March 26 2010
Obama on the Road Again
President Obama is about to take health care reform on the road. Inevitably this brings back memories of last summer's angry town hall meetings, when the public outcry against a government-takeover of health care seemed like it would be sufficient to stop the legislation in its tracks.
So now that the President signed "The Recovery Act" into law, some might wonder how the public will respond to the bill. The message from the White House and the mainstream media is clear: Find out what's in it for you.
On the surface there are a lot of great benefits. Insurance companies can no longer drop people with pre-existing conditions. The bill will close the infamous "donut hole" in the Plan D Medicare Prescription Drug program. And "children" will be able to remain on their parents' insurance policies until they turn 26. (Of course, some of the "freebies" have been over-stated: President Obama claimed that children with health problems would receive immediate protection against insurance companies denying coverage; turns out, that provision doesn't kick in until 2014.) Nevertheless, there will clearly be some "winners" from this health care legislation.
Yet the losers will far outnumber the winners. Foremost, the country as a whole - and the principles on which it was founded - will suffer. Because underneath the expansionary reforms are insidious provisions that fundamentally change the relationship of the American people to their government. Consider three examples that encapsulate the essence of the bill: industry levies, capping flexible savings plans, and student loan reform.
(1) Industry levies: It's unlikely that most people will bat an eye at the levy being imposed on the tanning salon community to help pay for the health care system. Framed as a sin tax, lawmakers will pitch the levy as punishment for a bad (but still legal) business. (Of course there's plenty of science to support that moderate sun exposure is, in fact, healthy.) But the levy on tanning salons is an arbitrary tax on a business simply for doing business.
What's more, President Obama and Democratic lawmakers plan to impose levies on other businesses as well, like the medical device industry. This time it's not because these are "sinful" businesses - rather this is the heart of medical innovation - it's simply because they're successful and have deep pockets for Uncle Sam.
Excise taxes are nothing new, but we ought to pay attention to this kind of concentration of power that allows Washington to arbitrarily target one industry at the expense of another. Americans might not be hyper-concerned about tanning salons, in particular, but I suspect a lot of people would feel different if it were their dry cleaning business, hardware store, or ice cream shop being randomly punished by the government.
(2) Capping the Flexible Spending Plan: Beginning in 2013, ObamaCare will set a $2,500 cap on contributions to flexible-spending accounts, which currently enable employees to save money tax-free for medical expenses. This overlooked provision really gets at the heart of the Democrats' health care reform - remove as much responsibility from the individual as possible.
Flexible spending accounts, like health savings accounts, encourage individuals to be more involved with decisions pertaining to their health. Eliminating third parties and encouraging individuals to make more decisions about their health care is a proven way to drive down costs. But that's exactly the opposite of what "The Recovery Act" seeks to do.
(3) Student loan reform: Many Americans might be wondering what student-loans have to do with health care. That's a good question. And the answer is nothing. In order to ensure he achieved another one of his signature domestic agenda items, President Obama had Congress furtively insert student loan reform into the health care bill. As one news organization phrased it, "a provision tucked into that bill would put the Federal Government in charge of all student loans."
So much for transparency. And so much for change. This new reform will further expand government's role in higher education, at the expense of taxpayers and students who will have less competition as they seek out loans for college.
The legislation as a whole was crafted behind closed doors, without the support of Republicans and without any sensible market-based reforms. So it's no surprise that Democrats would hide an extra provision in the bill that has nothing to do with health care.
The industry levies, the cap on flexible spending plans, and the student loan provision are just the tip of the iceberg. But they exemplify the legislation's overall theme: The Recovery Act systematically places more power in the hands of the federal government, removes control from the individual, and fosters a culture of clandestine politics.
In one fell swoop, the bill gives lawmakers more arbitrary control over businesses and over individual lives, by imposing an estimated $52.3 billion in new taxes over the next 10 years. By limiting choice in health care, it ensures that Americans become more dependent on the new system. And it undermines the political process by advancing the use of dirty, surreptitious legislative tricks.
President Obama is going to have to put on some road show to convince Americans that somehow all this is good for them.
Sabrina L. Schaeffer is a senior fellow with the Independent Women's Forum and managing partner of Evolving Strategies.