Mitt Romney on Health Policy

This is the fourth in a series of entries revisiting Mitt Romney's policies as stated in the debates. The first covered foreign policy; the second covered economic policy. The third covered the social issues of religion, gay marriage, contraception, abortion, and guns. This entry covers health care, including Obamacare, Romneycare, Medicare, Medicaid and other health reform ideas.

Obamacare vs Romneycare:

Romney often highlighted differences between the Massachusetts health care reform commonly called "Romneycare" and the national Patient Protection and Affordable Care Act, commonly called "Obamacare." While he supported and throughout the debates continued to defend Romneycare, he opposed Obamacare to the extent that he promised to grant waivers to all 50 states on his first day in office and to press Congress for full repeal. Claimed differences include:

• Obamacare raises taxes; Romneycare didn't
• Obamacare takes money from Medicare; Romneycare didn't
• Obamacare is a national program; Romneycare is a state program
• Similarly, Obamacare is unconstitutional for the national government; Romneycare is constitutional because it's at the state level
• Obamacare includes "a panel that ultimately is going to tell people what kind of care they can have," referring to the Independent Payment Advisory Board; Romneycare does not include such a panel
• Obamacare applies to 100% of the citizenry; Romneycare supposedly only addressed the 8-9% who were uninsured (he said 9% in the 5th debate, 8% in the 6th, 7th and 17th debates)
• Obamacare leads to regulations like the contraception mandate; Romneycare had a provision that people did not have to buy coverage for treatments or medical devices which violated their religious beliefs
• Obamacare was 2,700 pages long; Romneycare was 70 pages long

Note that these are differences claimed by Romney; whether or not you find them believable is up to you. Also, some of these were repeated (a lot) more than others. Throughout the debates, Romney often returned to Obamacare's cuts to Medicare and to the federalism defense that states can adopt individual mandates but the national government cannot. On the other hand, the IPAB point was, to my knowledge, only mentioned once.

Medicare and Medicaid

As mentioned above, Romney often criticized Obamacare for cutting Medicare. In fact, almost every time Romney mentioned Medicare, it was either to criticize Obamacare for cutting it, or defending Romneycare for not cutting it.

Regarding actual reforms to Medicare, he wants a shift to a premium support model like the Ryan plan. He also favors means testing for Medicare, where the rich would receive lower benefits and everyone else would receive higher benefits. Finally, he would not repeal Medicare Part D.

He would send Medicaid to the states as a block grant and only allow it to grow at either 1-2% per year (in the 8th debate) or inflation-plus-one-percent (in the 10th debate). He never mentioned any other reform to Medicaid, but repeated this block grant plan in several debates. 

Other Health Reforms 

Individual Mandates: While Romney opposes Obamacare, including its national individual mandate, he often defended the individual mandate itself as a good policy to carry out on the state level. In the 3rd debate, he compared it to states' ability to require children to attend school. He sees individual mandates as ways to provide the uninsured with what he called in the 6th debate "market-based, private" insurance. In the 8th debate, he said about the individual mandate in Massachusetts, "A lot of people were expecting government to pay their way. And we said, you know what? If people have the capacity to care for themselves and pay their own way, they should." Romney disagrees with Obama on what level of government should impose the individual mandate, but he agrees that it's a good policy in the first place.

Health Savings Accounts: In the 5th debate, Romney said health care "isn't working like a market," but rather is "working like a government utility" because consumers are separated from the cost of health care. He advocated health savings accounts to fix this problem, mentioning HSAs in the 5th and 9th debates.

Employer-based Insurance: In the 9th debate, Romney said we should treat individually-purchased insurance the same as employer-purchased insurance in regards to the tax code. He also mentioned this in the 19th debate.

Tort Reform: In the 9th debate, he advocated tort reform as part of the package of reforms he would replace Obamacare with. 

Health Issues Covered Elsewhere

Romney's positions on contraception and abortion were covered in the third entry in this series, on social issues. In addition to the section above, Obamacare was also covered in the second entry in the context of regulations and fiscal responsibility.

Mitt Romney on Economic Policy

This is the second in a series of entries revisiting Mitt Romney's policies as stated in the debates. The first covered foreign policy, including immigration, trade and defense, as well as policies toward some specific countries and regions. This entry covers Romney's seven-point plan for economic growth (which he outlined in whole or in part in the 3rd, 6th, 7th, 17th and 19th debates) and the connected policy areas.

1: Taxes

Romney's position on taxes changed from debate to debate. For example, in the 3rd debate, he said, "I don't believe in raising taxes" and indicated he would walk away from a deal with Democrats offering a 10:1 ratio of spending cuts to tax hikes. But in the 4th debate, he said taxes should be "part of the American experience," so he was not concerned about raising taxes on those who do not pay federal income taxes. In the 8th debate, in Nevada, he advocated a state-level redistribution tax tied to acceptance of a nuclear waste facility. The state that built the facility would receive the money while the other 49 would pay the tax.

In the 16th debate he said the top tax bracket should be 25%, while in the 20th debate, he wanted to cut all marginal rates by 20%. Taken at face value, that would turn the current tax brackets of 10%, 15%, 25%, 28%, 33% and 35% into brackets of 8%, 12%, 20%, 22.4%, 26.4% and 28% (assuming the Bush cuts are kept in place and the 2013 tax cliff is avoided), with two brackets higher than 25%.

He would cut the corporate tax rate to 25% to make it more competitive with other countries. When combined with state corporate taxes, this would move us from the highest rate to the 8th highest rate among the 34 OECD countries. He would also eliminate taxes on savings for people with incomes less than $200,000.

2: Regulations

He said he wants to improve the regulatory climate, and specifically mentioned Obamacare, Dodd-Frank and NLRB actions such as going after Boeing as regulations that are hurting businesses and preventing job creation.

He also wants to require every business to prove the legal immigration status of new hires through a national identification card connected to the federal E-Verify database. Any business that hires someone without the card or that accepts a counterfeit card would be "severely sanctioned."

3: Trade

I covered Romney's trade policy in the first entry in this series. It primarily consists of "cracking down on China," but he also advocated expanding our exports.

4: Energy

Romney said in the 8th debate, "We're an energy-rich nation that's acting like an energy-poor nation." He focuses on energy security-- getting our energy from domestic sources rather than importing them. In the 4th debate, he said he wanted to "make sure we stop sending about $500 billion a year outside our country, in many cases to nations that are not real friendly with ours." However, he does support the Keystone XL pipeline from Canada.

To accomplish his goal of increased domestic production, he wants to reduce regulations on energy companies, especially oil and gas. At the same time, he has criticized Obama for subsidies to Solyndra and other alternative energy programs, indicating a general laissez-faire approach to energy. On the other hand, in line with his focus on domestic energy sources, he said he was willing to accept more expensive gasoline if that was the result of the "crippling sanctions" he wanted to place on Iran.

5: Rule of Law

While Romney often spoke of the fifth point as reinstating the rule of law, his focus with this point early on was labor policy. He viewed pro-union actions by the Obama administration as violations of the rule of law, in particular citing the GM bankruptcy and the NLRB case against Boeing. Romney believes the auto companies should have gone through the normal legal bankruptcy process from the beginning, saying in the 2nd debate that the GM bankruptcy allowed Obama to "put his hands on the scales of justice." However, in the 20th debate, he indicated he would be willing to bail out the auto companies after they've gone through a normal bankruptcy process, saying, "If they need help coming out of bankruptcy, the government can provide guarantees and get them back on their feet. No way would we allow the auto industry in America to totally implode and disappear." (Note that these positions on the auto bailout have apparently already been Etch-a-Sketched.) He also supports a federal right-to-work law.

In later debates he broadened the "rule of law" point to an opposition of "crony capitalism," citing Solyndra and the rejection of the Keystone XL pipeline as examples. Since I think it's appropriate, I'll include here a few positions from even broader interpretation of "the rule of law."

Judicial Oversight: Romney does not want Congress to oversee judges directly in most cases, but he does believe Congress has the ability to "rein in excessive judges" (from the 13th debate) either through direct impeachment or by clarifying statutes or, of course, Constitutional amendment.

Extrajudicial Killings: In the 11th debate, he said there is "a different form of law" for those who "attack the United States" compared to those who merely commit crimes against American citizens. In the 10th, he said that anyone who joins a force we are at war with is "fair game" even if they are an American citizen. In the 16th debate, he said, "Let me tell you, people who join al Qaeda are not entitled to rights of due process under our normal legal code."

Indefinite Detention: In the 16th debate, he not only said he would have signed the NDAA, which authorized indefinite detention of American citizens, but also defended indefinite detention itself. He would have signed the NDAA not just as a flawed bill that would still get funding to the troops, but because he believes indefinite detention of American citizens is, in itself, a good policy.

Eminent Domain: In the 2nd debate, he said he believed in eminent domain for "a public purpose" but not for property that would end up going to private organizations.

SOPA: He opposed SOPA and considered opposition to SOPA to be "standing for freedom" in the 17th debate. 

6: Education

In the 6th debate, he said, "We need to get the federal government out of education." He supports school choice and standardized testing. When accused by Perry of supporting Obama's Race to the Top program, which uses funding incentives to reward school systems for meeting certain goals, Romney said he did not support Race to the Top, but did support teacher evaluations and encouraging schools to hire better teachers and get rid of bad teachers. In the 20th debate, he supported No Child Left Behind because it stood up to the teachers unions and promoted school choice by establishing testing standards.

He also supports allowing illegal immigrant children to gain citizenship through military service, but not through attending college. He also frequently cited his policy requiring English immersion in Massachusetts schools as an example of how conservative he is.

7: Fiscal Responsibility

In general, Romney believes government should not spend more than it takes in. He frequently talked about the Cut, Cap and Balance plan-- cutting current spending, capping federal spending at 20% of GDP and thus balancing the budget through spending cuts rather than tax increases-- mentioning it in the 3rd, 5th, 7th, 10th and 20th debates.

He often cited repealing Obamacare as a way he would cut spending, but also complained that money was being cut from defense to pay for Obamacare, and that he wanted to spend the money on defense instead. As mentioned in the previous entry on Romney's positions on foreign policy, he wants to increase defense spending.

Other ways he proposed to cut spending include returning discretionary spending back to its 2008 level, cutting federal employment by 10% through attrition, linking public sector compensation to private sector wages, eliminating the National Endowment for the Arts, including public broadcasting, and block granting several programs, such as Medicaid, housing and food stamps, to the states. However, he would walk away from a deal with Democrats offering a 10:1 ratio of spending cuts to tax hikes.

He gave the impression that he would support spending-based stimulus, saying that the recovery was slow partly because we had "a stimulus plan that was not as well-directed as it should have been."

On Social Security, he said in the 4th debate, "Under no circumstances would I ever say, by any measure, it's a failure," because there are "tens of millions of Americans who live on Social Security." He made similar points again in the 5th and 6th debates. In the 16th debate, he said he would keep Social Security the way it is for those 55 and older. For the rest of us, he would apply two different inflation adjustments, a lower one for the rich and a higher one for everyone else. He would also raise the retirement age "a year or two," but for the most part would keep the system in place the way it is today.

Other Economic Policies

The Fed: He would not reappoint Bernanke, and believes the Fed should be less independent and have more Congressional oversight. But contrary to Ron Paul, he argued in the 5th debate that "we need to have a Fed… because if we don't have a Fed, who's going to run the currency, Congress?"

Housing: He wants to block grant federal housing programs to the states. In the 9th debate, he said we have a housing crisis because government was too involved in housing, and that when government is the problem, more government is not the solution. However, in the 18th debate, he added that he wanted to "help people see if they can't get more flexibility from their banks," although he didn't say how he would use government to make that happen.

Poverty: He wants a personal unemployment account system rather than the current unemployment benefits system. He wants most anti-poverty programs to be run at the state level through block grants, specifically mentioning food stamps, Medicaid and housing programs. 

Pro-Market Quotes

In the 13th debate, asked what industries will create the most jobs in the next few years, he says, "The free market will decide that; government won't."

In the 17th debate, he said, "My view is, capitalism works. Free enterprise works."

Anti-Market Quotes

In the 18th debate, he said, "Markets have to have regulation to work-- you can't have everybody open up a bank in their garage."

In the 20th debate, he said, "That's the nature of what it is when you lead an organization or a state. You come to Congress and you say, these are the things we need."

Social Security and The Payroll Tax Cut

Last Friday, Congress passed another extension to the payroll tax cut. It looks like this one will last until the end of 2012, at least. This has always been an issue that seemed like a slam dunk to me, especially for conservatives and libertarians. We spend so much time saying taxes are too high, so when one of the most liberal Presidents in living memory actually wants to cut taxes, why would we ever say no? Nevertheless, many Republicans and even a few libertarians I admire have resisted this tax cut, allowing the media to paint this most recent extension as "handing President Barack Obama a major victory in this election year" (that's Reuters at the Yahoo link above).

Even though this isn't likely to come up again for another ten months or so, I left a comment on Coyote's post above, and I'd like to echo those ideas here. If taxes are too high, I think we should cut them any chance we can, because we don't get too many chances. But the main issue with the payroll tax cut, for me, is how it relates to Social Security reform.

The Personal Case for Reform
I'm young enough that two things are true for me when it comes to Social Security:

1) The Cliff. The program isn't going to be there for me when I retire, not without major cuts to benefits or major tax increases. The most relevant graph is on slide 15 of this CBO report, reproduced at right. Although revenues are projected to stay rather constant, outlays are already greater than revenues and are expected to grow even more. That is, they're expected to grow until the trust fund runs out in the late 2030s, and the "payable benefits" line has a dramatic cliff. Suffice it to say, my earliest-possible retirement date doesn't come until after that cliff.

There are some (relatively) minor changes that could be made to push that cliff back a few years, such as raising the retirement age, raising the tax rate, changing the cost-of-living adjustment calculation, means testing benefits, etc. We might even push it back a few decades, but this ignores that in 2008 (PDF), the cliff wasn't supposed to come until the late 2040s. In less than four years, the cliff is some fourteen years closer. Considering demographics, including the high probability of advances in life extension, pushing the cliff back will only be a temporary solution (and we may not succeed at pushing it back in the first place).

2) There is still hope. If we do manage to enact meaningful reform (meaning some kind of personal accounts that move us away from pay-as-you-go), my retirement is far enough in the future that I have time to save up enough for my own retirement within the new system.

For these reasons, I personally hope that we switch to something like the Chilean model as soon as possible.

The Societal Case for Reform
Obviously, not everyone will be persuaded to do what is best for me alone, but I also believe that this is the best approach for the rest of society as well. The two facts above are even more true for everyone younger than me, and they are also mostly true for those a few years older than me. On the other hand, no serious proposed Social Security reform touches those who are already on benefits, and most don't change the program at all for those 55 or older, so those two groups won't see any difference anyway.

Those who stand to lose the most from immediate reform are therefore those in the 40-55 age range. However, given probable medical advances in the coming decades, those who are now in their 40s and 50s can likely expect to live to their 80s, 90s or beyond. They will live past the approaching cliff, and will have to deal with the same cuts in benefits that I would. The difference is that, unlike me, they might be able to push the cliff past their own deaths with only minor reforms.

The Payroll Tax Cut
The Social Security trust fund is held in Treasury securities. Like all Treasury securities, when the securities in the trust fund are redeemed, they are paid for from the general fund. Since the Social Security Administration is now running on a deficit, redeeming the Treasury securities it holds, Social Security benefits are already being paid for, in part, by the general fund. That general fund comes from all the other taxes we pay. The Social Security trust fund is real, but it is funded through general tax dollars, not through some special pile of cash we've kept separate from the rest of the economy somehow

This is a marvelous accounting gimmick. Indeed, from my view, the biggest argument against Social Security reform today is the false idea that nothing is wrong because we have the trust fund. Therefore, anything we can do to dispel this idea will be useful in achieving real reform early enough to make a difference for people like me.

How do we dispel this false idea? Well, education, partly through blog posts like this, is one way to do it. But a more effective way is to erase the accounting gimmick itself-- that is, draw down the trust fund until no one is able to ignore that coming cliff. The payroll tax cut accomplishes exactly that. If we keep the tax cut in place, Social Security runs a larger annual deficit, and has to draw down the trust fund faster than planned. The sooner we draw down the trust fund, the sooner we'll see real reform.

With the payroll tax cut, we're more likely to see real Social Security reform sooner. Add to that the libertarian-minded benefit of cutting any tax and the economics-minded benefit of giving every worker a little extra take-home pay, and, as I see it, extending the payroll tax cut is a clear victory for the good guys.

The Cain-Gingrich Debate

Herman Cain and Newt Gingrich held their own two-person debate on Saturday. Cain and Gingrich are now the two strongest non-Romney candidates according to RCP's poll of polls, with Cain and Romney vying for the #1 position. Ron Paul and Rick Perry are pretty close to Gingrich, but while Gingrich is trending upwards, Perry is still trending downwards, and Paul just isn't going anywhere.

Before this debate, I had said it had the potential to finally rally the anti-Romney vote around either Cain or Gingrich, provided it got enough eyeballs. Unfortunately, I don't think that was the case. It was carried by C-SPAN rather than any of the major networks. Not only was it scheduled on a Saturday night, but it went head-to-head with the LSU-Alabama game. The full video is here, but be warned, it's plagued by jumpiness, a shaky camera and bad sound, and the actual debate doesn't start until about 15 minutes in.

This debate had three main sections, one each for Medicare, Medicaid and Social Security. Defense spending, which is about the same as Social Security at 20% of federal expenditures, was not addressed.

Medicare
Newt doesn't want to force people into a particular system, but rather provide different options and allow people to choose. He says the government is losing $70-120 billion per year to Medicare fraud (which is 13-23% of the Medicare budget).

Cain says, "I'm supposed to have a minute to disagree about something he [Newt] said, but I don't." He says when it was established in 1965, Medicare was projected to grow to $12 billion per year by 1990. The actual Medicare budget in 1990, he says, was $109 billion (in 2010 it was $520 billion [PDF]). To reform it, he supports HR 3000 (which is apparently the same as HR 3400 from the previous Congress). The important parts of that bill, he says, are health savings accounts, allowing association health plans and loser-pay laws.

Newt criticizes the third-party-payer system by comparing health care to getting a burger at McDonald's. He says we don't have Congressional hearings on McDonald's fraud because there's a direct relationship between the provider and the consumer, and we need to restore that relationship to health care. Newt also wants to eliminate the CBO, which is a very dangerous proposition. Certainly the CBO has it's problems, but is less Congressional accountability really the answer?

Asked about means testing, Cain talks more about health savings accounts, which doesn't directly answer the question but are still, I think, the most important part of Medicare reform. On the same question, Newt says we wouldn't need means testing if we simply dealt with the massive amount of Medicare fraud he mentioned earlier.

Both Cain and Gingrich are opposed to defined-benefit Medicare. Gingrich doesn't like defined benefits because that means you need bureaucrats to define those benefits in ever-increasing detail. As an example he cites the recent ruling on the prostate cancer test. Cain prefers defined contributions because it allows individuals to put their name on the account and to truly own the money, which he says will result in the money being spent more wisely.

Social Security
Asked about the three reform options of raising the retirement age, cutting benefits or raising taxes, Cain says, "None of the above." He says 30 countries follow the Chilean model of personal retirement accounts, and it's worked for them. He wants to institute optional personal retirement accounts, so that those close to retirement, or who simply prefer the current system, can continue to pay into the current system and receive their promised benefits, while those who want to exit the system and get personal retirement accounts can do so. He says that for people who choose the retirement accounts, half of their payroll taxes would go into that personal account, while the other half would pay for the benefits of those who choose to remain on the old system.

Newt brings up the Galveston plan, and says that you can put in half as much to the system and get twice as much back under the Galveston plan. He talks about how economic growth affects Social Security solvency and bashes Obama for scaring seniors over the summer, but ultimately reaches the same conclusion as Cain. Newt supports optional personal retirement accounts, just as Cain does, but unlike Cain, he doesn't address the transition period, which is possibly the most important question with these accounts.

Since they agree on personal retirement accounts, they spend the rest of the Social Security segment talking about where those accounts go and where you "park" the money. Newt says that keeping it in Treasury bills like the current Social Security trust fund is fine, as long as that money is kept separate from the general budget, but that some of it would also be put into the private sector. Cain focuses on the money in the private sector, and says workers would be able to choose the level of risk they're willing to take on, and that would determine the kind of investments the money is put into.

Medicaid
Cain supports block grants to the states while ending federal mandates. He says this would allow us to bring down the costs gradually over time, but doesn't really explain why. I think block granting might be good, but my main concern is that it turns one unsustainable system into fifty unsustainable systems. That one unsustainable system could be reformed by a single act of the federal government. Some of those fifty unsustainable systems would also be successfully reformed, but many of them wouldn't be. God help you if you live in a blue state.

Newt supports block grants, but he also wants to tie personal behavior to benefits. He cites a program in Florida where people with certain long-term illnesses who took care of themselves and avoided emergency room visits were given Christmas bonuses. It was a win-win because the people were healthier and got extra money, while the state saved money since the Christmas bonus cost less than the emergency room visits would. I'm not sure whether Newt wants to do something similar nationally, or just wants every state to do what Florida did.

Cain would support a health care voucher system, provided the vouchers did not cover the entire cost of the care. He says people need "some skin in the game." Newt doesn't come out specifically for or against vouchers, but rather goes back to the block grant idea, and says if individual states want to try vouchers, that's fine for them.

How would they stop Medicaid fraud? Cain says he wants to block grant both the money and the responsibility, and that if states had the responsibility of managing the money without federal strings attached, they would be able to stop the fraud. He has a lot more faith in state governments than I do. Newt pins Medicare fraud on the CMS, which he says is an outdated agency still using paper when they should be digital. He says a crook with an iPad working late in the evening is always going to beat a bureaucrat using paper who went at 5pm.

Conclusion
Since this was just a two-person debate, I'm not going to score it the same way I do the usual circuses. I will say that I really enjoyed this format, and I would absolutely love to see the rest of the debates converted into a format like this, with just two or three candidates getting to sit down and really explain their views in depth. Neither candidate really "won" this debate, I thought. Newt was obviously more comfortable with this format than Cain was, but Newt also had more statements that I disagreed with. Both showcased some really good ideas, but ultimately they agreed on so much of the policy that they really did seem like a President & VP ticket rather than two men competing for the same job (which is something mentioned by Cain himself).