The Lords of Entitlement

Speaker Nancy Pelosi defied policy logic and public opinion late Saturday night, ramming through the House a nearly 2,000-page health-care leviathan that counts as the biggest expansion of the federal government since the New Deal. As President Obama likes to say, this was a "teachable moment" about our current government.
The vote was 220 to 215, with 39 House Democrats joining all but one Republican in opposition. Mrs. Pelosi had to cajole and bribe her way to the magic 218, and the list of her promises must be stacked to the ceiling.
The lone Republican, Joseph Cao, represents a Democratic-leaning Louisiana district and extracted a promise that Mr. Obama would increase Medicaid payments to his state, and even then he only voted after Democrats had already hit 218. Let no one suggest this was the "bipartisan" health reform that Mr. Obama has long promised.
The bill is instead a breathtaking display of illiberal ambition, intended to make the middle class more dependent on government through the umbilical cord of "universal health care." It creates a vast new entitlement, financed by European levels of taxation on business and individuals. The 20% corner of Medicare open to private competition is slashed, while fiscally strapped states are saddled with new Medicaid burdens. The insurance industry will have to vet every policy with Washington, which will regulate who it must cover, what it can offer, and how much it can charge.
We have little sympathy for the insurers, or for that matter most of the other medical providers who signed on to this process only to claim now to be appalled by the result. The insurance lobby—led by Aetna CEO Ron Williams—made the Faustian bet that it could trade new regulations for more new subsidized customers who would face a tax penalty if they didn't buy their insurance. The Pelosi bill includes the regulation but guts the tax penalty because it's unpopular. Insurers will thus have to cover more sick people with fewer dollars, as healthy folk opt out of coverage until they are sick.
This writing was on the wall months ago, but the insurers chose to play an inside game rather than shape public opinion. Judging by their weekend statement—criticizing the House bill but vowing to seek "bipartisan" reform—they will now throw themselves at the mercy of the Senate. Good luck with that. The real victims are their customers, most of whom will pay more for insurance as the new mandates raise costs.

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Associated Press

House Speaker Nancy Pelosi.

Mrs. Pelosi's craftiest political turn was a last-minute compromise to strip federal funds from insurance plans that cover abortions. The deal—negotiated by Michigan Democrat Bart Stupak and supported by the National Right to Life Committee—gave cover to 40-some Democrats to support the larger bill.

However, as subsidized costs soar, government will have no choice but to ration medical care, starting with the aged and grievously ill. Is pre-natal life more valuable than the elderly? We're reminded of the way pro-lifers supported Anthony Kennedy over Laurence Silberman for the Supreme Court in 1987 merely because Mr. Kennedy was a Catholic who claimed to personally oppose abortion. Mr. Stupak played the right-to-lifers like a Stradavarius.
The real importance of the abortion uproar is as preview of the politics that will dominate every medical coverage issue if ObamaCare becomes law. Every decision of what to insure or not—when an MRI can be used, or whether a stage-four breast cancer patient can get Avastin or some future expensive drug—will become subject to political intervention over moral disputes or budget constraints. Heretofore, these decisions have largely been made between a doctor and patient. This is the real "right to life" issue.
Perhaps the most unsurprising news in this drama was the collapse of the Blue Dog "deficit hawks." Enough of them always cave in the end to give Mrs. Pelosi her way. It's nonetheless worth noting the surrender of that most vocal scourge of deficits, Tennessee's Jim Cooper, who voted aye on grounds that the bill can be improved in the Senate.
But Max Baucus's Finance Committee bill includes a similar gimmick of making the numbers look good by using 10 years of new taxes to finance only seven years of spending (six in the House). The deficits explode in the second decade and beyond in both bills.
The House also contains a new government long-term insurance program that starts collecting premiums in 2011 but doesn't starting paying benefits until 2016 and then runs out of money in 2029. North Dakota Democrat Kent Conrad called it "a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of" in an interview with the Washington Post in late October. Mr. Cooper has with a single vote made his entire career irrelevant.
Yet 39 other Democrats were given a pass on the vote, as the leadership knows how unpopular this bill is in most of America. They know this legislation is not the result of some national consensus in favor of expanding state power. Its passage was possible only because of temporary liberal majorities that are intent on fulfilling their dreams of a cradle-to-grave entitlement state. If they lose Blue Dog seats, or even their majority, in the short term, so be it. As the party of government, Democrats believe they will benefit in the long run from a much larger government.
Unless the Senate has an epiphany of common sense, Americans will be paying the bills for this willful exercise for generations to come.