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Someone please explain this…

If the medical device tax isn’t repealed, a few dozen Congresspeople are willing to default on our debt, potentially causing international financial turmoil and a major recession.

That’s reality, or at least what passes for reality these days.

Here’s the path we’ve trod to get to this point.

  1. A few dozen Congresspeople refused to pass a budget by October 1 because they wanted PPACA killed.  The Speaker of the House, averse to violating the “Hastert Rule”, went along with their demands.
  2. The Senate refused to comply, and anyway, the President would not have agreed.
  3. As public opinion turned increasingly against the few dozen, and their increasingly untenable position became increasingly obvious they changed their demands, from a delay to:
    • a delay of PPACA implementation, then
    • a repeal of the medical device tax, then
    • a delay of the enrollment mandate, then
    • a demand that Congresspeople and their staffers would have to pay all their premiums themselves; then
    • a delay of the employer reinsurance tax…
    • now PPACA appears to be off the table, and instead there’s a demand for some budget talks around addressing the sequester and long-term entitlement cuts.

Sure, some of these were mixed in together, and others were sorta kinda coupled, but you get the picture.

As some readers have pointed out, the Congresspeople’s actions are, in fact, legal.

They are also mystifying.  Sure, the most vocal come from very safe districts where their actions seem to reflect the current will of their voters, but is delaying the medical device tax really worth defaulting on the national debt – and the all-too-likely consequences of a default?

Medical device tax or… world-wide financial meltdown, immediate return to 2008 recession…

Of course, now that the GOP is on the run and desperate for a deal, any deal that allows them to declare victory (maybe changing PPACA’s health plan colors from bronze silver and gold to red, white, and blue?), Senate Majority Leader Reid is playing his own brinksmanship game, demanding a roll-back of the sequester.

The GOP won’t agree to that, so we’ll likely get just what we would have had if this whole stupid pointless embarrassing mess hadn’t even happened – a short-term deal late on October 16 (that’s tomorrow!) with some nice words about negotiations over long-term entitlement reform and revenue generation.

What does this mean for you?

Elections have consequences.

8 thoughts on “Someone please explain this…”

  1. Yet a deal tomorrow may even still be too late for the US to be able to pay all of its bills on time. In 1979 Congress played this game and raised the debt ceiling the evening before we were to default and our pay systems couldn’t respond quickly enough so a few bond holders were in fact paid late. We may have better technology now that would avert such a delay, but who knows for sure? Not to mention the damage already done to the debt and deficit by needlessly spending nearly 3 Billion dollars for the shutdown.
    The only string I would attach to a bill to raise the debt ceiling and re-open the government would be that should any member of Congress refuse to negotiate on a budget should be required to give up their seat at the table for someone who will negotiate.

  2. The GOP has really done it this time. I’m interested to see what occurs during the next mid-term elections.

  3. Hi Joe….
    The Democrats have been unwilling to negotiate with the Republicans. The ACA is a nightmare. It would not have passed if they let us know that it would be a tax, so they called it a “penalty”. The Supreme Court revealed what this is… a tax. It would be prudent to give all Americans the same benefit that big business got… a delay in the mandate. Why rush into some big entitlement program when we still don’t know all the consequences? This program is flawed and will cost the taxpayers plenty. The taxpayer will also get angry when they realize that the ACA is not actually affordable.

    I applaud their attempt to delay this program. I fear that once this is implemented it will be yet another federal entitlement program that will grow out of control.

    They will pass some temporary measure to buy time, but we cannot continue going down this path of out of control spending.

    1. thanks for the comment Kevin. couple thoughts.

      1. CBO indicates ACA will bring a net reduction to the deficit.

      2. Is shutting down the government and defaulting on the debt to stop a bill that was passed, signed, and affirmed by the Supreme Court worth the consequences?

      1. Hi Joe,
        I wouldn’t put my money on the CBO, their track record isn’t very good. There is an old saying, “Figures don’t lie, but Liars figure”…. Check out this link on some of the fuzzy math:

        I know it is not an exact science, but I certainly wouldn’t hang my hat on the CBO estimates.

        Also, the government doesn’t have to shut down if our President and the Senate Democrats would negotiate. The basic premise of the opposition, which is being born out with each day, is that the ACA is a bad law that was jammed through and is certainly not ready to be implemented If it were that good, then why are there waivers/exemptions? Why do big business and unions get waivers from the “mandate” but the common person doesn’t? All they would need to do, at least short term, is delay the implementation. This law is doomed to fail by its design, and the taxpayer will yet again have to pay. The bill was passed and signed, but it has changed dramatically since then. Why can they pick and chose the parts of a law they want to enforce?

        I’m not saying that healthcare is perfect in America. I would also say there are good aspects to the ACA (Pre-exitisting conditions, keeping kids on till 26). I just do not think that the ACA is the answer, unless you ultimately want a single payer system….


        1. Thanks for the comment, Kevin.

          Absent any credible research disputing CBO’s estimate, I’d go with theirs. Agreed that predicting long term is problematic, but CBO is non-partisan and for all Heritage’s current views, they did promote CBO when it served Heritage’s policy purposes (see Medicare Advantage)

          I’m afraid we’ll have to agree to disagree re negotiation. Unfortunately the last few times the Dems had a deal with Boehner the deal was undone when he could not get his caucus to go along with it. When you go thru that process several times, reach agreement, only to hear “nope, we want more”, it makes it difficult to believe the other side really wants to negotiate.

          Finally, I’d ask again – is it worth it to do this? That’s the question.

  4. I think the source of all these problems is the fact that Democrats passed a bill that arguably touches the life of most Americans without a single Republican vote. True reforms are bipartisan. I am not surprised if Republicans fight this for the rest of our lives.
    I wish we had a president who could lead. Who could work with the other side. Who could bring people together. Is working with John Boehner harder than working with Newt Gingrich? I don’t think so.
    I am not a big fan of this congress. But I am also very disappointed in our president.

    1. Azita – thanks for the comment.

      I’d note that the ACA did NOT include a public option, used the individual mandate, a concept originated by the conservative Heritage Foundation and former Sen. Bob Dole (R KS), and used only private insurers. Those were direct efforts to meet GOP demands.

      Republicans chose not to vote for the plan. Recall Senate Minority Leader McConnell said his job was to make sure President Obama was a one term President. That position may have had more to do with that decision than any attempts on the part of the Dems to construct a heath reform bill that would garner GOP support.

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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