The Country Thinker

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Thoughts on Law

I have to give Pres­i­dent Obama credit for ora­tory mas­tery, in par­tic­u­lar his abil­ity to mis­lead the Amer­i­can sheeple into think­ing he opposes that which he favors. The clas­sic exam­ple is when Obama dis­cusses “the failed poli­cies of the past,” which leads many lis­ten­ers to con­clude that he actu­ally opposed the sub­stance the George W. Bush admin­is­tra­tion. Noth­ing could be fur­ther from the truth; Obama has been Bush on steroids.

From inad­vis­able heavy-​​handed new reg­u­la­tions on busi­ness, to expan­sion of the enti­tle­ment state, to mas­sive deficits, to Key­ne­sian “stim­uli,” to bailouts, to dol­lar deval­u­a­tion to “boost” exports, to crony cap­i­tal­ism, to war “surges,” to divi­sive par­ti­san­ship, Obama has dou­bled down on Bush’s poli­cies. “Any­thing Bush Could Do, I Can Do Worse” ought to be his reelec­tion theme song.

So what has been the worst law that bears Obama’s sig­na­ture? There cer­tainly is no short­age of contenders.

The Stim­u­lus Bill is an easy one to vie for to spot because it was such a colos­sal fail­ure. Even the CBO acknowl­edges that the bill will harm the econ­omy in the long term. At over $800 bil­lion it was the largest appro­pri­a­tions bill in human his­tory, and yes, it goosed GDP while it was run­ning at full steam. But, once the dol­lars petered out, so did the bump to the num­bers. A suc­cess­ful stim­u­lus bill (the­o­ret­i­cally) gives the econ­omy a jump start. No such thing hap­pened with the Stim­u­lus Bill. And now we will pay inter­est on it until the end of U.S. his­tory, or until we repu­di­ate our debt, whichever comes first.

And of course, there is the Dodd-​​Frank finan­cial reform bill, a mas­sive, 2000-​​page bill that no one read and no one under­stands. A bill the pres­i­dent signed months before his finan­cial reform com­mis­sion reported to him on the causes of the finan­cial cri­sis the bill was designed to pre­vent. A bill meant to com­bat a myth­i­cal past threat (the pur­ported “sys­temic risk” of a Lehman Broth­ers col­lapse). A bill that reg­u­la­tors can­not fig­ure out how to imple­ment. A bill that cemented the pre­vi­ously ad hoc pol­icy of “too big to fail” into law. A bill that is chok­ing com­mu­nity banks and small busi­nesses. A bill that is lead­ing to a fur­ther con­sol­i­da­tion of the finan­cial sec­tor in the hands of a few mega banks. A bill that is mak­ing credit more expen­sive and less avail­able to con­sumers, par­tic­u­larly in the lower and mid­dle class. A bill for which the pri­mary con­se­quences have been both neg­a­tive and unin­tended. A bill that is caus­ing a mas­sive die-​​off of polar bears. (All right, I made that one up…)

But, for as bad as the Stim­u­lus Bill and Dodd-​​Frank have been, I have con­cluded that the Unaf­ford­able Care Act (aka “Oba­maCare”) is the worst bill of the Obama leg of the Bush­bama régime because it, a) will lead to a mas­sive increase in health care costs for the aver­age Amer­i­can fam­ily, and b) it has put us on the fast-​​track to a Greek-​​style debt crisis.

Regard­ing the first point, MIT Econ­o­mist Jonathan Gru­ber, who was a key advi­sor to Mitt Rom­ney and Barack Obama on their name­sake health care bills—and the one who claimed that the Unaf­ford­able Care Act would lower health care pre­mi­ums for Amer­i­can families—has had a dra­matic change of heart. He was tasked by three states to deter­mine the effect of the Unaf­ford­able Care Act on res­i­dents, and he has con­cluded that 59% of the indi­vid­ual mar­ket will see a 31% increase in health care pre­mi­ums as a result of the Act. For those of us who looked at the bill objec­tively, this report was a giant “duh” moment. And given Gruber’s philo­soph­i­cal sup­port for the bill, how­ever, 31% prob­a­bly under­states the hit that the aver­age fam­ily will take.

For rea­sons that are unclear to me, Repub­l­i­crats (both fla­vors) seem to have an unbri­dled con­tempt for the mid­dle class. “If you’re not at the table, you’re on the menu,” it is said. Would you like a side salad with your mid­dle class fam­ily, Mr. President?

Regard­ing the deficit blowout from the Unaf­ford­able Care Act, the CBO began revis­ing the cost of the pro­gram upward before the ink was dry on the president’s sig­na­ture. Aston­ish­ingly, there are folks out there still defend­ing the UCA on bud­getary grounds, even though none of its sup­posed fund­ing mech­a­nisms have actu­ally come on line. The CLASS pro­gram, for exam­ple, was sup­posed to be a revenue-​​earner, but was ditched by Kath­leen Sebe­lius because it was a huge money loser. Nonethe­less, it hasn’t been for­mally repealed, so the CBO con­tin­ues to score the pro­gram as a rev­enue source.

Sim­i­larly, the UCA was to be “paid for” in part by reduc­ing or elim­i­nat­ing the “doc fix.” Has the doc fix gone away? Nope. Have any of the unspec­i­fied Medicare cuts been imple­mented? Nope. The UCA was sup­posed to be funded by rolling granny off the cliff for the ben­e­fit of the unin­sured, but then the folks in Con­gress remem­bered that granny has more time to go to the polls. (See the chart here that shows Medicare cuts as the largest fis­cal com­po­nent of the UCA fis­cal scheme.)

Get­ting to the fis­cal side of the equa­tion, every­one knows that Medicare is the eight hun­dred pound gorilla in the room that is set to destroy the coun­try; even the pres­i­dent, who gen­er­ally has a poor grasp of the obvi­ous. And, as Peter Sud­er­man explained here, Medicare is the lead­ing cause of run­away health care costs in the U.S. Did the UCA do any­thing to address the root causes of the Medicare spend­ing blowout? Of course not, the UCA was sim­ply piled on top of the already-​​failing program.

Undoubt­edly there are those who will still believe the fic­ti­tious pro­jec­tions spit out by the CBO that show the UCA low­er­ing deficits. After all, there are those who watch Find­ing Big­foot and expect the cast to cap­ture real footage of a live Sasquatch. But here in the real world, the UCA will be another gap­ing hole in the hull of the sink­ing U.S. fis­cal ship. Like Social Secu­rity, Medicare (and all its let­tered sub­parts), and Med­ic­aid, the cost over­runs for the Unaf­ford­able Care Act will begin on Day One of oper­a­tion. Indeed, the rev­enue fail­ure has already begun, as stated above.

So in my opin­ion, of all the leg­isla­tive atroc­i­ties com­mit­ted dur­ing Bush 3 Obama 1 to date, the Unaf­ford­able Care Act is the worst. Between blow­ing a hole in the deficit and bur­den­ing mid­dle class fam­i­lies with huge health care insur­ance pre­mium increases, the UCA is a disaster.

The Stim­u­lus Bill was a fail­ure, but its harm is known and con­tained; we’ll pay inter­est on it for­ever. Dodd-​​Frank may yet sur­prise and have greater harm­ful con­se­quences than the UCA, but right now it appears that large chunks of the bill will go unim­ple­mented because bureau­crats can’t fig­ure out how to make it work.

So for the moment, the Unaf­ford­able Care Act looks like the worst law signed dur­ing Obama’s first term, and quite pos­si­bly this century.

This arti­cle is also pub­lished at Alexan­dria.