Analyzing Rep. Greg Walden’s opposition to healthcare reform

Greg Walden, (R-Ore.) represents the voters of central and Eastern Oregon in the House of Representatives; his district is largely rural and one of the safest districts in the nation for a conservative Republican. One would reasonably expect him to toe the conservative line and oppose meaningful reform since the alternative might cost him re-election in 2010.

Given that political reality he might well have produced this press release on Nov. 7: “Last night I voted against the Affordable Health Care for America Act because that’s what conservative voters in my district and the Republican Party expect of me. I actually care about improving healthcare for my constituents as I’ve repeatedly demonstrated by working for rural hospitals as a member of the bipartisan House Rural Health Care Coalition (RHCC) , but in this case I chose to vote for the status quo as a matter of political survival. Were I to break ranks with my Republican colleagues on this issue I would hand Democrats a political victory and my conservative constituents would classify me as a RINO.”

Of course the Press Release he issued was quite different; because, as safe as his district is, it is wiser to seem rational and principled to reassure himself, conservative constituents and his staff, and to convince some independent voters that he represents them as well. It is also a characteristic of our biological brains, evolved only to deal with the local and immediate issues of hunter-gatherer societies, that we tend to accept at face value statistics which support our belief systems, and we usually resist statistics or direct evidence which contradicts them. Consequently, it’s easy to throw together unsubstantiated statistics, or even untrue evidence to support our decisions made for entirely different reasons and feel no guilt or remorse; particularly when we are cheered on by rabid supporters; members of our tribe. (The Science of Fear by Daniel Gardner, 2008 is one of many books that discusses how the brain’s biology impacts our judgements.)

An earlier post  included an email exchange with Nick Strader of Greg Walden’s Bend office. Whereas my first email was answered promptly, the second one and the following email sent on November  20 have yet to be answered. Consequently, I will have to make some assumptions about probable responses as I analyze Greg Walden’s stated reasons for voting against health care reform.

Nick:

This is a follow-up request regarding the questions I sent you on November 16… I have rephrased, and I hope simplified them.  

1. In the press release of 11/7 there is a statement that ”5.5 million jobs will be lost”. On what data is it based. The “Jobs Impact statement” estimates 4.9 million jobs lost. Is there other data or analyses upon which Rep. Walden relied? 

2. The Jobs Impact Statement applies a 2.2  GDP multiplier to indicate that a 2.3 % increase in taxes for health care will result in a 5% shrinkage of GDP. I haven’t found that multiplier in the text of Berstein and Romer’s “The Job Impact of the American Recovery and Reinvestment Plan” document. Is it an averaging of the multiplier discussed in Appendix one of that document which indicates the multiplier effect of a permanent government stimulus of 1% of GDP.. a combination of Government purchases and tax cuts… which ranges from 2.05 (combined) in the first quarter up to 2.53 (combined) by quarter 16? Or is it from some other source?  

I did uncover the 0.75 multiplier used in “Jobs Impact” to equate the 5% decline in GDP to the 4.9 million job loss in Berstein and Romer on page 5, Section B paragraph 1: “The total effect on jobs is then estimated using the 1% of GDP equals 1 million jobs rule of thumb.” (which translates to 5 million jobs… with 1 million jobs equaling 0.75% of total jobs). 

3. The press release states : the cost of family premium in 2016 will be $15,000….  yet according to Page 5, paragraph 3 of the “Estimated Financial Effects” the total “out of pocket costs” for a family in 2013 will be limited to $10,000 and grow no more than the rate of medical cost inflation thereafter. Where can I find data that reconciles this apparent discrepancy?  

I’m posting these questions and your responses on my blog at www.dismountingourtiger.com  along with my preliminary analysis of the statements made in the press release on Monday the 23 rd, so I’d appreciate any information which will help me do so more accurately. 

Thanks for your help. Ed

Commentary on Greg Walden’s Press Release of November 7:

“Tonight, the U.S. House of Representatives had a choice of two healthcare reform plans. I voted for healthcare reform that would reduce the cost of health insurance premiums by 10 percent, cut the federal deficit by $68 billion, and make insurance more accessible to millions of Americans. Unfortunately, that’s not the plan that passed.

I’ve read through the Republican’s alternative plan and can’t see how these conclusions relate to it. My first reaction to it was unworthy of being documented; it didn’t seem like a serious alternative although it contained some things I could support in principal such as Tort reform.  The proposal to allow buying health insurance across state lines is one of those things that might provide initial competition for a handful of people but would wind up, within 10 years, with a few uncompetitive behemoths, as has happened in banking, that would eventually have to be bailed out by the Federal Government. It’s an overly simplistic, poorly thought out implementation of Republican principals.  

“As a small business owner for more than 21 years, I know what it’s like to pay the bills and sign the front side of a paycheck. Independent analysts estimate that the $730 billion in new taxes on Americans families and small businesses in the bill that passed today will result in the loss of 5.5 million American jobs. There’s even an unthinkable new tax on items like pacemakers, artificial hips, and stints.

According to Ned, the loss of 5.5 million jobs is supported by the Jobs Impact document. I’ve analyzed that document, which claims a probable loss of 4.9 million jobs, which Walden appears to have transmuted to a certainty of 5.5 million jobs. In any event, the document itself is shaky… who did the analysis? Are they ashamed to put their names on it? I would be. What assumptions were used to generate the GDP multiplier of 2.2? (See my email question… unanswered).  This is basically a dishonest analysis in so many ways that it’s hard to see how an objective person could buy into its conclusions.  If, as suggested, the analysis uses the assumptions in the report by Romer and Bernstein “ The Job Impact of the American Recovery and Reinvestment Plan” then it is a careless or dishonest misuse of those assumptions. The stimulus plan takes minted or borrowed money and creates a taxless demand. It accelerates without short term braking. Its jobs per dollar multipliers are therefore artificially high. The health reform taxes on the other hand are partially a shift of business expenses from insurance premiums to taxes… which should have a 0 multiplier, and the balance of taxes will immediately be spent on health care… a wash between new taxes and stimulus expenses. The “analysis” ignores the stimulating effects of transferring the taxes to stimulate private sector health care. The difference between the drag of taxes and the stimulation of expenses may be negligible, slightly positive or slightly negative but I can’t see how it could be more than 0.2 instead of 2.2 under worst case assumptions. This would mean a possible loss of 450 thousand jobs, worst case, over 10 years… not the 5.5 million claimed by Congressman Walden.

“The country cannot afford a new $1.3 trillion government program that creates 111 new bureaucracies, especially when nationwide unemployment is at its highest level in 26 years. Just this year, Washington, D.C. has launched unprecedented national takeovers of the auto industry, the energy industry, and now the healthcare of every American.

I don’t know how accurate the first sentence is, but the second one is fear mongering BS.

“The non-partisan Congressional Budget Office estimates that the cost of a family premium under the government takeover that passed today will be $15,000 in 2016. The Republican alternative that I voted for tonight would reduce that cost to $10,000 in 2016.

In this paragraph Congressman Walden seems to have left the world of objective reality. I checked the Congressional Budget Office estimates and they clearly say that a family’s out of pocket expenses will be reduced to $10,000 (which includes both premiums and co-pays) by 2013 and thereafter grow at a rate limited to inflation. There is nothing in the Republican alternative that would limit family premiums, much less overall medical costs to $10,000 in 2016. 

As I said earlier, we can expect Congressman Walden to vote against any meaningful health care reform so long as his job security depends on it. Most of us would do the same thing. I just wish he’d be factual about his position and tone down the fear mongering rhetoric.