Address to the South Carolina Tea Party Convention
Jeffrey H. Anderson
Remarks as Prepared for Delivery on January 18, 2015
Good morning. It’s good to be here today. I want to talk with you about three things: Where we’re at on Obamacare; the crucial importance of a winning alternative to Obamacare; and the opportunity provided by the King v. Burwell Supreme Court case.
First, where are we at on Obamacare?
When I last spoke at this convention two years ago, I said that I thought we were in the middle of the Obamacare debate — in terms of the timeline — and that it was very winnable. So I’d like to start by comparing where we are now to where we were then.
At that time, we were coming off an election in which the Republican presidential nominee had chosen, at his own peril, not to engage on Obamacare. He later claimed on Fox News Sunday that “Obamacare was very attractive.”
Yet almost immediately after the 2012 election, Obamacare started to reemerge as an issue, as Republicans noticeably began to talk more about it. Then, in the fall of 2013, the rollout of HealthCare.gov was a disaster and a showcase of federal incompetence. In the lead-up to the 2014 election, Kantar Media found that Republicans ran far more ads against Obamacare than either Republicans or Democrats ran on any other issue. In one week in October, Democrats ran about 500 anti-Obamacare ads of their own.
In the 2014 election, which I call the second Obamacare election — the first having been the Tea Party-fueled election of 2010 — Republicans picked up 9 Senate seats and 13 House seats, as President Obama became the first president since Woodrow Wilson to lose the House in one election and the Senate in another. The lone candidate who ran on a genuine alternative to Obamacare, Ed Gillespie in Virginia — who ran on the 2017 Project Alternative — almost pulled off the upset of the night. Predicted by polls to lose by nearly ten percentage points, he lost by just 0.8.
Another thing worth noting is this. Since two years ago, almost to the day, when Obama took the oath of office for the second time — an oath he’s taken very seriously, as you may have noticed — 169 polls have been taken on Obamacare, according to RealClearPolitics. Want to take a stab at how many of those 169 polls have found it to be popular? None. Not a single poll during Obama’s second term has found support for his signature legislation.
So I think we can safely say that we’re in even better shape than we were in two years ago. Now, how do we get across the finish line and bring about full repeal?
We need two things — a winning alternative to Obamacare, and political will.
The group I run, the 2017 Project, has committed most of its efforts to advancing a winning alternative to Obamacare. We have done so because, as unpopular as Obamacare is, you can’t expect to beat something with nothing. Most polls show that, if given a choice between Obamacare and the pre-Obamacare status quo — with no mention of an alternative — Americans are split. But when a recent poll asked the question in the context of a conservative alternative that “aims to lower health costs and help people get insurance,” the split was almost 2-to-1 in favor of repeal: 60 to 32 percent. Simply put, Americans want to ditch Obamacare, but they want to see our alternative.
It is quite clear that the momentum needed to repeal Obamacare will not come from establishment Republicans. It will come from the Tea Party and people who are sympathetic to it.
As to where I stand on that divide, my wife gave birth to our son in early 2013. And in the days before his arrival, I realized that we still had a Romney sticker on our car. So we bought a Tea Party sticker online and paid expedited shipping to make sure we’d get it on time, so that his first car ride would be in a car with a Tea Party sticker rather than a Romney sticker.
In truth, most establishment Republicans are not privately committed to repeal. That’s why they don’t bother to advance an alternative to Obamacare. Recently, those of us at the 2017 Project were meeting with a key staffer for a pretty high-level establishment Republican senator. We talked about our alternative as she spent much of the time typing emails into her BlackBerry. Then she asked me, “What about some of the consumer-friendly features of Obamacare? Would you keep those?” I answered, “What consumer-friendly features of Obamacare?” She replied, “Like the exchanges. People like that you can shop in oneplace. Would you keep those?” Barely hiding my irritation, I said, “You think HealthCare.gov is consumer friendly?” She said, “Well, people like things like that, like Kayak….” I said, “You think HealthCare.gov is like Kayak?”
So that’s what we’re up against. And it’s evidence that the momentum behind an alternative has to come from those who actually care about repeal.
We need to move in the total opposite direction from Obamacare. Obamacare funnels massive amounts of power and money to Washington. It tries to push doctors out of private practice and make them hospital employees. It tries to push Americans into prepaid health-care plans rather than genuine insurance. It hurts employment. It uses your tax dollars to fund abortion. It reduces the quality of American medicine and blows a hole in the federal budget. Worst of all, it undermines Americans’ liberty. It can, should, and must be repealed. And with the right conservative alternative in play — an alternative that will take us in the opposite direction in each of these ways — it will be.
The 2017 Project’s Winning Alternative to Obamacare is designed with two goals in mind — to pave the way to full repeal, and to shift things in a conservative direction from the pre-Obamacare status quo.
It would fix what the federal government had already broken even before Obamacare was passed, as it would finally end the unfairness in the tax code. For 70 years, Americans who have gotten their health insurance through their employer have gotten a generous tax break, while their neighbors who have bought insurance on their own, have not. For all of its 2,700 pages of federal largess, Obamacare did not fix this longstanding unfairness in the tax code. Our alternative would. In doing so, it would get the government’s foot off the scale and allow the individual health-care market to flourish.
We would fix this inequality in the tax code by offering refundable, non-income-tested tax credits to every American who buys health insurance in the individual market. Those under 35 years of age would get a tax credit of $1,200. Those between 35 and 49 would get $2,100. Those 50 and over would get $3,000. And parents would get a $900 tax credit per child. If people bought insurance for less than the value of their tax credit, they could pocket the difference in a health savings account.
Meanwhile, the tax treatment of the typical American with employer-provided insurance wouldn’t change one bit. The only thing we would do in the employer market is close the tax loophole that allows people to get a perpetual tax break on insurance. We would cap the employer-based tax break at a $20,000 family plan and an $8,000 individual plan. A family with, say, a $23,000 plan would still get the full tax break on the first $20,000, just not on the last $3,000.
In this way, we would equalize the tax treatment of employer-provided and individual-market insurance without disrupting the insurance of the roughly 160 million Americans who are on employer-provided insurance — the people likely to decide the fate of Obamacare.
Making tax credits refundable means that those who don’t pay taxes would still get them. Making them non-income-tested means that middle-class Americans, most of whom get to pay for Obamacare but get nothing out of it — would get them. Obamacare blatantly neglects the middle class.
Here’s a quick quiz for you. How much do you think a 39-year-old single woman who makes $35,000 a year and lives in Myrtle Beach, South Carolina gets in Obamacare subsidies? (Nothing. She’s too young and too middle class.) How much do you think a 64-year-old couple who makes $22,000 and lives in Fairfield County, Connecticut gets in Obamacare subsidies? ($19,416.) Obamacare is for the near-poor and the near-elderly — and no one else.
Now, if we were operating in a political vacuum, we probably wouldn’t be proposing a refundable tax credit. But we’re not operating in a political vacuum. We’re staring down the barrel of the cannon of Obamacare. We have opponents who are determined to keep it. We have allies who are willing to fix it. So, if we want to win — as we must — we need an alternative that doesn’t kick millions of people off of their insurance and send them back to the ranks of the uninsured.
Simply put, a refundable tax credit is the pill we must swallow to get to repeal. But it’s a very easy pill to swallow in exchange for the greatest domestic-policy victory in the history of the conservative movement — which is what the repeal of Obamacare will be.
Besides, if you want to shift people from Medicaid to tax credits, you have to make them eligible for the tax credits, which means making them refundable.
For most Americans, however, the tax credit is a tax cut. In contrast, Obamacare doesn’t cut anyone’s taxes. Our alternative would cut millions of Americans’ taxes, get the government’s foot off the scale, and revitalize the individual market. People would start to shop for value. Prices would start to appear. It would be like living in America.
You can see more about the 2017 Project’s Winning Alternative to Obamacare on the handouts that are all around the room. Three other quick things about it: We would offer a 1-time, $1,000-per-person tax credit for having or opening a health savings account. This would give people more control over their own health-care dollars and help jump-start the individual market. We would deal with the issue of preexisting conditions through the use of state-run high-risk pools and commonsense regulations. For example, parents wouldn’t have to buy insurance before a baby is born to avoid paying more if their child is born with a preexisting condition. They would have a year to insure their baby without paying more. Lastly, line-1 of the alternative would repeal every last letter of Obamacare.
The nonpartisan and politically neutral Center for Health and Economy recently scored the 2017 Project Alternative. It said it would save $1.1 trillion in federal spending over a decade versus Obamacare, reduce premiums substantially, enhance access to doctors and hospitals by a whopping 57 percent in the individual market, and result in 6 million more people having private health insurance than under Obamacare. If our side will unite around this alternative, or something close to it, we will achieve full repeal while moving things in a conservative direction from the pre-Obamacare status quo.
The crucial importance of uniting behind a winning alternative leads me to the third and final thing I want to talk about: the opportunity presented by King v. Burwell. As some of you know, Obamacare’s plain text says that its taxpayer-funded subsidies can only be paid out through its state-based exchanges, yet the Obama administration has been paying out subsidies through the federal exchanges as well. If the Supreme Court rules that Obama has been paying out these subsidies in violation of Obamacare’s written text — that he has been paying them out illegally — then millions of Americans in the 36 federal-exchange states will lose their Obamacare subsidies and, in most cases, their insurance.
This court case, which should be decided just before July 4th, presents a big potential pitfall and a tremendous opportunity.
If the Court shuts the subsidy spigot off, Obama will petulantly tell Congress to pass a bill to turn it back on.
Meanwhile, the weaker-kneed among the Republican governors and state legislators will try to set up state-based exchanges to keep subsidies flowing.
Back in Washington, the temptation for establishment Republicans in Congress will be to use this as an opportunity to negotiate “fixes” to Obamacare with the Obama administration. That result would be the worst possible outcome. Republicans should not be in the businesses of “fixing” Obamacare but of repealing it. It would be better for the Court to rule against us than to have Republicans turn a win at the Court into a defeat for repeal. In that scenario, the justices would have given Republicans just enough rope to hang themselves.
But if we play our cards right, this case poses a great opportunity. If the Court hands down a favorable ruling, Republicans should say this: “Here’s our alternative, which would effectively repeal and replace Obamacare in 36 states.”
That alternative can be a scaled-down version of something like the 2017 Project Alternative, but it must include its central piece — refundable, non-income-tested tax credits: refundable, because most people who stand to lose their Obamacare subsidies pay little or nothing in income tax and therefore would get little or nothing from a tax deduction or a non-refundable tax credit, so Republicans wouldn’t be providing an answer to their plight and wouldn’t have any leverage; non-income-tested, because that will keep things simpler, reduce the role of the I.R.S., let all Americans see what they’ll be getting, move away from Obamacare’s income-redistribution, avoid high implicit marginal tax rates that disincentivize work, and be true to conservative principles regarding property rights. Not income-testing the credits would also finally end the longstanding unfairness in the tax code for millions of middle-class voters who buy insurance on their own rather than getting it through their employer.
All Obamacare regulations and mandates would need to be waived in those 36 states — and in any of the other 14 states that want to jump ship — so that people could buy insurance of their own choice on the open market, rather than being forced to buy Obamacare-compliant insurance through Healthcare.gov.
Such an alternative would be a huge victory for liberty, for America’s fiscal solvency, and for the quality of American medicine. And it would perfectly set the stage for November 2016 and for the full repeal and replacement of Obamacare in January 2017.
Obama wouldn’t embrace such an alternative, of course. But he would be holding very weak cards. Millions of Americans who became newly insured under Obamacare would now be poised to become uninsured. He’d say to Republicans, “Pass a bill. It only needs to contain four words: ‘…or the federal government.’” Republicans should respond by saying, “Our alternative only requires two words, which you can sign right here: ‘Barack Obama.’”
This is poised to be the Obamacare fight of 2015. The fixers and cavers will want to repair or expand Obamacare. Those of us who are committed to repeal must unite and push for a winning alternative that will effectively repeal and replace Obamacare in 36 states and set the stage for 50-state repeal a year-and-a-half later.
The battle in which we are engaged will define the future of our country. Obamacare is not merely an affront to good medical care, fiscal responsibility, and the rule of law. It’s an affront to our founding principles of limited government and liberty. It’s an attempt to consolidate and centralized power and money in the nation’s capital to an unprecedented degree. It’s the symbol of big-government liberalism. It was passed as “comprehensive legislation,” and it needs to be repealed comprehensively. It was passed against the clear will of the American people, and we need to make good on James Madison’s words that “the cool and deliberate sense of the community ought, in all governments, and actually will, in all free governments, ultimately prevail over the views of its rulers.”
But we must be prudent as well as principled. At the Constitutional Convention, Madison and his fellow large-state delegates hated the proposed system of equal-state representation in the Senate. Why should Virginia, then 16 times larger than Rhode Island, get no more say in the Senate than that tiny northeastern state? Yet Madison, George Washington, and the rest of the Virginia delegation wisely realized that the Constitution was too important to throw overboard because they disagreed in principle with part of it. Some of you may not agree in principle with every part of a winning conservative alternative to Obamacare. But I would ask you to follow the lead of Washington and Madison. Unite behind a conservative alternative that may not be perfect but which, when put next to Obamacare, looks like the Platonic ideal of the good.
If we do so, we will win. Support a winning alternative. Back candidates who champion it. And then sit back and relish the greatest domestic-policy victory in the history of the conservative movement. Washington and Madison would approve.
Thank you.
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By Jeffrey H. Anderson inSouth Carolina Tea Party Convention, January 18, 2015
Real Healthcare Reform