Free Markets, Free People

Daily Archives: March 19, 2010


CBO says with “doc fix”, HCR adds to deficit

It has always been a smoke and mirrors show, but now we’re beginning to see through it to the truth of the matter. At the GOP’s request, the CBO confirms what I and many others have been saying for quite some time:

Contrary to recent claims, the Democratic health care overhaul will increase Federal deficits by at least $59 billion, and more likely $260 billion, over the next 10 years.

New analysis from the Congressional Budget Office [CBO] provided at the request of House Budget Ranking Republican Paul Ryan, indicates that including the “doc fix” in the Majority’s health care overhaul adds $208 billion to the cost of the bill, increasing the deficit by $59 billion over the next 10 years.

In response to a question regarding passage of the doc fix, Speaker Pelosi said “it’s not in this bill  but we’ll have it soon. We’ve made a commitment to do this.”

The fact that they intended to repeal the law cutting fees to doctors isn’t a secret and hasn’t been a secret. As I said, the Senator from Louisiana talked about a permanent fix last night on Fox News. But she tried to dodge the question about why it wasn’t included in the health care bill when it certainly is a large chunk of the future cost.

The reason of course is obvious. Not that it is going to change what will probably happen on Sunday. But it is clear, regardless of the spin, regardless of the hype and despite the promises and hoopla – this monstrosity is going to add to the debt.

Of course, how could it not – more insured, no payment caps, no pre-existing conditions? How could any rational person actually conclude it would cost less?

And after 2019? Well, dealing in reality and removing some of the historically unrealistic assumptions which Democrats built into the bill to reach their number yields an entirely different outcome, as you might expect:

Removing these assumptions reveals a stark reality. If these assumed savings are never realized – as is the likely scenario – CBO projects that rather than reducing the deficit in the years beyond 2019, the deficit would increase over the decade following 2019 “in a broad range around one-quarter percent of GDP.” Using the Majority’s own methodology, this amounts to a second decade deficit of $600 billion.

Bendin’ that cost curve down, boss. Bendin’ it down …

/sarc

~McQ


Different country, different reaction

You have to wonder why this announcement as Secretary of State Hillary Clinton began her visit, wasn’t treated the same was as a recent announcement in Israel was treated:

Prime Minister Vladimir Putin said Thursday that Iran’s Russian-built nuclear power plant will be launched this summer, even as the United States called for Russia to delay the start-up. Secretary of State Hillary Rodham Clinton, in Moscow on an official trip, urged Russia not to launch the plant until Tehran proves that it’s not developing atomic weapons.

But Russian Foreign Minister Sergey Lavrov, at a joint press conference with Clinton, immediately responded that Russia would put the reactor online.

 All smiles in Russia.

No courage in the face of an enemy, but willing to kick an ally at the first perceived “insult”.

Amateur hour in the US and the Kremlin knows it.  I mean, look at the “respect” the American position was given.

~McQ


Voting for Obamacare? Fair warning …

Rasmussen has the numbers that should have Democrats who are voting yes worried:

Fifty percent (50%) of U.S. voters say they are less likely to vote for their representative in Congress this November if he or she votes for the health care plan proposed by President Obama and congressional Democrats.

A new Rasmussen Reports national telephone survey taken Wednesday night finds that 34% are more likely to vote for their Congress member’s reelection if he or she supports the president’s health care plan. Eight percent (8%) say the health care vote will have no impact on how they vote this November, and another seven percent (7%) are not sure.

Rasmussen also reports that 33% favor a single payer system and that heavily influences their plan to vote for their rep if their rep votes for the plan. However, as even Maxine Waters knows, 33 or 34% won’t get you elected. What will get you elected is the independent vote. And that’s pretty bad news for those contemplating a “yes” vote:

But perhaps more significantly, 51% of voters not affiliated with either major party are less likely to support someone who votes for the legislation. Just 32% of unaffiliateds are more likely to vote for someone who supports the bill.

I still don’t get this. If Democrats back off, say “we heard you” and team up with and include Republicans they could actually pass something called health care reform (not that I’d support that either – just discussing the politics here). And by doing that, they could lay it all in the GOP’s lap with a “put up or shut up” move, preserve their majorities in Congress and most likely win over a majorities of Americans to their side (unfortunate, but true).

So why the continued push to get this monstrosity through? Why play dumb power politics when you can accomplish much the same thing with smart politics and preserve your base of power?

Look, we watch politics here at QandO, and this is just dumb politics. It is going all-in for something which is very unpopular, will most likely destroy the Democratic majorities in Congress and doesn’t even begin the benefit cycle (the downside of gaming the CBO) until 2014 when it is entirely likely they may not even hold the White House any more.

I don’t get it – this was supposed to be such a cool and smart man who was well attuned politically – these are not the politics of someone fitting that description. It just says to me again that while he may be the face man, he’s not really in charge of the agenda.

~McQ


Who is the reactionary now? (update)

Ezra Klein has this to say about “the process” now under fire by Republicans:

So far in the health-care debate, Republicans have attacked the legitimacy of private negotiations, parochial deal making, the budget reconciliation process, self-executing rules, the Congressional Budget Office’s analysis, and even the constitutionality of the legislation. It’s a good theory: Make people hate Washington and mistrust the legislative process and you’ll make people hate and mistrust what emerges from that process.

But it’s also dangerous. As Republicans well know, private negotiations between lawmakers, deals that advantage a state or a district, and a base level of respect for the CBO’s scores have long been central to the lawmaking progress. As the parties have polarized, reconciliation and self-executing rules (like deem and pass) have become more common — and the GOP’s own record, which includes dozens of reconciliation bills and self-executing rules, proves it.

As anyone can tell who has read this far, Klein is championing the status quo. Private negotiations, not transparency. Deals that advantage a state or district, not equal treatment under the law, parliamentary tricks vs. up or down votes as well as gaming the CBO and blowing off constitutional questions.

And his defense? Well the GOP’s done it too.

His defense is all about the process and how the process has worked in the past and should be left alone.  What did he say?  Attacking tha misbegotten process is a good “theory” but practically it’s “dangerous”.

Is it?

Do you find it at all ironic that the group – “progressives” – who were just recently championing transparency are now defending a completely opaque process with private closed-door negotiations and special deals isn’t it?

Klein goes on:

The GOP’s answer to this is that health-care reform is important. Stopping the bill is worth pulling out all the stops. And I’m actually quite sympathetic to this view. Outcomes are, in fact, more important than process. But once you’ve taken the stops out, it’s hard to put them back in. Democrats will launch the very same attacks when they’re consigned to the minority, and maybe think up a few new ones of their own.

Pulling out all the stops, as any fair observer would note, is certainly not at all confined to the GOP side (I swear, given my time observing and writing about them, “progressives” or liberals, whatever label they prefer today, are truly irony impaired). On the Democrat side we’ve seen gaming the CBO, leaving out critical health care legislation (doc fix) to make the numbers look better, stupid accounting tricks like double counting, locking the opposing party out of the process and then claiming they’re the “party of no” and parliamentary tricks that would make a banana republic blush.

And then there’s deception like this:

Democrats are planning to introduce legislation later this spring that would permanently repeal annual Medicare cuts to doctors, but are warning lawmakers not to talk about it for fear that it will complicate their push to pass comprehensive health reform. The plans undercut the party’s message that reform lowers the deficit, according to a memo obtained by POLITICO.

Undercuts it?  It destroys it (139 billion deficit reduction over 10 years v. 200 to 250 billion pay out to doctors over 10 years : net -61 to -111 billion even with their numbers over 10 years).

If “pulling out all the stops” means cleaning up a process like that, I say pull em out even further. And if it comes back to bite the GOP, so be it. It would most likely end up being a good thing.  Because it would probably mean they’re trying the same sort of crap the Democrats are trying to pull of now.

UPDATE: Ed Morrisey is reporting the memo cited by Politico could be a hoax.  He’s apparently verified that it exists and has been seen by sources of his on the hill, but Democrats are denying it’s theirs.  That said, I listened to Mary Landrieu (D-LA) tell Greta Van Susteren essentially the same thing the purported memo says, last night on Fox, i.e. there would most likely be a permanent legislative solution offered for the “doc fix” soon (i.e. the cut will be repealed).

~McQ


Ah, bi-partisanship: Graham and Schumer want to solve the immigration problem with a national I.D

Lindsey Graham, fresh off his bi-partisan attempt to sell cap-and-trade lite is now engaged with Chuck Schumer in trying to establish a need for a national ID.

In a Washington Post op/ed, they lay out their plan for immigration reform. In all honesty not all of it is bad. And if they stopped there (and added something about anchor babies), it might be a plan most could get behind. But then they throw this in the mix:

Besides border security, ending illegal immigration will also require an effective employment verification system that holds employers accountable for hiring illegal workers. A tamper-proof ID system would dramatically decrease illegal immigration, experts have said, and would reduce the government revenue lost when employers and workers here illegally fail to pay taxes.

We would require all U.S. citizens and legal immigrants who want jobs to obtain a high-tech, fraud-proof Social Security card. Each card’s unique biometric identifier would be stored only on the card; no government database would house everyone’s information. The cards would not contain any private information, medical information or tracking devices. The card would be a high-tech version of the Social Security card that citizens already have.

Prospective employers would be responsible for swiping the cards through a machine to confirm a person’s identity and immigration status. Employers who refused to swipe the card or who otherwise knowingly hired unauthorized workers would face stiff fines and, for repeat offenses, prison sentences.

What were you told about your Social Security card? It’s not an ID card and it would never, ever be used as a means of identification – correct?  This proposal goes completely against that promise about the card.

Secondly – read the middle paragraph about the storage of your biometric info.  Biometric information is by definition “private information”.  It is unique only to you.  Additionally, what good does it do on a card if there isn’t some way to verify it?  And unless that information exists at another site, what are you swiping the card to do?  Where is the swiped card’s information going and what is verifying it as “ok”? 

So again read it carefully – “no government data base would house everyone’s information”.  Translation: multiple government data bases would house parts of all your information.  Bottom line – the government would have your biometic info on file in their databases.

Uh, no. 

Enforce the borders, streamline the immigration process to make it work better and quicker, work out a method to bring in seasonal workers, offer an arduous path to citizenship to illegals that involves taxes, fines and learning english and deal with the anchor baby problem.

But come up with a method of verifying citizenship that doesn’t involve my biometric info or a national ID because I am not the problem and I’m not going to become a party to handing my private biometric info over to government or carrying a national ID. 

Got that Mr. Graham (I know better than to bother addressing Schumer)?

~McQ


More analysis of the HCR bills and CBO numbers

 Megan McArdle takes a first look at the bill and CBO numbers and gives her preliminary assessment.  I want to specifically discuss a few of them:

1)  Thanks to reconciliation instructions, they needed to improve the budget impact by at least $1 billion in the sidecar.  They improved it by exactly $1 billion.  Which goes back to what I’ve now said several times: the CBO process has now been so thoroughly gamed that it’s useless.

 That’s the point I’ve been attempting to make for some time – CBO is limited to a 10 year window when it “scores” a bill.  When you look at the graph below, you see the literal gaming that has taken place to get the numbers needed to make this seem palatable. 

 That brings us to a second point raised by McArdle:

2)  The proposed changes increase spending dramatically, most heavily concentrated in the out-years.  The gross cost of the bill has risen from $875 billion to $940 billion over ten years–but almost $40 billion of that comes in 2019.  The net cost has increased even more dramatically, from $624 billion to $794 billion.  That’s because the excise tax has been so badly weakened.  This is of dual concern: it’s a financing risk, but it also means that the one provision which had a genuine shot at “bending the cost curve” in the broader health care market has at this point, basically been gutted.  Moreover, it’s hard not to believe that the reason it has been moved to 2018 is that no one really thinks it’s ever going to take effect. It’s one thing to have a period of adjustment.  But a tax that takes effect in eight years is a tax so unpopular that it has little realistic chance of being allowed to stand.

 This proposal with the reconciliation package actually costs more than the previous version.  And, she’s dead on right about the tax provision which will most likely never be enforced.   That, of course, would add 32 billion to the net cost of the bill pushing it to over 826 billion.  That’s not all:

3)  As I expected, the size of the magic asterisk–the modern equivalent of David Stockman’s infamous “savings to be named later” in the Reagan budgets–has had to be beefed up to offset the new spending.

Go back and look at the chart here.  She’s talking about the last line, “Other Effects on Tax Revenues and Outlays”.  No specifics.  Assumed savings of 44 billion to help arrive at the net 794 billion.  Will there be any savings?  Who knows, but given government’s history in that regard  – the “magic asterisk” whose saveing never seem to actually materialize – probably not.  So when you add that to the tax that’s never taxed, your net is now $860 billion over 10 years. 

Add the 200 to 250 billion “doc fix” not in the bill and where are we “net”?  Over a trillion dollars hidden in a gamed 10 year period.

 She concludes:

 I think this is a fiscal disaster waiting to happen.  But no one on the other side cares, so I’m not sure how much point there is in saying that any more.

 I think she’s right, but it is well worth recording the sentiment though.  This has devolved into an exercise in power, politics, party and the presidency.  It has little if anything to do with what’s best for the other “p” – the people.

~McQ


Your morning Health Care Reform update

Well the dice are cast and the only thing we’re waiting for is to see if Democrats come up with their point or crap out.  Right now, I’d have to say it’s inching toward making their point – but I’m not sure they’re going to end up considering that to be a good thing in the near future.  What’s caused me to reconsider my thinking about whether or not this will pass is yesterday’s vote on the Slaughter rule or “deem and pass”.   In a straight party-line vote, 222 Democrats (6 more than they need to pass HCR) said yes to “deem and pass”.  That says that the bulk want this monstrosity to pass and are looking for the appropriate cover to make it happen.  So all whip counts aside, there are enough votes to make it happen, they just don’t want to be on record saying so – thus yesterday’s vote.

If they don’t use the rule, I think the bill may fail.  If they do, the state of Virginia is lined up to take the Congress to court with a Constitutional challenge.  Although the court has been loath to rule about Congressional procedures for the most part, this particular rule flies directly in the face of a Constitutionally mandated duty to record the “Yeas and Nays” in “the journal”.  That says to most who read it that votes must be recorded by name.

That aside, the numbers from the CBO are being widely panned as misleading.  Those aren’t the CBO’s numbers – they simply deal with what they’re given – they’re the numbers from the pending bill and reconciliation package.  The Weekly Standard gives them some pretty good context that all can understand:

[It] is like the introductory price quoted by a cell phone provider.  It’s the price before you pay for minutes, fees, and overcharges — and before the price balloons after the introductory offer expires.

If you need a more graphic representation, this will do:

Of course, if you take the decade of 2014 to 2024 into account, the “introductory” offer doesn’t at all look so rosy or good.

Maggie’s Farm has a great round up (and is where I found the graphic).  Good quotes from some of the analysis being done on both tdhe numbers and the bill.

Keith Hennessey adds some analysis here.

The Heritage Foundation also looks at the bill and taxes involved.  Here are three effects they find within the bill and reconciliation package:

New Middle-Class Taxes: Throughout his campaign, President Barack Obama promised he would not raise taxes on American households making less than $250,000. The Senate bill shatters that promise. For starters, just look at the reason Trumka went to the White House yesterday: the excise tax on high-cost health insurance plans. This tax would overwhelmingly hit middle-class taxpayers. Taxes on prescription drugs, wheel chairs and other medical devices would also be passed on to all consumers, hitting the lower- and middle- classes the hardest.

Increased Health Care Costs: The Senate bill manifestly does nothing to bend the health care cost curve downward. According to the latest CBO report, the Senate bill would actually increase health care spending by $210 billion over the next 10 years. This follows a previous report from the President’s own Center for Medicare and Medicaid Services (CMS) showing the Senate bill would result in $234 billion in additional health care spending over 10 years.

Increased Health Insurance Premiums: The President initially promised that Americans would see a $2,500 annual reduction in their family health care costs. But under the Senate bill, premiums would go up for millions of Americans. In fact, according to the CBO, estimated premiums in the individual market would be 10–13 percent higher by 2016 than they would be under current law.

In fact, further commenting on the last paragraph, in a letter to Sen. Olympia Snowe, the CBO has said those premium increases would be significant.  Identifying the most basic level of health care coverage as “Bronze level”, the CBO’s Douglas Elmendorf said:

“Overall, CBO estimates that premiums for Bronze plans purchased individually in 2016 would probably average between $4,500 and $5,000 for single policies and between $12,000 and $12,500 for family policies,” he wrote.

If you can divide by 12, that’s not in anyway cheaper than health care is now. And that’s for the bare minimum which covers an estimated 60% of cost.

Cost containment?  Lower premiums?  Cheaper health care costs?

Let’s review the promise one more time: The Democrats promise more people on the insurance roles, no cap on payouts, sicker people on the insurance roles and it’s all going to cost less.

I don’t know where you’ve been all your life, but I’ve existed in the real world where experience tells me that such promises are indicative of scam of the worst kind.  Nigerian emailers score on the same sort of scam daily.  It’s a crying shame when it is your government that is involved in the scam.  But, given Medicare, Medicaid and Social Security, it’s not unexpected.

~McQ