The tax increases (in billions) include:

1. 40% excise tax on health coverage in excess of $8,500 (individuals) / $23,000 (families). . .
2. Additional 0.5% Medicare (Hospital Insurance) tax on wages in excess of $200,000 ($250,000 for joint filers) – begins in 2013 – $54 B tax increase
3. Impose annual fee on manufacturers and importers of branded drugs – begins in 2010 – $22 B tax increase
4. Impose annual fee on manufacturers and importers of certain medical devices – begins in 2010 – $19 B tax increase
5. Impose annual fee on manufacturers and importers of certain medical devices – begins in 2010 – $60 B tax increase
6. Cut in half (to $500K) the amount of an executive’s compensation that a health plan can deduct from its corporate income taxes – begins in 2013 . . .
7. Impose 5% excise tax on cosmetic surgery and similar procedures – begins for surgery in 2010 – $6 B tax increase!

The bill will cost far more than projected. The bill uses “accounting tricks” to keep the short-term costs down, by temporarily raising taxes before spending explodes. But in every year thereafter, it will increase the deficit, notes an analysis from the Congressional Budget Office. “In its true first decade (2014 to 2023), CBO projects the bill’s costs to be $1.8 trillion — double the price Reid is advertising.”

The Dean of Harvard Medical School, Jeffrey S. Flier, gave the health care bill a “failing grade” in an analysis published yesterday in The Wall Street Journal, saying that it would drive up costs and stifle medical innovation.

The health care “reform” bills “would reduce senior care,” increase “medical costs,”  and “jeopardize access to care for millions,” reported experts at the federal Centers for Medicare and Medicaid Services.    They will explode state and federal deficits, and contain payoffs for trial lawyers and racial preferences.

ObamaCare spends money on frills like “cultural competency,” while cutting spending on crucial things like anesthesia.

Fact-checkers say Obama is lying about health care.  In a speech, Obama claimed that Medicare is “unsustainable” and “running out of money,” then contradicted himself by claiming that “Medicare is a government program that works really well,” making it a model for national health care.

A CNN commentary noted that Obama’s plan would take away “5 freedoms,” such as the freedom to choose your doctors, keep your existing plan if you like it, and choose what’s in your plan.

In discussions with dozens of health-care leaders and economists, I find near unanimity of opinion that, whatever its shape, the final legislation that will emerge from Congress will markedly accelerate national health-care spending rather than restrain it. Likewise, nearly all agree that the legislation would do little or nothing to improve quality or change health-care’s dysfunctional delivery system.

[. . .]

Worse, [the] legislation would undermine any potential for real innovation in insurance and the provision of care. It would do so by overregulating the health-care system in the service of special interests such as insurance companies . . . rather than the patients who should be our primary concern. . . Ultimately, our capacity to innovate and develop new therapies would suffer most of all. [emphasis added]

The health care “reform” bill backed by President Obama “would reduce senior care,” increase “medical costs,” and “could jeopardize access to care for millions,” report health care experts at the federal Centers for Medicare and Medicaid Services. The House recently passed the bill by a vote of 220 to 215.

The bill will raise taxes on the middle class. It will also explode state and federal deficits and cost far more than promised. It contains special-interest pork, such as payoffs for trial lawyers, and racial preferences.

The bill will increase tax rates to “European levels of taxation.” It restricts national competition in health insurance, which is permitted in countries with cheaper health care.

ObamaCare spends money on frills like “cultural competency,” while cutting spending on crucial things like anesthesia.

“ObamaCare is all about rationing,” and tax increases, says one of Obama’s own economic advisers, Martin Feldstein.

Fact-checkers say Obama is lying about health care. Obama often contradicts himself. In the very same speech, Obama claimed that Medicare is “unsustainable” and “running out of money,” then contradicted himself by claiming that “Medicare is a government program that works really well,” making it a model for national health care.

CNN noted that Obama’s plan would take away “5 freedoms.”

The House of Representatives recently passed the bill by a vote of 220 to 215.

According to the federal experts, the bill would likely either cost much more than projected, or result in some “hospitals and nursing homes” deciding to ”stop taking Medicare altogether,” notes the Washington Post.

The bill will increase taxes to “European levels of taxation,” while failing to provide European-style universal coverage.  It will vastly increase the costs of our health care system, rather than reducing it to European levels.   It reinforces foolish restrictions on national competition in health insurance, which do not exist in Europe.

Doctors afraid of being wrongly sued for malpractice despite providing good quality care order unnecessary tests (or defensive medicine), which wastes at least $200 billion annually. That’s nearly as much money as France spends on health-care for all its citizens.  The bill does nothing to reduce such costs, ignoring lessons from Europe.  (Many European countries have specialized health courts, rather than American-style jury trials, to cut lawyers’ bills, speedily compensate the injured, and prevent American-style baseless lawsuits against doctors.)

In European countries like France, doctors don’t need to be paid as much, because competing professions, like lawyers, are paid less.  European law is generally much more conservative than American law when it comes to lawsuits, including lawsuits against doctors.  Punitive damages are generally forbidden, and lawsuits are discouraged by making unsuccessful plaintiffs pay the other side’s legal bills.

The health-care bills backed by Obama also contain lots of waste and subsidies for politically-correct things like “cultural competency,” while cutting spending on crucial things like anesthesia.

Obama’s proposals contain provisions that he falsely claims will cut costs, but which actually exploded costs when tried by state governments.

With much of the health care reform debate still focused on the wisdom of including a government-run, “public” health insurance “option,” too many opponents are neglecting a far more insidious feature of the Democratic proposals:  the mandatory purchase requirement.  Under each of the bills moving through Congress, every person living in the United States would be required by law to have health insurance.  And, if your employer doesn’t provide you with it, you’ve got to buy it yourself or pay a monetary penalty.

What’s more, the proposals would make it more difficult to get some of the options that are available now — particularly the low-cost insurance plans that cover only catastrophic health events and have substantial cost-sharing features.  And, depending on which bill would eventually be enacted into law, Congress, state insurance commissioners, and/or a federal Health Choices Commissioner would get to dictate what benefits have to be covered in every policy, and would be empowered to determine whether any given plan even qualifies as health insurance.  The end result will be considerably higher costs for almost every person living in the country.

On the other side of the equation, the Democratic proposals would mandate that every insurance company has to issue a policy to anyone who wants to enroll, and would forbid premiums from being based on the enrollee’s health status.  The expectation is that healthy young people would subsidize the health care costs of those who are older or sicker.  But states that have enacted these guaranteed issue and community rating mandates see premiums rise and healthy individuals drop their coverage.  After all, if insurers must issue a policy to all comers, why not wait until after you get sick to sign up?

Early on in the health care debate, the insurance industry agreed to support guaranteed issue and community rating, but only if Democrats would implement the mandatory purchase requirement.  That made Democrats happy because the number of uninsured Americans would fall if being uninsured were made illegal.  And the insurance industry was happy because more people would be forced to buy their products, hyper-inflated prices or not.

Trouble is, in all of this back-door finagling, someone forgot about ordinary Americans.  It turns out that most people don’t like the idea of being fined for choosing not to buy health insurance.  In turn, Democrats were forced to lower the penalty on people who choose to go without it.  And that means there will be fewer healthy people in the system to subsidize the rest.  All of which leaves the insurance industry holding the bag.

Janet Trautwein, CEO of the National Association of Health Underwriters, has an op-ed in today’s Wall Street Journal whining that a weak individual purchase mandate is bad for everyone, and insisting that Congress give people less choice, not more.  It’s unfortunate, to be sure, that hundreds of millions of Americans will face higher health insurance premiums generated by ill-considered legislation.  But, no one should feel bad for those in the health insurance industry who tried to cut this lousy deal and came out losers.  The better solution is not to double-down on the individual purchase mandate, but to scrap the other regulations that will put health insurance and health care out of reach for millions of Americans.

Someone should tell Janet Trautwein that, if you lie down with dogs, you might get fleas.

Unemployment is at 10 percent in France, which refused to adopt a U.S.-style stimulus package, and only 7.6 percent in Germany, which adopted a stimulus package that was smaller relative to its economy than ours was.  (Countries that refused to adopt big stimulus packages have fared better than those that imitated President Obama. And the biggest-spending countries have suffered worst in the recession.)

A “broader measure of U.S. unemployment,” including discouraged workers, puts U.S. unemployment at 17.5 percent, reports the New York Times.

As the Post notes, “For many on the left, the lament for years has been: Why can’t America be more like Europe? Why can’t rustic Americans be more like sophisticated Europeans? The sentiment has resurfaced in recent months as the health-care debate has raged on — why can’t the American health-care system be more like Europe’s?”

Well, America is now more like Europe when it comes to unemployment.  But not when it comes to social benefits and protections.  The American Left knows how to import Europe’s failures, but not its successes.

The massive health-care bill passed by the House on Saturday is a classic example.  It would expand health care coverage somewhat, but not to European levels, and it would vastly increase the costs of our health care system, rather than reducing it to European levels.   It would also increase taxes to “European levels of taxation.”  The health care bill contains politically-correct provisions that Europeans would never put up with, like pork for trial lawyers and racial preferences.  And restrictions on national competition in health insurance, which do not exist in Europe.

In France, doctors don’t need to be paid as much, because competing professions, like lawyers, are paid less.  French law is much more conservative than American law when it comes to lawsuits, including lawsuits against doctors.  There are NO punitive damages, and France discourages lawsuits by making unsuccessful plaintiffs pay the other side’s legal bills.  (Other European countries have specialized health courts, rather than American-style jury trials, to cut lawyers’ bills, speedily compensate the injured, and prevent American-style baseless lawsuits against doctors.)  There are no racial preferences — even my Marxist father-in-law, a French trade unionist who likes Michael Moore’s book Stupid White Men, thinks that racial preferences are evil.  French people do not let political correctness shackle their minds the way American leftists do.

Europe is not as far to the left of America as people think, and America’s business climate is already not much more favorable than Europe’s.  For every three ways in which Europe is more socialistic than America, there are two ways in which it is less socialistic than America.  The Obama administration is getting rid of our advantages, but not our disadvantages.

American tort law and family law are much more burdensome, anti-business, and bent on redistribution of wealth, than Europe’s.

Confronted with the specter of new burdens under the health-care bills and global-warming bills backed by the Obama administration, many businesses with the money to do so are afraid to hire people and create jobs lest they be stuck with a large tab for things like health care benefits for newly-hired, less-skilled employees.

The Congressional Budget Office has repeatedly admitted that Obama’s stimulus package will shrink the economy “in the long run.”  It contained welfare and repealed welfare reform.  Unemployment is higher now than if Congress had voted it down.

The massive health-care bill passed by the House contains provisions sought by trial lawyers that will increase medical costs. Doctors afraid of being wrongly sued for malpractice despite providing good quality care order unnecessary tests (or defensive medicine), which wastes at least $200 billion annually.

In his 2008 campaign, Obama promised not to raise taxes on anyone making less than $250,000 a year. But this health care bill would impose a laundry list of new taxes on the middle class, including a tax on uninsured people. Americans for Tax Reform earlier summarized the tax increases in Obamacare: an individual mandate tax (if you don’t have health insurance); an employer mandate tax for each employee if health coverage is not offered; an “excise tax on high-cost health plans”; a “medicine cabinet tax”; capping Flexible-Spending Accounts (FSA’s); abolishing most HSAs; and increasing tax penalties for HSAs.

The broken promises include his pledge to enact a “net spending cut,” his promise not to raise taxes on anyone making less than $250,000 a year, and his promise not to sign bills without first giving the public five days of notice.

The Congressional Budget Office says that Obama’s proposed budgets will explode the national debt through massive spending increases, increasing the already large deficits left behind by the Bush administration from $4.4 trillion to $9.3 trillion. His record-setting budgets flagrantly violate his promise to propose a “net spending cut.”

Obama broke his campaign promise not to raise taxes on anyone making less than $250,000 a year by signing into law a regressive excise tax increase to expand the SCHIP program, and by proposing a cap-and-trade energy tax that could charge up to $2 trillion, a massive cost that Obama himself has said will be passed “on to consumers,” as well as homeowners and motorists. (In 2008, Obama privately admitted to the San Francisco Chronicle that if he was elected, electricity bills would “skyrocket” under his administration, but it didn’t report that.)

He also broke his promise not to raise taxes by backing health-care bills that would impose a laundry list of new taxes on the middle class, including a tax on uninsured people.  Americans for Tax Reform earlier summarized the tax increases in ObamaCare: an individual mandate tax of $900 per individual or $3800 per family (if you don’t have health insurance); an employer mandate tax of $400 per employee if health coverage is not offered; an “excise tax on high-cost health plans”; a “medicine cabinet tax”; capping Flexible-Spending Accounts (FSA’s); abolishing most HSAs; and increasing tax penalties for HSAs.

The costly cap-and-trade energy bill supported by Obama would lead to big tax increases, administration officials privately have conceded, even though they publicly claim otherwise.  “Officials at the Treasury Department think cap-and-trade legislation would cost taxpayers hundreds of billion in taxes, according to internal documents circulated within the agency and provided to The Washington Times” by CEI.  It could raise household taxes by $1761 per year, equivalent to a 15 percent tax increase.   It would also result in “loss of steel, paper, aluminum, chemical, and cement manufacturing jobs.”  (Obama earlier admitted that “under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”)

Although cap-and-trade backers claim it will cut greenhouse gas emissions, it may perversely increase them and also result in dirtier air, as well as harming forests and water supplies.   It would enrich politically-connected corporations, and result in massive destruction of the world’s forests.   By expanding ethanol subsidies and mandates, it would cause enormous “damage to water supplies, soil health and air quality.” Ethanol subsidies have already resulted in forests being destroyed in the Third World, and by diverting cropland to fuel production away from food production, they have already caused famines that have killed countless people in the world’s poorest countries.

Over and over again, Obama has broken his campaign promise to give the public five days of notice before signing bills into law, including his very first law, the trial-lawyer backed Lilly Ledbetter Fair Pay Act. Obama also repeatedly made false claims about the Supreme Court decision that the Ledbetter law overruled, misstating the facts of that case and how long it gives employees to sue over pay discrimination (the Court did NOT say that employees have to sue even before discovering discrimination).

Obama broke seven campaign promises dealing with transparency and clean government in signing the $800 billion stimulus package, much of whose contents were secret until shortly before Congress voted on it, and whose 1400 pages went unread by most Congressmen who voted on it.  (It repealed welfare reform and contained loads of welfare, pork, and waste, while wiping out jobs in the export sector.)

Obama’s broken promises are part of a larger pattern of dishonesty. Obama claimed his $800 billion stimulus package was needed to avert “irreversible decline.” But the Congressional Budget Office concluded before and after its passage that the stimulus package will actually cut the size of the economy in the long run. Obama’s budgets don’t add up, either, piling up $9.3 trillion in red ink, according to the Congressional Budget Office, a staggering $2.3 trillion more than Obama claimed.

At the Atlantic, Megan McArdle, who voted for Obama, explains how ObamaCare will cost much more than promised — at least $150 billion more.  That’s true even if promised cuts to Medicare included in ObamaCare actually take place — but as McArdle notes, even the head of the Congressional Budget Office “does not think the cuts will take place” (which didn’t stop him from pretending those cuts would occur in giving ObamaCare its original $900 billion price tag).

ObamaCare is based on deceptive accounting that makes Enron look good.  As The Wall Street Journal notes:

“The House disguises hundreds of billions of dollars in additional costs with budget gimmicks. It ‘pays for’ about six years of program with a decade of revenue, with the heaviest costs concentrated in the second five years. The House also pretends Medicare payments to doctors will be cut by 21.5% next year and deeper after that, ’saving’ about $250 billion. ObamaCare will be lucky to cost under $2 trillion over 10 years; it will grow more after that…

“All this is particularly reckless given the unfunded liabilities of Medicare—now north of $37 trillion over 75 years. Mrs. Pelosi wants to steal $426 billion from future Medicare spending to ‘pay for’ universal coverage. While Medicare’s price controls on doctors and hospitals are certain to be tightened, the only cut that is a sure thing in practice is gutting Medicare Advantage to the tune of $170 billion. Democrats loathe this program because it gives one of out five seniors private insurance options.

“As for Medicaid, the House will expand eligibility to everyone below 150% of the poverty level . . . at a cost of $425 billion [to state and federal governments at a time when] when budgets from Albany to Sacramento are in fiscal collapse.  . .

“All told, the House favors $572 billion in new taxes, mostly by imposing a 5.4-percentage-point ’surcharge’ on joint filers earning over $1 million, $500,000 for singles. This tax will raise the top marginal rate to 45% in 2011 from 39.6% when the Bush tax cuts expire—not counting state income taxes and the phase-out of certain deductions and exemptions. . . .Meanwhile, a tax equal to 2.5% of adjusted gross income will also be imposed on some 18 million people who CBO expects still won’t buy insurance in 2019.”

A study by PriceWaterhouseCoopers found that the provisions in the Senate version of ObamaCare would add $1,700 a year to the cost of family coverage in 2013 and $600 for a single person. By 2019, family premiums could be $4,000 higher and individual premiums could be $1,500 higher.

Greg Conko calls the bill “worse than the disease.”  In a recently-released paper, “A Cure Worse than the Disease: Obama Care Won’t Cut Costs, But May Cut Quality,” Conko notes that most of the alleged cost-cutting measures in the Baucus bill merely shift costs from the federal government onto the states or private payers, without reducing long-term health care inflation.  The only measures that could conceivably reduce the annual rate of growth in health care costs would erect government barriers between patients and their doctors, while jeopardizing long-term medical innovation.

Another new study found that provisions contained in the health care reform bills, like guaranteed issue and community rating mandates, would drive up premiums by 50 percent for individual policies and 19 percent for small group plans.

A study from the Independence Institute says that ObamaCare would drive up inflation and medical care costs, while shrinking the economy.

As Conko notes, many states have highly concentrated markets.  In Hawaii, Rhode Island, and Alaska, for example, 95 percent or more of the health insurance market is served by just two insurers.  But Obama and congressional Democrats oppose letting insurers compete across state lines, blocking competition that could make health insurance cheaper.  Other countries with cheaper health insurance permit insurers to compete nationally.

ObamaCare would raise taxes.  It would also explode state and federal budget deficits, and would actually cost $2 trillion — far more than its promised $800 billion price tag.  It contains special-interest pork, like racial preferences.

It contains provisions sought by trial lawyers that will increase medical costs.  Doctors afraid of being wrongly sued for malpractice despite providing good quality care order unnecessary tests (or defensive medicine), which wastes $200 billion annually.

In his health care speech, Obama falsely promised tort-reform pilot projects, as a token gesture to doctors.   But the health care bill he backs does just the opposite, requiring states to repeal existing reforms to their medical malpractice laws if they want federal funds.  For example, they lose money if they do anything to “limit attorneys fees.”

The health care bills backed by Obama and congressional leaders ignore reforms that would help doctors and patients alike, like setting up specialized health courts to rule on malpractice claims instead of having them ruled on by juries that have little understanding of medicine or technology.

In other news, a study by PriceWaterhouseCoopers found that the provisions in the Senate health care “reform” bill sponsored by Sen. Max Baucus (D-Mont.) would add $1,700 a year to the cost of family coverage in 2013 and $600 for a single person. By 2019, family premiums could be $4,000 higher and individual premiums could be $1,500 higher.

CEI’s Greg Conko calls the Baucus bill “worse than the disease.”  In a recently-released paper, “A Cure Worse than the Disease: Obama Care Won’t Cut Costs, But May Cut Quality,” Conko notes that most of the alleged cost-cutting measures in the Baucus bill merely shift costs from the federal government onto the states or private payers, without reducing long-term health care inflation.  The only measures that could conceivably reduce the annual rate of growth in health care costs would erect government barriers between patients and their doctors, while jeopardizing long-term medical innovation.

A new study by the Oliver Wyman consultancy found that provisions contained in the health-care reform bills, like guaranteed issue and community rating mandates, would drive up premiums by 50 percent for individual policies and 19 percent for small group plans.

A study from the Independence Institute says that ObamaCare would drive up inflation and medical-care costs, while shrinking the economy.

As CEI’s Conko notes, many states have highly concentrated markets.  In Hawaii, Rhode Island, and Alaska, for example, 95 percent or more of the health insurance market is served by just two insurers.  But Obama and congressional Democrats oppose letting insurers compete across state lines, blocking competition that could make health insurance cheaper.  Other countries with cheaper health insurance permit insurers to compete nationally.

ObamaCare would raise taxes.  It would also explode state and federal budget deficits, and would actually cost $2 trillion — far more than its promised $800 billion price tag.  It also ignores needed reforms that would actually reduce the costs of health care, like steps to reduce the cost of defensive medicine, which wastes $200 billion annually.  And it contains special-interest pork, like racial preferences.

As I explain in a new Competitive Enterprise Institute paper out today, “A Cure Worse than the Disease: Obama Care Won’t Cut Costs, But May Cut Quality,” most of the alleged cost-cutting measures in the Baucus bill merely shift costs from the federal government onto the states or private payers, without affecting long-term health care inflation.  The only measures that could reduce the annual rate of growth in health care costs would erect government barriers between patients and their doctors, while jeopardizing long-term medical innovation.

Skeptics have made hay arguing that the so-called Sustainable Growth Rate can’t be counted on to cut $245-billion in Medicare spending. But Senate Finance Committee negotiators have designed a Medicare Commission—what the White House previously called an Independent Medicare Advisory Commission—to make similar cuts in physician and hospital payment rates in a more opaque way.

In an April New York Times interview, President Obama suggested that such a group, working outside of “normal political channels,” should guide decisions regarding that “huge driver of cost…the chronically ill and those toward the end of their lives.”  That’s not exactly a death panel roving the country to pull the plug on innocent grandmas who’ve survived past their sell-by dates, but the effects could be equally pernicious.

What the Medicare Commission is likely to do is work with the Patient-Centered Outcomes Research Institute also established by the Baucus bill to incorporate comparative clinical effectiveness recommendations into Medicare and Medicaid payment policies.

In theory, there’s nothing wrong with comparative effectiveness research, or what used to be called evidence-based medicine.  Good research comparing the clinical effectiveness, risks, and benefits of two or more medical treatments can help doctors better understand the likely benefits of the treatments they prescribe and improve the quality of care they deliver.  But patients vary substantially in their individual physiology, their response rates to drugs and surgical procedures, and their willingness to tolerate side effects.  Doctors know this, and they realize that one size definitely does not fit all. That’s why, in practice, evidence-based medicine in the U.S. and abroad has produced incrementally useful information, but has failed to systematically change the practice of medicine.

Generally, we should encourage efforts to eliminate waste and reduce the use of ineffective treatments, especially when we’re talking about public programs and taxpayer money.  But the only way these programs would result in significant savings is if legislation or subsequent implementation tries to force the square peg of comparative effectiveness research results into the round hole of clinical practice by requiring physicians to always pick the treatment deemed best for the average patient.

That’s not just bad for patients in the near term, it would also wreak havoc on long term medical innovation.  If every new medicine were required, immediately upon gaining regulatory approval, to be effective and cheap enough to get the support of bureaucratic bean counters, research on the next generation of treatments for cancer, heart disease, and countless other serious conditions would slow to a snail’s pace.

Get used to the innovative medical treatments that we already have today.  If these programs become part of our health care system, we’ll be seeing a lot fewer treatment innovations tomorrow.

It is true that a handful of states have highly concentrated markets.  In Hawaii, Rhode Island, and Alaska, for example, 95 percent or more of the health insurance market is served by just two insurers.  But, federal intervention would do nothing to address this problem.  After all, insurers are still governed by state competition law, which prohibits anticompetitive practices.

The main benefit insurers get from McCarran-Ferguson is antitrust immunity for sharing the actuarial data on which firms individually base their premiums.  Ordinarily, information sharing of that kind of  would be a big no no, since it suggests pricing collusion.  But, state insurance laws permit it because it helps small insurers gain access to a sufficiently large pool of information to set premiums at an appropriate level.

The only way federal antitrust enforcement could significantly reduce market concentration would be to break up the firms into smaller pieces—think of the dissolution of John D. Rockefeller’s Standard Oil trust, or the break up of AT&T’s local service monopoly into seven regional Baby Bells.  But, as Boston University health economist Austin Frakt  notes:

“Taxpayers will be best served by insurers with sufficient market power to bargain down provider rates, but with not quite enough power to keep the savings (“rents”) for themselves.  … How to balance the power of insurers and providers is far from simple. Many have pointed to the alleged dominant market position of insurers as a substantial source of high health care costs. However, the health economics literature supports the notion that recent increased market power of insurers does not lead toward monopolistic pricing, but rather it provides a counter-balance to the power held by hospitals and provider groups.”  (Hat tip, Tyler Cowen.)

Democrats know this of course.  And, in the end, it’s not clear that they really do intend to repeal McCarran-Ferguson, or if they’re just sending a signal to health insurers and other dissenters that “this is how we deal with people who stand in our way.”  As my wife said yesterday, they’re playing Chicago hard ball now.  They’ll do whatever it takes to win.

Senate Majority Leader Harry Reid admitted that the actual cost will be more like $2 trillion, and health-care experts have given it a similar price tag of more than $2 trillion.

The reason for the lower $829 billion price tag was that the bill’s supporters promised to offset its costs by making massive cuts in Medicare that no one actually expects politicians to follow through on, since Medicare cuts infuriate seniors and doctors.

Year after year, Congress waives “the annual cut in fees paid by Medicare to physicians” mandated by an earlier law. Yet, now, backers of ObamaCare claim they will cut Medicare by much more to finance coverage of the uninsured. The most recent version of ObamaCare drafted by Senator Max Baucus of Montana claims it will also make “$240 billion in cuts to hospitals, home care providers, nursing facilities and hospices.” Based on Congress’s past track record, the chance of this happening is zero.

As economist and former Congressional Budget Office director Douglas Holtz-Eakin notes in the Wall Street Journal, the promised cuts to pay for ObamaCare will not happen: “Congress will not allow doctors to suffer a 24% cut in their Medicare reimbursements. Senate Democrats chose to ignore this reality and rely on the promise of a cut to make their bill add up. Taking note of this fact . . . destroys any pretense of budget balance.”

As Holtz-Eakin notes, some “middle-class families would get hit with a double-digit increase in their marginal tax rate” under this version of ObamaCare.

Moreover, state budget deficits and state taxes will increase under ObamaCare, which outsources costs to the states by requiring states to expand their Medicaid programs for poor people.

Backers of ObamaCare have refused to cut medical costs through tort reform, with Senate Majority Leader Harry Reid saying it will save “only” $54 billion. Yet they justify ObamaCare partly on the alleged need to prevent uninsured people from not paying their medical bills — even though unpaid medical costs are only 2 percent of all medical costs, a small multiple of the amount Reid admits could be saved from tort reform. (Tort reform would cut the wealth of trial lawyers, who are some of the biggest supporters of the Democratic Party.) In reality, tort reform would save far more than $54 billion.

The Pacific Research Institute estimates that just one type of cost that could be reduced through malpractice-lawsuit reform — defensive medicine — costs around $200 billion annually (which is almost as much as France spends annually on health-care for all of its citizens; France has no punitive damages, few lawsuits against doctors, and “loser-pays” rules).

One reform — setting up specialized health tribunals to hear malpractice cases — would be particularly helpful.  Using specialized health courts, rather than continuing to use uninformed juries, would provide more consistent rulings from case to case, eliminate meritless cases, reduce defensive medicine, and more speedily compensate injured people who truly are victimized by doctors’ carelessness. Such tribunals already exist in countries like “Sweden, Denmark, Finland, Iceland and New Zealand.”

Comprehensive tort reform would also reduce lawyers’ wages, resulting in some additional students choosing to go to medical school (where a critical shortage of doctors is projected over the next decade) rather than to law school (there are already too many lawyers, who sometimes can make work for themselves by bringing “creative” lawsuits).  At least two of my law school classmates had already gone to medical school before going to law school (one decided to become a medical malpractice lawyer). At least a dozen that I know of had considered going to medical school instead.  But life is easier as a lawyer, and you don’t get sued as much if you are a lawyer rather than a doctor.   As long as professionals like lawyers get paid a lot, doctors will have to be, too — greater “wage inequality” in the U.S. means that we have to pay doctors more than other countries do to get the same number of people to become doctors.  (The looming shortage of doctors is aggravated by arbitrary restrictions placed on highly-qualified immigrant doctors, who have to repeat their residencies all over again  in the U.S. even if they manage to immigrate to the U.S.)

Another reform opposed by Obama that would make health insurance cheaper would be to let people buy cheaper insurance across state lines, which an antiquated federal law now prevents.  Countries with cheaper health insurance permit national competition among insurers.

Martin Feldstein, one of Obama’s own advisors, has said that Obama’s health-care plan would explode the federal budget deficit and lead to “crippling deficits,” as well as “higher taxes, debt payments, and interest rates” that would cut America’s standard of living.  Feldstein also noted that Obama’s health-care plan would harm people with insurance, and predicted that it would lead to massive tax increases.  Other analysts have predicted that it will drive up medical costs and inflation.

Obama is relying on $2 trillion in imaginary savings to pay for his health care plan.   He is also relying on tax increases, which breaks Obama’s campaign promise not to raise taxes on the middle class.

Fact-checkers say Obama is lying about health-care.  CNN Money says ObamaCare would take away 5 freedoms.

Most of Wall Street came to government asking for a bailout when the government-created housing bubble popped.

The Big Three automakers also went to Washington for largesse when their customers came to prefer Toyotas and Hondas.

Health insurance companies stand to make a killing if Obamacare passes.

T. Boone Pickens and Al Gore would make millions from environmental legislation.

Ludwig von Mises explained the reason for all of this corrupt behavior with a single sentence back in 1949: “It is precisely the fact that the market does not respect vested interests that makes the people concerned ask for government interference.”
-Human Action, 4th Edition, p. 337.

Even the trimmed-down version of Obama’s health-care plan recently announced by a ranking Senator contains lots of tax increases for the middle class (see below).

And the costly cap-and-trade energy legislation passed by the House and supported by Obama would lead to big tax increases in the name of fighting global warming, Administration officials privately have conceded, even though they publicly claim otherwise.  “Officials at the Treasury Department think cap-and-trade legislation would cost taxpayers hundreds of billion in taxes, according to internal documents circulated within the agency and provided to The Washington Times” by CEI.  It would also result in “loss of steel, paper, aluminum, chemical, and cement manufacturing jobs,” as jobs migrate overseas to countries which have fewer environmental protections than the U.S. does.

Obama earlier admitted that “under my plan of a cap and trade system, electricity rates would necessarily skyrocket.” As Obama admitted, that cost would be directly passed “on to consumers” — just the way Herbert Hoover’s excise tax increases were in 1932, aggravating the Great Depression. Although the tax’s supporters claim it will cut greenhouse gas emissions, it may perversely increase them and also result in dirtier air, as well as harming forests and water supplies.

Americans for Tax Reform summarizes the tax increases in the trimmed-down version of ObamaCare revealed by its principal drafter, Senator Max Baucus (D-Montana).  Here is a partial list:

· Individual Mandate Tax.  If you don’t sign up for health insurance, you will have to pay a tax in the following range:

· Employer Mandate Tax. $400 per employee if health coverage is not offered.  Note: this is a huge incentive to drop coverage, as $400 is much less than the average plan cost of $11,000 for families or $5000 for singles (Source: AHIP)

· Excise Tax on High-Cost Health Plans.  New 35% excise tax on health insurance plans to the extent they exceed $21000 in cost ($8000 single)

· Medicine Cabinet Tax.  Americans would no longer be able to purchase over-the-counter medicines with their FSA, HSA, or HRA

· Eliminate tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D

· Report Employer Health Spending on W-2. This is clearly a setup for the easy individual taxation of employer-provided health insurance down the road.

· Cap Flex-Spending Account (FSA) Contributions at $2000. Currently unlimited.

· Backdoor Death of HSAs. By requiring that all plans (besides the few that are grandfathered) provided first-dollar coverage for most services, there would be no HSA-qualifying plans available from the Massachusetts-like exchanges

Many on the left are critical of of health savings accounts and high-deductible health care plans, claiming they reduce consumption of preventive health care and drive up costs in the long-run. Now, leaving aside the dubious-at-best projected cost savings that can be practically realized through increased preventive care (and new research suggests that shifting toward a “preventive care model” will likely increase overall health care expenditures), let’s tie this into the oft-repeated fact that many personal bankruptcies are driven by massive health care bills. But what exactly are these financially-ruinous health care expenditures? Well, routine, expected exams and clinic visits are not the culprits; chronic illnesses and unexpected emergencies are. This is the point of HSAs and HDHPs. You pay out of pocket for normal, relatively low-cost care, and purchase insurance to protect yourself from extremely costly, unexpected catastrophic events. In fact, this is supposed to be the point of insurance.

Unfortunately, the current system incentivizes the purchase of low-deductible policies that cover annual physicals and regular exams, but don’t cover high-cost medical emergencies or conditions.

But for a brief, shining moment, in the mid to late 1970s, Kennedy viewed smaller government as the most compassionate answer in one area of economic life: transportation. Kennedy was the prime mover in Congress behind the airline and trucking deregulation bills that were signed by President Jimmy Carter. He saw the impact of regulation in these industries as protecting entrenched companies from competition, and decided that the liberal, compassionate thing to do was to deregulate to give consumers lower prices and more choices. As the news stories search for all the ways Kennedy’s impact is felt by everyday Americans, one obvious impact is reflected in this headline today on AOL news, “Fall Airfares Starting at $59.”

From the 1930s to the 1970s, the federal government treated interstate airlines as a public utility, setting routes, schedules and fares through the Civil Aeronautics Board. The incumbent carriers had learned to like the system because they were protected from competition on their routes, and the price-setting operated as more of a price floor than a price ceiling. Low-cost carrier Southwest Airlines, which is offering the aforementioned $59 one-way fare and now dominates the airline industry, was confined to intrastate flights within Texas – where the federal government couldn’t reach – for the first eight years after its founding in 1971. (See this tribute to Kennedy today in Southwest Airlines’ blog.)

Some folks may have fond memories of the linen napkins and china plates on airlines in the “good old days” before deregulation when airlines aggressively competed on service because they couldn’t do so on price. But millions of middle-class families and small businesses were locked out of flying because of the high fares and limited service.

Think tanks, academics, and even consumer advocate Ralph Nader began to argue in the 1970s that airline deregulation was a good idea. In addition to problem of high consumer prices, deregulation was also advocated out of a kind of “systemic risk” concern. Railroads such as Penn Central were going bust and being bailed out, and observers feared that airlines would suffer the same fate and cause the same drain on taxpayers if they were not allowed to become competitive and self-sustaining.

But the aviation industry fought against repealing these controls that had long protected it from real competition (And, contrary to popular narrative, this instance of businesses championing regulation out of self-interested motives is not unique. Read Washington Examiner columnist and former CEI Warren T. Brookes Fellow Timothy P. Carney’s brilliant book, The Big Ripoff: How Big Business and Big Government Steal Your Money.). There were other businesses that supported deregulation, notably retailers like Sears that correctly saw that airline and trucking deregulation – which would lower their shipping rates – were part of a package. But the airlines fought hard and had a staunch ally in fighting deregulation in Sen. Howard Cannon (D-Nev.), chairman of the powerful Subcommittee on Aviation of the Senate Commerce Committee.

But deregulation advocates found an ally of their own in Kennedy, who, with the help of young policy aides like now-Supreme Court Justice Stephen Breyer, began to see the egalitarian case for deregulation. Beginning in 1975, Kennedy held hearings on airline and trucking deregulation as chairman of the Senate Judiciary Committee’s Subcommittee on Administrative Practice and Procedure and later the Subcommittee on Antitrust and Monopoly. Kennedy’s opening statement for one of these hearings sounds positively CEI-esque on the detriments of regulation and the benefits of the free market. The senator said, “Regulators all too often encourage or approve unreasonably high prices, inadequate service, and anti-competitive behavior.  The cost of this regulation is always passed on to the consumer.  And that cost is astronomical.”

Scholars Martha Derthick and Paul J. Quirk write in their book The Politics of Deregulation (published by the Brooking Institution – read excerpts here): “Kennedy’s lack of jurisdiction over regulatory legislation may have tended to limit the effect of his activities, but if so this limitation was amply offset by his ability to attract the press and exert pressure on the Senate subcommittees that did have jurisdiction.” The author write that “with Kennedy showing so much interest in pro-competitive regulatory reform, it became very hard for [Cannon] to show none.”

Cannon would hold his own hearings, and in the end, became a co-sponsor of Kennedy’s Airline Deregulation Act of 1978 that passed Congress and was signed by Carter. Kennedy would go on push the Motor Carrier Act of 1980 that deregulated trucking rates and was also signed by Carter. Kennedy would note these deregulatory accomplishments in his base-rousing “Dream Shall Never Die” speech to the Democratic National Convention in 1980, delivered just after he lost the nomination fight to Carter and considered the greatest speech of his career. “While others talked of free enterprise, it was the Democratic Party that acted and we ended excessive regulation in the airline and trucking industry, and we restored competition to the marketplace,” Kennedy intoned. “And I take some satisfaction that this deregulation legislation that I sponsored and passed in the Congress of the United States.”

Kennedy argued in the speech, “The demand of our people in 1980 is not for smaller government or bigger government but for better government.” Deregulation in the airline and trucking sectors, he implied, was an example of “better government.” Open Market bloggers would argue that smaller government is almost always better government, but Kennedy’s pragmatic case for this specific deregulation holds lesson for the regulatory debates of today. As much as deregulation is almost a dirty word and wrongly blamed for the financial crisis, practically no one would really want to go back to the bad old days when Southwest could only offer its low fares in the state of Texas.

CEI President Fred L. Smith Jr. and scholar Braden Cox point out in an entry of The Concise Encyclopedia of Economics that fares on flights have fallen 45 percent in inflation-adjusted terms since airlines were deregulated in 1978. They also cite research by scholars Robert Crandall and Jerry Ellig finding that even when figures are adjusted for changes in quality and amenities, deregulation still saves $19.4 billion per year in passenger costs, and these savings have been passed on to 80 percent of passengers.

The lessons of airline deregulation’s benefits to the common man in terms of lower prices and more choices apply even to issue on which Kennedy was on the other side. Health care consumers would benefit from competition among insurers across state lines, and a federal government bureaucracy that set rates and mandated what insurance companies could and could not cover – even if there were no “public option” – would likely be as bad for consumers as the old Civil Aeronautics Board that Kennedy fought to depower.

And as Smith and Cox pointed out, we should also fight to finish Kennedy’s job of air travel deregulation by allowing foreign carriers to compete on domestic routes and through privatization of airports and air traffic control, which other countries, including ironically Canada, have gone further than the U.S. in achieving. Completing this liberalization would help resolve lingering problems such as flight delays and passengers stuck on the tarmac for an inordinate amount of time, as the private sector could modernize aviation facilities just as the airline industry has adjusted.

In tribute to Senator Kennedy, Open Market urges all legislators to look at his accomplishments in airline and trucking deregulation, and be Kennedy-esque in applying his insights on these issues to the economy at large.

Disclosure: Like million of Americans, I happily fly Southwest Airlines, and I also own shares of its stock.

As Christian Cámara, director of CEI’s Florida Insurance Project, said in the release, “There are a lot of very serious unanswered questions.”

There was one question that was unfortunately left out of the release. Since this is indeed hurricane season and of course a timely issue, the RRM team would like to pose the question here:

Gov. Crist recently claimed that divine intervention has kept hurricanes away from Florida. If this is the case, is the State of Florida taking proper action to appease the various storm gods? What types of sacrifices are being offered to these deities? Are OIR high priests following proper sacrificial rites? What types of objects or animals are being used and what is the cost of these sacrifices to Florida taxpayers? Would you be amenable to privatizing these sacrificial rites?

These are important questions that need to be answered for the sake of the safety of Floridians. These issues may actually be important to those who aren’t Florida homeowners, though, as the horses of Florida may in fact be in danger due to possible sacrifices to the storm gods. Could there be a connection between the recent horse poaching in Florida and these offerings to the storm deities? Could privatization of the insurance market and legalization of the sale of horse meat solve both of these issues?

The Center for Risk, Regulation, and Markets and all those concerned about the citizens and horses of Florida are waiting for your answer, Mr. McCarty.

Professor Natelson says that ObamaCare is unconstitutional because:

“1. It is not based on any enumerated power of Congress, not even on a very expansive reading of the power to regulate interstate commerce.

2. It relies on Excessive Delegation of the type held unconstitutional in Schechter Poultry.

3. It violates Substantive Due Process, and interferes with doctor-patient medical decisions to a vastly greater extent than did the laws declared unconstitutional in Roe v. Wade.

4. It violates the Tenth Amendment by commandeering state governments.”

(However, commenters in response to Professor Natel’s post argue that by the time any challenge to ObamaCare reaches the Supreme Court, Obama will have packed the court with liberal justices who are unsympathetic to such arguments).

The U.S. Commission on Civil Rights has criticized the racial preferences in the health-care bill backed by Obama, saying that they are likely unconstitutional under the Supreme Court’s Adarand decision, which subjected race-based affirmative action to “strict scrutiny” and barred federal racial preferences absent evidence that they are needed to remedy intentional past discrimination by the government. (In cases like Rothe Development Corp. v. Department of Defense and the Western States Paving case, the courts have sometimes struck down federal affirmative-action plans sponsored by liberal lawmakers, citing the Supreme Court’s Adarand decision. ObamaCare goes even further in mandating the use of race than past affirmative action plans.)

Fact checkers say Obama is lying about health care. ObamaCare will cost far more than its predicted trillion-dollar price tag.

One of Obama’s own advisers says the Obama Administration’s health-care plan will harm people with insurance while raising their taxes. Obamacare will take away 5 important freedoms, notes a CNN commentary. It will also destroy many affordable health-care plans while breaking Obama’s campaign promises.

Rep. John Shadegg, a conservative Republican from Arizona, has proposed a bill to allow interstate purchase of health insurance. Blue Cross has fiercely opposed this idea that could introduce more competition. Currently, Blue Cross companies typically have only a handful of competitors in each state.

Property and casualty insurers operate under a similar state-level protectionist arrangement.

CEI adjunct Ned Andrews argues for interstate insurance choice here.