Congressional Democrats led by Harry Reid and Nancy Pelosi are quietly working to repeal the “Cadillac tax,” a 40 percent excise on certain expensive health-insurance policies enacted as part of the so-called Affordable Care Act, which grows less affordable by the minute.
The Cadillac tax was never going to be long-lived. It was a lie from the beginning, a part of the great fiction that allowed Democrats to claim that Barack Obama’s signature health-insurance initiative would add “not one dime” to the deficit, as the president repeatedly insisted. But the tax was and is bitterly opposed by important Democratic constituencies: the AFL-CIO and the American Federation of Teachers, the members of which enjoy very generous health-care programs (the teachers at your direct expense, suckers) and don’t much like paying taxes despite their endless nattering about the need to make sure everybody pays his “fair share.”
The teachers’ unions, it should be noted, are the biggest political spenders in the country — not the NRA, not the Koch brothers, not the Chamber of Commerce or Big Oil or Big Whatever. In the private sector, unions are in decline and have been for decades, mainly because extortion is a terrible business model in the long term. But in the public sector — in government — unions rule the roost, which is why they run the Democratic party in spite of their relatively small overall numbers. Hillary Rodham Clinton cannot be president without the support of the teachers’ unions, period, and so she supports repealing one of the main revenue-generating measures attached to Obamacare.
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When the Affordable Care Act was being debated, many on the right, myself included, argued that the optimistic projections of the Congressional Budget Office were wildly unrealistic, inasmuch as it was not at all likely that the unpopular revenue-raising provisions of the law, such as the Cadillac tax, would be enacted or that, if enacted, they’d survive long. Our criticism of the CBO estimates was echoed by . . . the CBO, which expressed the same reservations for the same reason: All the political pressure is on higher spending and lower taxes, but the architecture of Obamacare requires the opposite if it is to perform as advertised. Defenders of the proposal, such as Ezra Klein, argued that, the sum of historical evidence notwithstanding, Congress is capable of sticking to the ACA despite the inevitable pressure to knuckle under to the unions and other Democratic special-interest groups.
Nancy Pelosi and Harry Reid — and Herself — all confirm it now: We were right, they were wrong.
But that’s cold comfort to a nation enduring a large injection of chaos into its health-care market and, should the Democrats succeed in the repeal effort, a deficit that will balloon even more dramatically than had been calculated. What to do?
#share#Speaker of the House Paul Ryan, who is a numbers guy, should have the CBO rescore Obamacare as it is actually being implemented, incorporating not only the proposed Cadillac-tax repeal but also the effects of enrollment numbers that are lower than projected — current expectations are that 2016 will see about half the enrollments originally estimated. The result will be not billions but hundreds of billions of dollars in additional deficits. Let Herself defend that on the campaign trail this year, or let that batty old loon from Vermont try to convince the public that all that lost revenue can be made up by raising taxes on 400 guys in Manhattan. By all means, let’s have that fight.
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Republicans blew the health-care fight last time around. Barack Obama rolled into town with his sack of goodies like some cracked Santa Claus, and all Republicans could muster was: “We have the best health-care system in the world. Harrumph! Harrumph!” We didn’t. We had a half-socialized mess of a system in which very important health-care decisions — the ones regarding insurance — were mainly taken out of the hands of consumers and put in the hands of their employers, who have very different economic incentives. Thank Franklin Roosevelt for that. Add to that a wildly corrupt, fraud-ridden Medicaid program and an insanely unsustainable Medicare program, insufficiently competitive insurance markets, and a few other flavors of nightmare fuel, and it’s easy to see why people wanted health-care reform — and why they want it still. “No” is my favorite word in politics, but it isn’t the right answer every time, and it wasn’t the right answer on health-care reform.
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Neither was Obamacare, of course. The president had campaigned on health-care reform, and the Democrats had an unusual commanding position in Congress that was unlikely to be sustained or repeated. The president made it clear that he would happily sign any stack of paper, up to and including a three-year-old Denny’s menu, if the words “health-care reform” appeared in its title. The Democrats indulged the worst sort of dishonesty — we’ll cover millions more people while saving money and improving quality and look a unicorn! — and they cooked up the Affordable Care Act, with Nancy Pelosi famously insisting that Congress had to pass it to discover what’s in it.
Now that she’s discovered what’s in the act, she doesn’t much like it.
It will fall to Republicans to reform the reform, either replacing it one piece at a time or, should the nation inaugurate a President Cruz in 2017, repeal it wholesale in one grand act of catharsis. That’s a pleasant prospect to consider. But what comes next will still matter — and it will matter more. Further, it won’t be a one-time thing: You can’t just pass a big law and declare health care reformed — because reform will mean doing some pretty unpopular things, which politicians will want to reverse.
For now, eliminating the Cadillac tax is one tax cut that Republicans should resist. The teachers’ unions and the AFL-CIO put these clowns in office and inflicted Obamaare on the country, and we should make them pay for it. As Ed Koch famously said: The people have spoken, and now they must be punished.
— Kevin D. Williamson is roving correspondent at National Review.
http://www.nationalreview.com/article/426748/obamacare-cadillac-tax-democrats-unions-harry-reid-nancy-pelosi
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