Monday, October 19, 2009

Mike Pence Jay Inslee: Karl Rove Jay Inslee: CBO Baucus Bill Fuzzy Math

Karl Rove, writing for the Wall Street Journal, said that Congressional Budget Office Director Douglas Elmendorf "admitted" that the $500 billion in tax hikes in the Baucus bill would be passed onto consumers, pushing up insurance premiums. This is how the Obama government plans to make health care more affordable - for the government, not for you. Before you dismiss this, remember that Rove is talking about a Senate hearing. Not likely he is making this up. Put away your partisan divide and your hate of Rove and examine the details. Setting the scene for the video below:

 (1) We know that under the Democrat's health care reform, we can keep our private insurance. We can keep it according to the original House Bill, only because it is "grandfathered in," meaning that you keep it because you already had it. Page 16, Sec. 102. The word "grandfathered in" is actual wording.

(2) We know that if you have private insurance and change jobs, and your new employer provides health care coverage, you are not eligible, because you were not "grandfathered in." You get the government option.

(3) We know that if you do not have private insurance at the time the bill is enacted, you never again have the option for private coverage. You get the government option.

(4) We know that companies will be assessed a tax of 8 percent of workers' wages, if the company does not provide health care insurance for workers.

(5) We know that a tax of 8 percent of company payroll is less than the cost of providing health care for most employers. "In 2005, the median employer cost was 11 percent of payroll."

(6) We know that the company will drop the private plan pronto.

(7) We know that individuals who decline an offer of affordable coverage will pay 2.5 percent of their incomes as a penalty, up to the average cost of a health insurance plan.

(8) We know that once the company drops the private plan, we have no more options for private insurance. The Obama government is not giving us the option for private insurance any way or any how. We know that we have joined the government of Barack Obama, if we want health insurance.

(9) Finally, we know that private health care will no longer be available to the majority of Americans, with the exception of Congress, Congressional retirees, Union retirees and their families, and perhaps community organizers described in the original bill as "voluntary beneficiaries" (page 65).

None of the above is surprising, because it is all well-documented. It has been put into writing in the House bill. We do not know what is in the Baucus bill because only the "idea" or "concept" has been submitted for the CBO's scoring of the bill. But we know the goal that Democrats are stumbling toward.

So the scene is set. Karl Rove writing in the Wall Street Journal:

The problem for Mr. Obama is that the Baucus bill is being sold on the strength of accounting tricks that make it appear that it won't add to the deficit.

The bill imposes tax hikes and benefit cuts right away, including $121 billion of Medicare reductions between 2011 and 2015. [snip] 
Then there are $400 billion in benefit cuts that are frightening seniors. Jeffrey H. Anderson of the Pacific Research Institute has pointed out that the Baucus bill cuts Medicare payments to physicians by 25% within two years and keeps payments at that level forever, without adjusting for inflation. If this becomes law, doctors who take Medicare patients will see their real income decline each year.
Didn't we think we would have 3 years before any reform kicked-in? If the plan is not to take effect for 3 years, that would be assumption, but no, the reform begins immediately and the reform is not a bonus, but a penalty if we are on Medicare or are a physician.

The following is very surprising to me, because I am not devious enough to begin to think that the CBO would possibly accept this:
...the Congressional Budget Office (CBO) released a report last week claiming the bill won't add to the deficit. But this assumes that employers who dump employee coverage under the Baucus bill will then increase worker paychecks by an amount equal to what they had spent on health care. This replaces a nontaxable event (providing health insurance) with a taxable one (increasing worker paychecks), magically producing $83 billion in revenues. Without this windfall, the Baucus bill adds billions of dollars to the federal deficit in the first decade.
About the taxes to be levied against the employer who finds it cheaper to drop your insurance and pay the fines:
Of course, why would a company drop employee coverage just so it could pay more (in fines, taxes and wages) than it did before?

The CBO report also estimates that receipts from the 40% excise tax the Baucus bill would levy on "Cadillac" insurance policies "would grow by roughly 10 percent to 15 percent" a year after 2019.

That's nonsense. If you tax something heavily you'll get less of it. If this tax is enacted, there will be fewer Cadillac plans—and hence less revenue.
In the video below, you will hear Rep. Jay Inslee (D-WA) ignore the point that money will be saved due to employer's increasing employee wages after dropping private health care. He has nothing to offer other than his dislike for Karl Rove and the tired old lie that Republicans have no plan (a complete lie as there are many plans offered and rejected by Democrats). Inslee insists that there will be a "very, very small number of employers" who will drop coverage. Incredible! Martha McCallum gets it.  Rep. Mike Pence (R-IN) at 4:14 minutes into the video, says the idea that employers will raise wages is "not really credible," and you'll see that Inslee does not make his case.

Pence, Inslee, Rove on Baucus Bill Fuzzy Math (video)

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