by Dick Morris
A second provision instituted strict gun controls on assault weapons and required a waiting period and background checks for handgun purchases. Republicans hated this provision, but the public, as a whole, supported it. Republicans voted against it, but—because they knew the public wasn’t on their side—wisely did not make it their key objection to the overall bill.
The third part, which drew all the public debate, set up public works projects to improve life in the inner city. It famously authorized “midnight basketball” courts on which young people could expend their energies. The public, rightly, saw it as a boondoggle and the Republicans made the entire debate about this one provision.
The bill barely passed and so drained the president’s popularity that it contributed to his loss of Congress a few months later.
The point is that when you make a proposal in Washington, the opposition decides what to focus on and that becomes the major issue. Your bill or your plan is only as strong as its weakest link.
The weakest links in the health care debate are:
Obama’s expansion of the IRS as an enforcement vehicle to make sure everybody has an insurance plan that the government finds acceptable and that employers cover all their workers
His $500 billion cut in Medicare spending and the health care rationing it will trigger
His expansion of Medicaid to cover 16 million new people (including those earning up to $30,000 a year)
The state insurance exchanges, which the law requires, the cornerstone of the entire program
Let’s concentrate our defunding efforts on these four fronts.
DEFUNDING THE IRS
The requirement that individuals buy health insurance (the individual mandate) and that businesses either provide coverage or pay a fine for failing to do so (the employer mandate) is the key to the whole bill. Destroy this and you cripple the entire program. And the bill happens to assign to the most hated and feared agency in the government—the IRS—the happy duty of enforcing these provisions. (After Congressional reforms in the 1990s, the IRS has done a lot to clean up its act and to be more professional and fair, but the public still regards it with a large load of apprehension.)
Obama proposes to vastly expand the IRS to enforce his legislation. The IRS says it will need to hire as many as 13,500 additional agents to administer and enforce the individual mandate.53 Congressman Dave Kamp (R-MI), the ranking Republican member of the House Ways and Means Committee, puts the number even higher, saying that the “IRS could have to hire 16,000 agents, auditors, and other workers” to enforce these provisions.54 This expansion would add 15% to the current IRS staff of 106,000 employees.55
The Ways and Means Committee estimates that the IRS will have to spend about $10 billion enforcing the individual mandate provision of the ObamaCare bill.56
Republicans should take aim at defunding the IRS expansion. If they do this, they will have an enormously popular position from which to fight.
The ObamaCare legislation authorizes the IRS to fine individual taxpayers 2.5% of their total incomes if they don’t have insurance. The minimum fine is to be $695 and the maximum will be $2,085 for anyone caught without having “minimum essential coverage.”57 This enforcement provision is the Achilles’ heel of the law. The fine is heavy enough to be a real threat to the average taxpayer.
After all, an American with a net taxable income after deductions and credits of $50,000 a year has to pay about $9,000 in federal taxes. To add an additional $1,250 onto it (2.5% of his income) for failing to have health insurance will be a steep penalty, which comes to a tax increase of more than 14%.58
But the alternative will be even more expensive. ObamaCare requires a family making $50,000 a year to pay about 7% of its income for health insurance—about $3,500—before any subsidy kicks in. So they will be between a rock and a hard place: pay a $1,250 fine and get no health coverage or pay $3,500 and get covered. Either way, that’s a hefty chunk gone from family budgets already stretched pretty thin.
A family making $80,000 would have to pay a fine of $2,000 or buy a health insurance policy that costs 9.5% of its income, or $7,600.
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REQUIRED PREMIUM PAYMENTS UNDER OBAMACARE BEFORE SUBSIDY KICKS IN
Income: Up to $29,000
What You Must Pay: $ 580
Income: $29,000–$33,000
What You Must Pay: $ 870–$1,320
Income: $33,000–$44,000
What You Must Pay: $1,320–$2,772
Income: $44,000–$55,000
What You Must Pay: $2,773–$4,427
Income: $55,000–$88,000
What You Must Pay: $4,427–$8,360
Source: Kaiser Foundation59
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Neither choice will be popular with the average family. By defunding the enforcement provision, Republicans will be echoing the resentment of most American families at having to bear such a burden in the midst of a recession. While the individual mandate will not kick in until the start of 2014 (so as to move it conveniently after Obama stands for reelection), the IRS will have to start gearing up to enforce it now.
ObamaCare also would force employers whose businesses have fifty or more workers and do not offer insurance coverage to pay a fine of $2,000 per employee. This provision will also be enforced by the IRS.
The Republican House should defund the IRS enforcement of both provisions, not only by cutting the funding, but also by passing explicit language in the legislation itself banning the use of any appropriated funds for enforcement of the ObamaCare law. Any federal employee who violates the law should be subject to specific criminal penalties.
Without such a provision, the IRS will be free to shift resources from other parts of the agency to cover the costs of the enforcement of the individual mandate to buy insurance.
Republicans will doubtless pass the defunding legislation soon after they take power in the House of Representatives. Then it will either die in the Senate or pass. (Much legislation like this will attract the votes of so-called moderate Senate Democrats anxious to cover themselves to avoid defeat in 2012.) But even if it passes the Senate, Obama will, of course, veto it.
So the Republicans should fold the defunding of ObamaCare into any legislation raising the debt limit and, failing that, into their 2012 budget appropriations. Then the battle over funding ObamaCare will become a central part of the test of wills between the parties that will dominate the 2011–12 period and play itself out before a national audience. The addition of the IRS enforcement ban to the national debate can only help the Republicans win the battle.
In December 2010, the United States District Court for Virginia declared the individual mandate provision of the ObamaCare law unconstitutional. As we predicted in our previous book, 2010: Take Back America—A Battle Plan, the interstate commerce clause of the Constitution, on which the administration relied in justifying the bill, cannot cover ObamaCare’s mandate. It is neither interstate nor is it commerce.
It isn’t interstate because insurance companies are specifically barred from selling their policies across state lines. And it isn’t commerce because a failure to buy health insurance cannot be called an act of commerce.
ObamaCare faces a long and tedious journey through the federal courts. It will win some and lose some, and then the U.S. Supreme Court will likely decide the issue. But, until then, we must focus on defunding the enforcement of this mandate through Congressional action.
DEFUNDING MEDICARE CUTS
America’s elderly registered their sharp opposition to the cuts to Medicare that finance half of ObamaCare. They were so outraged by this $500 billion cut that they turned out in huge numbers to fight Obama in the 2010 election.
According to pollster John Zogby, senior citizens (over 65) cast 23% of the vote in the midterm elections, although they are only 18% of the adult population. And they voted more heavily Republican (57–38) than any other age group.60
Blocking these cuts by cutting off administrati
ve funding must be a key priority for the House Republicans.
The Medicare cuts are to be administered by a new Independent Payment Advisory Board that will oversee the program. The Commission will be charged with deciding how to cut Medicare by $500 billion over ten years. These cuts will go into effect automatically unless stopped by specific legislation. With Medicare slated to cost $7 trillion over the next decade, the cut would amount to a 7% slash—no easy task to achieve.
We need to zero-fund this Payment Advisory Board. No money. No staff. No overhead. No offices. Zero. And we must prohibit the diversion of any other monies from other budgets to pay for their evil work. And should the Board actually make any cuts, we must override them in amendments to the debt limit and budget appropriations bills. If Obama vetoes these bills, then let the government shut down before we allow cuts in Medicare.
By contesting the Medicare cuts in the budget and appropriations bills, wrapping them into the overall debate, Republicans can turn the tables on the Democrats. During the Clinton years, Democrats beat back Republican attempts to cut Medicare, and their success dominated the outcome of the government shutdown crisis and the subsequent elections of 1996. Now it would be the Republicans who are trying to stave off cuts in Medicare. The issue would work for us, not for the Democrats, and give Republicans a key edge in the ensuing struggle.
A closely allied provision of ObamaCare requires the Department of Health and Human Services (HHS) to set up a Patient-Centered Outcomes Research Institute to compare costs and results of various treatments for illness to analyze which work the best and the cheapest. This analysis will provide the basis for care rationing decisions about what medicines and treatments doctors may offer their patients under the program. The ObamaCare legislation authorizes—but does not appropriate—$500 million a year to carry out the research.61
Note that these metrics are all based on one common and false assumption, that one size fits all. HHS is charged with deciding what the treatment should be for everybody afflicted with a vaguely similar illness. Of course, one size does not fit all, and the art of medicine involves assessing often subtle variations in each patient’s condition and need for care. But HHS will handcuff doctors and stop them from using their judgment in deciding what course is right for each particular patient.
It will also probably go well beyond assessing the viability of treatments or medications and start looking at the viability of patients themselves. Who can get a heart transplant? What age? Smokers? Diabetics? People with chronically high blood pressure? If the data says they aren’t likely to live a lot longer with a new heart, the omnipotent Research Institute may issue guidelines denying them treatment. Rationing. Literally, death panels.
During the debate over ObamaCare, the public outrage over the potential of the bill to encourage premature euthanasia became so intense that the administration dropped a provision authorizing Medicare payments to reimburse doctors for talking to their patients about their desired end-of-life treatment as part of an annual checkup. Critics like Sarah Palin called this provision, coupled with the rationing ObamaCare would force, the equivalent of death panels.
Now the Obama administration is planning to implement by executive order that which it had to withdraw from its legislation. The New York Times reported—on Christmas Day of 2010—that Obama had decided to impose a new rule saying that “Medicare will cover ‘voluntary advance care planning,’ to discuss end-of-life treatment, as part of the annual visit.”62
“Under the rule, doctors can provide information to patients on how to prepare an ‘advance directive,’ stating how aggressively they wish to be treated if they are so sick that they cannot make health care decisions for themselves.”63
We must defund all three forays into government-sponsored euthanasia and health care rationing. The Republicans must delete funds from the Independent Payment Advisory Board, the Patient-Centered Outcomes Research Institute, and the new authorization for Medicare reimbursement for end-of-life counseling. Without funds to administer either the 7% cut in Medicare or the research to accumulate metrics to decide on which care to allow and which to disallow or to support end-of-life counseling, neither effort can proceed. Are these folks willing to work without pay or benefits? Case closed.
DEFUNDING MEDICAID EXPANSION
The Republican House must also focus on the vast expansion of Medicaid. President Obama’s legislation expands coverage to 16 million people not now eligible and will likely compel tens of millions more who are now eligible to register.
ObamaCare requires states to cover everybody earning up to 133% of the poverty level (up to about $30,000 income per year). Its costs will not only wreck the federal budget, but will also force states to impose new, high taxes to finance their share of the costs.
Beyond the general tactics of refusing to vote funds for the expansion of Medicaid and prohibiting the use of other appropriated monies from being used for this purpose, Republicans may be able to use a special tactic to defeat the Medicaid growth. Because of the high costs the expansion imposes on each state, even many Democrats are eager to exempt their states from the provision. The New York Post reported that “Democratic Senator Ron Wyden of Oregon…asked for his state to be exempted from many of the law’s provisions.”64
Republicans might form a coalition with Democrats who are worried about being responsible for triggering tax hikes in their states to exempt state after state from the Medicaid expansion. In classic log-rolling, legislators could condition any one state getting an exemption on all of the states that want them winning it. Such tactics might even produce enough votes to override the veto of an increasingly unpopular president.
DEFUNDING HEALTH INSURANCE EXCHANGES
A final key point of attack is defunding the “health insurance exchanges” for small businesses and individuals. These state-level exchanges are designed to force insurers to offer plans that provide a minimum level of benefits and are competitive in price. Writing for BNET, the CBS Interactive Business Network, Ken Terry explains how defunding the exchanges might work:
Should Congress block funding for these exchanges, it could cripple a centerpiece of reform and trigger a cascade of unintended consequences. Here’s how that could happen. First, some states might bail on their plans to set up exchanges, citing their unaffordability in the absence of federal support. Second, the feds would have no money to set up its own exchanges in states that fail to do so…Any failure to create exchanges…by 2014 would in turn block federal insurance subsidies to individuals and tax credits to small firms in those states. So individuals would still be required to buy insurance…on their own without government help. The natural result: a consumer revolt in which many people would simply refuse to buy coverage, preferring to pay the government fines instead.65
And, Terry notes, “if a large number of people remained uninsured, but insurers were required to accept everyone who applied for coverage, health plans would naturally jack up rates to handle the increased risk of covering the population. That would set off a health insurance death spiral, with more businesses dropping employee coverage, boosting the ranks of the uninsured and inevitably making insurance too expensive for most anyone to afford.”66
These fights will not be easy. The defunding effort will only succeed if there is a mobilization of concerned citizens and activists akin to that which opposed the passage of ObamaCare in the first place and which animated the massive Republican wins of 2010. Everybody must donate, take to the streets, rally, demonstrate, and demand defunding. The rally cry must shake the nation!
Our health care system’s fate is in our own hands. If we fight for it, we can preserve it, even now, from the ravages of President Obama and his socialist cronies. But it will take a massive effort from all of us. All hands on deck!
REPEALING THE DEATH TAX
The budget deal reached between Republicans and President Obama called for reinstitution of the inheritance tax for the next two years at a 35% rate w
ith an exemption for estates of $5 million or more. The fact that a lame duck Congress—filled with Democrats in control of both houses—agreed to this extension does not take the issue off the table.
The conservatives now in control of the House must press for its elimination as part of their budget position.
The reimposition of the inheritance tax (or death tax) looms large over American investors and entrepreneurs. It freezes their efforts to expand their businesses or invest their capital in creating new jobs. The chance that they might die and saddle their heirs with a large tax liability forces them to keep their capital liquid, readily available to pay the taxman if they should pass away.
A study by no less than Obama’s former economics advisor Larry Summers and economist Laurence Kotlikoff found that “intergenerational transfers” account for a very large portion of all capital in the United States. Summers and Kotlikoff found that “between 41% and 66% of capital stock was transferred by bequests at death or through trusts and lifetime gifts.” The study concluded that “patterns of savings don’t validate” the idea that rich people spend down their savings. Instead, they pass them along to their heirs. “A major motivation for saving and building businesses,” Summers and Kotlikoff noted, “is to pass assets on so children and grandchildren have a better life.”67
If rich and elderly businessmen and investors knew that their heirs did not have to ante up 35% of the value of their estate in taxes, they would feel much freer to reinvest their profits in business expansion and new job creation rather than keep it under the mattress (or in CDs, T-bills, or stocks) to pay the estate tax.