Republican Calls for Repeal Invite Deficit Scrutiny and Skepticism

Reform is Bitter Medicine

One aspect of President Obama’s health care reform legislation that has not received enough serious discussion is deficit reduction.  Despite claims that the legislation expands government, the non-partisan Congressional Budget Office (CBO) says that it will reduce the deficit by a significant amount over the next twenty years. 

This has not stopped Republicans, such as Lindsey Graham, from announcing a campaign to “repeal and replace” the legislation.  What the Republicans have not said, is whether they would increase the deficit by such repeal, or find a way to match or improve upon the projected $130+ billion dollars in deficit reduction over first ten years and more than a trillion dollars in projected saving by 2030 contained in the Obama plan.  (Atul Gawande in the New Yorker gives some context)

It’s not hard to create popular legislation if it gives benefits that it does not pay for.  Remember that President Bush’s Medicare Prescription Drug benefit was popular, but was also a giveaway, increasing the deficit.  The harder part is to create legislation that lowers the deficit, without losing support among constituents, who like the idea of deficit reduction, but don’t want to see their own benefits taken away.

No matter what happens in November, President Obama would surely veto any attempts to repeal health care reform.  He may be open to improving upon current legislation, but he has promoted the “paygo” (from pay-as-you-go) rule, which requires that new legislation not raise the deficit.  “Paygo” requires cuts in spending or increases in taxes to offset any new program spending.  “Paygo” led to surpluses in the Clinton presidency, and will again, so long as it is followed.  However, Republicans have no credibility on fiscal discipline.  They may run for office on a repeal platform, but will they propose alternatives to health care reform that cut the deficit?

Remember, repealing the current law would, in itself, raise the deficit, since Obama’s new legislation substantially lowers the deficit.

Republicans’ most appealing political argument, superficially, at least, against Obama’s health care reform, is that it takes money from Medicare.  Republicans claim it will bankrupt Medicare and hurt senior care.  Democrats refute these claims, arguing that the elimination of waste, fraud and abuse and the establishment of an independent panel to review Medicare spending will lower costs without cutting the quality of senior’s care.

An ongoing disagreement over doctor reimbursement rates may be another difficult challenge or an opportunity for creative problem solving, when it resurfaces in coming months or years.

It is no surprise that Republicans have come down on the side of spending more, and reassuring constituents, rather than bold action and fiscal responsibility.  But if Republicans are going to have any relevant part in the health-care debate going forward, they must be willing to offer potentially unpopular proposals that the CBO agrees will cut the deficit.  So far, Republicans have shown no appetite for the politically difficult task of cutting spending, not in Medicare, not in Social Security, and not in Defense. 

President Obama has taken criticism for his stimulus spending.  But this was one-time emergency spending to stave off economic crisis, and the benefit of a rebounding economy should include increased tax revenues and a lowering of the deficit over time.  The President has since made it clear that he came to Washington to make the tough decisions, including long-term deficit reduction.  His health care reform triumph follows through on that promise.

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For more on health care reform:  You’ve Got to Hand it To Them:  Obama, Pelosi and Reid.

Marc Seltzer blogs at http://marcivanseltzer.wordpress.com/

http://www.flickr.com/photos/donkeyhotey/4393343019/sizes/o/

78 comments

Barbara Kuyper-cross

Roger and Margret, Although this bill did not go far enough to reduce costs for the consumer and the economy (single payer or public option would have been better) it is, as I and many others have stated, a start. You cannot improve upon that which you do not start.
As far as increasing premiums and the ultimate tax costs of this bill...
The regulations which are the purview of the DHHS and the President have not been issued yet. Why don't we wait and see what this legislation becomes over the next few months.
Meanwhile, some recommended reading would be: Landmark - The inside story of America's new Healthcare Law and what it means for us all. It is written by the Washington Post Staff writers whom, you should agree, are bipartisan and usually pretty damned smart. In the very least it will give a disection of the bill in lay-terms.

Between the regulatory part of the legislation (the teeth) and this book (the non-political analysis) we can stop the speculation, all of us, and see the TRUE impact. After the dust settles, I am confident the worst that can be said is that it did not go far enough.
But then again, it is a start.
On a side note I have recently visited the district offices of my Senator (Republican) and Representitive (also R) and met with staffers on healthcare (under another hat I wear for Amnesty International). You would be surprised about the dialogue surrounding healthcare reform now that it is law.
If you are interested, I will share off line.

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Margaret W.
Margaret W9 years ago

Barbara by any chance did you see the Sunday NY Times front page article about the fact that NY mandated coverage for pre existing conditions several years ago and that law has proven to be fairly disastrous in terms of significant increases in health care premiums for EVERYBODY ELSE? Gee maybe looking at a situation that tried this idea and the results might have led folks to realize that this is going to increase premiums for everyone else. There is no cap on the premiums in the law and no effort to control costs. Roger is correct on this.

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Roger H.
.9 years ago

Barbara,
The CBO was only given enough information to make the numbers come out the way the Democratic leadership in Congress needed to get enough votes to pass the bill. CBO numbers after the bill was passed show a different story and actually show that the new health care law will increase the deficit unless Congress comes up with more money to pay for it (raising taxes). A VAT tax is being proposed, similar to the one used in European countries to help pay some of the costs of the program that were not given to the CBO. This VAT tax would be in addition to our income tax and would affect the cost of all goods and services we buy. As was done in Europe, to get support for the VAT tax, the tax rate would start out small and is estimated to eventually need to be raised to a rate of up to 25%. It would raise the cost of everything every American purchases eventually by the 25% amount and rebates would be given to people below a certain income level.
This new health care law still leaves us with the highest cost health care of any industrialized nation and those costs must be addressed.

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Barbara Kuyper-cross

Steve please read the CBO report to get your requested proof.
It does not matter what you 'say' .....or anyone else for that matter. It matters what the facts are.
This reigning in of the out of control avarice of the Insurance Cartel and placing on the books the hidden costs of health care for the uninsured is HUGE and a most needed first step.
If you want more facts without wading through hours of legaleze then order a copy of the book being published by the writers at the Washington Post. This non-partisan publication details the benefits of the Insurance reform for individuals, businesses and the economy. Stop troubling yourself with opinions and calm yourself with the facts.

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Steve Gomer
Steve Gomer9 years ago

You say in your article that the Presidents health care reform will reduce the deficit. Where is the proof? Did he should you any hard proof to this fact? Because the dems make claim to it does not make it a fact.I say you cannot spend 900 billion in 10 years and reduce the budget. You likewise cannot create 100 new Government institutions with and estimated 1,500 or more employees(to over see this night mare health care reform) and reduce the budget.

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Barbara Kuyper-cross

@Dominick F: That which you posted is so much garbage, and you probably know it. The only problem with this legislation is that it did not go far enough. That was largely due to people like you who believe the lies fed to you by insurance company shills and spread them to others.
No Rationing-That comment is just plain silly.
There is a tax on those who do not carry insurance so that the rest of us do not have to pay their emergency room bills. But, hey, if you don't want them to pay their own way then perhaps they should send their bills to YOU.
Not everyone is covered until 2014...so which is it??? Is this bill too much or not enough...you can't have it both ways. Or didn't you think someone would call you out on this hypocricy.
As far as high risk pools-that is how people who can't get insurance from the Cartel are getting it right now. Get your facts straight.
People come here from everywhere in the world because of the Superior Medicine NOT because of our Health Insurance. Health Insurance is what got reformed. Again, get your facts straight. Silly.
YOU have not read the bill. YOU. I have. My reps have; both Republican and Democrat. If you have not kept yourself informed, which obviously you have not because you get your "facts" from Fox "News", then shame on you. But do not try to roll this caca out to the rest of us!
Your scattered commentary cannot stand up to the light of day.

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Dominick F.
Dominick F.9 years ago

The health bill will: Ration health care, create a panel that will have the final say on any treatments, surgeries.Put a tax (fine) on anyone not enrolling in a government approved health plan.Not cover everyone until 2014, put you in a high risk pool if you have a pre-existing condition untill then.Why do you think they come here from Canada to have surgeries? People have not read the health bill, then neither has Congress (the Democrats).Then the cost of this bill would wind up with each state, who are hurting for money.

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Barbara Kuyper-cross

Margaret - We are in total agreement about how much work needs to be done to get to a plan that puts Americans and not Corporate Overmasters in charge. But we have started and we are going to get there.

I too, was in the insurance industry early in my career. So I do not say it lightly that regulation is the key to getting this Monopolistic Cartel. into the real world. Again, this legislation is a start, long in coming. As taxpayers and voters we were very reticent in our management of our legislators during the 80's, 90's and early 2000's and we are paying for it now.
We also agree on the cost containment issue, but this legislation is a start and you can't improve on what you do not start.

My long, varied and successful career did not end because I, unlike you and others here, was taking care of a family member. I merely was battling multiple cancerous brain tumors, the last robbed me of the ability to walk unaided and the latest has yet to be dealt with. However, I will agree that to care for a loved one is more difficult.
I like to quote a slogan I see posted almost everywhere at MD Anderson Cancer Center, and that is "...everyone is battling something". My road is not yet done and my time will be spent improving this legislation.
I volunteer lobby for healthcare and aid groups, including several I have mentioned in my posts. I have to be carted around like so much furniture but my mind and my voice still work. I will not stop until there is healthcare for all.

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Margaret W.
Margaret W9 years ago

Barbara - you are the one who has included the personal attacks.
My CV for the record: Vassar College with honors, University of Maryland Law School Order of the Coif (that is equivalent of Phi Beta Kappa for law school) Masters in Business Administration from College of Notre Dame with honors.. The job I left to care for my mother was as Chief Operating Officer and General Counsel for an international reinsurer based in Ireland focused on products in Asia. I understand the insurance and reinsurance business. I know how premiums are calculated and the reality is the insurers will not lose so long as the actual costs of medical care (the drugs, the tests etc) are not contained. That is where the focus needs to be. I am also not for repeal but this legislation needs a lot of work to deserve the title "reform".

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Barbara Kuyper-cross

Margaret, I respect you for your difficult and loving task of caring for your mother. I would like to send you supportive documentation regarding the newly legislated benefits to seniors including the CLASS legislation which I am sure impacts you, also on the Medicare D 50% drug discounts 2011, as well as the $250 benefit this year.

As far as the regulatory part-Yes, I am serious. The states have failed in regulating this Cartel so now the Federal Government must step in and oversee it. They will be held to 85% of the income from premiums being used for services provided. Right now, it is less than 70%. So if they raised premiums before this legislation it went straight to profit, under this legislation it must go to care. Additionally this bill will ensure consumers can appeal decisions private insurers make about their plans by creating a new, independent appeals process and will help create consumer assistance offices with funding coming this fiscal year. These offices will help consumers file complaints or appeal decisions from insurance companies.
If Insurance Companies do not comply with these new polices then they will be denied inclusion in the exchange which is providing insurance to 30 million new consumers. The carrot and the stick.
I really have had enough of you and Pa H deriding my business acumen. I am quite sure that my CV recounts higher positions in major corps. and small businesses than either of you have ever held.
P&L nad net profits, ind

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