Monday, July 2, 2012

Some Final Thoughts On Obamacare

I’m taking the week off until next Monday. But before I go, here are my final thoughts on the ObamaCare ruling. Basically, while this is a legal disaster for the country, I think politically this is a very good thing. Also, by way of a bonus, at the end of this article, I’ve included some links to the CommentaramaCare proposal which outlines the reform we really need.

The Supreme Court Fails: Legally speaking, the ObamaCare decision is horrible. Some conservatives have latched onto the fact Roberts made a lot of great points about how the Commerce Clause and the Necessary and Proper Clause don’t extend nearly as far as the statist would have you believe. Sure, that’s nice. BUT then he turns right around and opens an unlimited window for Congress to use its tax powers to do anything! There may eventually be limits on this power, but as it stands right now, this is one of the five or six biggest power grabs in Constitutional history.

It is also troubling that this decision is based on verbal semantics: punishing someone for non-compliance is not the same thing as forcing someone to comply. Really?! That’s nonsense! That’s a distinction without a difference -- a verbal game -- and it’s disturbing that the Supreme Court would accept this double-speak as reasoning. This will lead to a whole new world of control once Congress realizes it can just “tax” you into compliance without ever triggering the limits on its power to “punish.” That’s troubling.

The Conservative Opportunity: Politically, however, this is a very different story. Politically, I think this decision is a Godsend for two reasons.

First, this decision will destroy the Democrats, and not just Obama. Human nature tells us that people forgive and forget misbehavior if it stops before the negative consequences kick in. So long as people assumed the Supreme Court would rein in ObamaCare, the public was very likely to forgive the Democrats and consider this a non-issues. Now that assumption is gone, and this decision revives the possibility of negative consequences. That will wake up the public and end its forgiving mood. Indeed, I would suspect this will endanger another 3-5 Democratic Senators in flyover country and could ultimately give us another 2-3 seats. And while I don’t think that will give us enough seats in the Senate to overcome a filibuster, it will be the difference between a majority (52-53 seats) and a solid majority (54-57 seats), which should be all we need under the new scorched-earth Senate.

Secondly, I think this ruling saved us from a disaster. If the Supreme Court had struck down the mandate, but left the rest, I have no doubt the Republicans would have declared victory and just moved on. That would have left a plethora of horrible things ensconced in law, including trillions in taxes, dirty deals with drug companies, anti-competitive requirements on hospitals and doctors, new entitlements, the unfunded expansion of Medicare, the creation of these insurance exchanges, etc. In effect, the least damaging part of the law would have been struck down and the other 99% of the harm would have remained. Now the Republicans will need to address the bill itself, and the pressure will be to repeal and replace the whole thing. That means they will actually need to fix much of this. That is the real reason this decision may ultimately prove to be a saving moment for the Republic, because it means the Republicans can’t ignore the real problems.

Repealing Stupidity: Repealing ObamaCare should be simple. Passing it by reconciliation means that by definition it can be repealed by reconciliation. And reconciliation only needs 51 votes. Naturally, the Democrats (and some weak Republicans) are whining that somehow the bill can’t be repealed by reconciliation, but that’s nonsense.

Building A New Crisis: There is an economic crisis built into ObamaCare and it will be interesting to see what happens. The law expands Medicaid to the point that it will shatter state budgets. But states don’t need to sign up for this. Indeed, the Supreme Court ruled that the states can refuse to expand Medicaid as the bill requires, and the Federal government cannot withdraw Medicaid funding if the state so chooses -- it can only withhold the additional funds intended to cover that expansion.

But just because states don’t need to sign up, doesn’t mean they are smart enough to refuse. A few Republican governors have said they won’t sign up, but most see this more as an opportunity to negotiate a lot of freedom from the requirements of Medicaid. It will be interesting to see what they obtain. The problem, however, lies with the Democratic states. . . as always. These idiots are rushing to sign up as a show of support. This will result in a dramatic increase of their Medicaid costs, which will bust their budgets. At first, the federal government funds this expansion, but within a couple years, that subsidy vanishes. That’s when states like California and New York will find themselves in budget hell (as if they weren’t already). Without federal money, I don’t see this as sustainable, but how will they cut off so many people once they sign them up? Watch out if you live in a liberal state which accepts this expansion!

Death to the Middle Class: Conservative economist and Senior Economics Writer for the Wall Street Journal, Stephen Moore, just made an interesting statement. He claims that 75% of the cost of ObamaCare will fall on the middle class -- people making less than $125,000 per year. That’s not at all surprising because that’s who always pays for these programs. Still, this is unwelcome news for a middle class which has been hit with falling incomes, falling asset values, falling home prices, massive inflation, an ever-higher tax burden, and fewer job prospects. At some point, this rubber band will break.


To sum up my thoughts, this bill is a disaster. It will crush the stupid states, it will crush the middle class. It will damage our healthcare system a lot. The Supreme Court’s ruling has damaged our Constitution. BUT this will wake up the public and will help to finish off the Democrats. It will also force the Republicans to act. In the end, this decision may prove to be the moment which spurred the Republicans to actually fix the healthcare crisis, and thereby save the country. Let’s hope.

Finally, by popular demand, here are some links for you to consider:
First, here’s what’s wrong with our healthcare system: Out of Control Costs, Out-of-Control Costs II, Access, and Quality Control Problems.

Secondly, we have a report card on why ObamaCare fails to address these problems: FailureCare.

Lastly, we have CommentaramaCare, a proposal on how the system should be fixed: Com-Care Tort Reform, Com-Care Medical Reforms, Com-Care Coverage Reform, and Com-Care Summarized and Priced.
Have a happy and free Fourth everyone!

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