Health Care Reform: Those “Irreconcilable Differences”
Mar 4th, 2010 | 61 responses
In an Editorial last Friday, USA Today discussed how the health summit exposed “irreconcilable differences” between Democrats and Republicans on the issue of health care reform. It said in part:
That at least makes it clear where reform goes from here. Obama and his party have three choices: They can give up and blame GOP intransigence. They can try to settle for the same sort of incremental changes made after President Clinton’s health reform effort failed in 1994. Or they can try to push through a comprehensive plan to overhaul a dysfunctional system that works well for some Americans but leaves far too many with no coverage and costs everyone too much.
My personal opinion is that—given that Democrats honestly believe that Americans (especially the 30 million uninsured ones) indeed deserve a better health care system—-there is really only one choice, and that is to proceed full steam ahead and “damn the Republican torpedoes.”
A USA Today reader took the words out of my mouth in a Letter to the Editor on Tuesday:
Democrats must stick to convictions on health care
Just as today we have “irreconcilable differences” between Democrats and Republicans concerning the proposed health care reforms, such was the case in 1935 with Social Security, and again in 1965 with Medicare (“Health summit exposes irreconcilable differences,” Editorial, Friday).
Both times, Democrats displayed conviction and had the backbone to continue to fight for what they believed was right for America. They were able to pass landmark legislation with, at the last moment, some Republican support.Although your editorial mentioned that President Obama and the Democrats have three choices, history and the desperate health care needs of millions of Americans leave them only one choice: To push through their comprehensive plan — with or without Republican support — face the music in the upcoming elections, and let the American voter be the final judge. The voters and history will once again look favorably on how Democrats handled these differences.
Some may say, yes but look at the dire straits Social Security and Medicare are in right now, and look at how much it is costing the nation.
I would agree with those who express such concerns. Those issues can and should be addressed in a bi-partisan manner, and hopefully those programs can be “made well” again. But I would also like to point to the millions upon millions of Americans who have benefitted from those programs, and suggest that if we could take a poll of past and present beneficiaries (and their families), not too many would condemn those programs or say that they would decline the benefits.
It is ironic, and a pity, that our political leaders have not been able to responsibly and forthrightly achieve much needed reconciliation on this critical issue and, instead, may very shortly be staring into the barrel of that dreaded “Reconciliation gun.”
I may be wrong, but I sincerely believe that when we look back upon these “irreconcilable differences” twenty years from now, most of us who are still around will say that the major factor that made those differences irreconcilable was the politics of the day.
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61 Responses to “Health Care Reform: Those “Irreconcilable Differences””
DdW
Fair enough. Thanks for the consideration.
For sure there are people behind the statistics and we have to balance the two to find wisdom.
First, thanks to DJ and Dorian for the defenses. I've had interesting, informative and fact-based dialogs with several here with whom I generally disagree, including DJ, CS and even DLS on occasion. I won't be trying to do so with steveinch, whom I find insulting and ideologically driven. I hope it's not a violation of comment policy to say so. In this thread, we're introduced to the latest divisive meme, a generational war in which now older Americans are the “other” that is supposedly taking unfair advantage. First, to dispute the basis of that, 65+ Americans have lower median income than anyone except those <25. jNote on the same chart that the relative income ratio of those 45-54 to those 25-34 hasn't changed since the 1980s. The income growth rate for 55-64 is and has always been the lowest of any group, with the exception of the Bush years 2000-2006 when ONLY this demographic had positive income growth. The wealthy old people meme here is at odds with the facts. Are there more wealthy older than younger people. Probably, yes. But the problem is not that we're giving too much to the old. It's that we are and have been giving too much to the already rich.
For a primer on the danger I describe, Sober Realist has a good article with lots of good charts, some of which I've linked separately here in case you don't want to read the whole article, which I do recommend.
There is no debate that we have a rising wealth gap, the greatest in American history. Here's the detail of what the top 1% and each quintile owns, their debts and net worth. It's far above the danger level seen before the Great Depression. It has been largely created by deregulation and tax cuts, starting with Reagan. It correlates with the increase in the national debt, also largely a creation of Republican administrations starting with Reagan. The effect of tax policy on the wealth gap is also apparent in the “Reagan revolution.” <font><font size=”2″><font size=”2″><font>No Wonder the Poker Game is Ending: The Wealthiest Have Taken All of the Chips.</font>
Finally, a</font></font></font>s for those wealthy old geezers:
Green,
In an attempt to respond in kind, I find you have a tendency to question motives before facts which annoys the heck out of me. Your last post is more in keeping with something that's a debatable proposition.
As I understand your argument, you are primarily concerned with rising income inequality. This is a good thing to worry about and is an issue. Where I question your logic is in linking it to government action or lack thereof. The links you provide largely deal with the existence and issues associated with inequality and I think we broadly agree. I probably am not as immediately concerned as many of the authors you quote but that's a question of degree rather than direction.
I do not think you make a particularly strong case on the government's role here. The most direct link you provide is the income of people in the financial sector. It's not at all clear to me that that these people constitute the top 1% nor that their income is a consequence of deregulation. To take an example, Goldman Sachs has largely been unaffected by deregulation, never being a bank to begin with and yet offers some of the highest salaries in the World. Yes they received TARP money and that was wrong and yes they probably unfairly profited on CDSs through the AIG bailout which was also wrong. I suspect you and I would agree on many things here (e.g., not allowing carried interest to be taxed at a lower rate than ordinary income) but I don't think the link of income equality to deregulation is as strong as is posited in the articles.
The only real substantive disagreements I have with the Sober Realist article are two. The first is the focus on marginal tax rates as opposed to effective tax rates. The effective tax rate is a more reasonable estimate of the tax liability faced by an individual or group since it's simply total taxes divided by total income. As the CBO shows, the effective tax rates are moving in a different direction than the marginal rates. This is true for two reasons. First, deduction phase outs hit relatively hard in the higher brackets and second, there has been a substantial increase in exemptions and refundable credits in the code. These have the net effect of lowering rates much more substantially on those with lower tax liabilities since they are flat dollar amounts rather than related to income. The second concern is the overlay that the US is governed by a “plutocracy”. I'm actually not saying this isn't true, rather, I don't think it is a provable proposition. It is something the author seems to take as an article of faith that is consistent with rather than proven by his data.
Finally, you accuse me of saying “that older generations are taking unfair advantage.” What I have attempted to say is that we face a serious budget challenge and that part of that challenge is reforming entitlements and in my mind, given the distribution of wealth AND income, the most fair solution is to ask older people who have wealth to spend that wealth on themselves as oppose to receiving benefits from the population at large and passing that wealth on to their heirs. I do not believe that government has a stake in increasing intergenerational wealth transfer which is what we do when we provide financial support to people who have means. The alternative is either taking more from other people to support this intergenerational wealth transfer or just limiting eligibility by increasing the retirement age. Despite the fact that this latter solution is more politically popular, to my mind it is much less fair since it deprives people regardless of means of benefits that some of them need but others do not.
I believe that this point exists independently of the level of income disparity that exists in the country.
As it relates to that point, let me just say that I believe the best way of attacking income disparity is on the front end — through education and training — versus on the back end — through redistribution. I infer from your comments that you would do both. On that point we will likely continue to disagree because I genuinely do believe that if an employer agrees to pay me a salary that money is mine and should only be shared to the degree that it is necessary.
Peace to you and yours and sorry for creating the impression that I am an idealogue. If you see me post things in particular that create that impression in the future, please feel free to point them out.
Just one more thought as it relates to income distribution. I've found there's quite a philosophical difference between people who view taxes as a way to fund the government and people who view taxes as a way to correct an “unfair” or “inappropriate” income distribution. If one takes the former point of view, one regards as quite compelling the increase in the share of total burden and effective tax rates for the “rich”. If one takes the latter point of view, such data is trumped by data on income equality.
This is probably one reason why you and I will not likely agree. I don't see “correcting” income equality as the role of the government since it's entirely not obvious to me what the correct level of inequality would be. Providing the government with the ability to make that determination causes me great concern but that is largely because I don't trust government. I see it mostly as a necessary evil. That is probably another reason we will always see things differently.
Hey there GD —
Can't speak for Steve, but since I think I understood him (and for the most part agreed), let me explain where I, at least, am coming from on this one.
We have a number of programs in place to help people in our society. Medicaid, Medicare, and Social Security are the biggies. Of these, only one — Medicaid — is specifically designed for people below a specific income threshold. The other programs are systemic, and apply to everyone after they've reached a certain age — and that's regardless of income or assets.
All elderly or retired people do not require assistance. POOR elderly / retired people require assistance. Thus, there IS a common denominator that could be applied to all these social programs but is not: poverty.
I know for a fact that means testing of benefits — specifically SS benefits — would reduce payments. It would affect many of the people I know, and would likely reduce payments to me when I get to that age. It might even affect you.
OTOH, I also know people who live on SS only, and the income is less than $800 / month. No assets, no investments. *That's* someone who needs help. There's no comparison between my circumstances and those.
It's unfortunate that we've set these programs up in such a way that they've become totally integrated with all aspects of planning. Medicare, for instance: because it's an auto-benefit over a certain age, private employers and ordinary plans simply don't offer coverage. If, however, coverage was still widely available privately, then need for assistance from the government for medical care could likewise be means-tested.
In this thread, we're introduced to the latest divisive meme, a generational war
Actually we were talking about a generational subsidy. Until you declared it a war. Who, exactly, is being divisive?
There is no debate that we have a rising wealth gap, the greatest in American history.
There is some debate about its size and implications. Your “danger level” graph, which virtually defines a depression as a period of low taxes, suggests we've been in a second great depression since about 1990. We haven't. It also claims high taxes brought prosperity, a questionable causation hypothesis.
The other side of the story is we were in massive debt after WWII, which we finally paid off in the 70's. You can frame 90% tax rates as the natural state of affairs and Reagan's tax cuts as a sell-out, or you can file them among the many wartime hardships Americans endured, which were appropriately reversed once the war was behind us.
The formula for Milton Friedman's economic policies is “privatize, deregulate, cut social spending”. Those policies are at the heart of “Reaganomics” (or “Thatcherism”), which the first Bush famously (and correctly) called “voodoo economics”. The implementation of these policies always has the same result.
1. A shift of public wealth to private hands,
2. a shift of private debt to public hands and
3. a widening wealth gap.
Virtually all major deregulation directly causes the first, and there are many many examples beyond the financial sector, though it has been among the worst. Telecomm deregulation is another, the direct gift of 90 billion in public property (wavelength) to 6 companies and their shareholders. Deregulation of safety or pollution standards obviously harms the public's air and water and degrades worker safety for private gain. This too robs from many Pauls to enrich a few Peters (to use the original icky analogy). Privatization of military operations and support, disaster relief, prisons, school lunches -to name a few- increases costs through profit and inefficiency, and in many cases creates yet another powerful special interest that distorts our political process through legalized bribery, plus prepetuates bad policy such as the “war on drugs” and obscene “defense” costs. Any link between childhood obesity and the shift from school cafeteria food to fast food franchises?
We have a bloated corporate bureaucracy that is self prepetuating, greedy and selfish; and ironically, that huge layer of profit and waste fuels a prepetual meme that “government” is wasteful bureaucracy and all or most of its functions should be privatized.
Many I think are unaware how they're being misled while the misleaders use OUR resources to bribe our officials to make the rules their way. But some, especially the corporate elite and their opinion marketing minions, ARE complicit. They know the effects of these policies, know the effects are benefiting them against the public good, and use fear, nationalism and religion to distract and polarize, while picking the public pocket. Or as Lincoln put it:
Eisenhower warned specifically about the military industrial complex:
DJ suggests that the paying down of the WWII debt should have resulted in lower tax rates. And those top rates DID go down under Reagan. But the defense budget didn't drop. Reagan simply borrowed it from future generations, then gave it away in tax relief to rich donors while middle income wages stagnated, for decades. Both Bushes did the same and now your generation is saddled with a ton of debt that frankly, your generation didn't vote against. So, a few are complicit in the bleeding of public wealth, future wealth and middle income wealth into the pockets of those few. Most are just misled, I believe.
As for plutocracy, I assume you are aware by now of how much law and regulation is influenced by -indeed often written by- regulated industries and their lobbyists. Even if 80% of people want something, affected industries and corrupt politicians, with powerful opinion-shaping programs, can derail “the will of the people.”
Goldman. Don't get me started. Tiabbi is a bit abrasive in style but gets the facts about right HERE.
Virtually all major deregulation directly causes a shift of public wealth to private hands.
On the contrary, that's the result of *increasing* regulation. The more spending you funnel through the government, the more susceptible it is to hijack by lobbyists. Indeed, the more people and corporations *have* to spend on lobbying if they hope to protect their interests.
Deregulation, on the other hand, leaves more wealth in private hands to begin with. The fly in the ointment is that that the private sector allocates wealth toward economic efficiency, or “badly” if you were hoping for more social justice or ecology or other worthy goals.
Regulation is therefore the spider we swallow to catch the fly. The spider dooms us to statism and corporatism, where decisions are made centrally and driven mostly by corporate lobbyists. No one seems very happy with this state of affairs.
It's here that liberals and conservatives part company. Conservatives argue that since we don't like spiders, we should swallow as few as possible. Liberals want us to swallow the bird of first amendment restrictions, in the hope of micromanaging the lobbying spiders, that they might do a better job of catching the flies.
Perhaps we'll die.
I think I gave enough examples of how public money is squandered by lack of government oversight. Regulation was enacted to protect the public from unethical companies. Reducing the regulation raises risk to the public while serving only to increase the bottom line of businesses. The debacle caused by deregulation of the savings and loans cost every American $13,000 (probably double that in 2010 dollars). Deregulation of the financial sector nearly destroyed our economy. Incentivizing the offshoring of jobs and profits benefitted the few while hurting the many. Deregulating mercury increases brain damage. Deregulating credit card companies cost Americans billions. And on and on. Corporations will NOT act responsibly and there is no magic “market force” that makes them do so. Exxon Mobil fought against paying for the damage they did (which no one disputes) for 25 years, and their profit was just fine the whole time. Now they portray themselves as “green” at every chance.
Your view about regulation is bizarre. You want unregulated food, drugs, securities, advertising, construction, hospitals, schools, prisons, roads, bridges, tunnels, aircraft and commerce? I don't.
Your view about regulation is bizarre. You want unregulated food, drugs, securities,…
You've tidily sidestepped my entire point and jumped to your usual condemnation.
I'll say it again: regulation serves often very worthy goals. We certainly need some. But it brings its own set of problems, which we don't like and don't know how to fix. So I'm in favor of as little regulation as possible.
“We need regulation” is a useless lesson to draw from the financial crisis, since we had it long before it happened. It was a great example of a huge regulatory failure. One set of regulators was encouraging more mortgages to dodgy borrowers, another set was taking the Glass-Steagal stops off the banks…and all because of politics. The political susceptibility of regulators is one of those problems we don't know how to solve.
IMHO the right amount of regulation for banks would give them plenty of elbow room to overpay their employees and would minimally constrain how they do business. It would simply make sure that when the market punishes their bloat and arrogance by bankrupting them–as it attempted to do last year–they won't take the whole world's economy down with them. Nor extort billions of dollars from taxpayers. Instead, we'd all gather around and watch.
I'll bring the marshmallows