The Facts versus the Grandstanding

The audience in the White House is made up mainly of medical practitioners--those who get paid, not those who seek care, and especially not those who pay.

The message is: "The status quo is not working." This sets the stage for repeating the erroneous belief that reform cannot make things worse. There is hardly a worse foundation for any major legislation.

Next come the usual stalking horses: Some want to scrap private insurance and let the government do everything, some want to remove all insurance regulation. If we forgo those extremes, that leaves room in the middle for almost anything Obama wants to do.

The Democrats therefore want to get it all done before the Easter break. They may succeed, in which case we all repent or deplore in leisure.

Then comes the grandstanding, and the claims are these:

  1. Doctors and nurses should be free to decide what is best for patients, as if costs were irrelevant.

  2. We have to stop insurance firms from doing what we don't like, such as denying insurance to consumers with pre-existing conditions, and never mind the legislative overreach that requires.

  3. Everyone should get what federal employees get--an utter fantasy.

  4. Tax credits in the Democrats' plan will be so expansive as to constitute the largest middle-class tax cut in history. Which is to say: We will have huge taxpayer subsidies without limits.

  5. Much of what is spent now in health care is wasted, and Obama's plan will deal with this. But in truth there are no details offered here, and none of the Democratic plans contain anything serious about identifying and cutting excessive spending.

  6. Obama's reform plan is "paid for." Maybe, maybe not: There will be new taxes on drugs and devices and insurance, plus income-tax surcharges, all of which will increase when costs escalate.

  7. He says his plan includes "most of the serious ideas" for cutting costs. In fact, his eleven-page summary says almost nothing about cost control. The Democrats' bill include some of those ideas in a small way, though not enough to do much, leaving costs as an irredeemable flaw in the Democrats' plans.

The grand finale, with no question permitted: Congress has to pass this legislation now. In fact, the Democrats are racing against time. They have to pass the Senate bill plus reconciliation before it sinks in for voters and their representatives that the three most troublesome elements remain: The bill will make insurance more expensive, everyone will have to buy insurance, and taxpayer subsidies will be huge and unlimited. The Democrats therefore want to get it all done before the Easter break. They may succeed, in which case we all repent or deplore in leisure. If they don't get it done before Easter, they may lose their race against public awareness.

John E. Calfee is a resident scholar at AEI.

Photo Credit: White House/Joyce N. Boghosian

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About the Author


John E.
  • Economist John E. Calfee (1941-2011) studied the pharmaceutical industry and the Food and Drug Administration (FDA), along with the economics of tobacco, tort liability, and patents. He previously worked at the Federal Trade Commission's Bureau of Economics. He had also taught marketing and consumer behavior at the business schools of the University of Maryland at College Park and Boston University. While Mr. Calfee's writings are mostly on pharmaceutical markets and FDA regulation, his academic articles and opinion pieces covered a variety of topics, from patent law and tort liability to advertising and consumer information. His books include Prices, Markets, and the Pharmaceutical Revolution (AEI Press, 2000) and Biotechnology and the Patent System (AEI Press, 2007). Mr. Calfee wrote regularly for AEI's Health Policy Outlook series. He testified before Congress and federal agencies on various topics, including alcohol advertising; biodefense vaccine research; international drug prices; and FDA oversight of drug safety.

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