In this op-ed in today’s Washington Post, Jackson Diehl argues that there are strong similarities between Barack Obama and George W. Bush, and asserts that Obama’s decision to pursue health care reform can be compared to Bush’s to go to war in Iraq. Each, he suggests, is a “war of choice”:
So Obama hasn’t strayed far from Karl Rove’s playbook for routing the opposition. But surely, you say, he’s planning nothing as divisive or as risky as the Iraq war? Well, that’s where the health-care plan comes in: a $634 billion (to begin) “historic commitment,” as Obama calls it, that (like the removal of Saddam Hussein) has lurked in the background of the national agenda for years. We know from the Clinton administration that any attempt to create a national health-care system will touch off an enormous domestic battle, inside and outside Congress. If anything, Obama has raised the stakes by proposing no funding source other than higher taxes on wealthy Americans, allowing Republicans to raise the cries of “socialism” and “class warfare.”
Just as Bush promoted tax cuts as a remedy for surplus and then later as essential in a time of deficits, so Obama has come up with strained arguments as to why health-care reform, which he supported before the economic collapse, turns out to be essential to recovery. Yet as he convened his “health care summit” at the White House on Thursday, the stock market was hitting another 12-year-low; General Motors was again teetering on the brink of insolvency and the country was still waiting to hear the details of the Treasury’s proposal to bail out banks. George W. Bush might well be asking: Is the president taking his eye off the ball?
I agree that we should think about General Motors as we decide whether it is the right time to finally do something about health care reform. But that brings me to the opposite conclusion: If we don’t fix our health care system, everything else we do for the automakers may well be a waste. That’s because health care costs are one of biggest things that are killing this country’s auto industry. Detroit is spending more on health care these days than it is on steel. Diehl might read this story that his colleague Ceci Connolly wrote in 2005:
American manufacturers are losing their ability to compete in the global marketplace in large measure because of the crushing burden of health care costs, General Motors Corp. chairman and chief executive G. Richard Wagoner Jr. said yesterday as he called on corporate and government leaders to find “some serious medicine” for the nation’s ailing health system.
In a speech at the Economic Club of Chicago, the auto executive, who is responsible for providing health insurance for more people than any other private employer in the nation, graphically detailed how rising medical bills are eating into his company’s bottom line and ultimately threatening the viability of most U.S. firms.
“Failing to address the health care crisis would be the worst kind of procrastination,” Wagoner said, “the kind that places our children and our grandchildren at risk and threatens the health and global competitiveness of our nation’s economy.”
After spending several years on the health policy sidelines, Wagoner is launching a mini media blitz, hoping the competitiveness argument will be the one that finally prompts lawmakers to take on an increasingly expensive system rife with inefficiencies and inequities. Wagoner said he intends to press his case personally in Washington and with the nation’s governors.
Though self-interest may be at the heart of Wagoner’s crusade, he and a range of corporate leaders and policy analysts warned that GM’s woes are a harbinger of what lies ahead.
“GM is the canary in the coal mine for Medicare and everyone else,” said Sean P. McAlinden, chief economist at the nonprofit Center for Automotive Research. “There are many, many more companies out there in trouble because of health care costs than just the auto, steel and airline industries.”
McAlinden, a labor expert sympathetic to union views, said many in Washington have mistakenly concluded that GM and other carmakers are simply whining about costly union contracts.
“GM and the United Auto Workers didn’t cause this double-digit inflation in health care,” he said. And if GM pushed for sharp reductions in health benefits, the powerful union would likely strike and send the company into Chapter 11 bankruptcy protection, he predicted.
Last year the automaker, known for its innovative approach to health care, spent $5.2 billion to cover 1.1 million retirees, employees and their families. Prescription drugs cost GM $1.9 billion, and the company projects overall medical spending will increase by $400 million this year. That could be offset by a provision in the Medicare drug benefit to pick up a portion of firms’ retiree drug costs.
But the figure that prompted Wagoner to raise his voice is $1,500. That is the amount of money added to the price of every single vehicle to cover health care, a cost that his foreign competitors do not bear.
“The cost of health care in the U.S. is making American businesses extremely uncompetitive versus our global counterparts,” he said. “In the U.S., health care costs have been rising at double-digit rates for many years. In 2003, they were about 15 percent of GDP, at least 30 percent higher than the next-most-expensive country.”