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Obama's Advisers Vs. Obama on Health Care?

October 25, 2008 1:48 PM

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

October 25, 2008 | Permalink | Share | User Comments (23)

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Posted by: Thinking | Oct 25, 2008 2:14:01 PM

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