"Worst Bill Ever" Is But One Small Part of a Looming Economic Disaster
NOVEMBER 24, 2009
After months of debate, the House has finalized a healthcare reform bill that the Wall Street Journal recently called “The Worst Bill Ever.” The Senate is now bringing a bill to the floor for debate. The House bill includes a public option, an amazing number of disincentives for consumers and physicians, and a price tag of more than $1 trillion, despite smoke-and-mirror tactics designed to make the cost seem closer to $800 billion.
Both bills would be bad news for nearly all healthcare stakeholders, including physicians, medical device makers, pharmaceutical companies, the insurance industry, current Medicare recipients, and, most importantly, all of us as patients and consumers. Neither bill will not do anything to correct the fundamental flaws of our current system, but would exacerbate existing problems while creating a vast new entitlement that will require trillions of dollars in additional funding.
In the meantime, while many have been focused on the implications of healthcare reform for all of the healthcare stakeholders, an economic catastrophe is building—one that threatens to make healthcare reform but a frightening footnote to a devastating period of American history. Put simply, we are spending ourselves into economic oblivion. This is not hyperbole; it is a fact.
Recently, the White House disclosed that the fiscal 2009 budget deficit is $1.4 trillion. If that sounds bad (and it does), consider that the Obama administration is openly admitting that there will be $9 trillion in additional debt over the next decade.
How much debt is this? Consider that if Congress taxed 100% of the incomes of those earning more than $500,000, such a move would only raise about $1.3 trillion. Of course, such a tax rate is not possible or sustainable, but consider again whether only “the wealthy” will bear the burden of these expenditures. In recent weeks, Administration officials such as Treasury Secretary Tim Geithner have notably backed off of the Obama campaign promise not to increase taxes for anyone earning less than $250,000. This is just the beginning of a bait-and-switch that will have the middle class paying dearly for “universal” healthcare.
Also, if $9 trillion in debt is what the administration is willing to admit to, how much higher will the number actually be? Look again at healthcare reform: Does anyone really believe it is possible to massively expand the size and scope of government involvement in healthcare while reducing the deficit? Another recent WSJ editorial put it well: “Anyone who reads beyond the top-line numbers will find that the [Baucus] bill creates massive new spending commitments that will inevitably explode over time, and that this is ‘paid for’ with huge tax increases plus phantom spending cuts that will never happen in practice.” Now consider expansions in spending across all government agencies, which is what we’ve seen for two years running.
On our current course, the U.S. will eventually run out of financiers for its debt. To decrease the debt, we’ll either have to cut trillions of dollars in expenditures, or increase Federal revenues through massive tax hikes. When this happens, the U.S. economy will slip into a tailspin from which it is unlikely to recover.
We are treading a very dangerous path. I have often wondered if what we need now is for someone to step forward and lead meaningful opposition to proposals that would be crippling to our economy and are downright dangerous to our health. Maybe it’s a political independent, like Joe Lieberman, who has recently voiced his opposition to the public option. Perhaps it’s an influential organization, such as the AARP or the AMA. As the President has abandoned his earlier tactic of working with physician groups and industry representatives in favor of a battering-ram–approach, health insurers, physicians, and advocacy groups are now voicing their opposition to the current plans. The media, after largely ignoring this issue for months, finally appears ready to take on this Administration’s tax-and-spend ways.
Now I am starting to believe that no one organization or individual can end this political play for income-redistribution-at-any-cost. I now believe it will be thousands if not millions of smaller voices, rising up together in a crescendo of opposition that even the current Administration will be unable to ignore.
Mike Hennessy is Chairman and CEO of MJH & Associates. Click here for more Hennessy's Highlights