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"Reasonable" Fairy Tales

By Big Tent Democrat

First, Ezra Klein's fairy tales:

The subsidy scheme: This one's really a no-brainer. The House's legislation makes insurance more affordable than the Senate's does. And really, that's what this process is all about. The House would expand Medicaid coverage to households with incomes of up to 150 percent of the poverty level, rather than the 133 percent proposed by the Senate. And between 150 percent and 300 percent of the poverty level, the House's subsidies are stronger, helping people buy better insurance, at a lower cost, with less out-of-pocket risk, than the Senate bill. For decades, Democrats have worked to ease the plight for folks who can't afford insurance. To come this far only to choose the less generous subsidy scheme would be like building a grand house only to decide to save a few bucks by not putting locks on the doors.

(Emphasis supplied.) Yet that is exactly what is going to happen. The price tag for the bill is set at less than 900 billion. It ain't changing. So what then Ezra? More . . .

Next, Paul Krugman:

[T]here’s the argument that many “Cadillac” plans aren’t really luxurious — they reflect genuinely high costs. That’s surely true. A flat dollar limit to tax deductibility has real problems. At the very least, the limit should reflect the same factors insurers will be allowed to take into account in setting premiums: age and region.

Good luck with that Paul. Krugman continues:

[T]his hurts unions which have traded off lower wages for better benefits. This would be a bigger issue than I think it is if the excise tax were going to kick in instantly. But it won’t, giving time to renegotiate those bargains. And bear in mind that this kind of renegotiation is exactly what the tax is supposed to accomplish.

Perhaps they can renegotiate for ponies as well. The problem with the wonks' approach is that it is completely divorced from reality. All for a science experiment. Krugman writes:

[W]e really don’t know what it will take to rein in health costs, but that’s a reason to try every plausible idea that experts have proposed. Limiting tax deductibility is definitely one of those ideas. Bottom line: the details of the excise tax should be fixed, but it’s on balance a good idea.

(Emphasis supplied.) That sounds like a nice science experiment. But it won't be "fixed" and a lot of people who have suffered through 30 years of stagnant wages are going to be hurt.

And if anyone cares, the fortunes of the Democratic Party are also going to be hurt.

The health care debate has been a debacle since Max Baucus hijacked the process last summer. In no small measure due to the inanities of wonks like Klein and Krugman. In the real world, the good this bill will do is offset by the harm.

The political and policy malpractice has been astonishing.

Speaking for me only

Full post as published by TalkLeft on January 10, 2010 (boomark / email).