Why ObamaCare May Die

It took centuries of intellectual, philosophical development to achieve political freedom. It was a long struggle, stretching from Aristotle to John Locke to the Founding Fathers. The system they established was not based on unlimited majority but on its opposite: on individual rights, which were not to be alienated by majority vote or minority plotting. The individual was not left at the mercy of his neighbors or his leaders: the Constitutional system of checks and balances was scientifically devised to protect him from both. This was the great American achievement…

- Ayn Rand

Sadly, our current executive and legislative leadership is not acting in the best interest of the individual, but in the interests of various groups. The silver lining is that their juggling act may be collapsing. Michael F. Cannon, Director of Health Policy Studies at The Cato Institute, has a blog post on how the Democrats’ various constituencies are becoming plainly at odds – and why this friction could ultimately be ObamaCare’s doom.

The Left and the health care industry both want universal health insurance coverage.  The industry, because universal coverage means massive new government subsidies. The Left, because that’s their religion.

But universal coverage is so expensive that Congress can’t get there without taxing Democrats.

• Sen. Jay Rockefeller (D-WV) is the biggest opponent of Sen. Max Baucus’ (D-MT) tax on expensive health plans because that tax would hit West Virginia coal miners.
• Unions vigorously oppose that tax because it would hit their members.
• Moderate Democrats in the House oppose Rep. Charlie Rangel’s (D-NY) supposed “millionaires surtax” because they know it would hit small businesses in their districts.

And on and on…

But if congressional leaders pare back those taxes, they lose the support of the health care industry, which wants its subsidies.

• That’s why the health insurance lobby funded this PriceWaterhouseCoopers study saying that premiums would rise under the Baucus bill: the $500 billion bailout they would receive isn’t enough.  They also want – they demand –  steep taxes on Americans who don’t buy their products.
• The drug companies, the hospitals, and the physician groups are likewise demanding big subsidies, and will run ads to kill the whole effort if those subsidies aren’t big enough.

As always, health economist Uwe Reinhardt put it colorfully:

“It’s no different from Iraq with all the different tribes…‘How does it affect the money flow to my interest group?’  They are all sitting in the woods with their machine guns, waiting to shoot.”

Once the shooting starts, industry opposition will sway even Democratic members, because there are physicians and hospitals and employers and insurance-industry employees in every state and congressional district.

Can President Obama and the congressional leadership satisfy both groups?  My guess is, probably not, and this misguided effort at “reform” will therefore die.  Again.

President Obama’s Keynesian economic policies and programs attempt to defy reality by evading the law of causality. As with all collectivist societies, however, we will be visited by reality’s judgment and learn the hard way that empty rhetoric and false promises will never replace innovation and production as tools of economic prosperity.

HT: Club for Growth