State of the Union

The Presidentís State of the Union Address

Earlier today I participated in a short video produced by the American Enterprise Institute with reactions from scholars and fellows to some of the statements made by the president in his State of the Union Address.  The full video is available here. I also have a brief post up at National Review Online with some of my thoughts on the president’s (predictably) disappointing speech.

He said we can never pull back on promises made in the form of entitlement commitments — without ever mentioning that those promises have never been fully funded and will lead, at some point, to a fiscal and economic crisis. There’s nothing more fiscally irresponsible than to suggest that entitlement commitments can never be revised — but that’s essentially what the president said in his speech tonight.

You can read the rest of the post here.

posted by James C. Capretta | 2:59 pm
Tags: State of the union
File As: Politics, U.S.

On the State of the Union Speech

Over at National Review Online, I have a brief take on last night’s State of the Union speech. And at economics21, a lengthier response:

It was no real surprise that during last night’s state of the union address the president hit on the same populist themes he has been pounding since Labor Day, which essentially come down to this: the nation’s economic troubles — anemic job growth today, massive federal borrowing and debt accumulation, and stagnant wage growth for the middle class — can all be traced to public policies which deliver excessive economic gains to the rich at the expense of everyone else. In other words, if only the Republicans were willing to tax the rich, all would be well....

But what President Obama didn’t explain last evening — indeed, has never really explained — is how a tax hike on higher income households will help the struggling middle class. Because it’s not at all obvious it would.

You can read the whole column here.

posted by James C. Capretta | 2:19 pm
Tags: State of the Union
File As: Health Care

The Insurance-Benefit Canard

Obamacare didn’t get mentioned until near the end of the president’s State of the Union address, but when the president did get around to talking about it, the content of what he said was predictable. He attempted once again to justify a full government takeover of American health care on the grounds that the new law is already providing vital new insurance protections to Americans. There were the obligatory anecdotes of people who, the president says, have already been protected by these new insurance rules.

Framing what Obamacare does in this way is misleading in the extreme. For starters, despite the impression the president is trying to create, Obamacare hasn’t banned pre-existing condition clauses from insurance plans yet. That doesn’t happen until 2014. So, as of today, there are still millions of Americans with such conditions who are uninsured, and Obamacare is doing nothing for them. The new “bridge” high-risk-pool program that is intended to help those with pre-existing conditions get coverage until the “big bang” reforms of 2014 has been an abysmal failure so far. Enrollment is anemic because the program is poorly designed, with premiums that are too high and unpredictable to attract subscribers. As of last month, there were only 8,000 people signed up with the program. The president and his team have drawn many of their anecdotes of “early beneficiaries” from this incredibly small pool of people, but the truth is that this aspect of the new law is more an indictment of its failings than a proof of its virtues.

The president would like the public to think that Obamacare is mainly about new insurance rules, which is why he now calls it “health-insurance reform.” But, of course, that’s not really an accurate description of Obamacare. It’s a massively expensive government takeover of American health care. It will spend trillions, raise taxes and premiums, and lead to inferior-quality care. It will disrupt insurance coverage for millions of people. The federal government will become the choke point for all major resource-allocation decisions in the health sector.

Based on what he said last night, the president would seem to be willing to jettison just about everything else in Obamacare — the entitlement expansions, the exchanges, the Medicare cuts, the taxes, the new long-term-care insurance program — so long as new insurance rules to remove lifetime caps and allow 26-year-olds to stay on their parents’ plan are retained. Perhaps Republicans should take him up on it.

posted by James C. Capretta | 10:24 am
Tags: State of the union, bridge, high-risk pools
File As: Health Care