Warren Buffett, the billionaire investor and an informal advisor to President Barack Obama, made headlines for declaring in a recent interview with news channel CNBC that the Senate version of the White House’s health care overhaul bill, approved by the House of Representatives on March 21, will not sufficiently lower health care costs in America.
“What we have now is untenable over time,” Buffett said. “That kind of a cost compared to the rest of the world is really like a tapeworm eating, you know, at our economic body.… We have a health system that, in terms of costs, is really out of control. And if you take this line and you project what has been happening into the future, we will get less and less competitive. So we need something else.”
Opposes Current Bill
Buffett believes the health care overhaul bill approved by the Congress and signed by the President doesn’t do enough to cut health care costs.
“Unfortunately, we came up with a bill that really doesn’t attack the cost situation that much,” Buffett said.
Although the White House has repeatedly claimed employers will save as much as $3,000 per worker on health care costs thanks to the reform package, this statistic is derived from a Business Roundtable report issued in 2009, which did not analyze specific legislation. The Congressional Budget Office found the approved version of reform would actually increase premiums for people buying their own coverage by an average of 10-13 percent.
Buffett stated if he were an official advisor on health care reform to President Obama he would “just show this chart of what’s been happening and say this is the tapeworm that’s eating at American competitiveness. And I would say that one way or another, we’re going to attack costs, costs, costs, just like they talk about jobs, jobs, jobs.”
Asked if he would vote against ‘Obamacare’ and start a new health care overhaul bill, Buffett said: “I would.”
Reflects Supporters’ Concerns
Dr. David Henderson, a health care research fellow at the Hoover Institution, believes Buffett does not hold much sway over the White House when it comes to health care policy, but that his words indicate some Obama supporters recognize fiscal dangers in the legislation.
“I don’t think Buffett is thought of by the White House as an advisor on health care,” said Henderson. “It is nevertheless a serious sign that even some of those who have strongly supported Obama in the past realize that Obama’s plan will add to costs and make the government’s future budget problem even worse.”
Diana Furchtgott-Roth, a health care analyst at the Hudson Institute, also sees Buffett’s decision to air his grievances with the Obama White House over health care as significant. She notes Buffett has a great financial interest in ensuring the American economy continues to thrive.
“Warren Buffett has a great interest in the efficiency of the American economy, and he can see this legislation is going slow the economy, raise taxes, lower GDP growth, lead to higher unemployment and a higher cost of health care, and is bad for business and bad for the U.S. economy. He is calling it as it is,” Furchtgott-Roth said. “Buffett is a prominent Democrat, but he is not a politician—he is not beholden to anybody—and so he can call it as it is. He has put aside his loyalty to President Obama to state the truth.”
Political Cover for Opposition
Furchtgott-Roth does not think Buffett’s criticism of Obamacare will change legislators’ minds about the proposal, but it may provide some lower-level Democratic politicians with an excuse to vote against the bill.
“Perhaps Buffett’s comments will benefit Democrats who were sitting on the fence about this bill, giving them the rationale to not vote for it and also not be called traitors to the Democratic Party. They will be able to say, ‘Warren Buffett said vote no,’ and use him for political cover in November,” Furchtgott-Roth said.
Thomas Cheplick ([email protected]) writes from Cambridge, Massachusetts.