HEADLINES

Thursday, May 27, 2010

Fwd: Obamacare’s Cooked Books and the “Doc Fix”



  

Fix Health Care Policy

The Obama administration continues to insist (see this post from White House budget director Peter Orszag) that the recently enacted health-care law will reduce the federal budget deficit by $100 billion over ten years and by ten times that amount in the second decade of implementation. They cite the Congressional Budget Office's cost estimate for the final legislation to back their claims.

And it is undeniably true that CBO says the legislation, as written, would reduce the federal budget deficit by $124 billion over ten years from the health-related provisions of the new law.

The Scoop

Obamacare: Impact on Seniors 
 
Congressional Research Service Report of Medicare Provisions in Obamacare
 
Video: Health Care Reform Timeline
 
Department of Health and Human Services Report: Medicaid Children Not Receiving Health Care
 
Entitlement Spending & Interest Payments Are Squeezing Out Other Programs

But that's not whole story about Obamacare's budgetary implications — not by a long shot.

For starters, CBO is not the only game in town. In the executive branch, the chief actuary of the Medicare program is supposed to provide the official health-care cost projections for the administration — at least he always has in the past. His cost estimate for the new health law differs in important ways from the one provided by CBO and calls into question every major contention the administration has advanced about the bill. The president says the legislation will slow the pace of rising costs; the actuary says it won't. The president says people will get to keep their job-based plans if they want to; the actuary says 14 million people will lose their employer coverage, many of whom would certainly rather keep it than switch into an untested program. The president says the new law will improve the budget outlook; in so many words, the chief actuary says, don't bet on it.

All of this helps explain why the president of the United States would be so sensitive about the release of the actuary's official report that he would dispatch political subordinates to undermine it with the media.

It's not the chief actuary's assignment to provide estimates of non-Medicare-related tax provisions, so his cost projections for Obamacare do not capture all of the needed budget data to estimate the full impact on the budget deficit. But it's possible to back into such a figure by using the Joint Tax Committee's estimates for the tax provisions missing from the chief actuary's report. When that is done, $50 billion of deficit reduction found in the CBO report is wiped out.

And that's before the other gimmicks, double counting, and hidden costs are exposed and removed from the accounting, too.

For instance, this week House and Senate Democratic leaders are rushing to approve a massive, budget-busting, tax-and-spending bill. Among its many provisions is a three-year Medicare "doc fix," which will effectively undo the scheduled 21 percent cut in Medicare physician fees set to go into effect in June. CBO says this version of the "doc fix" would add $65 billion to the budget deficit over 10 years. The entire bill would pile another $134 billion onto the national debt over the next decade.

If the Obama administration gets its way, this three-year physician-fee fix will eventually get extended again, and also without offsets. Over a full 10-year period, an unfinanced "doc fix" would add $250 to $400 billion to the budget deficit, depending on design and who is doing the cost projection (CBO or the actuary).

Administration officials and their outside enthusiasts (see here) say the Democratic Congress shouldn't have to find offsets for the "doc fix" because everybody knows a fix needs to be enacted and therefore should go into the baseline. (By the way, the history of the sustainable growth rate [SGR] that Ezra Klein provides at the link above is a misleading one. The SGR was a replacement for a predecessor program that too had run off the rails — the so-called "Volume Performance Standard" enacted by a Democratic Congress in 1989.)

But supporting a "doc fix" is not the same as supporting an unfinanced one on a long-term or permanent basis. Not everybody in Congress is for running up more debt to pay for a permanent repeal of the scheduled fee cuts, which is why such a repeal has never been passed before. In the main, the previous administration and Congresses worked to find ways to prevent Medicare fee cuts while finding offsets to pay for it.

But that's not the policy of the Obama administration. The truth is the president and his allies in Congress worked overtime to pull together every Medicare cut they could find — nearly $500 billion in all over ten years — and put them into the health law to pay for the massive entitlement expansion they so coveted. They could have used those cuts to pay for the "doc fix" if they had wanted to, as well as for a slightly less expansive health program. But that's not what they did. That wasn't their priority. They chose instead to break their agenda into multiple bills, and "pay for" the massive health entitlement (on paper) while claiming they shouldn't have to find offsets for the "doc fix." But it doesn't matter to taxpayers if they enact their agenda in one, two, or ten pieces of legislation. The total cost is still the same. All of the supposed deficit reduction now claimed from the health-care law is more than wiped out by the Democrats' insistent march to borrow and spend for Medicare physician fees.

And the games don't end there. CBO's cost estimate assumes $70 billion in deficit reduction from the so-called "CLASS Act." This is the new voluntary long-term-care insurance program that hitched a ride on Obamacare because it too created the illusion of deficit reduction. People who sign up for the insurance must pay premiums for at least five years before they are eligible to draw benefits. By definition, then, at start-up and for several years thereafter, there will be a surplus in the program as new entrants pay premiums and very few people draw benefits. That's the source of the $70 billion "savings." But the premiums collected in the program's early years will be needed very soon to pay actual claims. Not only that, but the new insurance program is so poorly designed it too will need a federal bailout. So this is far worse than a benign sleight of hand. The Democrats have created a budgetary monster even as they used misleading estimates to tout their budgetary virtue.

There is much more, of course. CBO's cost projections don't reflect the administrative costs required to micromanage the health system from the Department of Health and Human Services. The number of employers looking to dump their workers into subsidized insurance is almost certainly going to be much higher than either CBO or the chief actuary now projects. And the price inflation from the added demand of the newly entitled isn't factored into any of the official cost projections.

We've seen this movie before. When the government creates a new entitlement, politicians lowball the costs to get the law passed, and then blame someone else when program costs soar. Witness Massachusetts. Most Americans are sensible enough to know already that's what can be expected next with Obamacare.

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Fwd: Majority of Americans Believe Future of Don?t Ask, Don?t Tell Should be Left Up to Military Commanders, Zogby Poll Finds




Today's Headlines

Thursday, May 27, 2010


Majority of Americans Believe Future of Don't Ask, Don't Tell Should be Left Up to Military Commanders, Zogby Poll Finds
(CNSNews.com)
– Fifty-nine (59) percent of Americans think military leaders, rather than Congress, should be making the decision about the military policy on homosexuality, according to a poll released Tuesday by the Family Research Center...

Senate Leader Reid: Some Republicans Call Unemployed Americans 'Bums' and 'Hobos'
(CNSNews.com) -
As the unemployment rate in the United States approaches 10 percent, Senate Majority Leader Harry Reid (D-Nev.) said that some "on the Republican side" have called out-of-work Americans "bums" and "hobos." He also said the unemployed are people who legitimately "cannot find work for long periods of time," and he disagreed with those who suggest that unemployment is a "never-ending issue."...

'Synthetic' Cell Research Isn't Frankenstein Science, but Raises Troubling Questions, Analysts Say
(CNSNews.com)
- The recent report that scientists have created a "synthetic cell" for the first time has raised several questions about the societal and ethical implications of such technology...

Biden: $787 Billion Stimulus Bill Created 'New Ideas on How to Spend Government Money Wisely'
(CNSNews.com)
– Heading up a Middle Class Task Force roundtable discussion on Wednesday, Vice President Joe Biden said that one of the benefits of the $787 billion stimulus package signed into law in February is that it has generated new ideas for dealing with economic problems, including unemployment...

Obama's July 2011 Draw-Down Date for Afghanistan Sends Mixed Messages, Former Afghan Presidential Candidate Says
Washington (CNSNews.com)
- Dr. Abdullah Abdullah, a candidate in the 2009 Afghan presidential election, said the July 2011 date set by President Barack Obama for U.S. troops to draw-down from Afghanistan is problematic because it creates a perception of mixed messages about U.S. commitment to the country...

Brennan Names Al Qaeda and Affiliates as the Enemy, Silent on Hezbollah, Others
(CNSNews.com)
– President Obama's counter terrorism advisor framed America's enemy Wednesday as "al-Qaeda and its terrorist affiliates," but said nothing about anti-U.S. Islamists not affiliated to the network led by Osama bin Laden...


CNSNEWS.COM VIDEO

Dave Matthews: 'Too Bad If We Have To Pay a Little Extra Money for Gasoline'
Grammy award-winning musician Dave Matthews said it's "too bad if we have to pay a little extra money for gasoline" and coal because that's what "we have to do" to protect the environment.


OTHER CNSNEWS.COM HEADLINES

Suspected Terror Mastermind Free to Rail Against India and 'Blasphemy'
Oklahoma Governor Vetoes Abortion Bill on Insurance
Mortgage Rates Sink to Lowest This Year
Tight Pants Ban Takes Effect in Indonesia's Aceh

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COMMENTARY

Minimum Wage Cruelty: An Update
By Walter E. Williams
It's breathtakingly stupid to think of minimum wages as an anti-poverty tool. If it were, poverty in places such as Haiti, Ethiopia and Bangladesh could be instantly eliminated simply by proposing that these country's legislators mandate a higher minimum wage. I'm wondering whether the Obama administration has proposed a $7.25 minimum wage as part of the cure to Haiti's poverty...


 


Fwd: Eric Cantor (R-VA) On Missile Defense



  

 

Rep. Eric Cantor (R-VA) On Missile Defense

Representative Eric Cantor presented a lecture at The Heritage Foundation on the importance of a strong national defense for America. An excerpt of his remarks on missile defense:

"Most troubling is that this is happening as America's military defenses are being downgraded. Nowhere is the erosion of peace through strength more evident than in nuclear and missile defense policy."
 


Missile Defense News

Missile Defense Agency and Skeptics Clash Over SM-3
 
Sen. Jim DeMint Criticizes START
 
Russia Agrees to Iran Sanctions
 
Get the FAQs on Missile Defense
 

"Missile defense is modern technology's most game-changing deterrent to a potentially devastating attack. By abandoning the Third Site in Europe to placate Russia, all we have done is push back the date when we can credibly deter Iran. Meanwhile, our nuclear weapons arsenal is aging and desperately needs to be replenished, but the Administration and congressional Democrats have cut off funds to do it. "

"The Administration hails the renewal of the START treaty as a major accomplishment, but what does it really accomplish? As we rein in our nukes, Iran and others will try to increase theirs. Then the White House promises that the U.S. won't respond to any biological or conventional attack with nuclear weapons."

"How does taking the threat of massive retaliation off the table make us safer? It's akin to responding to a crime wave by announcing that you are pulling police officers off the street."

Read Congressman Cantor's full remarks here


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Fwd: Morning Bell: This Congress Has No Shame


Morning Bell
05/27/2010

This Congress Has No Shame

On February 4, 2010, pushing for passage of her pay-as-you-go (PAYGO) legislation, House Speaker Nancy Pelosi (D-CA) said on the House floor: "When I became Speaker of the House, the very first day we passed legislation that made PAYGO the rule of the House. Today we will make it the law of the land. ... So the time is long overdue for this to be taken for granted. The federal government will pay as it goes." That was the promise. But here is the reality: in the three years that Speaker Pelosi has enforced her PAYGO rule, the House has violated it by nearly $1 trillion.

And now with the U.S. Debt Clock officially passing the $13 trillion milestone Wednesday, the House is set to violate their own PAYGO law yet again, this time to the tune of around $150 billion. The legislation clocks-in at almost one-fifth the size of President Barack Obama's original $862 billion failed economic stimulus, and the leftist majority in Congress has titled it "The American Jobs and Closing Tax Loopholes Act." And it is a tax-hiking, spending-exploding, job-killing, deficit-hiking wonder.

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