Saturday, February 27, 2010

Climbing the Health Summit

Yesterday, the long-awaited health care takeover summit at the White House took place, and it was not as was expected nor advertised. It was supposed to be a trap. Congressional Republicans were supposed to “compromise,” laying the groundwork for the government takeover of the nation’s entire health care system once and for all.

Only, they did not lie down. Indeed, they were well-prepared and their arguments were highly effective against ObamaCare on just about every point, even though Democrats spoke for 233 minutes compared to the GOP’s 110 minutes, according to the Senate Republican Conference. Barack Obama alone spoke for 119 minutes, which he studiously ignored as not counting towards the Democrats’ time. Said Obama, “I don't count my time because I'm the President.”

Leaving Obama’s arrogance aside, Republicans made the most of their time in the summit, and outside of it. Congressional Republicans’ messaging machine was firing on all cylinders throughout the day. They deployed a rapid response fact-checking barrage of press releases, which ALG News chronicled at its news aggregator, Washington News Alert. Everything from Obama lying about CBO’s report, which does state that ObamaCare would raise premiums; to Reid lying about the Democrat threat of reconciliation.

Congressional Democrats, on the other hand, apparently were not so concerned about getting rapid reponses out to the media at all. By design, it appears, they put all their stock on the summit selling itself, or perhaps the media promoting it for them. The truth is, their silence was telling.

Republicans, on the other hand, climbed the summit. And they came out on top. Within an hour of the summit’s opening remarks, it was clear that skeptics who thought Republicans should have sat it out were wrong. Republicans need not have walked away from this challenge. For, they hit the ground running.

Senator Lamar Alexander in the Republican opening statement made the point, quite effectively, that the summit was effectively pointless if Congressional Democrats refused to take the reconciliation threat off the table.

Said Alexander, “my request is this: before we go further today, that the Democratic Congressional leaders and you, Mr. President, renounce this idea of going back to the Congress and jamming your bill through on a partisan vote through a little-used process we call reconciliation.”

Continued Alexander, “You can say that this process has been used before, and that would be right, but it’s never been used for anything like this. It’s not appropriate to use to rewrite the rules for 17 percent of the economy. Senator Byrd, who is the constitutional historian of the Senate, has said that it would be an outrage to run the health care bill through the Senate like a freight train with this process. The Senate is the only place where the rights to the minority are protected, and sometimes, as Senator Byrd has said, the minority can be right.” Indeed.

Instead, Congressional Democrats left reconciliation — a process reserved for minor budget fixes — right there on the table as the summit continued unabated. Everything Republicans, and more importantly, the American people needed to know about the spirit of “bipartisanship” in Washington took place in those first minutes. And the meeting followed suit.

For Obama, the summit was a failure. And it failed precisely because Democrats refused to take the loaded gun off of the table. Instead, Republicans refused to simply bow to the will of Obama and his party. Republicans could have very easily just filed out of the room at that very moment, and just as much would have been substantively produced legislatively by the summit.

But, if they had just walked out then and there, or if they had not attended at all, a great opportunity would have been missed to set the record straight, which is exactly what they did. On point after point.

Obama and the Democrats may have thought they were laying a trap, but instead, it is they who have been hoisted by their own petards. So, Americans for Limited Government would like to say bravo to Congressional Republicans for standing up for the American people. They thank you.

On a bright note, reconciliation may have been an exaggerated threat all along, as reported by RedState’s Dan Perrin. Apparently, the votes may not be present in the House to pass a reconciliation bill. Why?

Senator Kent Conrad said, “I don’t know of any way where you can have a reconciliation bill pass before the bill that it is meant to reconcile passes.” Only, that is exactly what Democrats’ plan is in the House: pass the reconciliation bill first, then have that pass in the Senate, and only then would the House pass the Senate bill. Obama would then sign the Senate bill first, and the “reconciled” bill second, amending the Senate bill.

But, if a serious point of order can be raised, as it surely would, that the rule can only be applied to standing law and, importantly, that was enforced by Congress’ parliamentarian, House Democrats would be left with but one choice to enact their health takeover: vote on the Senate bill first. Except, they do not have the votes to do that.

Reports Politico, “When reminded that House Democrats don’t want to do health care in that order, Conrad said bluntly: ‘Fine, then it’s dead.’” One can only hope, Obama’s attempt at resurrecting his bill yesterday notwithstanding. Even if he ultimately succeeds at passing this monstrosity, at least the American people have a political party that fought for them, even when the cards were stacked against them.


After Health Debate, Obama Threatens Dem-Only Strategy

Thursday's bipartisan health care summit seemed less like an opportunity to reach across the aisle than an opening salvo in the last big battle over health care reform before the November elections. While the president and lawmakers attempted substantive policy discussions, that could not hide bitter partisan divisions.

In his opening remarks, Sen. Lamar Alexander, R-Tenn., addressed Obama on one of the issues that most irritates the GOP: "My request is before we go further today, that the Democratic Congressional leaders and you, Mr. President, renounce this idea of jamming through on a partisan vote, through a little used process known as 'reconciliation,' your version of the bill." Reconciliation is a process that takes only 51 votes to pass the Senate, instead of the 60 needed to end debate on nonbudget bills. The House would have to pass the Senate health care bill, then OK a subsequent "reconciliation" measure that altered the Senate plan.

Alexander's plea did not sit well with Senate Majority Leader Harry Reid, D-Nev. "No one has said — I read what the president has online — no one has talked about reconciliation, but that's what you folks have talked about, ever since that came out, as if it's something that has never been done before," said Reid. "Of course, reconciliation is not the only way out of this. But since 1981 reconciliation has been used 21 times, most of it by Republicans, for major things. Like the Contract for America, Medicare reform, the tax cuts for rich people."

Right-leaning blogs jumped on Reid's comments, pointing out that he said just last week Democrats were willing to use reconciliation.

Sen. Majority Whip Dick Durbin, D-Ill., said earlier in the week that Democrats were willing to move without Republicans. During the summit's break, Durbin was asked if a bipartisan deal was possible. "It's a long shot (but) it's possible," he said, "If nothing comes of this we're going to press forward. We just can't quit. This is a once in a political lifetime opportunity to deal with a health care system that is really unsustainable."

A Gallup poll released Thursday showed the public opposed to reconciliation, 52%-39%. A CNN/Opinion Research poll found just 25% support a bill similar to the one working its way through Congress; 48% say start from scratch and 25% say just stop working on health care.

Whether Congress will have the votes for reconciliation is unclear. IBD contacted the offices of two dozen moderate Democrats who voted for the House health bill in November to see if they supported reconciliation. Most declined to respond. Those who did were decidedly ambivalent. "He hopes that we can find a bipartisan way and that is his focus," said Brenden Timpe, spokesman for Rep. Earl Pomeroy, D-N.D. Asked what his boss might do if the reconciliation strategy were tried anyway, he replied: "I don't know. I haven't had a conversation with the congressman on that."

Abigail Gardner, spokeswoman for Rep. Dan Maffei, D-N.Y., couldn't pin her boss down on the issue either. She hadn't heard him say "one way or another if he is personally in favor of it or whether it would change his vote."

Rep. Kathy Dahlkemper, D-Pa., apparently isn't sure what she will do either. "Until we know it is the strategy, it is really just a hypothetical and I cannot comment on that," said spokeswoman Marie Francis.

Meanwhile, Rep. Bart Stupak, D-Mich., and a dozen or so Democrats object to the Senate health bill's abortion language. So Speaker Nancy Pelosi, D-Calif., likely will need Blue Dog moderates who voted "no" on the House bill to switch to yes. Reconciliation could give them another reason — or excuse — not to put themselves on the political chopping block.

House Majority Leader Steny Hoyer, D-Md., seemed to reflect the wobbly status of his caucus when he told reporters Tuesday that Democrats may have to break a big bill up and pass small parts instead. "We may not be able to do it all," he said.

At the halfway point of the summit, Rep. Tom Price, R-Ga., chairman of the Republican Study Committee, said, "So far the summit has illuminated what Americans have feared: Democrats fundamentally believe that medical decisions should rest in Washington, rather than with patients and doctors."

Ralph Neas, CEO of the liberal National Coalition on Health Care, not surprisingly, had a different take. "I think what we're seeing today is — and I'm sure the structure of the topics is not an accident — so much time devoted to cost containment and health insurance reform," he said. "I think you're seeing a lot of agreement on health insurance reform, whether it's the prohibition of discriminating against pre-existing conditions, or caps on benefits, or canceling of insurance."

Focusing on insurance reform could prove to be smart politics for the Democrats. The same CNN poll found that respondents favored barring insurance companies from declining coverage to those with pre-existing conditions 58%-42% and from dropping coverage of those who are sick 62%-38%. But those reforms alone could destroy the economics of the industry, experts argue, forcing premiums to surge and leaving more people without coverage.

Neas said the summit had "defied the expectations of many in terms of the relative absence of political exchanges." But policy exchanges were often characterized with heated rhetoric. Sen. Jay Rockefeller, D-W. Va., said, "The health insurance industry is the shark that swims just below the water. And you don't see that shark until you feel the teeth of that shark. ... This is a rapacious industry that does what it wants."

Rep. Paul Ryan, R-Wis., attacked the Senate bill because it's a good proxy for Obama's similar plan released Monday. "This bill does not reduce costs," he said. "The (Congressional Budget Office's) job is to score what is placed in front of them, and what has been placed in front of them is a bill that is full of gimmicks and smoke and mirrors."

At the close of the summit, Obama said the GOP needed to do some "soul searching" on health care, and that he'd proceed without them if necessary. But the GOP might not be the only ones who'll need to do some introspection. "The president and Democrat leadership have backed themselves into a politically difficult position," said Ed Haislmaier, senior research fellow at the conservative Heritage Foundation. "They want insurance reforms that necessitate an individual mandate, and that mandate is not very popular on the right, left or center."


Republicans find loophole in budget ploy to push through healthcare legislation

As it turns out, Senate Democrats may not be able to force healthcare legislation through the chamber on a simple majority vote. Republicans say they have found a loophole in the budget reconciliation process that could allow them to offer an indefinite number of amendments. Though it has never been done, Sen. Jim DeMint (R-S.C.) says he’s prepared to test the Senate’s stamina to block the Democrats from using the process to expedite changes to the healthcare bill.

Experts on Senate procedural rules, from both parties, note that such a filibuster is possible. While reconciliation rules limit debate to 20 hours, senators lack similiar constraints on amendments and could conceivably continue offering them until 60 members agree to cut the process off. Another option for Democrats would be to seek a ruling by the parliamentarian that Republicans are simply filing amendments to stall the process. But such a ruling could taint the final healthcare vote and backfire for Democrats in November. Or Senate Majority Leader Harry Reid (D-Nev.) could use a tactic similar to the so-called nuclear option to quash the GOP tactics.

If those options failed, and Reid couldn’t convince a single Republican to vote with his 59-member conference, Democrats might be forced to consider withdrawing the healthcare bill.

A Democratic leadership aide confirmed to The Hill that the options outlined in this article are correct. House Democrats have said they would not pass the Senate healthcare bill unless changes are made through reconciliation, which is necessary because Republicans control 41 Senate seats, enough to block legislation through the regular process. But Republicans may end up having that power even under reconciliation.

“You could keep offering amendments until you don’t have any more to offer,” said a congressional aide, who said he did not know how long senators would be willing to stay in the chamber to move the reconciliation package. “What the body’s tolerance would be is unknown.”

A former Senate Republican leadership aide said: “The limit is on debate, not on consideration of amendments.”

DeMint said he’s ready to try anything. “You’ll see Republicans do everything they can to delay and stop this process,” DeMint said. “They need to get the message the track they’re on is the wrong track.”

Reid spent significant time last year in close study of the Senate rules for fast-tracking healthcare legislation under special budget rules. Reid stayed away from the special process of passing healthcare reform with only 51 votes because he knew it would be messy.

But since Republicans won a Senate seat in Massachusetts, thereby stripping Democrats of a filibuster-proof majority, it appears Democrats will need to invoke those rules to make crucial changes to healthcare legislation.

DeMint said that using reconciliation rules to pass the House-requested changes to the Senate healthcare bill with only 51 votes is “tyrannical.” “I think you’ll see us offering amendments to get us into November, if we can,” said DeMint.

Sen. Judd Gregg (N.H.), the ranking Republican on the Budget Committee, said: “You could continue to offer amendments, I suspect. “You can offer an unlimited number of amendments on the budget after time is elapsed so it’s logical that you could also do it on reconciliation,” Gregg said.

Democrats could try to persuade Republican colleagues to back down and withdraw their amendments after several hours or days of voting. With a unified Democratic conference, Reid would need just one GOP senator to cut off the process. The most likely candidate would be Sen. Olympia Snowe (R-Maine), who voted with Democrats to advance the Senate Finance Committee bill but has since opposed the healthcare measure on the Senate floor.

Reid or another Democrat could make a point of order that using amendments to stall a reconciliation bill violates the spirit of the Budget Act of 1974, which sets up for expedited consideration of budget-related bills. Reid or another Democrat could argue that offering unlimited amendments violates the spirit of limiting debate.

The parliamentarian has ruled that the limit on debate does not allow senators to filibuster the motion to proceed to a reconciliation bill. The parliamentarian could rule that the same concept applies to amendments. No one really knows, because a lawmaker has never tried to use amendments to filibuster a reconciliation package. “We haven’t ever tried it before,” said a congressional aide.

Parliamentarian Alan Frumin could rule Republican amendments after a certain number out of order. But he could also allow the GOP amendments, since they are not expressly barred. If Frumin ruled with Republicans, Reid would be in a difficult position. He could either pull the bill off the floor or he could appeal the ruling of the parliamentarian.

With a simple majority of 51 votes, Reid could overturn the ruling of the chair and set a Senate precedent that amendments must be limited to within reason. This tactic would be similar to the so-called nuclear option Senate Republicans considered using in 2005 to overrule Democratic filibusters of judicial nominees.


Obama’s Health Plan – Taxes, Taxes Everywhere

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.


Report Concludes President Obama's Health Proposal Would Lead to Public Option

President Obama's new health care plan will all but guarantee the elimination of private insurance and lead to a single payer government-run health care system, says a new report, "White House Health Care Plan Contains Back Door to a Public Option" by policy analyst Matt Patterson of the National Center For Public Policy Research. Among the findings:

* The President's plan would create a new federal agency charged with monitoring health insurers to make sure that proposed premium increases are not "unreasonable" or "unjustified." This agency could compel private insurers to lower premiums, offer rebates or "take other actions to make premiums affordable."

* The President's plan would also dictate that health insurers cover those with pre-existing conditions and saddle them with billion in new taxes and fees.

* Health insurance is one of the least profitable industries America. In terms of profit margin, in 2009 it ranked a dismal 87th out of 215 industries; their overall profit margin was a mere 3.4 percent.

* The President's proposed combination of new taxes and price controls would cause a wave of health insurer bankruptcies, devastating the industry and reducing health insurance options for consumers.

* Eventually, the shrinking pool of private insurers would force the government to enact a single payer system to provide the insurance that Congress mandates that all Americans have.

Patterson calls Obama's ploy "breathtakingly audacious," noting, "Far from being able to keep the plan you like, the President's health care plan seems designed to make sure you end up with only one option for your health care - the government."


The recent rises in American healthcare costs are not unique

Newer drugs and procedures will cost more wherever you are

On this, we can all agree: American health care is feverishly expensive, swallowing up 17 percent of GDP. Since 2000, health-insurance premiums have more than doubled, affecting the bottom lines of businesses and hitting Middle America in the pocketbook. It’s not surprising, then, that since inauguration the administration has made the reduction of “long-term growth of health-care costs for businesses and government” its highest priority for health reform. “If we do nothing, then health-care inflation is going to keep on going up at 8 percent, 9 percent, 10 percent a year,” the president said last July, urging immediate action.

Over this past year, the administration has blamed rising costs on things that make U.S. health care different. American private insurers are too greedy. American doctors prescribe wastefully. American doctors are paid inefficiently.

The White House has pushed sweeping measures: a Medicare-style plan to compete with private insurance; new bureaucratic committees to define and oversee private coverage; expansions of public programs; and a government body tasked with bettering health care by guiding the decisions of doctors. White House budget director Peter Orszag crowed that the latest Obamacare bill “contains more cost containment and delivery-system reforms . . . than any bill that has ever been considered on the Senate floor, period.”

Of course, the very same “cost containment” systems exist in countries with socialized health care. And if the White House has confidence in a government-based solution to this problem, here’s the irony: Health-care inflation rates in the United States have been similar to those in government-managed systems that often employ the sort of regulatory policies championed by the White House.

Over the long term, the difference between the rise in costs of American health care and the OECD average from 1990 to 2006 was just 0.4 percent annually — even though bureaucrats manage most of the health spending in those other countries. Jump ahead a few years, and the trend hasn’t changed. Health care might be cheaper in socialized systems (in part, because of rationed care), but, even with their long waiting lists, costs are rising just as quickly there as here. Consider the 2009 figures:

In Britain, health costs rose 3.1 percent (and a full 5.5 percent increase in the strictly controlled hospital sector). In Ireland, the republic’s health-care system produced 2.5 percent health inflation; Irish prices declined by 5 percent across the economy, by the way. Germany’s inflation rate was at a 20-year low of 0.1 percent; health costs still rose by 1.8 percent. In Canada, health costs rose by 3.0 percent.

Canada is an interesting case study, since private insurance is banned in most of the country. Yet commentary in newspapers would be familiar to an American reader. The Toronto Star insists “something must be done” to reverse “unsustainable” spending growth. The Globe and Mail describes spiraling health costs as a “ticking time bomb.” But if costs are rising, government rationing can be felt. This month, the Province of Newfoundland’s highest elected official, Premier Danny Williams, went to the United States for urgent heart surgery, insisting the necessary treatment was unavailable in Newfoundland.

And how did the United States do with its lack of Obama-inspired Canada-Irish-German-style bureaucratic controls? Health inflation here was 3.4 percent last year, just over double the basic inflation rate. Tellingly, the worst cost increases were experienced by . . . government. Medicare costs were up 8.6 percent, and Medicaid, up 9.9 percent.

Make no mistake: That 3.4 percent may be lower than the alarmists predicted, but it’s still no cause for celebration. Whether it’s as high as other countries’ or not, health inflation is unsustainable. And international trends suggest health inflation is caused by the things that make America similar to other Western nations: worsening diet and fitness habits; higher health expectations; an aging population; costly new medical technologies; and payment systems that tend to insulate people from the economic consequences of their decisions (mainly private insurance here and public insurance abroad).


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