Karl Rove: Repealing Obamacare Will Be Easier If Congress Skirts Normal Process
Author: Rob Bluey
“Deeming” and “reconciliation” are hardly household words, but for the next week Americans will come to know them as key procedural maneuvers that could push Obamacare across the finish line. But while they might deliver a bill to President Obama’s desk, they will also make it easier to repeal the measure, says former White House deputy chief of staff Karl Rove.
On the road for his “Courage and Consequence” book tour, Rove chatted with The Heritage Foundation about Obamacare, his defense of President George W. Bush’s conservatism, the growth of Tea Parties and anger toward government spending.
Rove, who joined Heritage for the launch of our San Francisco Community Committee last September, recalled how even in the heart of Speaker Nancy Pelosi’s (D-CA) district, conservatives were teeming with energy and enthusiasm. Rove will appear at a Heritage Foundation community committee event in Naples, FL, next week.
During the interview, he did not hold back his criticism of conservatives, particularly those who took issue with Bush’s support of No Child Left Behind, the Medicare prescription drug benefit and TARP. He also singled out conservatives, in addition to congressional Democrats, for the failure of Social Security reform in 2005.
Rove, however, has a positive vibe about the future of conservatism, particularly leaders such as Reps. Paul Ryan (R-WI) and Kevin McCarthy (R-CA); Sens. Richard Burr (R-NC), Lamar Alexander (R-TN) and Jon Kyl (R-AZ); and Govs. Tim Pawlenty (R-WI), Mitch Daniels (R-IN) and Bobby Jindal (R-LA).
What follows is a partial transcript of the interview.
This is crunch time in Congress for Obamacare, and Rove said he was surprised at the procedural tactics Democrats are willing to use:
They’re going to use every tool at their disposal, no matter how weird and perverted its use will be. This idea that they’re going to take a major piece of legislation and use in the House what’s called deeming … is pretty extraordinary. And then for the Senate to use budget reconciliation—not to adjust the dials on spending and tax rates on existing law, but in essence to create new law—is an enormous perversion of the system.
If they pass this bill using these procedures, they will come to regret that because the procedures used to pass it may also be used to repeal it. And if they use 51 votes in the Senate to make a major substantive change in legislation, that’s going to be a problem.
Rove also debunked claims by liberals about reconciliation, specifically its use during the 2001 tax cut legislation signed by Bush:
We used reconciliation on the passage of the tax cuts in 2001. Well, guess what? One-quarter of Democrats in the Senate were supportive of the tax cuts, so there was bipartisanship. Reconciliation is generally used as a way to smooth the consideration of budget and tax measures that are changes in existing law. It was not designed and was never intended to be used to pass major, dramatic, big, huge, economy-affecting policy that the Democrats are trying to do in this instance.
Rove also spoke at length about Bush’s conservatism, specifically programs such as No Child Left Behind, the Medicare prescription drug benefit and TARP, which have raised questions about his fiscal conservatism.
His defense of No Child Left Behind:
[Rep.] John Boehner and [Sen.] Judd Gregg were the two Republicans who worked with [then-Sen.] Ted Kennedy and [Rep.] George Miller and the administration to put No Child Left Behind into place. I believe it is conservative legislation. It says states are in charge. If you get federal money, a state has to have standards. We don’t care what those standards are; you just have to have standards.
The education oligopoly doesn’t like to be held to account. And having standards—expectations about what children are expected to learn and when they’re expected to learn it—is a conservative principle. …
What’s so odd to me is that a lot of conservatives have come to join with the teacher unions in objecting to children being tested. … Conservatives should not get in bed with the teacher unions and give them what they want, which is weakening or an end to a tool that gives parents and communities a chance to demand success and to blow the whistle on failure.
His defense of the Medicare prescription drug benefit:
We had two competing plans: We had an $800 billion Democratic plan that was government-run. The government set the formulary. It decided what drugs you got and set their prices. And it was not paid for. The Republican plan was free-market oriented and was scored by the CBO at $450 billion, and included other reforms of Medicare and the creation of health savings accounts.
Because it was based on free-market principles, in which private companies competed to deliver the benefit, guess what? The program is costing one-third less than what CBO anticipated. … Why? Because it’s based around markets and markets have a wonderful way of lowering prices and increasing benefit. …
It’s the only government-sponsored health program in the history of the country which has come in under its original estimates. …
I understand if a conservative says to me, ‘I think we ought to repeal Medicare and it ought to be gone. And I, therefore, object to a Medicare prescription drug benefit.’ I salute them as being consistent. But if Medicare is going to exist, then we need to have Medicare driven by market forces and we need to have it as modern as possible. …
It was a wise decision for conservatives to say, while we have this moment—a Republican President, a Republican House, a Republican Senate—let us pass a conservative, market-oriented version of this benefit, rather than allowing them to pass a much more expensive, much larger, big government, price-fixing form of service.
On the use of TARP I, supported by Bush, and TARP II, supported by Obama:
The difference between those two are clear: We have one where a Republican, conservative president said, I don’t like doing this, but if we’re going to have to do this to save the economy, we better make certain the taxpayer is protected and at the end of the day we get made whole and we make money. And we have a Democrat president who says, I’ve got a big pot of money, let me use it to reward my friends, punish my enemies and engage in industrial policy.
What went wrong in the Social Security reform debate of 2005:
When it came to Social Security reform, we had problems on the left and the right. The political left in Congress was not the same as thoughtful liberals like [the late Sen.] Daniel Patrick Moynihan, who said we better repair the safety net before it breaks. We had no political support among Democrats. …
Let’s be candid about this. Republicans applauded when Bush talked about this in the 2000 and 2004 campaigns, and there were a lot of reformers like [Sens.] Elizabeth Dole, John Sununu and Jim DeMint who got elected to the Congress by talking about this. But when it came time for the rubber to meet the road in 2005, there was little enthusiasm among Republicans for taking this up, and particularly striking among some conservative leaders whom you would’ve thought would’ve understood the special moment we had and the responsibility we had to save this program, who said, nope, sorry, not going to do it.
The role of Tea Party groups:
I don’t want them to become an adjunct of the Republican Party. I think they are far more powerful and influential if they remain as they are today, which is a movement that holds the feet of elected officials in both parties to account for what they do on spending, deficits, debt and powers of government.
The best reporter to cover the Bush White House:
I hate to sound like I’m flacking for my friends at Fox, but the Fox reporters were always good in that they were tough but fair. I thought also, surprising enough, that Jake Tapper, who is an ABC reporter, who is a lefty, was nonetheless reasonably fair and tough. You could count on him to ask you tough questions.
Rove’s thoughts on those who call Obama a “socialist”:
We’ve got to be very careful about our language in order not to give our adversaries cheap shots to make at us, while at the same time making the case against President Obama and liberal policies. …
President Obama wants things to remain in the hands of private owners and operators. It’s just that he wants them to be subjected to a level of regulation, scrutiny and restraint by government that would be stifling.
We have to remember our target: It’s not our fellow conservatives. Our object here is to say things and make the case to people whose ears and eyes are open, but who don’t necessarily view themselves as conservatives.
How technology is changing politics:
We need to as a movement avail ourselves of all these channels because they are ways to reach people, particularly younger people who are otherwise not available to us. Just remember this, 2008 in the presidential election, it’s the first election in history that more people said they got their information about the election from the Internet than from local newspapers.
The new House health care bill (H.R. 3962) unveiled by Speaker Nancy Pelosi (D-CA) yesterday clocks in at 1,990 pages and about 400,000 words. As written, the bill purports to cost only $1.05 trillion over the first ten years and is paid for by over $700 billion in tax increases and cuts to Medicare Advantage and Medicare prescription drug payments. But as troubling as those numbers are, the scariest thing about the bill is the solid foundation it lays for a complete government take over of the health care sector of our economy.
The Washington Post describes the bill as “creating an expensive new entitlement program (subsidies to purchase health insurance) and dramatically expanding an existing one (Medicaid).” This is true by itself, but the Post later dismissively adds: “If you’ve noticed that we haven’t talked about the public option in the House bill, that’s not an oversight. For all the fury over the issue, it doesn’t matter that much; the CBO estimates that the government-run plan would actually have slightly higher premiums.” This is a breathtakingly naive statement by the Post and demonstrates that they have not yet fully grasped how all the different elements of the bill are designed to interact to produce President Barack Obama’s desired outcome.
The Medicaid Expansion: Under current law the CBO projects that only 35 million Americans would be on Medicaid by 2019. The House bill massively expands the Medicaid program by raising the upper income cutoff to 150 percent of the federal poverty line (FPL). As a result, the CBO now estimates some 50 million Americans will be enrolled in the program at a ten year cost to the federal government of $425 billion. This does not include the $34 billion in increased Medicaid costs that state governments will have to spend.
The Insurance Subsidies: The House bill also creates a Health Insurance Exchange through which individuals without employer based coverage could purchase insurance. The bill also provides “affordability credits” to people who are below 400% FPL. However, the bill also denies access to the credit for all people who are “eligible” for Medicaid. In essence, therefore, the House bill forces all Americans below 150% FPL to enroll in Medicaid or pay the individual mandate fine. The CBO explains why the Democrats chose this route: “The estimated costs of providing subsidies through the new insurance exchanges are now lower for several reasons: the larger expansion of Medicaid means that fewer people would be eligible for coverage through the exchanges.” In other words, it’s cheaper to force people into Medicaid then to give them subsidies high enough to buy private insurance. Furthermore, individuals are only allowed to enroll in the cheapest (”basic”) plans for the first two years. After that, they can only choose more expensive plans or the government run plan.
The Employer Mandate: The bill imposes a new 8% payroll tax on employers who don’t cover specified percentages of their employees’ health insurance. In the short term this will only result in job losses and lower wages. But further down the road, the health plans would have to meet new requirements to be specified later by Obama’s new Health Czar (“Health Choices Commissioner”). If your employer’s health plan doesn’t meet those requirements (which are all but guaranteed to drive up the cost of your health plan), you couldn’t keep it.
The Public Option: As health insurance premiums keep rising thanks to all the new requirements in the current bill and the Health Czar’s future regulations, more and more people will have no choice but to depend on the government plan or face a fine. At first, only individuals and employers with 25 employees or fewer would be eligible for the government run plan. But in year two (2014) individuals and employers with 50 employees or fewer become eligible, in year three (2015) employers with at least 100 employees become eligible but starting that year, the Health Czar permitted from this year forward to expand employer participation as appropriate, “with the goal of allowing all employers access to the Exchange.” In effect, the bill makes larger sized employers explicitly eligible and still turns over authority to the Health Czar to further open it up. The goal has been, and still clearly is, to open the exchange and the public plan to everyone. As the Post notes, the CBO now projects that the government run premiums will actually be higher than private plans. The Democrats will not allow this to continue. History shows that entitlement programs like this quickly devolve into price control central planning. A less “robust” public option today will almost certainly be a more robust public option tomorrow. Look no further than the history of Medicare. Medicare was initially designed to pay private rates, but now the program has a complex formula for administered pricing.
So that’s the plan: force all Americans to buy health insurance, regulate the private plans till they are too expensive, and then slowly expand the power and size of the public option as Americans are left with no choice but to turn to government run health care. That is how Pelosi aims to achieve Obama’s goal of “Everybody in, Nobody out” government run health care. The costs are going to be staggering. Not only will health care quality and choice suffer as more and more Americans are forced onto a government plan that reimburses providers at low government set rates, but the price tag is guaranteed to skyrocket. The only way the House managed to keep their price tag as low as $1.05 trillion is by pretending that Congress would cut Medicare reimbursement rates by 20% in 2010. The full ten-year cost of being honest about the Medicare reimbursement rates would be $250 billion. Less choice, lower quality health care, and trillion dollar deficits for years to come: that is the House’s prescription for health reform.
Quick Hits:
- An alleged member of the Hamburg, Germany terror cell linked to the Sept. 11 attacks is believed to be among al Qaeda leaders helping the Taliban in Pakistan.
- According to leaked House Ethics Committee documents, more than 30 lawmakers, including nearly half of the Defense Appropriations subcommittee, are being scrutinized about issues including defense lobbying and corporate influence peddling.
- In a rejection of President Obama’s engagement strategy, Iran told the United Nations nuclear watchdog on Thursday that it would not accept a plan to send its stockpile of uranium out of the country.
- Thanks to the fraud riddled homebuyers tax credit, and the $24,000 per car cost to taxpayers Cash for Clunkers program, the nation’s Gross Domestic Product grew 3.5% this summer.
- How Democrats can say the bill costs less than $1 trillion.