Healthcare Reform To Be Fast Tracked?

It sure sounds like it, if you listen to Senator Chuck Schumer.

Democrats may go it alone on gov't insurance plan
(6/22/09 AP via Yahoo Finance) [emphasis is mine]

"Democrats generally are standing behind their position that a health care system overhaul must include a government-sponsored plan that would be available to middle-class workers and their families.

"A key Democrat, New York Sen. Chuck Schumer, said this option now seems even more of a necessity in view of unsuccessful behind-the-scenes attempts to get a deal with Republicans on nonprofit co-ops as an alternative to a public plan.

"Schumer told The Associated Press Sunday night that those efforts have proved frustrating, saying that he and his Democratic colleagues now may have to go it alone."

What does Senator Schumer mean by "go it alone"? I suspect he means using a legislative process called "reconciliation". It is a process that allows a contentious budget bill to be considered without being subject to filibuster. If this process is used, the floor debate will be restricted to 20 hours, and the bill will only need a simple majority to pass.

The co-op proposal was floated by a Democratic Senator Kent Conrad (ND) as a compromise plan.

"The public plan that most Democrats envision would be offered alongside private plans through a new kind of insurance purchasing pool called an exchange. Individuals and small businesses would be able to buy coverage through exchanges, but eventually businesses of any size might be able to join.

"Proponents say the option of a public plan in the marketplace would put a brake on costs and check the power of insurers. But Republicans, insurers and many business leaders say a government plan could drive private insurance companies out of business."

The Republicans' opposition, though, does not question the need for a reform. The response from the House Minority Whip Eric Cantor is rather lame:

""The most important thing for us to make sure is that we do increase coverage to a basic plan for more Americans and the way we're going to do that is starting with where people get most of their health care, and that's their employer," House Minority Whip Eric Cantor, R-Va., said Monday. "We've got to be sure to make it so those employers can keep their health care costs down.""

There seems to be public support behind the health care reform, although it is doubtful that people actually know what's in it.

"Two recent news media polls have found public support for a government plan, even if many people are unsure about its implications. The most recent survey, a New York Times-CBS News poll released Sunday, found that 72 percent supported the idea, including half of those who identified themselves as Republicans."

The Congressional Budget Office estimated that "enacting the proposal would result in a net increase in federal budget deficits of about $1.0 trillion over the 2010-2019 period.When fully implemented, about 39 million individuals would obtain coverage through the new insurance exchanges. At the same time, the number of people who had coverage through an employer would decline by about 15 million (or roughly 10 percent), and coverage from other sources would fall by about 8 million, so the net decrease in the number of people uninsured would be about 16 million or 17 million."

So, it would cost about $60,000 to cover one uninsured person. A rather pricey health insurance, wouldn't you say?

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National Sales Tax???!!!

Just when I thought things couldn't go any worse, they do, and these days that happens almost every single day. Today, it is this headline from Washington Post.

Once Considered Unthinkable, U.S. Sales Tax Gets Fresh Look

"With budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax.

"Common around the world, including in Europe, such a tax -- called a value-added tax, or VAT -- has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity."

Fiscal calamity of their own making, and what does the government do? Come up with a new, equitable tax, of course. For what purpose? For the latest plug from the White House and lawmakers: health care.

"A VAT is a tax on the transfer of goods and services that ultimately is borne by the consumer. Highly visible, it would increase the cost of just about everything, from a carton of eggs to a visit with a lawyer. It is also hugely regressive, falling heavily on the poor. But VAT advocates say those negatives could be offset by using the proceeds to pay for health care for every American -- a tangible benefit that would be highly valuable to low-income families. "

""Everybody who understands our long-term budget problems understands we're going to need a new source of revenue, and a VAT is an obvious candidate," said Leonard Burman, co-director of the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, who testified on Capitol Hill this month about his own VAT plan. "It's common to the rest of the world, and we don't have it." "

It's common and we don't have it, so we'd better have it? Mr. Burman also thinks 25% VAT "should do it all..."

"And in a paper published last month in the Virginia Tax Review, Burman suggests that a 25 percent VAT could do it all: Pay for health-care reform, balance the federal budget and exempt millions of families from the income tax while slashing the top rate to 25 percent. A gallon of milk would jump from $3.69 to $4.61, and a $5,000 bathroom renovation would suddenly cost $6,250, but the nation's debt would stabilize and everybody could see a doctor. "

And here's a kicker for me in the article:

"And the threat of a VAT could pull the country out of recession, some economists argue, by hurrying consumers to the mall before the tax hits."

A value added tax will pull the US out of recession! Please tell me then why Europe, with high VAT, has stagnated economically all these years.

The article also tells us that Obama's budget director at the White House has hired the brother of Obama's Chief of Staff, Rahn Emanuel. He is a VAT advocate, and he will advice the budget director on "health care" issues.


In my area (a county in California) we already have state/county sales tax that amounts to almost 10%. Does that mean the total sales tax would double overnight with the introduction of national VAT? (I don't see how the state can let go of this steady revenue source.) So that the federal government can provide health care for all Americans? Whether Americans like it or not? This is too unreal for the morning.

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Obama Admits "We're Out of Money"

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(Update 4:38pm PST) Here's the link to c-span interview.
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The president admits, but it doesn't seem to bother him much.

From the Drudge Report headline "We're Out of Money" (the link may disappear, as this is a news flash at the moment, but the following is an entire post on Drudge plus my grunting in bullet points):

"In a sobering holiday interview with C-SPAN, President Obama boldly told Americans: "We are out of money." C-SPAN host Steve Scully broke from a meek Washington press corps with probing questions for the new president.

• "Probing"? Well let's see...

SCULLY: You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?

• Mr. Scully, if the government budget incurs debt year after year, and the country has $11 trillion deficit, that means we ran out of money a very long time ago. The last budget surplus was under Clinton (although this is disputed by many people). For paying off the national debt, you have to go back to President Andrew Jackson .
  
  
• US 2008 GDP is $14 trillion. National Deficit is $11 trillion. (And that's excluding the private debt.) That's almost 80% of GDP. GDP is set to decrease this year, probably substantially. Do the math. No wonder traders were wondering "Will the US be the next (to be downgraded, after the UK)?" Or even worse: turning Japanese and have debt at 200% of GDP.

OBAMA: Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we've made on health care so far. This is a consequence of the crisis that we've seen and in fact our failure to make some good decisions on health care over the last several decades."

• Ummmm, health care? I'm sorry Mr. President, but increasing number of people are scrambling to come up with the money to pay for groceries, bills, mortgages. Health care reform doesn't come to mind as the most urgent thing we must do when the economy is tanking.


• Your budget director also talks about "health care" whenever he opens his mouth on any subject. So if you repeat often enough it becomes important?
  
  
• We are in deep deficits. And your proposal is to go even deeper. Only makes sense in this bizzarro world.

"So we've got a short-term problem, which is we had to spend a lot of money to salvage our financial system, we had to deal with the auto companies, a huge recession which drains tax revenue at the same time it's putting more pressure on governments to provide unemployment insurance or make sure that food stamps are available for people who have been laid off.

"So we have a short-term problem and we also have a long-term problem. The short-term problem is dwarfed by the long-term problem. And the long-term problem is Medicaid and Medicare. If we don't reduce long-term health care inflation substantially, we can't get control of the deficit."

• Short-term or long-term, as you say, WE DON'T HAVE MONEY. Why should we do any of that? So far, the funding method seems to be to PRINT money, and to come up with more and more ways to extort, oh sorry, collect tax money, whether the taxpayers like it or not.

So, one option is just to do nothing. We say, well, it's too expensive for us to make some short-term investments in health care. We can't afford it. We've got this big deficit. Let's just keep the health care system that we've got now. Along that trajectory, we will see health care cost as an overall share of our federal spending grow and grow and grow and grow until essentially it consumes everything... "

• I am for doing nothing. It sure feels like a good time to hunker down and reduce debt, not incurring it. That's what businesses and individuals have been doing.
  
  
• Money grows on trees. Probably it grows in the new White House organic garden.

SCULLY: When you see GM though as “Government Motors,” you're reaction?
OBAMA: Well, you know – look we are trying to help an auto industry that is going through a combination of bad decision making over many years and an unprecedented crisis or at least a crisis we haven't seen since the 1930's. And you know the economy is going to bounce back and we want to get out of the business of helping auto companies as quickly as we can. I have got more enough to do without that. In the same way that I want to get out of the business of helping banks, but we have to make some strategic decisions about strategic industries... "

• So you want to get out of GM and Chrysler ASAP. Why did you get in to begin with? Was there some overwhelming support from the taxpayers? Your leaders at Auto Task Force are bankers and a hedge fund manager with no auto industry experience (other than having defaulted on the soon-to-be-ditched owner of Chrysler). How can they actually help? Oh I forgot; your auto czar was surely effective in "persuading" the "recalcitrant" hedge fund managers.
  
  
• Strategic decisions about strategic industries? Who decides what's "strategic"?

SCULLY: States like California in desperate financial situation, will you be forced to bail out the states?
OBAMA: No. I think that what you're seeing in states is that anytime you got a severe recession like this, as I said before, their demands on services are higher. So, they are sending more money out. At the same time, they're bringing less tax revenue in. And that's a painful adjustment, what we're going end up seeing is lot of states making very difficult choices there... "

• Sure the states will suffer. Your Treasury Secretary says he has to uphold the law so he is not going to give any TARP money to assist the states. The states may be better off that way after all, looking at what has happend to Chrysler and what is about to happen at GM.

SCULLY: William Howard Taft served on the court after his presidency, would you have any interest in being on the Supreme Court?
OBAMA: You know, I am not sure that I could get through Senate confirmation...

• I suppose that would depend on who becomes the president after him.

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