Thursday, December 20, 2007

California Health Reform Terminator Model ABX1 1 

There's Less to the Schwarzenegger-Nuñez Deal Than Meets the Eye

Categories:  California

When California Assembly Speaker Nuñez introduced his health "reform" bill into the special legislative session in November, my colleague Diana Ernst wondered whether ABX11 needed batteries and a remote control to operate!

The Assembly and Senate Democratic majorities had previously agreed on a bill that included an employer-paid payroll levy up to 6.5% of income, designed to tax us into "universal" health care, but could neither get Governor Schwarzenegger on board nor override his veto without a few Republican votes.

Curiously, the governor cheered the amended bill that the Assembly passed (with zero Republican votes) on December 17, but Senate President pro tem Perata somehow curbed his enthusiasm. Maybe the Senate would get to it after January 10, he suggested, but the ballooning budget deficit has pushed expensive health "reform" down his list of priorities. What gives?

In California, a tax hike needs 2/3 majority in the legislature or approval by the people via a ballot initiative. With zero Republican support in either chamber, the priests of the Church of Universal Coverage (as Michael Cannon describes them) can only pass a bill that creates the institutions and rules they want, but they cannot fund them unless they put the taxes onto the ballot in November.

Fact is, time is running out to write an initiative proposal, get it approved by the attorney-general, and gather enough signatures to get it on the ballot for the general election. So, why the foot-dragging by Sen. Perata?

Truth is, Gov. Schwarzenegger and Speaker Nuñez have agreed on less than they've fooled the media into believing. Previously, the governor wanted to cap the job-killing payroll tax at 4%, but the media reports that the new ABX11 keeps the assembly's original 6.5% payroll tax. (On the other hand, it now embraces state tax-deductibility for Health Savings Account contributions, one of the few things we supported in the governor's initial proposal, and despised by the clergy of the Church of Universal Coverage).

Careful reading of the bill that passed last Monday reveals, in fact, that references to the level of the payroll tax were struck out. So, despite the happy talk about post-partisan, ecumenical worship, the fact is that there are still schisms and heresies in the Church.

Which might explain why Sen. Perata is smoking behind the shed while everyone else is singing hymns. While Gov. Schwarzenegger and Speaker Nuñez pretend that getting Senate approval will almost be routine, the fact is that they have not yet agreed on the toughest part of the question to put to the people in November: How high will the tax be?

Model ABX11: It may be a fun toy robot to buy your kids for Christmas, but as far as health reform goes - it's likely terminated.



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