Dear Editor,
In recent weeks Mr. Ray Peck has had multiple letters published in our local paper. He lists himself from Helena and thus I am not sure why he feels the need to submit his opinion to the residents of Granite County. However, given his multiple questions within his letters I would like to take a moment to move past political punditry, and focus not on a tautological opinion, but on an educated analysis.
Mr. Peck implied that "right wing folks back east" have complained of being maligned by the process used to pass health care reform, which I might add, is not health care reform,
it's health insurance reform (but we'll come back to that). He talked of the minority party acting like they should be in charge, even though they refused to allow the democrats to be in charge before they ultimately took back over. He went on to mention their concern over the national debt, which he said "we all have to some extent" before saying that President Clinton was the only president that was successful in reducing the debt (false-President Clinton produced a surplus that was subsequently spent by the Bush administration and not used to pay down the debt). I might also add that the budget was balanced with Bill Clinton as president, but the Balanced Budget Act of 1995 was passed under the direction of Newt Gingrich and the “Contract With America” given to the American public by the Republican takeover of Congress in 1994. Republicans hadn’t controlled Congress in over 40 years. Surely they had nothing to do with it. Finally he asked the "rabble rousing teabaggers" to explain some of these matters. I am not a "tea bagger" but would like to respond to his quarries none-the-less.
Let me say first that President Obama is right. We need health care reform, badly, and for reasons that President Obama knows go way beyond the simple arguments that costs are too high, care is deficient, access is limited, etc. Mr. Obama knows that we need health care reform to keep from going broke, and here's why. We currently spend 40% of our national budget paying for entitlements, namely, Medicaid, Medicare, and Social Security. Moreover, according to the Congressional Budget Office (the federal accountants), if our economy grows at the average pace of the top 30 industrialized nations in the world (around 3.3% annually), in just 27 years it will require 100% of our budget to cover the costs of entitlements. That means nothing else for defense, schools, roads, education, etc. Every penny, just to cover medicaid, medicare, and SS. We all know that SS has been raided, we can't change that now. I might also add that this was done before the people of my generation, now strapped with the financial burden, could even vote; but the deficiencies go way beyond that. As the government continues to borrow money (last year we borrowed 63 cents for every dollar we spent) inflation will continue to skyrocket which means cost of living increases go up. In order to keep from maxing out our spending on entitlements, Mr.Obama has tried thus far to do two important things. First, is growth. With economic growth, tax revenues grow, which in turn can be used to meet the costs of entitlements (currently 7000 baby boomers become eligible to draw social security every day). During a recession, government is the only entity capable of securing the funds necessary to spend in order to get the economy moving. Thus, we got the stimulus package.
Unfortunately, Mr. Obama spent the money before fixing the problem. In 1999 President Clinton and the Republican congress bought into the "too big to fail" concept and passed the Financial Services Modernization Act. This Act repealed most of the New Deal banking regulations instituted by FDR in the Glass-Steagall Act of 1933, intended to prevent another Great Depression. Glass-Steagall banned banks, brokerages, and insurance companies from doing business within each other’s industries. Moreover, investment banking and commercial banking were required to be separate from each other. Once these regulations were removed, it took less than ten years for our economy to effectively collapse yet again. Two years after the collapse, Mr.Obama, the democratic congress, and specifically Chris Dodd (D-CT), chairman of the Senate Banking committee, have yet to do anything to regulate the banking industry once more. So, we spent one Trillion dollars (most of which was borrowed from China) to stimulate our economy, increase consumer confidence, and get people to start reinvesting their money; all before we did anything to guarantee those people that had lost their retirement benefits, nest eggs, health benefits, etc. that it was safe to yet again reinvest their money. Did our democratic congress or Mr.Dodd, who was the ranking member of the Senate Banking Committee, and the key ally in helping Mr. Clinton pass the Financial Services Modernization Act of 1999 come out and say...ooops, wrong idea? Nope. Did he say, we thought it was safe to get rid of Glass-Steagall but we were wrong and we're going to put it back in place to make sure this doesn't happen again...Nope. He argued that the problem went way beyond the repeal of Glass-Steagall; proceeded to ally with Mr. Obama in borrowing and spending 1 Trillion borrowed dollars, and dare I say it....DID NOTHING (thus far)...to fix what caused the financial collapse in the first place. I would ask Mr. Peck, how effective he believes Mr. Obama’s attempt at stimulating growth will be, in order to meet the financial burden of federal entitlements, in light of the Democratic held government having done nothing to fix the banking collapse that caused the recession in the first place.
Now we can move to the second thing President Obama has done to help keep the costs of entitlements from maxing out the federal GDP. Health care reform. In order to make medicaid and medicare cheaper, and less of a burden on the federal budget, we need to lower costs. So, none other than our very own Senator Max Baucus (D-MT) authored the recently passed and amended America's Affordable Health Choices Act of 2009. A 2,700 page spellbinder attempting to lower the cost of insurance and an indirect attempt to lower health costs.
First, lets look at the attempt to lower insurance rates. But before explaining why the bill is insufficient, I would like to digress for a moment and help Mr. Peck understand that it is insufficient. Rather than using my own argument, I will use those of the Democratic party of which Mr. Peck writes with defensive support. Mr. Baucus, our other Senator, Jon Tester (D-MT), and over 40 other members of the democratic majority in the U.S. Senate have all stated that the bill has several flaws that will need to be addressed. You can read their press releases at VoteSmart.org. Just last week, in one of his rare statements on the senate floor, Mr. Tester partook in a colloquy with Senator Sherrod Brown (D-OH). During their give and take, Mr. Tester proceeded to address the Republican argument that health insurance costs will rise in spite of the Affordable Health Choices Act. His response, if I may briefly paraphrase was, "they're going to go up anyway". Gee, here’s a funny idea Jon, how about doing something to actually lower the cost of insurance? How's that for a novel concept.
Well, here's what they did do. First they mandated that we all buy insurance. This will force many people at low risk of bad health to buy insurance anyway. Such will increase the "pool" of insured and specifically those that pay more for coverage than they receive in benefits. To offset those that can't afford it, the government will subsidize low-income households that can't afford the costs. This is essentially another entitlement; the government has mandated itself (and specifically us taxpayers), to help people that can't afford insurance buy it anyway. Here’s a crazy idea, why not institute regulations that lower the costs of care in order to bring down insurance rates so that people can afford it for themselves? Think about this for a second. Imagine you are an insurance company. You are a private industry and the government has now mandated that everyone buy your product and has even promised that they will help those that can't afford your product buy it anyway. Can you say JACKPOT!!!! This is nothing new, George W. Bush and the Republican congress did something similar when they passed the Medicare and Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), also know as Medicare Part D. As of January 1, 2006 the federal government now subsidizes the cost of prescription drugs for seniors. Not a bad idea at all. In fact, every post-industrialized country in the world does this. However, they regulate it. Under the MMA, unlike with other government programs, the federal government is not allowed to negotiate the price of drugs with the prescription companies. That means the prescription drug companies can charge whatever they want. As they increase their prices more and more people need subsidies to cover the costs, and the federal government has obligated itself to pay whatever the pharmaceutical companies want.
Well, here's what they did do. First they mandated that we all buy insurance. This will force many people at low risk of bad health to buy insurance anyway. Such will increase the "pool" of insured and specifically those that pay more for coverage than they receive in benefits. To offset those that can't afford it, the government will subsidize low-income households that can't afford the costs. This is essentially another entitlement; the government has mandated itself (and specifically us taxpayers), to help people that can't afford insurance buy it anyway. Here’s a crazy idea, why not institute regulations that lower the costs of care in order to bring down insurance rates so that people can afford it for themselves? Think about this for a second. Imagine you are an insurance company. You are a private industry and the government has now mandated that everyone buy your product and has even promised that they will help those that can't afford your product buy it anyway. Can you say JACKPOT!!!! This is nothing new, George W. Bush and the Republican congress did something similar when they passed the Medicare and Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), also know as Medicare Part D. As of January 1, 2006 the federal government now subsidizes the cost of prescription drugs for seniors. Not a bad idea at all. In fact, every post-industrialized country in the world does this. However, they regulate it. Under the MMA, unlike with other government programs, the federal government is not allowed to negotiate the price of drugs with the prescription companies. That means the prescription drug companies can charge whatever they want. As they increase their prices more and more people need subsidies to cover the costs, and the federal government has obligated itself to pay whatever the pharmaceutical companies want.
Let's come back to health insurance. The democratic government has now done the same thing. Insurance companies can set whatever prices they want and the feds have promised to pay, no matter what the cost. Is this a good idea? It's funny because President Obama and the democratic congress got on TV and other media and accused the republican party of being the "do nothing" party. Actually the GOP did make suggestions. Suggestions that were ignored time and time again, and dismissed as "fear mongering". Suggestions like allowing people to go out of state to buy their insurance, creating greater free market competition which leads to lower costs...democrats said no to that. Allow people to purchase drugs from Canada at a cheaper rate than buying them in the U.S...nope to that too. I can go on and on, but I've written a novel already. What's more, don't you find it funny that the insurance industry was eerily silent while all of this was going on. If this bill was going to hurt the insurance companies, don't you think they would have tried to convince the public that the bill was going to put them out of business or affect their ability to cover people. Heck no. They licked their chops and will continue to do so all the way to the bank. Do they care that the government is going to force them to cover people with pre-existing conditions, or that they can't drop coverage, etc....nope. And why not? Because they can charge whatever they want and the feds will pick up the tab for those that can't afford it. Do you know what democratic Senator received the most amount of money from the insurance industry in their most recent election campaign? None other than the bill’s author, your very own Mr. Max Baucus. Were they fooled? Did Max Bacus take their money and than regulate their industry, crippling them into covering people they had previously refused coverage too? Nope, he created another entitlement that will speed up the national debt clock pushing our country closer to bankruptcy.
So, what did they do to lower the costs of care? In short, they created a hodge podge. Most of the 2700 pages of the health care bill institute pilot programs. Mr. Obama once again started off on the right path before horribly failing (see stimulus before banking reform). President Obama and Max Baucus took the suggestions of over 10,000 doctors, nurses, hospital administrators, pharmaceutical representatives, health equipment companies, social workers, etc. and asked them what changes needed to be done to lower costs. Almost every one of these suggestions are now pilot programs that will be instituted on a limited scale to see how effective they are at limiting costs. Not a bad idea, this is how he got it right...but once more, here's how he got it wrong. As Atul Gawande recently pointed out in his article "testing, testing" in the New Yorker, in the early 1900's agriculture was crippling the U.S. economy. American families were spending over forty percent of their income on food and almost half of the American work force made their living by farming. So the federal government passed multiple bills during the first decade of the 20th century. They didn't know what would work but needed to lower the cost of food in order to free up part of the American work force to work in production to foster economic growth. They were willing to try many things in order to find out what works. Which they did, and low and behold they found several things that worked (which I will not get into here). Bills that worked were expanded and expounded. In just 20 years the cost of food was cut in half, as was the amount of people working in agriculture to make a living. President Obama is trying to do the same thing with pilot programs here. Here's the problem, what happens when they do actually find things that lower the costs of health care?
Whatever they find will have to lower costs without affecting the companies that are making money. Just like Max Baucus did with the Affordable Health Choices Act, only he left out the reforms that might actually lower costs. The well-oiled lobby machines of today did not exist in 1900’s to the extent that they do today. To give an example of how effective they are we can look at Senator Frank Lautenberg (D-NJ), who recently introduced the Polluter Pays Restoration Act, originally signed into law in 1980. This act instituted a fee on oil and chemical companies (those that required pollution in order to turn profit), the revenues where than used to clean up superfund sites. In 1995 these companies kicked their lobbyists into high gear and got Bill Clinton and the Republican congress to allow the bill to expire. In 2003, the fund finally went bankrupt and the funding of superfund cleanup sites, such as the 30,000+ unclaimed abandoned mines in Montana, shifted from industries that pollute to you and me, the good ol' American taxpayer. The point is this, even if the health care bill finds things that can reduce health care costs do you not believe that the industries affected aren't going to lobby against them? Do you think the political climate in this country will motivate politicians to take actions that aversely affect those industries that contribute to their campaigns?
So, what did they do to lower the costs of care? In short, they created a hodge podge. Most of the 2700 pages of the health care bill institute pilot programs. Mr. Obama once again started off on the right path before horribly failing (see stimulus before banking reform). President Obama and Max Baucus took the suggestions of over 10,000 doctors, nurses, hospital administrators, pharmaceutical representatives, health equipment companies, social workers, etc. and asked them what changes needed to be done to lower costs. Almost every one of these suggestions are now pilot programs that will be instituted on a limited scale to see how effective they are at limiting costs. Not a bad idea, this is how he got it right...but once more, here's how he got it wrong. As Atul Gawande recently pointed out in his article "testing, testing" in the New Yorker, in the early 1900's agriculture was crippling the U.S. economy. American families were spending over forty percent of their income on food and almost half of the American work force made their living by farming. So the federal government passed multiple bills during the first decade of the 20th century. They didn't know what would work but needed to lower the cost of food in order to free up part of the American work force to work in production to foster economic growth. They were willing to try many things in order to find out what works. Which they did, and low and behold they found several things that worked (which I will not get into here). Bills that worked were expanded and expounded. In just 20 years the cost of food was cut in half, as was the amount of people working in agriculture to make a living. President Obama is trying to do the same thing with pilot programs here. Here's the problem, what happens when they do actually find things that lower the costs of health care?
Whatever they find will have to lower costs without affecting the companies that are making money. Just like Max Baucus did with the Affordable Health Choices Act, only he left out the reforms that might actually lower costs. The well-oiled lobby machines of today did not exist in 1900’s to the extent that they do today. To give an example of how effective they are we can look at Senator Frank Lautenberg (D-NJ), who recently introduced the Polluter Pays Restoration Act, originally signed into law in 1980. This act instituted a fee on oil and chemical companies (those that required pollution in order to turn profit), the revenues where than used to clean up superfund sites. In 1995 these companies kicked their lobbyists into high gear and got Bill Clinton and the Republican congress to allow the bill to expire. In 2003, the fund finally went bankrupt and the funding of superfund cleanup sites, such as the 30,000+ unclaimed abandoned mines in Montana, shifted from industries that pollute to you and me, the good ol' American taxpayer. The point is this, even if the health care bill finds things that can reduce health care costs do you not believe that the industries affected aren't going to lobby against them? Do you think the political climate in this country will motivate politicians to take actions that aversely affect those industries that contribute to their campaigns?
In case you doubt this point, let me tell you how much money means to a campaign. In the 2008 congressional elections, 91% of candidates that won were the ones that raised the most money. Ninety-one percent. Now, corporation A comes to your elected official and says sure, this pilot program works but it's going to cut into our bottom line. If you vote for it not only are we not going to donate to your campaign, but we are going to give this donation to your opponent. Can you say double whammy? What would you do? My short answer, campaign finance reform and term limits, they work in Montana, they can work with the feds. We need representatives in government driven by the needs of their constituents, not their need to gather corporate campaign funds.
Now I know, I know, I'm a right-wing "fear mongering" member of the "do nothing" Republican Party. Well I do actually have an idea. What if I told you that there is a state that has experienced economic growth, as well as a decline in health costs during the current recession. As Senator Hutchison (R-TX) stated on the Senate floor December 6th of 2009, "since... tort reform has been passed in Texas, over 7,000 new physicians have flooded into our State--a 7,000 increase. The reason? Tort reform. Since passed just 5, 6 years ago, physicians in Texas have saved $574 million in liability premiums, and their liability rates have been cut an average of 27.6 percent, almost a 30-percent cut in premiums. What has this done? Today in rural counties (We have none of those here in Montana), the number of obstetricians has increased by 27 percent. Twelve counties did not have one obstetrician before this was passed, and now they do; 24 counties had no emergency room physicians, and now they do; and 58 counties, in addition to that, have added one more. Rural counties are the ones that have suffered the most, and every State in this Union has rural counties--every one. They are the ones who are hurt the most. Yet the Medicare cuts will take $135 billion out of rural hospitals' ability to serve Medicare patients. "
Now I know, I know, I'm a right-wing "fear mongering" member of the "do nothing" Republican Party. Well I do actually have an idea. What if I told you that there is a state that has experienced economic growth, as well as a decline in health costs during the current recession. As Senator Hutchison (R-TX) stated on the Senate floor December 6th of 2009, "since... tort reform has been passed in Texas, over 7,000 new physicians have flooded into our State--a 7,000 increase. The reason? Tort reform. Since passed just 5, 6 years ago, physicians in Texas have saved $574 million in liability premiums, and their liability rates have been cut an average of 27.6 percent, almost a 30-percent cut in premiums. What has this done? Today in rural counties (We have none of those here in Montana), the number of obstetricians has increased by 27 percent. Twelve counties did not have one obstetrician before this was passed, and now they do; 24 counties had no emergency room physicians, and now they do; and 58 counties, in addition to that, have added one more. Rural counties are the ones that have suffered the most, and every State in this Union has rural counties--every one. They are the ones who are hurt the most. Yet the Medicare cuts will take $135 billion out of rural hospitals' ability to serve Medicare patients. "
Did the democrats put tort reform into their health care bill...nope. However, House Speaker Nancy Pelosi tried to lower medical malpractice. You can read about it on pages 1431-1433 of the House version of the Health Care Bill (I took the time to read both bills). She went so far as to create a fund that would pay states for finding ways to lower malpractice rates, not a bad idea. There is a financial incentive for states to try “alternative medical liability laws.” However, you don’t get the incentive if you have a law that would “limit attorneys’ fees or impose caps on damages.” Why would she do that? Because the insurance companies didn't want it. Just like they didn't want a public option, or the allowance of people to seek insurance out of state. That’s why, in spite of their willingness to use a large chunk of their political capitol on passage of an unpopular bill, they didn’t include a public option or anything else that would significantly increase competition and lower rates. I feel sick to my stomach every time I think about it. Much of the costs of the American Affordable Choices Act are going to be deferred to the states in the form of Medicaid and Medicare costs. I hope our state will move beyond the influence of the insurance, labor, and malpractice attorney lobbies and institute reforms that help people, not industry.
Finally, our debt. Mr. Peck brushed it off as a slight annoyance arguing that the Republican party has instituted unpopular reforms and thus the Democrats should be free to do so. The GOP got us into two "stupid wars", he said, and in his words wasted one trillion dollars; as if that is justification for the Democrats to have the ability to waste one trillion in return. Is that really what we have come too? Our country has been economically insulated because so much of the worlds reserve currency is the U.S. greenback (currently it sits at just under 50%). However, since Nixon took us off the gold standard, foreign countries have moved to shift their reserve currency away from the dollar. They are being encouraged even more by the amount of debt we are amassing along with the inflation that comes with it. As the reserve currency changes to the euro, yen, pound, etc., the world will no longer fear allowing our economy to suffer. As of now when we suffer, everyone suffers. American dollars are foreign gold. When the value of the dollar goes down (through trade or inflation), the value of all other currencies, backed by the dollar, go down as well. We can either really try to lower the costs of health care and entitlements to save our economy or we can wait until people decide they no longer want to buy U.S. Treasury bonds. Thus far in 2010 we have sold about 480 billion worth. Borrowed money needed to make sure everyone gets their social security check, their prescription drugs, their unemployment checks, etc. What happens when our economy can't pay for the things we have promised ouselves? What happens when people lose their newly promised health care subsidy. I haven't even gone into the "cadillac tax" or the burden this is going to put on business. I am not fear-mongering. I'm trying to save my country. I'm trying to find ways to meet the burden that was placed upon me as soon as I became a U.S. taxpayer. When I started paying taxes our country paid around 210 billion/year in interest on our debt. In ten years the CBO estimates that the interest (just the interest), on our debt will be 1 trillion. Thats trillion, with a T.
I bash Republicans and Democrats equally, they are both stupid. Regulate the banking industry so it doesn't collapse. Regulate the pharmaceutical companies so they don't have a blank check to charge whatever they wish on the American Taxpayer. Do like Germany and make health insurance companies non-profits. If they make astronomical profits, tax them. Pass reforms that lower health care costs instead of implementing pilot programs that will be heavily lobbied against if found to succeed. Do something that works. Not what the industry wants in order to increase their bottom line. Mr. Peck, I ask that you leave your ill-fated opinions at the barrier of bipartisanship and meet me at the alter of compromise. I will happily meet you there.Finally, our debt. Mr. Peck brushed it off as a slight annoyance arguing that the Republican party has instituted unpopular reforms and thus the Democrats should be free to do so. The GOP got us into two "stupid wars", he said, and in his words wasted one trillion dollars; as if that is justification for the Democrats to have the ability to waste one trillion in return. Is that really what we have come too? Our country has been economically insulated because so much of the worlds reserve currency is the U.S. greenback (currently it sits at just under 50%). However, since Nixon took us off the gold standard, foreign countries have moved to shift their reserve currency away from the dollar. They are being encouraged even more by the amount of debt we are amassing along with the inflation that comes with it. As the reserve currency changes to the euro, yen, pound, etc., the world will no longer fear allowing our economy to suffer. As of now when we suffer, everyone suffers. American dollars are foreign gold. When the value of the dollar goes down (through trade or inflation), the value of all other currencies, backed by the dollar, go down as well. We can either really try to lower the costs of health care and entitlements to save our economy or we can wait until people decide they no longer want to buy U.S. Treasury bonds. Thus far in 2010 we have sold about 480 billion worth. Borrowed money needed to make sure everyone gets their social security check, their prescription drugs, their unemployment checks, etc. What happens when our economy can't pay for the things we have promised ouselves? What happens when people lose their newly promised health care subsidy. I haven't even gone into the "cadillac tax" or the burden this is going to put on business. I am not fear-mongering. I'm trying to save my country. I'm trying to find ways to meet the burden that was placed upon me as soon as I became a U.S. taxpayer. When I started paying taxes our country paid around 210 billion/year in interest on our debt. In ten years the CBO estimates that the interest (just the interest), on our debt will be 1 trillion. Thats trillion, with a T.
Jon Arnold
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