An Afterthought on Taxation: Raymond Sandoval, President Obama’s New Mexico director, made the argument that Obama made the agreement to extend the Bush tax cuts for two years primarily to prevent an even longer extension being demanded by the GOP leadership. He has insisted, however, that President Obama will, under no circumstances, agree to extend the Bush tax cuts after they expire at the end of 2012. He says that Obama will agree to let the cuts expire for even those individuals earning under $200,000 and for those households earning under $250,000. Currently, however, President Obama does not agree with Sandoval’s position.
The current position of President Barack Obama is that the tax cuts should expire for only those individuals earning over $200,000 and for those households earning over $250,000; however, it is highly unlikely that the Republican-controlled House of Representatives will agree to a deal in which only the cuts to high earners expire. The argument now being made by Democrats that unless the FICA tax is cut in half as presently proposed, a worker earning $50,000 would have $1,500 less in his/her pocket, would logically apply to ending the Bush tax cuts for everyone.
II. A Diminished Health Care Reform
Health care reform was a major theme of Barack Obama’s presidential campaign. His plan and that of Hillary Clinton were quite similar, except that Clinton understood a mandate to purchase health insurance was a necessity and Obama did not.
While a state senator in Illinois in 2003, Barack Obama was in favor of a single-payer plan; furthermore, while running for tte presidency, he said that in an ideal world he would favor a single-payer plan. Since there will never be an ideal world, Obama should have proposed what he thought would be the superior program and then used his rhetorical skills to “sell” it.
Obama’s role in the rocky legislative journey of health care reform was largely one of “hands off.” Construction of the plan was parceled out to several legislative committees, with the predictable result that several versions emerged.
Obama’s changes of position on the public option were a source of deep frustration to his supporters. Contrasted with his expressions of strong support for a public option, such as a Labor Day picnic filled with reform supporters, were his characterizations of it as “a sliver” of the plan and “a modest” part of the plan.
The journalistic icon, David Broder, now deceased, caught a very noticeable shift in President Obama’s health care message. It initially was “change we can believe in,” modified to “change we need not fear.” Obama said that no one will need to change what they already have; therefor rhetorically limiting the reach of health care reform to the 45 million or so uninsured and to the private insurance companies. He also assured Medicare recipients that there would be no change for them through adoption of reform.
The public option was widely promoted, even by Obama himself, as perhaps the best way to control the premium costs of private insurance companies. He lost that leverage when he abandoned it. Howard Dean, a prominent supporter of the public option, said that reform without it would be “meaningless.”
The Affordable Care Act does have its strong points, especially the prohibition on denying coverage due to pre-existing conditions; requiring insurance companies to spend a higher percentage of their revenues on care of patients; and coverage of about two-thirds of the uninsured. Yet the mandate to purchase has drawn a number of serious challenges and about a third of the uninsured are not covered.
There was and is a powerful selling point for a single-payer plan and that is the difference between what millions of U.S. households would pay in additional taxes to finance single-payer and to meet other neglected national needs and what they are now paying in taxes and health care insurance coverage, including deductible amounts and co-pays. Some examples of very sizable windfalls were provided in the blog section on a new taxation structure.
Even those households whose members are uninsured would be contributing more to what is now free emergency room care, due to the need to pay higher income taxes under the new taxation structure.
A further boon to the economy through the adoption of a single-payer system is a big reduction in health care costs. Public Citizen, which is a major advocate of single-payer, estimates an annual saving of $350 billion in administrative costs and profits. Other single-payer advocate groups put the annual savings at over $400 billion.
Under a single-payer system there will be a sharp increase in public health funding to prevent diseases. Preventive care will avoid more costly treatment later. Also, under a single-payer plan there will be no deductibles, no co-pays and no bills.
A major argument being made by some supporters of the Affordable Care Act is that it will help pave the way for more health care improvements in the future, including eventual adoption of a single-payer plan. Since, however, the passage of the Affordable Care Act will relieve the pressure for more reforms in the health care field, the new law could make it more difficult to adopt a single-payer plan.