Congress + Obamacare = same blog post every few months

6 thoughts on “Congress + Obamacare = same blog post every few months”

1. It wasn’t just Collins. There’s 52 Republican senators (out of 100), so the Republicans could have passed the bill even if two Republican senators had opposed it. There were six who publicly opposed it: four conservatives (Rand Paul, Ted Cruz, Ron Johnson, Mike Lee), saying that it didn’t go far enough, and two moderates (Dean Heller, Collins), who oppose loss of insurance for their constituents. After the vote was postponed, three more Republicans announced their opposition: Jerry Moran, Shelley Moore Capito, Rob Portman. Business Insider: Which GOP senators are against healthcare bill?

   Wagner observed that state spending tends to rise as a proportion of GDP (Wagner’s Law). Joseph Heath, Three Normative Models of the Welfare State:

   One of the most striking features of the welfare state is its extraordinary growth over the course of the 20th century. Furthermore this growth pattern has largely confirmed what is known as “Wagner’s law of expanding state activity”, that public-sector expenditure can be expected to increase as a percentage of GDP as a society becomes more affluent. Over the course of the 20th century, welfare state spending did not just grow along with everything else, but steadily increased its relative share of GDP. This tends to be taken for granted, but is actually hard to explain on either the communitarian or the egalitarian model [as opposed to the public goods model].

   One of the most striking features of this growth pattern, in particular, is that it was
   largely unaffected by the ideological complexion of the political party in power. With very few exceptions, the welfare state continued to expand – in some cases quite dramatically – under the custodianship of right-wing political parties that explicitly rejected both egalitarian and communitarian ideals. Conservative governments have often introduced changes in the tax system, in order to make income taxes less progressive, or else shift the burden of revenue-collection to more regressive taxes. But at the same time that the tax system was being made significantly less egalitarian (under, say, Ronald Reagan or Margaret Thatcher), state spending as a whole was still increasing, almost always at a pace that exceeded the rate of economic growth. If the core normative logic of the welfare state involved a commitment to promoting equality, or else protecting certain spheres of interaction from commodification, one would naturally expect to see a certain ebb and flow in the activities of the state, with expansion of state activity following the election of political parties who endorsed this moral vision, and contraction during periods following the election of parties who explicitly rejected it. And yet the actual pattern is not like this.

   If, however, one thinks of the major set of welfare-state programs as public goods, in the broad sense of the term, then it is easier to see why they are so notoriously difficult to cut. When a redistributive program is eliminated, those who had been winners in the transfer can be expected to resist, while those who were losers will tend to support the initiative. With a Pareto improvement, on the other hand, the outcome is win-win, and so there is no “natural” constituency there to press for its elimination, the way that there is with a win-lose outcome.

   If this analysis is correct, and the Republicans aren’t going to be able to shrink government spending, what can they reasonably expect to do? They could shift the tax burden away from the rich by making the tax system less progressive, reducing the highest rates and making up the revenue somewhere else (e.g. by introducing a broad value-added tax). They could replace Obamacare with some program that’s basically equivalent, but gets rid of some of the unpopular features. Medicaid is surprisingly popular, despite providing relatively cheap and low-quality care, so perhaps they could make basic health insurance available to everyone in the form of Medicaid, and simultaneously remove Obamacare’s restrictions on private health insurers, dropping the marketplaces and subsidies for private health insurance. None of this seems likely.

2. That said, there’s a fair amount of randomness in the political process, so it may be that McConnell can find some way to get 50 votes in the end. Nobody wants to be the one vote that inflicts a major political defeat on their own political party. Politico: Why I’m Not Betting Against Mitch McConnell.

   On the third hand … this is a very unpopular bill. Your favorite commentator, David Brooks: The G. O. P. Rejects Conservatism.

   First, conservative policy intellectuals tend to have accepted the fact that American society is coming apart and that measures need to be taken to assist the working class. Republican politicians show no awareness of this fact. Second, conservative writers and intellectuals have a vision for how they want American society to be in the 21st century. Republican politicians have a vision of how they want American government to be in the 21st century.

   Republican politicians believe that government should tax people less. The Senate bill would eliminate the 3.8 percent tax on investment income for those making over $250,000. Republican politicians believe that open-ended entitlements should be cut. The Senate health care plan would throw 15 million people off Medicaid, according to the Congressional Budget Office. (This is the program that covers nearly 40 percent of America’s children.)

   Is there a vision of society underlying those choices? Not really. Most political parties define their vision of the role of government around their vision of the sort of country they would like to create. The current Republican Party has iron, dogmatic rules about the role of government, but no vision about America.

3. @ R Wvong:

   Cannot the increase in transfer payments over time simply be explained by the SJWs that favor transfer payments are more intolerant than the greedy Republicans and/or libertarians that are against transfer payments and welfare?

   http://fooledbyrandomness.com/minority.pdf

4. http://www.investopedia.com/articles/retirement/080516/retire-45-500k-it-possible.asp says

   “Health insurance will be a significant expense until you reach Medicare age at 65, probably eating one third to one half of your yearly expenses, depending upon where you live”

   We now live in a world where the biggest deterrent to retiring at age 45 is the government mandate to buy health insurance & it’s considered normal. Like all single mane programmers, I never had any major problems & there’s little chance I will ever require the insurance industry.

5. Viking1: That’s a very interesting article! (In short: when uniformity and scale are important, minority tastes may prevail; in a political party, an extreme faction may be able to exercise a veto.) I don’t think it’s a good explanation for Wagner’s Law, though. In a parliamentary democracy with a high degree of party discipline, a conservative party leader (like Thatcher in the UK or Mulroney in Canada) has a lot of freedom to set policy; internal opposition from within the party is going to be weak.

   In the US political system, which has weak party discipline, it’s a lot easier for a small group to veto changes, so McConnell is going to have to work very hard to push the bill through – if either the moderate Republican senators like Collins or the conservatives like Mike Lee aren’t happy, they can block it. But that explains why the US political system changes slowly – it doesn’t explain the direction of change.

   jack crossfire: “We now live in a world where the biggest deterrent to retiring at age 45 is the government mandate to buy health insurance & it’s considered normal.”

   I think you meant to say “country.” But under Obamacare, I’m not sure why it’s a deterrent: if you’re really thinking of retiring on $20,000 a year, wouldn’t you be able to get subsidies to purchase health insurance? If your income is less than about $50,000 (corresponding to 4% withdrawals from investments of $1.25 million), your health insurance premiums are basically capped at less than 10% of income. Details.

6. We now live in a world where the biggest deterrent to retiring at age 45 is the government mandate to buy health insurance & it’s considered normal. Like all single mane programmers, I never had any major problems & there’s little chance I will ever require the insurance industry.

   Russil has a good point about this. You could just pay the tax if you don’t to buy the insurance. It’s not accurate to say that it’s considered normal. Obamacare has been very controversial if you haven’t noticed. Canadians might say that the problem in America is that the health insurance industry exists at all for basic health care. On the other hand, that sentence that begins “I never had any major problems” doesn’t really make sense. Insurance is often purchased to prepare for event that have “little chance” of occurring.

Comments are closed.