Sept. 30, 2008

Expert panel meets to discuss health care and immigration, but massive bailout is on minds of most

About 1,000 people convened in Bailey Hall Sept. 26 to hear experts discuss the U.S. presidential candidates' positions on health care, immigration and Social Security. But, wondered moderator David Harris, Cornell's interim provost and professor of sociology, have these policy areas been eclipsed by the nation's financial markets' turmoil and the prospect of a $700 billion government bailout?

"If we experience a prolonged recession, it will make it harder to address" these other important national issues, said panelist John Palmer, dean emeritus of the Maxwell School of Public Policy at Syracuse University.

This and similar exchanges took place preceding the Oxford, Miss., debate between presidential contenders John McCain and Barack Obama. The pre-debate debate, "Educate the Vote: McCain v. Obama in 3D -- Data and Debate on Domestic Policy," was sponsored by the College of Human Ecology.

However, said Palmer, unlike Social Security and health care, which are ongoing, annual expenditures, any eventual bailout plan would be a one-time cost. Thus, he said, although it might force the candidates to change the timing of their spending plans, "it doesn't have to derail them."

McCain's health-care plan is in less trouble in the present economic climate because it covers new expenses by eliminating tax subsidies for health insurance, said Mark Pauly, chair of the Health Care Systems Department at the Wharton School of Management at the University of Pennsylvania. Obama's plan, he said, continues those subsidies but targets them "much more strongly toward lower-income people" than under the current system. He expressed concern over what he called "the pay or play mandate" in Obama's proposal: "Requiring employers to buy health insurance or pay a portion of payroll into a fund is sort of the antithesis of the kind of political transparency Senator Obama has refreshingly brought to the debate." Nevertheless, said Pauly, "If I woke up and found either plan had been put in place, I would count it as a happy day."

Harvard health economics professor Kathy Swartz had more reservations about McCain's plan. Removing the tax incentive for sponsoring group health insurance would cause many employers to stop providing it, she said. The McCain plan provides tax credits for people who buy their own health insurance, but premiums can top $1,000 a month. "If we're talking about a low-income worker, I don't see how a $2,500 tax credit is going to offset this," said Swartz.

Health-care issues spilled over into discussing future financing of Social Security, which Palmer said was "not urgent" and seems to be heading toward a bipartisan solution. Medicare, he said, was much more urgent: "We can't go on paying Medicare taxes at 18 percent of GDP [gross domestic product] and paying out benefits at 24 percent GDP."

Alejandro Portes, director of the Center for Migration and Development at Princeton University, noted that almost all undocumented workers are uninsured, but he took issue with an audience member's question about the burden these workers they place on the U.S. health-care system. "It is a fiction that undocumented workers make hospitals close," he said. Because these workers are required to show proof of residence, "they don't come into the system if they can help it."

Michael Piore, a professor of political economy at the Massachusetts Institute of Technology, pointed out that social welfare and health-care programs are running into particular trouble in countries with low fertility rates and large elderly populations, such as in Western Europe. "All of our problems would be worse if we didn't have a liberal immigration policy," he said.

Portes said he believes the presidential candidates are moving closer to agreement on an immigration policy, with both focusing on border security. However, Portes and Piore agreed that the border fence is a poor way to address the issue of undocumented workers. "It gives a false sense that we have solved the problem," said Piore, adding that the fence gives the United States "a very negative image" in Latin America. "If it worked, it might be worth it," he said, "but it doesn't."

Claudia Wheatley is a writer with the Office of Publications and Marketing.