deficit

ObamaCare’s Enormous Cost Is Hidden by Dishonest Gimmicks, Says New York Times Columnist Who Supported Obama in 2008

by Hans Bader on March 14, 2010 · 6 comments

in Health and Illness, Healthcare, Insurance, Politics as Usual, Precaution & Risk, Regulation, Sanctimony

New York Times columnist David Brooks, like other columnists at that staunchly liberal newspaper, supported Obama in the 2008 election. But even he can now see that Obama’s health care plan is full of dishonest gimmicks that hide its enormous cost and the fact that it will drive up the deficit and health-care costs:

They’ve stuffed the legislation with gimmicks and dodges designed to get a good score from the Congressional Budget Office but don’t genuinely control runaway spending.

There is the doc fix dodge. The legislation pretends that Congress is about to cut Medicare reimbursements by 21 percent. Everyone knows that will never happen, so over the next decade actual spending will be $300 billion higher than paper projections.

There is the long-term care dodge. The bill creates a $72 billion trust fund to pay for a new long-term care program. The sponsors count that money as cost-saving, even though it will eventually be paid back out when the program comes on line.

There is the subsidy dodge. Workers making $60,000 and in the health exchanges would receive $4,500 more in subsidies in 2016 than workers making $60,000 and not in the exchanges. There is no way future Congresses will allow that disparity to persist. Soon, everybody will get the subsidy.

There is the excise tax dodge. The primary cost-control mechanism and long-term revenue source for the program is the tax on high-cost plans. But Democrats aren’t willing to levy this tax for eight years. The fiscal sustainability of the whole bill rests on the naïve hope that a future Congress will have the guts to accept a trillion-dollar tax when the current Congress wouldn’t accept an increase of a few billion.

There is the 10-6 dodge. One of the reasons the bill appears deficit-neutral in the first decade is that it begins collecting revenue right away but doesn’t have to pay for most benefits until 2014. That’s 10 years of revenues to pay for 6 years of benefits, something unlikely to happen again unless the country agrees to go without health care for four years every decade.

There is the Social Security dodge. The bill uses $52 billion in higher Social Security taxes to pay for health care expansion. But if Social Security taxes pay for health care, what pays for Social Security?

Earlier, health care cost expert James C. Capretta explained how “Obamacare Is A Budgetary Disaster” that will cost at least $1.4 trillion more than promised.

The Congressional Budget Office, which refused to question Obama’s gimmicks to lowball the cost of his health care plan, nevertheless admits that “President Obama’s policies would add more than $9.7 trillion to the national debt over the next decade.”

There are $3,000,000,000,000 in tax increases in Obama’s budget.  But he’s spending money at such a furious pace that the deficit will skyrocket anyway: “The president’s budget would borrow 42 cents for each dollar spent in 2010,” and “double the national debt over the next decade.”

Obama’s healthcare plan will further increase deficits, as even Democrats have admitted.   ObamaCare would reduce medical innovation, raise taxes, drive up insurance premiums, break campaign promises, and increase state deficits.  It  would cut the quality of  care, while imposing restrictions that failed when tried at the state level.  It ignores advice from experts about how to cut costs.

Obama recently ran up the largest budget deficit in history, by a huge margin.

Obama Runs Up Largest Budget Deficit in American History; Monthly Deficit Alone Exceeds Entire Annual Deficit for 2007 Under Bush

by Hans Bader on March 11, 2010

in Bailout Watch, Economy, Health and Illness, Healthcare, Insurance, Politics as Usual, Precaution & Risk, Regulation, Sanctimony

“The Obama Administration has run up the largest budget deficit in American history in February of 2010, a whopping total of $220.9 Billion in just one month.   February 2010’s unprecedented total is more than most year-long budget deficits in American history,  including 2007’s year-long total of $161 Billion.”

“President Obama’s policies would add more than $9.7 trillion to the national debt,” the Congressional Budget Office said.   That’s roughly fifteen times the cost of the Iraq and Afghanistan Wars combined.

The president’s healthcare proposals will add still more to the national debt, which he is attempting to conceal through budget gimmicks.  Even Democrats have expressed alarm about their unaffordable cost.   The true cost of his healthcare plan, experts say, is at least $2.3 trillion, dramatically increasing the budget deficit.   ObamaCare would reduce medical innovation, raise taxes, drive up insurance premiums, break campaign promises, and increase state deficits.  It  would cut the quality of  care, while imposing restrictions that failed when tried at the state level.  It ignores advice from experts about how to cut costs.

In the 2008 campaign, Obama promised a “net spending cut,” but as soon as he was elected, he proposed massive spending increases.

Economists and real estate experts say that a mortgage bailout program the Obama administration spent $75 billion on has backfired and harmed the real estate market.

The Washington Post today reports that the administration has no plans to reform Fannie Mae and Freddie Mac.  Those mortgage giants are receiving huge bailouts (more than $125 billion and rapidly rising) to enable them to carry out Obama’s policy of giving billions of dollars in handouts to deadbeat mortgage borrowers, some of whom have high incomes, and lived beyond their means.

LibertyWeek 83: What Would Reagan Do?

by Richard Morrison on March 8, 2010

in CEI Projects, Podcast

Richard Morrison, Jeremy Lott and Marc Scribner collaborate to bring you Episode 83 of the LibertyWeek podcast. We cover the ever-growing deficit, the Reagan legacy, Cablevision v. ABC, the RNC’s fundraising strategy and David Paterson on scandal watch.

Obama’s Policies Will Increase National Debt by $9.7 trillion, Says Congressional Budget Office

by Hans Bader on March 6, 2010 · 3 comments

in Economy, Environment, Health and Illness, Healthcare, Insurance, Legal, Politics as Usual, Precaution & Risk, Regulation, Sanctimony, Stimulus to Nowhere

“President Obama’s policies would add more than $9.7 trillion to the national debt over the next decade, congressional budget analysts said Friday. . .The 10-year outlook by the nonpartisan Congressional Budget Office is somewhat gloomier than White House projections, which found that Obama’s policies would add $8.5 trillion to the debt by 2020.”

That’s from the an article in The Washington Post summarizing the findings of a recent report by the Congressional Budget Office.

As the Associated Press notes, “The deficit picture has turned alarmingly worse. . .Economists say that deficits of that size are unsustainable and could put upward pressure on interest rates, crowd out private investment in the economy and ultimately erode the nation’s standard of living.”

The President’s healthcare proposals will add still more to the national debt, which he is attempting to conceal through budget gimmicks.  Even Democrats have expressed alarm about their unaffordable cost.

In the 2008 campaign, Obama promised a “net spending cut,” but as soon as he was elected, he proposed massive increases in federal spending instead.  It’s one of a long series of broken promises by the President.

Obama broke his campaign promise not to raise taxes on anyone making less than $250,000 a year by signing a regressive SCHIP excise tax increase, and by proposing a cap-and-trade global-warming 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).

Obama broke seven campaign promises dealing with transparency and clean government in signing the $800 billion stimulus package.  Obama claimed the 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 persists in pushing a government takeover of health care, event though most Americans oppose his plan. It would reduce lifesaving medical innovation, raise taxes, drive up insurance premiums and the deficit, break many campaign promises, and impose heavy burdens on state budgets.  It  would also jeopardize the quality of medical care for many, while imposing restrictions that failed when tried at the state level, and ignoring advice from federal and academic experts, and lessons from countries with universal healthcare, about how to keep costs down.

Obama recently nominated to a key federal appeals court a left-wing radical who seeks to make welfare a constitutional right, at taxpayer expense — a radical sometimes suggested as a future Supreme Court nominee.

Obama Names SEIU’s Stern to Deficit Commission

by Ivan Osorio on February 26, 2010 · 1 comment

in Economy, Employment, Labor, Politics as Usual

President Barack Obama has appointed Service Employees International Union (SEIU) President Andrew Stern to a new commission tasked with coming up with recommendations to help reduce the federal deficit. While disappointing, this is not surprising. Stern’s appointment is merely the culmination of a series of appointments by the Obama administration of individuals closely associated with SEIU to government posts.

These include Patrick Gaspard, a former vice president for politics and legislation for SEIU Local 1199, a giant New York health care workers union, who was named White House political director following Obama’s election, and SEIU Treasurer Anna Burger, who was named to Obama’s Economic Recovery Advisory Board. Then there’s former SEIU associate general counsel Craig Becker, whose nomination to the National Labor Relations Board failed in a Senate cloture vote.

Stern himself, according to White House visitor logs released in November, visited the White House at least 22 times in 2009, making him the most frequent visitor during that time (the Alliance for Worker Freedom has filed a request for an investigation of Stern for possible lobbying disclosure violations, including during those visits).

This access hasn’t come easy. SEIU has invested heavily in politics. In 2008, it was the seventh biggest campaign donor, with nearly all of its contributions going to Democrats, according the the Center for Responsive Politics. Stern told The Las Vegas Sun in May 2009: “We spent a fortune to elect Barack Obama — $60.7 million to be exact — and we’re proud of it.”

Coziness between the administration and a special interest aside, asking the head of a union that organizes public sector workers presents a clear conflict of interest, especially now that union members in the public sector sectors outnumber their private sector counterparts for the first time ever.  Would Stern be willing to reduce growth of the sector where his union is most likely to find new members? More likely are calls for higher taxes to fund more “public services” for SEIU to unionize. That also shouldn’t be surprising. Today, government employee unions constitute a permanent special interest lobby favoring the growth of government, one that is motivated, organized, and well-funded.

For more on SEIU, see here, here, and here.

For more on public sector unions, see here and here.

Regulation of the Day 118: Unlicensed Dogs

by Ryan Young on February 24, 2010

in Regulation, Regulation of the Day

In Los Angeles, it is illegal to own a dog without a license. The city government employees eight people whose full-time job is to make sure that people are complying. But they aren’t doing a very good job of it; roughly two thirds of Los Angeles’ dog population is unlicensed.

This epidemic of unlicensed dogs is easily the most pressing issue facing America’s second-largest city. Packs of wild, unlicensed dogs roam the streets at night. People are scared to go out after dark. An entire city huddles in fear.

Or not. Maybe unlicensed dogs don’t really matter. Most places do just fine without dog licensing regulations. So why is the city government clamping down on enforcement all of a sudden?

The answer is simple: money. LA is looking at a $400 million budget deficit this year. At $15 per license, the city estimates it will make $3.6 million from full compliance. Hopefully it will spend somewhat less than that getting there.

Los Angeles is hardly the only city having revenue troubles. One wonders what other obscure regulations are being used for money grabs across the country.

Basic Irony

by Ryan Young on February 19, 2010

in Economy, Politics as Usual

From yesterday’s WSJ.com Political Diary (subscription required):

The same day President Obama called for another $50 billion to $100 billion stimulus plan (and concomitant increase in the deficit), he also appointed the chairmen of his Deficit Reduction Commission. It says a lot about Washington that almost no one got the irony of those paired announcements.

Indeed it does. Fortunately, the Commission’s job is pretty simple. There are only two ways to cut the deficit. One is to cut spending. The other is to raise taxes. Cutting spending is the right thing to do. But it is also politically difficult. There is a lot of fat to trim from the budget. But government has little incentive to put itself on a diet.

That’s why the Commission is expected to recommend a tax increase, probably in the form of a VAT. A prestigious bipartisan Commission can provide the political cover that Congress and the administration need to avoid the embarrassment of backtracking on their policies.

Wayne Crews and I recently warned why a VAT is a bad idea in Investors’ Business Daily. Hopefully some of the arguments will find themselves into the debate.

LibertyWeek 78: Obama’s 23% Approval Rating

by Richard Morrison on January 25, 2010

in CEI Projects, Podcast

Richard Morrison, Jeremy Lott and the American Spectator’s Jim Antle collaborate on Episode 78 of the LibertyWeek podcast. We cover the reverberations from Scott Brown’s Senate election, Obama’s 77% disapproval rating among investors, the 1st Amendment verdict in the Citizens United case, the shame of UN climate science and a new hope for Haiti.

Against a Value Added Tax

by Ryan Young on November 17, 2009

in Deregulate to Stimulate, Economy

Over at Investor’s Business Daily, Wayne Crews and I make the case against a Value Added Tax. Policy makers have been flirting with the idea as a way to reduce the $1,400,000,000,000 budget deficit.

We argue that a VAT is:

-Complex; it would require roughly doubling the size of the IRS.

-Untransparent; most VATs don’t show up on receipts the way sales taxes do. Taxpayers are clueless as to how much tax they actually pay.

-Vulnerable to special-interest tinkering; politically incorrect goods are routinely penalized with higher rates. Politically favored goods are granted exemptions.

-Prone to increases; 20 out of 29 OECD countries with a VAT have increased their rates since implementing a VAT.

A point we didn’t make is that VATs affect industrial organization. VATs are applied at each stage of the production process. That gives companies an incentive to reduce the number of taxable steps. That means more vertical integration than would otherwise occur. This can decrease the efficiency of the manufacturing process. Which means higher prices and fewer goods. Plus the tax.

Health-Care “Reform” Bills Increase Costs, Endanger Access for Millions, Federal Experts Say

by Hans Bader on November 15, 2009 · 1 comment

in Health and Illness, Healthcare, Insurance, Legal, Nanny State, Personal Liberty, Regulation

The healthcare “reform” bill backed by Obama “would reduce senior care,” and “could jeopardize access to care for millions,” report healthcare experts at the federal Centers for Medicare and Medicaid Services. The bill also “increases medical costs” through inflation, increasing health-care costs to 21.1 percent of GDP by 2019.

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.

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