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Why health care bill is too big a risk

By David Frum, Special to CNN
  • David Frum says he wanted to support the health bill
  • Americans pay too much but don't have outstanding longevity and live in fear of losing benefits, he says
  • Frum says bill's promise to save half a trillion in Medicare spending is unrealistic
  • Democrats are creating huge new entitlement that will result in government ordering price cuts

Editor's note: David Frum, resident fellow at the American Enterprise Institute, was special assistant to President George W. Bush in 2001-2. He is the author of six books, including "Comeback: Conservatism That Can Win Again" and the editor of FrumForum.

(CNN) -- I wanted to support President Obama's health care reforms if I possibly could.

The U.S. health care system costs too much, delivers too little and excludes too many. Americans pay 60 percent more per person for health care than any other nation. Yet Americans rank only 41st in life expectancy and live with the paralyzing fear that the loss of a job means the loss of coverage.

Rising health care costs are devouring worker pay. Employers pay 25 percent more per hour on average for labor in 2006 than they did in 2000. Yet not one dime of that extra money reached workers. All of it was gobbled up by the surging cost of health care benefits. The typical worker actually earned less after inflation in 2006 than in 2000.

Health care drives federal spending. The U.S. government will spend twice as much this year on Medicare, Medicaid and other health programs as on national defense, including the wars in Afghanistan and Iraq.

If a Democratic president were willing to accept the political risks of addressing these problems, then more power to him. And if he were willing to work constructively with Republicans and conservatives, that would be a welcome change as well.

Early Monday morning, the Senate cast a critical vote to move its version of the bill forward. It has not passed yet -- and negotiations with the House may alter the law further -- but probably the deal accepted by holdout Nebraska Sen. Ben Nelson on Saturday morning is the plan President Obama will sign sometime in January.

It's not a plan that those of us who support free markets and limited government can endorse.

This bill will push health care costs farther up, not down. Where is the extra money to come from? The Senate bill promises to find half a trillion of savings in Medicare over the next 10 years. Good luck with that.

Maybe you've heard that the bill is deficit-neutral. What that means is that the Congressional Budget Office has added up the promised cuts and scored them as equaling the enacted spending. But because CBO "scores" something does not mean that CBO believes it. CBO must take Congress at its word, no matter how often Congress has broken that word before.

Example: To balance the budget in the 1990s, Congress reduced doctor fees under Medicare. Doctors protested, and Congress relented: by postponing the reduction for one year. The next year, Congress postponed the reduction once more. The year after, it did it again.

Every single time,CBO obligingly "scored" the fee cut as a budget saving that would commence the following year. As of 2009, the doctor fee cut has been postponed more than 10 times -- and still CBO registers it as a big budget cut that will go into effect any minute now.

It's not only the taxpayer who will feel the pressure of rising costs. Experts predict that the bill will raise health insurance premiums for those who purchase insurance as individuals rather than getting it through their employer. Lower-income Americans will receive subsidies to cover those added costs, but middle-income and upper-income Americans of course will not.

It's hoped that new efficiencies will materialize down the road. Maybe. Maybe not. But doesn't it seem reckless to create this huge new entitlement with no idea at all of how the public and private sector will support it? Remember all the complaints about George W. Bush cutting taxes while waging war? At least tax cuts can be rescinded if need be. New social programs endure forever.

Health care reform fused two powerful ideas into one great whole: by squeezing costs out of the system, the United States could spend less while covering more.

Instead, what we have done is leap into the dark. Americans have bought a huge new entitlement without any clear idea at all of how to pay for it. But the shape of things to come can already be seen: the government will use its power to order price cuts, substituting command and control for markets and competition across one-sixth of the U.S. economy.

You can blame Republicans for not trying harder to find compromises that might have improved the bill. It might have saved money and preserved market competition. (I have done so again and again and again.)

Yet in the end, the decision was the Democratic majority's and that of the president. At a time of war, financial crisis, debt and deficits, they have launched the biggest expansion of American government since the middle 1960s. Their decision. Their responsibility. Their consequences.

The opinions expressed in this commentary are solely those of David Frum.