Daily Archives: March 28, 2010
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The new health care law: Unintended consequences already popping up? And, as Chuck Schumer predicts, will this be a winner in November for the Democrats?
US credit: Moody’s is warning of a downgrade in our country’s credit rating if we don’t commit to some pretty drastic changes. Treasury bonds didn’t sell well this week. Meanwhile we’ve enacted a massive new entitlement and Social Security is now officially in the red. What does it all mean?
Fear and anger: Is it real? Is it as real as the Democrats would have you believe?
UPDATE [Dale]: The podcast is available at BlogTalkRadio
And no, I wasn’t asked to put this up. In fact, I knew nothing about this book until I literally discovered it all on my own from a random link referral. The author has no inkling this is coming. Or that I know about the book. However, having read McPhillips for years, I’m sure that it is an excellent read.
Congrats, McP. I look forward to reading it.
Sen. Chuck Schumer (D- Outer Space) has made a prediction that just doesn’t ring true for me.
“I predict that by November those who voted for healthcare will find it an asset and those who voted against it will find it a liability,” Schumer said on NBC’s “Meet the Press.”
Uh, yeah, I don’t think so.
Anyone been following the first effect of this bill? Billions of dollars in new charges against the earnings of businesses who were able, previously, to write off a subisdy and all of health care coverage they paid (for prescription drugs for retirees) that they can no longer do.
Now you’re probably saying, “libertarian dude – I thought you were against all government subsidies”. I am. And there’s nothing different about this. I’m actually rather pleased to see the subsidy ended. However that’s not the point of the post. This development runs counter to two promises the administration and Congress made concerning this bill -a) your coverage wouldn’t change and b) it would cost less.
In fact, given the fact that accounting laws require companies to immediately restate their earnings when the law changes and they take on an increased tax burden. What the likes of AT&T, Deere and Caterpillar are doing is complying. That means a) if you work for AT&T or the others your coverage will change (most likely it will end and they’ll end up on Medicare’s much less generous drug program) and b) it will cost more.
How much more? Well, if you look at the loss Caterpillar will take, it works out to about $1,200 dollars per employee. That 100 million they’re talking about in increased cost has to be made up somewhere. If that’s true about all large companies – even those with union contracts which aren’t ending anytime soon – then that equals one heck of a lot of PO’d pensioners. Certainly not a good sign for those that voted for this, is it?
As I covered previously, Verizon has sent word to its employees that coverage may cost more. That gives the company a couple of choices – it can maintain the level of coverage and raise the price to meet the increased cost, or it can cut benefits to match the present cost. Either way, either a) or b) end up being incorrect.
This has Democrats a little flustered. And Henry Waxman, (D-Odius) has decided that these evil corporations must answer to him for this since all those billions in charges they’re having to take against earning wasn’t the intent of this legislation – so he’s going to have hearings to get to the bottom of this. After all, according to Waxman, in the letter he sent to these businessmen their findings just can’t be right (I mean, face it, these businesses want to take a hit against earnings of billions of dollars just to show the Dems up, huh?):
“They also appear to conflict with independent analyses. … The Business Roundtable, an association of chief executive officers from leading U.S. companies, asserted in November 2009 that health care reform could reduce predicted health insurance cost trends for businesses by more than $3,000 per employee over the next 10 years…”
You’ve got to love it – Waxman’s strongest case is an association comprised of some CEOs who “asserted” – got that? “asserted” – that health care reform “could” – again, “could” – reduce cost trends.
In other words, instead of actually doing the work of checking with authoratative sources that could have actually run the numbers and vetted the requirements of the law, he, Waxman, went with the assertions of a bunch of CEOs because they said what he wanted them to say. Reminds you a bit of the IPCC, doesn’t it?
Another entity with a bit more credibility has actually taken a look at the law and its impact and come up with this interpretation:
The Employee Benefit Research Institute says this exclusion—equal to 28% of the cost of a drug plan—will run taxpayers $665 per person next year, while the same Medicare coverage would cost $1,209.
In a $5.4 billion revenue grab, Democrats decided that this $665 fillip should be subject to the ordinary corporate income tax of 35%. Most consulting firms and independent analysts say the higher costs will induce some companies to drop drug coverage, which could affect about five million retirees and 3,500 businesses.
And that brings us back to Schumer. Why does Schumer think that it will be all unicorns and rainbows for those who voted for this monstrosity?
“It’s going to become more popular and here’s why,” Schumer said. “The lies that have been spread, they vanish because you see what’s in the bill.”
“The No. 1 lie that bothers people is that you’ll lose your insurance if you have it now and are pretty happy with it,” Schumer said.
Yeah, well, so far, not so good on that front, huh Chuck?
And fyi – polls aren’t supporting the Schumer claim either. Most are running against the bill. The one mentioned in the article with the Schumer quotes has it 50-46 against. My guess is that was before the news broke about the charge offs and the effect on pensions.
But hey, it’s all theirs now and they can whistle past the graveyard if they want too – it’s not going to change what happens in November one bit.