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Our Own Philosopher-King

By Harold Meyerson
Wednesday, November 24, 2004; Page A21

Though his reelection campaign brilliantly marketed President Bush's anti-intellectualism, the truth is that his administration has trusted more to pure theory than virtually any modern president's. The Iraq war is a triumph of ideology over the facts on the ground (it's certainly not a triumph of anything else). And, as it's currently shaping up, Bush's second term looks to be even more theory-driven than his first.

Theory certainly is driving the administration's tax policies. In his first term, Bush took an ax to the taxes on dividends and mega-estates. In his second term, according to a story by The Post's Jonathan Weisman and Jeffrey H. Birnbaum, the president is looking at eliminating taxes on dividends and capital gains and creating generous tax shelters for all investment income. The theory here is that investment, not labor, is the real creator of wealth -- so the taxes on investment income will be scrapped, while those on wages will keep rolling along.

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And in the name of this theory, Bush seems willing to sacrifice much of the social compact that made America, in the second half of the 20th century, the first majority middle-class nation in human history.

To pay for his investment tax cuts, Weisman and Birnbaum report, the president is considering scrapping the tax deduction for employer-provided health insurance. This could mean that businesses would no longer be able to deduct from their tax bills the value of the health coverage they provide. Or it could mean that employees would have to pay taxes not just on their wages but on the value of the health coverage they receive. Or it could mean both.

It's hard to imagine a greater disruption of the way we live now. According to a September report from the Kaiser Commission on Medicaid and the Uninsured, 156 million Americans currently receive individual or family health coverage through an employer. Workers, of course, pay a share of their coverage, and that share is growing as employers shift the burden toward their employees in the face of rising health care costs.

According to a survey from the Labor Research Association, unionized workers on average pay $2,341 yearly for family coverage, while nonunionized workers pay $3,282. But the total average family annual premium now comes to $9,950 -- a figure well beyond the reach of median income families if their employers stopped providing coverage or greatly curtailed it.

Employer-provided health insurance in America is something of a historical accident.

During World War II, when wages were frozen, the United Steel Workers and United Auto Workers won health coverage for their members at the bargaining table, setting a pattern for much of the rest of the economy. Today the pattern is being set by nonunion Wal-Mart rather than unionized General Motors. Fewer employers offer health coverage these days. Most employers scale back benefits, and the number of medically uninsured Americans has risen to 45 million. Either the government must step in to pick up a greater share of the cost, or individuals will just have to go it on their own.

The Bush administration has made it abundantly clear that it thinks government should play a smaller role in providing health care. Now, if it goes ahead with plans to tax employer-provided health benefits, it will significantly reduce the role of businesses in providing health coverage, too.

Never mind that the 45 million Americans who are currently without insurance haven't declined coverage as a matter of preference; on the whole, they simply can't afford it. Never mind that families with incomes of $50,000 cannot find an additional $6,000 or $7,000 for health coverage, or that families with incomes of $80,000 will be trading off their kids' college tuition savings to purchase their health care. These are mere facts, which are as nought in the realm of high theory where Bush's unworldly philosophers reside.

There are other theories out there, of course, theories that propound that health care is a right and should not be rationed on the basis of income. But to this president, the sanctity of wealth accumulation eclipses such other doctrines as egalitarianism. And to this president, the sanctity of theory -- his theories -- obviates the need for anything so small-minded as an empirical test. The Bush presidency is shaping up as the golden age of half-baked philosophes, from neocon adventurers to free-market snake-oil vendors.

The Iraqis have already seen how the champions of American unilateralism have failed to secure their nation. Now, with the capital uber-alles whizzes unleashed for the president's second term, we'll see how far our philosopher-king can go to undermine economic security in our own nation.


© 2004 The Washington Post Company