How CBO Scored Baucus Health Care Plan As Defict Neutral

Suppose I told you that I can fly by flapping my arms at a rate of 40 miles an hour, and I were to ask you how long it would take me to get to the top of a hill located 30 miles away.  The correct answer would be to say, “45 minutes.”

In actual point of fact, of course, I can’t fly by flapping my arms, I can’t walk at anywhere near the rate of 40 miles an hour, and I would likely have to take a considerably longer route up to the hilltop.  It would probably take me a good two days to get to that hilltop, if I were operating in the realm of factual reality.  But your job wasn’t to check whether I had wings; it was to score the math in my proposal.

That’s basically the sort of answer the Congressional Budget Office gave to the $829 billion (so far) Baucus health plan.

When the Senate Finance Committee handed the abbreviated version of the Baucus plan to the CBO, the CBO assumed that Congress would do exactly what the plan said Congress was supposed to do.  And if Congress does ONLY what is in the bill without adding ANYTHING, and imposes EVERY unpopular (even with Democrats) tax that the bill calls for, the CBO claimed that the Baucus plan would cost a deficit-neutral $829 billion over ten years.

Here are some things that would have to happen for the deficit-neutral $829 billion cost projection to be even close to correct:

First, the Medicare budget – which has never been cut or reduced in spite of repeated attempts to do so in the past – would have to be slashed by $404 billion over ten years.  Senior citizens would absolutely freak.  It will not happen.  If it did happen, Democrats would lose every single seat in the next election, as Republicans simply promised that if they are voted in, they would overturn the bill.

So add that $404 billion back in.  And the bill is already no longer even CLOSE to being “deficit neutral.”

Second, there are $201 billion in taxes for the so-called “Cadillac” health care plans.  And while there are some bigwig execs that collect such benefits, the overwhelming majority of the plans go to union employees.

Question: do you truly believe that Democrats won’t exempt the Democrat-supporting unions – which will just go to show what a truly partisan plan the Democrats are truly offering – before all is said and done?

So you can subtract a whopping load of the $200 billion in tax revenue.   It aint going to happen.  And that deficit this bill will create will go up by another giant amount.

Third, the Baucus plan is going to impose $121 billion in taxes – with $29 billion of that just discovered hidden in the byzantine language of the bill  – on insurers and medical device suppliers – which the CBO has said would simply be passed on to customers in higher prices.

This amounts to a tax on customers that is passed off as “fees” for the business that will pass the taxes on to customers.  It is simply a cowardly way to raise taxes.

And this goes to the heart of what is wrong with “the public option.”  If you tax the insurers and the providers in order to generate revenue for the public option, what obviously happens?  You undermine the private companies in order to supplant them with the government.  It will drive the private industry out of the industry, leaving only the government to fill the vacuum that it created in the first place.

In addition to those taxes, there will also be $27 billion in taxes collected from those who will be forced to buy insurance.  So much for Obama’s promise that people making under $250,o00 won’t see their taxes go up a single dime.  Unless you want to argue that “$27 billion is NOT a single dime,” so Obama was telling us the truth.

Healthy younger people who have historically decided they could forgo insurance will HAVE to pay significantly into the Democrats’ system in order to “spread the risk and share the burden.”  Too bad they didn’t know that when they voted for Obama.  What can I say except, “Surprise!”

Fourth, it needs to be pointed out that after that ten years, the costs of the Baucus bill would absolutely skyrocket.  Why?  Because the Baucus plan – if passed – would begin collecting taxes/fees beginning next year, but would not actually begin supplying benefits and thus accumulating costs until after 2013 — and don’t go fully into effect until 2015.  The Baucus plan will therefore have three to as much as five years to collect revenue before having to pay out any money.  That makes it a lot easier to be “deficit neutral.”  But it’s based on smoke and mirrors.  And of course outright lies.

But unfortunately, the CBO only scores the plan for the first ten years.

Stop and think: the federal budget deficit for 2009 was just announced to be a an absolutely staggering $1.4 TRILLION – which is more than THREE TIMES more than Bush’s all-time high 2008 deficit of $459 billion.  Which incredibly cynical Democrats pounced upon as “fiscally irresponsible.”  And Obama’s 2009 deficit will represent an astounding and utterly unsustainable 9.9% of the nation’s entire gross domestic product (it was 3.2% in spend-crazy 2008).  There is utterly no possible way we will be able to afford to see our spending continue to skyrocket in future years as it will under the Baucus plan.

And fifth, it turns out that Joe Wilson was more right when he shouted “You lie!” at Obama for saying that illegal immigrants would not be covered than many first realized.

According to what we’re being told, the Baucus plan would cover 94% of the population by 2019.  That means about 25 million people would not be covered.  Including illegal immigrants.  From the AP:

It said that by 2019, “the number of nonelderly people who are uninsured would be reduced by about 29 million,” either through private insurance or by enrolling in federal programs. That would leave an additional 25 million uninsured, about one-third of them illegal immigrants who are not eligible for coverage under the bill.

At the time that Wilson made that outburst, the language in the plans actually proved that Obama was factually wrong — and the Democrats’ proposals WOULD have covered illegals.  They since tightened up the language such that illegals are excluded.

But ARE they excluded?  It turns out that this is just another fantasy, smoke-and-mirrors illusion as well.  The fact of the matter is that the Supreme Court has been very consistent in its interpretation of the word “persons” over the last couple of decades.  The SCOTUS has repeatedly ruled the “persons” means ALL people in the country, whether citizen or illegal alien whenever government social plans have been at issue.

Do you know what that means?  It means that the only way to prevent illegal immigrants from being allowed to obtain benefits from a big government social program is to not have the big government social program in the first place.

Illegal immigrants WILL ultimately be covered under this plan.  Don’t be so naive as to think otherwise.  That will cost us plenty.  And nobody is factoring it in.

Medicare has cost more than NINE TIMES more than projected by 1990:

In 1966, the House Ways and Means Committee estimated Medicare would cost $12 billion a year by 1990; in 1990, however, Medicare cost $107 billion, nine times more than its estimate.

And the Medicare program is so deep in the bottomless pit of red ink that Newseek says it could go bankrupt as soon as NEXT YEAR.

Does anyone think the government will do better counting its cost now than it ever has in the past?  Does anyone truly believe that a president who created a deficit THREE TIMES higher than Bush’s historic 2008 deficit (again, $1.4 TRILLION vs. $459 billion) will be able to control spending?

Think about it: Medicare is about to go bankrupt even as Democrats are voting to raid some half trillion dollars from it to pay for their new liberal health gimmick.

We need to fix and reform Medicare rather than create a giant system that will make the coming health care collapse all the greater.

Democrats’ Effort To Fearmonger Path To Socialized Medicine Has Been Tried Before

In the mainstream media narrative, Sarah Palin is demonized as “about half a whack job” and her statement about “death panels” is literally interpreted in a way I’d love to see them apply JUST ONCE to the Constitution.  Conservatives were denounced as an “angry mob,” as “un-American,” and as exhibiting Nazi characteristics by the Democrat Speaker of the House.

The media loves to talk about rightwing fearmongering.

I’d like to say a little more about leftwing fearmongering.

How about the one that we need to pass health care reform in order to get our economy out of the toilet?

A smattering of various Obama “warnings” fearmongering health care:

– “We must lay a new foundation for future growth and prosperity, and a key pillar of a new foundation is health insurance reform.”

– Obama cast retooling the U.S. health-care system as crucial to the nation’s economic success. Reform would help rein in the national deficit and rebuild the economy, he argued, in a way that would help middle-class workers, whose wages have stagnated in recent years largely because of spiraling health-care costs.

– WASHINGTON: President Barack Obama warned on Thursday that the United States would not rebuild its economy unless political leaders joined him immediately on a perilous political drive for healthcare reform.

– President Obama warned Wednesday night that health-care reform is central to rebuilding the economy “stronger than before,” and without congressional action on health-care reform, “We’re guaranteed to see Medicare and Medicaid basically break the federal budget.”

And our last Obama “warning”:

“The country has to reform its health care system or else not only are you going to continue to have people really going through a hard time, we’re also going see a continuing escalation of our budget problems that can’t get under control,” Obama told Moran. “I think America has to win it here.”

In the dialogue surrounding health care, Obama warned against “scare tactics,” which he said are fostering anxiety and serving to distract Americans from the plan’s principles.

What’s nice about the last one is that it includes fearmongering on the one hand with warning against “scare tactics” on the other.  Obama tells us one the one hand that our economy will plummet unless we implement ObamaCare, and then demonizes everyone who has a different fearmongering message.

It doesn’t matter that Obama’s urgings that we pass health care “reform” will lower our costs and boost are economy are entirely false:

Under questioning by members of the Senate Budget Committee, Douglas Elmendorf, director of the nonpartisan Congressional Budget Office, said bills crafted by House leaders and the Senate health committee do not propose “the sort of fundamental changes” necessary to rein in the skyrocketing cost of government health programs, particularly Medicare. On the contrary, Elmendorf said, the measures would pile on an expensive new program to cover the uninsured.

Though President Obama and Democratic leaders have repeatedly pledged to alter the soaring trajectory — or cost curve — of federal health spending, the proposals so far would not meet that goal, Elmendorf said, noting, “The curve is being raised.” His remarks suggested that rather than averting a looming fiscal crisis, the measures could make the nation’s bleak budget outlook even worse.

It also doesn’t seem to matter that, given that the “reforms” Obama is seeking wouldn’t take effect until at least 2013, there is little reason to rush headlong into anything other than opportunistic partisan demagoguery.  And yet Barack Obama was out there rushing “reform” and calling August 1st “the people’s deadline” even as polls showed “the people” overwhelmingly wanting Congress to take time crafting health care legislation.

Interestingly, these tricks of fearmongering health care “reform” in the name of averting economic calamity and trying to rush the process through have been tried before.  Think Bill Clinton, First Inaugural Address, 1993:

But all of our efforts to strengthen the economy will fail—let me say this again; I feel so strongly about this—all of our efforts to strengthen the economy will fail unless we also take this year, not next year, not 5 years from now but this year, bold steps to reform our health care system.

In 1992, we spent 14 percent of our income on health care, more than 30 percent more than any other country in the world, and yet we were the only advanced nation that did not provide a basic package of health care benefits to all of its citizens. Unless we change the present pattern, 50 percent of the growth in the deficit between now and the year 2000 will be in health care costs. By the year 2000 almost 20 percent of our income will be in health care. Our families will never be secure, our businesses will never be strong, and our Government will never again be fully solvent until we tackle the health care crisis. We must do it this year.

The combination of the rising cost of care and the lack of care and the fear of losing care are endangering the security and the very lives of millions of our people. And they are weakening our economy every day. Reducing health care costs can liberate literally hundreds of billions of dollars for new investment in growth and jobs. Bringing health costs in line with inflation would do more for the private sector in this country than any tax cut we could give and any spending program we could promote. Reforming health care over the long run is critically essential to reducing not only our deficit but to expanding investment in America.

What’s interesting about this is that liberals depict the Clinton years as the time when the streets were lined with gold and every child went to bed in a warm house with a full tummy.

So the point would obviously be, either Clinton was fearmongering health care in a way that did not turn out to be true at all, or the “glorious Clinton economy” is itself a fabrication.  Because somehow Bill Clinton had to flounder along with no health care reform.

We need to put some things into historic perspective: 1) Bill Clinton so mismanaged the country his first two years in office that it led to the largest political tsunami ever experienced in American history as Republicans took over in an unprecedented landslide 1994 election.  2) Many of the benefits that Bill Clinton has received credit for were actually enacted by the Republican Congress (example: welfare reform).  3) Bill Clinton benefited from an economy that was just recovering from a severe recession at the end of the Bush I administration as Clinton took over.  By contrast, George Bush II – like Barack Obama now – had a significant recession handed to him that will count against his average performance.  In President Bush’s case, that recession was compounded by the worst attack on American soil in nearly 200 years  in the 9/11 terror attack.  4) Bill Clinton changed the way unemployment figures were calculated back in 1994 – making comparisons to previous eras appear far more rosy than they really were.  5) The “Clinton Budget Surplus” is in reality a myth.  In actuality, Clinton created a smoke and mirror illusion by transferring “public debt” costs which are calculated as part of the budget over to “intergovernmental holdings” (eg., by borrowing from Social Security) which are not counted as part of the public debt.

I might also point out that Bill Clinton’s famous statement from his State of the Union Speech in January 1996 – “THE ERA OF BIG GOVERNMENT IS OVER” – tacitly recognized the new Republican era, and which in reality was the ultimate reason why the Clinton economy became ultimately successful.

Democrats were wiped out in 1994 as Republicans swept into power when Americans became fed up with Democrat incompetence and massive spending.  And Bill Clinton was wise enough to recognize the handwriting on the wall.  As a result, he transitioned into a fiscal moderate and avoided the fate of his party.

But now the man who recognized that “The era of big government is over” is back to his pre-1994 ways.  Bill Clinton has joined Barack Obama with the very same big spending, big government socialistic mindset that brought the Democrats to such historic disaster in 1994.

There are many things we can do to improve our health care system.  That goes without saying.  But the Democrat’s presentation that opposing their system is opposing “change” or “reform” is simply asinine.  If any change is better than our present course, than we should just nuke ourselves and be done with it: that would be “change,” after all.  We need to recognize that there is good reform and there is bad reform – and government-run health care is simply “bad” reform.

ObamaCare suffers from massive policy problems that go right to the heart of the greater debate surrounding the size of government, the size of Obama’s unprecedented deficits, and the unsustainable size of our debt.  Democrats have a real problem explaining how they are going to spend $1.6 trillion and yet bring down costs – especially given the CBO’s damning analysis.  They have a problem explaining how they’re going to take hundreds of millions out of Medicare and yet not affect the quality of care to Medicare beneficiaries.  And they have a problem explaining how they’re not going to end up transferring over a hundred million Americans out of their employee-based health care and into the “public option” when good analysis sees exactly that happening (and see also here).

The American people listened to Obama fearmonger his way to the gigantic stimulus package that will ultimately cost Americans $3.27 trillion.  The stimulus has been deemed by the American people as being so unsuccessful that fully 72% of Americans now say “returning the unused portion of the $787 billion dollar stimulus to taxpayers would do more to boost the economy than having the government spend it.”  People are turning against what they increasingly recognize as big government socialism.

We need to STOP health care “reform” until it includes tort reform such as loser pays, until it includes an end to state and federal mandates, until it includes allowing our 1300 private insurance companies to compete across state lines.  And we need to STOP health care “reform” until it EXCLUDES giving full medical coverage to more than 12 million illegal immigrants, until it excludes “public options,” excludes “Co-Ops,” and excludes any other device that becomes a backdoor guarantee to government health care.