Posts Tagged ‘CBO’

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


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.

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