Free Markets, Free People


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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13 Responses to How To Make $1.5 Trillion Look Like $894 Billion

  • This wild conspiracy theory in denial of leftist talking points is so over the top it reminds me of Jewish theories about the Nazis wanting to kill every last one of them. Therefore, I’m going to stop reading this blog so you won’t have to be annoyed by my profound and unceasingly correct pronouncements!
    /Erb

    • Boy it didn’t take him long to tire of being on the defense after many years of ripping the Bush admin, did it?

      • Especially after he spent three months after Obama’s election crowing about it and telling us all how wonderful it was going to be now that our thinking was being “pushed aside”.

      • Yeah, I really think he was starting to realize he made a big mistake backing Obama so forcefully and he didn’t want to continue struggling to make his leftist viewpoints sound centrist. He couldn’t get the talking points quickly enough to keep up with the criticism.

        I did get a good laugh out of his tantrum, however.

  • It is astonishing that they discuss such reform without addressing the most basic question: cutting down on AMA monopoly. The costs of medical care will consider to skyrocket for as long as medical lobby sets the obligatory terms.

  • “How to Make $1.5 Trillion Look Like $894 Billion.”

    I hate to say this, but you ordinary folks out there just have the cease and desist being shocked by the Left lying to your faces. Here is what I have learned: <B>Lying is in their blood. It is in their nature. They cannot help themselves.</B>

    Tale an example: global warming. Now, if the Left were not full of el crappola, they would know that the Earth warms up, then the Earth cools down – it is cyclical. People with an IQ in double digits knows this to be true. Unfortunately, Leftists are just not that smart. They tell you that “global warming” is happening; then, when snow comes three weeks early, they tell you again how “global warming” is dooming the planet. When you, as an intelligent person, scoff and tell them that they full of banana oil, do they back down? Of course not…they just change “global warming” to “climate change.” Now that snow coming three weeks early happened because man has caused the planet unending harm, and, according to British Numbnuts and Prime Minister Gordon Brown, we are into our last 50 days before life on Earth as we know it is wiped out.

    So it stands to reason with health care. Pooh on people who protest having government-run mandates. Why? Because the Left lies and says that “70-80% of the American people want the public option,” despite polls that show less than a majority want that. The Clown™ says no abortions will be funded, illegal aliens will not get health care, and he will give a serious look at tort reform to be added into the bill. So what happened? Abortions will be funded, illegal aliens will get health care, and tort reform was not only dismissed by the Nancy Pelosi crowd of Whackjobs, but they added in a provision that states that enacted tort reform, like Texas, will be punished for doing just that!

    The Left lies, the media covers for them, and people are shocked. So, my advice is, stop being shocked. The Left wants you to believe that this is a one-time thingy. It ain’t – take my word for it. I have seen members of my own family lie to me about things I knew to be true, and when confronted they changed the subject or told me that I must have heard them wrong.

    The problem is: I didn’t hear them wrong…and you did not hear The Clown™ or Nancy Shmancy Pelosi or Harry Reid say that they will make the health care thing “deficit neutral,” because if they did, this pile of crap they want to pass would give proof that they lied from start to finish.

    • I have it on good authority from a leftist professor that they’re not lying. They just have multiple truths.

      • Rational people see reality as “out there” and try to understand it. The (hard) left thinks it’s a concoction inside their heads, to be manipulated into a system that can be “gamed”.

  • As I wrote in connection with the recent hate crimes bill that was tacked onto the defense appropriation, I have to ask (rhetorically, of course) why, if the goal is so noble, so VITAL, and enjoys such widespread support, the dems have to resort to such chicanery and trickery to get it passed.

    I think those of us with an IQ in at least the double digits (thanks, James) know the answer.

    Speaking of Mr. Marsden…

    James Marsden… you ordinary folks out there just have the cease and desist being shocked by the Left lying to your faces.

    I’m not shocked that they lie.  I was pretty young when I realized that lying is a politician’s greatest skill behind self-aggrandizement and getting graft.  I confess, however, that the breathtaking scope of democrat lies in the past several years DOES suprise me.  It’s not that they lie per se, but rather that they get away with it.  It surprises me that their supporters really are that gullible, stupid, and intellectually dishonest.  Their leaders really CAN p*ss down their backs and tell them it’s raining.

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