The White House and its congressional allies are trying to suggest that the latest Congressional Budget Office (CBO) cost estimate proves that their health-care plan is fiscally responsible.
But, in fact, the latest CBO projections confirm — again — that the President’s health plan would pile more another unfinanced entitlement program on top of the unaffordable ones already on the federal books.
According to CBO, the new entitlement spending in the plan would cost $216 billion by 2019, and then increase by 8 percent every year thereafter. In other words, the President’s plan would stand up another health entitlement program that will grow much faster than the nation’s economy or revenue base. The changes the Democrats would make to the Senate-passed bill would make the entitlement program even more expensive.
Over a full ten years of implementation, the cost of the new entitlement spending would reach $2.5 trillion, at least, not $1 trillion as advertised by the White House.
The President and his congressional allies have suggested that the offsets they are pushing will more than cover this massive spending increase. But even a modest amount of scrutiny reveals these supposed offsets are nothing more than gimmicks and implausible assumptions.
For starters, the plan doesn’t count $371 billion in spending for physician fees under the Medicare program. The President and Congressional Democrats want to spend this money, for sure. They just don’t want it counted against the health bill. That’s because they want to reserve all of the Medicare cuts in the bill as offsets for another entitlement instead of using them to pay for the problem that everyone knows needs fixing. The President says he shouldn’t have to pay for the “doc fix.” But why not? Never before did congress move to add the cost of a permanent fix to the national debt. But that is exactly what the President now wants to do. When the cost of the “doc fix” is properly included in the accounting, all of the claimed deficit reduction from the President’s health plan vanishes.
Then there’s the “Cadillac” tax on high-cost insurance plans. Because of union pressure, the President pushed the tax back to 2018, well passed the point when he will have left office. But once in place, he now would allow the threshold used to determine “high-cost” to rise only with the CPI, beginning in 2020. That means a very large segment of the middle class would get hit with the tax as the years passed. The President has shown that he is unwilling to actually collect this tax. But he wants us to believe we can count on a huge revenue jump over the long-run because his successors will have more stomach for it than he does.
Similarly, to jury-rig “long-term deficit reduction,” the latest plan would first increase the premium assistance subsidies paid to low and moderate wage families above the levels in the Senate-passed bill, but then index their value to something below the growth in premiums to give the appearance of deficit reduction in the decade after 2019.
There’s no “bending of the cost-curve” here. It’s sleight of hand that, if actually implemented, would force millions of low-income families to pay ever higher premiums every year. The Democrats don’t want to talk about that. They just want to pretend they have been serious with fiscal discipline.
The other gimmicks remain in the plan as well. The double-counting of premiums for a long-term care insurance programs an offset for the health entitlement spending. The assumption that congress will allow Medicare reimbursement rates to fall so low that one in five hospitals and nursing homes might be forced to stop taking Medicare patients. And the expectation that somehow congress can hand out generous new subsidies to those getting insurance through the exchanges, even though many tens of millions of others with the same resources would get no additional help for their job-based coverage.
The bottom line here has been clear for months. The bill being pushed by the President would take what’s already a very bleak budget outlook and make it much, much worse.
Cross-posted at The Corner.
Another day, another poll showing President Barack Obama’s health care plan is wildly unpopular with the American people. Yesterday NBC News/The Wall Street Journal released their latest poll showing that the percentage of Americans who believe President Obama’s health care plan is a bad idea (48%) is at the highest level since they started asking the question last year. Only 36% of Americans are willing to call the plan a “good idea” which is up a whole four points from the time when House Rules Committee Chair Louise Slaughter (D-NY) wrote this about the Senate health plan:
[U]nder the Senate plan, millions of Americans will be forced into private insurance company plans, which will be subsidized by taxpayers. That alternative will do almost nothing to reform health care but will be a windfall for insurance companies. … Supporters of the weak Senate bill say “just pass it — any bill is better than no bill.”
I strongly disagree — a conference report is unlikely to sufficiently bridge the gap between these two very different bills. It’s time that we draw the line on this weak bill and ask the Senate to go back to the drawing board. The American people deserve at least that.
The Senate health bill is so unpopular, even among House Democrats, that the leftist House leadership is desperately trying to trick the American people into believing that the House can pass the Senate bill without voting on it. Hence the Slaughter Rule which would deem the Senate bill passed at the same time the House would approve a new reconciliation bill. Speaker Nancy Pelosi (D-CA) was crystal clear on her motives this week telling a group of leftist bloggers: “It’s more insider and process-oriented than most people want to know. But I like it because people don’t have to vote on the Senate bill.”
There is one increasingly glaring problem with Pelosi’s pass-the-bill-without-voting plan: it is proving impossible to draft that reconciliation bill. The Democrats first promised to unveil their new bill last Wednesday. Then Thursday. Then Friday. Then Monday. Then last night. As of this morning, still nothing. Democrats say they are waiting for a score from the Congressional Budget Office before they release their bill, but there is nothing stopping them from releasing whatever text they have now and then publicizing the CBO score when it comes back. But they are not choosing that open and transparent path.
As we reported last week, getting a CBO score consistent with reconciliation is going to be very difficult. According to House rules, a reconciliation measure must reduce the deficit by at least $2 billion over five years compared to existing law. In this case, however, “existing law” would be the yet-to-be-passed Senate bill. And all of the changes Democrats want to make to the Senate bill (scaling back the tax on high-end health insurance policies; closing the Medicare D loophole; boosting insurance subsidies; increasing Medicaid payments; and expanding the Cornhusker Kickback to all) either increase spending or decrease revenue. Which means the Democrats have to identify new revenues to make the CBO score work. And as Congressional Quarterly reported yesterday, Democrats have not yet identified the right pay-fors to game the CBO right. That is why House Leadership has not unveiled their new bill yet: they can’t figure out how to pay for it.
Not that it really matters if they ever do. The reconciliation bill is never going to become law. The Senate will never pass it. They have no reason to. The Senate likes the existing Senate bill. That’s why it’s called “the Senate bill” … they are the ones who passed it. The White House also likes the Senate bill. As soon as the House passes it, President Obama will sign it and then leave for Asia. That’s it. Obamacare will be, as White House Press Secretary Robert Gibbs promised last Sunday, “the law of the land.” After the Senate bill is law, what could possibly motivate the White House, let alone the Senate, to ever pick up the yet-to-be-written House reconciliation bill?
This is why the White House political machine is pulling out all the stops to get the House to pass the toxic Senate bill. Democratic National Committee Vice Chair Donna Brazile is actively encouraging primary challenges to Democrats who vote against the Senate bill. One House Democrat aide tells Politico: “We’re having donors, even donors outside of our district, that are being called and asked to urge support.” For her part Speaker Pelosi is relishing the bare knuckle fight telling reporters yesterday: “I never stop whipping. There’s no beginning, there’s no middle, and there’s no end.” Let’s just hope her members remember which bill she’s really whipping them on.
Quick Hits:
- Testifying before the House Appropriations Committee, Attorney General Eric Holder refused to answer whether or not the Obama administration would read Osama bin Laden his Miranda rights, insisting that bin Laden would never be taken alive.
- Cash strapped states like Illinois and California are coming hat in hand to Washington for hundreds of billions of federal taxpayer dollars in bailouts.
- Homeland Security Secretary Janet Napolitano announced yesterday the Obama administration will delay the virtual U.S.-Mexico border fence.
- The Chinese government is setting the foundation for Internet giant Google to pull out of the country.
- Former-Democrat and current Massachusetts State Treasurer Timothy Cahill tells The Boston Globe: “If President Obama and the Democrats repeat the mistake of the health insurance reform here in Massachusetts on a national level, they will threaten to wipe out the American economy within four years.”