What Progressive Victory Looks Like: Ending Corporate Welfare To Help Regular Americans

Yesterday was actually big victory for progressivism. Not in health care, but in student loan reform. Finally, a wasteful and worthless corporate welfare program was eliminated. The taxpayer dollars that were being thrown away on private profits will now be redirected to help low income students attend college and pay down the debt. This is what progressive victories look like.

One can have a legitimate argument with libertarians about what the scope of the government should be. Should the government try to help poor kids attend college, should it try to provide everyone with basic health care, should the government try to stop global warming, should the government build highways, etc. But once the decision is made that the government should try to do something, the work of progressivism is to make sure the government achieves that goal in the best, most cost effective manner possible. To make sure it is done in a way that most benefits regular Americans (or at least minimizes the damages as much as possible) while making sure the program is a cost effective use of taxpayers’ money.

This is what the student loan reform portion of the reconciliation bill did. It has been abundantly clear for years that the direct student lending program provided the same loan services at a much cheaper cost to the taxpayers than the weird private/public government guaranteed FFEL program. The FFEL program was corporate welfare at its worst, a program where the government gave private banks huge amounts of money to do something the government could do itself for much cheaper. The FFEL program should have been shut down years ago, but big money lobbyists and their friendly senators kept it alive for far too long.

It is interesting, too, that one part of the health insurance reform law will take similar action against Medicare Advantage. Again, this is an incredibly wasteful corporate welfare program where the government subsidizes private companies to provide a service the government itself is able to provide for much cheaper. The government gave money to private insurance companies to provide Medicare-style coverage that happened to cost the government way more than just directly giving seniors insurance through regular Medicare. The program completely overpaid these companies, again using taxpayer money to provide for private profit. Thankfully, the formula has been changed by the new law to make Medicare Advantage much less wasteful.

This is not progressivism

Contrast the progressive victory achieved with student loan reform and what the new health care law will do to expand coverage.

For years, Medicare has proven that the government can provide high quality health insurance much cheaper than private health insurance companies. Yet, when the bill tried to expand coverage, it used massive subsidizes to the wasteful private insurance industry, and a mandate forcing people to buy their overpriced products. It is a liberal goal, but not the least bit “progressive” because it was designed with the explicit goal of unnecessarily wasting huge amounts of taxpayer money and regular people's premiums to protect the private profits of huge corporations.

Most importantly, they kept out a public health insurance alternative which could serve as a benchmark, like the direct lending program did in student loans, and Medicare did with Medicare Advantage. Without a benchmark, it will be much harder in the long run for the American people to see just how much of their money is being stolen by this weird system set up to enrich unnecessary corporate middlemen with public money.

It is ironic that while the new law reforms the hugely wasteful private health insurance exchange for Seniors, Medicare Advantage, to bring it on par with Medicare, the law also creates the same wasteful private insurance exchange model writ large.

This health care portion of this bill will help some people, but it is not progressivism. There will not be a progressive health care victory until the system is reformed to remove the massive amounts of waste and corruption that were built directly in to the new structure. Progressive reform will be achieved when the system is set up to actually provide every American with quality affordable health care, and does that with the most cost effective use of tax dollars possible.