Washington Update

Over the past year, Democrats have fought passionately for universal coverage.  They have fought for it even while the country is more concerned about the economy, and in the face of serial political defeats.  They have fought for it even though it has crowded out other items on their agenda and may even cost them their majority in the House.

And they’ve done it for almost no votes.  The 30 million who would be covered under the Democratic proposals are not big voters, while the millions who would pay for the coverage are strikingly unhappy.

There is something morally impressive in the Democrats’ passion on this issue.  At the same time, it’s interesting to compare it to their behavior on other issues in which they have no emotional investment.

For example, Democrats say the right thing when it comes to helping small businesses create jobs, but there’s no passion there.  For the past year, small business owners have been screaming that they can’t hire people because they don’t know what the rules will be on health care, finance or energy.  Democrats hear them, but those concerns take a back seat to other priorities.

Small business owners have been screaming about the health care bill that forces them to offer coverage or pay a $2,000-per-employee fine but doesn’t substantially control rising costs.  Democrats hear their concerns, but push ahead because getting a health care bill is more important.

Then there is the larger issue of exploding federal deficits.  A few Democrats seem to be genuinely passionate about this, President Obama says he is amongst them.  He has fought tenaciously to preserve a commission that would shift the blame for restraints on Medicare spending.  But most of those in Congress have no desire to own that same blame.

They’re going through the motions.  They’ve stuffed the legislation with gimmicks and dodges designed to get a good score from the Congressional Budget Office but don’t genuinely control runaway spending.

There is the doc fix dodge.  The legislation pretends that Congress is about to cut Medicare reimbursements by 21 percent.  Everyone knows that will never happen, so over the next decade actual spending will be $300 billion higher than paper projections.

There is the long-term care dodge.  The bill creates a $72 billion trust fund to pay for a new long-term care program.  The sponsors count that money as cost-saving, even though it will eventually be paid back out when the program comes on line.

There is the subsidy dodge.  Workers making $60,000 and in the health exchanges would receive $4,500 more in subsidies in 2016 than workers making $60,000 and not in the exchanges.  There is no way future Congresses will allow that disparity to persist.  Soon, everybody will get the subsidy.

There is the excise tax dodge.  The primary cost-control mechanism and long-term revenue source for the program is the tax on high-cost plans.  But Democrats aren’t willing to levy this tax for eight years.  The fiscal sustainability of the whole bill rests on the naïve hope that a future Congress will have the guts to accept a trillion-dollar tax when the current Congress wouldn’t accept an increase of a few billion.

There is the 10-6 dodge.  One of the reasons the bill appears deficit-neutral in the first decade is that it begins collecting revenue right away but doesn’t have to pay for most benefits until 2014.  That’s 10 years of revenues to pay for 6 years of benefits, something unlikely to happen again unless the country agrees to go without health care for four years every decade.

There is the Social Security dodge.  The bill uses $52 billion in higher Social Security taxes to pay for health care expansion.  But if Social Security taxes pay for health care, what pays for Social Security?

There is the pilot program dodge.  Admirably, the bill includes pilot programs designed to help find ways to control costs.  But it’s not clear that the bill includes mechanisms to actually implement the results.  This is exactly what happened to undermine previous pilot program efforts.

The Democrats not see themselves as having been completely irresponsible.  It’s just that as the health fight has gone on, their passion for coverage has swamped their less visceral commitment to reducing debt.  The result is a bill that is fundamentally imbalanced.

This past year, we’ve seen how hard it is to even pass legislation that expands benefits.  To actually reduce benefits and raise taxes, we’re going to need legislators who wake up in the morning passionate about fiscal sanity.  The ones we have now are just making things worse.

The bulk of this was taken from a NYT article.

Our Health Care

Health care is a fungible good; nothing more.  It's a result of capitalists doing what they do to make progress and money in the process.  President Obama will stop that progress to institute a mediocre system where everyone is treated exactly the same regardless of input, output, or creativity or productive effort or results.  No one is entitled to the efforts of others (like doctors and researchers, for example).  He's a Socialist, a system that diminishes rewards in exchange for reduced efforts of the productive.  People will still suffer and endure pain.  In fact, any of the proposed health care bills will make MORE people suffer, not fewer, because of reduced incentives to innovate.  Innovators have skin in the game and expect rewards; rewards that will not be forthcoming under the President's bill, whichever one it is.


Lawyers have the unique persepctive they can command others that will obey due to the force of law and the threat of incarceration or fiscal damage.  But they have no command over the creative to create, or way to induce the bright to peruse medicine as a career instead of the banking so many seem to detest of late.  Smart people will do what is best for them; that is the rule of the jungle whether you like it or not.  Society should never have any legitimate interest in a population's health care outside of public health.  We all die, some sooner than later.  Life's tough.  Now buck up campers and get back out there and do something productive.

Obama openly calls for Reconciliation on Health Care

I called this one, but that was no special feat.  Obama made it clear in his public address today that he would be using the reconciliation process to force the passage of Health Care.  The process that will be used going forward is not easy or simple, but here it is in a nut shell.

First.   Obama has proposed some modifications to the bill passed in the Senate.  Due to the modifications, the bill must pass another Senate vote.  This is why the reconciliation process will have to be used.

Second.   The modified Senate bill must pass the House of Representatives with a simple majority.  For those that do not know, this is normal operating procedure in the House.  Only the Senate requires a super majority.  This should pose a challenge as the change in abortion funding between the two bills is a hotly contested issue on the Democratic side.  However, Nancy Pelosi has assured the White House that she can produce the votes needed.

Third.  Reconciliation the "Nuclear Option" - In this approach, the bill that passes in the House would then be voted on in the Senate using the reconciliation process.  This is the riskiest part of all.  Normally this procedure is used only for budgetary measures that impact up to a 5 year budget.  Therefore, the CBO would be asked to score the Health Care plan over a 5-year period instead of 10.  This will probably produces some very interesting numbers.  This 5-year report could prove unsavory enough that the embattled Reid would not be able to muster even the simple majority necessary. 

Obama may have forgotten the Massachusetts lesson already but many Democrats, in tough election battles this year, have not. 

The "real" Healthcare Issues

There are two problems with healthcare.  The problem "voters" want fixed is rising premiums, rising costs, etc.  The fact is that most of them have insurance, and every year it costs them more than the year before.


The problem progressives want to fix is that 47 million people don't have insurance.  Of course, this is not an entirely different problem -- assuming that health insurance is something people want, then it stands to reason that we got costs under control people would actually buy their own insurance.

In other words, if you solve the problem "voters" want solved, then the problem progressives want to solve actually becomes smaller.

This presents its own problem, since solving the 47 million problem is just an excuse for universal healthcare.  Progressives don't want any particular problem solved, they want a specific solution.  Any solution that threatens to increase coverage (by lowering prices, for example) reduces the 47 million, and along with them, the "need" for universal care.

I know people who honestly believe that progressives actually want high unemployment because it increases the number of uninsured.  I don't know if that's true.  But suddenly it doesn't seem so improbable that progressives rely on expensive healthcare dysfunction to make their costly utopian liberal healthcare reform seem "revenue neutral."

Paul Ryan (Obama Owned the transcript)

Stolen from here:

Many viewers were wowed by the president's performance at the health care summit, his command of facts and ability to rebut every point the Republicans made. We must have been watching another channel.

'Obama dominates the room at health care summit" was the headline on a Reuters dispatch that found the president "always in command not only of the room but also the most intricate policy details, as he personally rebutted every point he disagreed with."

In a Washington Post column titled "Professor Obama schools lawmakers on health care reform," Dana Milbank marveled at how the president "controlled the microphone and the clock, (using) both skillfully to limit the Republicans' time, to rebut their arguments and to always have the last word."

Milbank went on to tell how Sen. John McCain got his "knuckles rapped" by the learned professor, how Sen. Mitch McConnell was made to "look small in his chair" and how various other Republican low-achievers felt the sting of Obama's "big rhetorical paddle."

But neither Reuters nor Milbank — nor many others, it seems — noticed Obama's conspicuous non-rebuttal to Rep. Paul Ryan.

It was the Wisconsin congressman who made the most pointed remarks about Obama's reform proposal. For example:

• "This bill does not control costs (or) reduce deficits. Instead, (it) adds a new health care entitlement when we have no idea how to pay for the entitlements we already have."

• "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. The true 10-year cost (is) $2.3 trillion."

• "The bill 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."

• "The bill takes $72 billion from the CLASS Act (long-term care insurance) benefit premiums and claims them as offsets."

• "The bill treats Medicare like a piggy bank, (raiding) half a trillion dollars not to shore up Medicare solvency, but to spend on this new government program."

• "The chief actuary of Medicare (says) as much as 20% of Medicare providers will either go out of business or have to stop seeing Medicare beneficiaries."

• "Millions of seniors who have chosen Medicare Advantage (Medicare through a private insurer) will lose the coverage that they now enjoy."

• "When you strip out the double-counting and ... gimmicks, the full 10-year cost of the bill has a $460 billion deficit. The second 10-year cost of this bill has a $1.4 trillion deficit."

• "The 'doc fix' (restoring cuts in Medicare reimbursements) costs $371 billion ... a price tag (that) made the score look bad. (So) that provision was taken out, and (put) in stand-alone legislation. But ignoring these costs does not remove them from the backs of taxpayers. Hiding spending does not reduce spending."

• "Are we bending the cost curve down or are we bending the cost curve up? If you look at your own chief actuary at Medicare, we're bending it up. He's claiming that we're going up $222 billion, adding more to the unsustainable fiscal situation we have."

In response to all this, Obama basically talked up the benefits of Medicare Advantage. Call us sticklers, but we expected something a little more, uh, professorial.

Obama OWNED (the video link)

If you don't watch anything else this week, you absolutely have to watch this.

Health Care Anyone?

"We cannot have another yearlong debate about this," Obama declared. "I'm not sure we can bridge the gap."

1.  There is no "gap" - the GOP will not support a government takeover of this much of the economy.  You knew this a year ago when you completely shut them out.
2.  Reconciliation here we come
3.  Don't forget that it will take 10 years to pay for 6 years of this plan
4.  There is no need for a provision that takes away the ability of a future Congress to repeal this bill.  Entitlements never die.  Example:
1. Greece 
2. California 
3. Social Security 
4. Medicare

What is Insurance?

Lifted from Here:

Now let’s discuss risk assessment. Ignoring pre-existing conditions might sound compassionate, but it is equivalent to declaring that a fire-insurance company must charge the same amount for a modern house with smoke detectors and interior fireproofing as for a century-old, wooden-frame former stable, complete with some hay left over, and a basement full of painting supplies. Taking the analogy further, the same premium must be charged for a well-protected, unscathed house as for one that is already on fire.


The business of insurance is about determining risk and charging accordingly. It’s why insurance companies exist. If we eliminate that, medical insurers are just form-processing companies for the government. Worse, we lose a valuable economic input: that of accurate risk assessment and pricing, without which sensible management of medical expenses is impossible.

‘Don’t Ask’

The desire to help those with pre-existing conditions is laudable. The way to do this is to help. If someone needs more medical care than he or she can pay for, direct state subsidy is far more efficient than making insurance companies pretend that the patient isn’t ill or at high risk of becoming ill. We can separately debate the degree of generosity of this subsidy, but it is efficient and honest. Making insurance companies play “don’t ask, don’t tell” with health status is neither.

Though you wouldn’t know it from the headlines, our system today, and our discussion of reform, isn’t about insurance. It’s about the total provision of health care, largely by employers, with costs hidden from individuals. Furthermore, much of the proposed reform is about eliminating the main function of an insurance company: the assessment and pricing of risk.

Creating a system of real health insurance, along with honest subsidy where necessary, is the simple solution to many of our problems, and an honest first step toward tackling the rest.

Obama is tackling healthcare... still?

Obama is having a "bipartisan" meeting to discuss healthcare reform on Feb. 25.  This is great!  Now instead of barring Republicans from the meeting altogether, he is going to have them right there in the room so that they can be ignored. 

Republicans have made it very clear that they have heard the people and will not support a federal take-over of healthcare.  This means that the entire legislative process needs to be restarted.  Obama still thinks that he can bribe Republicans enough to get them to sign onto this rediculous plan.  There is really no solution that will work in the long run because the fundamentals are the problem.  Neither the Democrat (Progressive) nor the currently recommended Republican plans for changing the system will work to fix the insolvency issue that is our current entitlement fiasco.

The fundamental issues are that as life-expectancy has increased, the retirement age has not and too many people have no "skin in the game" concerning medical costs.  This means that programs like Social Security, Medicare, and Medicaid are eternally doomed. 

Look at Paul Ryan's "Roadmap for America's Future" lifted in part from here:

Medicare and Social Security would be preserved for those currently receiving benefits, or becoming eligible in the next 10 years (those 55 and older today). Both programs would be made permanently solvent.

Universal access to affordable health care would be guaranteed by refundable tax credits ($2,300 for individuals, $5,700 for families) for purchasing portable coverage in any state. As persons under 55 became Medicare eligible, they would receive payments averaging $11,000 a year, indexed to inflation and pegged to income, with low-income people receiving more support.

Ryan's plan would fund medical savings accounts from which low-income people would pay minor out-of-pocket medical expenses. All Americans, regardless of income, would be allowed to establish MSAs -- tax-preferred accounts for paying such expenses.

Ryan's plan would allow workers under 55 the choice of investing more than one-third of their current Social Security taxes in personal retirement accounts similar to the Thrift Savings Plan long available to, and immensely popular with, federal employees. This investment would be inheritable property, guaranteeing that individuals will never lose the ability to dispose every dollar they put into these accounts.

Ryan would raise the retirement age. If, when Congress created Social Security in 1935, it had indexed the retirement age (then 65) to life expectancy, today the age would be in the mid-70s. The system was never intended to do what it is doing -- subsidizing retirements that extend from one-third to one-half of retirees' adult lives.

Look at these common sense solutions, then look at the quagmire that is the 2,000 page Progressive solution to healthcare.  Tell me which one makes sense for both current and future stability.

Obama on YouTube

I wish I could say that it was super interesting and informative, but it was only moderately so. He noted a few items of interest. Amongst those are Healthcare, student loan repayment, net neutrality, education, terrorism, and energy. See the full video here.

Healthcare - nothing new here, he still wants the government to run it.

Student loan repayment - nothing new here either. I am still struck by his thinking on this one though. Why would you let the debt expire for someone making (on average) 40k/yr after 20 years, but let someone making (on average) 70k/yr have theirs forgiven after only 10 years? The incongruity here is staggering. For that matter, why would you forgive any of this debt at all? God knows I am still paying my student loans. Instead of seeing them as a burden that I can foist off on others, I see them as the price I pay for access to the quality of life I enjoy. It is a slippery path you start down when you view your quality of life as being the responsibility of others.

Net Neutrality - wow, this is truly a can-of-worms. Please take the time to educate yourself on this point. I do not want to spoon feed anyone on this. My opinion on it - VERY BAD.

Higher Education - makes you a better citizen. Ouch.

Terrorism - I am actually pretty in-line with Obama's approach on this. I agree with each strategic decision he has made given where he found himself. I still regret going into Iraq under the pretenses that we did. Not that it did not need to be done, but we needed more concrete proof and justification for what we did there.

Energy - We are pretty much on the same page here. I advocate truly "clean" energy based on its proven ability to lower pollutants in the atmosphere. I do not endorse his indefensible opinion on climate change. We just have two separate roads to the same conclusion.

California Trifecta

Just about every day something stupendously insane that one state or another has done will come to my attention, but those jokers in California managed a trifecta.  They double-dipped into healthcare and still managed to bungle some inmate legislation.

First let's look at the more ridiculous of the two health care fiascos.  They have decided that since the single-payer plan will not pass for the entire country it will still suffice for the good people of California.  Were they not paying attention to the failures that similar plans have become in Tn and Ma?  Even better yet, they seem to have lost sight of their current budget crisis and are looking to spend even more money that they do not have.  Perhaps they figure that their deficit is just not big enough yet to deserve a bailout.  Well, I guarantee that they have found the vehicle to permanent financial destruction.  This legislation would triple the size of their current budget. Couple this with item number two and the repercussions are staggering.

Second on the list of WTF items for California is patient wait time.  California has already passed legislation that will reduce the time someone will wait to see a doctor.  That is correct; apparently the whole issue here was that a rule needed to be established.  The doctors have plenty of openings to see you, but since there was not rule in place limiting the wait time, they just hung out in their offices doing sudoku puzzles and playing solitaire.  Of course, since they were wasting all that time instead of seeing patients it likely saved them money in payments to administrative staff to file the insurance claims over and over again.  The new law, which goes into effect in 2011, is a huge step towards... what?  If I practiced medicine in California, I would be asking all my friends to save boxes.  I would need them for the move.

Last but not least, it looks like California is going to make good on its promise to release inmates early as a means to reduce their budget deficit.  This idea is perfect.  If you take some vocational classes while in prison you can get out early.  But the deal does not end there, there is also a reduction in parole that goes along with your early release.  By reduction I mean that many prisoners will not be monitored at all after release.  Minor infractors will no longer be monitored for two reasons.  First, if they are not monitored, then they will not violate parole and therefore, not be subject to a return to prison (logical, if you don't think of the other implications here).  Second, it will allow the more dangerous prisoners to be monitored more closely.  California is really rolling the dice on this one.  I sure am glad I live on the other side of the country.  This is just one more reason to pack your bags and move (as if you needed it).