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Health Care Thoughts

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Blake D. Dvorak

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Before The Voting Booth gets back to its regular focus on Illinois politics -- and as I continue to catch up after a week off -- first a few thoughts on the health care bill just passed:

1. Beware the first rule of politics. As I've mentioned repeatedly, the first rule of politics is that things are never as good, or as bad, as they first appear. Remember when Scott Brown miraculously won Ted Kennedy's old seat? Republicans and many pundits (and this blog) saw Brown's victory as a the Gettysburg of the Democratic majority: Obama, Reid and Pelosi had reached the extent of their domination of Washington and what was to follow was a slow but steady readjustment of the administration's and congressional Democrats' goals, all in an attempt to stave off mass defeats come November. Supposedly first on the chopping block: health care. Today, the president's health care bill is the law of the land.

This is not to say that those November defeats still won't happen for Democrats; it's that majorities matter; the power of the president matters; and in the end, one election is only one election. Two months ago, Democrats were in the dumps and Republicans were flying high. Yup, beware the first rule of politics...

2. GOP: Repeal It? Regardless of the Democrats' victory, it is not at all clear -- as the administration and Reid and Pelosi argued -- that the American public won't punish the Democrats in November over this bill. The Democrats' thinking goes something like this: Once Americans come to appreciate all the goodies in this bill, they'll embrace it as fervently as Medicare and Social Security. Maybe, maybe not. But that supposes a pretty dim view of the American public.

It's as if the virtue of a particular bill is based on its popularity. By that logic, giving out free cars to every American is good public policy because, well, Americans love free cars -- and woe to the politician who threatens taking away your free car. Similarly, there are a lot of goodies in this health care bill that Americans will no doubt love, but at what cost? To pay for this health care bill, spending will rise, as will taxes. All that nonsense about this bill cutting the deficit at no cost to the public is the very definition of selling snake oil.

Most Americans understand this, which is why public opinion of this bill is so low. Still, Democrats hope that once things kick in, it'll all be puppy dogs and ice cream. Get real. Most of the bill's goodies don't begin until 2014. The ones that do -- the pre-existing conditions mandate and the ability for children under 26 to stay on their parents' insurance -- start in six months. That is a very short amount of time for the public to embrace this bill and Republicans will be able to campaign on the "Repeal It!" platform successfully. In other words, the overall electoral outlook for Democrats come November remains very poor.

3. The paradigm shift. However, whatever happens in November, Democrats have scored a long-term victory. That's because the federal government is now intimately involved in health care, and once in, it's next to impossible to dislodge. Over time, this will be as accepted as Social Security. You don't hear any serious politician talking about repealing Social Security. They talk about reforming it; they talk about making it solvent; but never repealing it. Meaning, the debate is about how to manage government's involvement, not how to remove it. The same thing will happen to health care. 

And this was a primary objective of Democrats all along: To move the debate to their turf; to shift the paradigm from "should government manage health care?" to "how should government manage health care?". Which is why both sides fought so hard over something the president himself claimed wouldn't do a thing to 85% of Americans' health insurance. It was about getting government in the door, if only by an inch.

4. Taxes, taxes, taxes. Still, it's impossible to say when that acceptance will happen. Could be in a few years. Could be in 10 years. And until it does, Democrats could take multiple beatings at the polls. Because, unlike Social Security in the 1930s, this bill comes during a time of major budget shortfalls. The federal government, and the states, simply cannot pay for all the entitlements out there without a major increase in revenue. What form this will take or when it will happen is not clear. But it will have to happen.

Last night on Special Report w/Brett Baier, Charles Krauthammer made the prediction that the cost-cutting board, which is supposed to find out ways to make health care cheaper, will suggest a national sales tax to pay for all this. Krauthammer believes the board won't make this suggestion until after the November elections, but that it will likely dominate the 2012 presidential race. Conservative or liberal, one ignores Krauthammer to his peril, which means the president has asked his fellow Democrats to make a deal with the devil: Pass the bill, make history, shift the paradigm, but accept that fact that we will have to raise taxes on everyone. 

Quinn Calls for 33% Tax Hike

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Blake D. Dvorak

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Addressing the General Assembly today, Gov. Pat Quinn called for a 33% hike in the state income tax to raise $2.8 billion a year and help close the budget deficit. From the Trib:

Quinn wants to increase the personal income tax rate from 3 percent to 4 percent --- a 33 percent increase --- with the corporate tax rate rising from 4.8 percent to 5.8 percent. The tax hike would bring in $2.8 billion a year.

"I believe this 1 percent for education makes sense, and I think the people of Illinois will understand. We must invest in the future, even in these tough economic times," Quinn said. This is urgent. We don't have six months. We don't have six weeks. I challenge the General Assembly to take immediate action to enact the 1 percent for education initiative."

Last year, Quinn unsuccessfully tried to raise the personal income tax rate from 3 percent to 4.5 percent and provide some tax relief.
Bill Brady, talking to reporters after the address, said, "This budget doesn't do anything to bring back the 250,000 jobs we've lost in just this last twelve months." Here's a video, courtesy of Cap Fax:


It's a bold move to call for a tax increase as you're running for reelection. But that's part of Quinn's calculation: He wants to be credited with doing the people's business regardless of political consequences. And many in the media and on the left will say as much.

But it's still a tax increase and voters still generally despise them.

It might seem that Brady's job is easier: Call Quinn a tax-and-spender and promise no new taxes in a Brady Administration. But not so fast. Unless Brady can convince voters that all hell won't break lose without a tax hike, he'll be in danger of appearing unserious -- and, as Jim Edgar said, "naive." That requires a detailed budget blueprint -- not a campaign slogan like "10% cut across the board."

It also requires a bit of economics. Brady need to explain to voters that his opposition to tax increases is about the economy, not the budget. He needs to make the case that his primary concern as governor is to improve the state's economy and put Illinoisans back to work. Which means the budget crisis is almost secondary.

Journalists, politicos, policy wonks, etc. hate hearing that. For many of them, the state's fiscal health is the economy, and for Brady to focus on one at the expense of the other is incomprehensible. And that's why there's going to be a lot more backlash against Brady for opposing tax hikes than Quinn for proposing them: All the schools that will close; all the inmates who will be released; all the social services that won't be delivered -- these stories will dominate coverage of Brady's economic agenda. 

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