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Thursday, March 25, 2010

Awaiting the Administrative SNAFU

The above chart was used in the healthcare debate to illustrate the bureaucracy that the bill would introduce. Apparently nothing relevant has changed and 159 new agencies and bureaus will be created. It completely defies logic and history that this complex set of regulatory, personnel and factual decisions will produce a rational, intended outcome.

Those banking on the implementation of the healthcare take-over to increase its public support are betting on a lottery ticket in a rigged drawing. Many discretionary decisions must be made under the new law by people that are yet to be appointed, trained, or identified. One of the first "Polish jokes" I learned in Poland was the tale of the new potato inspector. The young man was briefed on what are good and bad potatoes and given a pile of several hundred by his supervisor. He was told to sort them as instructed. Hours later the supervisor returns and see that only eleven potatoes have been sorted. He demands to know why. The young inspector-trainee simply replies: "Every potato is a decision."

No one can imagine the number of decisions or their consequences from the bureaucratic nightmare set out in this boondoggle. We already know that the doctrine of unintended consequences is alive and well in the act. Employers will be incentivized to drop health plans and pay smaller penalties ($750 per employee) in lieu of continuing their employee coverage. Major subsidies to employers cut off at 26 employees, so there is a build-in incentive to keep hiring lower. And, of course, it will be increasingly tempting to move facilities across borders to lower operating expenses. But hundreds of other discretionary decisions of what to include in approved plans, what to tax, and other "command-and-control" mechanisms will replace individual market-based decisions.

We know that the catastrophic insurance option (which is a cost-effective way to cover the risk of major illness), will disappear over the phase-in period, because it will not meet all of the coverages demanded as an "approved plan." Do millions of Americans even know that they will not be able to select the type of insurance that fits their needs anymore? What will the reaction to "one size (and only the most expensive size) fits all"?  Obviously millions of young workers have no idea that they will be compelled to buy insurance, especially insurance that covers things that present no health or economic risk to them. Add to this basic inequity built into the act that fact that some bureaucrats will decide what has to be covered and the makings of a disaster seem to lurk under every arrow in the chart.

Imagine the regulations that have to be promulgated. Litigation over the regulations?

Now interpose a Republican House and maybe a Republican Senate that will use every turn of events to stymie the program and advance the cause of repealing it in whole or part.

Anyone who thinks that it was a good idea to try to do a whole-cloth remake of American healthcare against the wishes of a clear majority of American likely voters will obviously join the ranks of fans of the tooth fairy. The new system will not implode, because it will never get to the point where it has enough internal pressure to inflate.

Sunday, March 21, 2010

The Hyjacking of Healthcare is now THE Issue

As I watch the agony of the House Democrats telling their sob stories to try to justify the greatest legislative mistake in modern times, I cannot imagine the incredible stupidity and arrogance that is driving their suicide pact. To think that this vote will somehow put these issues behind us is one of the most naive political hypotheses ever espoused. This issue will dominate the next two election cycles and will create a giant scythe that cuts down hundreds of Democrats at all levels of government. We have come to accept that only about half of the public votes, but conservative voters are significantly more likely to vote even in normal times (hence the inevitable 6-8 point difference in polls of "adults" versus polls of "likely voters"). But now we will see a growing disparity, with conservative voters making the elections a crusade against evil. There may be no counterpart to what is happening in our political history. Congressman Stupak's opponent, just announced apparently, is getting about one new hit a second on his FaceBook page. Expect that new polling in the coming weeks will see an acceleration of the trends of the last year and an emerging certainty that the Democrats will lose the House and probably the Senate. Given voter turnout dynamics, there is no safe seat for the party of Big Govwernment, Big Spending and Big Debt. [Scott Brown only lost Barney Frank's district by 500 votes, so no Democrat will be safe].

The singular issue of the next ten years or more will be federal spending and the deficit. The crisis in Greece is an omen of things to come as the US may join several other nations in a sudden realization that the price of the modern welfare state cannot be sustained with aging populations and the flight of entrepreneurs. The delusional assumptions given to the CBO will not change reality and the impact of passing the bill will itself slow economic recovery even more and lower revenue growth, making the deficit worse. Implementation of the healthcare bill, which appears to be passing, will stretch out for years and create a new controversy every month. The tax burden will kick in immediately and combined with the regulatory uncertainty will have a significant negative impact of job growth, which will only add to the Democrats' political Waterloo.

March 21, 2010 will go down in history as the high water mark of so-called American liberalism. Watching the last week as reluctant Representatives were essentially bribed with our tax dollars and IOUs from out children and grandchildren was painful. The whole notion that government exists to take from the productive public and redistribute the wealth in exchange for political support must stop. More than any other issue, the giant and amorphous healthcare bill has reminded Americans of how far from the proper function of government we have drifting.     

The price is not only our liberties, but the solvency of our nation.

We can retake Congress in 2010 and the new Congress can start to repeal this monstrosity by cutting off appropriations,  delaying executive appointments to the multitude of new agencies, conducting oversight of the actual program costs, and a dozen other programs that will assure that the will of the American people prevails over the Leftist dream of more dependency on government.

NOTE; If the Sunday night news is correct on the Senate Parliamentarian's view that the Social Security  provisions in the House "reconciliation" bill will disqualify it as not in order due to violation of the Congressional Budget Act rules, then the senate bill will be the law. That means that the tax on union benefits and the pro-abortion language will be the law, just for starters. None of the cover that House members thought they had in "reconciliation" will be there and the Democrats will have the Senate version that is unpopular even within their own base. We will then see the Democrats being compelled to go back to Congress and start an amendment process from scratch, since reconciliation is impossible. That means re-voting the whole thing  in pieces to get the House changes enacted, including a full Senate 60-vote hurdle. If nervous Democrats think that this vote and a simple Senate vote is the end game, they will be surprised IMO.  Healthcare amendments and fixes will likely be a major topic of legislation right up until the election this year.  Robbie Burns comes to mind, "Oh what tangled webs we weave, when first we practice to deceive!"

UPDATE: Stupak's opponent's FaceBook page went from a few hundred followers to 11,000 by 2 AM Monday morning. He will get the deserved blame more than most other House Members for this and I expect that every one of his last-minute YES voters will be defeated in the election. Bold prediction, and I have not check the last two election margins, but I cannot help but think that the conservatives in their districts will be on the warpath - beginning today.