Obama Signs SCHIP, “First Step” in New Government Expansion
“This bill is only the first step.”
With these words, Barack Obama celebrated his signing into law the expansion of the State Children’s Health Insurance Program (SCHIP). The bill authorizes an additional $32.8 billion over the next five years to be spent on existing state programs. The difficulty with this legislation is trying to figure out what change has been implemented by the new administration which campaigned so heavily on the slogan. Is it the new federal spending that’s different, or another broken promise by a politician who pledged transparency and stronger ethics rules?
Let us first address the trivial matters.
The not-so-shocking aspect of this bill is the fact that Barack Obama apparently violated his own ethics rules yet again. On his website BarackObama.com – which is still currently available for viewing – there is a statement about ethics that describes his plan for government transparency and cutting waste out of non-emergency legislation. This is what is written:
“Too often bills are rushed through Congress and to the president before the public has the opportunity to review them. As president, Obama will not sign any non-emergency bill without giving the American public an opportunity to review and comment on the White House website for five days.”
The SCHIP bill was passed by Congress on Wednesday afternoon and signed by Obama just hours later. I’m not sure whether health insurance qualifies as “emergency” spending, but it is clear that the five-day waiting period was not employed. This can be interpreted in two ways: Either Obama thought the SCHIP legislation was an “emergency bill” or he decided his own ethics rules don’t necessarily apply at all times. Considering many of his cabinet appointees’ tax problems and lobbyist positions, I would be inclined to believe the latter is the case.
Getting to the heart of the matter, it seems that Obama’s promise to provide universal health coverage is off to a good start – depending on how you look at it.
If government-provided healthcare given to select Americans at the expense of specific taxpayers is our idea of a “good start,” then Wednesday was a great success. If we are happy that the federal government is prepared to give more money to the governments of the several states for a service that ought to be the responsibility of individuals, then this new legislation ought to thrill us all.
If, however, we believe that the government is already too big, too expensive, and too involved in our private lives, then this is a disaster – and as Obama said, it “is only the first step.”
There is a lesson to be learned here, but it will not be learned by those unwilling or incapable of doing so. For everyone else, this needs to be explained.
Yesterday – February 4, 2009 – our federal government took another of many recent steps along the path to socialism, or more generally, statism. For the record, statism is not acceptable in this country. It never has been and never should be. It should also be noted that nothing is free, especially when it comes from the government. Allowing the government to provide healthcare for our children is a statist policy and is detrimental to individualism and liberty. Asking for it is suicidal. Sure, we may have “free” healthcare for children, but at what expense?
If we believe that only smokers will be paying for this new spending, then we are being quite naïve. The proposed tax of sixty-one cents on each pack of cigarettes in order to fund this legislation is demonstrably counterintuitive. Sixty-one cents in additional taxes will most likely lead a considerable amount of smokers to either curb their habits or perhaps quit altogether. What happens when many smokers stop smoking?
Cigarette sales have actually been on the decline over the past decade and many state governments have been targeting smokers and smoking. Therefore, attaching new federal funding to a stigmatized and diminishing social habit doesn’t really sound like a great idea. Leave it up to politicians to fail in making such an obvious connection.
But surely the congressmen that drafted this bill understand supply and demand – and economics in general, right? Well, maybe they don’t. They may not understand economics and they may not recognize that if it costs more for an individual to fund a certain behavior, then fewer of these individuals will partake in that behavior. This is especially true during slow economic times.
On the other hand, maybe these congressmen do understand…and that’s the problem.
Nevertheless, there are other factors that need consideration.
Once cigarette smoking decreases and the funding consequently follows, how will the government compensate for the lost revenue? Will they raise the cigarette tax again or will they then use money from their general funds? Who will ultimately subsidize this health insurance program?
Another scenario to mull over is the possible and probably inevitable increase in the number of children covered by this program. This is a common trend in entitlement spending. Once the population realizes they can get services “free” from the government which they currently have to pay for out of their own pocket, many of those people simply stop purchasing the services themselves and get in line for the government handout.
So, when the amount of uninsured children increases over the next five years and cigarette sales continue to decrease, how much more money will the federal government pledge to the programs and from whom will they get it? This is a question that apparently was not asked. If Obama was able to stick to his campaign promises, the American People would have had a chance to ask him about it over the next five days – if we are to believe that our input would be sincerely examined, of course.
We should remember that during his statement before signing the SCHIP bill, Barack Obama said that this was only a “down payment” on his “commitment to cover every single American.” Insuring a few million children is merely the beginning of the systemic overhaul and expansion of our federal government’s entitlement programs.
Thirty-three billion dollars and government-controlled healthcare for several million children is just the first step. The next step may be the first one we take in our newly-introduced statist society…where everything is “free,” but everybody is not.
Reader Comments
Fail. “For the record, statism is not acceptable in this country.” We have literally hundreds of examples of socialized systems in this country that are highly successful: Police, fire, roads, social security and even electricity in some parts. Government does a better job, at lower cost, than private industry. You need only look at the Iraq war to see examples of extreme spending for little effect: Halliburton made a killing. Individual medical insurance plans makes as much sense as buying insurance for lunch: You know you’re going to need it. You think private enterprise will provide it? They only take your money, they don’t hand it back.
Ok..free healthcare or should I say government subsidiesed healthcare = bad.
Now, when I managed a houskeeping department for a hotel, a large majority of our staff could not afford the Healthcare program the hotel provided them (roughly 200 every two weeks for a family). So most declined coverage and went to the county emergency room when they got sick. How do we get these people at the low end of the payroll coverage? Do we say ‘f-u’ too bad? Do make healthcare reduce costs? Do we make healthcare providers non-profit? Do we make employers pay more?
Thanks for the comment, Dwight.
I recognize that we do have state institutions/infrastructure, such as police, fire, and roads. A police force is necessary to enforce the laws we created as a free society. We cannot live in a society of vigilantism and we cannot privatize police departments for obvious reasons. Fire departments are debatable, but so far they have proven to be quite successful.
Your other examples are not at all “highly successful.”
Our interstate highways were a noble project, but roadways in general are failing under government control. I’m sure we can discuss numerous examples of road construction projects around the country that are/were extremely over budget; where it took many months or years to complete a job that should have been completed in a fraction of the time by a private contractor; where improvements and expansions are made or needed annually, leaving roadways under permanent construction.
Social Security? It’s going bankrupt. There is no trust fund for it and it is becoming a massive un-funded liability. The government has squandered every penny that was supposed to be sent to the fund, and on what? Other entitlements? Pork spending? Welfare? Monuments? Wars? It is not the responsibility of the government to take money from one person and give it to someone else. Social Security is a perfect example of government inefficiency and is a direct result of the redistribution mentality.
Utilities are largely government-operated and some of them are well-run. But many of them are not cost-efficient, they are over-burdened, and they are over-regulated by local and state governments. California’s electricity problems are a great example of a failed power grid and environmentalist ignorance. When government tells us how or from where to get our power, it puts limits on the capacity to provide it to those who need it.
Governments do not do a “better job, at lower cost, than private industry.” Governments are wasteful bureaucracies with entirely too much overhead and inefficient processes. We have nearly two and a half centuries of our own examples of it. There are many local municipalities that are contracting private companies to take care of local services - because they’re cheaper and better. You also said that private enterprise only takes our money and “they don’t hand it back.” What does the government “hand back” to us? “Free” and inefficient services that they tax us heavily for?
We need to rid ourselves of this “government-can-do-no-wrong” mentality. It is the same philosophy of monarchical society, except in those times the law implicitly stated that it was the king who could do no wrong. Today we have substituted “king” with “federal bureaucracy” and we continue to pay dearly for it.
We do none of those. What we need to do is make it easier and cheaper for healthcare practitioners to practice medicine. How can we do that?
First of all, we need to address tort reform. Liability insurance is one of the major costs of healthcare. Frivolous lawsuits have driven up insurance costs for every doctor in this country. If we move to something like a “loser-pays” system, it will help to greatly reduce the number of these lawsuits, and consequently, price structures at hospitals and clinics.
Another way to reduce prices is to eliminate third-parties when possible. Some of the additional costs for insurance are a result of administrative fees for the insurance company itself. And practitioners also have administrative costs associated with insurance claims for visits. If we were more willing to pay out-of-pocket for basic services directly to our doctors, it would be much cheaper than going through an outside company for every visit.
Some people also know that they can get away with charging more money for a procedure if they know the patient isn’t paying the full costs anyway. So, they raise their rates and charge the insurance company more than it actually costs - but all you pay is the co-payment…or so you think. Your annual rates are factored according to how much medical procedures cost and how often you’re likely to need them. If your insurance company is doing unnecessary paperwork for a simple check-up and your doctor is charging higher rates because of liability insurance and because they can (since you’re not paying full cost anyway), it’s going to bring prices much higher than they really ought to be.
Just a few things to think about. Thanks for the comment.