Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.
Sir Winston Churchill, Speech in November 1942
President Obama has crossed the Rubicon with the health care vote. The bill was not really about medicine; after all, a moderately priced, relatively small federal program could offer the poorer not now insured, presently not on Medicare or state programs like Medicaid or Medical, a basic medical plan.
We have no interest in stopping trial lawyers from milking the system for billions. And we don’t want to address in any meaningful way the individual’s responsibility in some cases (drink, drugs, violence, dangerous sex, bad diet, sloth, etc.) for costly and chronic health procedures.
No, instead, the bill was about assuming a massive portion of the private sector, hiring tens of thousands of loyal, compliant new employees, staffing new departments with new technocrats, and feeling wonderful that we “are leveling the playing field” and have achieved another Civil Rights landmark law . . .
Victor Davis Hanson, We've Crossed The Rubicon, PJM, 21 March, 2010
On Saturday night, we were a nation in deep trouble. We had a national debt of $12,676,374,186,522.00 - and were hemorrhaging billions in red ink daily. Unemployment/underemployment was well over 16% and was not forecast to get better during the coming year. We were still in the midst of the worst recession in our nation since the Great Depression - a recession itself brought on by Democrat social engineering of lending standards and a massive market distortion caused by Fannie and Freddie. (Update: The WSJ reports today that personal incomes contracted in the past year) Social Security, run as a ponzi scheme by a rapacious Congress for years and protected at all costs by Democrats, faced a huge problem of solvency (Update: with the insolvency starting this year) - dwarfed only by the massive unfunded liabilities looming in Medicare/Medicaid. And our ability to borrow to finance Obama's world record spending spree was rapidly deteriorating. Not only was our AAA rating for government securities in danger, but the market had already weighed in. "Two-year notes sold by the . . . Berkshire Hathaway Inc. in February yield 3.5 basis points less than Treasuries of similar maturity." Indeed, so serious are our economic woes that the "latest Fox News poll finds that 79 percent of voters think it’s possible the economy could collapse, including large majorities of Democrats (72 percent), Republicans (84 percent) and independents (80 percent)." Moreover, the same poll finds that three times as many individuals, some 64%, see our national debt as a greater threat to our nation than terrorism. In short, we were, on Saturday night, in a very bad situation. And then, Sunday night, Obama and the progressive left managed to make a bad situation exponentially worse.
On Sunday night, the progressive pulled out all of the stops to pass Obamacare, taking over, directly and indirectly, one sixth of our economy (voting roll here). Instead of addressing the looming disaster of Social Security and Medicare - indeed, instead of addressing unemployment and an economy in deep distress - Obama added on top of our failing entitlement programs the biggest entitlement program of them all. And Obamacare comes replete with massive new taxes, including taxes on investment income, unfunded state mandates that will mean higher state taxes, and the assurance of skyrocketing insurance premiums. As to our national debt, Douglas Holtz-Eakin, former head of the CBO, explained the massive additions to our debt that we can expect as a result of this bill's passage.
The IRS will now expand massively as the designated arm of the state to enforce Obamacare. They will shortly begin hiring the 16,000 new agents needed to enforce the mandatory purchase of health insurance by all Americans. Over one hundred new bureaucratic offices are about to be created, all to oversee our Obamacare. As summed up by NRO, the vote last night “will increase taxes, increase premiums, and increase debt, while decreasing economic growth, job growth, and the quality of health care.” And the people are not fooled. When polled by CBS as to whether the health care plan pushed by Obama and the left was motivated by political concerns or actual concerns with health care - the majority, and even a majority of Democrats, 57%, answered that it was motivated by politics.
It is not enough to now simply say that our government runs our health care system. To give full credit where it is due, the Democrats now own it. Let's never let anyone forget that salient fact.
It looked for awhile like Bart Stupak and a handful of pro-life Democrats might hold out against language in the Senate bill that was so crafted as to allow for federal financing of abortions. Ultimately, Stupak caved in under intense pressure and with the promise that Obama would sign an executive order directing that no financing would go for abortions. An executive order does not trump the plain language of Congressional legislation. Indeed, a Court interpreting the law would likely only acknowledge the executive order in a footnote to its decision, if at all. You can bet your bottom dollar that, when the mandates become operative in a few years, there will be a law suit forcing the issue - and a court with any intellectual integrity will require that the government provide federal funding of abortion. The reality is that federal funding of abortion through Obamacare is now virtually inevitable.
Obama stated in remarks after the vote:
This is what change looks like. . . . We proved that this government — a government of the people and by the people — still works for the people.
Is Orwell now Obama's speechwriter? Health care played no role in causing our economic downturn - yet Obama pretended that it was at the heart of the problem. The plan designed by the progressive left does nothing to bend down the inflation of health care costs - yet it was sold on the basis of sound fiscal policy (Update: James Pethokoukis of Reuters no less calls it Faith Based Deficit Reduction; see also the post above, wherein Krauthammer forecasts an Obama attempt to impose a regressive VAT tax in order to fund Obamacare). Not a single poll showed that a majority of the people wanted this monstrosity - yet Obama claims a popular mandate. This was not a bill passed on its merits - it was progressive sausage made with toxic, backroom deals. All that last night proved was that the progressive left are power hungry statists willing to say and do anything in order to amass power. This is not a government that works for the people - it's a political elite that wants to control the people and punish wealth creation.
Megan McArdle, herself a throwback to old times - an intellectually honest, if a bit misguided, Democrat - summed up her thoughts at the Atlantic:
What I hope is that the Democrats take a beating at the ballot box and rethink their contempt for those mouth-breathing illiterates in the electorate. I hope Obama gets his wish to be a one-term president who passed health care. Not because I think I will like his opponent--I very much doubt that I will support much of anything Obama's opponent says. But because politicians shouldn't feel that the best route to electoral success is to lie to the voters, and then ignore them.
As Bill Kristol points out, this is by no means over, even now. Republicans are planning a series of parliamentary procedural moves that may yet impact final passage of proposed changes to the bill. But the real challenge lays in the upcoming elections. "[W]hat Republicans have to do is to make the 2010 and the 2012 elections referenda on Obamacare, win those elections, and then repeal Obamacare." Truer words were never spoken.
James Fallows, on the other hand, writing at the Atlantic thinks that "this will not seem anywhere near as poisonous seven months from now as it does today." He is living in a dream world if he thinks, after the election of Brown to Kennedy's seat in blue Mass., after the birth of the Tea Party movement so maligned out of fear by the left, this will all blow over. At the Politico, they speculate as to which Democrat seats are now in danger as a result of their vote last night on health care. No need to speculate. The answer is every damn one of them.
Even John McCain has put the left on notice that they should not expect any cooperation in Congress from the right after their actions of the past year:
"There will be no cooperation for the rest of the year," McCain said during an interview Monday on an Arizona radio affiliate. "They have poisoned the well in what they've done and how they've done it."
No, they didn't just poison the well, they urinated in it. And we really should go one further than McCain. If you hear anyone mention the word "bipartisan" again, in any suggesting that the Republicans should cooperate with the Obama administration, the only appropriate response is a swift and powerful kick to the groin. Repeat as necessary until the person expressing this obscenity has undergone a complete and permanent attitude adjustment.
While it will be several years before the full weight of Obamacare will be felt, some of the provisions, including ones directly attacking the health insurance industry, kick in immediately. One is a change to the acceptable ratio of payments to benefits that has long been the health insurance industry standard. The health care plan signed into law changes the acceptable ratio from 65/35 to to 85/15. In a stroke, Obama has destroyed the ability of health insurance companies to pay overhead, salaries and make a modicum of profit. In addition, the new health care bill includes a 40% rise in taxes on health insurance companies - which also must be paid from the 15. The net effect of this war on our health insurance industry will be a massive increase in premiums next January, when most plans renew, and a massive contraction of the health insurance industry as many, if not all, medium and small insurers, are forced from the market. This from a transcript of Rush Limbaugh's show on Tuesday, wherein a health insurance employee highlighted the impact of the newly passed bill:
. . .
CALLER: Okay. For time immemorial, both state and federal regulation -- and also just the industry standard -- has been a 65-45 percentage arrangement: 65 in claims payment and 45 for administration and claims expense. Withholding that you store for, you know, a major catastrophe or something.
RUSH: This is to pay your claims?
CALLER: No, 65% is to pay the claims. Thirty-five percent is for everything else.
RUSH: That means 35% is salaries, administration costs, and the offices, all the paperwork, that kind of thing?
CALLER: It's that as well as, you know, we are required to keep a certain amount of cash on hand as a percentage of our claims exposure to pay claims. . . .
RUSH: Now, I just want to make sure I understand here. State and federal regulations set those percentages?
CALLER: State and federal regulations, yes.
RUSH: So if you wanted to have 85% set aside for claims, you couldn't. You had to go at 65%?
CALLER: Exactly.
RUSH: If you wanted 30% set aside for claims and the rest were administration, you couldn't do it. It had to be 65%.
CALLER: That's illegal, yes. It has to be 65-35, and there's a couple of percentage either way, but generally when an insurance company falls outside of those guidelines, they are considered financially unstable.
RUSH: Well, who audits you all to make sure you are within the ratio?
CALLER: We're audited by the state insurance departments, primarily. There are some plans that are audited both state and federally, and then you have your private auditors who will come in as part of the stock market and that kind of thing. So we're audited often.
. . .
CALLER: . . . So what Obama just did an hour and a half ago is make every insurance company in the country financially unstable. Remember, the 15% that we are left has not only to pay salaries, maintenance, upkeep of buildings; it also has to pay the 40% increased taxes that we've got. I mean, there's just no way. You can't do it.
RUSH: Well, you're getting a little bit ahead of me here. What did Obama sign that changes this 65-45 split? In what way did Obama now sign you into permanent instability?
CALLER: The provision in the Senate bill requires that all insurance companies pay 85% of premiums collected every year in claims.
RUSH: So the 65 is now 85?
CALLER: Exactly. It doesn't matter how much we increase the premium, it won't matter.
. . .
Rush: . . . You originally thought that your industry would survive. You're speaking industry or just your particular company?
CALLER: I would say 99% of all insurance companies, health insurance companies in the country.
RUSH: Okay. So you originally thought you might have three to five years to stay in business under Obama. Now you said it's two to three. Why?
CALLER: Because of the 85-15. Plus the additional expenses were going to incur. Additionally, the mandates, what people don't understand when CMS (which is the Centers for Medicaid and Medicare) push a mandate down on insurance companies, we have to pay to complement those mandates. We don't know how many of those are in this monstrosity. So we can have our mandate budget doubled, our taxes already up 40% or whatever it is, and our cash flow immediately cut.
RUSH: Well, how can you know in advance of paying any claims? Because they've now shifted to 65% that you have to set aside for claims to 85%. How in the world can anybody know in advance of paying claims that it's going to amount to 85%?
CALLER: Well --
RUSH: Of course 65%? It seems to be like this is a ridiculous dictate made by people that have no clue how your business works.
CALLER: Well, they don't have a clue. But the way that that amount of money is calculated is you look at the past year, past five years, past ten years, and you see what your claims expense have been those years. Then based on your enrollment and your demographics you project forward into what you expect to be paying in the future, in the next year and the next five years. So you can do that. It's not precise to a dollar, but you usually get pretty close. What he's done is by saying, for example, the preventative services now --
RUSH: Those are free. Those are, quote, unquote, "free."
CALLER: Yeah, exactly.
RUSH: What the hell is a preventative service covered by an insurance company anyway?
CALLER: Well, that would be your colonoscopies, your mammograms, your yearly physicals, your lab work.
RUSH: Oh, so those are free now! So if I want to go get a colonoscopy today and I have an insurance policy, I'm not going to pay for it?
CALLER: Exactly.
RUSH: But you will.
CALLER: Well, we will. We'll pay out the nose for it.
RUSH: (laughing) Well...
CALLER: I know, bad analogy. I'm sorry.
RUSH: It is Christmas!
CALLER: But, Rush --
RUSH: Well, no, I don't look at a colonoscopy as Christmas. Don't misunderstand. . . . But it is Christmas in the sense that I'm not paying for it. I don't know how you can stay in business even two to three years with this kind of thing happening to you this year alone.
CALLER: I don't think we will and that's why I am seriously considering leaving this industry. I'm updating my resume. You know, people who I work with -- even people who voted for Obama and thought he was the greatest thing since sliced bread -- are shell-shocked.
RUSH: That just frustrates the hell out of me. Anybody with a brain has no reason to be shell-shocked about who this guy is, but it is what it is.
. . .
CALLER: And you know how many people are going to die in the interim, Rush? I say that in all sincerity, because come January 1st you're going to see 200, 300% increases in premiums and people are going to drop their coverage. So you've got the woman who isn't going to go get the mammogram or the man who's not going to get the prostate exam.
RUSH: Wait a minute!
CALLER: People are going to die.
RUSH: I thought the mammogram was free.
CALLER: Not when you drop the coverage because you can't afford three times the premium. Remember, the premiums are going up because of the government, and jobs are being lost because of the government. If you can't pay it, you can't pay it. So people are going to drop it. They're going to drop their insurance before they drop their mortgage.
RUSH: They're going to be clamoring to the government to fix the mean-spirited insurance companies for raising the prices so high and that's where Obama's going to step in and say, "You know what? We have no choice here but than to do it ourselves," and then you get dumped on again first and foremost with Obama portraying the government as the savior. . . .
Read the entire transcript.
When Julius Caseser crossed the Rubicon river in 49 B.C., entering into Roman territory, it marked both a crossing of the point of no return and a declaration of war on the Republic. The end result was ultimately the destruction of Rome's Republican form of government. I think the analogy here is apt. Obama has so polarized politics in our government, it is questionable when or if we will see a return to rational, measured politics until either conservatism or progressivism wins out and the other is pushed into the dustbin of history. We are, as I blogged here, in a zero sum ideological war today. Never in history has the political system been so manipulated and in such a highly partisan fashion. Its provisions, mandating each person purchase health insurance, if upheld, will represent a vast expansion of the government's power to control and direct our lives. But even beyond all of that, this bill threatens not merely our health care system, but it also poses a clear and present danger to the fiscal viability of our nation.
In the end, the right must not merely repeal Obamacare, but it must present a better alternative. In that respect, Paul Ryan may in fact have the answer to Obamacare, as well as the problems of Medicare and Social Security. His "Roadmap" is a very serious attempt to address the actual problems we face. Here is hoping that Congressman Ryan is a player in 2012.
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