what we all ran against.

This anger and rage is coming from an elected member of the

Democrat party. This is a member that attended closed door meetings with
leaders. One of the points Massa made is that Democrats are ignoring
Republican claims that the American people do not like ObamaCare and
have repeatedly rejected it.

You can not effectively govern this country without the consent of
governed. The entire nation has said let’s rewrite the health care bill. Let’s
find what we can agree upon. No. No. No. We are going to ram this down
the throats of the American people.

Consent of the governed is an important concept and the Democrats have

ignored the polls calling for Congress to start over and people of
Massachusetts who sent Senator Scott Brown (R-MA) to the Capitol to kill
ObamaCare. Massa, a Democrat, was a voice in the caucus saying to rewrite
the bill and listen to the American people.

The American people have lost faith in this piece of legislation and if we
pass this bill using reconciliation it will tear this country to pieces. It will rip
this country asunder. And I have made this argument over and over and
over and over again with House Leadership.

And the House leadership ignored him and others saying that reconciliation,
the Health Care Nuclear Option, will destroy our nation politically. The
people will be very angry and our populace will become more polarized.
I have said we are supposed to be as democrats the party of unity. We are
supposed to be the party that builds consensus. We are supposed be the part
that governs equally without malice towards anyone. We are supposed to be
the ones that find the solutions.

The promise — the covenant Democrat leadership had with the American
people has been broken. They have not been the party of unity, nor the party
of consensus, nor the party that governs without malice, nor the ones that
find solutions. They have been the party of a faction that ignores broad
based solutions in favor of using strong arm tactics to force through a left
wing approach to health care reform.

But instead of actually trying finding the solutions and writing a piece of
legislation that will get you a 90 percent solution with 70 percent
agreement among the American people. They are going to ram this bill
down the throats of this country and it is going to rip this nation to pieces
politically and it will be a generation for this nation to recover.

These are strong words from Congressman Massa, but, his words give us
some evidence that elements of the Democrat party are pleading for
ObamaCare to be shelved. One may be skeptical of his claims of innocence,
yet still give credence to his strong claims of unethical behavior on the part
of Dem Leadership. ObamaCare is taking on some water and the bill may
yet stink because of the dangerous tactics Dems have used to railroad the bill
through Congress against the will of the American people.

http://www.redstate.com/brian_d/2010/03/08/obamacare-to-rip-this-nation-to-pieces/
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ObamaCare is Tyranny, Not Legislation

By John Frisby • Mar 18th, 2010 •
What we’re seeing in Washington, D.C. is not “politics as usual” with the
arm twisting and “horse trading” that is typical in getting a bill passed;
instead, it is ideological warfare. What Obama, Reid and Pelosi are doing is
not legislating; it is an act of tyranny — overturning all the rules and
principles of government in a representative democracy. Attempting to pass
the Senate version of ObamaCare in the House under the ironically named
“Slaughter Rule” (to circumvent the objections of the Stupak coalition to
taxpayer funding of abortion) is an exercise in raw power akin to the many
acts of judicial tyranny the American public has endured over the last 40
years from judges who have little regard for the Constitution.
Apparently Obama, Reid and Pelosi aren’t worried about losing control of
Congress in 2010 or even the presidency in 2012, because their higher goal
is to irrevocably institutionalize their ideology. Once government control of
health care is established, their leftist principles will be implemented by an
unelected bureaucracy that rules without accountability to the general public,
whether or not the Democratic Party is the majority in Congress or holds the
presidency.
Obama, Reid and Pelosi have learned nothing from history; they are as blind
to their own tyranny as were King George and the British Parliament. They
show no comprehension of the moral outrage that will ignite in this country
if they ram through ObamaCare ObamaCare , a bill that requires taxpayer
funding for abortion, usurps individual rights to choose their own personal
health care options, and saddles the nation with a growing flood of debt
which will drown our children and grandchildren.
Last Friday morning you could see workers beginning to set up barricades
around the Capitol in preparation for the demonstrations they expect in
response to the Democrats’ autocratic actions. They mistakenly think that
the Tea Party protests are temporary flare ups that mere barricades can
contain, but their legislative and executive tyranny is unleashing emotions
that have the potential to rival the anti-slavery movement of the Civil War
era and the Civil Rights protests of the 1960s. Having abandoned those
transcendent moral principles upon which this nation was founded for a false
ideology of their own imagining, they have no understanding of the
righteous fury that will build in this nation when her citizens see their
government sanction morally reprehensible acts.
Leaders across the nation — nearly half a million strong — have already
signed the Manhattan Declaration declaring that moral principles take
precedence over laws that ignore the value of human life and individual
freedom. These deeply-held religious beliefs are inviolable, non-negotiable,
and they are protected under the U.S. Constitution. Thousands of America’s
Orthodox, Catholic and evangelical Christian leaders have laid down a
gauntlet: By reaffirming the fundamental truth that life and liberty come, not
from man-made laws, but from God, we have joined together “to defend the
sanctity of life, the dignity of marriage as the conjugal union of husband and
wife, and the rights of conscience and religious liberty.”
We have, in good faith, expressed our objections and righteous indignation
over and over again only to be repeatedly rebuffed and ignored. Poll after
poll demonstrates that U.S. citizens are strongly opposed to ObamaCare and
its impact on our nation. Yet the Obama Obama /Reid/Pelosi axis is
determined to ignore the will of the people that they were elected to
represent and to dictatorially impose on the nation their ideas of what’s best.
They have lived so long in the rarified air of elitism that they think the
“masses” will simply accept their “superior wisdom.” These unprecedented
assaults on basic American principles compel Manhattan Declaration signers
to forcefully mount a defense of human life, marriage and religious freedom.
Manhattan Declaration signers have said that civil disobedience is necessary
when faced with gravely unjust laws requiring submission to laws that
violate our principled moral beliefs about abortion, marriage, and religious
freedom. As the Manhattan Declaration states, “We will fully and
ungrudgingly render to Caesar what is Caesar’s. But under no circumstances
will we render to Caesar what is God’s.”
Read at: http://www.americanthinker.com/2010/03/obamacare_is_tyranny_not_legis.html

http://www.luxlibertas.com/obamacare-is-tyranny-not-legislation/
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