Romney isn’t the only Republican who paved the way for Obamacare.
(Page 2 of 2)
President Bill Clinton signed both bipartisan measures into law. Kennedy-Kassebaum mostly expanded regulations, while SCHIP spent federal money to provide state governments with matching funds to buy health insurance for families with children who earned too much to qualify for Medicaid. A block grant rather than an open-ended entitlement, SCHIP was expanded over Republican objections—and following two Bush vetoes—by the Obama administration in 2009.
These Republican excursions into health care were at best only secondarily about improving real problems with the medical system. The main objective, it seemed, was to make the issue go away until the next election. But these cheaper knock-offs of Democratic proposals at least had the benefit of being relatively small. Not so the Medicare prescription drug benefit.
In the close 2000 presidential race, ultimately decided in Florida, both George W. Bush and Al Gore supported Medicare coverage of prescription drugs. Rising drug costs were a problem for senior citizens and the lack of a drug benefit seemed a defect in the Medicare system. The idea polled well, especially among older Americans. Bush’s version was supposed to avoid price controls and as large a government program as the Democratic alternative.
What we ended up with was the biggest new entitlement since the Great Society. To be sure, the plan Bush signed into law contained some free-market elements, like Medicare Advantage, and was projected to cost less than the Democratic bill. But Medicare Part D still added anywhere from $8 trillion to $15.5 trillion to the federal senior health program’s already substantial unfunded liabilities. Not for nothing did former U.S. Comptroller General David Walker call the bill “the most fiscally irresponsible piece of legislation since the 1960s.”
“It’s important to remember that the congressional budget resolution capped the projected cost of the drug benefit at $400 billion over 10 years,” Bruce Bartlett later wrote in Forbes. Otherwise the bill was vulnerable to a point of order under congressional rules. But Richard Foster, Medicare’s chief actuary, believed it would cost more than $534 billion over the same period.
Foster later alleged that a Republican appointee in the Bush Health and Human Services Department had threatened to fire him if he blew the whistle on the prescription drug benefit’s cost. Foster wasn’t the only one that Republican leadership had to sway by extraordinary means. Michigan GOP Rep. Nick Smith claimed that his colleagues promised that his son would be guaranteed to succeed him in Congress if he voted for the bill. House Republican leaders had to extend the vote past the standard 15-minute window to get the legislation enacted.
Yet it is beyond dispute that the new benefit was entirely unfunded by new revenues or spending cuts. This fact later weakened Republican arguments against Obamacare, which the Congressional Budget Office (rather implausibly) scored as deficit-neutral. Republicans then simultaneously complained both that Obamacare increased federal expenditures and also that it cut $500 billion from Medicare (I explored the implications of the latter in detail in the November issue).
EVEN WHEN IT became clear that Paul Ryan was going to become chairman of the House Budget Committee, Republican leaders appeared reluctant to spell out specific proposals for entitlement reform or embrace the details of Ryan’s health care proposals as contained in his early budget blueprints. “Is it any surprise that most Republican politicians failed to sell the Ryan budget to the public?” Reason’s Suderman asked after the NY-26 special election, in which a Republican supporter of the Ryan plan was defeated. “It was never clear that most of them actually bought it themselves.”
An accurate appraisal of Republican Medicare failures, this is even truer when it comes to health care reform more generally. In 2008, John McCain included in his platform a fairly ambitious free-market health care plan. Its centerpiece was an insurance tax credit for individuals, to replace the untaxed health care benefits largely provided by employers. Obama relentlessly attacked it as a tax increase on employer-provided health insurance (such a tax eventually became part of Obamacare). McCain was largely silent in response and after the election consigned his proposal to the same fate as other Republican presidential candidates’ health care plans: unveiled during the campaign season and then ignored afterward, not least by the candidates’ themselves. Paul Ryan, who is trying to revive the tax credit, would later say, “He did a very, very poor job of explaining the idea.”
Ryan is very, very much an outlier in his own party. After Hillarycare was defeated, costing Democrats control of Congress in 1994, many Republicans appeared to think they would never have to tackle the health care issue again or that co-authoring small SCHIP-style programs with Kennedy would do the trick. Others ended up tinkering with health care reform ideas that ended up looking a lot like Obamacare. But that just assured that when health care returned to the political forefront, it would be when the Democrats were in power—and would be done exclusively on Democratic terms.
It is a sad irony that many ambitious Republicans wasted two decades toying with the system of exchanges, subsidies, and mandates that eventually became Obamacare. It would be even sadder if continued Republican short-sightedness contributed to making this state of affairs permanent.