Archive for March, 2010

Labeling the Republicans as malevolent agents of “Evil” corporations is as well-loved a Democratic pastime as taking vacations to Martha’s Vineyard while politicizing the plight of the poor.

The Republicans are promising to run in November on a health care agenda of repeal and replace with true reform. Not surprisingly Democrats are back to their favorite tactic – claiming that Republicans are in bed with the insurance companies. Asserting that by encouraging repeal the GOP simply wants to return power to the big, bad insurance providers

In a recent interview David Axelrod said,

“I heard Congressman [Mark] Kirk in Illinois — running for the Senate — say he was going to lead the fight to repeal this health-insurance reform. . . . It’ll be interesting to see if they’re willing to do that — whether they’re willing to say, ‘We want to put the insurance companies back in the driver’s seat.”

Axelrod may be confusing his enemies here. Turns out, the Democrats health care reform plan will be an enormous boon to insurance companies. Although initially skeptical, two of the largest insurance lobbies – the American Medical Association and the American Hospital Association endorsed the legislation. Why? Well Moody’s Investor’s service issued a report stating,

“We expect both for-profit and not-for-profit hospitals and health systems to benefit from reduced charity-care write-offs and bad-debt expense as the number of uninsured in the U.S. should decrease significantly.”

Another indication that health care reform will be a windfall for insurance companies is the enormous stock bump these companies have received. In December the day after health care reform passed through the Senate, stocks for the six largest publicly traded insurance companies rose by an average of 4.49%, outperforming the market by 3.4%, and representing a net gain of $3.34 billion dollars.

So are Republicans really the one’s who want to put insurance companies back in the drivers seat? After all, it wasn’t Scott Brown being bankrolled by health insurance companies in the crucial election that could have held the fate of healthcare. That distinction goes to Martha Coakley who received money from Pfizer, Merck, Eli Lilly, Humana, UnitedHealthcare and various other insurance and drug giants. And let’s not forget that Democrats haven’t exactly turned down money from insurance lobbyists.  As FireDogLake reported,

Health insurance executives who have poured money into the campaign coffers of Blue Dogs, Max Baucus, Chuck Grassley, Kent Conrad, Joe Lieberman and Susan Collins (as well as their political action committees) likely made all their money back in the one day rise in stock prices.  The companies themselves, which hold huge amounts of their own stock, surely recouped all of their PAC investments on Tuesday alone.

You don’t have to wonder whether Wall Street thinks Max Baucus’ deal is great news  for the health insurance industry’s status quo: numbers like these don’t lie.

They are right. Numbers don’t lie.  Insurance companies stand to earn a fortune from the Democrats’ recently passed plan. For instance, the Senate bill pushes $447 billion in public subsidies to people so that they may purchase a private health insurance plan. Dollar signs in insurance executives eyes. So when Axelrod says Republicans just want to put insurance back in the drivers seat, ask yourself, have they ever not been driving the car?

by Brandon Greife and Ricky Fraxedas

The Promise: “…[A]s bad as these deficits that we’re running up over the next – that have already been run up…the real problem with our long term deficit actually has to do with our entitlement obligations . . . So  we’re going to have to craft what George Stephanopoulos called a ‘grand bargain.’” Barack Obama Interview, January 15, 2009

The Reality: Rather than reform the broken entitlement system the President merely throws more trash on the garbage heap. As Paul Ryan wrote in a recent op-ed for the Milwaukee Journal Sentinel,

“Our debts and deficit crisis driven by $76 trillion in unfunded liabilities – would accelerate from the creation of a brand new entitlement and an increase in the federal deficit by $662 billion, when the true costs are factored in. National health expenditures will increase by an additional $222 billion over the next decade, according to the president’s own chief actuary, and $2.4 trillion in the decade after the new entitlement is up and running.”

Fact 1: Sticking with the Status Quo is NOT an Option

Over the past few weeks we have laid out the frightening state of the nation’s finances. Consider:

• A report issued by the Centers for Medicare and Medicaid Services (CMS) says that Medicare’s trust fund will be insolvent by 2019 and that from 2009 through 2017 – $342 billion will need to be transferred from the federal treasury to keep it afloat
• Social Security Trustees report that the program will began paying more in benefits than it receives in taxes by 2017 and their funds will be exhausted by 2041
• A Cato study found that over the next century Medicaid will represent 48% of federal general revenues which represents about 7.4% of GDP

Fact 2: Fortunately Republicans Have a Solution

The problem is deep and multi-faceted, a combination of bloated entitlements, an aging population, and an ever-growing bureaucracy. There is the iceberg and we’re headed right for it. But Obama’s agenda does nothing to turn the steering wheel, instead choosing to slam on the accelerator. Fortunately, Wisconsin Congressman Paul Ryan has come up with a plan to put the brakes on out of control government spending. Ryan’s plan, called the Roadmap for America’s Future, is just that – a comprehensive method for righting the balance sheet and making sure that our generation, the future, is put on a path toward financial stability.

The all-encompassing Roadmap, tackles everything from health care reform, Medicare, Medicaid, to the tax code. Among the highlights:

• Freeze all discretionary spending except national defense and veteran’s health care for five years
• Simplify the income tax code by creating a two-tiered flat tax – 10% for incomes up to $100,00 and 25% on higher incomes
• Lower corporate income taxes, currently the world’s second highest, by replacing them with a consumption tax of 8.5%
• Overhaul Medicare to give seniors premium support through vouchers for private insurance to draw more people into a competitive market
• Index the retirement age for Social Security to today’s life expectancy
• Make the tax cuts of 2001 and 2003 permanent

Fact 3: But They Need OUR Help

The results of Ryan’s plan are astounding. The nonpartisan CBO analyzed the bill saying,

“The lower budget deficits under your proposal would result in much less federal debt than under the alternative fiscal scenario and thereby a much more favorable macro-economic outlook . . . The Roadmap would put the federal budget on a sustainable path, generating an annual budget surplus of about 5 percent of GDP by 2080.”

This is our generation’s future. This is about our ability to receive the benefits of programs such as Medicare and Social Security that we are already paying in to. This is about averting a course where the nation’s debt grows to a point the government must raise taxes simply to make its interest payments. Moreover, we will play an important role in this fight because it will no doubt be a generational struggle. Despite the facts to the contrary, seniors will likely view this as a threat to Medicare and Social Security. These programs are insolvent as they currently stand. Our generation, and the next generation of seniors, have no hope of seeing the same benefits if we remain idle. We must make our voices heard. After all, the plan is entitled Roadmap for America’s Future and we, College Republicans, are America’s future.

Bottom Line: We must reform a broken entitlement system – not continue to add new ones.

by Brandon Greife, Political Director

The passage of the President’s healthcare bill was a depressing moment for College Republicans all over the country.  We know that the bill does nothing to address America’s ballooning healthcare costs.  We know that it does nothing to increase competition in the healthcare sector.  We know that it will force people in our age group into costly insurance plans that don’t realistically reflect the needs of young people. We know that this costly plan will drive the deficit and taxes even higher—and we know that it is our generation that will be left with the bill.

Now that this ill-conceived, poorly crafted, hideously expensive legislation has become law, the challenge for the Republican Party is to come up with effective ways to clean up the mess.  We must repeal the law just passed, and replace it with a responsible, sustainable alternative.

We should not get drawn into the trap of defending every aspect of America’s healthcare system as we’ve known it—that system doesn’t fully live up to our party’s standard of private competition or humanity’s standards of basic fairness.  Instead, we should push for a healthcare revolution.  We should push for a new healthcare system that fosters more competition between private providers where individuals can select plans that accurately reflect the needs of their families.  We should push for a system where people purchase insurance from a private nationwide market rather than one limited to the company they work for or the community or state they live in.  In short, we should push to offer people something they have never had in healthcare before: Choice.

America’s free enterprise system has caused the quickest and most profound leap in human progress in the history of the world.  The power of America’s free minds and free markets has solved so many of the problems the world has faced, and if unleashed, these forces can solve America’s healthcare crises as well.

It is imperative that we repeal the law that was just passed.  But it is equally imperative that we don’t allow things to go back to the way they were.  We need a new system where government doesn’t shackle competitiveness and creativity with bureaucracy and counterproductive mandates.  We need a new system where corporations have to offer a wide range of plans and compete for individual customers rather than enjoy a stagnant marketplace where competition is statutorily limited.  We need a new system that empowers individuals and gives them choice instead of forcing them into one-size-fits-all plans.

Now more than ever, it is time for a healthcare revolution, and it is our generation that must make it happen.

Zach Howell–Chairman of the College Republican National Committee

Shortly before noon today, President Obama signed a $1 trillion dollar government takeover of our healthcare system that imposes its greatest burdens on young Americans. College Republicans know that America is headed for a fiscal train wreck.  That’s why we are working to stop Congressional Democrats from continuing to mortgage our future.

Some inconvenient truths regarding the Obama Healthcare bill according to Susan Ferrechio from the Washington Examiner:

Lie #1: The bill provides affordable coverage for the middle class.
Fact: The new legislation actually makes it more costly for middle class families to buy health insurance by forcing those who shop on the individual market to buy generous but expensive plans mandated under new law. Put into perspective, a family earning $100,000 will end up spending nearly a quarter of their net income on health care.

Lie #2:  Health Premiums will go down.
Fact:  Health care premiums for those in individual insurance market will rise 10% to 13% by 2016 under the plan.  The cost of premiums will be subsidized with taxpayer dollars for 57% of those enrolled in new government run insurance exchange.

Lie #3:  Federal funds will not cover abortion.
Fact: An executive order signed to restrict federal funding on abortion will do nothing to curb the provision in the bill that Bart Stupak said represents a “dramatic shift in federal policy that would allow the federal government to subsidize insurance policies with abortion coverage.”

Lie #4: Medicare costs will be cut, not services.
Fact: Bill makes 528 billion in cuts to Medicare and 4.8 million seniors will be kicked off the Medicare plan by 2019.

Lie #5: The bill will pay for itself.
Fact: All told, the bill runs 59 billion in the red over the next decade.  The 10 year deficit would exceed $560 billion.

Lie #6: There will be no rationing.
Fact: 46% of physicians said they would quit or retire if democratic health care reform bill becomes law.  In addition, the individual and employer mandates will inundate the health care system with millions of new patients. Increased demand and reduced supply will reduce the quantity and quality of care available to patients.

Lie #7:  The bill does not raise taxes.
Fact: The bill imposes a 40% excise tax on “Cadillac” insurance plans.

Stand with the College Republicans to hold these lawmakers accountable. In August, the College Republican National Committee will be launching a 25-person field program to throw these democrats out of office. Democrats like Bart Stupak, Dick Durbin, Henry Waxman, Max Baucus, John Dingell, and Sandy Levin will in the crosshairs of the College Republicans in 2010,  who will be on the front lines ensuring Democrats like these aren’t re-elected.

Join us today in helping defeat the Democrats in November. Mortgaging the future of young people has consequences and Nov. 3, 2010 will be judgment day.

Contributions to College Republicans are not limited. Stand with us today with a donation of $100, $200, $500, or $1,000 and help us restore fiscal sanity and responsible policy to Congress once and for all by putting our field reps on the political front lines.With your help we can win in November, and win back our future.

The Roman poet, Juvenal, coined the phrase “bread and circuses” to highlight the policy (or lack thereof) of the Imperial Government. The government would provide food and entertainment in order to gain the support of the public or distract the masses from policies they would not support. The ploy got so out of hand that the Roman calendar contained as many as 159 holidays, 93 of which featured games funded by the public treasury. The strategy has been copied over time and throughout the world. The Spanish had “bread and bullfights” and the Russians had “bread and spectacle.” The United States now appears to follow suit.

No, the government is not paying for a Cirque de Soleil show to be held in the Capitol; no, it is not giving everyone free Ben and Jerry’s. It is a much more subtle “bread and circuses” but the results could be the same. For instance, Robert Gibbs went in to full “sell mode” today saying,

“[I]f people want to campaign on taking tax cuts away from small businesses, taking assistance away from seniors getting prescription drugs, and want to take away a mother knowing that their child can’t be discriminated against by an insurance company — if that’s the platform that others want to run on, taking that away from families and small businesses, then we’ll have a robust campaign on that.”

There are benefits to the legislation. Both parties promoted the idea of removing the ability of insurers to discriminate based on preexisting conditions. The bill will insure more people, albeit through an individual mandate. The reform does provide a small-business tax credit to help employers pay for coverage. But focusing solely on the positives of the bill risks covering up its serious underlying flaws. One of the legislations most serious defects is the unbearable burden it places on states’ Medicaid budget.

The Obama Administration will tout the fact that the health care overhaul will provide coverage to millions of uninsured citizens. But what they won’t say is that they do this by placing additional weight, in the form of 15 million more Americans, onto a crumbling Medicaid infrastructure.  There is an enormous problem with this planned expansion. Currently, the states are facing massive declines in tax revenues due to the recession, declines which are putting the squeeze on Medicaid rolls.

Consider the plight of Arizona. A story by the New York Times on the day before health care reform passed the House said,

The Arizona budget is a vivid reflection of how the fiscal crisis afflicting state governments is cutting deeply into health care. The state also will roll back Medicaid coverage for childless adults in a move that is expected to eventually drop 310,000 people from the rolls.

By expanding Medicaid, states’ that are already having trouble finding money to pay for the Medicaid expenses they already have, are being put in dire states. Arizona is not alone. California is facing a budget deficit of $20 billion. According to Toby Douglas, the chief deputy director for California’s health care program, “the extra load will cost at least an additional $2 billion to $3 billion annually.” Florida, which will spend an additional $1.6 billion for Medicaid, is also facing dire circumstances and will likely have to consider slashing its Medicaid rolls. Talking about the benefits of increased coverage is a mere circus if the government can’t come up with the bread to fund the increase.

Any government can pass a “bread and circuses” agenda. But we as citizens, must not be deluded into believing that this bill is all sunshine and smiles. As Juvenal wrote,

Already long ago, from when we sold our vote to no man, the People have abdicated our duties; for the People who once upon a time handed out military command, high civil office, legions — everything, now restrains itself and anxiously hopes for just two things: bread and circuses.

So remember that someone must pay for the circus. To be distracted by the benefits and lose sight of the costs risks our nation going the way of the Roman Empire.

by Brandon Greife and Ricky Fraxedas

It is a bad time to be looking for work. The number of available jobs continues to go down as the number of discouraged job seekers continues to go up.  While Main Street is feeling the squeeze, in the world of Capitol Hill, business is a boomin’.

According to a Cato study; in 2008, the average wage for 1.9 million federal civilian workers was $79,197, which compared to an average $50,028 for the nation’s 108 million private sector workers. This gap widens to around $60,000 when you factor in federal workers benefit packages compared with the private sector. Moreover, the disparity is not limited to a few occupations. The average federal salary exceeds a comparable job in the private sector 83% of the time.

These sample figures, taken from the USA Today illustrate the vast wage differences in specific jobs between the public and private sector:

In 2008, the federal government, using private tax payers dollars spent about $224 billion dollars on compensation for about 2 million civilian employees. Add state and local government employees onto the total and you’ll find around $1.32 trillion on salaries and benefits. Rather than slash the size of government in response to declining tax revenues, the bureaucracy continues to grow. Since the economic downturn began in December 2007, approximately 8 million Americans have lost their jobs, meaning private employment rolls are down approximately 7%. In the same time period public employment has grown nearly 2%.

At this point, shouldn’t we be encouraging someone, anyone, to hire? As a Democrat told me recently, “a job is a job, we need anything.” While increased public sector employment may be good in the short term, it is a dangerous long term trend. As the private sector contracts, the tax burden of funding the federal government is shared by fewer people. As the public sector expands, that burden, already being placed on fewer people, grows heavier. To put it another way – the government doesn’t create a marketable good and thus its only revenues are taxes. Since they create no true “product” each government employee must be subsidized by taxes placed on the private sector. Assuming we are running a balanced budget (a big assumption nowadays) – the scale between private and public employment must be carefully weighted. If the public sector grows too large and tips the deficit scale – the balance can only be restored by increasing tax revenues on the private sector. Currently the balance is misaligned. Government employment and wages are exploding at the same time private rolls are being slashed. Something must be done before the weight becomes too heavy for the nation’s taxpayers to bear.

A the very least the federal government must work to reduce the size of its bureaucracy and get public sector wages in line with the market. The private sector is not an ATM that you can withdraw from with impunity. Pretty soon we’ll just run out of cash.

by Brandon Greife, Political Director

The Democrats seem to be “giddy” to quote Rep. Clyburn, about the latest number from the Congressional Budget Office. According to the CBO the “reconciled bill” will save “$120-$130 billion in the first ten years, and substantially more after that.”[1] But to put it delicately, there are several, shall we say “issues” with this estimate.  Moreover, Congressional Democrats seem to realize this. A leaked draft letter to the Democratic Health and Communications Staff says, http://ow.ly/1ozcP

“We have increasingly noticed how right-wing fringe media are trying to pick apart the CBO score. We cannot emphasize enough: do not allow yourself (or your boss) to get into a discussion of the details of CBO scores and textual narrative.”

As part of the “fringe media” I will now do my best to live up to their expectations and “pick apart” the score.

First, a caveat. The numbers that the CBO are reporting have not been made official and are merely part of a preliminary report. As Paul Ryan explains,

“The Congressional Budget Office has confirmed that there is currently no official cost estimate.  Yet House Democrats are touting to the press – and spinning for partisan gain – numbers that have not been released and are impossible to confirm.  Rep. James Clyburn stated he was “giddy” about these unsubstantiated numbers.  This is the latest outrageous exploitation by the Majority – in this case abusing the confidentiality of the nonpartisan Congressional Budget Office – to pass their massive health care overhaul at any cost.”

Second, all of the previous tricks are still in play. We all remember what went into the last favorable score, but its worth a quick rehash:

• The bill starts counting revenue the first year after it is enacted but the costly benefits begin in year four. 10 years of revenue to pay for 6 years of costs often leads to a favorable, if misleading score. For instance, the CBO score says that the bill will cost $17 billion in the first four years while the last six it would costs $923 billion.
• The score doesn’t include the cost of the $200 billion doc fix which was deliberately taken out of the bill to distort its 10 year cost
• Of the $138 billion “saved” in the first decade – $70 billion is money that will go right back out the door to pay for a long term care program
• Double counts Medicare savings

This just the tip of the iceberg when it comes to trying to figure out the total cost of the health care bill. Under the current law, Medicare Physician Fees will be cut 21 percent from last year’s level – a change which the CBO has already said could cause Medicare providers to “find it difficult to remain profitable, and, absent legislative intervention, might end their participation in the program.” That’s not the only cut to Medicare:

• More than $150 billion will be cut from hospitals, nursing homes and hospice
• More than $200 billion will be cut from Medicare Advantage
• Nearly $40 billion in cuts to home health care

It should be noted that the final version of the Healthcare Bill is yet to be posted. We have yet to know the final cost of what this bill. Since the CBO can only work with what is in front of them; the Democrats has just been putting out the estimates which will predict the costs and savings to their benefits. So the preliminary cost of $940 billion dollars could change considerably once the harsh political realities set in.

Liberal, and pro-health care columnist Ruth Marcus admitted as much in a story today for the Washington Post. She wrote,

Here is the accompanying tablespoon of salt: The CBO is required to assume that Congress will do what it promises. So, for example, Congress promises in the measure to cut several hundred billion dollars in Medicare spending. Sometimes such promises have come to pass. Other times, as in the current difficulty with scheduled cuts in Medicare reimbursements for doctors, they are put off because of a public — or politically connected — outcry.

One big reason for the CBO’s long-term assessment of major cost savings involves the excise tax on high-cost insurance plans. This is the tax that, in the face of opposition from labor unions and others, has been diluted to almost nothing — a measly $32 billion, compared with $149 billion in the original Senate bill — during the first 10 years. Will the tax really be collected in 2018 — long after many of those voting for it will have left office, long after the benefits it is helping to finance have kicked in?

As Representative Paul Ryan says, “hiding spending doesn’t reduce spending.” So when the Democrats claim that the bill will reduce costs in the long run, they are misleading the American people.

There is very little reason for anyone to get giddy about this healthcare monstrosity. Throughout the process, there has been bribery, manipulation, and delaying tactics. The Democrats could at least show some curiosity to the CBO employees who have been working overtime just trying to get the numbers through. They should also realize that no matter what they do, the American people will see through it. If they continue to follow this path the American “will find some way out of here” in the ballot box on November.,

by Ricky Fraxedas and Brandon Greife

Throughout the health care debate President Obama has made it a point to surround himself with doctors in white coats. It is a smart public relations move. Patients trust their physicians, often with their lives. The idea that hundreds of doctors in lab coats and stethoscopes stand behind the President’s ideas could ease the fundamental misgivings many voters have about health care reform. As Obama said in a speech to physicians in the White House rose garden, “nobody has more credibility with the American people on this issue than you do.”

He continued,

“When you cut through all the noise and all the distractions that are out there, I think what’s most telling is that some of the people who are the most supportive of reform are the very medical professionals who know the health care system best.”

Republicans have certainly done their best to counter the notion that physicians are on the side of health care. Front and center for the GOP have been the “Senate Doctors”: John Barasso, Tom Coburn, and Lamar Alexander.

Far from cutting through the noise Americans are left confused. They’ve heard the arguments back and forth about literally everything. Doc fixes and Medicare cuts. Cornhusker Kickbacks and Gator-aid. Cost curves and Cadillac taxes. But what do doctors think about health care reform. Do we trust the President’s props in lab coats or the Republican’s doctors-turned-Senators?

A new poll conducted by physician search firm Medicus should answer the question. In large part physicians seem to mirror the feelings of most Americans. A tiny minority, 3.6 percent, felt that we should do nothing on health care reform. Even Republicans agree that something must be done; the conflict comes in what that something should look like. To this question, 62.7% of physicians feel that health reform is needed but should be implemented in a gradual, targeted approach, as opposed to a sweeping comprehensive overhaul.

Physician concerns about health care also shed some light on some unintended consequences of reform. As Steve Marsh, managing partner of the Medicus Firm explains, “what many people may not realize is that health reform could impact physician supply in such a way that the quality of health care could suffer.”

For instance the survey found that 50% of respondents feel that income and practice revenue will be negatively impacted and 14% believe that income and revenue will “decline or worsen dramatically.”

I can tell some ears just perked up. Doctor’s revenue is going to fall? That’s great! Surely that means more money will stay in consumers pockets.  Well no. Even worse, in a time when we are going to need more physicians, many could either leave or be deterred from practicing medicine. The survey found that 46.3% of primary care physicians believe that passing health care reform will either force them out of medicine or make them want to stop practicing. If economics taught us anything, it will be tough to find cheap health care when the demand is greater than the supply. Beyond the idea of lower cost, Marsh says that quality could be affected,

“What many people may not realize is that health reform could impact physician supply in such a way that the quality of health care could suffer. . . The reality is that there may not be enough doctors to provide quality medical care to the millions of newly insured patients.”

As it turns out those “very medical professionals who know the health care system best” appear to have serious concerns about the future of medicine if health care reform passes. Doctors, the one’s who have a finger on the pulse of health care, know that this reform plan is the wrong prescription for America.

by Brandon Greife, Political Director

Disclaimer: if you’re a taxpayer, you are not going to like what you are about to hear. If at any point you feel your blood pressure rising, sense the onset of chest pains, or find yourself on the verge of tears, please stop reading immediately.

Fannie Mae and Freddie Mac, those so-called “government-sponsored enterprises” that guaranteed some $1.5 trillion in junk mortgages and then crashed, continue to eat into taxpayer wallets. At their peak Fannie and Freddie had their hands on more than half of the mortgages in the entire United States. Unfortunately, they also held or guaranteed around 10 million subprime and Alt-A mortgages that triggered the housing collapse (and really the economic collapse).

The fact that taxpayer backed companies were dabbling in risky loans is worrisome enough. The fact that they are still doing it is beyond belief. As the Wall Street Journal describes,

“The government took over Fannie and Freddie nearly 18 months ago as rising loan defaults burned big holes in the companies’ balance sheets. The government has agreed to absorb unlimited losses for the next three years and up to $400 billion after that. So far the companies have taken a combined $127 billion in Treasury support, making this bailout one of the most expensive of the financial crisis.”

As one noted economist explains, “this is like giving unlimited liquor and car keys to two irresponsible teenagers.” Not only are these companies still around, they dominate the housing market as never before. The Obama Administration has used the two irresponsible lenders as arms of the federal government and tasked them with buying more risky loans and loosening already questionable lending standards. The result: Fannie Mae reported a $72 billion net loss for 2009. It has also asked for another $15.3 billion to stay afloat. The smaller Freddie Mac posted a $21.6 billion loss in 2009 and predicts continued losses. We are all paying for this. And we will continue to pay because of Obama “unlimited losses” pledge.

As Forbes points out, the fact that taxpayers are footing the bill will lead Fannie and Freddie to “reemerge as what they were before: enterprises that unfairly dominate the market because of their assumed guarantee of their debt by Uncle Sam.”

But if we’re not going to cut off the taxpayer spigot that unwillingly helped grow these monsters, shouldn’t we at least reform them? Unfortunately, the Obama Administration has continually put off the date for a planned overhaul despite promises that it would have been done by now. Treasury Secretary Tim Geithner said in February that,

“We want to make sure that we get it right, that we do it carefully. We can’t do everything right away.”

Right away? The housing collapse happened more than two years ago. What he meant to say was that, “taxpayers will have to continue to foot the bill because we don’t want anything else taking away from our health care pitch. Get in line somewhere behind finding people jobs and getting the economy back on track.”

The truth is that the public isn’t angry enough about this yet. The government has done a good job of covering it up. Because they are merely “government-sponsored” the combined debt and gallons of red ink of the two companies won’t show up on the government’s books. As a Washington Post article explained,

The companies’ more-than-$5 trillion debt is all but guaranteed by the federal government, but is not counted in the U.S. national debt.

Geithner rejected the pressure. “We do not think it is necessary to consolidate the full obligations of Fannie and Freddie onto the nation’s budget,” Geithner said.

So what we are left with is two government owned chasms we keep dumping money into without the political costs of it showing up in the budget. Transparency at its finest. If you haven’t had an aneurism yet congratulations you’ve now become immune to the ridiculous money pit that has become the Obama Administration.

by Brandon Greife, Political Director (hat tip Matthew Cavanaugh)

Predictions are inherently difficult. Attempting to take today’s knowledge and apply it five, ten, or fifty years in the future can often get you into trouble. For instance, British physicist Lord Kelvin predicted that “heavier than air flying machines are impossible.” Or, the president of a Bank who advised Henry Ford’s attorney that “the horse is here to stay but the automobile is only a novelty, a fad, a passing, fancy.” As a sports fan my personal favorite is by baseball hall of famer Tris Speaker who said of Babe Ruth, “taking the best left-handed pitcher in baseball and converting him into a right fielder is one of the dumbest things I ever heard.”

In other words, predictions, even by those who should know what they’re talking about, often fall flat. After saying all that, I’m now going to try and peer into the near future if health care reform passes.

The demand for health care reform (which has since turned into insurance reform) began because the costs of health care are skyrocketing. Barack Obama’s campaign website says,

“Health insurance premiums have doubled in the last 8 years, rising 3.7 times faster than wages in the past 8 years, and increasing co-pays and deductibles threaten access to care. . . Over half of all personal bankruptcies today are caused by medical bills . .  . And given current trends, this problem will only get worse as health care spending is expected to double within the next decade.”

There is an undisputed need for reform. At this point, there are very few things people from across both sides of the aisle agree on, but they do agree that the current system is broken. Of course, the knives come out when you begin to discuss how to reform it.

Now, assume that Nancy Pelosi cobbles together the necessary votes to pass health care reform. Will the cost problem be fixed to the point where Americans are once again content? Will costs go down, or at least remain stagnant, so that health care fades back into the mist as a campaign issue?

Simply put. No. At least not for the people that health care reform is directed to – those in the non-group market who do not receive health care through an employer. In fact, the cost of insurance for people shopping in the individual marketplace would skyrocket faster than if nothing was done. As the CBO wrote in its assessment,

“CBO and JCT estimate that the average premium per person covered (including dependents) for new nongroup policies would be about 10 percent to 13 percent higher in 2016 than the average premium for nongroup coverage in that same year under current law.”

In other words, the legislation as written provides very little financial incentive for people to let the issue fade. So then what happens? My guess is that people once again begin demanding reform. Democrats, assuming they are able to weather the brutal storm of November 2010, can attempt to do one of two things. First, they can preach patience. At this point, I think it is clear the public doesn’t really want to hear that. People either want this bill killed or passed. And they want it done yesterday. Second, Democrats can say that while the insurance exchanges were a fun idea, what this country really needs is what we wanted from the beginning – a public option.

Democrats will be back on the stump. Nancy Pelosi can be more forceful when she says, “If someone has a better idea for promoting competition and reducing health care costs, they should put it on the table.” Anthony Weiner can go back to saying, “any real change requires the inclusion of a strong public option to promote competition and bring down costs.” Dennis Kucinich and the rest of the Progressive Caucus can reiterate their view that we need a “robust public option…to protect consumers from these rampant premium increases.”

After years of constantly increasing premiums under the current version of health care the public may be more apt to listen to the Democrats idea.  Rather than skewer this bill for what it is – bad on cost control – Democrats can use it as an opportunity to take another step toward single payer.  Obviously, political prognostication is a tricky and often inaccurate tool (who could have predicted a year ago that we’d have a Republican Senator in Kennedy’s Massachusetts seat). Nevertheless, the fact that it is a possibly underscores the serious flaw in the current Senate bill. This is not the health care reform we, or even candidate Obama, envisioned. The very people it said it would protect, those in the individual market, it hurts the most.

I may be the next Lord Kelvin or Tris Speaker. I may be giving short shrift the next airplane, automobile, or Babe Ruth. But then again, maybe not.

by Brandon Greife, Political Director