Tuesday, July 21, 2009
July 21, 2009
When Barack Obama pilfered Martin Luther King Jr.’s line about the “fierce urgency of now,” he wasn’t kidding. The line has come to define his presidency. His legislative strategy moves in two gears — fast and recklessly faster.
As with the stimulus package, Obama’s health-care plan depends on speed. More important than any given provision, more important than any principle, more important than sound legislating is the urgent imperative to Do It Now.
Do it now, before anyone can grasp what exactly it is that Congress is passing. Do it now, before the overpromising and the dishonest justifications can be exposed. Do it now, before Obama’s poll numbers return to Earth and make it impossible to slam through ramshackle government programs concocted on the run. Do it now, because simply growing government is more important than the practicalities of any new program.
The stimulus partly drives the rush on health care. The program was so ill-considered and so festooned with irrelevant priorities as the price of hustling it through Congress that it becomes more of a drag for Obama every day. So health care has to be rushed through before Obama pays the full price for the failure of his previous rush job. Haste — and waste — makes for more haste.
Obama cultivated an image of cool during the campaign. Unrattled. Deliberate. Cerebral to a fault. Who knew he’d be in a panic to remake one-sixth of the economy by the first week of August of his first year in office?
Normally, the larger and more complicated a bill is, the longer Congress takes to consider it. With the stimulus and cap-and-trade, Obama and the Democrats upended this rule of thumb by passing byzantine, 1,000-page bills that no one had the time to read. When the work product is indefensible, deliberation is dangerous.
There’s a touch of the guilty conscience about Obama’s terrible rush. As if he knows he was elected as a moderate-sounding deficit hawk last year, and if he’s going to pass an ambitious left-wing program, he must do it before the opposition builds.
Why else the mad dash? Obama noted in an interview with ABC News the other day that his health program won’t be phased in until 2013. That’s four years from now. The problem that Obama describes of rising health-care costs bankrupting the government is also a long-term issue, one that needn’t be addressed in pell-mell fashion over the next two weeks.
But the longer Obama’s health-care program marinates in the sun, the worse it smells. Obama’s signature line that anyone who likes his current coverage gets to keep it has been shown to be untrue in recent weeks. His rationale of passing a $1 trillion program to reduce costs is undermined every time the Congressional Budget Office analyzes a real Democratic proposal. No wonder Obama wants to close down the debate before his rating on health care — down to 49 percent in the latest Washington Post/ABC News poll — drops any farther.
Ramming through legislation without any assurance that it will work doesn’t seem pragmatic or farsighted. But for Obama’s purposes, it is. His goal is nothing short of an ideological reorientation of American government. Putting in place the structures to achieve this change in the power and role of government is more important than how precisely it is accomplished.
The stimulus might not do much to stimulate the economy during the recession, but its massive spending creates a new baseline for all future spending. The cap-and-trade bill might not reduce carbon emissions during the next decade, but it creates a mechanism for exerting government control over a huge swath of the economy. Obamacare might not work as advertised, but it will tip more people into government care and create the predicate for rationing and price controls.
Barack Obama is an ideologue in a hurry. He wants to put American government on a radically different path.
And he wants to Do It Now.
Saturday, July 18, 2009
Trying to ram through one of the greatest raids on private income and business in American history.
With huge majorities and a President in a rush to outrun the declining popularity of his agenda, Democrats are bidding to impose an unrepealable European-style welfare state in a matter of weeks. Mr. Obama's February budget provided the outline, but the House bill now fills in the details. To wit, tax increases that would take U.S. rates higher even than most of Europe. Yet even those increases aren't nearly enough to finance the $1 trillion in new spending, which itself is surely a low-ball estimate. Meanwhile, the bill would create a new government health entitlement that will kill private insurance and lead to a government-run system.
Hyperbole? That's what people said when we warned about this last fall in "A Liberal Supermajority," but even we underestimated the ideological willfulness of today's national Democrats.
Consider only a few of the details:
A huge new income surtax. The bill's main financing comes from another tax increase on top of the increase already scheduled for 2011 under Mr. Obama's budget. The surtax starts at one percentage point for adjusted gross income above $350,000 in 2011, rising to two points in 2013; a 1.5 point surtax at incomes above $500,000, rising to three in 2013; and a whopping 5.4 percentage points in 2011 and beyond on incomes above $1 million. This would raise the top marginal federal tax rate back to roughly 47% or 48%, if you include the Medicare tax and the phase-out of certain deductions and exemptions. With the current top rate at 35%, this would be the largest rate increase outside the Great Depression or world wars.
The average U.S. top combined state-federal marginal tax rate would hit about 52%. This would be higher than in all but three (Denmark, Sweden, Belgium) of the 30 countries measured by the OECD.
According to the table to the left, compiled by the Heritage Foundation, taxpayers in at least five U.S. states would pay higher marginal rates even than Sweden. South Korea, which Democrats worry is stealing American jobs, would be able to grab even more as its highest rate is a far more competitive 38.5%.
House Democrats say they deserve credit for being honest about the tax increases needed to fund their ambitions. But then they also claim that this surtax would raise $544 billion in new revenue over 10 years. America's millionaires aren't that stupid; far fewer of them will pay these rates for very long, if at all. They will find ways to shelter income, either by investing differently or simply working less. Small businesses that pay at the individual rate will shift to pay the 35% corporate rate.
When the revenue doesn't materialize, Democrats could move to soak the middle class with a European-style value-added tax.
The plan drew fire from the U.S. Chamber of Commerce, the nation’s biggest business lobby.
“The intention of this plan is to tax high-income households, but the real victims would be America’s small business owners,” the Washington-based group’s president, Thomas Donohue, said in a statement. “Since when does our great free-market country punish success?”
Eric Cantor, the No. 2 House Republican, picked up on the theme, saying the plan would be paid for by “small business men and women we are counting on to start hiring workers again.”
Then there's yesterday's testimony, from Congressional Budget Office (CBO) Director Doug Elmendorf, that ObamaCare's cost "savings" are an illusion. Mr. Obama claims government can cover more people and pay less to do it. But Mr. Elmendorf told the Senate Finance Committee that "In the legislation that has been reported we don't see the sort of fundamental changes that would be necessary to reduce the trajectory of federal spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health-care costs." The nonpartisan agency said in a partial and preliminary analysis that the plan would run to more than $1 trillion over 10 years and reduce the number of uninsured by roughly 37 million. The agency said that by 2019 some 17 million people....about half of them illegal immigrants.....would lack coverage.
Further on the public plan: "It raises the amount of activity that is growing at this unsustainable rate."
No matter, Speaker Nancy Pelosi is whisking the bill through House committees even before CBO has had a chance to score it in detail. As Wisconsin Republican Paul Ryan put it to us, "We will not have read it, and we will not have a score of it, but we will have passed it out of committee."
A new payroll tax. Unemployment is at 9.5% and rising, but Democrats will nonetheless impose a new eight percentage point payroll tax on employers who don't provide health insurance for employees. This is on top of the current 15% payroll tax, and in addition to a new 2.5-percentage point tax on individuals who don't buy health insurance. This means that any employer with more than $400,000 in payroll would have to pay at least 25% above the salary to hire someone. Result: Many fewer new jobs, with a higher structural jobless rate, much as Europe has experienced as its welfare states have expanded.
Other new taxes, including an as yet undetermined levy on private health plans. This tax, which Democrats say could raise $100 billion or so, would make it even harder for private plans to compete with the government plan, which would already benefit from government subsidies and lower capital costs. For good measure, the House bill also gets the ball rolling on tax increases on foreign-source corporate income.
But the most remarkable quality of this health-care exercise is its reckless disregard for economic and fiscal reality. With the economy still far from a healthy recovery, and the federal fisc already nearly $2 trillion in deficit, Democrats want to ram through one of the greatest raids on private income and business in American history.
Wednesday, July 8, 2009
Sen. Chris Dodd, who is guiding Senator Ted Kennedy's Health Care Legislation in his absence, speaking about the cost of this.....plan, offered this telling retort:
"Looking back over the past eight years, we've done a lot of legislation here where actually bills have been passed before we knew the numbers. Hey, we've passed legislation way more irresponsibly than this before! I'm not trying to use historical precedent for all of this but..." he said, trailing off before thanking the CBO for its work in coming up with estimates for the in-progress legislation.
So, should we've been as much, if not more, irresponsible in the past be the rallying cry for this complete overhaul of the health care system and control of about 1/6th of the economy?
How bout that Hope and Change, baby?
But, as it is, Dodd is only following the lead of the President and Party leaders.
House Majority Leader Rep. Steny Hoyer laughed at the notion that he would read all of what was in the health care bill before voting on it. “If every member pledged to not vote for it if they hadn’t read it in its entirety, I think we would have very few votes,” Hoyer said at his regular weekly news conference....In fact, Hoyer found the idea of the pledge humorous, laughing as he responded to the question. “I’m laughing because I don’t know how long this bill is going to be, but it’s going to be a very long bill,” he said.
Wait, wait! Isn't that what you were elected to do, Congressman? Make informed votes!!
Makes ya feel all warm and fuzzy inside, don't it?
I know I would be proud.