Under increasing pressure to find unconventional ways to pay for the cost of health reform (which was supposed to save money for American families), the Senators sponsoring this legislative nightmare are getting more radical and desperate. While much of the debate has been on the higher-profile issues of cost and coverage, there are many more just as important, though unnoticed skirmishes, over defining the power of the federal government.
Promoting Raw Power. The Senate HELP Committee is using $58 billion in “savings” from the CLASS Act provisions to help pay for the overall cost of its bill. CLASS benefits are cash benefits for enrollees who need help with daily activities. The Congressional Budget Office (CBO) analysis of this provision makes it clear that this new program would add to the deficit in the long term. So, the HELP Committee has included a provision that gives the Secretary of the Department of Health and Human Services the raw power to reduce these benefits and increase enrollees’ premiums for the program. This is an enormous transfer of discretionary power to the Secretary of HHS. Indeed, based on its analysis, CBO not only thinks this is a possibility, CBO also expects such action to occur to keep costs under control.
In normal times, this kind of Czar-like scheme would stretch the imagination. Just try it. Imagine the outcry from the seniors’ lobby if the Secretary of HHS were given such authority- the power to raise premiums and cut benefits- to solve Medicare’s unfunded liability problem: the trillions of dollars that are being added to current and future taxpayers’ burdens. Imagine also the popular revolt against giving the Commissioner of the Social Security Administration the power to increase Social Security payroll taxes and reduce seniors’ pension benefits. Imagine the Attorney General defending the right of the federal government to take such action against a lawsuit instigated by a low-income beneficiary challenging the constitutionality of such a provision. Such actions are simply beyond imagination.
Promoting State Debt. As the HELP provision is difficult to imagine, Senate Finance Committee liberals have another one for you to ponder. They are so determined to expand Medicaid, but they unable to find sufficient savings to offset the skyrocketing costs, Senate Finance Committee members have just floated a complex bonding arrangement with the states. Under this proposal, the states would be required to finance the entire cost (states pay only 43 percent of Medicaid costs on average) of the proposed Medicaid expansion through taking on new debt by issuing bonds. Federal help is supposed to somehow magically materialize, but in a disguised manner intended to keep the cost “off the books” of the federal government. If the costs are “off the federal books,” maybe taxpayers won’t figure it out. Instead of details, more imagination is required.
Issuing bonds to cover recurring operating expenses is, to put it mildly, generally ill-advised. Many states may not even have the authority to enter into such obligations under state law. In even considering such a proposal, the Committee seems out of touch with the critical budget situation of states like California. California is issuing IOUs to its own employees and state vendors. Can the states afford a federal IOU? Finance apparently ignores the fact that states can already expand eligibility to many of the individuals to be covered under the Finance provisions, but the elected men and women at the state level choose not to do so. Does forcing the sovereign states to take on a debt that is not of their making mean anything in today’s context?
These are alarming developments. The Senate, in even considering such proposals, is hardly acting like the cool and deliberative body it is supposed to be in the civics books. It’s time for the solons to take a time out. Collect themselves. Reconnect with the real world. When running headlong in the wrong direction, the shortest path to the right destination is to stop, take a deep breath, and turn around.