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Obama Will Settle for Less on Health Care
The CBO put in writing the obvious: In its second decade, Obamacare significantly bends the curve upward -- increasing deficits even more than in the first decade.
This is obvious because Obama's own first-decade numbers were built on arithmetic trickery. New taxes to support the health-care plan begin in 2011, but the benefits part of the program doesn't fully kick in until 2015. That excess revenue is, of course, one time only. It makes the first decade numbers look artificially low, but once you pass 2015, the yearly deficits become larger and eternal.
Three CBO strikes and you're out cold. Though it must be admitted that the White House itself added to the farcical nature of its frantic and futile cost-cutting when budget director Peter Orszag held a three-hour brainstorming session with Senate Finance Committee aides trying to find ways to save. "At one point," reports the Wall Street Journal, "they flipped through the tax code, looking for ideas." Looking for ideas? Months into the president's health-care drive and just days before his deadline for Congress to pass real legislation? You gonna give this gang the power to remake one-sixth of the U.S. economy?
Hardly. Whatever structural reforms dribble out of Congress before the August recess will likely not survive the year. In the end, Obama will have to settle for something very modest. And indeed it will be health-insurance reform.
To win back the vast constituency that has insurance, is happy with it, and is mightily resisting the fatal lures of Obamacare, the president will in the end simply impose heavy regulations on the insurance companies that will make what you already have secure, portable and imperishable: no policy cancellations, no preexisting condition requirements, perhaps even a cap on out-of-pocket expenses.
Nirvana. But wouldn't this bankrupt the insurance companies? Of course it would. There will be only one way to make this work: Impose an individual mandate. Force the 18 million Americans between 18 and 34 who (often quite rationally) forgo health insurance to buy it. This will create a huge new pool of customers who rarely get sick but will be paying premiums every month. And those premiums will subsidize nirvana health insurance for older folks.
Net result? Another huge transfer of wealth from the young to the old, the now-routine specialty of the baby boomers; an end to the dream of imposing European-style health care on the United States; and a president who before Christmas will wave his pen, proclaim victory and watch as the newest conventional wisdom reaffirms his divinity.