Health Care Reform - The Devil will be in the Details

Sydney M. Williams

Thought of the Day

“Health Care Reform – The Devil will be in the Details”

March 22, 2010

In his rush to add a new entitlement (universal health care) and therefore increasing the dependency of even more people on the beneficence of government, the President has accomplished two negative factors: he has deepened the hole already containing $100 trillion in unfunded future liabilities for Social Security and Medicare and, in relentlessly pursuing a plan the majority of Americans oppose, he has further divided an already divided nation.

Unlike both Social Security and Medicare, this legislation passed in a totally partisan fashion – not one Republican voted for the Bill. What gave the Bill its final impetus, in my opinion, was the decision by the President in February, instead of arguing the merits of universal care, to attack the insurance industry based upon the Anthem Blue Cross in California to request a 39% increase – an increase that already had been approved by the California Insurance Commission.

The creed of promises today, with little regard to costs tomorrow, is as old as politics. What is needed in this Country are programs designed to increase savings, reduce spending and to recognize the consequences of a failure to do either. The problem of unfunded liabilities is not just confined to government programs, it is acutely apparent in the private sector as defined contribution plans replace defined benefit plans. (Stephanie Pomboy, in Barron’s over the weekend, quoted an EBRI [Employee Benefit Research Institute] study that stated, a “staggering 27% of workers have saved less than $1000 toward retirement.”) The conversion to defined contribution plans is a result of a realization on that part of employers that promises given years ago were never going to be met. That reality is what is facing state governments today, as promises to unions threat bankrupting state coffers. This new entitlement, no matter the CBO score, is bound to run into the same future funding problems.

Entitlements remove a sense of individual responsibility; it is a dangerous path to be on (think Friedrich van Hayek and The Road to Serfdom). Government has a responsibility to the elderly, the infirm and to those incapable of caring for themselves – those who truly need its support – but when government supplants individual responsibility it condemns its citizens to a future of subservience. As the Chinese proverb has it, give a man a fish and he eats for a day; teach him to fish and he eats for a lifetime.

A second negative consequence of the Bill’s passage is to further divide an already divided nation. Partisanship in Washington has been well publicized. It can be seen in the reportedly now-empty Senate dining room, supplanted by weekly Party caucus meetings. Every time a Party leader heads to a microphone, he or she is surrounded by a group of their own, heads nodding approvingly like puppets on a string.

But partisanship is visible abroad in the nation. In Sunday’s New York Times, Book Review section, Ross Douthat reviews Voodoo Histories by David Aaronovitch. He writes of a poll: it showed “…roughly a third of Republicans believed that Barack Obama had been born outside the United States. Liberals trumpeted the finding as proof of the Republican base’s slide into madness. But conservatives had a rebuttal: as recently as 2007, they pointed out, polls showed that a third of Democrats believed George W. Bush knew about 9/11 in advance.” The same division is palpably evident in religion where the fastest growing sects – Evangelical Christians, Orthodox Jews and Islamic Fundamentalists – are those that are the least tolerant.

Partisanship is encouraged by politicians who compartmentalize specific groups, to whom they promise special deals rather than discussing universal ideas. Partisanship is abetted by a Press more interested in ad sales than in truth. Even the normally balanced Financial Times over the weekend had a front page story, “Obama Nearing Victory on Healthcare”, by Edward Luce, in which he wrote: “Republicans, who have opposed all versions of healthcare reform, yesterday signaled they would do what they could to upset the likely vote.” Mr. Luce is well aware that Republicans don’t “oppose all versions”. They have made proposals, such as tort reform, allowing insurance companies to compete across state lines, providing individuals the same tax treatment in purchasing health insurance as corporations, among others. They disagree with the plan that was voted upon and the tactics used to pass the plan. His article was simply partisan and untruthful.

Nancy Pelosi, despite my dislike for the processes she employed, did an incredible job in bringing along recalcitrant Democrats – a feat that seemed impossible a few weeks ago. Now, as she earlier said, we will discover what is in this monstrosity – the devil will be in its details.

The consequences of this Bill are that interest rates will rise further, taxes will go higher and that over time health care will be nationalized. The Federal government now pays more than Berkshire Hathaway, Procter and Gamble and Johnson and Johnson for Two-year paper. Whenever the rights and freedoms of the individual are made subservient to the State, it is a step toward socialism.

I was reminded this morning of a timely quote from Winston Churchill: “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of misery.”