[StBernard] Obama's Advisers Vs. Obama on Health Care?

[Westley Annis]

Obama's Advisers Vs. Obama on Health Care?
October 25, 2008 1:48 PM
http://tinyurl.com/6ku7sz


The conservative Wall Street Journal editorial board  takes a look at Sen.
Barack Obama's attacks on Sen. John McCain's health care proposal -- and how
some of his arguments seem to contradict principles outlined by a couple
Obama advisers.

Obama's economic adviser Jason Furman, specifically, wrote in the first
issue of Democracy: A Journal of Ideas in Summer 2006, "The fact that the
tax subsidy, which supports the employer-sponsored system, is better than
nothing is a feeble excuse for resisting any changes to the status quo."
(You can read the whole article HERE, registration required.)

Says the Journal: "Furman implored fellow Democrats and other progressives
to confront 'a critical missing link' in their health ideology -- the same
link his boss now spends most of his time demagoguing. Mr. Furman used to
portray the current system as regressive, inequitable and a subsidy for
health plans that insulate consumers from the cost of their care, thus
inflating health spending. When he was director of the Brooking
Institution's Hamilton Project, Mr. Furman outlined a health reform -- again
using tax credits -- that took the 'sensible approach' of 'exposing
individuals to the price of health care through greater cost sharing.'"

The Journal also notes that Obama adviser David Cutler, the Otto Eckstein
Professor of Applied Economics at Harvard, in his 2004 book "Your Money or
Your Life," wrote that "Health insurance is not something that is made
better by tying it to employment. As a result, essentially all economists
believe that universal coverage should be done outside of employment."

"Cutler's plan," writes the Journal, "like Mr. McCain's, also applied
subsidies such as 'tax credits -- people get a lower tax bill, or a refund
from the government, to be used to purchase insurance.' In this he was
echoing many other liberal health experts such as MIT's Jonathan Gruber,
another Democratic policy star. These advisers know that Mr. Obama's claim
that Mr. McCain will tax health benefits 'for the first time in history' is
particularly disingenuous. For people who stick with employer coverage under
the McCain plan, the money employers take out of wages to pay for insurance
would be taxed, but the new credit more than covers the bill. The people who
decide to buy coverage on their own would see their wages rise. And everyone
who joins the individual market -- many of them uninsured now -- would be
equipped with new health dollars, instead of paying with after-tax income."

Obama spox Bill Burton replies: "The Wall Street Journal took quotes from
Jason Furman out of context. The health plans he outlined before joining the
campaign had much more in common with the plan Barack Obama has proposed
than the plan John McCain has proposed. For example, as Ezra Klein noted,
'What Furman has described here is a new health care system that looks
almost identical to Barack Obama's National Health Insurance Exchange.'"

Burton adds, "In fact, Furman explicitly warned about precisely the type of
plan that John McCain is proposing, writing: 'When conservatives look at the
tax code's effect on health care, they all too often use the current crisis
as a pretext to cut taxes and shift risk onto individuals; some even want to
eliminate all the tax incentives for the employer-sponsored system without
creating any meaningful alternative. With no subsidy at all, some employers
would drop their health insurance plans and some of the 174 million people
with employer-sponsored health insurance would lose it, especially those
working at smaller companies that are already on the verge of dropping their
coverage.'"

-- jpt