The Obama Watch

Unhinged from Reality

How can President Obama possibly get away with spouting so many shameless falsehoods to the entire nation?

By 9.16.09

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President Obama told the nation last Wednesday night:

Some of people's concerns have grown out of bogus claims spread by those whose only agenda is to kill reform at any cost. The best example is the claim made not just by radio and cable talk show hosts, but by prominent politicians, that we plan to set up panels of bureaucrats with the power to kill off senior citizens. Now such a charge would be laughable if it weren't so cynical and irresponsible. It's a lie, plain and simple.

The prominent politician who first complained about the death panels in the Obama health plan was Sarah Palin. Later on CNN, White House Press Secretary Robert Gibbs was asked, "You pull out the dictionary, and the person who tells a lie is a liar. Does the President think Sarah Palin is a liar?" Gibbs answered:

I think that for whatever reason despite many media outlets saying what Sarah Palin said was untrue, she continued to say it. I'll let Webster define what one calls her. I think in the absence of fact sometimes what happens is we fill the void with stuff that quite frankly isn't true….It's obvious and true there aren't death panels.

But people who live in glass houses shouldn't throw stones. Calling Sarah Palin a liar was most unfortunate given the speech on health care Barack Obama gave last Wednesday night. In that speech, President Obama accused his critics of spreading "misinformation" and "bogus claims," of "demagoguery and distortion," and of "scare tactics" instead of honest debate. But all of that was most prominently featured in his own speech.

Obama's Calculated Deception

President Obama said that his health overhaul plan includes no Medicare cuts, telling seniors: "[D]on't pay attention to those scary stories about how your benefits will be cut." He continued, "The only thing this plan would eliminate is the…unwarranted subsidies in Medicare that go to insurance companies -- subsidies that do everything to pad their profits but don't improve the care of seniors."

What Obama is talking about here is $177 billion in cuts for Medicare Advantage -- the private insurance options that almost one-fourth of seniors have chosen for their coverage under Medicare. Republicans enacted this choice for seniors, and close to 10 million retirees have chosen one of these private insurance options because they get better benefits from it than from standard Medicare.

At a minimum, Obama's cuts will force these plans to cut back on their benefits for seniors. Or the Medicare Advantage plans may just go out of business altogether, dumping all the seniors who have made that choice because they are getting a better deal. Does Obama's quote above regarding this component of his health plan honestly explain to you what is involved? Or does it seem calculated to deceive you?

Obama's health overhaul plan also includes cuts of "hundreds of billions of dollars in waste and fraud" in Medicare. What Obama is talking about here is over $300 billion in additional Medicare cuts, for a total of $500 billion, for payments to doctors and hospitals. In response, doctors and hospitals will cut back on the services and care they provide to seniors. This is the beginning of the health care rationing in the Obama plan. Calling this just cuts in "waste and fraud" is again a calculated deception.

Obama promises seniors in his speech "not a dollar of the Medicare trust fund will be used to pay for this plan." But what Obama doesn't tell you is that only Medicare payroll taxes are devoted to the Medicare trust fund. Medicare is largely financed in addition by general revenues, and Medicare cuts can provide general revenue savings that do not involve taking money out of the Medicare trust fund. The general revenue savings just don't have to be put into the trust fund in the first place. Again, does Obama's discussion of this sound like calculated deception?

Obama even endorses in the speech the idea for an Independent Medicare Advisory Council, saying, "And we will also create an independent commission of doctors and medical experts charged with identifying more waste [in Medicare] in the years ahead." Sarah Palin accurately explained what that is in a September 9 article in the Wall Street Journal, writing that such a commission would be

an unelected, largely unaccountable group of experts charged with containing Medicare costs. In an interview with the New York Times in April, the President suggested that such a group, working outside of 'normal political channels,' should guide decisions regarding that "huge driver of cost… the chronically ill and those toward the end of their lives."

In other words, this unelected, unaccountable commission operating outside of "normal political channels" would have the power to adopt still more Medicare cuts, focused especially on the most sick and those toward the end of their lives. Palin concludes:

Given such statements, is it any wonder that many of the sick and elderly are concerned that the Democrats' proposals will ultimately lead to rationing of their health care by -- dare I say it -- death panels? Establishment voices dismissed that phrase, but it rang true for many Americans.

President Obama expects credit for these Medicare cuts when promising "I will not sign a plan that adds…one dime to the deficit, now or in the future" and "The plan will not add to our deficit." But even with these Medicare cuts, the Congressional Budget Office (CBO) has officially scored the plan as adding hundreds of billions to the deficit.

Obama also said during the campaign that those earning less than $250,000 per year would not pay one more dime in taxes in any form. But under his health plan, individuals not covered by the health plan that the government specifies you must have will be forced to pay a special tax. Can you rely on anything he says?

President Obama also said Wednesday night, "[U]nder our plan, no federal dollars will be used to fund abortions." But Obama knows that the health plan workers will be mandated to buy will include coverage for abortions. However, the premiums you or your employer will pay for that coverage will not be considered federal funds. Another calculated deception?

Higher, Not Lower, Costs

President Obama also promised in his health speech that his plan "will slow the growth of health care costs for our families, our businesses, and our government." But all the politically correct benefits, like abortion, in the government specified health plan that workers and businesses will be required to buy will raise the cost of health insurance for those workers and businesses. So will the guaranteed issue, community rating, and other insurance regulation in the Obama plan, as in Massachusetts. The Council for Affordable Health Insurance, associated with some of the smartest free market conservatives on health care in the country, estimates that these factors will cause health insurance premiums to almost double.

Obama's new 8% payroll tax for employers who do not provide health coverage will add to costs for those businesses. The plan's increased Medicaid benefits will increase costs for state governments.

CBO estimates that the Obama plan will increase federal costs by almost $1 trillion. This is why taxes will be increased under the plan, not reduced. But Harvard economics professor Martin Feldstein writes, "the actual costs will be much higher" because "the CBO's method of estimating the cost of such a program doesn't recognize the incentives it creates for households and firms to change their behavior." Independent private estimates project increased federal costs of $3.5 trillion to $4.1 trillion under the Obama plan.

Even so, CBO Director Doug Elmendorf still testified before Congress regarding health costs under Obamacare:

In the legislation that has been reported we don't see the sort of fundamental changes that would be necessary to reduce the trajectory of federal spending by a significant amount…[O]n the contrary, the legislation significantly expands the federal responsibility for health costs….[The government public option for health insurance] raises the amount of [spending] that is growing at this unsustainable rate.

Obama's Death Panels

The President also said last Wednesday night, "And I will make sure that no government bureaucrat or insurance company bureaucrat gets between you and the care that you need." Oh, really. Then what, pray tell, is the Federal Coordinating Council for Comparative Effectiveness going to do? What about the Health Choices Administration, the Health Benefits Advisory Committee, the Bureau of Health Information, the Institute of Medicine, the Physician Quality Reporting Initiative, the National Priorities for Performance Improvement office, the Center for Quality Improvement, the National Center for Health Workforce Analysis, and the above mentioned Independent Medicare Advisory Council? These are the bureaucracies created under Obamacare with the power to ration and deny you health care. These are all Obama's death panels.

It really is all explained in a report from President Obama's own Council of Economic Advisors, "The Economic Case for Health Reform," released on June 2. That report has been touted by Obama as showing how the government is going to reduce costs under Obamacare. What it discusses is actually a thorough government takeover of health care, with the government deciding what health care works and what doesn't through what is called "comparative effectiveness," the government deciding whether the health care you want and your doctor says you need is worth it to society to pay for through what is called "cost effectiveness," the government deciding what health care technologies and innovations will be allowed and paid for.

The government's decisions on all of these matters are to be enforced according to the report through the payment reimbursement system for doctors, hospitals, surgeons, specialists, drug manufacturers, medical technology companies, and other health care providers, through what is called "pay for performance" and other payment reforms. Payments to all these health providers for medical care and treatments will also be constrained to keep costs down. This will decimate the incentives for investment in the entire health care sector, for the development and adoption of new technological advances, new drug breakthroughs, new miracle cure innovations, hospitals, clinics, even doctors' practices. This will affect investment in human capital as well as physical capital, as talented doctors, surgeons, specialists draw back and out, and the supply of new young professionals weakens sharply. The result is the rationing and denial of care.

This is not new territory. This is exactly what we see in all of those "universal health care" systems in foreign lands that Obama is so anxious to bring to America. Obama's copycat health care overhaul, so ardently supported by left-wing Democrats as well, is not taking us forward to the future. It is taking us backwards to the old-fashioned, throwback, failed, socialized medicine policies of these foreign countries, policies rooted in thinking again from the 1930s, Obama's favorite decade.

America enjoys today the best, most advanced, cutting edge health care in the world, which is why people worldwide come to America for health care from the old fashioned socialized medicine systems Obama and his left-wing Democrats so admire. This high quality health care is a central component of our high standard of living. Obamacare would bring us down towards the much lower standard of living of other countries.

Moreover, Obama is surrounded by advisors who embrace this vision of health care rationing, from Ezekiel Emanuel, to David Blumenthal, to John Holdren, to Cass Sunstein, to Peter Orszag, to Tom Daschle. Obama originally picked Daschle for Health and Human Services Secretary precisely because Obama favored his health policy vision. While scandal forced Daschle to withdraw, he has been increasingly present in White House health policy deliberations. Daschle, of course, wrote the book, Critical: What We Can Do About the Health Care Crisis, in which he openly advocated that America adopt the severe health care rationing of Great Britain, through a government bureaucracy like Britain's oppressive National Institute for Clinical Excellence, with the Orwellian acronym NICE.

Supposedly liberal commentators and talking heads who deny there is any such government rationing in Obamacare, and mock Sarah Palin's articulate formulation of the threat through the term "death panels," are uninformed Obama Kool-Aid drinkers. They may read the bills, but they don't understand what they are reading. You are not going to see the term "rationing" in those bills, but you will see cost effectiveness, comparative effectiveness, pay for performance, and all of the above bureaucracies with the power to ration and deny you care on these grounds. True liberals would oppose such government health care rationing as a gross infringement of personal autonomy and choice. But are there any true liberals left?

Obama's Government Takeover of Health Care

Finally, Obama complained to the nation last Wednesday night about those "who oppose reform as a government takeover of the entire health care system," and those "making wild claims about a government takeover of health care." But what else can you call it when the government is making decisions about what health care works and what doesn't, about whether your health care is worth the cost, about what health care you can get and when, about what health care technology and innovations can be adopted and when? What else can you call it when 57 new government bureaucracies are created with the power to implement these policies?

And what else can you call it when the government dictates to the insurance companies exactly what benefits and coverage they must provide, who they must cover, what they can charge, what premium income they can keep and what will be "risk-adjusted" to other insurers, and what deductibles, co-pays, and other out of pocket expenses they can offer? If you are one of the almost 12 million Americans with low cost Health Savings Account insurance plans or similar high deductible plans, and you like it, too bad, because Obama's promise of allowing you to keep your plan does not apply to you, just as it does not apply to the 10 million seniors with Medicare Advantage, or the 88 million estimated to be dumped into the Obama/Democrat "public option." Obama offered the nation another calculated deception last Wednesday when he proclaimed "nothing in this plan will require you or your employer to change the coverage or the doctor you have." No, nothing will require it, it will just have that effect, as Obama knows, which is why he so carefully and misleadingly phrased it this way.

The question you should be left with after Obama's health care speech last Wednesday is how can he possibly get away with spouting such shameless falsehoods to the entire nation?

Mr. Ferrara's article "Taking Health Savings Into Account" appears in the September 2009 issue of The American Spectator.

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About the Author
Peter Ferrara is Director of Entitlement and Budget Policy at the Heartland Institute, General Counsel of the American Civil Rights Union, Senior Fellow at the National Center for Policy Analysis, and Senior Policy Advisor on Entitlements and Budget Policy at the National Tax Limitation Foundation. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under President George H.W. Bush.