An Unhealthy Debate
Obama and Biden's health-care deceptions.


Yuval Levin

The rule of thumb for fact checkers of Thursday night’s vice-presidential debate was that every time Joe Biden sounded especially confident, he was saying something that wasn’t true.

For the most part, these were gross exaggerations or convenient fictions aimed to allow him to make a point he couldn’t otherwise support. How to answer the charge that he and Obama voted for a budget resolution that called for taxing Americans making $42,000? Assert that John McCain voted for it too, although he didn’t. How to argue that we’re paying no attention to Afghanistan? Claim repeatedly that we spend more in Iraq in three weeks than we have spent in Afghanistan in seven years, although that’s very far from true. How to explain his vote for the Iraq war in light of his subsequent views? Say it wasn’t a war resolution, though it was. And on and on Joe went.

One set of distortions in particular, however, seemed like more than extemporaneous exaggeration. Biden offered several criticisms of John McCain’s health-care plan which tracked precisely with the line of attack the Obama campaign has taken up against the plan in recent days, and which are flatly untrue and deceptive.

The Deregulation Canard

The approach involved two basic elements. First, after (somehow) implicitly attributing the current financial crisis to deregulation, Biden argued that McCain wants to do the same thing to the health care sector and so presumably send it into a similar crisis. “As a matter of fact,” Biden said, “John recently wrote an article in a major magazine saying that he wants to do for the health-care industry deregulate it and let the free market move like he did for the banking industry.” The same argument is advanced in a new Obama campaign commercial. Over images of Fannie and Freddie logos, the ad asserts that McCain wants to do to health care what “Bush/McCain policies have done to our economy,” by which they mean deregulation. The ad says:

McCain just published an article praising Wall Street deregulation; said he’d reduce oversight of the health insurance industry too, “just as we have done over the last decade in banking.”

The line they quote comes from an article by John McCain (i.e by his campaign) about the McCain health plan in the latest issue of Contingencies magazine. In a passage arguing for more competition to lower the cost of health insurance, McCain writes:

I would also allow individuals to choose to purchase health insurance across state lines, when they can find more affordable and attractive products elsewhere that they prefer. Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation. Consumer-friendly insurance policies will be more available and affordable when there is greater competition among insurers on a level playing field.

The Obama ad of course doesn’t quote all of that, but merely suggests McCain is endorsing some supposed deregulation of Wall Street. In fact, McCain is very plainly talking about the Riegle-Neal Interstate Banking Act, passed in 1994, which permitted banks to establish branches nationwide by eliminating the requirement for separate subsidiaries in each state and the prohibition against banks accepting deposits from customers out of their home states. This very sensible reform updated a 1956 law to modernize American banking, and there is simply no question it has been successful and useful. It passed the Senate 94 to 4, and Sen. Biden voted for it.

That important act of deregulation had exactly nothing whatsoever to do with the economic crisis we now face, and on the contrary has contributed to American prosperity and competitiveness. The Obama campaign could raise questions about how close an analogy there might be to that law in allowing health insurers, like banks, to work across state lines. But the tack they have actually taken — accepting the analogy and asserting it reflects poorly on McCain’s plan — is either dishonest or ignorant. Either way, it makes no sense.


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