THE NEW NORMAL IN AMERICA?
Last week we watched a vote occur in the US House of Representatives that was a classic example of what is the reality of political decision making in the United States. That is the new (relatively) normal of ‘me instead of you.’ It might also be titled, ‘The heck with you, I’ve got mine’.
In a rush to try and accomplish something in the general timeframe of 100 days of the new administration in Washington the House pushed through a bill that was supposed to deliver on the promise to ‘repeal and replace’ the Affordable Care Act; affectionately known as Obamacare. And the term ‘pushed through’ is being kind. Back when the Democrats pushed through the ACA (which anyone must admit they most certainly did) they at least had 100% of their Representatives and Senators vote for it (although two did abstain). The AHCA vote this year was so close that it squeaked through by only five votes with almost 20 of the majority party actually voting against it. The Senate has already laid claim to an attempt to try and see if they can turn bad politics into good law. Good luck with that.
So why is this a ‘Me instead of you’ bill? Well, let’s look at it a minute. The law repeals twelve, count them, twelve taxes that were part of the ACA. There will be those that argue, in some ways justifiably, that these taxes represented a tax burden on the middle class that needed to be changed. No argument there; there certainly were some taxes that should have gone. But all twelve? No, not when the way to pay for this tax reduction was to negatively impact those who need help the most. It is estimated that the tax cuts totaled $1.0 trillion dollars; we can’t be sure because the bill was pushed through before the Congressional Budget Office could score it and give Congress an idea of its impact on the federal budget. But in the famous (although some claim misquoted) words of the late Senator Everett Dirksen, “A billion here, a billion there and pretty soon you’re talking about real money.” Many, if not most, of these cuts will impact those who are at the higher end of the income scale; i.e. – the ‘me’ or ‘I’ve got mine’ side of the equation.
The AHCA tries to minimize the negative impact of these tax cuts on the federal budget in classic, ‘Me instead of you’, fashion – by reducing coverage for the poor, the sick, and the most vulnerable. In other words, the ‘you’ or ‘The heck with you’ side of the equation. Cuts to Medicaid, higher premiums for those with pre-existing conditions, and reducing the list of health benefits that are required to be covered by insurance. In response to outrage and opposition to this reduction in benefits to those most in need, and in order to try and attract votes for the bill, a compromise was reached to provide $8.0 billion dollars to support those with pre-existing conditions. For those who don’t do math in their heads very well that amounts to less than one percent of the one trillion dollars in tax cuts.
Savings in the name of ‘Me instead of you’; I pay less in taxes (‘me’), you get less in medical benefits (‘instead of you’). And this is probably not the end. Look for this same new normal approach in tax reform legislation later this year.