The March of the Senate Democrats | HughHewitt.com | 12.21.09

As one early morning report puts it, the Senate is now “marching” to passage on Christmas Eve of its version of health overhaul.  Three motions preliminary to a cloture vote have passed 60-40, all Democrats for, all Republicans against.  What does this Democrats-only bill do?  What are the consequences?

As it stands today, the health overhaul bill is a hoax.  We all may know some part of the litany, but it is worth keeping in mind just how many forms this hoax takes.

The administration promised overhaul would come with not a penny of new taxes for Americans earning under $250,000 a year, later lowering that to $200,000 for individuals.  Estimates now hold that 25 percent of Americans earning under $200,000 will see their taxes go up. ( http://tiny.cc/SSfFu )

The administration has said repeatedly that if you like your current plan the health overhaul will let you keep it. But the bill includes numerous definitions of care that will act as Federal mandates layered on top of the state mandates that have done so much to drive up health insurance costs. Insurance plans that don’t comply will have to change or close down.  Those that change will be the New Coke of health care.  Same label.  Different formula.  Different taste.  Current plans in name only.

The administration insists that the bill will lower the deficit over the next decade. That’s because tax increases will kick in early, benefits much later (see http://tiny.cc/UYhLs ). But after the government’s planning horizon has expired, the bill will take spending as a proportion of national income permanently beyond the levels reached only in a single year in our history to date – the peak year of spending in World War Two.   This will mean not just higher deficits but a fundamental altering of the American economy, with the U.S. embracing the economics of Europe.

Yet among the bill’s assumptions is that Congress will cut Medicare reimbursement of doctors.  Already cuts and slow payments have led to doctors opting out of Medicare in rising numbers.  Is Congress really prepared to impose and stick by cost containment that hollows out the program?  If not, even within this decade the Senate’s deficit projections will prove a hoax.

And with Nebraska now receiving Medicaid cost relief apparently in perpetuity and Louisiana getting something similar, how long will it be before every senator will demand federal absorption of these state budget busters?  And what will that do to the federal deficit?

History points where we are going.  As Sally Pipes (one of the nation’s most astute economists analyzing the health overhaul and president of Pacific Research Institute, which I chair) has noted, in the mid-60s when Medicare was passed “it was projected to cost $12 billion in 1990. Well in fact it cost $107 billion. Last year it cost $427 billion; it’s estimated in 2017 to cost $884 billion.” Today Medicare carries a $73.4 trillion unfunded liability – a national debt six times as large as our official nation debt.

If Senate Democrats do not know what this means, they should talk to the People’s Bank of China.  ShanghaiDaily.com (http://tinyurl.com/ykmtv92 ) reports that on Friday the bank’s deputy governor “told an academic audience that… [t]he United States cannot force foreign governments to increase their holdings of Treasuries. Double the holdings? It is definitely impossible.”

Senate Democrats clearly do not understand or perhaps even care about nation’s finances.  They are under tremendous, even unprecedented, pressure from the White House and special interests like the thuggish Service Employees International Union. The only numbers left to move them come from the polls.

Here is where the issue stands today, then.  If Democratic senators up for reelection see their numbers tank between now and Christmas Eve, one or two may say no. Which senators?  The most likely are those from centrist states: Indiana’s Evan Bayh, North Dakota’s Byron Dorgan, and Arkansas’ Blanche Lincoln.  But unless polls make overwhelmingly clear that voters understand the hoax, abhor it, and will remember it on election day eleven months hence, the march of the Senate Democrats will continue, health overhaul will pass the Senate on Christmas Eve, and in all likelihood will pass the Congress in January or early February. Wooden soldiers on parade.