Thursday, December 31, 2009


So different health care reform bills have squeaked through the Senate and the House and now must be melded together and passed again.

The right thing for the Democratic majority to do would be to recognize that it is trying to go too far, too fast. Let’s remember that Congress is trying to reorganize the equivalent of the entire British economy in one costly bill, with a slim majority held together by bribes and wishful thinking. This would be a good time to sharply pare back the legislation.

But assume they push ahead. What should those senators with major concerns about the bill demand? Plenty.

For one thing, they need to demand a real solution to the ludicrous plan to cut the fees of Medicare doctors by 20 percent in 2011. That was done cynically to keep the projected cost down. No one in Washington expects it to happen. But not doing so would explode the cost. Serious lawmakers must demand large spending reductions elsewhere to roll back that cut and prevent doctors from leaving Medicare in droves.

There also needs to be a “bank it first” requirement, so each new stage of spending goes into place only after the savings to pay for it have actually been obtained. Right now, it’s doubtful Congress will make the tough decisions needed to get those savings. Bill proponents say: “no sweat.” Well, if they’re so confident, they should accept a “trust but verify” requirement.

Lawmakers must also make sure the Medicare Commission - intended to force discussion of hard Medicare cuts - does not become an unelected Supreme Court of Health. That means nixing the administration’s demand that commission proposals go into effect unless Congress blocks them. Instead, Congress should have to sign off on any proposal.

To avoid another huge and unfunded entitlement, which would merely add to the debt burden on our children, Congress needs to remove the Community Living Assistance Services and Supports Act. This new social insurance program for disabled Americans has worthy goals. But it would mean very costly benefit promises without adequate future funding. The administration’s own actuary has condemned it as financially “unsustainable.” It should be sent back to the drawing board and introduced in separate legislation when it’s ready for prime time, if it ever is.

Huge inequities need to be fixed. Each lower-income household in the proposed exchanges would get thousands of dollars to help pay for coverage. But identical households that get coverage though the workplace would only get today’s tax break - worth a few hundred dollars at best. To the extent that employers “pay” for those families’ coverage, it means lower cash wages.

That’s grossly unfair. To maintain the cost and deficits targets, lawmakers need to trim back the subsidies in the exchange and share them with families that depend on employer coverage, or trim back spending elsewhere.

At last it’s agreed that the public plan has to go. But senators need to make sure their provision for a set of national private plans administered by the Office of Personnel Management (a federal agency) doesn’t turn into a public plan. OPM oversees a very successful program of exclusively private plans available to members of Congress and other federal employees.

Here’s the worry. OPM has a lot of power in reserve that could turn those private plans in the legislation into one-size-fits-all equivalents of public plans. It doesn’t do so today mainly because federal workers actually don’t want the government messing with their coverage! But lawmakers need to build in protections ensuring that OPM’s powers are strictly limited when managing new coverage for other Americans.

And lawmakers melding the two bills need to make sure the House’s philosophy of tax-and-tax successful Americans does not become the mantra. That would discourage small entrepreneurs and the others whose earnings and capital are needed to rebuild the economy. The Senate’s “Cadillac” tax on expensive health plans has problems, but at least it would encourage employers and unions at many firms to rebalance the mix of cash and health benefits in workers’ compensation, and so could help trim health costs.

Principled holdouts on this mammoth piece of legislation stressed their commitment to fiscal responsibility, to fairness and to preventing a back-door government takeover of our health system. If that commitment is genuine, and their votes are not simply up for sale, they need to have some real demands in the House-Senate negotiations.

Stuart Butler is vice president of domestic policy studies at the Heritage Foundation (

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