Free Markets, Free People

CBO

CBO: Jobs “saved or created” by stimulus cost $228,055 each

I’m increasingly leery of the worth of the information put out by the CBO simply because in many cases it seems to fit the definition of GIGO.  This would be one of those instances. CBO now claims that the $821 billion “stimulus” money saved or create “between 1.4 million and 3.5 million” jobs.

Really?  Can’t narrow it down any closer than that?  Well no, because:

This estimate seeks to state the net impact the stimulus had on the number of people employed in the United States as a result of the stimulus, taking into account not only the new jobs believed to be created and the existing jobs believed to be killed by the stimulus, but also the existing jobs that were saved that otherwise would have been lost.

It is all about estimates based on some sort of criteria that isn’t clear to anyone apparently.  And it certainly isn’t centered on hard data – not with a range like that.

Here’s how I look at it.  The administration said that if we didn’t pass the stimulus, the unemployment rate would hit 8%.  If we did, it promised that the unemployment rate would stay below 8%.  The stimulus was passed, the money supposedly spent and the unemployment rate went to 10%.

That, in my way of thinking, is stimulus FAIL. 

Now they want to argue about how it could have been worse?  That it was prudent to spend at least $228,055 per job they believe (because they’re obviously not sure) they may have created or saved?

Yeah, I’m sticking with “stimulus FAIL” and a total waste of borrowed money.

~McQ

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Year 3 of Obamanomic brings us $1.5 trillion more of debt

Or so sayeth the CBO.  Good thing they waited until today to announce it.  Otherwise we might have heard snickering and outright laughter during the SOTU when our deficit-hawk President talked about how serious he was about reducing the deficit and the debt.

The budget deficit is now estimated to have widened this year to $1.5 trillion, the CBO said. That compares to a budget deficit of $1.3 trillion for the fiscal year that ended Sept. 30.

The increase in the deficit would bring it to 9.8 percent of gross domestic product, the CBO said, following deficits of 10 percent and 8.9 percent during the previous two years.

Do you remember how he promised to half the debt by the end of his first term in office?  Yeah?  Well that means he could run a deficit of $750 billion and keep his word.  Funny how that works out, huh?

The CBO’s projections assume that current laws remain unchanged. If the nation continues on its current path, the CBO said, the total national debt will rise from 40 percent of GDP in 2008 to 70 percent by the end of 2011, reaching 77 percent of GDP by 2021.

But hey, this is all the other guy’s fault, remember?  Oh, and one more point, those of you on the left having fun with Rep. Paul Ryan’s factual response?  Make sure you go find someone who can explain the ramifications of this to you, ‘kay?  And have them point out who it is that the CBO agrees with in principle as well:

“To prevent debt from becoming unsupportable, the Congress will have to substantially restrain the growth of spending, raise revenues significantly above their historical share of GDP, or pursue some combination of the those two approaches,” CBO Director Douglas Elmendorf wrote in a blog post announcing the report.

While you’re at it, have them explain the appetite for tax increases. Wait, I’ll save you the question – there is none.  See December’s extension of the current income tax rates.  Now, given that – try to focus.  What does that leave?  Yes, they’re left with “substantially restrain[ing] the growth of spending”.  As in “no more new spending” and “cut back existing spending”.  Precisely what Ryan has been saying, isn’t it?

So when Rep. Ryan makes the point that:

Under the terms of a House resolution passed Tuesday, Ryan is to set ceilings at 2008 levels or less.

He has a good reason, one backed by the facts of the situation and not some meandering mewling from Paul Krugman.  This is the medicine for the addiction.  America has said and is saying again that the voters are not willing to give you a single nickel more until government proves it can significantly cut it’s spending habit.  No cuts, no increased taxes.  In fact, if the cuts are indeed significant enough, the perhaps no new taxes are needed at all.

Yeah, I know, living within your means like all the rest of us have to do – what a concept.

~McQ

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More real ObamaCare costs emerge

I don’t want this one to slip by, because it is significant. It is yet another study that shows the numbers attributed to the cost of ObamaCare were so much nonsense. The interesting thing is it comes from an organization friendly to ObamaCare (via HotAir):

Families USA commissioned The Lewin Group to use its economic models to estimate how many individuals would benefit from the new premium tax credits in 2014 and the value of the dollars going to help pay for insurance (see the Methodology on page 12 for more details). We found that an estimated 28.6 million Americans will be eligible for the tax credits in 2014, and that the total value of the tax credits that year will be $110.1 billion.

Where’s the disconnect? Well the Congressional/CBO estimate for this particular cost was almost 600% lower than the Lewin Group study. Ed Morrissey lays it out:

In his presentation to Congress, CBO director Douglas Elmendorf predicted a cost of only $20 billion on health-exchange subsidies and associated costs.  The Lewin Group, which conducted the study for Families USA, shows that four times as many people will become eligible for subsidies in 2014 than the CBO predicted in March and that the cost will be 550% higher as a result (page 4 of the linked study).

How did the CBO arrive at those numbers with which to calculate the cost of ObamaCare?  Well when Morgen at Verum Serum pointed out the discrepancy to Families USA, they had a peculiar answer:

Morgen also contacted Families USA to get an explanation of the difference, and was told that he made an “apples to oranges” comparison.  Why?  This survey, they explained, showed how many people would be eligible, while the CBO predicted how many people would actually take advantage of their eligibility for tax credits.  This is an odd distinction to make, since the entire idea of the subsidies is to encourage uninsured Americans to buy health insurance through both mandates and generous subsidies.

Morrissey asks:

How likely will it be that people will pass on the notion of getting big tax credits to subsidize must-issue health insurance?  And if the success rate in applying mandates, higher taxes, and more government authority to the 270 million Americans who are already insured is only 20-25% in getting the other 30 million insured, how is that at all successful?

The deficit projection given by Democrats was apparently based on 75% failure rates to get people into the system; their advocates are busy touting the massive amounts of subsidies in the program that will tip ObamaCare into a deficit exploder in Year 2.

75% failure rates?  In other words, 75% of those eligible for a generous subsidy through tax credits won’t take advantage of them? 

Really?  I guess this is one of those “benefits” Bill Clinton was talking about that hasn’t quite made an impression yet – exploding costs well above the nonsense the Democrats used to “justify” the abysmal ObamaCare bill.

Talk about being sold a pig in a poke.

~McQ

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Stimulus spin

This is being pointed to as a validation of the “stimulus” plan:

The oft-criticized stimulus plan boosted the economy in the second quarter by as much as 4.5%, the Congressional Budget Office said on Tuesday.

In a report published the same day as Minority Leader John Boehner’s criticism of President Obama’s economic policy, the CBO said the stimulus law boosted the economy by between 1.7% and 4.5%, lowered the unemployment rate by between 0.7 percentage points and 1.8 percentage points and increased the number of people employed by between 1.4 million and 3.3 million.

Of course it boosted the GDP by a sizeable amount.  When you pour almost a trillion dollars out of the government bucket and that is part of the calculation of GDP, then naturally the GDP is going to be “boosted”.

The question is, what good did it do.  Claims of “increasing the number of people employed” is, as is obvious, a guess cranked out by an economic model. 

But look around you.  When what the bucket has dumped out drains away, what do we have?

9.5% unemployment – at least at an official level – 1.5% higher than what was promised if the “stimulus” wasn’t passed.

A stagnant economy. 

Businesses neither expanding nor hiring.

Car sales – down.

Housing sales – way down.

Consumer confidence – in the tank.

Expanded regulation, increased taxation and a war on business.

Policies that have been described as an “economic Katrina.”

So let the left and the media try their best to make this more than it is – the effect on GDP calculation that absurd levels of governmental deficit spending will have.

Take that out and there isn’t much to shout about, is there?

In practice, that means the stimulus plan is the main reason the U.S. economy grew during the second quarter. The Commerce Department estimates the economy grew 2.4% in the second quarter, a figure most economists expect to be sharply revised lower in a report due Friday.

Uh, no, there isn’t.

One last little point:

The CBO also upwardly raised the cost of the stimulus plan to $814 billion from $787 billion.

Nice.

~McQ

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Our coming fiscal trainwreck

Last Friday, the Committee for a Responsible Federal Budget released a report commenting on the CBO’s long term budget outlook. As one might imagine, it’s not pretty:

Yesterday, the Congressional Budget Office (CBO) issued its Long Term Budget Outlook. Under CBO’s “Extended-Baseline Scenario,” the long-run fiscal picture has slightly worsened over the next twenty years, compared to last year, but significantly improved over the longer run – due largely to the impact of health care reform on spending and especially revenues. However, CBO’s overall analysis shows the budget to be on an unsustainable path, with debt moving to unprecedented and cripplingly high levels.

One has to wonder how any budget found to be on an “unsustainable path, with debt moving to unprecedented and crippling high levels” could at the same time show significant improvement over “the longer run”. The fact remains that whatever “significantly improved” picture any particular budget provides over another one, the bottom line remains “unsustainable, unprecedented and crippling” for our future. The Committee’s report goes on:

Under current law, CBO projects that public debt will rise from 62 percent of GDP this year, to 84 percent by 2040, and to 107 percent by 2080. This scenario is highly optimistic, since it assumes that all the 2001/2003 tax cuts will expire this year as scheduled, there will be no AMT patches or doc fixes, all of the savings in the health care bill will be sustained over the next two decades, and revenues will eventually exceed 30 percent of GDP.

“Highly optimistic” doesn’t begin to describe this budgetary charade. A 6 month “doc fix” has been passed the Senate and is awaiting House approval. Most believe it will continue to be passed in the foreseeable future. Legislators do not have the spine necessary to refuse the fix and weather the consequent political fallout which would see a mass exodus of doctors from the Medicare program. And anyone with the IQ of an onion knows that the “waste, fraud and abuse” savings promised for health care are simply throw-away promises made to balance out the numbers and get the bill passed into law.

So there are no savings on the way through health care. Optimistic is the wrong word to use here. It should be “fraudulent”. In fact, if we throw out the fraudulent health care assumptions, we end up with reality – which CBO calls its “Alternative Fiscal Scenario”:

Under CBO’s Alternative Fiscal Scenario, which does not make these assumptions, debt will rise to 87 percent by 2020, 233 percent by 2040, and to 854 percent by 2080.

There’s the most likely picture we’ll see in 2020. And frankly, at that point, it will almost be a runaway fiscal train. Impossible to stop and headed for a disastrous crash.

Even under the “highly optimistic” scenario, we’re in deep, deep trouble:

Yet, even under the current law revenue scenario – in which all the 2001/2003 tax cuts expire at the end of this year, policymakers discontinue the annual practice of enacting AMT patches, real bracket creep continues unfettered into perpetuity, and the excise tax on high cost health care plans grows to raise an increasing amount of revenue (3 percent of GDP by 2080) – revenues will fall short of spending. And under this scenario, revenue will grow to 30 percent of GDP. That’s twice as large a share of the economy as we will raise in 2010, and nearly 50 percent greater than any time in our history.

We’re certainly seeing history in the making, but it isn’t history in which we should be willing participants. The solution isn’t difficult to see, but politically its implementation is very hard to do. That’s because there are no political incentives to solve the problems. In fact, there are tremendous political incentives not to do that. That’s because no matter how much fiscal sense austerity measures (spending cuts, reductions in force, closing government agencies and departments, etc.) make, they’re painful and a political minefield. And we’ve yet to see the political class – regardless of their ideological bent – willing to seriously tackle this crisis in any meaningful way and take the political hits necessary to do so.

No one really expects that to change. Of course, that means the doomsday analysis by the CBO, which will be mostly ignored by politicians on both sides, is likely to come to pass. What the politicians of today plan on doing is letting those of their ilk in office at the time the fiscal train crashes deal with it and the fallout. How’s that for being ill served by the political class? Of course it’s nothing new – it’s been going on for decades.

Unfortunately for us, when the avoidable crisis finally hits in the near future, it will most likely be too late to do what is necessary and politically viable at the same time. Those stuck with the problem, at that time, will essentially have to commit political suicide. Of course, given the gravity of the situation they will face, they’ll have absolutely no choice.

What will come out of the trainwreck is anyone’s guess – but whatever it is will be a country that is weaker, less powerful and more vulnerable than it has been since its founding. And its enemies will be sure to take advantage of that situation, you can count on it.

~McQ

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Shocking news: ObamaCare will increase the nation’s health care costs

Yes, yes, I know – it comes as a complete surprise.  No question, we all thought having more covered by insurance, no pre-existing conditions, no caps on payouts and lower premium costs – all the while run by our efficient government – would surely lower costs.  It’s just logical, right?

President Obama’s health care overhaul law will increase the nation’s health care tab instead of bringing costs down, government economic forecasters concluded Thursday in a sobering assessment of the sweeping legislation.

You know, you want to laugh at this because most people who gave up on moon ponies and unicorns when they were 8 knew that what was promised by this bill wasn’t possible.  But it is hard to laugh at this level of mendacity.  Isn’t it interesting that now suddenly the truth begins to filter out – after the fact, of course.

USA Today, in true sycophantic fashion, tries to lessen the blow to the administration by calling it a mixed verdict. It also notes it is the first look at the legislation by “neutral experts”. That’s because it was so important to rush this bill through without giving anyone time to read or analyze it – you know, so the benefits could kick in … in 2014.

And what do these experts find? Well it is less than a “mixed verdict”. As I read it, it’s an outright condemnation of the law.

[T]he analysis also found that the law falls short of the president’s twin goal of controlling runaway costs. It also warned that Medicare cuts may be unrealistic and unsustainable, driving about 15% of hospitals into the red and “possibly jeopardizing access” to care for seniors.

Translation: this goes to the central political point about the bill. Who among the politicians in DC are going to be willing to take on the necessary cuts to Medicare promised by the bill (to “pay” for it) and alienate one of the most powerful demographic election blocs?

The Medicare actuary says no one.

The report acknowledged that some of the cost-control measures in the bill — Medicare cuts, a tax on high-cost insurance and a commission to seek ongoing Medicare savings — could help reduce the rate of cost increases beyond 2020. But it held out little hope for progress in the first decade.

“During 2010-2019, however, these effects would be outweighed by the increased costs associated with the expansions of health insurance coverage,” wrote Richard S. Foster, Medicare’s chief actuary. “Also, the longer-term viability of the Medicare … reductions is doubtful.”

Of course they are, and anyone but the moon pony crowd knew that going in. It’s like the promise of eliminating “waste, fraud and abuse”. If there was any appetite or ability to do that, don’t you think the estimated $60 billion a year in Meidcare waste, fraud and abuse would have been eliminated by now?

And what if they did make the cuts?  Anyone, what is the likely reaction of health care providers?  Uh, “we don’t take Medicare/Medicaid patients anymore”? That is exactly what will happen.  That means those with government insurance coverage won’t be able to find access (unless that too is eventually mandated). 

A separate Congressional Budget Office analysis, also released Thursday, estimated that 4 million households would be hit with tax penalties under the law for failing to get insurance.

The U.S. spends $2.5 trillion a year on health care, far more per person than any other developed nation, and for results that aren’t clearly better when compared to more frugal countries. At the outset of the health care debate last year, Obama held out the hope that by bending the cost curve down, the U.S. could cover all its citizens for about what the nation would spend absent any reforms.

The report found that the president’s law missed the mark, although not by much. The overhaul will increase national health care spending by $311 billion from 2010-2019, or nine-tenths of 1%. To put that in perspective, total health care spending during the decade is estimated to surpass $35 trillion.

The administration doesn’t even argue the point, claiming that’s a bargain for insuring 95% of the country. Of course, what USA Today doesn’t point out is that 75% of the 4 million households that will be hit with those tax penalties average less than $60,000 a year individually and families making less than $120,000 a year.

Also keep in mind that the CBO analysis and estimate are based in the assumption that absolutely everything in the bill goes as planned – to include the Medicare cuts. Or said another way, the $311 billion “cost’ is a joke and it will most likely cost far more than that.

The CBO also looks at Medicare:

In addition to flagging the cuts to hospitals, nursing homes and other providers as potentially unsustainable, it projected that reductions in payments to private Medicare Advantage plans would trigger an exodus from the popular program. Enrollment would plummet by about 50%, as the plans reduce extra
benefits that they currently offer. Seniors leaving the private plans would still have health insurance under traditional Medicare, but many might face higher out-of-pocket costs.

That brings us back to the politics and the polite word used -‘unsustainable’ – to mean the cuts just aren’t going to happen.

USA Today ends its article with this:

In another flashing yellow light, the report warned that a new voluntary long-term care insurance program created under the law faces “a very serious risk” of insolvency.

What they’re talking about is this:

One other interesting note from this study was a paragraph on the new Community Living Assistance Services and Supports insurance program for home care, known as the CLASS Act.

While it produces a $38 billion net savings through 2019, that’s mainly because you have to pay five years of premiums before you can start taking advantage of the program.

After that, the Medicare Actuary doesn’t like the way it looks in financial terms.

“Over the longer term, expenditures would exceed premium receipts, and there is a very serious risk that the program would become unsustainable as a result,” the study says.

“Unsustainable” – pay 5 years of premiums before you get the first benefit and the “expenditures would eventually exceed premium receipts”. Sounds exactly like every other program I’ve seen designed and engineered by politicians. That’s why we’re in the freakin’ fiscal mess we’re in now.

And the moon pony crowd keeps believing you can get something for nothing and that we can fix crap like this to where it will actually work and cost less too.

Repeal it.

~McQ

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Democrats: How do we game CBO so VAT doesn’t look so bad?

Mary Katherine Ham reports that the CBO is being hit with a lot of questions about the Value Added Tax (VAT) by Congress.  Taking Paul Volker at his word, they’re obviously in the beginning stages of trying to make the VAT “not as toxic an idea” as it has been in the past. As the title implies, the masters at gaming the CBO are probably already hard at work.

Said CBO chief, Douglass Elmendorf:

“Many people in Congress are interested in it,” he said of the VAT, a national sales tax that adds between 10 and 20 percent to purchases in European countries where it’s been implemented. “We’ve had conversations with a number of members and their staffs.”

You don’t say?!  I know, dear reader, you’re as shocked as I am, aren’t you?

A couple of points – this is going to be constantly misrepresented as a “national sales tax”.  It’s not a national sales tax.  VAT is a tax levied against every step in the production process rendering any retail good 10 to 20% higher than it would have been without the tax.  No one is going to add 10 or 20% at the register – instead everything you purchase will have that additional cost of taxation already added to its final purchase price.  It’s a nicely hidden tax (thus very attractive for the looters in DC) that saves you being reminded of it at the register everytime you buy something.  You’ll just see your overall purchasing power erodeded by whatever the VAT percentage is.

Oh, and that will be in addition to the income tax.   You didn’t think the IRS was going away, did you?  Finally, it certainly isn’t a progressive tax as it will lower the purchasing power of the poor much more than that of the rich.  And we all know what that means – somewhere there’s going to be a subsidy or a kick-back to consumers  of certain levels of income.  And yes, you’ll pay for that as well. Trust me, this will only end up being fully levied on the despised “rich”, as usual in t.

Revenue, folks, revenue – the beast is hungry and insatiable.  And it has a very serious problem looming the future.  It wants no part of lean and mean.  Instead, it wants to be fat, happy and expanding – and VAT would do that.  And you, dear wage earner, are the means to its dreams.

~McQ

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CBO: Debt will be 90% of GDP by 2020

I’m sure this is a CBO report (the “gold standard” remember) that Democrats and the administration will try to ignore.  Especially since adding to the debt so significantly with ObamaCare.

President Obama’s fiscal 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than the administration projected, and raise the federal debt to 90 percent of the nation’s economic output by 2020, the Congressional Budget Office reported Thursday.

In its 2011 budget, which the White House Office of Management and Budget (OMB) released Feb. 1, the administration projected a 10-year deficit total of $8.53 trillion. After looking it over, CBO said in its final analysis, released Thursday, that the president’s budget would generate a combined $9.75 trillion in deficits over the next decade.

Of course that’s a static assessment that assumes nothing changes over the next few years.  Or said another way, if left to their devices, this is precisely what Democrats and this administration plan for our future.  And all the denial in the world won’t change that.  This is a plan for fiscal ruin.

To put it in a more easily understandable context:

The federal public debt, which was $6.3 trillion ($56,000 per household) when Mr. Obama entered office amid an economic crisis, totals $8.2 trillion ($72,000 per household) today, and it’s headed toward $20.3 trillion (more than $170,000 per household) in 2020, according to CBO’s deficit estimates.

That figure would equal 90 percent of the estimated gross domestic product in 2020, up from 40 percent at the end of fiscal 2008. By comparison, America’s debt-to-GDP ratio peaked at 109 percent at the end of World War II, while the ratio for economically troubled Greece hit 115 percent last year.

So, is it time to demand those calling the path we’re on “unsustainable” (i.e. Timothy Geithner, Barack Obama  and the Democratic Congress) to put up or shut up?  As usual, we continue to hear Democrats blather on about PAYGO, but we continue to see them ignore it in legislation they pass.  It appears, given the budget numbers, they also plan to ignore it in the future – wouldn’t you say?

Look at that per household figure from 2008.  It was already outrageous and yet within the next 10 years they plan on tripling it to $172,000. 

Anyone have any idea of the effect such debt will have on our economy?

For countries with debt-to-GDP ratios “above 90 percent, median growth rates fall by 1 percent, and average growth falls considerably more,” according to a recent research paper by economists Kenneth S. Rogoff of Harvard and Carmen M. Reinhart of the University of Maryland.

Hey, when you have the fiscal policy of Greece or Argentina, what do you suppose the end result might be?

~McQ

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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

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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

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