September 21, 2009

I watched Obama’s interview with George Stephanopoulos, part of Sunday morning’s talk show blitz (he went on five talk shows on Sunday morning), in which he made some incredibly revealing statements about health care and other issues he is currently facing.

In the campaign, Obama famously promised not to raise taxes on families making less than $250,000 a year, something that some people have pointed to with questions about the proposed mandate that all Americans purchase health insurance or pay a fine. In the interview, Obama revealed his definition of a “tax”. From the WSJ’s article on the interview:

Mr. Stephanopoulos posed the obvious question about this kind of coercion when “the government is forcing people to spend money, fining you if you don’t [buy insurance]. . . . How is that not a tax?”

“Well, hold on a second, George,” Mr. Obama replied. “Here’s what’s happening. You and I are both paying $900, on average—our families—in higher premiums because of uncompensated care. Now what I’ve said is that if you can’t afford health insurance, you certainly shouldn’t be punished for that. That’s just piling on. If, on the other hand, we’re giving tax credits, we’ve set up an exchange, you are now part of a big pool, we’ve driven down the costs, we’ve done everything we can and you actually can afford health insurance, but you’ve just decided, you know what, I want to take my chances.  And then you get hit by a bus and you and I have to pay for the emergency room care, that’s . . .”

“That may be,” Mr. Stephanopoulos responded, “but it’s still a tax increase.” (In fact, uncompensated care accounts for about only 2.2% of national health spending today, but that’s another subject.)

Mr. Obama: “No. That’s not true, George. The—for us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase. What it’s saying is, is that we’re not going to have other people carrying your burdens for you anymore . . .” In other words, like parents talking to their children, this levy—don’t call it a tax—is for your own good.

Mr. Stephanopoulos tried again: “But it may be fair, it may be good public policy—”

Mr. Obama: “No, but—but, George, you—you can’t just make up that language and decide that that’s called a tax increase.”

“I don’t think I’m making it up,” Mr. Stephanopoulos said. He then had the temerity to challenge the Philologist in Chief, with an assist from Merriam-Webster. He cited that dictionary’s definition of “tax”—”a charge, usually of money, imposed by authority on persons or property for public purposes.”

Mr. Obama: “George, the fact that you looked up Merriam’s Dictionary, the definition of tax increase, indicates to me that you’re stretching a little bit right now. . . .”

Mr. Stephanopoulos: ”I wanted to check for myself. But your critics say it is a tax increase.”

Mr. Obama: ”My critics say everything is a tax increase. My critics say that I’m taking over every sector of the economy. You know that. Look, we can have a legitimate debate about whether or not we’re going to have an individual mandate or not, but . . .”

Mr. Stephanopoulos: “But you reject that it’s a tax increase?”

Mr. Obama: “I absolutely reject that notion.”

If you can follow this reasoning, then you probably also think that a new entitlement is the best way to reduce entitlement spending.

It is hard logic to follow indeed.  One part of his claim that I don’t understand is that he says that people that don’t have health insurance are pushing costs onto the rest of  us.  When people that don’t have health insurance go to the doctor, they are still billed for it.  Now, in some cases, those people cant afford to pay, and so there does end up being some uncompensated care, but in a lot of cases, especially those that the President is referring to (in which people are simply choosing to “take [their] chances”), the people end up just paying out of pocket.  To extend Obama’s auto-insurance analogy, its like getting liability only coverage, then having an accident and having to pay a higher bill to fix your car than you otherwise would.  And for those people that actually can’t pay, Obama’s plan gives them a tax subsidy to buy coverage, so the rest of us are still paying for their health care anyways.

More hard logic to follow is Obama’s logic on his promises about Medicare.  In his speech to the joint session of Congress on 9 Sep, he made a lot of promises about Medicare, saying that it is a “sacred trust” and that no one’s benefits would be cut.  He also said in that speech that if you want to keep your current plan, you can – the proposal he is making won’t require anyone to change their plan.  However, at the same time, he said that his plan would be deficit neutral, funded in large part by cutting “waste and abuse” from Medicare (which, according to the WSJ’s analysis, simply wouldn’t work).  The revealing bit from the Stephanopoulos interview, however, is that evidently by saying that people wouldn’t lose their current coverage, Obama means that they will simply be forced into another plan with benefits that he says are the same.  From the interview:

STEPHANOPOULOS: Let’s go to Medicare then…

OBAMA: Good.

STEPHANOPOULOS: …because you also said that no one will lose what they have. And Senator Bill Nelson, a Democrat, says that the cuts you’re looking at in Medi — the Medicare Advantage program…

OBAMA: Right.

STEPHANOPOULOS: …are going to force people to lose coverage they now have.

OBAMA: No. Here — here’s what’s going to happen. These are essentially private HMOs who are getting, on average — and this is not my estimate, this is Democrats and Republicans, experts have said — they’re getting, on average, about 14 percent more over payments, basically subsidies from taxpayers for a program that ordinary Medicare does just as good, if not better, at keeping people healthy.

Now, they package these things in ways that, in some cases, may make it more convenient for some consumers, but they’re overcharging massively for it. There’s no competitive bidding under the process.

And so what we’ve said is instead of spending $17 billion, $18 billion a year, $177 billion over 10 years on that, why wouldn’t we use that to close the donut hole so the people are actually getting better prescription drugs…

STEPHANOPOULOS: But Senator Nelson says it’s going to…

OBAMA: …Why don’t we make sure that we’re using some of that money to actually make people healthier?

STEPHANOPOULOS: But he said it’s going to cause beneficiaries right now to lose what they have.

OBAMA: Look, I understand that change is hard. If what you’re saying is that people who are currently signed up for Medicare advantage are going to have Medicare and the same level of benefits, but they may not be having their insurer get a 14 percent premium, that’s absolutely true and will the insurers squawk? You bet.

STEPHANOPOULOS: They may drop the coverage.

OBAMA: No, these folks are going to be able to get Medicare that is just as good, provides the same benefits, but we’re not subsidizing them for $18 billion a year.

STEPHANOPOULOS: So Senator Nelson, he wants to pass an amendment that shields anyone currently on Medicare advantage from any cuts. Do you support that?

OBAMA: George, I’m not going to be negotiating a particular provision of the bill, sitting (ph) down with you here right now. What I am going to say is this: the basic principle that is indisputable is that we are wasting hundreds of billions of dollars in Medicare that is not making people healthier. I want to make sure that we’re using that money to actually make people healthier.

STEPHANOPOULOS: But if people lose their Medicare advantage?

OBAMA: What I have said is we’re not going to take a dollar out of the Medicare trust fund. We’re going to make sure that benefits are just as strong if not stronger. We’re not going to subsidize insurance companies in ways that end up creating a situation that Medicare is actually weaker and has a less financial foundation, because right now, we’ve got eight years from now potentially Medicare going into the red.

I think it’s pretty obvious by now that even if Obama claims that ordinary people won’t be forced to change their health care provider under this bill, using his logic for Medicare as a guide, he (could) mean that people ordinary people will simply have the same benefits, no matter who is providing the coverage.  Which some people may interpret as clearing the path toward a single-payer, government run system.  As a nod to Obama, however, he did explicitly say that “This [plan] isn’t grafting a single payer model onto the United States” , so take that as you will.

In the interview, they also briefly discussed Afghanistan, and Obama explained his current position there:

Here’s what I think. When we came in … I ordered a top to bottom review. The most important thing I wanted was us to refocus on why we’re there. We’re there because al Qaeda killed 3,000 Americans and we cannot allow extremists who want to do violence to the United States to be able to operate with impunity…

I did order 21,000 additional troops there to make sure that we could secure the election, because I thought that was important. That was before the review was completed. I also said after the election I want to do another review. We’ve just gotten those 21,000 in. General McChrystal, who’s only been there a few months, has done his own assessment.

I am now going to take all this information and we’re going to test whatever resources we have against our strategy, which is if by sending young men and women into harm’s way, we are defeating al Qaeda and — and that can be shown to a skeptical audience, namely me — somebody who is always asking hard questions about deploying troops, then we will do what’s required to keep the American people safe.

Obama is doing the right thing in Afghanistan.  As Dan Senor & Peter Wehner pointed out a few weeks ago, “In this instance, President Obama has acted in a way that advances America’s national security interests and its deepest values,” and we should credit him for it.

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