AMERICAN CONSERVATISM IN 2008 AND BEYOND

MARCH 27, 2009
National Health Preview
The Massachusetts debacle, coming soon to your neighborhood.

Praise Mitt Romney. Three years ago, the former Massachusetts Governor had the inadvertent good sense to create the "universal" health-care program that the White House and Congress now want to inflict on the entire country. It is proving to be instructive, as Mr. Romney's foresight previews what President Obama, Max Baucus, Ted Kennedy and Pete Stark are cooking up for everyone else.

In Massachusetts's latest crisis, Governor Deval Patrick and his Democratic colleagues are starting to move down the path that government health plans always follow when spending collides with reality -- i.e., price controls. As costs continue to rise, the inevitable results are coverage restrictions and waiting periods. It was only a matter of time.

They're trying to manage the huge costs of the subsidized middle-class insurance program that is gradually swallowing the state budget. The program provides low- or no-cost coverage to about 165,000 residents, or three-fifths of the newly insured, and is budgeted at $880 million for 2010, a 7.3% single-year increase that is likely to be optimistic. The state's overall costs on health programs have increased by 42% (!) since 2006.

Like gamblers doubling down on their losses, Democrats have already hiked the fines for people who don't obtain insurance under the "individual mandate," already increased business penalties, taxed insurers and hospitals, raised premiums, and pumped up the state tobacco levy. That's still not enough money.

So earlier this year, Mr. Patrick appointed a state commission to figure out how to control costs and preserve "this grand experiment." One objective is to change the incentives for preventative care and treatments for chronic disease, but everyone says that. It sometimes results in better health but always more spending. So-called "pay for performance" financing models, on the other hand, would do away with fee for service -- but they also tend to reward process, not the better results implied.

What are the alternatives? If health planners won't accept the prices set by the marketplace -- thus putting themselves out of work -- the only other choice is limiting care via politics, much as Canada and most of Europe do today. The Patrick panel is considering one option to "exclude coverage of services of low priority/low value." Another would "limit coverage to services that produce the highest value when considering both clinical effectiveness and cost." (Guess who would determine what is high or low value? Not patients or doctors.) Yet another is "a limitation on the total amount of money available for health care services," i.e., an overall spending cap.

The Institute for America's Future -- which is providing the intellectual horsepower (we use the term loosely) for reforms like those in Massachusetts -- argues that the cost overruns prove the state must cap how much insurers are allowed to charge consumers and regulate their profits. If Mr. Patrick doesn't get there first, that is. He reportedly told insurers and hospitals at a closed meeting this month that if they didn't take steps to hold down the rate of medical inflation, he would.

Even the single-payer cheerleaders at the New York Times have caught on to this rolling catastrophe. In a page-one story this month, the paper reported on the "expedient choice" that Mr. Romney and Democrats made to defer "until another day any serious effort to control the state's runaway health costs. . . . Those who led the 2006 effort said it would not have been feasible to enact universal coverage if the legislation had required heavy cost controls. The very stakeholders who were coaxed into the tent -- doctors, hospitals, insurers and consumer groups -- would probably have been driven into opposition by efforts to reduce their revenues and constrain their medical practices, they said."

Now they tell us. What really whipped along RomneyCare were claims that health care would be less expensive if everyone were covered. But reducing costs while increasing access are irreconcilable issues. Mr. Romney should have known better before signing on to this not-so-grand experiment, especially since the state's "free market" reforms that he boasts about have proven to be irrelevant when not fictional. Only 21,000 people have used the "connector" that was supposed to link individuals to private insurers.

Which brings us to Washington, where Mr. Obama and Congressional Democrats are about to try their own Bay State bait and switch: First create vast new entitlements that can never be repealed, then later take the less popular step of rationing care when it's their last hope to save the federal fisc.

The consequences of that deception will be far worse than those in Massachusetts, however, given that prior to 2006 the state already had a far smaller percentage of its population uninsured than the national average. The real lesson of Massachusetts is that reform proponents won't tell Americans the truth about what "universal" coverage really means: Runaway costs followed by price controls and bureaucratic rationing.

March 2, 2009
Obama’s Health Plan, Ambitious in Any Economy, Is Tougher in This One
By ROBERT PEAR

WASHINGTON " President Obama’s goal of remaking the health care system was always going to be difficult to reach. But as he prepares to begin a campaign for universal coverage this week, the ailing economy has complicated his task.

Mr. Obama is proposing a major expansion of the federal commitment to health care even though the government can barely afford the health insurance programs it has. The financial condition of Medicare is deteriorating because of the recession, according to new information from federal officials, and the Medicare trust fund could be depleted several years sooner than expected.

As he gears up for a week focused on health care, Mr. Obama hopes to turn the economic crisis to his advantage by citing the burden of health costs and the growing ranks of the uninsured, now at 46 million people, to justify a shake-up.

“Health costs are exploding,” said Melody C. Barnes, the director of the Domestic Policy Council at the White House. “We are in a crisis. The circumstances are dire. That’s driving people to conclude that we have to come up with a solution, and the time is now.”

Mr. Obama has already won a gigantic economic stimulus bill, persuaded Congress to free up hundreds of billions more for the financial bailout and proposed a budget that in normal times would be attacked as fiscally reckless. Through it all, his popular standing has held up.

On Monday, Mr. Obama is expected to introduce Gov. Kathleen Sebelius of Kansas as his pick for health and human services secretary. At a White House conference on Thursday, he will outline the basics of a plan to make affordable coverage available to all, and then invite Congress to fill in the details. He used a similar strategy on the stimulus legislation, inviting criticism from some quarters.

The powerful interests that dominate the health care industry could challenge even Mr. Obama’s political deftness. To pay for any new plan, he would tax upper-income households and require new “efficiencies” in health care. He has also proposed cutting federal payments to hospitals, insurers, drug companies and home health agencies, and that could turn powerful groups against him.

Lobbyists for the industry say they are torn between their impulse to work with the president to win universal coverage and the need to fight against deep cuts. They are already on guard because of Medicare’s precarious condition, warning the administration not to try to mend the program by reducing their payments.

“We support the president in his desire to bring the benefit of health care coverage to all Americans,” said Val J. Halamandaris, president of the National Association for Home Care and Hospice, a trade group. “But it must not be accomplished on the backs of the homebound elderly who are so sick with multiple complex medical problems.”

Administration officials say Medicare’s financial problems reflect the larger problems plaguing the overall health care system and stem from a common source: the relentlessly rising costs of health care. For this reason, Mr. Obama contends, “we can’t solve Medicare in isolation from the broader problems of the health care system,” and “comprehensive health care reform is the best way to strengthen Medicare for years to come.”

Ms. Barnes, the White House aide, said Mr. Obama would bring “all the relevant players together” at the White House on Thursday. “Nobody will own the table, but everyone will be around it,” she said. “There will be people at the table who in the past were opponents of health care reform.”

John C. Rother, policy director of AARP, the lobby for older Americans, said: “The purpose of the White House forum is to launch the whole health reform initiative " not to unveil a detailed plan, but to reinforce the need for change. It’s an opportunity for Obama to take ownership of the issue again.”

Mr. Obama’s efforts have been hampered by delays in naming a secretary of health and human services to lead the campaign for universal coverage. His first nominee, Tom Daschle, withdrew on Feb. 3 after disclosing that he had belatedly paid more than $140,000 in back taxes and interest. Ms. Sebelius accepted Mr. Obama’s offer to take the post on Saturday.

Democrats in Congress said they looked forward to working with Ms. Sebelius. Senator Max Baucus, a Montana Democrat who is the chairman of the Finance Committee, said she had “solid experience” as a state insurance commissioner and former president of the National Association of Insurance Commissioners. As a Democratic governor in a Republican state, she also has experience working across the aisle.

Mr. Obama has set forth eight “principles for health care reform,” with which few would disagree. Rather than drafting his own legislative proposal, Ms. Barnes said, the president will work with Congress “in a collaborative way,” allowing lawmakers to write most of the specific provisions.

“It’s important to be flexible and pragmatic about this,” she said.

The White House event is likely to include an element of political theater. “One purpose is to have real people come in and tell their tales of woe,” said a health lawyer who strongly supports the president’s effort.

But the event is also meant to galvanize members of Congress, especially those who have been waiting for a signal from the White House.

Representative Frank Pallone Jr., the New Jersey Democrat who is chairman of the health subcommittee of the Energy and Commerce Committee, said he would begin a series of hearings within days after the White House forum. “We have been looking for guidance from the administration,” Mr. Pallone said in an interview.

For example, Mr. Pallone asked: Does the president favor an “individual mandate,” requiring all Americans to carry health insurance? Or should the requirement apply just to children at first, as Mr. Obama said in the campaign? Will Mr. Obama insist that the government offer a new public plan, to compete with private insurers? Insurance companies adamantly oppose that idea.

In the Senate, Democrats have been working for months on comprehensive health legislation.

In November, one week after the election, Mr. Baucus unveiled a detailed proposal to guarantee health insurance for all. Aides to Senator Edward M. Kennedy, Democrat of Massachusetts, have been meeting twice a week with lobbyists for consumers, doctors, hospitals, insurance companies and employers, in search of a consensus.

On Thursday, Mr. Baucus will meet with members of his committee to set a timeline for work on health legislation. He may move in tandem with the health committee, led by Mr. Kennedy.

Mr. Kennedy, who is in Florida battling brain cancer, spoke to Mr. Obama about health legislation last week. Aides said it was not clear if Mr. Kennedy would attend the White House forum.

In their annual report last April, Medicare trustees estimated that Medicare’s hospital insurance trust fund, a widely watched barometer of the program’s financial health, would be depleted in 2019. But Richard S. Foster, the chief Medicare actuary, now says the recession will speed exhaustion of the trust fund by as much as three years.

Most of the money in the trust fund comes from payroll taxes. Because of the recession, Mr. Foster said, unemployment has been higher than expected, and wage growth slower, so payroll tax revenues have been lower.

JM, Another scare tactic? What's wrong with you people? Can't you see that our health care system is broken? Who ever claims Obama will use the Canadian or UK health system doesn't know what they are talking about. That's because they haven't even started legislation on it yet.

No, georgeob, let's wait and see what the final product looks like before we jump to any conclusions before any legislation is even in the process.

If you want assumptions, go right at it; it's your waste of time.

By all indications thus far, all the conservatives have done is tell us the sky is falling with Obama's stimulus plan, but they have failed to produce any budget of their own.

If you have solutions for the health care system of the US, please be so kind as to tell us what they would look like. Do you think doing nothing is an option?

Dr. Michael Cox, economic adviser to the Federal Reserve Bank of Dallas, and Richard Alm, a business reporter for the Dallas Morning News, co-authored a 1999 book, Myths of Rich and Poor: Why we are Better Off Than We Think, that demonstrates the pure nonsense about the claim that the poor are poorer.

For those who Say Obama will make it better and make it work better than the afore mentioned countries we now have an American example that shows that the premise is wrong for the real world where all things obtained must be paid for. Behold:

Actually, I read both of what you and he wrote, every word of it. You just didn't write what you meant to write."

No, georgeob, let's wait and see what the final product looks like before we jump to any conclusions before any legislation is even in the process. "

:"and how does anything in the article about Massachusetts relate to the Canadian system? anything? just because the word Canada is used doesn't mean the author of the article knows anything about the Canadian system."

Work harder, take home less
From 2000 to 2007, worker productivity rose significantly in the United States, but real income fell for middle-class families, a group of economists says.
By David Goldman, CNNMoney.com staff writer
Last Updated: August 28, 2008: 7:05 AM EDT

NEW YORK (CNNMoney.com) -- For most of the past decade, the economy grew much stronger - but middle-class Americans had little to show for it.

That's the conclusion of a trio of economists who on Thursday released a preview of their book The State of Working America in 2008/2009 due out next year.

Despite two periods of recession in the past decade, U.S. worker productivity still rose 18% in the 2000s - about 2.5% per year, according to author Jared Bernstein, a widely followed economist from the liberal-leaning Economic Policy Institute.

But inflation-adjusted income for the American middle-class family actually fell during the same period. The median real income for working-age middle-income families in the United States dropped $2,000 between 2000 and 2007, from about $58,500 to $56,500, the U.S. Census Bureau reported Tuesday.

As a result, the 2000-2007 business cycle was the first ever in which the nation's middle-class families had less real income at the end than when they started.

"It's a compelling example of a large disconnect," said Bernstein. "Americans aren't being rewarded for their productivity."

That's a stark change from 1989 to 2000, when the median income for working-age middle class families rose 10% - about half of the productivity growth over the same period, according to EPI. Had the trend of the '90s continued, the median income of working-age households would have risen by $3,600 instead of falling in the 2000s.

Not every economist agrees with that assessment.

"The numbers are misleading, because you need to take into account everything that workers are earning, including substantially more in health care and retirement plans," said James Sherk, the Bradley Fellow in Labor Policy at the conservative-leaning Heritage Foundation.
Weak job market

My Note: As we all well know by now that any "retirement plan" benefits that may have increased income during that period all but disappeared during the past several months.

Bernstein said the middle class has not taken out an equal share of what it put into the economy because of weak job creation during the decade and a widening gap between rich and poor.

"This is a story of missed opportunity," Bernstein said.

The nation suffered through a weak job market in the 2000s. Jobs grew only 0.6% during the period, which wasn't enough to keep up with the growing population, the EPI said. As a result, there were 1.5 million more unemployed workers at the end of the business cycle than at the beginning.

"The official unemployment rate understated how difficult it was to find a job in the 2000s," said EPI economist Heidi Schierholtz. "The U.S. jobs creation machine came to a screeching halt after the 2001 recession and barely picked up steam in the recovery."

Schierholtz cowrote The State of Working America with Bernstein and another EPI economist, Lawrence Mishel. The book was originally published in 1988; the new edition includes updated chapters on jobs, wages and income.

According to the book, the economy took four years to return to the previous peak jobs level after the 2001 recession - an unprecedented amount of time. The recovery took more than twice as long as the 21-month average of all other recoveries after 1945.

Jobs weren't helped by a second round of very weak economic growth toward the end of the cycle.

"The economy of the 2000s has been like shampoo instructions: Bubble, bust, repeat," Bernstein said. "We need to generate growth that's sustainable, not on bubbles."

By the end of the business cycle, nearly one in five unemployed workers had been out of a job for at least half a year.

Furthermore, one in 11 workers were underemployed in the 2000s, as they were looking for full-time work but involuntarily took part time jobs. Workers' hours were cut by 2.2% in the 2000s, which negated the median family's 1% rise in hourly wages.

Sherk said, however, that unemployment levels are comparable to other decades other than the 1990s, when the tech bubble added a disproportionate number of jobs to the economy.

"Unemployment is high compared to the late '90s, but not the '80s," Sherk said. "It's not unusually high, especially when you consider that the labor force hasn't grown as rapidly this decade as it did in the 90s."
Increased inequality

Another finding from the book:Many middle class Americans who had jobs probably found that their bosses were getting big raises, while their paychecks were staying about the same.

That's because 90% of the growth in U.S. workers' income from 1989 to 2007 went to the top 10% highest earners, EPI said. Income for the top 1% grew 204% since 1989, and the top 0.1% saw their income grow 425% in that span.

But Sherk said the top earners are rarely the same today as they were five years ago. "This is coming from people who weren't in the top 1% before," he said.

"Bill Gates, Jeff Bezos, the Google founders. It looks like they're getting more than their share, but it's actually something else: They're all setting new high standards," Sherk said.

Still, the gap continues to grow. In 2006, the top 1% held the highest share of total U.S. income since 1928, according to EPI.

"There was a vast disconnect in what people earned with what they produced," said EPI's Mishel.
First Published: August 28, 2008: 5:50 AM EDT

Lets start with leveling the playing field.

Part of the problem with our economy is that we dont export as much as we import.
Many countries, especially Japan and China, claim that we dont meet their quality standards, that we dont understand their systems, etc.

So, lets make it fair.
Allow the commerce dept, along with the justice dept, to make laws and standards that exactly mirror the laws that other countries want to hold us to.
That way, our trade laws will exactly mirror theirs.

That will cause some of the countries that flood our markets with cheap junk to seriously reduce their imports, because we will be using the same standards regarding imports against them that they use against us.

That alone will put thousands of people back to work as we start making more of our own stuff to make up for what we no longer import.

Lets start with leveling the playing field.

Part of the problem with our economy is that we dont export as much as we import.
Many countries, especially Japan and China, claim that we dont meet their quality standards, that we dont understand their systems, etc.

So, lets make it fair.
Allow the commerce dept, along with the justice dept, to make laws and standards that exactly mirror the laws that other countries want to hold us to.
That way, our trade laws will exactly mirror theirs.

That will cause some of the countries that flood our markets with cheap junk to seriously reduce their imports, because we will be using the same standards regarding imports against them that they use against us.

That alone will put thousands of people back to work as we start making more of our own stuff to make up for what we no longer import.