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Health Care: Deficit Neutral is Not Tax Neutral

Editor’s note: One of the main contentions of this letter is that it is, ‘better than deficit neutral’. However it is not better than spending neutral. It depends on raising taxes significantly. Are these folks listening the the majority of  their constituency. No more taxes, in fact, lower taxes and spur economic growth so that there is job growth and real recovery.


Dear Leader Reid:

We respectfully ask that you bring for a vote before the full Senate a public health
insurance option under budget reconciliation rules.

There are four fundamental reasons why we support this approach – its potential for
billions of dollars in cost savings; the growing need to increase competition and lower
costs for the consumer; the history of using reconciliation for significant pieces of health
care legislation; and the continued public support for a public option.

A Public Option Is an Important Tool for Restoring Fiscal Discipline.

As Democrats, we pledged that the Senate health care reform package would address
skyrocketing health care costs and relieve overburdened American families and small
businesses from annual double-digit health care cost increases. And that it would do so
without adding a dime to the national debt.

The non-partisan Congressional Budget Office (CBO) determined that the Senate health
reform bill is actually better than deficit neutral. It would reduce the deficit by over $130
billion in the first ten years and up to $1 trillion in the first 20 years.
These cost savings are an important start. But a strong public option can be the
centerpiece of an even better package of cost saving measures. CBO estimated that
various public option proposals in the House save at least $25 billion. Even $1 billion in
savings would qualify it for consideration under reconciliation.
Put simply, including a strong public option is one of the best, most fiscally responsible
ways to reform our health insurance system.

A Public Option Would Provide Americans with a Low-Cost Alternative and
Improve Market Competitiveness.

A strong public option would create better competition in our health insurance markets.
Many Americans have no or little real choice of health insurance provider. Far too often,
it’s “take it or leave it” for families and small businesses. This lack of competition drives
up costs and leaves private health insurance companies with little incentive to provide
quality customer service.

A recent Health Care for America Now report on private insurance companies found that
the largest five for-profit health insurance providers made $12 billion in profits last year,
yet they actually dropped 2.7 million people from coverage. Private insurance – by
gouging the public even during a severe economic recession – has shown it cannot
function in the public’s interest without a public alternative. Americans have nowhere to
turn. That is not healthy market competition, and it is not good for the public.

If families or individuals like their current coverage through a private insurance
company, then they can keep that coverage. And in some markets where consumers have
many alternatives, a public option may be less necessary. But many local markets have
broken down, with only one or two insurance providers available to consumers. Each and
every health insurance market should have real choices for consumers.

There is a history of using reconciliation for significant pieces of health care

There is substantial Senate precedent for using reconciliation to enact important health
care policies. The Children’s Health Insurance Program (CHIP), Medicare Advantage,
and the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), which
actually contains the term ‘reconciliation’ in its title, were all enacted under

The American Enterprise Institute’s Norman Ornstein and Brookings’ Thomas Mann and
Molly Reynolds jointly wrote, “Are Democrats making an egregious power grab by
sidestepping the filibuster? Hardly.” They continued that the precedent for using
reconciliation to enact major policy changes is “much more extensive . . . than Senate
Republicans are willing to admit these days.”

There is strong public support for a public option, across party lines.
he overwhelming majority of Americans want a public option. The latest New York
Times poll on this issue, in December, shows that despite the attacks of recent months
Americans support the public option 59% to 29%. Support includes 80% of Democrats,
59% of Independents, and even 33% of Republicans.
Much of the public identifies a public option as the key component of health care reform
— and as the best thing we can do to stand up for regular people against big insurance
companies. In fact, overall support for health care reform declined steadily as the public
option was removed from reform legislation.

Although we strongly support the important reforms made by the Senate-passed health
reform package, including a strong public option would improve both its substance and
the public’s perception of it. The Senate has an obligation to reform our unworkable
health insurance market — both to reduce costs and to give consumers more choices. A
strong public option is the best way to deliver on both of these goals, and we urge its
consideration under reconciliation rules.


Michael Bennet (D-CO), U.S. Senator
Kirsten Gillibrand (D-NY), U.S. Senator
Jeff Merkley (D-OR), U.S. Senator
Sherrod Brown (D-OH), U.S. Senator


February 17, 2010 - Posted by | Federal Government, healthcare | , , ,

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