By Dick Morris on August 25, 2009

Sen. Joe Lieberman’s (I-Conn.) criticism of the Obama healthcare initiative may prove to be a pivotal turning point in the congressional debate over the increasingly unpopular proposal. Previous commentary about the Obama plans has focused exclusively on their impact on healthcare in America. The elderly are increasingly recognizing that, whatever its defenders say, extending coverage to 50 million new people — without any new doctors or nurses or equipment or hospitals — will create a scarcity that will lead to rationing, to the disadvantage of those over 65. Defenders of the free enterprise system have looked with alarm at the socialization of one-sixth of our economy and opponents of single-payer systems have argued that government control of healthcare is the inevitable result of the plan.

But Lieberman’s critique was not primarily focused on the healthcare aspects of the program, or even on its ultimate desirability, but rather on the wisdom of attempting so radical a transformation and so extensive — and expensive — an extension of government’s role in our economy during a major recession attended by a huge budget deficit. His go-slow commentary integrates worries about the economy, the deficit, the debt and interest rates with those about the healthcare proposal itself. In effecting this linkage, Lieberman cautions supporters of the idea and of the plan that this might not be the right time to try to do it all.

His comments come at a time when the Congressional Budget Office predicts a growth in the 10-year deficit projection to $9 trillion and when Americans are growing increasingly nervous about the massive debt we are incurring. Few buy the president’s argument that spending $1 trillion extra will cut the deficit and rein in spending. The very notion is so counterintuitive that it is hard to give it any credibility.

If the elderly are worried about the projected $500 billion cut in Medicare and Medicaid over the ensuing decade and conservatives fret over socialization of healthcare, the average American can relate most easily to the concerns over the size of the debt and the deficit that Lieberman articulates.

Lieberman’s critique gives moderates a place to go in the healthcare debate. Caught in the tug between the liberals who dominate Democratic primaries and the more conservative voices that may prevail in November, centrist Democrats can rally easily around the “not now” approach of Joe Lieberman. It is obvious that, despite the Obama majorities in Congress, this is the exact wrong time to embark on a major new government spending program.

Worries that the deficit will drive us anew into recession abound. And, increasingly, it appears that the back end of this “double dip” will be accompanied by inflation, as happened in the ’70s. Alarm mounts that the Fed will be unable to fight the inflation without hurting the economy further and, conversely, cannot stimulate a flagging economy without worsening the rise in prices. Add to all this concerns that the world might not be willing to invest further in a deteriorating dollar and we have the makings of, well, a Catastrophe!

By expressing the obvious — that this is a time for retrenchment, not for expansion of the public sector — Lieberman may even have given the president an avenue of escape, permitting him to accept a scaled-back, phased-in program that might attract bipartisan support.

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