There’s a reason a big-ass lie is called a “whopper”. Someone’s going to try to convince you this is a good deal.
The CBO reported late today, in a letter to Senator Bauccus, the CBO spelled out the news.
That net cost itself reflects a gross total of $829 billion in credits and subsidies provided through the exchanges, increased net outlays for Medicaid and the Children’s Health Insurance Program (CHIP), and tax credits for small employers; those costs are partly offset by $201 billion in revenues from the excise tax on high-premium insurance plans and $110 billion in net savings from other sources. The net cost of the coverage expansions would be more than offset by the
combination of other spending changes that CBO estimates would save $404 billion over the 10 years and other provisions that JCT and CBO
estimate would increase federal revenues by $196 billion over the same period.1 In subsequent years, the collective effect of those provisions would
probably be continued reductions in federal budget deficits. Those estimates are all subject to substantial uncertainty.
But let’s run with that substantial uncertainty, all the way to the bank. Obama’s “this is not a tax” rhetoric is busted, as if there were any doubt. And even judging by a liberals’ analysis, this doesn’t really change the costs at all. In fact, the mandate penalties are reduced by $16 Billion. To my mind, that makes it less likely that people will join, meaning the other numbers will skew.
Anyway, those are my initial impressions. Would you trust $196 Billion in ‘savings’ marked “other”? I don’t, and won’t, and some very smart people think you shouldn’t either. From The Tax Foundation’s Joe Henchman:
Other $196 billion NET CHANGE TO 10-YEAR DEFICIT: +$81 billion
As the non-economist, I should note that when Medicare was passed in 1965, it was estimated to to cost $3 billion in 1990, the equivalent of $12 billion after adjusting for inflation. The actual cost in 1990 was $98 billion. And my earlier blog post on the argument that entitlement programs paying for themselves is worth relinking to.
Give me a hamburger today, and I shall gladly pay you $196 Billion on Friday.
UPDATE: Now that a day or so has gone by, here’s some excellent number crunching and deeper analysis from someone who knows what they’re talking about. Upshot: Total cost is closer to 2 trillion. Remember when a billion seemed like a big number?
UPDATE II: via Marginal Revolution
Jim Capretta looks at the Baucus healthcare bill and concludes that, because the subsidies phase out as income rises, it imposes an effective marginal tax rate on income of about 30 percent for many families. Add that figure to the income tax, the payroll tax, and the phase-out of the EITC and “the effective, implicit tax rate for workers between 100 and 200 percent of the federal poverty line would quickly approach 70 percent — not even counting food stamps and housing vouchers.”
Link here. I await further updates on these estimates…
So much for a ‘sock-the-rich’ mentality most lefties I know where hoping for.
Health insurance for 29 million Americans by 2019 who don’t have it currently is good thing …
… but when “substantial uncertainty” means there is nothing in place to ensure continued reductions in budget deficits, merely that CBO says deficit reductions are probable beyond 10 years (beyond the next administration?), coupled with what appears to be almost no change to the majority of insured Americans, I’m disappointed.
I hoped that sweeping reform was the goal. Now it just looks like a reshuffle of the same old cards.
Like I’ve said before, this kind of radical realignment of the system isn’t effective, and it isn’t cost-effective. There are much better ways to fix the system that would increase coverage, help decrease costs, and not entail massive government spending and increase in authority.
This argument never has much inventory, let’s take some: We already have government sponsored health protection. Since 1953, we’ve had the department of health and human services chartered with “protecting the health of all Americans and providing essential human services, especially for those who are least able to help themselves.” We currently spend a quarter of our federal budget on this mission. Let’s ask what we are currently provided from this investment? And being aware, as an example the No Child Left Behind Act, that an enormous increase in funds will not necessarily lead to an enormous increase in the quality of product received, let’s think about what we’d be getting exactly.
I move to try to scrap the “insurance” portion of the argument wherever it may be. Especially those on the left, focus on what you want, which I’m assuming is no cost health care for the majority of US citizens.
Now, this is totally allegorical, but compare the amount of time you’ve seen the presence of the American Red Cross in your life time to the amount of time to the amount of time you’ve been exposed to agents of the DHHS (withholding the omnipresence of the FDA, a conversation for another time). The Footprint of the Red Cross is global and they operate at about $4.1 billion a year (1/2 a percent of the DHHS budget) consisting primarily of donations. People give their time, effort and resources to this organization because it works. Board members are volunteers and often the president will refuse salary. When people see it no longer works, the Red Cross may cease to be. Unlike many if not most government entities, their survival is a function of their performance.
Let’s not discount the performance of volunteer associations to help solve the maladies of society. In fact, let’s praise them for their resourcefulness, perseverance and for taking a responsible role in aiding others. In fact, maybe we should go SO FAR as to forgo petitioning elected officials to act to fix this. Maybe we should petition each other.
Ultimately, we have to identify the economic tendency that for every $100 dollars given to the government we can likely get the same thing for $10 some where else. Meaning that we have $90 left to spend on video games, mosquito nets for overseas children and organic banana frozen yogurt.