Wednesday, December 2, 2009

Quote of the day (UPDATED)

... with a "Person of the year" update.

“The hope that health-care reform would take care of our budget problem has evaporated.”

That from Isabel Sawhill (not pictured), a fiscal expert at the Brookings Institution of which no one will ever confuse with the Heritage Foundation or the Cato Institute.

We will also use this as an opportunity to pimp our candidate for “Person of the Year” in Douglas Elmendorf, (pictured) the top dog at the Congressional Budget Office.

Back in August, when we made our initial push for Mr. Elmendorf we reasoned that the public tide-turning against health care began in earnest when the CBO was able to start “scoring” the various health care reform bills that were circulating around the Hill. Prior to that, because of the backroom nature of the legislation-fashioning, it was impossible for the public to grasp the scope of change these bills would wrought, thus the apprehension was more a fear of the unknown rather than the known.

Splashy graphics like the one below based on the CBO scorings, finally gave the electorate some understanding of what it was that was facing them and simultaneously exposed the accounting tricks and outright lies being peddled by health care reform proponents. Lies like Harry Reid saying the Senate version of health care would only cost $849 billion and would actually reduce the deficit in the first ten years.

(click to enlarge)

As one can see, Reid is counting the first four years as part of the ten - a period where we will be taxed for health care but will not see any of the “benefits” of that taxation. An honest assessment of the cost of health care reform should then shift four years to the right (2014-2023) where the taxation to fund health care and the outlays in health care are more concurrent and which results in the Senate bill actually costing $1.8 trillion over that same period of time.

We dug up this chart at B-Daddy’s behest who has his thought on the matter here and where we agree with his assessment that the Democrats have painted themselves into a corner on this issue.

Not passing healthcare reform would represent an epic failure of the Obama administration given the legislative advantages they possess. And conversely, passage of health care reform may well doom the Democrats in the next two election cycles and the President in ’12 as the electorate, already soured on the Senate bill, realize they will be making 4 years worth of down payments before they are able to move into the house Harry and Nancy built.

(UPDATE #1):It appears we may have been far too forgiving in tabulating the cost of the Senate bill for healthcare reform. Above we covered how the taxes start immediately but the spending doesn’t kick in until much later and progressively at that.

Another budget gimmick employed by the Senate bill is the requirement for individuals to purchase insurance. We’ll let Michael Cannon of the Cato Institute explain:

When the bills force somebody to pay $10,000 to the government, the Congressional Budget Office treats that as a tax. When the government then hands that $10,000 to private insurers, the CBO counts that as government spending. But when the bills achieve the exact same outcome by forcing somebody to pay $10,000 directly to a private insurance company, it appears nowhere in the official CBO cost estimates — neither as federal revenues nor federal spending.

This is an unfunded mandate that is not accounted for in estimating the cost of health care reform. Cannon estimates that when the spending is accounted for in the years 2014 – 2023 (the true lost decade) combined with that unfunded mandate in the same lost decade, the price tag for Obamacare checks in at, gulp…. $6.25 trillion dollars.

You may not want to believe that astronomical number but believe you must that even the whopping $1.8 trillion number estimated by the CBO is a low ball considering the fact they have not factored-in the unfunded mandate that will be borne by the private sector.

H/T: Hot Air

1 comment:

B-Daddy said...

Thanks for the link love and digging up the awesome graphic. The more I think about it, the dumber this seems. The good news is that if it passes, there won't be a built in constituency to defend Obamacare from repeal.