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I don’t know why the President let the Republicans get eight months ahead of him in selling health care reform to the public. Now that he’s started, though, he’s saying all the right things. He needs to convince people that if we don’t make these changes, even middle class people who currently have health insurance are going to be priced out of the market. And he needs to allay their fears that, in these recessionary times, we can pay for the plan without raising the deficit.

To make those with insurance understand their peril, Obama said:

But you know what’s happened over the last several decades.  What’s happened is, is that more and more businesses are saying, we can’t afford to provide health care to our workers because the costs are skyrocketing.  So they just drop health care altogether. A lot of small businesses, they don’t provide health care to their employees anymore. And large businesses, what are they doing? They’re saying to you, we’re going to jack up your premiums, we got to increase your deductibles.  If you’re self-employed, you are completely out of luck.  If you’ve got a preexisting condition, you are completely out of luck. And by the way, those of us who are lucky enough to have health care today, we don’t know if we’re the ones who are going to lose our job tomorrow, or suddenly it turns out that our child has a preexisting condition.  And we’ll be stuck in the exact same situation, even if we’ve got good health insurance.

Now, everything I just said, if you talk to my opponents, they’ll agree. They’ll say, you’re right, the health care system is broken. For too many people it’s getting worse.  They will acknowledge that the status quo is unsustainable.  But you know what they tell me?  We had that big health care summit.  I know you guys watched all seven hours of it.  (Laughter.)  Yes, absolutely.  It was scintillating.  (Laughter.)  But you heard what they said.  They said, well, we agree with you that the current system is unsustainable, but this is just not the right time to do it.  They said, let’s start over, that’s what they said.  We just got to start from scratch.


THE PRESIDENT:  Well, let me tell you something.  The insurance industry is not starting over.  They just announced a 39 percent rate increase in California and a rate increase of up to 60 percent right across the border in my home state of Illinois – 60 percent in one year.  That’s the future.  That’s the future if we fail to act.

The President’s emphasis on Wednesday, however, was less on the dire consequences if we fail to act and more on how savings in government spending can pay for the reform. He warmed up the audience by describing his line by line efforts to cut government spending on all fronts, not just health care.

For example, we decided not to fund an office maintained by the Department of Education – in Paris, France.  (Laughter.)  Now, I’m sure that was nice work if you could get it.  (Laughter.)  But I didn’t think that was a real good use of our money.  We eliminated a decades-old radio navigation system which cost $35 million a year.  And some people might say, well, why did you do that?  We need that navigation system.  Well, the thing is, we got this thing call GPS now, and satellites.  (Laughter.)  So the whole radio navigation thing wasn’t working so well.

With Claire McCaskill sitting behind him, Obama detoured into her ideas for saving government money, pointing out–appropriately, since he was heading for a high dollar fundraiser for her after his speech in St. Charles–that she “just pinches pennies.”

So we’ve been pushing for cuts on things that we don’t need, that government doesn’t do so well.  And we’re also reforming the way government contracts are awarded.  Think about this, between 2002 and 2008, the amount spent annually on government contracts more than doubled to half a trillion dollars.  Those are contracts with private contractors.  And the amount spent on no-bid contracts jumped by 129 percent – no-bid contracts.  That’s an inexcusable waste of your money.  So last March, I ordered federal departments to come up with plans to save as much as $40 billion a year in contracting.

Now, this brings me to the person standing right over here, the lady in pink.  (Applause.)  You know before Claire was your senator, she was your state auditor.  She just pinches pennies.  I mean, she’s just – (laughter) – you think I’m – I don’t like waste, but Claire, she just – every dime, she’s – (laughter.)

So thanks to Claire, we’re going to have a new tool to help us meet this goal of eliminating some of these wasteful contracts and no-bid contracts.  In the coming weeks we’re going to be rolling out a new online database, which Claire McCaskill proposed and helped pass into law.  (Applause.)  And we’ll be able to see, before any new contract is awarded, whether a company plays by the rules, how well they’ve performed in the past:  Did they finish the job on time?  Did the company provide good value?  Did the company blow their budget?  It’s your money, so you deserve to know how it’s spent and who these contracts are going to.

But back to funding health care. Similar savings can be found there.

Let me just give you one example – this is a long recognized but long tolerated problem called “improper payments.”  That’s what they call them.  Washington always has a name for these things.  “Improper payments.”  And as is often the case in Washington, the more innocuous the name, the more worried you should be.  So these are payments mostly made through Medicare and Medicaid that are sent to the wrong person, sent for the wrong reason, sent in the wrong amount.  Sometimes they’re innocent errors.  Sometimes they’re because nobody is bothering to check to see where the money is going and they’re abused by scam artists and fly-by-night operations.

(The President coughs.)  Look, health care.  (Laughter.)  This health care debate has been hard on my health, I got to tell you.  (Laughter.)

It’s estimated that improper payments cost taxpayers almost $100 billion last year alone.  Think about that.  That, by the way, just that abuse in improper payments is more than we spend on the Department of Education and the Small Business Administration combined.  If we created a “Department of Improper Payments” it would be one of the largest agencies in our government.

Now, for the past few years, there has actually been a pilot program that uses a system of tough audits to recover some of this lost money.  And even though these audits, they were just operating mainly in three states, they already found a billion dollars in improper payments.  So these results were both disturbing and encouraging.  They’re disturbing because it shows you how much waste there is out there in the health care system.  But it’s encouraging because we can do something about it.

So earlier today, with Claire looking over my shoulder – one of our auditors-in-chief – I signed an order calling on all federal agencies to launch these kinds of audits all across the country.  All across the country.  (Applause.)  So agencies would hire auditors to scour the books, go through things line by line.  Auditors are paid based on how many abuses or errors they uncover.  So it’s a win-win.  The auditor, if they do a good job they get a small percentage as a reward.  And the taxpayer wins by getting huge sums of money that would otherwise be lost that we can then spend to provide care to people who really need it, or we can use to reduce the deficit.

Obama compared fixing our broken health care system to the savings a homeowner with a leaky roof and drafty windows would experience if he made repairs. They would cost some money in the short run but save money in the long run. So, after listing ways in which health care insurance companies’ practices would be reined in, he returned to the issue of cost. That issue was where he began the conclusion of his speech:

And according to the Congressional Budget Office – this is the office that is supposed to be the independent referee for how things cost, it’s not supposed to be Democrat or Republican – according to the Congressional Budget Office, people buying health plans in the individual market right now, they’d see their premiums go down 14 to 20 percent.  (Applause.)  …

Now, here’s another thing.  A recent study by the Business Roundtable – that’s made up of all these big companies out there, they don’t – they’re nonpartisan, but it’s not like they’re just dyed-in-the-wool liberal Democrats, let’s put it that way; these are company CEOs – they commissioned a study and said the reforms could reduce premiums by as much as $3,000 per employee.  That’s their study, not mine.

Then the Congressional Budget Office said that the government would save a trillion dollars, reduce the deficit by a trillion dollars.  So think about it:  You’re saving money, employers are saving money, the federal government is saving money – not according to me, but according to these studies that were done by independent analysts.

Which brings us back to the video I posted Wednesday of Obama’s concluding remarks. It was enough to give a body chills.