Stall the push on health reform
Basketball aficionado President Barack Obama is coaching Congress on executing a legislative fast break on health care reform. He wants both the House and Senate to pass a health care reform bill before their August recess, and committees in both houses were moving forward with legislation this week.
Unfortunately, there are some serious issues about the cost of the proposals. We hope Blue Dog Democrats will join Republicans to put up a spirited defense against this rush to do something.
As we said earlier this summer, we believe reform of our health care system is necessary. It will probably require mandatory insurance coverage for all Americans, as well as an employer pay-or-play requirement.
But that doesn’t mean we believe reform is so urgently needed that it should be hastily jammed through the legislative sausage maker. Careful examination of several issues is in order. For example:
• The Congressional Budget Office this week pegged the cost of the House Democrats’ health reform legislation at $1 trillion over 10 years. Others, including some Democrats, say it could be $1.5 trillion or more over the next decade.
This in a federal budget whose deficit topped $1 trillion this week, and is expected to grow tremendously between now and 2019, even without the additional burden of health care reform.
• Congressional Democrats propose to pay for much of the reform by using that tired old bromide, “taxing the wealthy.” They have proposed an income surtax for couples making more than $350,000 a year, a “millionaire’s tax” for couples whose income tops $1 million and various schemes to reduce deductions for the wealthy, or raise what they pay for things like Medicare.
Trouble is, the wealthiest Americans already pay the lion’s share of income taxes. And, with the potential of significant hikes in what they pay, some experts believe they will become far more creative in how they shelter their income.
Even if it all works as planned, the tax-the-wealthy plans won’t raise nearly enough money to meet the health care costs, experts say. They might produce $500 billion over 10 years.
If the Democrats are to pay for their health plans, they will have to substantially raise taxes on the middle class — people making less than that magic figure of $250,000 a year — or find huge savings in the health care system by cutting services, or both. The only other alternative is to post still larger deficits and run the risk of creating hyperinflation.
Which is why concerned lawmakers need to stall the health reform push.