America's Newest Addiction

America is about to take her first “hit” of a very dangerous, addictive, opiate drug called “socialized medicine”.   Our President and the liberal left Democrat majority have started this nation on a pathway to addiction and Obamacare is the gateway drug.  We are no longer “unique” as a nation.  Tomorrow, when President Obama signs the Health Insurance Reform legislation into law, we will join the likes of other addict nations such as Canada, the United Kingdom, Germany, France, China, and Russia.  Instead of being a unique nation in world – a nation “Of the People, by the People, and for the People” -  we will join the ranks of the “governed nations”; a nation of lemmings looking to our government for answers that it simply cannot supply. 

We have been told time and time again by Pres. Obama,  Sen. Reid, and Speaker Pelosi that this legislation is about insuring the 30-40 million uninsured Americans.  But, is that what this legislation is truly about?  To quote House Minority Leader John Boehner, “HELL NO!”   Really people, stop and think about it.  We could have done exactly that for a heck of a lot less than what this legislation is costing us and the generations to come.  Instead, we have legislation that, by this administration’s own estimates, will be just $60 billion short of $1 Trillion dollars; and that is with collecting taxes for 10 years but paying benefits for only 6 years.  Heck, we could have deposited $1 million dollars in a medical savings account for each of these 30-40 million so-called uninsured Americans at a total cost of $40 million dollars and saved ourselves $900 billion dollars as a result! (Of course I’m not advocating that, but I think you get my point)  So, how can anyone claim this is about insuring the uninsured? 

Well, you ask, if it’s not about insuring the uninsured then exactly what is this legislation all about?  Look no further than other countries with socialized medicine to find that out.  Socialized medicine has never delivered the health care utopia its proponents claim.  What it does deliver is an entire nation of people that are dependent on the government to meet their needs.  Once a government has its citizens dependent on it to deliver their basic needs, then the party that promises more and more benefits will get more and more power – no matter what the cost in terms of tax dollars or individual freedoms for future generations. 

No, this is not about the health care needs of the American people.  This is about the political power needs of this President and his Democrat party.  This legislation is the opiate that will lead to an addiction by the common citizen –  like that of a child born to a cocaine addicted mother; not addicted by choice, but addicted nonetheless.

However, it is not just the people that will be addicted.  The politicians will be addicted as well.  To stay in power they will have to give the appearance of giving more and more to the people.  Like an addict, they will know that what they are doing is destructive to the body of America.  But they will not be able to stop.  They will occasionally make an effort to curtail their addiction, they will make impassioned promises, they will plead for trust, and they may even kick-the-habit for a time.  But it won’t be long before they are back on the “stuff” again.

Some of you are reading this with disbelief – you are thinking to yourself that I must be wrong.  Well, I’m not wrong… and I can prove it.

I hold up to you as proof our Medicare system – the proverbial “third rail” of the federal political system.  Everyone knows it’s bankrupt.  Everyone knows the money is simply not there to sustain it.  Everyone knows… the people who currently receive its benefits, those who will one day receive its benefits, and the government that administrates it benefits.  Yet no one is willing to change it.  Why – because the beneficiaries NEED it and the politicians NEED it.  Is this not the behavior of an addict?   We can say same the same for Social Security.

This is not an American phenomenon either.  My wife and I had visitors from Canada this summer.  It was a great opportunity for me to ask them how they liked their socialized medicine.  I was particularly interested in speaking with them because I knew the wife needed gallbladder surgery, a routine surgery that is normally performed here on an outpatient basis and usually within a week of having a diagnosis.  As for her, she waited in agony for well over a year before the surgery was performed. 

So I asked her and her husband, “How do you like your Canadian Socialized Medicine.”   Their response stunned me, “We love it – we would not want to do without it.” 

So I dug deeper asking the woman, “Didn’t you have to wait a very long time for your gallbladder surgery?”  Her response, “Well, not so long really.”  Now, I know through family members that she waited nearly 18 months to have her operation and that she was in agony during that time. 

I pressed on, “What about doctors and nurses.  Are there enough to go around or are they leaving the field?”  Their reply, “More and more are leaving the field of medicine.  There is a real shortage of doctors and nurses in Canada.”

I could not believe it.  These were seemingly rational people giving me completely irrational responses:

• I had to wait 18 months for surgery to stop my pain and agony – but that was not too long
• There are not enough trained people in the field of medicine – and more and more doctors and nurses are leaving the profession
• I love the system and could not do without it.

This lines up with the psychology of a drug addict:

• I know I’m in physical, psychological, and spiritual agony and I know this drug is causing it
• I know the cost of this drug is preventing me from caring properly for myself and my family
• I love this drug and could not do without it.

We look with compassion on the drug addict and try to find them help – and many do get help and learn to live a “clean” life.  But, where is the Twelve Step Program for a nation state?  Where is the Twelve Step Program for a people so addicted to their government entitlement programs that they are willing to say, “Oh, I only had to wait in pain and agony for 18 months before I got the surgery I needed, but that’s alright”?   Where’s the Twelve Step Program for the political party willing to sacrifice the future of our children for their “power fix” today.

America is about to takes her first “hit” of a very dangerous, addictive, opiate called “socialized medicine” – and the drug pushers reside in the Executive and Legislative Branches of our government.

Get ready for the Senate Healthcare Reform bill to become LAW!.  That’s right.  Regardless of what Pres. Obama and Speaker Pelosi and her minions, and the pendants in the main-stream media try to say, if the House passes the Slaughter Solution rule on Sunday the Senate Bill becomes law.  It will have become law without the House actually voting on it – a matter that will undoubtedly face constitutional challenges.  This graph is the reality and it is the truth!

Any member of the House of Representatives who votes for the Slaughter Solution is:

• Voting to ignore the will of the American people as pole after pole has demonstrated.
• Voting to ignore both the letter and the spirit of Article 1, Section 7 of the Constitution of the United States.
• Voting to pass the Senate Bill that simply would not have passed on a straight up/down vote by the House.
• Voting to implement a totally new entitlement program at the expense of Medicare.
• Voting to usurp the rights and authority reserved for the States by Amendment 10 of the Constitution of the United States.
• Voting for “back-room deal” after “back-room deal” struck to buy votes in both the Senate and the House with our tax dollars.  By default, a vote to pass the Slaughter Bill is a vote to validate corruption.
• Voting for the eventual collapse of Medicare, Medicaid, and private medical insurance systems through cuts, overwhelming & underfunding, and placing mandates respectively; forcing single-payer, government-run healthcare on all of us.
• Voting for incentives for your employer to drop your health insurance coverage
• Voting for incentives for your doctor to quit practicing medicine.
• Voting for the reduction of specialists that make the U.S. healthcare system the finest in the world.
• Voting for Federally funded abortions
• Voting for ANOTHER doubling of the Federal deficit
• Voting for the eventual rationing of healthcare because there IS NO cost containment in this legislation and rationing will be the only way to manage costs going forward.
• Voting for an eventual government take-over of 1/6 of the U.S. Economy

I’m tired of the argument that the U.S. is the only industrialized country in the world that does not have socialized medicine.  NO KIDDING!  Did you ever stop to think that this IS the reason why we have the best medical care of any country in world, why leaders and others form countries with socialized medicine come here for medical treatment. 

I’m tired of the argument that those who can’t afford coverage are not getting coverage – those who truly can’t afford coverage can get coverage by Medicaid and SCHIP.  There are those who choose to spend their money on things other than healthcare insurance – but that is their choice; just like it is their choice to live outside their means. 

I’m tired of hearing about a healthcare crisis in the United States.  There is no healthcare crisis.  What we have is a lack of personal responsibility crisis and a victimization crisis.  Who the hell ever said this country owes you a living, a guarantee to a home mortgage, or insurance of any kind?

I’m tired of the Democrats parading “victim” after “victim” in front of us.  We all would like everyone to have access to good medical care… What we have issue with is how.  A vast majority of the American people know that government run health insurance is not the answer; we know that this legislation will lead to exactly that.  We are not stupid Mr. President!

So go ahead Democrats, place your yes vote.  Go ahead; poke the bear with a stick.  You are about to experience the wrath of the American voter in a way that you never dreamed possible.  Not only will you face Constitutional challenges by at least 34 state Attorney Generals, but this November - you will face unemployment.

Look, I know there is a lot of passion on all sides of this Healthcare Reform debate that is currently gripping the nation.   You know, if we really take the effort to step back from the rhetoric and hysteria, it’s clear that we all agree on the goals of healthcare reform.  We all want to see those in need be able to get what they need.  We all agree that we need reform that will address the real concerns people have with powerful, corporate health insurance companies.  At the same time, we can all agree that we need to protect the insurance companies from people who are willing to game the system by not purchasing health insurance until they are really sick – after all, you and I will pay the price for that kind of irresponsibility. 

Nope, the goals are not the issue.  What is the issue though is how we achieve those goals and frankly, the American people have looked at the current legislation and the vast majority of us are saying that the ends do not justify the means.  We don’t agree with the approach being taken by the Democrats to both achieve the goals (which I don’t believe the legislation will do) nor the means by which they are legislating.   So, Sen. Reid, there is no need to trot out any more victims of tragic situations and tell us we are bad people if we don’t agree with your means of achieving laudable goals.  Come on, let’s be real here, do you really think that disagreeing with your methods is equivalent to disagreeing with the goals of reform?

As a reader, you may not agree with my point of view.  Nevertheless, I encourage you to stop for a moment and look at what is happening in Washington.  Something is going wrong… very, very wrong.  Ideology is on a collision course with the standards by which this nation’s legislative branch has conducted itself since its founding.  We are seeing leadership in both the Executive and Legislative branches of our government take on a “win at any cost” method of governing.  Is that really what we want from our government?  Is this the “change” so many American’s voted for… seriously?

Take a look at Venezuela and how Hugo Chavez operates.  He doesn’t like how the media treats him… he changes the rules.  He doesn’t like the way the election is shaping up… he changes the rules.  He doesn’t like the way businesses operate… he changes the rules.  Can you imagine how both dangerous and frustrating that is for the people of Venezuela?  Chavez is the living definition of a tyrant and his government is a tyrannical government.  There is no liberty for the people of Venezuela.  He talks like he is doing these things on behalf of the people… I don’t believe the people of Venezuela see it that way.

I’m willing to bet we all had an experience with a kid or two on the playground at school who had a win at all costs mentality.  You know the kid I’m talking about, the one who would change the rules during the game because things were not going his way.  Well, let’s scale that up a bit to our nation’s government.  Right now, Pres. Obama, Sen. Reid, and Speaker Pelosi don’t like the way things are going for them with the healthcare reform legislation.  So what are they plotting to do?  The exact same thing Chavez or the playground bully would do.  They are going to change the rules in the middle of the game. 

The rules of governance for both the Senate and the House serve several purposes; two of which are   to bring sanity to the process and prevent the ideology of the majority party from completely trampling the rights of the minority party.    If Nancy Pelosi has her way, she will have the rules of the U.S. House of Representatives changed so that the House can pass the Senate’s version of healthcare reform without voting on the bill.  That’s right, the same party that just one week ago demanded an up-or-down (simple majority) vote in the Senate on a conference committee bill that would not stand up to the Senates 60 vote rule is now willing to change the rules of the House so that it can pass legislation by simply declaring it as passed… without a vote!

Ideology has taken over common sense.   Tell me, how is this any different than the way Chavez governs his nation?   Do we want the steady hand of tradition, decorum, and established rules of governance at the helm of our Democratic Republic or do we want to trade in the 50 stars on our nations flag for 50 bananas and become a Banana Republic?

Some of us are old enough to remember Layaway programs.  They used to be all the rage before this country became addicted first to department store revolving charges and later to credit cards.  When you bought something on Layaway, you made a small deposit and the store kept the merchandise while you made a number of payments.  Once the item was paid for in full, you took it home.   I remember trying on winter coat after winter coat in the middle of the hot summer so my parents could retrieve it from layaway before the snow started to fall. 

Well, what the Senate healthcare legislation proposes is Healthcare Layaway.  We get to pay for this massive, multi-trillion dollar entitlement over a period of about four years; then we get to take it home.  As a bonus, we then get to continue to pay, and pay, and pay.  That’s the sliding-scale math the CBO had to use to in their analysis; ten years of payments for 5 years of expenses.  And that my friends is how Pres. Obama says we will reduce the deficit by $190B over ten years. 

Listen to what he is selling here.  Ten years of payments, the first four of which we will not receive the benefits we are paying for, and the deficit will be reduced by some fantasy number.  That begs the question:  Is the President telling us that those first fiveyears of payments are not being set aside for healthcare benefits and instead will be used to reduce the deficit?   What happens after that?  Well, the Republicans asked the CBO to score “the rest of the story” (wink and a nod to the late Paul Harvey).

When you score the legislation over fourteen years (first five years of taxes with no benefits, + 10 years of taxes with benefits) instead of reducing the deficit, we add close to $3 trillion dollars to it. In other words, this is a known deficit buster.  We know going in that the system they are proposing can not and will not be sustainable.  This is maddness.

Hmmm… so what we really have here is a Federal Healthcare Layaway Program where the payments go on and on, AND we continue to pile on more debt.  Don’t people in the private sector go to jail for these kind of ponzi schemes?

We know precious little of what really is in the Senate HealthCare Reform legislation to date.  The Wall Street Journal reported this morning  that the Senate version is including a stiffer fine of $750 per employee for employers with more than 50 employees who do not provide health insurance coverage – an increase from the $400 fine in the Baucus legislation markup that came out of the Finance Committee [1].  The bill also would provide a sliding-scale subsidy for those over 150% of the Federal Poverty Limit (FPL) and expand Medicaid coverage to those earning up to 150% of the FPL.  This expansion would result in upwards of 14 million more people being covered by Medicaid – a huge expansion of that system [2]

Therein lays the rub.  Expanding Medicaid coverage will fuel a downward spiral toward a so-called single payer system.  According to Guy Boulton of the Journal Sentinel [3], the average cost of family health care benefits is now $13,375 annually.  That works out to be $1115 monthly.  The fine for an employer opting not to provide coverage is $750 a month.  You don’t have to be an expert financial analyst to see that there is an incentive for the employer to opt out.  As more employers opt out, more people are forced into the Medicaid system or other government option with will control “costs” by reducing physician/hospital reimbursement rates.  As physicians/hospitals treat more patients with lower reimbursement rates they will be forced to increase their fees for services to make up for the loss.  As physicians/hospitals increase costs, private insurance premiums will rise.  As premiums increase, more employers will be forced to consider dropping health insurance benefits.  This self-perpetuating, downward spiral is described in the graphic below:

 It is not the Medicaid Factor only that will contribute to higher premiums for private health care insurance.  The so-called Baucus bill would impose a $121 billion tax on the drug companies and medical device makers over a 10 year period [4].  The problem with Congress is they think these taxes an business are not paid by the consumer.  If you impose a $121 billion tax increase on the drug/medical equipment products, that increase will be paid by the insurance companies.  Those companies in turn will have to raise their premiums.  This will simply add to the downward spiral described above.

In addition to Medicaid expansion not being healthy for the overall financial viability health care system, it is not going to be the panacea its supporters are proffering for those who would be covered by this program.  Because of Medicaid’s aggressively low reimbursement rates, which pay doctors pennies on the dollar for claims submitted (if they pay at all), many physicians are refusing to accept Medicaid patients.  By adding 14 million more patients to an already overwhelmed system is going to make it difficult if not impossible for a Medicaid recipient to get the treatment they need.

Okay… so, what is the big deal about a single payer, government run, health care insurance system – AKA: Socialized Medicine – anyway? Well, the biggest complaints are that while socialized medicine does cover everyone (for the most part), it does not live up the claims of its supporters of providing better care at lower rates.  In fact, the opposite holds true when you look at attempts in socialized medicine both here and abroad.  In addition, many opponents to socialized medicine fear that the government would have too much say in our medical care.  Of course, politicians that support socialized medicine claim that we should trust the government and not be concerned with the government overstepping its constitutional/traditional limits.  Tell that to the executives of the companies that accepted T.A.R.P. funds and are now having their income slashed by 90% and tell that to the banking industry that is facing government intervention with wage and salary limits. 

When considering how the government might act under any proposed legislation we have two choices.  We can evaluate what the government says or we can evaluate what the government has done or is doing, I choose evaluating what the government has done or is doing as the best indicator of what to expect the government will do in the future.

Footnotes:

[1] The Wall Street Journal: Senate on Verge of Health Bill;  Oct. 26^th, 2009 by Janet Adamy and Greg Hitt

[2] The Heritage Foundation: Why Congress Wants to Force More Americans into Medicaid

[3] JS Online: Health premium rise 5%, beating inflation again; Sept. 15, 2009 by Guy Boulton

[4] The Wall Street Journal Health Blog:  Fees on Health Industry Could Hit $121 Billion Over 10 Years; Oct. 7, 2009 by Jacob Goldstein

After this article was posted, the U.S. Senate rejected Reid and Stabenow’s attempt to decouple Medicare Reimbursements from health care reform legislation. [4]  Twelve Democrats and one Independent joined all forty Republicans in opposing the measure handing Reid and Pres. Obama the first major defeat in the administrations health care reform strategy.  This vote is the first real vote on health care reform and signals to the White House and the Democratic congressional leadership that overwhelming voter opposition to the proposed means of implementing health care reform is having an effect on Democrats who are in more conservative districts.  (It’s my hope that this blog contributed in some small way to this defeat)

This vote should energize the conservative base and their grassroots efforts to keep the pressure on their legislators to achieve health care reform while sticking to the principles stated by the President – specifically by not adding “one dime to our deficits – either now or in the future”, with transparency, and real impact on the uninsured.

It’s time for the President to get serious about his promise of transparency and bipartisanship.  When Pres.  Lyndon B. Johnson (D) worked on Civil Rights legislation, he had a Democratic majority in both the House and the Senate.  He could have had the Democratic leadership craft and pass Civil Rights legislation without a single vote from Republicans.  Instead, he demonstrated his commitment to bipartisanship by asking the Republican leadership to manage the legislation.  The result was the Civil Rights Act that pasted with bipartisan support and brought about long-overdue change in America.

Pres. Obama and the Democratic leadership have given nothing but lip-service to bipartisanship.  Republicans for the most part have been locked out of the process.  I think it’s time for the President to take a weekend at Camp David to do a little soul searching and consider that his political advisers are giving him bad advice on both strategy and tactics.  If he really wants the “change” he so eloquently spoke of in his campaign, he needs to stop the antagonistic tactics (i.e. attacks on media, legislative threats to the insurance industry, calling out individual legislators and private citizens) and replace them with real leadership.  Conservatives can and will join their liberal contemporaries in achieving real health care reform – we do want every American to have access to affordable health care and affordable health care insurance.  However, we believe this can be achieved without mortgaging our children’s future and the economic future of our nation.

There is both time and opportunity to come to consensus on a way forward for health care reform, but consensus can not be achieved through antagonism.

Continue reading below the original article

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This week, Heritage posted an article that explained the latest Capitol Hill shenanigans that is representative of the out-of-control deficit spending that has become the norm in Washington.

Pres. Obama made it clear in his Joint Session of Congress address on health care reform that he would not accept deficit spending as part of this legislation.  Specifically he said, “I will not sign a plan that adds one dime to our deficits – either now or in the future. Period.”  The problem is, no matter how the hard the Senate has tries, they cannot fashion a deficit neutral bill.  It’s simple math really.  Why?  Well, you can’t implement a $1 trillion entitlement program without adding to the Federal Deficit.

So, now the democratic controlled legislature has a problem.  They hold opposing positions on the same issue at the same time and are trying to call them both true – in other words, they hold the position “A” and “not A” simultaneously.  Anywhere else in the universe the law of non-contradiction would apply; that is anywhere in the universe but Washington.

Here is how White House Chief of Staff Rahm Emanuel worked with Senate leader Sen. Harry Reid (D-NV) and Finance Committee member Sen. Debbie Stabenow (D-MI) to suspend the “law of non-contradiction”.  Under the direction of Emanuel, Reid carved Medicare Reimbursement formulas out of the Senate version of the hybrid health care reform legislation and set it aside [1].  That particular part of the legislation would have added $247 billion to the deficit [2].  Then Sen. Stabenow introduced S. 1776, legislation that specifically deals with Medicare Reimbursement and Reid moved that legislation into the agenda so that it will be debated and voted on this week effectively sweeping $247 billion dollars in deficit spending under the proverbial rug – out of sight, out of mind.

Throughout history, the this shell game has been a staple politics at local, state, and federal levels.  So it would be easy to simply resign ourselves, shrug our shoulders and chalk it up to “politics as usual”.  But there is a reality we need to contend with.  That reality is that in every con-game there is a victim.  In this case, the victim is our children and grand-children who will have to foot the bill for both this Potomac Two-Step and our unwillingness to stand-up to these legislators and tell them “NO! We cannot sustain this kind of deficit spending”.

The appearance of deficit neutral legislation is not the only incentive for Reid & Co. to carve up the legislation.  According to Alexander Bolton of The Hill, Sen. Reid met with a number of physician organizations to offer them a “deal” for their support of his version of health care reform legislation [3].  The issue is this; since 1997 Medicare reimbursement rates were supposed to be tied something called the Sustainable Growth Rate (SGR) [2].  The SGR links Medicare Reimbursement rates to the overall growth of the economy.  If Medicare costs rise at a faster rate than the economy, the Medicare reimbursement rates are supposed to drop.  However, each year since 1997, congress has voted to forgo the downward rate adjustment to the following year.  The end result has been that each year, the downward adjustment has accumulated.  Without another extension this year, physician reimbursement would be a whopping 21.5% [1] and 40% by 2016 [3].  So, this is the proverbial “carrot and stick” shtick – and it’s a pretty big “stick” at that.  In fact, it’s down-right extortion.  Either support us and get the extensions you need or risk losing 21% of your Medicare Reimbursement in 2010.

If you had a loved one who was in denial of an addiction, would you not take the necessary steps to help them understand that the path they are on is leading to personal destruction?  Well, our legislators are addicted to spending money they – and we – don’t have.  They are addicted to our children’s and grand-children’s money.  They are spending it like a bunch of drunken sailors on liberty after months at sea.  The path they are putting us on is leading to destruction – destruction of our economy, destruction of our nation’s credit worthiness, destruction of our global position, and destruction of our liberty.

Footnotes:

[1] The Heritage Foundation:  Exposing the Obamacare Shell Game, Oct. 19, 2009, by Conn Carroll

[2] The Heritage Foundation:  The Senate Begins Voting on Obamacare This Week, Oct. 20, 2009, by Conn Carroll

[3] The Hill: Reid Offers Doctors a Deal, Oct. 20, 2009 by Alexander Bolton

[4] New York Times: Senate Rejects ‘Doc Fix’ Spending Bill, as Some Democrats Side With Republicans by David M. Herszenhorn and Robert Pear

I came across this site today, the Kaiser Family Foundation site,  that has couple of really nice tools to help a taxpayer consider the various health care reform bills currently working their way through both the U.S. House and the U.S. Senate.

One tool is the cost calculator and the other is a side-by-side health reform comparison tool. 

On the cost calculator, select the “No” option for the question “Is Employer Coverage Available?”  This will show you what the selected legislation will cost those individuals or families who will be required by law to purchase health care insurance.  It will also show you how much you will have to pay if/when your employer drops your health care insurance coverage as a result of this legislation. 

I compared the results from the calculator with an analysis from Heritage Foundation of the Baucus bill and found the results to be consistent.

Think your employer paid health care is safe… think again.  For example:  Why is it that unions throughout all sectors of the economy are supportive of this health care reform?  The answer to that is simple and self-serving.  For over a decade now, wages have pretty much been stagnant with many increases being at or below the cost of living.  One reason is that it is difficult, if not impossible, to negotiate higher wages as the cost of providing health care insurance has risen sharply.  Unions would like nothing more than to see health insurance be taken over by the Federal Government and dropped by employers.  This way, they can improve their bargaining position for higher wages.  Higher wages for union employees equals higher dues for the unions.  Of course, the employee then has to pick up the cost of health care insurance.  This may or may not be off-set by higher wages and, depending on your level of income, some government subsidies.  But at the end of the day, the union employee will pay higher dues, higher taxes, more out-of-pocket health care costs, etc.  This is not a win-win scenario for the union and the union employee.

In a perfect world, the employment rate would be high enough where employers would have to be highly competitive in the wages and benefit packages they offer in order to attract the most qualified employees.  But, the current economic climate is such where employers are not having to compete for the best talent.  And with higher deficits, higher taxes, and higher costs due to more regulation and mandates (cap-and-trade for example) it does not appear that we are in for an economic climate improvement anytime soon.  Employers looking to cut costs to survive would be crazy not to look at dropping health care insurance coverage.

I would encourage you to consider the “what could this cost me” scenario if your employer was to drop the employer based health care insurance coverage to determine not only what this will cost you today, but what it could cost you tomorrow.  Then, formulate your opinion based on the realities of your family budget and contact your Senator and Representative to let them know your position.

This health care insurance reform is a massive new federal entitlement, with massive subsidies that are funded by massive tax increases and the gutting of Medicare.  By all measures, this is a bad idea that will have both long and short-term implications.  I firmly believe that people want to do the compassionate thing here, but it is not prudent to allow our desire to be compassionate to blur our vision of reality and blind us to unintended consequences.

In his book “Money, Greed and God – Why Capitalism is the Solution and Not the Problem”, author Jay W. Richards points out that for much of U.S. history, “the federal government cost every citizen about twendy dollars a year” – and that is in “today’s” dollars.  He goes on to say, “Now it costs every one of us, on average, about then thousand dollars.”  You would think that with the trillions of dollars we have spent on the war on poverty through entitlement programs, we would have something to show for it.  Well, we do – according to Richards, studies have shown:

• Welfare benefits have resulted in reduced work hours (9% less for husbands, 20% less for wives, and 43% less for single males)
• One study shows that for every dollar spent on subsidised income results in 80 cents reduction in labor earnings.
• Another study shows that 10% increase in welfare benefits resulted in a 12% increase in out-of-wedlock births.
• Yet another study showed that a 50% increase in AFDC and food stamps led to a 43% increase in out-of-wedlock births. 

The single leading indicator for children being raised in poverty is children that are born out-of-wedlock. 

These studies reveal the unintended consequences of “government mandated compassion” – the term itself is an oxymoron.  Compassion implies we suffer alongside – massive federal programs do not suffer alongside.  Instead, they replace people closest to the concern with bureaucratic programs that can not consider the individual need – instead they paint with a broad paintbrush grouping people into ”classes” based on certain criteria.  The further we remove compassionate efforts to lend a helping-hand from the individual and individual responsibility, the more likely it is that there will be unintended consequences.  Aristotle put it this way – “If you want to encourage something, reward it.  If you want to discourage it, punish it.”

To limit the unintended consequences, it is best that assistance come through those that have the best understanding of actual, real needs of an individual or family.  This means that the first line of help is the individual in need (what are they doing to help themselves), followed by the family, then by local charities/churches, then the larger communities of city, county, state, federal, and international organizations.  The further you get from the individual, the effectiveness of assistance drops because the understanding of individual needs also drops.  When effectiveness and understanding of needs drop, the likelyhood of unintended consequences will increase.  This is one reason I financially support organizations – like World Vision – that put people in the community to help those in need.  They don’t simply throw money at a problem, they put boots on the ground, build community, and work to raise the standard of living through real compassion – suffering alongside for the purpose of lifting up.

Here in Detroit, the Federal Government dropped a $15.2 million of federal tax dollars through the T.A.R.P. legislation for the purpose of helping those who were about to lose their homes.  Over a couple of days, some 65,000 people lined up outside Cobo Hall to apply for a grant – ultimately only about 3,500 are expected to receive one.  Ken Rogulski of WJR Radio in Detroit interviewed a number of applicants.  One such applicant responded to his questions this way:

ROGULSKI: “Why are you here?”
WOMAN #1: “To get some money.”
ROGULSKI: “What kind of money?”
WOMAN #1: “Obama money.”
ROGULSKI: “Where’s it coming from?”
WOMAN #1: “Obama.”
ROGULSKI: “And where did Obama get it?”
WOMAN #1: “I don’t know, his stash. I don’t know. (laughter) I don’t know where he got it from, but he givin’ it to us, to help us.”
WOMAN #2: “And we love him.”
WOMAN #1: “We love him. That’s why we voted for him!”
WOMEN: (chanting) “Obama! Obama! Obama!”

Now, I realize that in that crowd of 65,000 people there are many who need and deserve assistance.  At the same time, one can not ignore the reality either.  This program does little or nothing to attack the real problems facing those in line.  Essentially, the Federal Government borrowed $15.2 million dollars from foreign governments (that we and our children will have to pay back) to drop into this program where only a handful of people will receive any assistance.  Of that hand-full, there is no real chance of the Federal Government truly understands the individual needs of the family they are trying to help.  Perhaps that real help is not throwing thousands of dollars at a housing problem.  Perhaps the real problem is the need for real accountability on a drug addiction, or a real need for job training, or a real need for medical assistance.  My point is that this is not compassion at all.  Instead this is a cold-hearted bureaucratic process assuming it knows best how to meet the needs of a hand-full of individuals.

Massive federal entitlement programs are the least effective way of addressing real need.  They take billions and billions of dollars out of the hands of taxpayers to fund these programs.  These dollars are filtered through layers and layers of bureaucracy – each one syphoning off more and more funds to pay for the bureaucracy itself.  In turn, the taxpayer now has less of the money they earned, money they could have used to help family members or to fund local charities that are closer to the people and therefore closer to the problem.  Money that could be applied directly where the rubber hits the road.

We’ve heard a lot about change over the past three years; first during a two + year presidential campaign and now 9 months into the presidency of the Barak Obama.  On the domestic front, the ideas on the table from the left:

• Cap and Trade
• Massive Health Care Reform
• Repeal of the Bush tax cuts
• T.A.R.P.

Just to name a few…

Of the above, only T.A.R.P – an $780 billion economic stimulus package – has been enacted.  This legislation was so massive in scope and so out of control that even today legislators are “surprised” by its content.  Why?  Because by their own admission they did not, and could not, have read the bill before the House and Senate leadership brought it to the floor for a vote.  The President, his Treasury Secretary, and congressional leadership had everyone whipped into a panicked frenzy with claims that if this legislation was not passed in days the entire world economy would collapse. 

So, it passed, and the deficit ballooned, and the money is rolling out and the results are pouring in.  Month after month, the unemployment rate continues to rise – e.g. reaching 9.8% nationally just yesterday (17% if you include the underemployed and those who have just stopped looking for work).  Month after month, businesses continue to fail – e.g. GM announces the closing of Saturn this week. 

Saturday, during the Defending The American Dream Summit sponsored by American’s For Prosperity, CNBC’s Larry Kudlow said. “Look, if it (T.A.R.P) was going to work, it would have worked by now.”  In Kudlow’s opinion, T.A.R.P. is already a failed, massive, government intervention into the free market and our society. 

Regardless if you agree with Kudlow’s assessment or not, one thing is true:  Irrespective of the success or failure of T.A.R.P. to stimulate our economy, our children and grand-children are going to have to foot the bill.  To me, that is simply irresponsible on our part to allow that to happen.

According to Senator Demint (R – SC):  “This year alone, the Senate has passed a $787 billion stimulus, a $350 billion Wall Street bailout extension, a $400 billion earmark-infested omnibus spending bill, a $109 billion loan to the International Monetary Fund, $6 billion to federalize charities and pay volunteers, $3 billion for cash for clunkers, $400 million in corporate welfare to help tourism corporations advertise overseas, and a $4 billion bailout of the Postal Service.” [1]

Given the apparent dismal, albeit short, track record of this administration, would it not be helpful if we were able to test their ideas before implementing them?  After all, don’t we test drugs before we give them to humans to cure them and don’t we test cars before we give them to drivers to drive them?  So, before we try to fix or drive our economy/health care/environment, would it not be a good idea to test these ideas before our legislators vote on concepts (not content) and implement change blindly?

Fortunately, the ideas being proposed by the Democrats in charge in Washington D.C. have in fact been tried and we have the ability to examine the results.  For example, California has implemented Cap in Trade and the Federal legislation passed by the U.S. House and under consideration by the U.S. Senate.  So, how’s it going in California – and elsewhere – where Cap and Trade has been implemented?

According to the Legal Planet, a blog run by UCLA’s Berkeley Law School (hardly a conservative think-tank), Cap and Trade laws have a dismal track record where ever they have been implemented.  In his article, “Cap and trade: it’s never worked, so let’s try it on a massive scale”, the author Ethan Elkind points out that the failure is the result of the lack of ability for government(s) to effectively legislate and administer environmental change with the resulting outcome being only massive tax increases and manipulation of so-called Cap and Trade markets [2].  Elkind’s position is supported by a law suit recently filed by several environmental advocacy groups against the California Air Resources Board (CARB) – the agency charged with implementing California’s Can and Trade Law – claiming that the government is failing to meet the objectives of the legislation [3].

So, if Cap and Trade laws have failed because governments, for a number of reasons, have been unable to implement them in a way to achieve the desired outcomes, then why are we moving forward to implementing them on a national scale with one economic analysis after another warning of massive job loss to India and China along with massive tax increases and massive negative economic impact on both businesses and individuals.

This is not the kind of change we need.

Footnotes:

[1] Washington Politicians’ Most Titanic Lie The Washington Examiner, Oct. 1, 2009 by Sen. Jim DeMint

[2] Cap and trade: it’s never worked, so let’s try it on a massive scale; Legal Planet, the Environmental Legal and Policy Blog, by Ethan Elkind

[3] Lawsuit alleges California’s cap-and-trade plan fails to minimize GHG emissions; Global Climate Law Blog by Lucy Wheatley Sept. 17, 2009

To many, discussing parliamentary procedures is a cure for insomnia.  But all of us should get a good dose of caffeine and pay attention to what the Senate Democrats are attempting to do.  In order to progress on passing a Health Care bill, the Senate is moving to use a procedural tactic called “Reconciliation”.  To fully appreciate what this means, we need to really understand some basics of the Legislative Branch of our government; a little Civics 101.

The Founding Fathers designed the Legislative Branch of our government for balance between the passion of the people and the deliberative nature of the statesmen.  To accomplish this balance, they divided the Legislative Branch of government into two Chambers – the House of Representatives and the Senate. 

Members of the House of Representatives serve a two year term by design.   The intent was to keep the representative as close to the passion of the people as possible.  Given a term of two years, as soon as a representative begins their term, they also begin a re-election campaign.  So, by nature, the House of Representative is more in touch with the people of the districts they represent; in theory at least.

The Senate, on the other hand, is designed to be a more deliberative group.  Senators are elected every six years.  Therefore, they are not always in “campaign mode”.  Senators represent their entire state and therefore are somewhat insulated from district-level politics.  By design, the U.S. Senate is where cooler heads are supposed to prevail.

In order for a bill to become law, it must be passed by both the House of Representatives and the Senate by simple majority votes.  Since the Senate has 100 members, a vote of 51 senators is all that is needed for a bill to pass the Senate.  So, what is all this talk about needing 60 votes to pass the Health Care Reform legislation in the Senate?  The answer lies not in the vote to pass, but the votes needed to bring debate of the legislation to a close so that the Senate can vote on it.

In the Senate, there is no limit on how long a bill can be debated before there is a vote.  Refusing to end debate to allow a vote is known as a filibuster.  You may recall Jimmy Stewart in the movie “Mr. Smith Goes to Washington”.  The climax of that movie is Stewart successfully “filibustering” a piece of legislation by talking for hours and hours on end.  The filibuster is an important piece of parliamentary procedure – especially for the minority party in the Senate. 

The rules governing the filibuster have evolved over the years.  Today, Senate Rule 22 governs the procedure.  For reasons of Senate decorum, senators are no longer routinely required to physically filibuster (talk a bill to death).  Instead, there is a vote to close debate, called a cloture vote, which requires a vote of 60 senators.  Simply failing to get enough votes for cloture is in effect a filibuster because the bill cannot be voted on.  The Senate Majority Leader may require a physical filibuster – but that would be highly unusual as it has physical ramifications everyone.  A senator’s physical presence is required during a filibuster.  In the past, sleeping cots where brought in to prepare the senate for a filibuster.  Senators have been known to wear diapers so they could relieve themselves while filibustering.  So, for reasons of decorum, the cloture vote now replaces the filibuster.

What does this have to do with the Health Care Reform legislation currently under consideration in the Senate?  Well, it’s pretty simple really.  Even though the Democrats have a majority of seats in the Senate – they do not have necessary 60 votes for cloture.  So, a filibuster (lack of cloture) is very likely for the Health Care Reform legislation currently under consideration.

To circumvent the filibuster, Sen. Reid may opt to use another procedure called reconciliation.  In 1974, Congress passed the Congressional Budget Act.  According to the glossary on the U.S. Senate website, “reconciliation process - A process established in the Congressional Budget Act of 1974 by which Congress changes existing laws to conform tax and spending levels to the levels set in a budget resolution.” [1]

This was done because as government grew, the budget legislation needed to fund the government became more and more complex.  Differences between legislation passed in the House and the Senate required multiple iterations to resolve – hence the term “reconciliation bill”.  Passages of reconciled bills were getting bogged down in legislative procedural processes.  Of course, some senators were taking full advantage of the filibuster rules by forcing cloture votes on every budget reconciliation bill.  The result was government services went unfunded and had to be temporarily shut down as the legislators wheeled and dealed to get budgets passed – it was a real mess. 

The Congressional Budget Act effectively put constraints on the filibuster, but the constraints were limited to reconciliation bills only – bills that modified laws with respect to tax and spending levels in the budget resolution.  Simply put, it’s a very narrow gate for specific legislation intended to limit the abuse of the filibuster on matters that could disrupt the day-to-day operations of the U.S. Government.  This is done by allowing a simple majority (51 votes) to end debate instead of the usual super majority (60 votes).

So here is what Sen. Reid is going to try and do.  There is currently a bill in reconciliation that qualifies for a simple majority cloture vote.  This bill has to do with that part of the T.A.R.P. legislation that will allow the Federal Government to limit the pay of executives that accepted T.A.R.P. funds (economic bailout funds) at the beginning of this year.  There were differences in the House and Senate versions of the legislation that had to be worked out.  The senate is now getting ready to vote on the reconciled bill – perhaps as soon as this week.

What Reid is about to do is this.  He will “attach” the current Health Care legislation being worked on in the Senate to this un-related budget bill as an “amendment” – kind of like the way a parasite (a tic) attaches itself to a dog.   By itself, the Health Care bill does not have enough votes for a super-majority cloture vote.  But attached as an amendment to a reconciliation bill, there are enough votes for a simple-majority cloture vote.  By doing this, Reid is using a highly questionable procedural maneuver to not only circumvent Senate Rules and long standing Senate traditions, he is in fact circumventing the will of the people.  Regardless of where you stand on the health care debate, this blatant disregard for and manipulation of the law and procedures should offend and anger you.

This kind of maneuver demonstrates so much of what is wrong with our legislative branch.  Attaching full pieces of legislation – especially legislation that is as complex and far reaching as health care reform – as amendment to some unrelated bill solely to circumvent the will of the people is reprehensible.

This report is detailed and has a lot of “finance speak”. It includes a couple of tables with valuable information. I’m providing  portions of the tables here that cut through all the calculations and get to the heart of the matter… What’s this going to cost me? If you currently don’t have insurance from your employer, here is what you can expect to pay in insurance premiums, co-pays, and uncovered medical expenses before you would qualify for any federal assistance:

                                              Congressional Budget Office Report [1]

These expenses are calculated based on the second lowest “Silver-Plan” insurance coverage as outlined by the Baucus bill.  Of course, you can choose not to purchase coverage. That will cost you anywhere from $750 – $3,800 a year in a new Federal Excise Tax [2] plus any out-of-pocket medical expenses you might have that year.

Look, numbers don’t lie. Let’s look at a family of four making $66K a year. What we are talking about here is an out-of-pocket expense of 20% of their income or $13,300 a year. I don’t know of any four person households at that income level that can find an additional $1,100 a month in their budget. The only option they really have is to pay the new Excise Tax of $750-$3,800 a year and hope that no serious illness hits the family.

For those of you who currently have health insurance coverage through your employer don’t get comfortable! The incentive is there for employers to drop your coverage. The reality is that the penalty for not providing employer based coverage is in many cases less than what employers pay for coverage. What this means is that there is a real incentive for some employers to drop health insurance coverage telling their employees that there is now a co-op for them to buy their coverage individually.

Additionally, consider the potential impact on our economy in general. If the family of four making $66K a year is going to have to spend 20% of their income on health care, then they are not going to be spending it on housing, appliances, clothing, automobiles, entertainment, etc. The impact on other segments of our economy will be devastating.

Furthermore, this is an incentive killer for people to improve themselves and therefore improve their income.  What is the motivation for the head of a household who currently earns $30,000 a year to improve their skills and add another $12,000 a year to their families income.  NONE!  By doing that, the out-of-pocket medical related expenses jump from $2,900 a year to $6,100 – more than double!

I know that people are hurting, that unemployment is high, and costs are up.  But, numbers don’t lie.  There is no relief in this bill for the average American family.  The burden on the middle-class is very high and the downside is quite real. 

This is a bad bill.  This is a bad idea.

Footnotes:

[1] An Analysis of Premiums Under the Chairman’s Mark of the America’s Healthy Future Act http://www.cbo.gov/ftpdocs/106xx/doc10618/09-22-Analysis_of_Premiums.pdf

[2] Preliminary Analysis of Specifications for the Chairman’s Mark of the America’s Healthy Future Act http://www.cbo.gov/ftpdocs/105xx/doc10572/09-16-Proposal_SFC_Chairman.pdf