The House of Representative has produced a terrible health reform plan. Sometimes choices are hard. This one isn’t: Nothing is far, far better than this mess. It can’t be fixed, patched, reworked or adjusted: it should be thrown away. I know it sounds strange, but the right course for progressives is to reject this bill completely.
This bill does solve the access to health care problem: by the simple expedient of loading more costs on a health care system that already costs too much. It does not change the health care system in any substantial way. It does not change how private health care works, although with its public option it probably insures the end of private health insurance. It does not provide for improved consumer choice or a more competitive system; it does not acknowledge the changed circumstances of the American job market; and it does not change at all the unlimited give-away employer health care subsidy. On the other hand, it does finance its more than $1 trillion extra costs by an 8 percent job tax on small business – it’s a new theory, employers will hire more if employees cost more – and by a second whack at high income families, bringing their marginal tax rates to those of the more expensive European nations. I can certainly understand why crafting this legislation required so much time and work.
This bill creates two serious cost and budget problems, one finally acknowledged, one largely unmentioned. First, considered just by itself, the bill costs more than $1 trillion and raises rather than lowers the growth of health care costs. In what should have been the death knell for the bill, but wasn’t, the director of the non-partisan Congressional Budget Office (CBO) said, “[I]n the legislation that has been reported we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health care costs. “
More seriously, and never mentioned by the Congress, this bill loads all of these costs on a national budget we already cannot afford. In 10 years, even without this bill, federal debt will already rise from 40 percent to 90 percent of GDP; in 10 years we are headed toward a “normal” every day 7.4 percent of GDP deficit. This is a train wreck. If we actually come even close to these numbers, we will cause more damage to the economy, to low and middle income families, to low wage workers, and to everyone else than any possible new program could add benefits.
What could the Congress possibly have been thinking of? And when – if ever – will Congress recognize the reality of the cliff we are heading toward? So far as I can see, there is only one person on the stage today with the brains and political skills to acknowledge we are at a dead end, to demand a do-over, and to provide a positive direction – President Obama. Unless that happens, we are in deep trouble.
About 40 years ago, when I first heard the mantra “don’t let the best be the enemy of the good,” I thought it was original and wise. I now know that it is a hackneyed cliché, invariably the signal of an effort to rationalize another terrible idea. I guarantee we will hear it in this case. But don’t kid yourself: there is no “good” here.
Braintruster Bo Cutter is a managing partner of Warburg Pincus, a major global private equity firm. Recently, he served as the leader of President Obama’s Office of Management and Budget (OMB) transition team.