06.30.2009 0

The “Deficit-Neutral” Blues

  • On: 07/24/2009 09:30:05
  • In: Health Care
  • By Robert Romano

    Barack Obama is publicly pulling out all of the stops to salvage his hemorrhaging government-run, socialized medicine scheme. The so-called public “option” is languishing in the House of Representatives, and so far, the Pied Piper President has been unable to win over members of his own Party.

    This week alone, he made a speech at a children’s hospital on Monday, he appeared in the Rose Garden on Tuesday, then had his much-ballyhooed national press conference Wednesday night, and again yesterday stumped in Ohio. All to push legislation that he still claims is a fait accompli. So, why the full-court press?

    Because in testimony delivered last week by Congressional Budget Office (CBO) Director Douglas Elmendorf, the non-partisan budget analyst single-handedly delivered a critical blow to the ObamaCare plan, stating that “the legislation significantly expands the federal responsibility for health-care.”

    Obama was already dealing with a House rebellion of the so-called Blue Dog Democrats refusing to support any health care legislation that is not “deficit-neutral.” And now he had a non-partisan budget director effectively testify that government health care spending was going to increase, not decrease, under the proposal.

    In other words, Mr. Elmendorf singularly put the lie to Obama’s promise to deliver health-care reform that was “deficit-neutral.” And so, what did Obama do?

    The Dear Leader summoned Mr. Elmendorf to the White House to “discuss” the financial costs of the House and Senate plans. Ostensibly, Obama is playing the moderate, attempting to show that he is willing to meet with his apparent critics. Pure theater.

    Underneath, it’s an unprecedented move, and threatens to tarnish any semblance of the Separation of Powers. The CBO reports to Congress, not to the Executive branch—hence the moniker Congressional Budget Office. This is intimidation and thuggery, and calls into question any future report from the CBO as political numbers, dictated by the hacks in the White House.

    So did the Oval Office thumbscrew brigade get what they wanted? Well not quite.

    On the CBO blog, Mr. Elmendorf writes, “I was invited to the White House to meet with the President, his key budget and health advisers, and some outside experts. The President asked me and the outside experts for our views about achieving cost savings in health reform. I presented CBO’s assessment of the challenges of reducing federal health outlays and improving the long-term budget outlook while simultaneously expanding health insurance coverage–just as we had explained these challenges in a letter to Senator Conrad and Senator Gregg last month. I also described CBO’s view of the effects of the health legislation we have seen so far, as I did last Thursday in a hearing at the Senate Budget Committee and a mark-up at the House Ways and Means Committee.”

    That he stood by his guns and did not change his assessments at the White House meeting is a testament to Mr. Elmendorf’s integrity, and if the White House was hoping to get him to revise his cost-estimates, they were surely disappointed.

    However, this was not even the most critical move made by the Obama Administration this week behind-the-scenes. If anything, it was a diversion from the main event.

    As ALG News has previously reported, seven key Blue Dog Democrats who sit on the House Energy and Commerce committee also met with Barack Obama on Tuesday, a day after the CBO-White House meeting, as he attempted to persuade them to lift their own opposition to his health care proposal.

    And what they do next will be a clear indication if the Blue Dogs are acting as watchdogs for taxpayers, or are in fact the Administration’s favorite new lapdogs.

    According to Politico, “Most of the White House session focused on slowing the rapid growth in health care costs, lawmakers said afterward. That discussion centered on a White House proposal to empower an outside body, like the Medicare Payment Advisory Commission, to make binding recommendations for cost cuts in government-run health care programs. Waxman and others previously opposed the idea, but the chairman made a verbal agreement to work with the seven Blue Dogs on his committee to break through an impasse that has stalled consideration of the enormous bill.”

    Although the Politico story, attempts to downplay this meeting’s significance as “arcane-to-the-outside development [that] is a pint-sized breakthrough in an ocean of concern,” this meeting could actually mean everything to the legislation’s chances of passage.

    In fact, the Blue Dogs may already be waffling. The Wall Street Journal quotes the apparent leader of the Blue Dog rebellion, Congressman Mike Ross (AR-CD4) as recently stating, “We want a bill that we can vote for. A lot of people say, ‘Why do health-care reform when the deficits are so big?’ But that is when we’ve got to do it.”

    All of which is a far cry from the loud bark Ross and his coalition made when he and six other Blue Dogs that sit on the Energy and Commerce committee signed the House Blue Dog coalition letter on July 9th. It stated that “We do not support health care reform that is not deficit neutral.” If they vote with Republicans, the legislation will not even make it to the House floor. Today, the committee is expected to take up the overall proposal.

    So, the key question is: Does this proposed amendment to the proposal make it deficit-neutral, rendering it politically palatable for the Blue Dogs to vote for?

    In short, no.

    Because if this is the grand compromise that is ironed out of the Energy and Commerce committee, it will mean that they have actually agreed to an ObamaCare rationing board to implement de facto price controls on the cost of health care nationally.

    And since all insurance carriers will be regulated through the new government-run system as well, all prices would be dictated by and through this body.

    Therefore, the effect would be to arbitrarily lower the costs of delivering health care: doctor pay, the cost of procedures, supplies, equipment and technology, etc. In turn, there will be at least three significant impacts: 1) watering down the quality of everyone else’s health care; 2) insolvency of health care institutions like hospitals; and 3) shortages of care and rationing.

    Therefore, any cost “reductions” would come at the true cost of reducing the quality of care through medical rationing. Why?

    Because the so-called cost “savings” will not even be contained in the bill. They will be up to the arbitrary whims of the ObamaCare rationing board or some other pencil-pushing bureaucracy that will invariably wind up making medical decisions based on cost-analysis, and not on what is best for patients—all of the horrors that opponents have predicted would happen in socialized medicine.

    And as ALG News reported Wednesday in “The Truth Stinks,” the House plan promises to cover an additional 45 million people under government-provided health care. In short, expanding care to that many individuals without raising costs can only be achieved with huge cuts to the quality of care delivered.

    An average premium currently goes for $4,700, bringing the total cost of the additional care to 45 million more people to roughly $211.5 billion extra annually. All of which will be piled atop an insurmountable debt that now totals $11.4 trillion.

    The other end of the equation is that this Board will invariably face market pressures undermining the effectiveness of price controls, since doctors still need to get paid, procedures still paid for, supplies bought, and equipment and technology procured and maintained, etc.

    All of which means that even if payments through insurance, Medicare, Medicaid, and the public “option” are price-controlled, the actual costs will still have to be made up for elsewhere. Where?

    Well, first the government-run system may try to shift the costs to individuals. Of course, everyone already knows that unpaid medical bills are an endemic part of the problem right now.

    When that fails, Congress and Treasury will then be forced to borrow more money to cover the unpaid bills in order to keep the institutions solvent.

    So much for the proposal being deficit-neutral! It can’t be.

    And these 7 Blue Dogs that signed the letter and sit on the Energy and Commerce committee know it. The committee is expected to meet again tomorrow to work on this “cost-cutting” measure. What they need to know is that the two likely outcomes of this very bad compromise are either price-controlled, watered-down coverage that declines in quality; or the most likely outcome: deficits as far as the eye can see.

    Such are the “deficit-neutral” blues.

    Robert Romano is the ALG Senior News Editor.

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