Saturday, February 21, 2009

Is GM About To Lead The Nationalization of Medicine?

American economic monoliths tend to steer the wheels of commerce by their sheer size and influence. A state like California can enact sweeping environmental laws that leads other states to do the same, and when a company like McDonald's acquiesces to posting nutritional information, others follow. As General Motors and the United Auto Workers iron out a deal involving its vaunted health care challenges, will its decision change how others do business and the debate due to commence in Washington?

As a part of GM's vast restructuring plan, the automaker is negotiating with the UAW to change the terms of the 2007 agreement that created a $35 billion trust fund for employee health care. To justify additional government bailout dollars, GM must show Washington details for future plans. The New York Times noted, GM "has to address how a company that lost more than $20 billion last year can afford $5 billion a year in medical bills."

Matt Miller, whose book The Tyranny of Dead Ideas identifies the role of companies paying for employee health care benefits as one of those mortally-wounded ideas. Instead, he believes the government should carry the burden like every other nation in the industrialized world. In his book, Miller writes:
The second force — The Rush for the Exits — is corporate America's desire to stop providing health care and pensions to its employees. To be sure, these costs are soaring in ways that seem unsustainable, especially when competing firms in other nations bear fewer of them. Still, American business leaders act today as if their search for an "exit strategy" on benefits is the end of the conversation. What happens to the millions of workers who are left unprotected if companies simply walk away?
Miller told NPR last month that the government would need to raise taxes to foot the bill, but with Baby Boomers retiring, taxes will increase anyway. "We need to tax ourselves more smartly ... [by] cutting taxes on things like payrolls, which hurt lower-income workers and kill jobs, and raising taxes on dirty energy, which we want to cut back on because of our environmental goals," said Miller.
The Obama administration may be signaling a willingness to allow GM to tinker with health care, according to statements made by his adviser David Axelrod and the naming of Ron Bloom as a key adviser to the Treasury Department. Bloom, according to the Wall Street Journal, is known for forcing parties to make significant concessions.

If GM is able to restructure its health-care responsibilities under the eyes of the White House, health-care reform critics and proponents alike will be wondering whether it could be the harbinger of the wholesale transfer of health care from private industry to the public sphere in the future.

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