Topic: Government and Politics

Is Barack Obama’s Health Plan a Prescription for Socialized Medicine?

Barack Obama’s health plan would enroll more than 50 million Americans in new and existing government health programs, effectively doubling the Medicare rolls.  It would increase taxes on nearly all workers.  It would give the federal government near-total control over health insurance, by letting Washington control prices and dictate the content of every private health plan in the country.  It would create a new government agency whose research would help government and private insurers ration medical care.  Harvard University and Harris Interactive recently polled Americans who claim to know what socialized medicine is, and found:

  • 79 percent believe that universal coverage equals socialized medicine,
  • 73 percent said that socialized medicine exists when “the government pays most of the cost of health care,”
  • 60 percent consider Medicare to be socialized medicine, and
  • 57 percent believe Obama supports socialized medicine.

Obama has repeatedly voiced his support for a single-payer health care system – the type of plan most people have in mind when they use the term socialized medicine.  Many who support Obama’s health plan, such as New York Times columnist Paul Krugman, do so because they believe the Obama plan would lead to socialized, single-payer system. 

So is Obama’s plan a prescription for socialized medicine? 

Somehow, respectable folks at the Urban Institute, The New York Times, The Washington Post, FactChecker.org, and National Public Radio still say no.  Their reasons boil down to these:

  • It’s only socialized medicine if the government employs the doctors and provides health insurance directly.  But that can’t be right.  There is little functional difference between health care system A, a public program through which the government taxes and spends your money on its health care priorities, and health care system B, a completely “private” system in which the government forces you to spend your money on identical priorities.  What matters is not whether health care is nominally “public” or “private,” but who controls the resources.  Even Center for American Progress scholar Jeanne Lambrew acknowledges that a (nominally) private sector is no barrier to socialized medicine: “the government role in socialized medicine systems [can include] public financing of private insurance and providers.”
  • It’s only socialized medicine if there’s government rationing.  But that can’t be right, either.  Barriers to access occur when the government limits spending below what is required to meet patients’ demand for medical care. To say that socialized medicine only exists when there are waiting lists or other access problems is to make the rather curious argument that socialized medicine would disappear if the government wrote bigger checks.

I offer a more reasonable definition:

Socialized medicine exists to the extent that government controls medical resources and socializes the costs.

In a Cato Briefing Paper released today, I use that reasonable definition of socialized medicine to show how America’s health-care sector is already more than half-socialized, and how Obama’s health plan would take us the rest of the way there.

False or Misleading in Every Particular

Barack Obama currently has the following health-care ad in the field. 

It’s an effort to make Obama’s health plan appear moderate.  That’s quite a trick, considering the plan might give Washington more control over the health-care sector than the Clinton health plan.  So pretty much the only way they could create the appearance of moderation was to write a script that is false or misleading in every particular.

The ad begins:

Health care reform.  Two extremes.  On one end, government-run health care, higher taxes.  On the other, insurance companies, without rules, denying coverage.  Barack Obama says both extremes are wrong. 

Those are not opposing extremes.  In fact, Obama pursues government-run health care, higher taxes, and insurance companies denying coverage, all at once. 

  1. Obama expands government-run health care.  Obama proposes to create a new government-run health care program modeled on Medicare for people under age 65.  One estimate suggests that program would enroll 45 million Americans.  He also proposes to expand Medicaid and the State Children’s Health Insurance Program.  Those expansions would enroll at least another 6 million Americans in government programs.  He also gives government a great deal more control over private-sector health care.  (See below.)
  2. Obama pursues higher taxes.  Funding those government programs will require higher taxes.  Obama admits he would raise taxes on those earning more than $250,000 per year, but that’s just the tip of the iceberg.  Obama would increase taxes on (nearly) all workers.  His proposed “pay or play” employer mandate would take money out of workers’ paychecks before workers even see it.  Finally, Obama would require insurance companies to charge healthy 18-year-olds the same premiums as 55-year-olds with multiple chronic conditions.  That constitutes a further tax on young and healthy workers that would force them to pay far more in premiums than they generate in costs. 
  3. Obama encourages insurers to deny coverage.  If the average 18-year-old makes $1,000 in claims per year, the average 55-year-old makes $20,000 in claims, and each pays a premium of $12,000, whom will insurance companies court, and whom will they avoid?  By requiring insurers to charge everyone the same average premium, Obama guarantees that insurers will avoid and provide lousy care to the sick whenever possible.  That problem already exists in states with community-rating laws and the Medicare program.  It doesn’t even matter if insurers deny care to the sick deliberately or not; Obama would reward them even if they do so unintentionally.  Finally, Obama proposes a new federal agency whose very purpose is to help insurers deny care.

The ad continues:

His plan.  Keep your employer-paid coverage.  Keep your own doctor.

Actually, once Obama gives himself the power to dictate the price and content of every health plan in the nation, his first act would be to eliminate the most affordable 30-50 percent of health plans currently on the market.  At the same time, his National Health Insurance Exchange would set off the ol’ adverse selection death spiral, which numerous studies suggest would eliminate comprehensive health plans from the market.  An awful lot of Americans would have to switch health plans, and would lose their doctors in the process.  Those who go from private to Medicaid coverage are going to have an awful time finding a doctor.

Take on insurance companies to bring down costs.  Cover pre-existing conditions and preventive care.

Nothing in the Obama plan would “take on insurance companies to bring down costs.”  Covering pre-existing conditions would increase costs.  Obama proposes to force insurance companies to spend less on administration and more on claims, but that too would increase costs.  The insurance companies will just game and lobby Congress until Obama’s plan works to their advantage. 

Obama claims he would boost preventive care.  Yet his National Health Insurance Exchange would let people switch plans every year, giving insurers absolutely no incentive to invest in consumers’ long-term health.

Common sense for the change we need. 

Um, yeah.

“I’m Barack Obama, and I approved this message.”

Well, I suppose that part is true.

There is one ray of hope.  The beginning of the ad says that Obama thinks that “government-run health care [and] higher taxes” are “wrong.”  Maybe, with enough persuasion, we can turn him against his own health plan.

Let the Government Do It — and Only the Government

In his acceptance speech to the Democratic National Convention, Barack Obama stirringly declared that all people are connected: “It’s that fundamental belief — I am my brother’s keeper, I am my sister’s keeper — that makes this country work.” And in his appearance at Rick Warren’s Saddleback Church, he said, “America’s greatest moral failing in my lifetime has been that we still don’t abide by that basic precept of Matthew — whatever you do to the least of my brothers, you do to me.”

And some conservative commentators like Rush Limbaugh suggested that it was hypocritical of Obama to declare his belief that each of us is ”my brother’s keeper” while his own half-brother lives at subsistence level in Kenya. Shouldn’t being your brother’s keeper start with, you know, your brother?

But maybe that’s unfair. This particular half-brother, George Hussein Onyango Obama, is 20 years younger than Barack Obama, and they’ve met only twice. Why should he be responsible for his half-brother’s welfare?

But then I noticed something else. Barack and Michelle Obama gave almost nothing to charity until their income skyrocketed after his election to the Senate in 2004. Between 2000 and 2004, for instance, they made about $1,218,000 and gave $10,770 to charity, a bit less than 0.9 percent. In 2005 and 2006, Obama earned much more from his books, and his wife’s salary at the University of Chicago doubled. In those two years they made more than $2.6 million and gave just over 5 percent to charity.

And then Joe Biden released his tax returns. And as the TaxProfBlog says, “the returns show that the Bidens have been amazingly tight-fisted when it comes to their charitable giving.  Despite income ranging from $210,432 - $321,379 over the ten-year period, the Bidens have given only $120 - $995 per year to charity, which amounts to 0.06% - 0.31% of their income.” The average American in that income category gives far more.

So Obama and Biden believe strongly that we are our brother’s keeper. They believe in redistribution of income to the poor and the middle class (and the Wall Street bankers). Are they hypocrites when they don’t give much of their own money?

Maybe not. They’re not hypocrites if they believe that it’s the job of government to take care of the needy. And that it’s not the job of anyone else. The traditional American argument for welfare and other transfer programs is that government should step in to take care of needs that can’t be met through self-help, mutual aid, churches, or other charities. But there’s another view in modern America, a view that says helping people is the job of government in the first place. Advocates of that view complain that we shouldn’t expect private charity to do the job of government, that caring for the needy is rightly and appropriately a collective task that should be undertaken collectively (and coercively) by government. That would seem to undermine the notion of virtue; I might consider my personal charity a virtue, but how can I think of myself as virtuous if all I did was pay my taxes as ordered? But there are clearly people who believe that faith, hope, and charity are attributes of government, not of individuals, churches, and private charities.

If that’s what Obama and Biden believe–that personal charity is no substitute for government welfare and foreign aid–then they’re not hypocrites. They’re living by their beliefs. But those are not the beliefs and practices of most Americans, who give more money to charity than Obama and Biden and who are perhaps unsurprisingly more likely to give and to give more if they oppose government redistribution.

But if that is Obama’s position, then he should not say “I am my brother’s keeper.” He should say, “You are my brother’s keeper,” or ”Everyone is everyone’s brother’s keeper, and I as a politician will tax you to pay for his needs.”

Existential Threats

The 2008 presidential election, scheduled to be a fight over differing visions of foreign policy and domestic spending priorities, has changed significantly. The two campaigns have been focused for weeks on figuring out how much money to take from taxpayers to insulate those same taxpayers from the costs of the decisions of a variety of parties, including the Senate to which both of them belong.

But the commonality between John McCain and Barack Obama on the giant bailout is, in some ways, similar to their overstated differences in the realm of foreign policy. Real differences exist, but in football terms, this been a boring struggle back and forth between the 45-yard lines of foreign policy thought.

Although the two candidates disagree vehemently about who said what when on Iraq policy and whether to negotiate with Iran, they agree with each other on a range of issues, including humanitarian intervention, the supposed need to make Georgia and Ukraine security protectorates, and the divine mission of America to promote democracy throughout the world. In a paper posted today [.pdf], I discuss some of these similarities and differences.

One issue where there is a clear difference, at least of degree, is on the subject of Iran. McCain repeated his view during the first debate, stating flatly that “if Iran acquires nuclear weapons, it is an existential threat to the State of Israel and to other countries in the region.” McCain went on to note that “we cannot have a second Holocaust” and to describe how his “League of Democracies” [.pdf] would hold the key to unlocking the Iran problem. Not to be outdone, Obama chimed in to agree that “we cannot tolerate a nuclear Iran.”

Governor Palin cranked things up a bit further, telling Katie Couric that we should “never second-guess” an Israeli attack on Iran, because doing so would “send a message that we would allow a second Holocaust,” and because “it’s obvious” to Palin who would be “the good guys in this one” and who would be “the bad guys.”

I have argued elsewhere that the United States, with a $13 trillion economy and a defense budget the size of all other nations combined, certainly could “live with” a nuclear Iran. But since all of the candidates respond first to questions about Iran by referencing Israel, perhaps it is worth examining that country’s thoughts on the issue, since it is much smaller, weaker, and closer to Iran than the United States.

What one finds is quite interesting. It was Tzipi Livni, then foreign minister of Israel and now a candidate for PM, who noted in an interview with Haaretz last October, that she believed that Iranian nuclear weapons would not pose any “existential” threat to Israel, and that she believed that then-PM Olmert was “attempting to rally the public around him by playing on its most basic fears.”

McCain, in particular, has been at the forefront of ringing the alarm bell in the United States (and abroad) that Iran does present such an existential threat, and that the prospect of an Iranian nuclear capability would necessitate U.S. military action, and all the attendant consequences.

Question for McCain: Why are you busily promoting alarmism about what a nuclear Iran would mean to Israel? Why are you more alarmed even than those charged by Israeli citizens with protecting their well-being? Does this in any way represent responsible statesmanship?

It’s a question that’s more important, though almost certainly less entertaining, than the scheduled programming of McCain implying Obama is a terrorist and Obama shooting back that McCain is a crazy old man.

Downsizing the Veep

Maybe I’m wrong, but I think I’m the source for the only constitutional question asked in Thursday’s vice-presidential debate. Moderator Gwen Ifill asked one that sounded a lot like the one I asked that morning in the New York Times:

IFILL: Governor, you mentioned a moment ago the constitution might give the vice president more power than it has in the past. Do you believe as Vice President Cheney does, that the Executive Branch does not hold complete sway over the office of the vice presidency, that it it is also a member of the Legislative Branch?

PALIN: Well, our founding fathers were very wise there in allowing through the Constitution much flexibility there in the office of the vice president. And we will do what is best for the American people in tapping into that position and ushering in an agenda that is supportive and cooperative with the president’s agenda in that position. Yeah, so I do agree with him that we have a lot of flexibility in there, and we’ll do what we have to do to administer very appropriately the plans that are needed for this nation. And it is my executive experience that is partly to be attributed to my pick as V.P. with McCain, not only as a governor, but earlier on as a mayor, as an oil and gas regulator, as a business owner. It is those years of experience on an executive level that will be put to good use in the White House also.

IFILL: Vice President Cheney’s interpretation of the vice presidency?

BIDEN: Vice President Cheney has been the most dangerous vice president we’ve had probably in American history. The idea he doesn’t realize that Article I of the Constitution defines the role of the vice president of the United States, that’s the Executive Branch. He works in the Executive Branch. He should understand that. Everyone should understand that.

And the primary role of the vice president of the United States of America is to support the president of the United States of America, give that president his or her best judgment when sought, and as vice president, to preside over the Senate, only in a time when in fact there’s a tie vote. The Constitution is explicit.

The only authority the vice president has from the legislative standpoint is the vote, only when there is a tie vote. He has no authority relative to the Congress. The idea he’s part of the Legislative Branch is a bizarre notion invented by Cheney to aggrandize the power of a unitary executive and look where it has gotten us. It has been very dangerous.

Biden made more of an attempt than Palin did to answer the question Ifill asked, but his answer doesn’t make much sense. Uh, Joe, Article I covers the legislative branch. And the veep’s only power is legislative, presiding over the Senate and breaking tie votes. The Constitution doesn’t grant him any executive power.

And yet here’s Dick Cheney, co-president from at least 9/11/01 on, giving orders to shoot down planes, running large swathes of the War on Terror, and even exercising formally delegated executive powers over the control of information.

As Glenn Reynolds suggests, it’s constitutionally suspect for the president to delegate executive power to officials he can’t remove from office. He also notes that

there may be practical reasons to limit vice presidential involvement in day-to-day executive business regardless of whether we accept the characterization of the Vice Presidency as a legislative office or not. Whether or not the Vice President is seen as a legislative officer, the office of Vice President is something special. The Vice President is, after all, primarily meant to serve as a sort of spare President, and—as with spare tires or backup servers—it may be safest not to put the spare into ordinary service before it’s needed. Presidents are lost in three ways: death, resignation, and impeachment. Vice presidential involvement in policy has the potential to put the “spare” role at risk in at least two of these contexts. When Presidents resign or are impeached, it is often over matters of policy.

Although the risk that a Vice President will be involved in the precipitating events is hard to estimate, it is certainly higher for an activist Vice President than it will be for a Vice President playing a traditionally quiescent role. Though talk of impeaching the current occupants of either office is unlikely to come to anything, it illustrates the risks…. Had Carter been impeached or forced to resign as a result of the Iran debacle, Mondale’s public distance would have been important in preserving his ability to govern.

Whatever one thinks of the impeachment talk of the last few years, two and a half impeachments over our entire constitutional history is probably fewer than we ought to have had. And impeachment becomes more difficult when the president’s replacement is deeply implicated in the activities considered grounds for impeachment.

And there are other problems with a Cheney-style vice presidency as well, problems that ought to be of particular concern to unitary executive fans. One of the more convincing arguments offered by Hamilton against the idea of a plural executive is that “it tends to conceal faults, and destroy responsibility.” He continues,

The circumstances which may have led to any national miscarriage or misfortune are sometimes so complicated that, where there are a number of actors who may have had different degrees and kinds of agency, though we may clearly see upon the whole that there has been mismanagement, yet it may be impracticable to pronounce to whose account the evil which may have been incurred is truly chargeable.

That’s certainly been the case over the last seven years. As Barton Gellman has recently shown, information about the so called Terrorist Surveillance Program was so tightly held among Vice President Cheney, David Addington, and their administration allies, that President Bush was unaware until the very last moment that the top echelon of his Justice Department was ready to resign over the illegality of the original program. When an activist vice president deliberately keeps the president in the dark, it can be difficult to discern where the buck really stops.

At the constitutional convention, when Elbridge Gerry objected to the veep’s legislative role, Roger Sherman made the salient point that “If the vice-President were not to be President of the Senate, he would be without employment.” Our early vice presidents didn’t play an important role in the executive branch. Washington kept John Adams at arm’s length from policymaking, and Adams was also frustrated in his attempts to actively manage the Senate as presiding officer. The best view of the vice-president’s constitutional role is that the veep really is supposed to be a bucket of warm [fluid] unless and until he or she is called upon to assume office. And there’s good reason for that. Here’s hoping that Vice President Biden or Vice President Palin will spend less time making policy and more time attending funerals.

Can We Cut Government Spending If They Have Less Work?

The U.S. Postal Service has far less mail to carry, but they’re still not quite ready to cut their massive workforce.

Never before has the U.S. Postal Service laid off workers. Now, it’s a real possibility.

“For the first time in history, that is being considered,” said Gerald McKiernan, a USPS spokesman.

Already, the Postal Service is not hiring because it simply doesn’t move as much mail as it once did. E-mail has taken an increasing amount of its business. McKiernan says mail volume dropped 11 percent in fiscal 2008, which ended Tuesday. That resulted in the service spending $2.3 billion more than it took in.

The workload is down 11 percent, but they’re not yet ready to lay anybody off? That’s government at work. Or non-work.

National Debt Soars under Bush

NPR’s “Studio 360” ran a segment Saturday on conservative folk music of the ’60s. Yes, it existed, though it seems to have been largely parodies of lefty folk songs. One of the clips included was a 1964 tune from the Goldwaters: “Oh, what have you done, left wing, left wing? Oh, what have you done for our country? Well, we’ve raised the national debt, Yeah, it’s going higher yet!”

So it must be a great disappointment to Goldwater Republicans to discover this story that got almost no notice this week:

With no fanfare and little notice, the national debt has grown by more than $4 trillion during George W. Bush’s presidency.

It’s the biggest increase under any president in U.S history.

On the day President Bush took office, the national debt stood at $5.727 trillion. The latest number from the Treasury Department shows the national debt now stands at more than $9.849 trillion. That’s a 71.9 percent increase on Mr. Bush’s watch.

The bailout plan now pending in Congress could add hundreds of billions of dollars to the national debt – though President Bush said this morning he expects that over time, “much if not all” of the bailout money “will be paid back.”

But the government is taking no chances. Buried deep in the hundred pages of bailout legislation is a provision that would raise the statutory ceiling on the national debt to $11.315 trillion. It’ll be the 7th time the debt limit has been raised during this administration.

Which might be why the former lead singer of the Goldwaters says he would describe himself “as a Libertarian today.”