Posts Tagged ‘2014-2023’

Democrats ‘Fix’ ObamaCare Numbers By Leaving Out TRILLIONS In Additional Spending

March 20, 2010

This is Bernie Madoff Accounting. And the same fate that befell Madoff’s investors will one day befall the American people. The Democrats only count the costs they want to count, and simply pretend the rest don’t exist, or assure us that they somehow shouldn’t be counted.  Positive numbers from unrealistic expectations show up on one side of the ledger, while negative numbers representing massive government and personal spending are ignored.

This article will demonstrate the REAL cost of ObamaCare.  And what we will find is that the monster it creates will sneeze chunks bigger than the $940 billion that the CBO score pitches.

It’s not like the CBO isn’t aware that it is being played like a fiddle.  They can only analyze legislation as it is presented – and this legislation is being presented by partisan Democrat ideologues.  The CBO has pointed out that the Democrats have a pattern of double-counting the same dollars.  But they can’t do anything about it: if the Democrats tell them to double-count, they dutifully double-count.  Paul Ryan points out that Medicare cuts are double counted, Social Security taxes get double counted, increased CLASS Act premiums get double counted, to the tune of hundreds of billions of dollars.  Other sources of revenue – such as the not-to-be-implemented “Cadillac Tax” which would itself count for 25% of deficit reduction in the CBO score – will likely NEVER see the light of day. The CBO numbers become a shell game.

You can understand why the Democrats would want to run away from details of the CBO score. If the facts get in the way of their theory, so much the worse for the facts.

Then there’s the likelihood that ObamaCare will destroy as many as 700,000 jobs.  What’s THAT going to cost America?  Would THAT be “deficit neutral”?  And how much will it cost Americans as increased government taxes on private health insurance companies, pharmaceutical companies, and medical device and supply companies, pass the burden of those taxes onto us? Will THAT be “deficit neutral” for American families?

But let’s stay out of the budgetary weeds, and remain on what is clear and straightforward.

Let us first begin with the “Doctor fix,” which is a $208 billion spending measure to restore the reimbursement rates for doctors who treat Medicare patients.  If it isn’t passed, the current rate – which already leaves hospitals and many doctors losing money to treat Medicare patients – would be slashed by an additional 21 percent.  It simply has to be fixed, or doctors and hospitals will quit treating Medicare patients.

But if the Democrats strip that part out of their health care bill, they can claim that 21 percent reduction in doctors’ reimbursements as “savings.”  Even if they intend to fix the reimbursement rate, such that those “saving” never materialize.  And that little bit of fiscal circular reasoning allows them to claim that their bill is “deficit neutral.”

Medicare fix would push health care into the red
Rollback of Medicare cuts to doctors, if added to health care bill, push it into the red
On Friday March 19, 2010, 6:33 pm EDT

WASHINGTON (AP) — Congressional budget scorekeepers say a Medicare fix that Democrats included in earlier versions of their health care bill would push it into the red.

The Congressional Budget Office said Friday that rolling back a programmed cut in Medicare fees to doctors would cost $208 billion over 10 years. If added back to the health care overhaul bill, it would wipe out all the deficit reduction, leaving the legislation $59 billion in the red.

The so-called doc fix was part of the original House bill. Because of its high cost, Democrats decided to pursue it separately. Republicans say the cost should not be ignored. Congress has usually waived the cuts to doctors year by year.

What this basically means is that $940 billion number in the CBO report that the Democrats are cheering over is entirely subjective.  It would have been a lot higher if they had included the stuff they should have included.  And they didn’t include these things simply because it would have made their number look bad.  It’s Alice in Wonderland accounting.

So let’s look at the truth: Democrats are claiming that their “$940 billion bill” would reduce the ten-year deficit by $138 billion.  But in reality, the doctor fix which SHOULD be in the bill would INCREASE THE DEFICIT by $59 billion.  That’s a swing of 197 billion dollars, which is one hell of a swing indeed.

But that certainly isn’t the only budget shenanigan that Democrats have used to monkey the numbers to appear to look like what they want:

For a variety of reasons, this tally doesn’t remotely reflect the bill’s real ten-year costs.  First, it includes 2010 as the initial year.  As most people are well aware, 2010 has now been underway for some time.  Therefore, the CBO would normally count 2011 as the first year of its analysis, just as it counted 2010 as the first year when analyzing the initial House health bill in the middle of 2009.  But under strict instructions from Democratic leaders, and over strong objections from Republicans, the CBO dutifully scored 2010 as the first year of the latest version of Obamacare.  If the clock were started in 2011, the first full year that the bill could possibly be in effect, the CBO says that the bill’s ten-year costs would be $1.2 trillion.

This $260 billion ($1.2 trillion minus $940 billion) deficit created by backdating the bill to 2010 instead of starting in 2011 when they should (until Democrats instructed them to do differently) has nothing to do with the deficit created by the doctor fix.  So they compound: $260 billion plus $197 billion equals $457 billion.

So we’re talking about a real and obvious deficit of nearly half a trillion dollars.  But that’s nowhere near as bad as it will really be.

You see, even starting the CBO ten-year cycle in 2011 is nothing more than a gimmick.  That’s because the plan begins taxing in 2011, but benefits (actual spending outlays) don’t begin to be funded until 2014.  The Democrats tax for ten years, but only spend for six.  Why did they do that?  Because that is the only way they can get the illusion of a “deficit neutral” figure.  As Heritage points out:

[S]ome scrupulous tactics were used to calculate the 10-year cost projections. The key provisions in the health care bill don’t go into effect until 2014. Meanwhile Medicare cuts and tax increases would go into effect immediately. So the money raised through taxes and spending cuts in the first four years of the 10-year projection would offset the expenditures in the subsequent six years. Consequently, when the true ten year window (2014-2023) is examined, and the costs of the “Doc Fix” are taken into account, the cost rises to $2.3 trillion.

This – and the shenanigans Democrats employ with the CLASS Act – is why Heritage rightly calculates the REAL cost of ObamaCare as likely far higher than $2.5 TRILLION.

These are obvious and transparent gimmicks.  But the mainstream media is largely simply ignoring it.  They are liberal in their ideology and “gatekeepers” in their philosophy of journalism.  The result is that they don’t tell you anything that they don’t want you to know.

But even that – as utterly terrible as it is – is STILL not anywhere close to the REAL cost of this disastrous health care bill.  Consider the most sobering Democrat omission of all.  From Cato:

Another gimmick pushes much of the legislation’s costs off the federal budget and onto the private sector by requiring individuals and employers to purchase health insurance.  When the bills force somebody to pay $10,000 to the government, the Congressional Budget Office treats that as a tax.  When the government then hands that $10,000 to private insurers, the CBO counts that as government spending.  But when the bills achieve the exact same outcome by forcing somebody to pay $10,000 directly to a private insurance company, it appears nowhere in the official CBO cost estimates — neither as federal revenues nor federal spending.  That’s a sharp departure from how the CBO treated similar mandates in the Clinton health plan.  And it hides maybe 60 percent of the legislation’s total costs.  When I correct for that gimmick, it brings total costs to roughly $2.5 trillion (i.e., $1 trillion/0.4).

Here’s where things get really ugly.  TPMDC’s Brian Beutler calls “the” $2.5-trillion cost estimate a “doozy” of a “hysterical Republican whopper.”  Not only is he incorrect, he doesn’t seem to realize that Gregg and I are correcting for different budget gimmicks; it’s just a coincidence that we happened to reach the same number.

When we correct for both gimmicks, counting both on- and off-budget costs over the first 10 years of implementation, the total cost of ObamaCare reaches — I’m so sorry about this — $6.25 trillion.  That’s not a precise estimate.  It’s just far closer to the truth than President Obama and congressional Democrats want the debate to be.

For the record, it was this subsidizing of the private health insurance companies that Dennis Kucinich was talking about before he backstabbed his own principles and voted for the bill anyway.

In 1994, the universal health care plan proposed by President Clinton included a mandate requiring all individuals to purchase health insurance. The Congressional Budget Office studied the issue and concluded that the United States had never in all its history mandated that individuals purchase any good or service.  The CBO stated:

A mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action. The government has never required people to buy any good or service as a condition of lawful residence in the United States. An individual mandate would have two features that, in combination, would make it unique. First, it would impose a duty on individuals as members of society. Second, it would require people to purchase a specific service that would be heavily regulated by the federal government.”

But it is going to start doing so now, under Obama and the Democrats in Congress.  They could care less about the Constitution, or about the consequences of radically expanding already massive government bureaucracies.

Obama is going to force you to purchase insurance, but the CBO won’t count the cost of one penny of that spending, now or ever.  If you send money to the government that the government requires you to send them, that’s a tax.  If the government spends money, that counts as spending.  But if the government forces you to send money to a private health insurance company, that isn’t counted.  It amounts to a tax that isn’t “deemed” (there’s a good word these days) a tax.

Thus the REAL ten-year cost of ObamaCare won’t be $940 billion.  It won’t even be $2.5 trillion.  It will be SIX TRILLION DOLLARS.  And counting, and counting, and counting, and counting.

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CBO Says Real 10-Year Cost of Senate ObamaCare Bill Still $2.5 Trillion

December 21, 2009

The American people will pay an additional one trillion dollars in taxes over ten years than they otherwise would have paid to finance the Democrats’ takeover of health care.  That is a brutal fact.

When the Democrats say their bill is “deficit neutral” what they mean is that they made drastic cuts in the Medicare budget and drastic increases in our taxes in order to create the illusion that it was deficit neutral.

Here’s some more brutal facts that your mainstream media will not tell you about regarding health care.

CBO: Real 10-Year Cost of Senate Bill Still $2.5 Trillion

With Obamacare, you get the good, the bad, and the ugly — except for the first part.

The Congressional Budget Office’s score is in for the final Senate health bill, and it’s amazing how little Americans would get for so much.

The Democrats are irresponsibly and disingenuously claiming that the bill would cost $871 billion over 10 years. But that’s not what the CBO says. Rather, the CBO says that $871 billion would be the costs from 2010 to 2019 for expansions in insurance coverage alone. But less than 2 percent of those “10-year costs” would kick in before the fifth year of that span. In its real first 10 years (2014 to 2023), the CBO says that the bill would cost $1.8 trillion — for insurance coverage expansions alone. Other parts of the bill would cost approximately $700 billion more, bringing the bill’s full 10-year tab to approximately $2.5 trillion — according to the CBO.

In those real first 10 years (2014 to 2023), Americans would have to pay over $1 trillion in additional taxes, over $1 trillion would be siphoned out of Medicare (over $200 billion out of Medicare Advantage alone) and spent on Obamacare, and deficits would rise by over $200 billion
. They would rise, that is, unless Congress follows through on the bill’s pledge to cut doctors’ payments under Medicare by 21 percent next year and never raise them back up — which would reduce doctors’ enthusiasm for seeing Medicare patients dramatically.

And what would Americans get in return for this staggering sum? Well, the CBO says that health care premiums would rise, and the Chief Actuary at the Centers for Medicare and Medicaid Services says that the percentage of the Gross Domestic Product spent on health care would rise from 17 percent today to 21 percent by the end of 2019Nationwide health care costs would be $234 billion higher than under current law. How’s that for “reform”?

Even MoveOn.org says that the bill is “a massive giveaway” to private insurance companies. The CBO estimates that, from 2015-25, private insurers would receive $1.0 trillion in subsidies from the American taxpayer — the insurers’ apparent price for giving up their freedom and being controlled by the government. Congress would mandate that Americans buy the insurers’ product and would redirect massive sums of taxpayer money to make that mandate more feasible. So, if insurance companies are your idea of a worthy object of philanthropy, then Obamacare is for you.

And this is the bill that Ben Nelson has decided to support?

One hopes that Nebraska voters — and all other voters in other states who have sent Democrats to Washington — are making a list and checking it twice, keeping track of votes on Obamacare.

As Harry Reid keeps senators in session rather than letting them go home to be with their families and celebrate Christmas, it’s important to remember that this bill would not go into effect in any meaningful way until more than an Olympiad from now. Thus, it is the American voters — and not the current Democratic Congress or the current president — who will ultimately decide its fate. Providing reminders to representatives in both chambers of that in the coming days will be crucial to beating back the onslaught of proposed legislation that, even if it passes the Senate, would at least have to passed again by the House and would likely have to go back through both chambers in compromised form.

Posted by Jeffrey H. Anderson on December 19, 2009 07:49 PM | Permalink

There’s a frightening game being played with the truth.  And willingly or not, the CBO is helping the Obama administration lie to the American people.

A big part of the problem is that the CBO has to take Congress’ word for everything in their scoring – and the Congress (especially this Congress) is a bunch of liars.

If Congress has a huge spending bill, and tells the CBO that they will pay for it by picking the right numbers and hitting the mega-jackpot every year for the next 20 years, then the CBO must assume that the bill will be paid for – and thus “deficit neutral” in its scoring.

Maybe I’m not being clear enough.  So I’ll provide another example.  If Congress says that they will pay for their spending bill by summoning a winged fairy who will wave a magic wand and create a trillion dollars from nowhere, the CBO must count that trillion dollars in their scoring toward a “deficit neutral” bill.

Back in July, Obama summoned the director of the CBO, Douglas Elmendorf, to the White House. Republicans were outraged by this unprecedented event.  The Wall Street Journal had an article entitled, “Bullying CBO.”

Some have thought that Elmendorf was in fact intimidated, because their scores suddenly became much friendlier to ObamaCare.  But I personally believe it was simply a matter of the White House learning how to write a bill so that it would appear “deficit neutral” in a CBO score.  Democrats, in other words, learned how to use the right gimmicks to get the right results.

So if Congress says that it will increase taxes by a trillion dollars, then the CBO has to take it as gospel truth in its calculations.  But the fact of the matter is that tax revenues go down dramatically as tax rates go up (and see here also) for the simple reason that more and more people change their behavior and start sheltering their assets.  In the same way, when a bunch of new fees are imposed, people will start buying less and less of what will suddenly become more and more expensive.

The more of your own money you are allowed to keep, the harder you will work, and the more you will risk your money by investing.  The more you are taxed, the more you will adjust your behavior by protecting what you have, and the less you will be willing to take risks for a shrinking reward.

Bottom line: the federal government will collect far less in revenue than it thinks it will.  Revenues are already down dramatically as the White House and congressional Democrats have repeatedly vowed to end the Bush tax cuts (i.e. raise taxes) and increase taxes across the board.

In the same way, if Democrats tell the CBO that they will create savings by cutting the Medicare budget to the tune of half a trillion dollars and apply that “savings” to ObamaCare, then the CBO must assume that that will be the case.

It’s frankly difficult to believe that the Democrats will actually gut Medicare as they are saying they will do.  Will they really take $500 billion from Medicare?  Really?  And utterly outrage seniors who have counted on that benefit for decades?  If they do, they will pay dearly for it in every election until those seniors finally die.  If they don’t, you can add at least half a trillion dollars to what the Democrats say their bill will cost.

The same thing applies to the “doctor fix.”  Democrats will either follow through with their plan to make Medicare so expensive to doctors and hospitals that many medical professionals stop accepting it, or else they won’t.  If they do, the Medicare system will collapse.  If they don’t, then you can add hundreds of billions more to the cost of their health care plan.

The Washington Post put it this way:

A plan to slash more than $500 billion from future Medicare spending — one of the biggest sources of funding for President Obama’s proposed overhaul of the nation’s health-care system — would sharply reduce benefits for some senior citizens and could jeopardize access to care for millions of others, according to a government evaluation released Saturday. The report, requested by House Republicans, found that Medicare cuts contained in the health package approved by the House on Nov. 7 are likely to prove so costly to hospitals and nursing homes that they could stop taking Medicare altogether.”

And to pay for that fiasco, the Democrats are playing games that even liberals recognize are gimmickry and trickery.

As the government increasingly takes over, costs are going to go up (as they always do when government starts administering programs) and quality is going to go down.

The very people people who are going to increase our health care spending by trillions of dollars are preaching fiscal responsibility and the need to reduce our spending even as they do it.

The hypocrisy, stupidity, and lunacy of the government is enough to make one scream.