Its the Costs, Stupid….

When James Carville in the 1992 Presidential campaign said, “Its the economy, stupid” he hit directly at the heart of the matter.

My above statement does the same now.

You know why people are anxious about the public option?  Why do people laugh when Obama says his plan will be budget neutral?

It is all about the costs.

Mr. Obama did some eloquent things in his speech last night.  He artfully attacked Republicans, without looking like the bad guy (wih an assist from Rep. Wilson’s idiotic heckling).  He had a beautiful explanation of the moral cause that liberals have been fighting for and why.  He was masterful using John Dingell and his father, as well as Ted Kennedy, to increase emotional push for health care.

There is a reason why a supermajority of the public simply do not believe Obama’s promise of being budget neutral.  This has been shown in multiple polls, but a Rasmussen poll shows that 68% of the public (and the majority of Democrats, actually) believe that this plan will increase the budget debt.

But the most important absence from the speech:  how are we going to pay for this monstrosity?

Obama says the bill will cost $900 billion over ten years.  To begin with, that is a falsehood.  Obama’s plan last night is almost identical to the bill proposed by the House (HR 3200).  You can quibble about small particulars, but in its overall structure, the bills are identical.  That bill was scored by the Congressional Budget Office at atleast $1.5 Trillion.  I have argued that is a conservative number, as far as I am concerned, because it also includes proposed $300 billion in savings over 10 years; and we know from empirical evidence that predicted savings are vastly overestimated by the CBO.

So what is left?  Well, taxes of course.

The Baucus plan, which the media was fawning over yesterday, has 37 new taxes. Thirty-seven.

Obama last night proposed increase taxes on ‘Cadillac’ health care plans costing more than $17,500 a year.  This is something I actually agree with.  A few studies have shown that these plans are too expensive, provide no benefit, and actually increase overall costs by driving up the need for more tests and studies.  The problem is, the biggest proponent of these plans are labor unions.  That is why it died earlier this summer, after John Kerry initially proposed it.  Will Obama have enough backbone to fight the unions on this?  I doubt it.

The most laughable suggestion is the proposed tax on businesses.  Democrats don’t call it that, but that is essentially what it is.  And this even won’t create a lot of money, because what will eventually happen is that these businesses will simply pay the 8% penalty, and let their employees struggle on their own to fight for health care.

One final point:  Obama has not even one, even a single device, in this plan that will decrease utilization of health care…unless he expects to ration some time in the future.

At the end of the day, the core problem with health care, costs, is not really confronted at all in Obamacare.  Not at all.  It is so far hopes and dreams that confront the cost challenge.  Sure, if you get miraculous saving from improving efficiencies; if you get more money back from waste and fraud; if preventative care for the first time in the history of man reduces overall costs; if these things happen, then we could slow the increase in costs, or as the President famously says, ‘bend the curve’.  But there is no hard and fast way that this current health care proposal does that.

Mr. Obama simply reiterated the same tired programs that he has suggested for months.  And frankly, that may be enough.  This has never been about Republicans; that is a sideshow.  Obama only needs to convince moderate Democrats and House Blue Dogs to ‘come home’, as it were, and vote with him.  That may be harder than he thinks. Why?  Well, ultimately there is one force in America that is stronger than the President of the United States:  you, the American voter.  And these politicians have seen the future, and that future clearly shows that those moderates that support any plan with the public option that increases the debt…well, their political careers are likely to come to an abrupt end.

The speech will surely shift the polls for a few days, maybe a week.  But after that, I would expect reality to set in.  Obama has been so prevalent on TV that this speech will be blurred in people’s memories along with all the others.  Then, it comes down to the facts.  The facts are these:  there are no cost controls in this bill.  Pure and simple.

The key moment will come when the CBO scores this bill, and the cost will surely be over $1.2 Trillion.  Obama can say anything he wants, and can believe in anything he wants.  But the CBO will bring him back to earth.  Obama is entitled to his own views, but not his own facts.  The bill will be expensive, and almost certainly will require deficit spending.  And then, what?  Then the pubic rebels.  So the fight goes on.  Obama did what he had to last night…now it is time for the public to react.

4 thoughts on “Its the Costs, Stupid….

  • September 10, 2009 at 8:13 am

    IC. So it was OK to have deficit spending for the war in Iraq so that Cheney’s company could make megabillions? But deficit spending so that the citizens of this country (you know, the people who are responsible for our GNP?) all have some form of health insurance is a terrible thing? Huh, who knew?

  • September 10, 2009 at 9:21 am

    Yes. I was ambivalent about the Iraq war, but during war, you don’t quibble about costs. You put young personnel in the firing line, than you make sure they have what they need. Period.

    Remember the liberal cry ‘war of choice, not necessity’? Health care is a ‘plan of choice, not necessity’.

  • September 10, 2009 at 6:19 pm

    Deficit spending has been ‘ok’ for everything that has had a social aspect going back as far as I can recall. I don’t recall anything about healthcare in our constitution… would someone please let me know which part it was in?

    There are programs… too many and not run well. Perhaps the first of the efficiencies could come out of the lawyers’ largess. Then we could reduce some of the government payroll and refine the regs. Or we could just spend our futures away and ration care later so liberals can claim they ‘did something.’

  • September 10, 2009 at 6:47 pm

    Many people ritualistically make poor choices in how they manage money. This goes from the ones who have the least that are forever being marketed to in order to spend every cent they can because these same marketers know they will to others straight up the ladder that are broke on higher levels.

    So, why would our Government be any different? In order to afford the spending the base needs to be proportionately larger than the burden it supports in order to keep from sinking into financial ruin. We are inverting the pyramid in our government scheme. The evidence comes from the insovency of Social Security, Medicaire, Medicaid and the US Postal Service (among others). The education burden is massive as are the obligations of pensions from public retirees. Did we learn nothing from the failures in the Auto Industry?

    No, I don’t want this cast of characters to do any more harm. I don’t want to short change my family to pay for anyone else. I certainly don’t feel like obeying many of the laws when people are here illegal and getting a pass for breaking our laws which apparently are only good enough for us.

    We do need reform: from the bottom levels of Government straight to the top (yes, both parties). That would be a change that would give us far mroe than spare change.

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