Showdown in the Senate on Reform?

Thomas Edison famously once said, “I have not failed. I’ve just found 10,000 ways that won’t work.” That’s great if you’re the inventor of the soon-to-be-banned incandescent light bulb, but not if you’re a policy maker in Washington, DC. Tinkering with healthcare policy will have dramatic consequences for our economy – intended and unintended. We have heard the mantra from Pelosi and her ilk that healthcare costs must be cut because healthcare is 16% of our GDP. Funny, Pelosi isn’t complaining that government spending already accounts for about 40% of our GDP. If Pelosi succeeds, then over half of our economy would be in some way under the control of the government. That doesn’t sound like a free-market economy to me.

Thankfully, Connecticut Senator Joe Liebermann has already voiced his opposition to the bill passed in the House. Liebermann, along with a handful of Democrat defectors in the Senate, could be enough to put a halt to this healthcare coup d’etat. Nevertheless, the push to pass a bill will be great. Obama and Senator Reid are lining up support and no doubt twisting arms behind closed doors. Unfortunately, so many simple, market-based solutions that could make healthcare more affordable, such as tort reform are off the table. However, another force is emerging that could derail the government subversion of healthcare and that is a growing concern about the national debt. In the face of stimulus packages, bank bailouts and increasing liabilities for Freddie Mac/Fannie Mae, Congress will have to raise the national debt ceiling to above the current 12.1 trillion. Even some traditionally liberal congressional leaders are balking at such stratospheric numbers. Senator Dianne Feinstein (D-Calif) expressed concerns to the Senate Budget Committee last Tuesday stating, “I will not vote for raising the debt limit without a vehicle” (to address unsustainable commitments). Talk is cheap and we shall see if anything is done about curtailing deficits – short of China turning off the spigot. I wouldn’t bank on financial epiphanies by our congressional leaders anytime soon.

Sadly, the current debate seems to be missing a few incontrovertible points: the current healthcare bill passed in the House is simply unaffordable, it increases taxes at a time of economic weakness and violates the Tenth Amendment (“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."). In the current House bill, people can be fined or sent to jail for not having health insurance. Josef Stalin would be proud!

To be sure, some reform is needed to improve our system, but the current legislation “throws the baby out with the bath water.” While Harry Reid may be itching for a showdown in the Senate, one can only hope that this current bill will bog down in a Senate committee and “end with a whimper, and not with a bang.”