David R. Henderson  

Competition in Media Works

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When I read that President Obama would make the rounds of all the major network news shows except that of Fox News Channel, I was skeptical that any hard information would come out. But we did see the results of competitive pressure yesterday and it was from, of all people, former Clinton appointee, George Stephanapoulos. Here's the transcript from the back and forth between Steph and Obama about whether Obama, with his proposed individual mandate, was proposing a tax increase:


STEPHANOPOULOS: You were against the individual mandate...

OBAMA: Yes.

STEPHANOPOULOS: ...during the campaign. Under this mandate, the government is forcing people to spend money, fining you if you don't. How is that not a tax?

OBAMA: Well, hold on a second, George. Here -- here's what's happening. You and I are both paying $900, on average -- our families -- in higher premiums because of uncompensated care. Now what I've said is that if you can't afford health insurance, you certainly shouldn't be punished for that. That's just piling on. If, on the other hand, we're giving tax credits, we've set up an exchange, you are now part of a big pool, we've driven down the costs, we've done everything we can and you actually can afford health insurance, but you've just decided, you know what, I want to take my chances. And then you get hit by a bus and you and I have to pay for the emergency room care, that's...

STEPHANOPOULOS: That may be, but it's still a tax increase.

OBAMA: No. That's not true, George. The -- for us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase. What it's saying is, is that we're not going to have other people carrying your burdens for you anymore than the fact that right now everybody in America, just about, has to get auto insurance. Nobody considers that a tax increase. People say to themselves, that is a fair way to make sure that if you hit my car, that I'm not covering all the costs.

STEPHANOPOULOS: But it may be fair, it may be good public policy...

OBAMA: No, but -- but, George, you -- you can't just make up that language and decide that that's called a tax increase. Any...

STEPHANOPOULOS: Here's the...

OBAMA: What -- what -- if I -- if I say that right now your premiums are going to be going up by 5 or 8 or 10 percent next year and you say well, that's not a tax increase; but, on the other hand, if I say that I don't want to have to pay for you not carrying coverage even after I give you tax credits that make it affordable, then...

STEPHANOPOULOS: I -- I don't think I'm making it up. Merriam Webster's Dictionary: Tax -- "a charge, usually of money, imposed by authority on persons or property for public purposes."

OBAMA: George, the fact that you looked up Merriam's Dictionary, the definition of tax increase, indicates to me that you're stretching a little bit right now. Otherwise, you wouldn't have gone to the dictionary to check on the definition. I mean what...

STEPHANOPOULOS: Well, no, but...

OBAMA: ...what you're saying is...

STEPHANOPOULOS: I wanted to check for myself. But your critics say it is a tax increase.

OBAMA: My critics say everything is a tax increase. My critics say that I'm taking over every sector of the economy. You know that. Look, we can have a legitimate debate about whether or not we're going to have an individual mandate or not, but...

STEPHANOPOULOS: But you reject that it's a tax increase?

OBAMA: I absolutely reject that notion.

Isn't it interesting that Obama thought that backing up an assertion about the meaning of a word by using a dictionary, the book we generally think of as the arbiter of meanings, is "stretching?"

Notice something else. It's rare for Steph to push so hard and not let up. Doing so was very effective. Also, though, as soon as he said, "your critics say it's a tax increase," he lost the moral high ground. Then it becomes he said, he said, rather than "words have meaning."


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CATEGORIES: Taxation



COMMENTS (8 to date)
RL writes:

Clearly the problem is that President Obama is mistaken as to the nature of the job for which he ran. He thought he was running, not for President, but for Red Queen...("a word means what I say it means, no more, no less...")

MattW writes:

It's a tax increase on those who don't have insurance, but it's a tax decrease on many others who are currently paying for those who don't have insurance.
Or am I missing something?

TomB writes:

Check out this post from Cato.

The post quotes Larry Summers:

Economists have generally devoted little attention to mandated benefits regarding them as simply disguised tax and expenditure measures… Essentially, mandated benefits are like public programs financed by benefit taxes... [If] the mandated benefit is worthless to employees, it is just like a tax from the point of view of both employers and employees…There is no sense in which benefits become 'free' just because the government mandates that employers offer them to workers.

Patrick R. Sullivan writes:

MattW, do you really expect there to be any tax cuts for anyone to counter the tax increases? At any rate, it is an empirical question as to whether there would be a net benefit even if there were tax cuts materializing.

Btw, Stephanopolous also pressed Obama about his less than truthful claim that no one would have to give up the plan they currently have. As Obama does want to do away with Medicare Advantage.

Yancey Ward writes:

Stephanopoulos was probably taking a measure of revenge for what Obama did to Hillary Clinton over just this issue. In addition, his argument was completely correct. It is a tax, and it is going to be used to subsidize the newly insured, not to cut the costs for the presently insured.

larry writes:

The Senate bill calls it an excise tax. This excise tax will be collected by the IRS. It's a tax. It boggles my mind that most of the media ignore this aburd statement by Obama.

Floccina writes:

You and I are both paying $900, on average -- our families -- in higher premiums because of uncompensated care.

Where does that $900/year figure come from? It seems high to me.

MikeB writes:

I must say, I commend someone for finally pushing Obama to the point where he feels pressured. However, what this interview doesn’t include is the major negative aspect that will affect hugely our economy (for the worse) and affect many employers.

To mandate that all employers offer a certain health insurance is a good idea for major corporations to those who have the money to pay for it. However, America does not only consist of major corporations. What about all the small businesses that will be required to obtain health insurance for their employees, even if they cannot financially afford it?? Thus what happens, they go out of business, people lose their jobs, and the employment rate skyrockets even more!

Taking a government issued healthcare would also eliminate the private healthcare industry thus worsening our economy.

Why is it that the American public must take this bill and must use this government healthcare, when those up in Washington do not? Has no one ever seen that items such as insurance that are government issued usually don't carry the same benefits that private insurance carries. Be rest assured that the government healthcare would be far less in benefits than that of a private carrier.

Overall the idea is a good one. However, the way it is being proposed is completely astounding.
Thank god for the ones who questions the president about this bill.

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