ObamaCare: A Pre-Mortem

ObamaCareChart

Barring some political miracle, National Health Care is dead. Many  current polls indicate that a majority of the public is now against it.  There is no chance of having a vote in either chamber of Congress before the August recess.  Considering the high popularity numbers that Obama had coming into office, and the wide majorities that the Democrats enjoy in Congress this is astounding.  What caused this debacle?  A few thoughts.

1.  Complexity-The chart at the top of this post was devised by Rep. Ken Brady (R. Tex) to illustrate the complexity of National Health Care as proposed by House Democrats.  The Democrats are so alarmed by this chart that they have attempted to block it being sent out by franked mail on the grounds that it is inaccurate.  How would they know?  The House version of the National Health Care bill is over a thousand pages in length.   Rep. John Conyers (D.Mich), doesn’t think it makes any sense for members to read the bill unless they have two attorneys to explain it to them and two days for the explanation.  This makes it a hard sell to the American people when our CongressCritters do not have a grasp of the proposed legislation.  As an attorney I would say that with a 1000 page piece of legislation it would take a few years of implementation before anyone could be certain how such a leviathan would work.  If you are going to make big changes in something as important as health care, and you wish to get a majority of voters to agree to the change, you have to observe the KISS principle  (Keep It Simple Stupid!).

2.  Lack of bi-partisanship-By and large the President has not sought Republican votes assuming he can ram this through with his Democrat majorities.  Rubbish.  Enough Democrats have qualms about this radical change in health care, that they will not sign on unless a fair number of Republicans vote for it.  Additionally the Republicans represent a broad portion of the population.  This type of transformation of the health care system simply will not pass unless opinion polls reflect broad popular support for it.  From the start, the President wrote off over 40% of the population as having  no input into National Health Care.  Not smart, not smart at all.

3.  Too much government control-As the 1018 pages of the National Health Care bill indicate, the federal government would be placed in control of health care.  This simply scares a majority of the voters.

4. Abortion-Blue Dog Democrats have made it clear that they will not support the legislation if abortions are funded.  Rest assured that many more Democrats will not vote for the legislation if abortions are not funded.  A good overview of the conflict is here.  This is definitely a bill killer and I see no solution for the proponents of GovMed.

5.  Lack of coordination between the House, the Senate and the White House-From day one the Democrats should have been singing from the same hymn book.  Instead the House, the Senate and the White House might as well be in the hands of three different parties for all the unity they have shown in this matter.  This is not to say that this is not the way business is usually done in Washington, but they knew going in from the failure of ClintonCare in 93 the obstacles and risks they were facing, and they had all winter after the election to develop a common bill and a common strategy.  This was not done.

6.  The Blue Dogs-Dr. Samuel Johnson had a saying that I have always been fond of:  “When a man knows he is to be hanged in a fortnight, it clarifies his mind wonderfully.”  Elections have the same impact on politicians.  Lots of Democrats were elected in 2006 and 2008 in Republican leaning  districts.  As the polls collapse on ObamaCare, you can bet that those Blue Dogs are going to think a very long time about casting a vote which might cost them their seat in November of next year.

7.  Most people are happy with their health care-At least that is what current polls say.  If the government can come along with a cheap, easy way to cover more people, I think a majority of Americans would probably be in favor of it.  However, the current proposal is neither cheap nor easy, hence the growing opposition to it in the polls.

8.  The numbers simply do not add up-As Keith Hennessey, hattip to Ed Morrissey at Hot Air, devastatingly demonstrates here,  the House bill increases the deficit by at least $239,000,000,000 over the next ten years.  This estimate is based on Congressional Budget Office numbers and is not his mere conjecture.  The American people are in no mood to keep adding yet more debt to the already astronomical figures incurred this year.

9.   Too many balls in the air-Obama is simply attempting to do too much too quickly.  The Stimulus Bill (The National Bankrupt the Nation Act of 2009), cap and trade, and myriads of other controversial policy initiatives diffuses the type of intensity needed from proponents to get National Health Care through.

10.  Media not adversarial enough-The woes of a sycophantic media.  If Obama had been blessed with the type of scrutiny that Republicans routinely receive, many of the problems with National Health Care would have been exposed at an early stage.  Obama could then have decided to mend them, or perhaps drop the proposal entirely if the opposition was too intense.  Instead, a largely cheerleading media lulled him into a dangerous false sense of security as to this, his most important domestic initiative.   All presidents dream of  the lapdog press that Obama has enjoyed, but sometimes it is better for a president to have a pitbull press challenging him at every term.

Update I: Hattip to Instapundit.  You know a Democrat piece of proposed legislation is nearing death when a plurality of respondents in an NPR poll are against it!

Update II: The NBC News\Wall Street Journal poll joins the chorus of the polls showing more Americans opposing National Health Care than favoring it.

31 Responses to ObamaCare: A Pre-Mortem

  • You mention the “stimulus” bill and the budget, but I think this needs to be emphasized:

    By essentially wasting $ 1 trillion on a pork bill that did absolutely nothing to stimulate the economy and put no money in the pockets of most voters (at least our family got $2400 under Bush, which helped pay for my kids’ Catholic school), the Democrats completely blew up the budget and used up what little political (and actual) capital there might have been for enacting a health care plan.

  • Technically, we are getting up to $800 per couple under the so-called stimulus package.

    But IIRC it’s being done through a remittance of payroll taxes in each paycheck, so I can’t blame you for not missing it.

    However, you nailed it on the source of the skepticism: the administration shredded its credibility by pushing through an ineffective spending bill that has come nowhere near to doing what its proponents asserted it would.

    Had there been a lot more infrastructure spending and a lot less wish-listing, I think there would still be a reservoir of good will. Instead, we have revelations like this, which make skeptics out of anyone who isn’t a daily pom-pon shaker for the administration:

    http://news.yahoo.com/s/ap/20090728/ap_on_re_us/us_stimulus_counting_jobs

  • Leaving aside a prudent distrust of politicians and a party that are beholden to special interests, love power, harbor contempt for the common man, and have no sense of fiscal sanity, why would any sane person want people who consider killing societies weakest “health care”?

    A link to a bigger version of that chart.

    http://www.rollcall.com/pdfs/healthchart072309.pdf

  • Ugh, should have been “society’s”. Combat illiteracy – it’s killing me. ;)

  • It strikes me that ObamaCare (like ClintonCare and Bush’s attempted reform of social security) is suffering from the fact that it either could not be or simply was not explained in a manner such as to gain the support of a significant portion of the population.

    One thing that is hard to get used to in the corporate world is that it doesn’t matter how good your ideas are if you can’t present them to decision makers in a way that convinces them to let you act on them. What political parties seem to have some difficulty grasping is that on a sufficiently big change in civic structures, the entire voting population counts as the decison makers. So if they can’t package something in a way that voters can understand its benefits, it will run aground unless the politician has enough capital to pull off the “trust me on this one” approach.

  • Jay simply asserts without argument. Well, here is the argument for the stimulus: we have seen an enormous decline in private demand. the only reason why we have not seen a similar collapse in overall economic activity is because it was cushioned by a large increase in public demand. See Krugman: http://krugman.blogs.nytimes.com/2009/07/15/deficits-saved-the-world/

    Much of this has been through automatic stabilizers, not stimulus, but automatic stabilizers are far lower in the US than in Europe (income tax is less progressive, social safety nets are smaller), meaning that discretionary stimulus needs to be larger. Of course, given capacity constraints, much of the money hasn’t been spent yet. But in countries where it has been spent quickly, and where automatic stabilizers are similarly small, fiscal stimulus has been a huge boon for growth. I’m talking mainly about China.

    Now, on the composition. As any economist will tell you, multipliers are larger for spending than for taxes. The tax cut component of the US stimulus was, I believe, too large. If you want the most bang-for-back, you’ll go where the multipliers are largest, and that’s on the spending side, espcially capital spending.

    The economic illiteracy on display in public circles is simply staggering. Quite aside from the laissez-faire small government ideology (stop exempting the military, and we’ll talk), you have pundits railing against “pork”. Well, sorry, but that is precisely the point. When you have a major across-the-board collapse in aggregate demand, and when monetary policy has reached its limits (interest rates at the lower bound), then you need government spending. It is an extreme response to extreme circumstances. You are *supposed* to spend more in times like this, and spend less when times are good. But the pundits just don’t get this.

  • Complexity? what this chart fails to note is that the current system is even more complex. What I find highly frustrating, as somebody who has been following healthcare wonkery for years, is the sheer ignorance out there about what this reform does and does not do. I would actually fault its timidity, for not doing enough to curb the bad behavior of the private insurance companies. It changes too little, not too much.

    But look at the rhetoric. We are suddenly moving to “government” healthcare. Of course, if you actually looked at the proposals, you would see the public option limited to those who can participate in health insurance exchanges, which in turn is limited to the unemployed, the self-employed and small businesses. The CBO thinks that only 27 million would be in the exchange by 2019, and only a small portion of these would be in the public option. For everybody else, it’s old-style employer insurance.

    And then there are the people who rail against the *costs* of government healthcare, oblivious to the fact that costs are rising substantially more slowly in medicare and medicaid than in private insurance (7.3 percent verus 4.6 percent for the average annual increase in premiums). And then there is the widely circulating story at the guy at sme town hall meeting who yelled out “keep your government hands off my Medicare”. We might smile, but this kind of delusion is only mildly hyperbolic.

    Of course, this is what the opponents of reform want. They don’t want people actually trying to understand what is going on. They want slogans and scaremongering. Because there is a lot of financial interests at stake here. And God forbid we reduce the profitability of the private insurance companies.

    Ezra Klein sums up my feelings completely; “what has kept health-care reform at the forefront of liberal politics for decades is moral outrage that 47 million of our friends and neighbors are uninsured. That medical costs are one of the leading causes of bankruptcy in the United States. That an unemployed machinist gets screwed by fly-by-night insurance schemes while a comfortably employed banker need never worry. That the working class ends up in emergency rooms with crushing chest pains because they didn’t have health insurance and didn’t get prescribed cheap blood pressure medications five years before.”

    As the Church would say, health care is a human right. Let’s treat it that way.

  • Jay:

    Ten days ago, I posted Robert Samuelson’s very fine post-mortem on the stimulus bust in the Washington Post 10 days ago. He argues convincingly that there was a need for the stimulus, but notes that what was enacted was an underpowered failure, misconceived from the start:

    On humanitarian grounds, hardly anyone should object to parts of the stimulus package: longer and (slightly) higher unemployment benefits; subsidies for job losers to extend their health insurance; expanded food stamps. Obama was politically obligated to enact a campaign proposal providing tax cuts to most workers — up to $400 for individuals and $800 for married couples. But beyond these basics, the stimulus plan became an orgy of politically appealing spending increases and tax breaks.

    More than 50 million retirees and veterans got $250 checks (cost: $14 billion). Businesses received liberalized depreciation allowances ($5 billion). Health-care information technology was promoted ($19 billion). High-speed rail was encouraged ($8 billion). Whatever the virtues of these programs, the effects are diluted and delayed. The CBO estimated that nearly 30 percent of the economic effects would occur after 2010. Ignored was any concerted effort to improve consumer and business confidence by resuscitating the most distressed economic sectors.

    Vehicle sales are running 35 percent behind year-earlier levels; frightened consumers recoil from big-ticket purchases. Falling house prices deter home buying. Why buy today if the price will be lower tomorrow? States suffer from steep drops in tax revenue and face legal requirements to balance their budgets. This means raising taxes or cutting spending — precisely the wrong steps in a severe slump. Yet the stimulus package barely addressed these problems.

    To promote car sales and home buying, Congress could have provided temporary but generous tax breaks. It didn’t. The housing tax credit applied to a fraction of first-time buyers; the car tax break permitted federal tax deductions for state sales and excise taxes on vehicle purchases. The effects are trivial. The recently signed “cash for clunkers” tax credit is similarly stunted; Macroeconomic Advisers estimates it might advance a mere 130,000 vehicle sales. States fared better. They received $135 billion in largely unfettered funds. But even with this money, economists at Goldman Sachs estimate that states face up to a $100 billion budget gap in the next year. Already, 28 states have increased taxes and 40 have reduced spending, reports the Office of Management and Budget.

    There are growing demands for another Obama “stimulus” on the grounds that the first was too small. Wrong. The problem with the first stimulus was more its composition than its size. With budget deficits for 2009 and 2010 estimated by the CBO at $1.8 trillion and $1.4 trillion (respectively, 13 and 9.9 percent of gross domestic product), it’s hard to argue they’re too tiny. Obama and congressional Democrats sacrificed real economic stimulus to promote parochial political interests. Any new “stimulus” should be financed by culling some of the old.

    http://tinyurl.com/lebua3

    While I don’t think he’d agree that it does “absolutely nothing to stimulate the economy,” he’d certainly concur that what was enacted had no prospect of doing what its proponents said it would.

  • Did I mention that I posted it ten days ago?

    Sigh….

  • Minion:

    Jay did not say that we shouldn’t have spent the stimulus money; he said the way the stimulus money was spent was retarded. Considering most of the money won’t be spent yet, while France has spent most of theirs, that’s a fair argument.

    Second, current system = bad does not lead to proposed system = good.

    Third, how on earth is one supposed to what the reform does? It changes daily! I’ve tried to keep up and I’ve had no chance; I can’t imagine what most Americans think!

    And finally, health care = right. Obamacare, however, is not a right and Obamacare does NOT = Church envisioned health care.

  • No, seriously. Does anyone else hear that sound (like an annoying gnat that won’t go away)? If you listen close enough it sounds like “I luvzzzzzzz me sommmmmmme Obbbbbbammmmmmma.”

  • Jay:

    You need to be drinking more Kool-Aid so that the “annoying gnat noise” in your ear turns into a beautiful song that you sing loudly every day.

  • Guys,

    While I agree that MM’s mixture of bow-before-my-authority expert posing and loud moral indignation is very annoying, let’s try to tread the line of not stooping lower in responding to it.

    MM,

    Ezra Klein sums up my feelings completely; “what has kept health-care reform at the forefront of liberal politics for decades is moral outrage that 47 million of our friends and neighbors are uninsured. That medical costs are one of the leading causes of bankruptcy in the United States. That an unemployed machinist gets screwed by fly-by-night insurance schemes while a comfortably employed banker need never worry. That the working class ends up in emergency rooms with crushing chest pains because they didn’t have health insurance and didn’t get prescribed cheap blood pressure medications five years before.”

    As the Church would say, health care is a human right. Let’s treat it that way.

    See, here’s the thing, MM. I could take the moral indignation a lot more seriously if it didn’t seem to only be trotted out in efforts to come up with systems designed to bring the electoral gold of the middle class into a government run health care system. The interest in reducing costs in the current system, making incremental changes to allow primary care to be more affordable for the uninsured, or setting up more efficient programs specifically to help those who cannot afford coverage or care seems to be rather sparse in the liberal camp. The interest is almost exclusively in finding a way to work towards a large government run program which the vast majority of Americans would eventually participate in — something which would represent a significant power increase for the people pushing it.

    Why the lack of interest in attacking the real problem (high costs and inability of some people to afford health care they need) when not associated wish the large government solution which has been on the progressive wish list for so long? It seems to suggest that the motives are rather less sterling than you present.

  • My. I am surprised by the behavior of some commenters here, especially those who usually demoan the mean-spiritedness of their imagined ideological counterparts in commenr boxes.

    I guess it depends on what side you stand on on your imagined ideeological divide.

  • Was I responding to someone? What? Did somebody say something?

  • Jay is an example of everything I am talking about. If somebody comes along with facts and arguments that go against cherished talking points, lets just change the subject to taunts and slogans. Hmmmm, doesn’t that sound familiar?

  • Darwin,

    Moral indignation? That would be righteous moral indignation!

    “sytems designed to bring the electoral gold of the middle class into a government run health care system”. What in God’s name does this mean?

    Did you read what I wrote? Let’s start at the basics. “Government run” health care means precisely that – the governmment employs and pays the healthcare workers and owns the facilities. Think of the UK. I personally support single payer which is NOT THIS. Single payer basically means a single insurance agent to leverage economies of scale, cover everybody, don’t try to weed out people for profit purposes, and use monopsony power to get better deals from suppliers.

    I support single payer not on ideological grounds, but on pragmatic grounds — it seems emprically the best way to contain costs and deliver superior outcomes. It’s gives good bang for buck. Of course, this is not the only way to do it. As I said elsewhere, the core principles of reform include community rating and the individual mandate, and this can be done with regulated private markets.

    The proposed reforms are a mere timid step in this direction. For people with employer converage, nothing much will change. Others can join the regulated exchanges. To me, this is exactly the kind of “incremental change” we need. It’s far less radical than previous proposals, including Nixon’s. It represents the best way of increasing coverage and reducing costs. Unless of course, like the GOP, you have a vested interest in protecting the balance sheets of the insurance companies.

  • Unless of course, like the GOP, you have a vested interest in protecting the balance sheets of the insurance companies,

    One might argue that the absence of tort reform is due to the Democrats’ vested interest in protecting the balance sheets of plaintiff attorneys instead of actually cutting costs.

  • I support single payer not on ideological grounds, but on pragmatic grounds — it seems emprically the best way to contain costs and deliver superior outcomes.

    Per a prior conversation, did you ever look into Singapore’s health care system?

  • Blackadder, ever an optimist, seems to think that he’s talking to someone who has any interest in learning new facts and evidence, as opposed to cutting-and-pasting one of his four blogging scripts (“prolifers are bad,” “Americans are Calvinists,” “Obama is good,” “single-payer is good”) into every discussion.

  • Singapore — yes, has some good aspects, but does a lousy job dealing with tail risks. As I keep saying, my preference is based on pragmatism. A private system based on community rating, the universal mandate, and subsidies for the poor would be a very good start. It just not would be as efficient as a public system.

    Michael — I have no problem with tort reform. Unfortunately, the costs of insurance and defensive medicine represent an insignificant part of healthcare costs.

  • Did you read what I wrote? Let’s start at the basics. “Government run” health care means precisely that – the governmment employs and pays the healthcare workers and owns the facilities. Think of the UK. I personally support single payer which is NOT THIS.

    I did not think that you were talking about single provider health care, nor was I addressing the question. I’m not sure why you like to try to shoe-horn your oponents into positions they don’t hold, but it doesn’t get conversation far.

    I support single payer not on ideological grounds, but on pragmatic grounds — it seems emprically the best way to contain costs and deliver superior outcomes.

    So you keep saying — even when people point to non-single-payer systems which work better than the single payer ones. (Heck, even the much vaunted French system is not actually a true single payer system.)

    And although you say your support is non-ideological, I can’t help seeing it as awfully convenient that a statist technocrat cries foul at any suggestion, however helpful it might be, which does not increase the amount of statist technocrat control over health care in the US — and supports programs other than his preferred one so long as they expand the reach of government.

    I will agree with your later comments thus far, however: It’s true that the proposed reforms are a timid step, delivering much complication and little improvement by anyone’s standards. Of course, that leaves me wondering why you’re so fiercely supportive. Why not hold out for what you think would actually solve the problem? Or, should we perhaps take that as a sign that you see the currently proposed legislation as being a clear step in the direction of a single payer system?

  • If somebody comes along with facts and arguments that go against cherished talking points, lets just change the subject to taunts and slogans. Hmmmm, doesn’t that sound familiar?

    Indeed —

    His name, or rather alias, happens to be Morning’s Minion!

  • As any economist will tell you, multipliers are larger for spending than for taxes.

    The size of the multiplier is precisely what has been disputed by Casey Mulligan, Gregory Mankiw, among other ‘economic illiterates’

  • Art, my wise friend, why aren’t you following the sage advice you gave me just yesterday? ;)

  • Guess I can’t resist, sometimes.

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