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Don't let reform lead us to ruin

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The Tampa Tribune

Published: July 19, 2009

Barack Obama ran for president promising to "reform" the country's health care system, and he certainly can be credited with sticking to his guns and pushing the issue even in the middle of the sickest economy in four generations.

But his insistence that Congress pass legislation before members leave for their August break is foolhardy. The different proposals will cost from $1 trillion to $2 trillion, and most members of Congress, not to mention the American people, have yet to figure out just what is in the 1,000-plus page bill unveiled by the House last week.

Moreover, there's no consensus among lawmakers on what the government's role in health care should be. The president insists the inclusion of Republican ideas makes any legislation a bipartisan measure, yet he and the Democrats don't seem to be listening to the GOP's warnings about a Big Government plan.

Still Obama would ram this shadowy proposal through, promising to extend health care coverage to all Americans and at a lesser cost to them. Does he want the impossible?

Most of us can agree that some reform is necessary. The cost of insurance and treatment has brought families to the brink of ruin. The cost of providing benefits is draining businesses. Too many people are uninsured and leave it to taxpayers to foot their medical bills.

But at a time of spiraling deficits, Congress must also weigh carefully the economic implications of its health care proposals. Lawmakers must ask whether building up the economy doesn't outweigh the benefit of insuring the uninsured today.

They should be focused on cost containment, and how to achieve it. And reform should rely on the free market as much as possible, while recognizing it has some limitations in serving people who need prompt care. In no event should there be an expansion of coverage if we cannot figure out how to pay for it.

Obama and congressional Democrats want to tax the wealthiest Americans - those making upwards of $350,000 and who already pay most of the taxes in the country - and businesses with payrolls above $250,000 that do not provide coverage.

Many Americans will approve of this approach. After all, it has been repeated often enough in recent years that there is a prosperity disparity between the very rich and the rest of us.

That may be a winning argument in Congress, but it doesn't make it fair to the individuals who will carry the financial burden.

And it doesn't mean only the wealthy will see their taxes go up.

The top marginal federal tax rate for the wealthiest Floridians, for example, who today pay 35 percent, could reach close to 50 percent if the legislation passes, according to an analysis by the Heritage Foundation. It's likely many of "the rich" would find ways to shelter their assets, so the costs of the plan could very well creep down into lower income tax brackets.

And what about the new tax on businesses? Those of us lucky enough to be insured through our workplaces tend to take it for granted that coverage is one of the benefits of employment. But it does not follow that a business that cannot afford to provide health benefits can afford to pay a payroll tax for health care coverage.

The House plan would force employers with a $400,000 payroll to pay an additional 8 percent payroll tax. Surely that requirement would force wage or job cuts. It could certainly spell the ruin of some businesses - hardly what we need in this economy.

Businesses already spend $500 billion a year on health care, according to the U.S. Chamber of Commerce, and the Congressional Budget Office says any new business taxes will be passed on to employees and consumers.

The House bill includes a "public option," a government health plan designed to compete with and so keep private insurance companies in line. But there is a legitimate concern that people will opt out of their current coverage and pour into the public plan, which would only increase the costs to the government.

Indeed, Congressional Budget Office Director Douglas Elmendorf warned lawmakers last week that the legislation he has seen would raise costs rather than lower them.

The bottom line is Congress should be wary of passing legislation that would not slow the increase in government spending that is gong to throttle the economy if it continues unchecked. The president needs to stop rushing and start listening - especially to those who understand more government is not the solution to all the nation's problems.

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