Obama's speech reinvigorates health care debate

By Money Matters Editors

 President Barack Obama, D-Illinois, did indeed restructure the debate Wednesday on health care reform, in a substantive, succinct, upbeat speech that could very well lead to solving one of the biggest economic problems facing the nation.

Obama’s task now is to: 1) lure House Democrats without losing Senate Democrats on concerns that a possible public option will be too expensive, and 2) lure Senate Democrats, without losing House Democrats on concern that the new health care program will not incorporate as many working uninsured poor individuals and families soon enough. If Obama garners one or two Republican Senate votes for the administration’s reform package, that would be a major victory. Don’t look for any House Republicans to support any reform legislation: if the Republican Party is ‘the party of no,’ the House Republicans are 'the captains.'




Obama’s plan would cost about $900 billion over 10 years, but most of that total would be paid for by savings found by making existing Medicare, Medicaid, and related programs more efficient. The plan may also include a tax on insurance companies for so-called 'gold-plate insurance plans,' and a provision that requires the U.S. government to come forward with additional spending cuts, if the savings projected do not materialize.

Wall Street’s response to the above? Well, three’s not a direct correlation between the Dow and presidential speeches but the Dow did finish 80 points higher to close at 9,627. Institutional investors – in particular bond market participants – are taking a wait-and-see stance: they want health care costs lowered, but they’ll believe everyone can be insured without too much added expense only after reviewing the details of the legislation that passes and is signed into law.