WSJ, CBS to Dems: Psyche!!

So what did the Democrats get out of the Schumer Shutdown? Exactly what we all predicted at its start: bupkis. They may not have even learned the expensive lesson from their utter failure. 

Let’s start with the lesson, which — as the Washington Post gently reminds readers today — has been taught repeatedly over the last 30 years. Chuck Schumer and Senate Democrats filibustered consideration of a clean CR to force Republicans to make two key concessions. The first was to repeal key Medicaid reforms in their earlier reconciliation bill (the One Big Beautiful Bill) that eliminated funding for coverage of illegal aliens. The second was to force a long-term extension of emergency ObamaCare subsidies created as a response to the COVID-19 pandemic, which will expire at the end of the year.

Six weeks later, Democrats not only didn’t get either, they didn’t even get a negotiation on either. Democrats accomplished nothing except to add yet another set of data to the lesson that shutdowns don’t actually work as negotiating strategies, Dan Merica and Matthew Choi observe:

Sen. John Fetterman (Pennsylvania), a Democrat who opposed the shutdown from the beginning, gave a scathing assessment of how the shutdown went for Democrats: “This was a failure.”

This raises the question: Do shutdowns work?

“No,” said Rep. Marcy Kaptur (D-Ohio), an appropriator who has served in Congress since 1983 and seen every major shutdown of modern times. “I have served in many Congresses where we didn’t shut anything down, where we witnessed the normal process: amendments in committees. We made friends on both sides of the aisle. That’s how you get things done.”

None of the three major (we’re defining “major” as more than 6 days) shutdowns before this year accomplished their central policy goal. The 35-day-long 2018-2019 shutdown stemmed from a dispute between Trump and Democrats on funding for a border wall. Trump never got the full funding, and agreed to reopen the government anyway, leading to rage from his right flank.

Merica and Choi note that Democrats are still trying to spin the inevitable loss as some kind of victory for consciousness-raising:

Most Democrats, particularly in the House, assert that this shutdown at least succeeded in bringing attention to the ballooning costs of health care, even if the bill to open the government did not include extensions to the ACA tax credits.

No one needed to bring attention to rapidly rising health care costs. Everyone feels that already. The problem with raising that issue in this context is that it actually brings attention to the fact that the so-called “Affordable Care Act” has done nothing to counter the ballooning costs of health care. Even the subsidies that Democrats demand to be extended have just help hide the extent of that rapid increase, even with the ObamaCare exchanges and controls in place. 

Why? Because ObamaCare didn’t actually address costs; it clumsily attempted to control prices, which are not the same thing. We made this argument constantly in the 2009-10 debate over the ACA. The main issues with increasing costs are lack of pricing signals due to interference from third-party payers, who then disincentivize expansion of supply through administrative overhead. Rather than encourage more supply, this top-down interference by third-party payers incentivizes consolidation, while driving potential general practitioners into specialties where they have more control over costs, pricing, and direction. 

The proper model for reform, as I argued at the time and ever since, were the models in place for elective surgeries, such as Lasik and elective cosmetic surgery. Insurers rarely if ever involve themselves in either, forcing both suppliers and consumers to deal directly with each other and providing clear pricing signals. The lack of third-party payer interference greatly reduces overhead and interference, and the market incentivizes the supply of providers to create a functional equilibrium between costs and prices. 

Barack Obama and the Democrats insisted in expanding third-party interference in health care rather than reducing it. The need for constantly increasing subsidies to shield consumers from actual costs demonstrates the failure of the “Affordable” Care Act. That’s one big lesson from this shutdown, one which Democrats are desperate to avoid. 

The Wall Street Journal’s Sabrina Siddiqui has a video primer on the impact that the expiration of the subsidies will have, and the Senate Democrats’ attempt to avoid the crash. Siddiqui also exposes how thin the claims of any win from the Schumer Shutdown actually are:

Please note, too, the tacit admission by the retiring Jeanne Shaheen in her statement. Democrats haven’t even written a proposal for the extension yet, even with the six weeks of stasis in the shutdown. What exactly were they demanding, then? If it was just a straightforward extension, wouldn’t that have been easy to draft and have ready to present at any point over the last six weeks?

Perhaps they knew it would be an exercise in futility, as CBS News made clear:

Congress could pursue other ways to make health coverage more affordable. On Saturday, President Trump called for sending the money saved by not extending the tax subsidies “directly to the people.” On his Truth Social platform, he criticized the ACA and said Americans should be able to use the savings to purchase other kinds of insurance.

“In other words, take from the BIG, BAD Insurance Companies, give it to the people, and terminate, per Dollar spent, the worst Healthcare anywhere in the World, ObamaCare,” he wrote.

Wager said it remains to be seen if Mr. Trump’s plan is feasible, saying “we haven’t seen a concrete enough proposal at this point.”

Some lawmakers have offered similar proposals, such as Senate Health Committee Chair Bill Cassidy, a Republican from Louisiana. In a floor speech last week, he said eligible Americans could be sent “a pre-funded federal flexible spending account” to use for health expenses, from dental care to prescription drugs and preventive services.

That may not be a perfect U-turn back to using market forces, but it would be a step in the right direction. Shaheen will certainly get her vote on whatever escalation of subsidies the Democrats now demand to prop up their failing ObamaCare system, but Republicans may want voters to understand just how expensive their big-government approach has become. At the very least, the GOP is not going to keep making emergency subsidies the new normal. 

If they don’t, though. Republicans will have to do something they have spent 15 years avoiding: coming up with a coherent and comprehensive replacement for ObamaCare. Are they ready to do that?

Editor’s Note: The Schumer Shutdown is finally over, but the FO will continue longer than the Democrats’ FA. Rather than put the American people first, Chuck Schumer and the radical Democrats forced a government shutdown for healthcare for illegals. They own this.

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