Robert Stein 1924-2014

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Monday, February 22, 2010

Which Beast to Starve?

Today brings a sharp contrast in political philosophies and economic reality. As Paul Krugman discourses on three decades of Republican attempts to shrink government and "drown it in the bathtub," President Obama discloses his intention to stop feeding the free-market monster that has devoured American health care.

In advance of Thursday's summit, the White House leaks a proposal to oversee and limit double-digit health insurance rate increases such as those the President denounced in his weekly address Saturday.

Legislation introduced last week by Sen. Dianne Feinstein would create a seven-member rate board, the Health Insurance Rate Authority--consumer, industry and medical representatives and experts in health economics--to determine which increases are justifiable and which are unconscionable by insurers who are siphoning off one out of every three dollars spent for "overhead" and profit.

This attempt, finally, to rein in a greedy industry, along with restrictions on denying care to policy holders, should become the centerpiece of streamlined reform legislation to replace last year's fiasco of a bill.

Its thrust, to protect Americans from private greed, is revealing in the light of GOP efforts to "protect" them from their own government, starting in the Reagan era.

The starve-the-beast strategy, Krugman writes, was "a game of bait and switch. Rather than proposing unpopular spending cuts, Republicans would push through popular tax cuts, with the deliberate intention of worsening the government’s fiscal position. Spending cuts could then be sold as a necessity rather than a choice, the only way to eliminate an unsustainable budget deficit."

They did just that in the Bush II years, but his tax cuts for the wealthy and unfunded wars ballooned the deficit, even as Congress couldn't muster the courage to cut popular programs like Social Security and Medicare.

Now both messes, budget deficits and health care, have been inherited by a Change president who is struggling to deal with them over the adamant opposition of those who played the biggest part in creating them.

This week will show how far he can get in trying to slim down the private beast, but it will take his new budget deficit commission a long time to start putting government on a subsistence diet.

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