Obama’s Policies Are Making Oil And Gas More Expensive And Increasing Foreign Dependence – And You’re Paying For His Stupidity

I’ve posted this video a number of times to document what Democrats really want: socialism and the government takeover of free enterprise and personal freedom.

But the words of the oil industry executive that led to Maxine Waters’ outburst are now equally interesting.

Listen to what he predicts:

Here is the exchange in transcript form:

Oil Executive: I can guarantee to the American people because of the inaction of the United States Congress ever-increasing prices unless the demand comes down – and the $5 will look like a very low price in the years to come if we are prohibited from finding new reserves, new opportunities to increase supplies.

Maxine Waters: And guess what this liberal will be all about? This liberal will be all about socializing … uh, um, [pause] … will be about [another long pause in which she tries not to document that Democrats are communists] … basically taking over and the government running all of your companies.

The executive explains simple reality: “If you don’t allow us to find and extract new oil resources the price is going to go up and up and up you lunatic idiot.”

And the lunatic idiot issues a threat that Democrat Marxist communist dictator thugs don’t need no stinking reality. They can “socialize” the oil companies by exercise of naked government dictatorship and that will somehow magically make all our problems go away.

On July 14, 2008 – as I’ve amply documented – George Bush ended the federal moratorium on offshore drilling. And on that news gasoline prices IMMEDIATELY DROPPED by nearly $10 a barrel:

Larry Kudlow: In a dramatic move yesterday President Bush removed the executive-branch moratorium on offshore drilling. Today, at a news conference, Bush repeated his new position, and slammed the Democratic Congress for not removing the congressional moratorium on the Outer Continental Shelf and elsewhere. Crude-oil futures for August delivery plunged $9.26, or 6.3 percent, almost immediately as Bush was speaking, bringing the barrel price down to $136.

In the few days that followed, the precipitous upward climb in the price of oil went down, down, DOWN:

Update: July 18, 2008 Crude Oil has dropped to $128.88 a Barrel

Update: July 17, 2008 Crude Oil has dropped to $130.73 a Barrel

Update July 15, 2008 Crude Oil has dropped to $138.74 a Barrel Biggest drop in 17 years

We had the price of oil dropping by ten bucks a day every day after Bush ended the moratorium.

You can look at the link that has the NYSE prices to follow that very obvious trend.

Liberals try to insinuate that the gas prices going down AS BUSH WAS SPEAKING WHEN THEY HAD BEEN GOING UP EVERY SINGLE DAY PRIOR TO BUSH’S SPEAKING was merely the result of the economy stagnating.  But that is a lie: our economy didn’t blow up until September of 2008.  By the time Lehman Brothers collapse officially triggered the financial collapse on September 14, oil prices were already at $100 a barrel.

It was the hint provided by George W. Bush that ended the speculatory bubble of oil.

We now even have a brand new example that increasing the oil supply will have the effect of immediately lower prices:

After rumors send oil prices falling, Welch renews call on President to tap nation’s oil reserves

BURLINGTON, VT – A day after rumors that the U.S. would tap the Strategic Petroleum Reserve (SPR) spooked Wall Street speculators and sent oil prices falling, Rep. Peter Welch is pointing to that episode as exhibit A of the effect such a move would have on gas prices and is renewing his call on President Obama to take action

Notice that Democrats are demanding that Obama open the strategic reserves, which amounts to a very temporary increase of oil on the market.  Democrats are demanding that Saudi Arabia drill more.  They are demanding that oil supplies be increased to bring down prices even as they deny that the US – which is idly sitting on reserves of 1.6 trillion barrels  of oil – would have any impact on prices.

Democrats want America to be more reliant and more dependent on Arab oil.  They absolutely refuse to allow America to become energy-independent.  That’s the bottom freaking line.

Our strategic petroleum reserve was intended to be stockpiled for time of national emergency or war.  Obama wants to use it as a political slush fund to benefit his presidential campaign.  The fact is, the US government bought that oil at a lower price and will replace that oil at a shockingly higher price.  And since we very obviously can’t keep doing that, it won’t have a measurable effect on gas prices because it clearly isn’t a long-term supply increase.

And all of the above is why during the last three years, gas prices have gone from well under $2 a gallon ($1.84 a gallon on January 20, 2009) to nearly $5 a gallon on Obama’s watch.  Bush gave us low gas prices; Obama took them away.

Obama picked an energy secretary who had said:

“Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.”

 Obama said he WANTED oil prices to go up – as long as the increase was gradual so the people wouldn’t get pissed off and hold him personally responsible.

Under Obama’s policies, he has done everything he could to choke off oil production on federal lands:

“Since taking office, [Obama] has declared 85% of our offshore areas off limits, decreased oil and gas leases in the Rockies by 70%, rejected the Keystone XL pipeline, and has 10 federal agencies planning more regulation of hydraulic fracturing…. The president’s ‘Jekyll and Hyde’ approach to energy security is hurting consumers.”

More on that:

[A] study, prepared by the nonpartisan Congressional Research Service (CRS), examined oil production on federal and non-federal land between 2007-2011. Approximately 96 percent of the total increase in domestic oil production occurred on non-federal land, CRS found.

Earlier this month, the Energy Information Administration reported that oil and natural gas production on federal land declined 40 percent over the past decade and 14 percent in 2011 alone.

And so you actually wonder why gas prices have “necessarily skyrocketed” under Obama’s watch???

Just today Obama announced that he was going to end the oil and gas tax breaks – which will amount to a $4 billion increase in gasoline prices as the oil companies get the money Obama is taking from them back.

This is nothing more than a continuation of Maxine Waters’ communist war on the means of production of the American economy.

I’ve written about the so-called “tax breaks” for oil companies.  Note that what little “tax breaks” there were came on the back of tax increases – and the tax increases outweighed the tax breaks.  The bottom line is that if Obama gives the oil industry a middle finger, the oil industry will give the American people who put this fool into office a middle finger.

What Obama is doing would make oil and gas more expensive for US consumers:

a March 2011 report by the nonpartisan Congressional Research Service suggesting that the president’s proposals could actually result in higher gas prices and a greater reliance on imports.

The proposed repeal “would increase tax collections from the oil and natural gas industries and may have the effect of decreasing exploration, development and production, while increasing prices and increasing the nation’s foreign oil dependence. These same proposals, from an alternate point of view, might be considered to be the elimination of tax preferences that have favored the oil and natural gas industries over other energy sources and made oil and gas products artificially inexpensive, with consumer costs held below the true cost of consumption, when the external costs associated with environmental costs and energy dependence, among other effects, are included,” the CRS said.

“The Administration estimates that the tax changes outlined in the budget proposal would provide $22.8 billion in revenues over the period 2012 to 2016, and over $43.6 billion from 2012 to 2021. These changes, if enacted by Congress, also would reduce the tax advantage enjoyed by independent oil and natural gas companies over the major oil companies. On what would likely be a small scale, the proposals also would make oil and natural gas more expensive for U.S. consumers and likely increase foreign dependence,” according to the report

It is ZERO coincidence that on the VERY DAY that Obama announces he’s going to slap down American oil some more, ExxonMobile just got replaced by Petrochina as the number one oil company in the world.  We’re now number two and sinking fast, baby. 

There was a funny line I remember from Big Bang Theory to put this into perspective:

Leonard: Well let me see if I can explain your situation using physics. What would you be if you were attached to another object by an incline plane, wrapped helicly around an axis?
 
Sheldon: Screwed.
 
Leonard: There you go.

We’re screwed as long as Obama is allowed to continue ruining America.

Don’t vote to get screwed.  Reject this fool president and his fool party and fool ideology before they finish imploding America (see here for another example).

Why Would ANY Decent American Want A Bunch Of Weiners Running Our Lives???

Anthony Weiner is a dishonest piece of slime.

He’s not merely a depraved serial sexual pervert and predator – which is vile enough.  He lied and broke all of his vows to his own wife.  He contacted a porn star with whom he had an internet sexting relationship and instructed her to lie.  He did all this on the people’s time and with the people’s resources.  He repeatedly lied to the American people in several press conferences.  He invited numerous reporters for interviews and then lied to them – and to all of their readers and viewers.

Republicans will bring up the Weiners and the Barney Franks and the Elliot Spitzers and the Charlie Rangels, and Democrats will bring up their list of Republican slime.

Fine.  For the sake of discussion, let us agree that all of our politicians are a slimy, vile group of people.  So with that, here’s my question:

Why on earth would we want to give these depraved, dishonest perverts our health care and our pensions (and so much more!) to people like this?

That’s what Democrats want, you know.  They want to entrust our lives to congressmen and congresswomen just like Anthony Weiner.  They want a bunch of Weiners to run our lives.  They want you to literally trust your LIFE and the lives of your CHILDREN to a bunch of Weiners.

Republicans want LIMITED GOVERNMENT.  They want to get the government monkey off your backs.  They want to reduce the size and power and scope of government to keep all these damn bureaucrats from being able to hump your leg and force you to take it.  As an example, Democrats shrilly demand that we end our subsidies for oil companies even as they also demand we INCREASE our subsidies to their beloved “green energy” boondoggles and INCREASE the crony capitalism that these subsidies create.  Republicans say, fine; let’s end ALL the energy subsidies!  But Democrats will never have that.  Rather, they want to punish the energy sources that actually GIVE US THE INEXPENSIVE ENERGY WE NEED and instead fund energy that is inadequate and inefficient instead.  They want to take away the Republicans subsidies and increase their own, is all.

Democrats want to give Weiners more power and control than ever; they want Weiners to be able to have more and more and more regulations; they want Weiners controlling a larger and larger chunk of health care with ObamaCare which they want to lead to single payer socialist medicine; they want Weiners to have a larger and larger chunk of our economy; they want Weiners to have the power to punish more and more businesses and punish them more and more harshly.

If you want a bunch of depraved elitest bureaucrat Weiners controlling every aspect of your life, then you vote for Democrats and Obama in 2012.  Because that is EXACTLY what they are promising to give you: more and more Weiners with more and more power to control your lives.  If you want to be allowed to have individual control over your own life, then vote for the Party of limited government.

Get the Weiners out of our lives.

Obama Keeps Lying About The Economy

“Fish story.”  “Such statements hurt his credibility.”  Let’s just call it what it is: a pile of lies from a profoundly dishonest man.

JULY 21, 2010
Obama’s Economic Fish Stories
On unemployment, the president claims that the stimulus bill was several times more potent than his chief economic adviser estimates. Such statements hurt his credibility.
By MICHAEL J. BOSKIN

A president’s most valuable asset—with voters, Congress, allies and enemies—is credibility. So it is unfortunate when extreme exaggeration emanates from the White House.

All presidents wind up saying some things that make even their own economists cringe (often the brainchild of political advisers unconstrained by economic principles, facts or arithmetic). Usually, economic advisers manage to correct these problematic statements before delivery. Sometimes they get channeled into relatively harmless nonsense, such as President Gerald Ford’s “Whip Inflation Now” buttons. Other times they produce damaging policies, such as President Richard Nixon’s wage and price controls. The most illiterate statement was President Jimmy Carter’s late-1970s plea to the Federal Reserve to lower interest rates to combat high inflation, the exact opposite of what it should do. Not surprisingly, the value of the dollar collapsed.

Martin Kozlowski

President Obama says “every economist who’s looked at it says that the Recovery Act has done its job”—i.e., the stimulus bill has turned the economy around. That’s nonsense. Opinions differ widely and many leading economists believe that its impact has been small. Why? The expectation of future spending and future tax hikes to pay for the stimulus and Mr. Obama’s vast expansion of government are offsetting the direct short-run expansionary effect. That is standard in all macroeconomic theories.

So, as I and others warned in 2008, the permanent government expansion and higher tax rate agenda is a classic example of what not to do during bad economic times. Worse yet, all the subsidies, bailouts, regulations and mandates are forcing noncommercial decisions on the economy, which now awaits literally thousands of new diktats as a result of things like ObamaCare and the financial reform bill. The uncertainty is impeding investment and hiring.

The president does not say that economists agree that the high future taxes to finance the stimulus will hurt the economy. (The University of Chicago’s Harald Uhlig estimates $3.40 of lost output for every dollar of government spending.) Either the president is not being told of serious alternative viewpoints, or serious viewpoints are defined as only those that support his position. In either case, he is being ill-served by his staff.

Mr. Obama’s economic statements are increasingly divorced not only from competing viewpoints but from those of his own economic advisers. It is surprising how many numerically challenged pronouncements come from this most scripted and political of White Houses. One slip is eventually forgiven, but when a pattern emerges, no one believes it is an accident.

For example, on the anniversary of the stimulus bill, Mr. Obama declared, “It is largely thanks to the Recovery Act that a second Depression is no longer a possibility.” Yet his Council of Economic Advisers just estimated the stimulus bill’s effect on GDP at its trough was 1%-2%.

The most common definition of a depression is a long period in which GDP or consumption declines at least 10%. The decline in GDP in the recent recession was 3.8%, in consumption 2%. No one disputes the recession was severe, but to reach a 10% GDP decline requires tripling the administration’s estimate (three times their 2% effect) added to the actual 3.8% decline. On the alternative consumption standard, the math is even more absurd. The depression statement isn’t credible. The stimulus bill has assumed certain mystic powers in administration discourse, but revoking the laws of arithmetic shouldn’t be one of them.

The recession would have been worse if not for the Fed’s monetary policy and quantitative easing. Also important were the unmentioned automatic stabilizers—taxes falling more than income, cushioning declines in after-tax incomes and consumption—which were far larger than the spending and tax rebates in the stimulus bill. Arguing that all these policies (including injecting capital into banks, which was necessary but done poorly) may have prevented a depression is perhaps still an exaggeration but at least is within hailing distance of plausibility. On that scale, the effect of the stimulus was puny.

On his recent “Recovery Tour,” Mr. Obama boasted, “The stimulus bill prevented the unemployment rate from “getting up to . . . 15%.” But the president’s own chief economic adviser, Christina Romer, has estimated that the stimulus bill reduced peak unemployment by one percentage point—i.e., since the unemployment rate peaked at 10.1%, it prevented the unemployment rate from rising to just over 11%. So Mr. Obama claims that the stimulus bill was several times more potent than his chief economic adviser estimates.

Perhaps the most serious disconnect concerns the impending expiration of the 2001 and 2003 tax cuts, which will raise the top two income tax rates and the rates on dividends and capital gains. If these growth inhibiting tax increases occur—about $75 billion in tax increases next year, $1.4 trillion over 10 years—there will be serious economic damage.

In the most recent issue of the American Economic Review, Ms. Romer (and her husband David H. Romer) conclude that “tax increases are highly contractionary . . . tax cuts have very large and persistent positive output effects.” Their estimates imply the tax increases would depress GDP by roughly half the growth rate in this so-far-anemic recovery.

If Mr. Obama is really serious about a second stimulus, by far the best thing he can do is have Congress quickly extend the expiring Bush tax cuts, combined with real spending cuts set to take effect as the economy improves.

The president badly needs to make more realistic pronouncements. No one expects him to say his policies have failed (although most have delivered far less than claimed at large cost). A little candor about the results of experimentation in uncharted waters would go a long way. But at the very least, his staff needs to avoid putting these exaggerations on the teleprompter. It undermines confidence and raises concerns about competence. It’s doing nobody any good—not the economy and certainly not Mr. Obama.

Mr. Boskin is a professor of economics at Stanford University and a senior fellow at the Hoover Institution. He chaired the Council of Economic Advisers under President George H.W. Bush.

Day after day after day, Obama touts slivers of good news as magnificent, while ignoring pile on top of pile of bad news.  We keep getting these tortured numbers, cherry-picked out of a a rotten mess.  And we’re constantly told the increasingly laughable narrative that Obama’s incredible leadership is what kept everything from being even worse than it is.

The funniest aspect of all is when Obama and his mouthpiece Robert Gibbs keep assuring us that no economist disagrees with their policies when their very own chief economist is on record disagreeing with Obama’s policies.

Obama mouthpiece Gibbs declares:

I’ll let Congressman Boehner unwind his eloquent argument for preserving the tax cuts for those that are quite wealthy.  I don’t think the President believes – I don’t think there’s an economist that believes there’s a stimulative effect to — or a good reason in terms of economic growth to extend those tax cuts, particularly given the choice that one has to make about the budget deficit.

Forbes Magazine demonstrates how fallacious and even dishonest Obama’s and Gibbs’ statements have been in pointing out that the:

chairman of the Council of Economic Advisers, Christina Romer, herself a Keynesian, has done research that undercuts the Keynesian view of good fiscal policy.  Some of this research is in a March 2007 paper, “The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks,” co-authored with her husband, fellow University of California, Berkeley, economist David Romer.

In their article, they find that “tax increases are highly contractionary” and that tax cuts are highly expansionary.

And Forbes goes on to conclude:

“In other words, if she believes her own research, Christina Romer should be a strong critic of her new boss’s policies.”

So maybe you guys should stop making flagrantly false statements that all the economists agree with you, when in point of fact even your own economist doesn’t agree with you.  Or, at least only agrees with you by denying her own academic research for the sake of appearances.

That may be why she’s leaving the White House.  She can finally tell the truth – something that the Obama White House would never even dream of allowing her to do.

The Utter Farce of ‘Green Jobs’

A few questions to ask yourself as you’re reading this article.

If green energy is so good, or is in any way the ‘wave of the future,’ then how come it has to be so massively subsidized with government money?  Why aren’t private businesses putting their own money into this?

Another question I want you to consider is how expensive green energy is when compared to the energy produced by fossil fuels (I will answer that after the article below).  And a final question you might ask might be, when are people going to finally wake up and stop believing idiotic liberal lies and wake up to reality?

Boston firm shifts ‘green jobs’ to China
By: Mark Tapscott
Editorial Page Editor
11/06/09 8:35 AM EST

President Obama and the Democratic majority in Congress are spending billions of tax dollars to subsidize development of “green jobs” – positions for people and companies designing and manufacturing alternative energy sources such as biomass, wind and solar.

One of Obama’s buddies, Gov. Deval Patrick of Massachusetts, is also a vocal advocate of such subsidies. Last year, Patrick put Massachusetts taxpayers’ money where is mouth is by backing a $58 million package of incentives and subsidies to Evergreen Solar, which manufacturers collector panels used in solar energy units.

Now barely a year later, Evergreen has announced that it is moving its final assembly phase to a factory in China, according to the Boston Globe. The firm’s Devens, Massachusetts, plant currently employs 577 full-time and 230 contract workers in designing and manufacturing the silicon wafers and cells that are then assembled into panels.

A company spokesman declined to say how many jobs will be shifted to the new assembly plant in China, according to the Globe.

“In exchange for receiving $58.6 million in grants, loans, land, tax incentives, and other aid to build in Massachusetts, Evergreen pledged that it would add 350 new jobs, a goal that it has, to date, far surpassed. However, the company disclosed in a financial filing yesterday that it would write off $40 million worth of equipment at Devens because of the production shift to China,” the Globe reported.

“The company has been a poster child of the Patrick administration’s efforts to develop a ‘green energy’ industry cluster in Massachusetts. But it has been struggling financially because of increased competition from overseas producers and rapidly falling prices for solar products. It recently persuaded the state to lend it another $5 million to cover equipment purchases, though the state has not yet released the funds,” the Globe said.

Evergreen has lost at least $167 million so far in 2009, according to the Globe. Last year during the same period, the company’s losses totalled only $33.6 million. Following announcement of the move to China, the company’s stock closed at $1.42 per share, down six cents per share.

So let’s see.  The poster boy for ‘green jobs’ got a $58 million handout, managed to lose $167 million in 2009, and is outsourcing its labor force to China.

If you think that’s the ‘wave of the future,’ then vote Democrat.  And may your children freeze in the dark at night for your moral idiocy.

Take a moment to ponder what Obama said about the impact of his own plan:

“Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”

Why is that?  Why is it that green energy has to be subsidized, even as fossil fuel energy – even when it is regulated and taxed and outlawed – is still so much less expensive than the green energy that Obama wants to impose on America?

Fossil fuels are so much cheaper, so much more efficient, so much more powerful, and so much more superior, to Obama’s green energy it is utterly unreal.

Here’s a graph of the difference (the accompanying article is available here):

This should start to explain why ‘green energy’ has to be massively subsidized, and is still a dud even when fossil fuel energy is massively taxed.  This is why nobody with a clue would put his own money into green energy, apart from the belief that a socialist government will impose insanity on the energy system.

Barack Obama wants to bankrupt coal – which costs less than one cent per kilowatt hour – and wants to impose in its place something that will cost more than forty times more.  How will you like it when your energy rates go up forty times higher?

And the only way to avoid your energy costs going up beyond your ability to be able to afford it – under Obama’s own announced plan – is to massively, massively subsidize the cost of that green energy.  At the cost of far more government debt, and on the backs of your children’s children’s children’s children’s children.  Assuming that we don’t economically implode into a banana republic first, which is far more likely.

And Obama is selling this load of crap to you based on two lies.  Lie one is the giant load of hooey of global warming.  And lie two is the bogus economic advantages we would supposedly get from replacing our energy source with one that would cost us eight to forty times more.

We’ve been told for well over a decade that we had reached a tipping point where the earth could no longer handle the CO2 humans were creating, such that we would experience a massive increase in global warming.

Yeah, right:

(ChattahBox)—Brrrr—-meteorologists are predicting that the United States, particularly the entire eastern half of the country, will experience record-breaking blasts of frigid cold weather this winter. The nearly nationwide swath of cold and stormy weather has not been seen since January 1985, when freezing cold temperatures reached as far South as Georgia.

AccuWeather.com Chief Meteorologist and Expert Long Range Forecaster Joe Bastardi, believes our current winter weather pattern is reminiscent of the long and bitterly cold winter of 1977-78, when the Eastern seaboard experienced the great blizzard of 1978. Bastardi predicts that the winter of 2009-2010 is shaping up like the snowy winters experienced during the Hippie-Vietnam War era. “It’ll be like the great winters of the ’60s and ’70s,” he said.

And this historic cold is a global phenomenon.

It’s like a desert out there, Al Gore.  But at least it’s a dry heat.

CO2 did go up, but there has never been a demonstrable link between CO2 and global temperatures.

We recently found out that the climatologists who were preaching global warming to line their own pockets were liars, frauds and demagogues.

Environmentalists and leftists want to seize $40 TRILLION of your money to “solve” the “crisis” of global warming.

From Time Magazine:

This is an enormously ambitious goal, but many experts agree it could make a real difference. The problem is that the cure may be worse than the disease. In a paper for the Copenhagen Consensus Center, climate economist Richard Tol, a lead author for the U.N. climate panel, determined that to cut carbon emissions enough to meet the 2° goal, the leading industrial nations would have to slap a huge tax on carbon-emitting fuels — one that by the end of the century would reach something on the order of $4,000 per metric ton of carbon dioxide, or $35 per gallon of gas ($9 per liter). According to Tol, the impact of a tax hike of this magnitude could reduce world GDP 12.9% in 2100 — the equivalent of $40 trillion a year. In other words, to save ourselves $3 trillion a year, we’d be giving up $40 trillion a year. No wonder we’re not getting anywhere.

So make that $40 TRILLION PER YEAR.

This is nothing but a socialist redistributionist power-grab, intended to secure the leftist agenda and ensure leftist totalitarian domination for a century to come.

And the Democrats attempt to seize control over health care is no different.  They don’t want to improve anything but their dominance.  And they will use any means to secure that dominance.

Don’t believe these transparent lies.  Fight these people.  Vote them out of power.  Vote them right off the island.  Or you will pay dearly for the agenda they impose upon you and your family.

Update, January 8: Obama is pitching billions more in funding for green jobs while our unemployment rate climbs.  I guess he wants to piss more billions down the toilet.

A Summary of the Government Takeover of Health Care

This is a prepared House Republican document which you can view as a PDF file here.

House Democrat Health “Reform” Legislation: Short Summary of the Government Takeover of Health Care

October 29, 2009

BACKGROUND AND EXECUTIVE SUMMARY
On October 29, 2009, Speaker Pelosi and the House Democrat leadership introduced H.R. 3962, the Affordable Health Care for America Act. The legislation combines provisions in the versions of H.R. 3200, America’s Affordable Health Choices Act, approved by the Committees on Education and Labor, Energy and Commerce, and Ways and Means, as well as other provisions negotiated behind closed doors by the Democrat leadership. The bill is expected on the floor the week of November 2, under a likely structured rule. While press reports indicate the bill will cost at least $894 billion, a CBO score is not yet available, and the following analysis will be updated as events warrant.

Buried within the contents of the 1,990 page bill—as well as a separate 13-page bill (H.R. 3961) that would increase the deficit by more than $200 billion—are details that will see a massive federal involvement in the health care of every American, including the following:

• Creation of a government-run insurance program that could cause as many as 114 million Americans to lose their current coverage;
• Abolition of the private market for individual health insurance, forcing individuals to purchase coverage in a government-run Exchange;
• Stifling insurance regulations that would raise premiums and encourage employers to drop coverage;
• Trillions of dollars in new federal spending that will exacerbate the deficit and imperil the nation’s long-term fiscal solvency;
• Taxes on all Americans—individuals who purchase insurance, individuals who do not purchase insurance, and millions of small businesses—that will kill jobs and raise health care premiums; and
• Cuts to Medicare Advantage plans that will result in higher premiums and dropped coverage for more than 10 million seniors.

SUMMARY OF KEY PROVISIONS
The Government Takeover

Creation of Exchange: The bill creates within the federal government a nationwide Health Insurance Exchange. Uninsured individuals would be eligible to purchase an Exchange plan, as would those whose existing employer coverage is deemed “insufficient” by the federal government. Once deemed eligible to enroll in the Exchange, individuals would be permitted to remain in the Exchange until becoming Medicare-eligible—a provision that would likely result in a significant movement of individuals into the bureaucrat-run Exchange over time. Employers with 25 or fewer employees would be permitted to join the Exchange in its first year, with employers with 25-50 employees permitted to join in its second year. Employers with fewer than 100 employees would be permitted to enroll in the third year, and all employers would also be eligible to join, if permitted to do so by the Commissioner. Many may note the limits on employer eligibility in the first several years are significantly higher than in H.R. 3200, thus expanding the scope of the government-run Exchange.

Exchange Benefit Standards: The bill requires the Commissioner to establish benefit standards for all plans. These onerous, bureaucrat-imposed standards would hinder the introduction of innovative models to improve enrollees’ health and wellness—and by insulating individuals from the cost of health services with restrictive cost-sharing, could raise health care costs.

Government-Run Health Plans: The bill requires the Department of Health and Human Services to establish a “public health insurance option” through the Exchange. The bill states the plan shall comply with requirements related to other Exchange plans. Empowered to collect individuals’ personal health information, with access to federal courts for enforcement actions and $2 billion in “start-up funds”—as well as 90 days’ worth of premiums as “reserves”—from the Treasury, the bill’s headings regarding a “level playing field” belie the reality of the plain text. In addition, the bill requires the Secretary to establish premium rates that can fully finance the cost of benefits and administrative costs, but there would always be the implicit backing of the federal government.

The bill provides that the government-run plan shall enlist all Medicare providers unless physicians affirmatively decide to opt-out of the program. While the Secretary will be required to “negotiate” reimbursement rates with doctors and hospitals, nothing in the bill prohibits the Secretary from using such negotiation to impose Medicare reimbursement levels on providers as part of a government-imposed “negotiation.” Should such a scenario occur, the Lewin Group has estimated that as many as 114 million individuals could lose access to their current coverage under a government-run plan—and that a government-run plan reimbursing at the rates contemplated by the legislation would actually result in a net $16,207 decrease in reimbursements per physician per year, even after accounting for the newly insured.

The bill requires the Secretary to “establish conditions of participation for health care providers” under the government-run plan—however it includes no guidance or conditions under which the Secretary must establish those conditions. Many may be concerned that the bill would allow the Secretary to prohibit doctors from participating in other health plans as a condition of participation in the government-run plan—a way to co-opt existing provider networks and subvert private health coverage.

“Low-Income” Subsidies: The bill provides subsidies only through the Exchange, again putting employer health plans at a disadvantage. Individuals with access to employer-sponsored insurance whose group premium costs exceed 12 percent of adjusted gross income would be eligible for subsidies.

The bill provides that the Commissioner may authorize State Medicaid agencies—as well as other “public entit[ies]”—to make determinations of eligibility for subsidies and exempts the subsidy regime from the five-year waiting period on federal benefits established as part of the 1996 welfare reform law (P.L. 104-193). The second provision would give individuals a strong incentive to emigrate to the United States in order to obtain subsidized health benefits without a waiting period. Despite the bill’s purported prohibition on payments to immigrants not lawfully present, and the insertion of a citizenship verification provision, some may be concerned that the provisions as drafted would not require individuals to verify their identity when confirming eligibility for subsidies—encouraging identity fraud while still permitting undocumented immigrants and other ineligible individuals from obtaining taxpayer-subsidized benefits.

Premium subsidies provided would be determined on a six-tier sliding scale, such that individuals with incomes under 133 percent of the Federal Poverty Level (FPL, $29,327 for a family of four in 2009) would be expected to pay 1.5 percent of their income, while individuals with incomes at 400 percent FPL ($88,200 for a family of four) would be expected to pay 12 percent of their income. Subsidies would be based on adjusted gross income (AGI), meaning that individuals with total incomes well in excess of the AGI threshold could qualify for subsidies.

The bill further provides for cost-sharing subsidies, such that individuals with incomes under 133 percent FPL would be covered for 97 percent of expenses, while individuals with incomes at 400 percent FPL would have a basic plan covering 70 percent (the statutory minimum). These rich benefit packages, in addition to raising subsidy costs for the federal government, would insulate plan participants from the effects of higher health spending, resulting in an increase in overall health costs—exactly the opposite of the bill’s purported purpose.

Medicaid Expansion: The bill would expand Medicaid to all individuals with incomes under 150 percent of the federal poverty level ($33,075 for a family of four). Under the bill, the bill’s expansion of Medicaid to more than 10 million individuals would be fully paid for by the federal government only through 2014—thus imposing billions in unfunded mandates on States, which would be expected to pay nearly 10 percent of the cost of the expansion beginning in 2015.

Benefits Committee: The bill establishes a new government health board called the “Health Benefits Advisory Committee” to make recommendations on minimum federal benefit standards and cost-sharing levels. The Committee would be comprised of federal employees and Presidential appointees.

The bill eliminates language in the discussion draft of H.R. 3200 stating that Committee should “ensure that essential benefits coverage does not lead to rationing of health care.” Many view this change as an admission that the bureaucrats on the Advisory Committee—and the new government-run health plan—would therefore deny access to life-saving services and treatments on cost grounds. As written, the Committee could require all Americans to obtain health insurance coverage of abortion procedures as part of the bill’s new individual mandate.

 

Funneling Patients into Government Care

Abolition of Private Insurance Market: The bill imposes new regulations on all health insurance offerings, with only limited exceptions. Existing individual market policies could remain in effect—but only so long as the carrier “does not change any of its terms and conditions, including benefits and cost-sharing” once the bill takes effect. With the exception of these grandfathered individual plans subject to numerous restrictions, insurance purchased on the individual market “may only be offered” until the Exchange comes into effect, thus abolishing the private market for individual health insurance and requiring all non-employer-based coverage to be purchased through the bureaucrat-run Exchange.

Employer coverage shall be considered exempt from the additional federal mandates, but only for a five year “grace period”—after which all the bill’s mandates shall apply. By applying new federal mandates and regulations to employer-sponsored coverage, this provision would increase health costs for businesses and their workers, encourage employers to drop existing coverage, and leave employees to access care through the government-run Exchange.

“Pay-or-Play” Mandate on Employers: The bill requires that employers offer health insurance coverage, and contribute to such coverage at least 72.5 percent of the cost of a basic individual policy—as defined by the Health Benefits Advisory Council—and at least 65 percent of the cost of a basic family policy, for full-time employees. The bill further extends the employer mandate to part-time employees, with contribution levels to be determined by the Commissioner, and mandates that any health care contribution “for which there is a corresponding reduction in the compensation of the employee” will not comply with the mandate—which would encourage them to lay off workers.

Employers must comply with the mandate by “paying” a tax of 8 percent of wages in lieu of “playing” by offering benefits that meet the criteria above. In addition, beginning in the Exchange’s second year, employers whose workers choose to purchase coverage through the Exchange would be forced to pay the 8 percent tax to finance their workers’ Exchange policy—even if they offer coverage to their workers.

The bill includes a limited exemption for small businesses from the employer mandate—those with total payroll under $500,000 annually would be exempt, and those with payrolls between $500,000 and
$750,000 would be subjected to lower tax penalties (2-6 percent, as opposed to 8 percent for firms with payrolls over $750,000). However, these limits are not indexed for inflation, and the threshold amounts would likely become increasingly irrelevant over time, meaning virtually all employers would be subjected to the 8 percent payroll tax.

The bill amends ERISA to require the Secretary of Labor to conduct regular plan audits and “conduct investigations” and audits “to discover non-compliance” with the mandate. The bill provides a further penalty of $100 per employee per day for non-compliance with the “pay-or-play” mandate—subject only to a limit of $500,000 for unintentional failures on the part of the employer.

The employer mandate would impose added costs on businesses with respect to both their payroll and administrative overhead. An economic model developed by Council of Economic Advisors Chair Christina Romer found that an employer mandate could result in the loss of up to 5.5 million jobs as employers lay off employees to avoid providing costly, government-forced health insurance.

Individual Mandate: The bill places a tax on individuals who do not purchase “acceptable health care coverage,” as defined by the bureaucratic standards in the bill. The tax would constitute 2.5 percent of adjusted gross income, up to the amount of the national average premium through the Exchange. The tax would not apply to dependent filers, non-resident aliens, individuals resident outside the United States, and those exempted on religious grounds. “Acceptable coverage” includes qualified Exchange plans, “grandfathered” individual and group health plans, Medicare and Medicaid plans, and military and veterans’ benefits.

For individuals with incomes of under $100,000, the cost of complying with the mandate would be under $2,000—raising questions of how effective the mandate will be, as paying the tax would in many cases cost less than purchasing an insurance policy. Despite, or perhaps because of, this fact, the bill language does not include an affordability exemption from the mandate; thus, if the many benefit mandates imposed raise premiums so as to make coverage less affordable for many Americans, they will have no choice but to pay an additional tax as their “penalty” for not being able to afford coverage. Then-Senator Barack Obama, pointed out in a February 2008 debate that in Massachusetts, the one State with an individual mandate, “there are people who are paying fines and still can’t afford [health insurance], so now they’re worse off than they were. They don’t have health insurance and they’re paying a fine.”

Medicare Advantage: The bill reduces Medicare Advantage (MA) payment benchmarks to levels paid by traditional Medicare—which provides less care to seniors—over a three-year period. This arbitrary adjustment would reduce access for millions of seniors to MA plans that have brought additional benefits.

The bill imposes requirements on MA plans to offer cost-sharing no greater than that provided in government-run Medicare, and imposes price controls on MA plans, limiting their ability to offer innovative benefit packages. This policy would encourage plans to keep seniors sick, rather than manage their chronic disease.

The bill also gives the Secretary blanket authority to reject “any or every bid by an MA organization,” as well as any bid by a carrier offering private Part D Medicare prescription drug coverage, giving federal bureaucrats the power to eliminate the MA program entirely—by rejecting all plan bids for nothing more than the arbitrary reason that an Administration wishes to force the 10 million beneficiaries enrolled in MA back into traditional, government-run Medicare against their will.
Tax Increases

Government-Forced Insurance Penalties: Offsetting payments to finance the government takeover of health care would include taxes on individuals not complying with the mandate to purchase coverage, as well as taxes and payments by businesses associated with the “pay-or-play” mandate.

Taxes on Small Businesses: The bill also imposes a new 5.4 percent “surtax” on individuals with incomes over incomes over $500,000 and families with incomes greater than $1 million. The tax would apply beginning in 2011. As more than half of all high-income filers are small businesses, this provision would cripple small businesses and destroy jobs during a deep recession.

Taxes on Health Plans: The bill prohibits the reimbursement of over-the-counter pharmaceuticals from Health Savings Accounts (HSAs), Medical Savings Accounts, Flexible Spending Arrangements (FSAs), and Health Reimbursement Arrangements (HRAs), and increases the penalties for non-qualified HSA withdrawals from 10 percent to 20 percent, effective in 2011. Because these savings vehicles are tax-preferred, adopting this prohibition would raise taxes by $8.2 billion over ten years, according to the Joint Committee on Taxation.

H.R. 3962 would place a cap on FSA contributions, beginning in 2012; contributions could only total $2,500 per year, subject to annual adjustments linked to the growth in general (not medical) inflation. Members may be concerned that these provisions would first raise taxes, and second—by imposing additional restrictions on health savings vehicles popular with tens of millions of Americans—undermines the promise that “If you like your current coverage, you can keep it.” At least 8 million individuals hold insurance policies eligible for HSAs, and millions more participate in FSAs. All these individuals would be subject to additional coverage restrictions—and tax increases—under this provision.

The bill also repeals the current-law tax deductibility of subsidies provided to companies offering prescription drug companies to retirees. Many may be concerned that this provision would lead to companies dropping their current coverage as a result.

Taxes on Health Products: Finally, H.R. 3962 would impose a 2.5 percent excise tax on medical devices, beginning in 2013. Many may echo the concerns of the Congressional Budget Office and other independent experts, who have confirmed that this tax would be passed on to consumers in the form of higher prices—and ultimately higher premiums.
Budgetary Gimmicks

Unpaid-For Doctor Fix: While the Democrats claim their bill is now deficit-neutral, the majority also introduced a separate piece of stand-alone legislation (H.R. 3961). The more than $200 billion cost of this legislation is not paid for, thus adding hundreds of billions of dollars in deficit spending and interest costs to the federal debt. Many may also note that the Congressional Budget Office recently analyzed similar legislation (S. 1776) as raising Medicare premiums by $70 billion.

Long-Term Care Program: The bill includes a new program for long-term care services that provides a benefit of at least $50 per day to individuals unable to perform certain functions of daily living. As the long-term care program requires individuals to contribute five years’ worth of premiums before becoming eligible for benefits, the program would find its revenue over the first ten years diverted to finance other spending in Democrats’ health care “reform.” However, the Congressional Budget Office, in analyzing similar provisions included in Section 191 of legislation considered by the Senate HELP Committee, found that “if the Secretary did not modify the program to improve its actuarial soundness, the program would add to future federal budget deficits in a large and growing fashion beginning a few years beyond the 10-year budget window.” As even Democrats such as Senate Budget Committee Chairman Kent Conrad (D-ND) have called the program a “Ponzi scheme,” many may find any legislation that relies upon such a program to maintain “deficit-neutrality” fiscally irresponsible and not credible.