THE HEALTH CARE DEBATE: THE REAL ISSUES

What this nation needs now is a reasoned, logical approach to one of the most formidable issues of our day.  We must solve some of the issues surrounding the current health care debate.  But how do we do this?  The Democratic Congress and president have proposed a sweeping piece of legislation (e.g., HR 3200), which will fundamentally change how we do health care in this nation and how we pay for it.  Its effects, if passed, are not clear.  Many of the details of the legislation are not yet hammered out.  But there are several key propositions that we already know.  These propositions, in the form of questions, must first of all be dealt with before we can go forward.  Most politicians or other leaders are not addressing these propositions.  In this Perspective, I hope to give focus to these propositions.

• First of all, this proposal, whatever its exact nature, will fundamentally and permanently increase the power and authority of the national government.  How big of a government do we want?  Insightfully, economist Robert Samuelson writes, “We face an unprecedented collision between Americans’ desire for more government services and their almost equal unwillingness to be taxed.  The conflict is obscured and deferred by today’s depressed economy, which has given license to all manner of emergency programs, but its dimensions cannot be doubted.”  A new report published by the Congressional Budget Office (CBO) makes this point rather powerfully:  For the last 50 years, federal spending has averaged about 20% of GDP, federal taxes about 18% of GDP and the budget deficit about 2% of GDP.  The CBO estimates that by 2020 (assuming full employment) federal spending will be 26% of GDP, taxes 19% GDP and the deficit about 7% GDP.  Samuelson writes that “What this means is that balancing the budget in 2020 would require a tax increase of almost 50% from the last century’s average. . . In today’s dollars, that would be about $1.1 trillion, a 44% annual tax increase.  Even these figures may be optimistic, because CBO’s projections for defense and ‘nondefense discretionary’ spending may be unrealistically low.  This last category covers much of what government does:  environmental regulation, aid to education, highway construction, law enforcement, homeland security.”  All of this is exacerbated by the aging population and the rapid increase in health spending.  For example, in 2000, Social Security, Medicare and Medicaid—the primary programs that provide income and health care for those over 65—totaled nearly 8% of GDP.  By 2020, CBO projects that these programs will reach 12% of GDP.  In my judgment, as we begin this national discussion on health-care reform, what is also needed is a robust discussion on the role of government in our lives.  Samuelson argues:  “Everyone favors benefits and opposes burdens (taxes).  Republicans want to cut taxes without cutting spending.  Democrats want to increase spending without increasing taxes, except on the rich.  The differences between the parties are shades of gray.  Hardly anyone asks the hard questions of who doesn’t need benefits, which programs are expendable and what taxes might cover remaining deficits.”  Furthermore, only in Neverland will Obama’s health care proposal make sense!  His health-care proposal will increase federal spending.  He contends that he will pay for it with tax increases on the rich or spending cuts on existing programs, but he never talks about reducing the federal deficit.  In so many ways, this is the core of our economic crisis.  We are avoiding the inevitable—our massive deficit, the enormous projections of federal spending and our propensity to continue to increase the role of the federal government.  This is simply unsustainable!  Common sense tells us that we cannot continue doing what we are doing!  Samuelson concludes that the “CBO notes that elevated deficits would penalize savings, investment and income, while unprecedented tax burdens ‘could slow the growth of the economy, making the [government’s] spending burden harder to bear.’  To such warnings, Americans’ collective response is:  Go away.”  Amazing—and profoundly sad!

• Second, President Obama has argued that, when it comes to health-care, “the status quo is unsustainable for families, businesses and government.”  What exactly does he mean by the “status quo?”  For the past 45 years, the US government has followed this paradigm:  Expand benefits and talk about controlling costs.  According to economist Robert Samuelson, “That is the status quo, and Obama faithfully adheres to it.  While denouncing skyrocketing health spending, he would increase it by extending government health insurance to millions of more Americans.”  This is the way America is currently framing the debate about health-care:  Health care is being promoted as a “right.”  Promoting health care for all Americans is a moral/ethical issue.  To attempt to control costs is deemed “rationing.”  Obviously, a bias toward expanding the federal government’s role in health care is the reality.  But what does history teach us?  Medicare was created in 1965 to cover those 65 and older.  In 1972, Congress added the disabled, now about 15% of beneficiaries of this program.  Congress added dialysis for kidney failure, a drug benefit in 2003 and added hospice care, mammograms, etc.  Medicaid originally covered those on welfare.  But Congress added children ages 6 to 18 in households under the poverty line.  In 1997, Congress further expanded the program by adding the State Children’s Health Insurance Program.  Furthermore, open-ended reimbursement by government and private insurance has ballooned health spending despite repeated pledges to “contain” costs.  Samuelson argues that “Obama would perpetuate this system. . . Obama’s program would do little to reduce costs and would increase spending by expanding subsidized insurance.”  The key focus of true health-care reform should be controlling spending, not expanding the services of government.  But we are not having that debate!  What Obama is doing is misrepresenting reality:  “He simply claims that his plan will do things it won’t.  What he’s offering is an enlarged version of the status quo that, as he says, is already unsustainable.”  In the short-run (i.e., 4 to 8 years) the federal government simply cannot both insure the uninsured and rein in health care spending.  Only in Neverland can you talk about doing this!  We are not having the debate in this nation that we should be having.  Our children will be the ones who will be crushed by our lack of wisdom and common sense.

See Michael Gerson in the Washington Post (14 August 2009); Robert Samuelson in the Washington Post (13 July, 27 July and 10 August 2009).

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