On Debt Ceiling and Health Care, GOP Is Just Fine with Uncertainty
enlarge Credit: Perrspectives For years, Republicans have deployed the word ” uncertainty ” to stymie any public policy with which they disagreed. A decade after President Bush declared “scientific uncertainties remain” about global warming , virtually the entire Congressional Republican caucus has proudly joined the deniers’ camp . Last month, GOP leaders revved up the uncertainty myth over taxes , falsely claiming that another tax cut windfall for the wealth was needed to “reduce the uncertainty that’s affecting employers all across our country.” Of course, on two of the most heated issues of the day – raising the U.S. debt ceiling and repealing the 2010 health care reform law – it is the GOP which is wholly responsible for creating real uncertainty for businesses, investors and all Americans. Next week , House Republicans will bring their quixotic effort to repeal the Affordable Care Act to the floor. (The vote originally scheduled for this Wednesday was delayed. That was altogether fitting, as Democratic Rep. Gabrielle Giffords received death threats and saw her office vandalized after her March 2010 vote for health care reform.) But whether they target the entire ACA or just individual provisions, Republicans are bringing only uncertainty – and not health care – to the American people. As Politico detailed yesterday (“Investors See Health Law’s Potential”), insurers themselves are agreed on that point: As Republicans push forward on repealing health reform, planning the law’s demise, a different conversation is happening among thousands of health care investors gathered in San Francisco for this week’s J.P Morgan Health Care Conference: how to capitalize on health reform’s new business opportunities. The Congressional Budget Office estimates 32 million Americans will gain health insurance by 2019 if the law stands. For health insurers, that represents a potential boon for both their individual market business as well as in the Medicaid market, where states regularly contract with private insurers to manage care. “The worst is behind them,” says Ipsita Smolinski, president of Capitol Street and senior advisor to McKenna Long & Aldridge, of the outlook for health insurers. “There was so much uncertainty last year. But with the MLR and rate review regulations out, investors know they have a pretty viable future. And it is the GOP’s threatened repeal effort, and not an influx of 32 million new subscribers, which is creating uncertainty among insurers: Health insurers spent barely anytime discussing Republicans’ repeal efforts. Aetna’s Zubretsky touched on the subject briefly only to say that Republicans understand that a rifle shot approach to tearing out specific health reform provisions, particularly the individual mandate, would not bode well for their business. “The unintended consequence of repealing and replacing part of the legislation is the biggest risk here,” he said. Of course, the risks for the American people are much greater still. Last week, the nonpartisan Congressional Budget Office (CBO) reported that the GOP’s H.R. 2, the Repealing the Job-Killing Health Care Law Act, would not only lead to higher out of pocket costs, reduced benefits and saddle employers with higher premiums, but over the next 10 years would add $230 billion to the deficit. On Friday, Harvard economist David Cutler released a paper estimating that that repealing the health law could destroy 250,000 to 400,000 jobs annually over the next decade. And, as the Los Angeles Times reported, major insurers are reporting that thanks to the incentives in the Affordable Care Act, “a growing number of small businesses are signing up to give their workers health benefits.” But Republican bluster over health care pales in comparison to the potentially fatal effects of their refusal to increase the United States debt ceiling . On Friday, Greg Ip and Felix Salmon contended that failure to do so wouldn’t necessarily mean the U.S. couldn’t pay off its debts and so trigger a global economic meltdown. But as former McCain economic advisor Mark Zandi warned: “If we get into a heated, protracted debate over the debt ceiling, global investors are going to grow nervous, and start driving up interest rates. It will all become negatively self-re-enforcing. No good will come of it.” And last week, Obama economic advisor Austan Goolsbee wanted to be sure the American people understood the implications and causes of the GOP’s dangerously hypocritical game of chicken on the national debt: “This is not a game. You know, the debt ceiling is not something to toy with. … If we hit the debt ceiling, that’s essentially defaulting on our obligations, which is totally unprecedented in American history. The impact on the economy would be catastrophic. I mean, that would be a worse financial economic crisis than anything we saw in 2008… If we get to the point where you’ve damaged the full faith and credit of the United States, that would be the first default in history caused purely by insanity.” But that’s a game of chicken Republicans remain determined to play. And while Ron Paul said of shutting down the government “I don’t think it would hurt one bit,” Rep. Mick Mulvaney (R-SC) admitted, “I don’t know” what will happen if the debt ceiling isn’t raised. Senator Lindsey Graham , who like Rand Paul , plans to holds the debt ceiling hostage in exchange for still-unspecified spending cuts , painted a grim picture of what would ensue: “Let me tell you what’s involved if we don’t lift the debt ceiling: financial collapse and calamity throughout the world. That’s not lost upon me. But we’ve done this 93 times. And if we keep doing the same old thing, then that is insanity to the nth degree.” No, it’s hypocritical. Because as the data show, Senate Republicans voted seven times to increase the debt ceiling under George W. Bush . They only withdrew their support when Democrat Barack Obama entered the White House. ( Donny Shaw at OpenCongress has the details.) Sadly, the American people seem to be buying the GOP’s snake oil, with a recent poll showing 71% oppose raising the debt ceiling. But rating agencies including Moody’s and Standard & Poor’s are not, warning Thursday that their AAA ratings for the United States were at risk. The final irony of the uncertainty machine that is the Republican Party is that the GOP played that same card just weeks ago in the run-up to the lame duck deal on extending the Bush tax cuts for two years. Of course, they are predictably silent about the 1980′s, when Ronald Reagan upended the tax code four times in five years, including “the biggest tax increase ever enacted during peacetime.” And despite conservative warnings then as now about “job-killing tax hikes,” American businesses responded by adding 23 million jobs after President Clinton raised upper-income tax rates in 1993. As ThinkProgress concluded last month, the GOP’s supposed concern over uncertainty was all a charade: Of course, when it came to tax cuts, Obama’s plan for permanent extension of the middle-class tax cuts and expiration of those cuts for the richest two percent of Americans would have provided certainty. But the GOP was so desperate to extend tax cuts for the rich that “certainty” was thrown under the bus. As Weigel put it, “By Boehner’s own standard, this compromise doesn’t reduce uncertainty, which during the election and after the election really became the key Republican argument for keeping the rates.” Jonathan Chait added, “For those still clinging to any naive notion that Republicans meant this as anything more than a slogan, the answer is now clear. [Republicans] want low tax rates for the rich. They don’t care about certainty”: Republicans had a choice. They could accede to certainty with Clinton-era rates on the rich, or uncertainty with Bush-era rates on the rich. They chose uncertainty. The Bush-era rates will live on for two years, after which nobody knows if they’ll be extended or not. Only when another Treasury-draining windfall for the wealthy was in jeopardy did Republicans fret about uncertainty they couldn’t live with. As for the health of the American people and the economy, that’s another matter altogether. (This piece also appears at Perrspectives .)
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On Debt Ceiling and Health Care, GOP Is Just Fine with Uncertainty
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on January 15, 2011. Filed under