By Peter Ferrara on 4.7.10 @ 6:09AM
When he was asking for our vote in 2008, then candidate Barack Obama most famously promised the American people:
And I can make a firm pledge. Under my plan no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.” [Emphasis added]
He didn’t just make that pledge once or twice. He promised it to the American people over and over, making it the centerpiece of his campaign.
His now enacted health care takeover bill directly violates that pledge. If you do not obtain the health insurance that Obama and Congressional Democrats now demand by law, either through your employer or directly yourself, then you must pay a new 2.5% income tax, or a minimum of $695 per person up to $2,085 per family. This applies to everyone making less than $250,000 per year as well as those making more than $250,000 per year. It cannot be logically denied that this violates a pledge not to impose any form of tax increase on such workers, though President Obama has, indeed, tried to so deny it.
But it gets worse. Because you don’t really avoid an effective tax increase by buying the required health insurance. Even with the budget crushing new entitlement subsidies in Obamacare, the mandated health insurance, with all of the required politically correct benefits and subject to highly expensive giveaway regulation, will be quite expensive, ranging up to 2% of income for people at 133% of poverty to 9.8% of income for people at 400% of poverty. That is like a new payroll tax, and everyone making less than 400% of poverty is making less than $250,000 per year.
But the pattern gets even worse. The above quoted pledge came right after an attack by Obama on his then GOP opponent John McCain for proposing to tax the Cadillac health plans of all workers, including those making less than $250,000 a year. Obama said then, “The better your health care plan, the harder you fought for your good benefits, the higher the taxes you’ll pay under John McCain’s plan.” But the health care legislation President Obama just signed taxes precisely the Cadillac health plans of workers making below $250,000 per year, as well as those making above $250,000, albeit after 2018.
The last time a President so blatantly violated a similar pledge was during the Administration of the first President Bush. After campaigning and winning in 1988 on a pledge of “Read my lips, no new taxes,” he broke that pledge in agreeing to the 1990 budget deal. The public rightly voted him out of office in the next election, because if a candidate once elected can so blatantly violate what he campaigned on, then we have lost our democracy, as there is then no way to express the will of the people among different policy choices.
President Obama owes John McCain an apology, not to mention the American people. But he owes one to Hillary Clinton too. During the Democrat primary battle, Obama attacked Hillary for supporting an individual mandate forcing people to buy the health insurance the government specifies. But the health care legislation he just signed includes precisely such a mandate.
The pattern goes all the way back to Barack Obama’s first appearance on the national stage, at the 2004 Democrat national convention. There he trumpeted as a central theme a call for a new era of post-partisanship, or bipartisan cooperation. He continued promoting that popular theme right through the 2008 election.
But since the election, what has been bipartisan? He laughed Republicans out of the room during the stimulus debate, saying “I won the election.” His Cap and Trade energy tax proposal squeaked through the House on a virtual party line vote, with no concessions to Republicans. Congressional Democrats locked Republicans out of health care deliberations, and then passed the legislation on a total party line vote in both houses, without a concession sufficient to win a single Republican vote. And so it has gone on every issue.
Health Care Deceptions
The pattern continues to this day. On April 1, Obama was in Portland, Maine, trying to sell the just enacted health care legislation. He proclaimed, “And over time, costs will come down for families, businesses, and the federal government, reducing our deficit by more than $1 trillion over the next two decades. That’s what this reform will do.”
Is it not deceptive for the President of the United States to run around the country saying that the Congressional Budget Office scores his legislation as reducing the deficit by a trillion dollars over the next two decades, without revealing that this deficit reduction estimate is based on an assumed $2.5 trillion in Medicare cuts as specified in his legislation? Such draconian Medicare cuts will sharply reduce the health care services that doctors and hospitals will be willing to provide to seniors. More and more seniors will be told in the coming years to just take the painkiller and go home, as President Obama suggested last year. With those cuts, and others, incentives will be squelched for investing the billions necessary for development of the breakthrough health care technologies, the life saving health care innovations applying the latest medical science, and the now possible miracle cure drugs improving and saving lives.
I thought the Obama health care gravy train was about providing health care for all. Or was it really about creating health care dependency for all, capturing voters for the Democrat political machine?
But President Obama continued last week in Portland, Maine, saying that under his now enacted health care overhaul “Insurance companies won’t be able to drop people when they get sick.” But that was, in fact, the law long before Obama ever came to Washington, because health insurance that can be canceled just because you get sick is like fire insurance that can be cancelled after your house catches on fire, or like flood insurance that can be canceled after the flood. That’s not insurance at all, and the prohibition on such cancellation can and should be strictly enforced without Obamacare’s trillion dollar new entitlement, 100 new health care bureaucracies, government mandates, multitrillion dollar tax increases, health care rationing, and draconian Medicare cuts.
Self-Deception and Dangerous Delusions
Another passage in President Obama’s Portland health care stump speech indicates something else is going on beyond a pattern of deception. Obama said:
So now that this bill is finally law and all the folks who have been playing politics will finally have to confront the reality of what this reform is, they’re also going to have to confront the reality of what it isn’t. They’ll have to finally acknowledge that this isn’t a government takeover of our health care system. They’ll see that if Americans like their doctor, they will keep their doctor. And if you like your insurance plan, you can keep it. No one will be able to take that away from you. It hasn’t happened yet. It won’t happen in the future.
This sounds more like someone who is quite sure that the health care legislation has been grossly misunderstood and that he will be vindicated by the reality of the now enacted legislation.
So let me be the first to reveal that the now enacted legislation is, indeed, a government takeover of the health care system. President Obama’s legislation creates over 100 new government bureaucracies, agencies, boards, commissions and programs with power over health care. These government authorities will now be involved in telling doctors and hospitals what are the “best practices” in health care, what works in health care and what doesn’t, what health care is cost effective, and what is quality health care and what isn’t, as if centralized government bureaucracies will know this so much better than your own, presumably hapless doctor.
Through both the individual and employer mandates, President Obama’s legislation also forces individuals to buy and employers to provide the health insurance with the exact benefits that he and his wise bureaucrats in Washington are certain you must have, regardless of what you want. Obama and San Francisco Democrat Nancy Pelosi kept repeating the mantra that the bill would provide “choice and competition.” But with these mandates, where is the choice, not to mention the competition? They could have created real choice and competition in a national market by allowing interstate sales of health insurance. But they were not in favor of anything that did not expand the power and reach of government, which is not where you get “choice and competition.”
Under President Obama’s legislation, the government also dictates to insurance companies exactly what health insurance they must sell, to whom they must sell it, and at what price, and even redistributes premium income among insurance companies through “risk adjustment.” There is actually no aspect of essential health care that President Obama’s legislation leaves beyond government control.
Moreover, President Obama has now bet his Presidency on “If you like your health insurance plan, you can keep it.” But you can’t keep your health plan if your employer terminates your coverage. Yet the legislation President Obama just signed encourages employers to do precisely that, as they can avoid the much higher and rising costs of the mandated health insurance by dumping their employees into the Exchanges, for a penalty that is a fraction of such costs. The expert Lewin Group estimated that close to 20 million workers would lose their employer health plan in this way, an analysis which the Democrats just dismissed as a fascist plot. I say it will be a lot more.
You also can’t keep your plan if your health insurer opts out of the business. President Obama is so certain he knows so much more than his own Medicare Chief Actuary, who has said that Obama’s sharp cuts for Medicare Advantage health plans will cause close to 10 million seniors to lose those plans, which provide them better benefits and coverage than standard Medicare.
And you also can’t keep your doctor if he terminates you because he is cutting back on his practice, or retiring early as an Obamacare refugee. Or if you are a senior and he stops taking Medicare patients due to Obama’s draconian Medicare cuts.
Perhaps Obama thinks that since his legislation doesn’t even become fully effective until 2014, and it will take time to have these effects, you will forget these promises he used to sell it, just as you may have forgotten all of his campaign pledges from 2008. Or maybe he thinks he will be out of office by the time you realize what has happened, even after a now remotely possible second term.
But maybe he is self-deceived to the point that he actually believes the health care fantasies he is weaving, which certainly seems to be true of Nancy Pelosi and other Congressional Democrats. Such self-deception fantasies are clearly on display in the controversy over the reported losses by major American companies already resulting from the passage of President Obama’s health care legislation. The companies tried to tell the Democrats these losses would result from the legislation. But, again, the Democrats simply dismissed what they had to say as a right-wing plot. Now the Democrats are shocked at the reality of the companies reporting the losses in legally required public accounting statements. If those reported losses are not correct, then the SEC can and should prosecute the companies.
But the reported losses are correct, as determined by professional accountants simply complying with the law. The reaction of top Congressional Democrats and the Obama White House simply reveals how out of touch with reality they are. President Obama and the Democrats promised us their government takeover of health care would promote jobs and economic growth by reducing costs for employers, but already it is doing just the opposite.
Beyond Health Care
But we see the same patterns on other issues beyond health care. During the 2008 campaign, Obama said, “Now, what I’ve done throughout this campaign is to propose a net spending cut.” Federal spending in 2008, when he was making this promise “throughout his campaign,” was $2,983 billion. President Obama’s own budget projects federal spending for this year of $3,720 billion, and for next year of $3,837 billion. That is some net spending cut. The health care legislation President Obama just signed involves by his own admission hundreds of billions in net spending and tax increases, just over the next 10 years. I say it will be a lot more.
On February 13, President Obama held a celebratory event at the White House for signing of the so-called Pay Go legislation. Obama explained, “It says to Congress you have to pay as you go. You can’t spend a dollar unless you cut a dollar elsewhere…. Now, Congress will have to pay for what it spends, just like everybody else.” But every time President Obama and Congressional Democrats want some new government spending, they simply waive this pay go rule, as they did recently for another supposed jobs bill, or as they did for recent extensions of unemployment benefits. When Republicans try to enforce President Obama’s pay go rule by holding up the new spending until it is paid for, they are pilloried by Democrats and their media allies as against jobs or unemployment benefits for the starving long-term unemployed. Pay go is just employed when it is helpful to justify yet another tax increase, and certainly to shortcircuit any notion of real tax cuts.
On March 31, President Obama held another White House celebration to announce new offshore drilling. But as we will discuss in detail in a future column, the actual policy adopted took offshore drilling off the table in the Pacific, a large portion of the Atlantic, much of Alaskan coastal waters, and in some of the most promising areas of the Gulf of Mexico, even delaying by a year already planned drilling off the coast of Virginia. The policy also terminated already issued leases for some Alaskan offshore drilling, as well as even some onshore leases in quite promising northern U.S. fields.
But Mallory Factor recently provided a valuable public service in finding two promises from his 2008 campaign that President Obama has managed to keep. One was “Date Night,” a pledge that if elected he would take his wife Michelle out for a date in New York City, which he did at great taxpayer expense for the Air Force One trip and for blanket Secret Service coverage, greatly worsening city traffic jams. The other was his pledge to get his girls a dog, which he did in acquiring Bo, a Portuguese water dog.
Peter Ferrara is director of entitlement and budget policy at the Institute for Policy Innovation, a policy advisor to the Heartland Institute, and general counsel of the American Civil Rights Union. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under the first President Bush. He is a graduate of Harvard College and Harvard Law School.