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Daily Archives: October 31, 2009

How To Make $1.5 Trillion Look Like $894 Billion

Actually, it isn’t that hard.  And the Democrats demonstrate how to do it in the House Health Care bill. James C. Capretta explains:

For starters, the gross cost of expanded Medicaid coverage and a new entitlement to subsidies for health insurance is much higher than Democrats are suggesting, according to the cost estimate released yesterday by the Congressional Budget Office (CBO). The Democrats report a lower number by netting out the taxes some individuals pay when they don’t enroll in insurance as well as the tax payments from employers who choose to “pay” rather than “play.” But that accounting confuses tax increases with spending reduction. The gross spending increase from the entitlement expansions in the revised House bill is $1.055 trillion over ten years, not $894 billion.

Remember, this is about what it will cost taxpayers. And netting out those who “pay” doesn’t lessen the cost or necessarily mean the revenue collected will go toward paying for this expanded health care.

Secondly:

In addition, as I noted previously, House Democrats have conveniently decided to take the so-called “doc fix” out of the larger health-care bill and pass it as a standalone measure, at a cost of $250 billion over ten years. The House health-care bill is bursting with other Medicare-related provisions. What could possibly justify separate accounting for the physician fee fix? In fact, there is no justification, other than budgetary smoke and mirrors. House leaders are splitting the costs of their scheme into two bills and pretending that this maneuver somehow brings down the overall cost to taxpayers. It doesn’t. In reality, House Democrats are still planning to spend $250 billion on Medicare physician fees, and that should be made clear in any honest accounting of what’s afoot here.

So a quarter of a trillion dollars in cost is going to be excluded from the pending health care bill and passed separately. This defines the terms “smoke and mirrors” when it comes to the real cost of this “reform”. And you can count on Democrats using every little procedural and legislative trick in the book to make this appear to be something it isn’t from a cost stand point – as demonstrated by this particular exclusion from the larger bill.  This is, along with global warming, is one of the biggest con jobs ever foisted upon a people.

Finally, there’s the other spending in the health-care plan. There’s loads of it. Higher Medicaid matching funds to buy off selected governors. A new program aimed at encouraging more physicians to enter primary care. Prevention spending. And apparently just about anything else House Democrats could think of to spend taxpayers’ money on. When it’s all racked up, these programs cost $230 billion over a decade. And that’s not even including the extra spending on Medicare drug coverage, which is obscured in CBO’s accounting by provisions which allow the government to set payment rates for certain products.

The 900 billion that President Obama set as an upper limit that would not add a “dime to the deficit” isn’t even close to being met. The cost curve and the deficit curve, as demonstrated above, will definitely go up. But there’s political cover here because the CBO has scored this bill under the 900 billion “won’t add to the deficit” threshold. Of course the CBO can’t score a separate bill that hasn’t been written yet (“doc fix”) nor can it add it to the bill it just scored. And, of course, the CBO estimate for 10 years assumes the legislation will be enacted precisely as it is written and remain unchanged for those 10 years – and we know that won’t happen as well.

But that won’t stop Obama and the Dems from claiming they’ve met the goal of not adding to the deficit when this monstrosity passes. Just hide and watch.

And they’ll also claim they have the revenue to pay for all of this:

On the tax side, Democrats are planning to saddle those with incomes exceeding $500,000 per year with a new 5.4 percent surtax. That would raise $461 billion over a decade, according to the Joint Tax Committee. But there’s also the penalty tax imposed on individuals who don’t sign up for health insurance. That raises $33 billion There’s also the employer “pay or play” mandate, which brings in $135 billion. And finally, there are the taxes on medical device manufacturers and many others. These provisions raise an additional $100 billion over a decade. All in, therefore, House Democrats want to raise taxes on Americans by $725 billion over the period 2010 to 2019 to partially pay for their health-care scheme.

Again, the assumption is that all of these will remain constant revenue streams. Of course, they won’t. The rich will find a way to avoid the tax eventually as will individuals taxed for not getting insurance. And employers will certainly find a way to avoid the penalty of “pay or play”. Plus, I’d be willing to bet that medical device manufactures and other providers will eventually be exempted from their tax when a outcry is heard from those who benefit from their products that the cost is too high. While these revenue streams won’t dry up, common sense says they will be vastly reduced.

And that leave them with what? It leaves them with little choice but to do what everyone has said they’ll be forced to do:

The Democrats close the remaining gap (excluding the physician fee spending) by cutting Medicare and Medicaid spending by about $550 billion over ten years and starting up a new, budget-busting long-term care program that brings in $72 billion in excess premiums in its early years.

The plan is $550 billion in cuts over 10 years. The reality, because the other revenue streams will begin to dry up, will be much higher.

That reality will eventually mean what as costs spiral upward alarmingly?

Rationing.

And who stands the biggest chance of becoming the victim of that rationing?

Those who use the most health care.

And as a demographic, who are they?

The elderly.

“Death panels” anyone?

~McQ

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How Out Of Touch Is The GOP?

Maybe a better question is “how far out of touch is the RNC” since Dede Scozzafava was their candidate?

Dede Scozzafava, the Republican and Independence parties candidate, announced Saturday that she is suspending her campaign for the 23rd Congressional District and releasing all her supporters.

[...]

Ms. Scozzafava told the Watertown Daily Times that Siena Research Institute poll numbers show her too far behind to catch up – and she lacks enough money to spend on advertising in the last three days to make a difference. Mr. Owens has support from 36 percent of likely voters in the poll, with Mr. Hoffman garnering 35 percent support. Ms. Scozzafava has support from 20 percent of those polled.

Now I have no idea if that means Mr. Hoffman will win (if the 20% Ms. Scozzafava had were really GOP supporters then he should win in a walk – but given Scozzafava’s more liberal leanings on many issues such as card check that’s a toss up), but what this indicates is the rank-and-file GOP voters aren’t at all satisfied with the RNC’s strategy or choices (as an aside, the fact that Scozzavafa hasn’t enough money left to spend on advertising says, at least, that the RNC knows it was supporting a loser). It seems to me to be a pretty in-your-face repudiation of this “big tent” theory of theirs which says “we’ll compromise our principles to boost our numbers”. Instead they seem to favor the “here’s our tent, if you like what we stand for, you’re welcome to come in” approach.

It’ll be interesting to see how the RNC and the establishment GOP types react to this mini-revolution. Given their tone-deafness of the past, they’ll ignore it and pay the consequences in 2010. But I see that as a very, very interesting turn of events.

~McQ

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