House Passes Fraudulent Health Care Bill 219-212

The Democrats have passed the Senate version of healthcare reform, and now turn to the reconciliation package of fixes. I think this means that reform will be enacted this year, though the road ahead still has some obstacles. But it's time to consider what happens after enactment.

Whatever its merits as a reform of the healthcare system, in financial terms ObamaCare is an act of shameless fraud. The act is said to be $940 bill (meaning over ten years) and to lower deficits by $138 billion. Douglas Holtz-Eakin, former director of the Congressional Budget Office, lays out the largest and most obvious bits of deceit in those numbers in the New York Times.

First, the act relies on $463 billion in cuts from Medicare. This includes the so-called "Doctor's fix" which is supposed to cut fees to doctors and has been in the law for a long time. But Congress rescinds the cuts every year. Are they suddenly going to stop doing that? And if they do, what will be the effect on Medicare recipients? Perhaps there is really enough waste, fraud, and abuse in the Medicare system to cover the rest of the cut, but if so, why are we only now acting to fix that? Moreover, Medicare is already insolvent over the near future. This is money that cannot now be used to try to fix the Medicare system. The CBO estimates that this healthcare reform will push Medicare into the red.

Second, the bill counts on $53 billion in higher Social Security taxes, anticipated because some employers will pay higher wages in lieu of healthcare benefits. Assuming that's what employers do, won't that money be needed for future Social Security benefits? In case you hadn't noticed, Social Security just went into the red.

Third, there are a considerable number of costs that aren't counted in the bill at all. $70 billion is raised in premiums in the first ten years, for benefits that would begin later. Another $114 billion in additional spending is required by the bill but not included in the tally. Holtz-Eakin estimates $562 billion added to the deficits over ten years.

None of this is new, of course. Congress has been spending money it didn't have, decades in advance, for most of the last century. But so far, no one paid a lot of attention. How many Americans knew, up until now, about the Doctor's fix?

The problem is, now a lot more Americans do know. A year of debate has brought a lot of these things out into harsh daylight. There is also the bigger monster in the room, about which a lot of Americans are suddenly aware.

As documented in another recent budget office analysis, the federal deficit is already expected to exceed at least $700 billion every year over the next decade, doubling the national debt to more than $20 trillion. By 2020, the federal deficit — the amount the government must borrow to meet its expenses — is projected to be $1.2 trillion, $900 billion of which represents interest on previous debt.

Bear in mind: that is what the Obama Administration is planning on. In ten years time, the interest on the national debt will be almost as large as Democrats say the healthcare bill will cost.

The more immediate problem the Democrats face is this: in the rather near future they will have to begin making Draconian cuts in Medicare (for example) or have the bill exposed for the fraud it is. Dick Morris argues, plausibly, that the Democrats are doomed either way.

Originally, doctor reimbursement rates were scheduled to drop on March 1 of this year, but Congress postponed it until the fall. Now the Democrats in Congress will face not only cuts in doctors' fees but in all forms of Medicare reimbursement -- the so-called "market basket" of cuts programmed into Obamacare…

Either poison -- the cuts or the deficit -- will be enough to eradicate an entire generation of House and Senate Democrats.

I am not sure that this isn't their plan. Pass this one last gargantuan entitlement, and then go safely to sleep in the minority; leave Republicans to forage in the bleak financial landscape.

Update: just in case you wonder whether ObamaCare will remain unpopular over the next year, consider this:

President Obama is set to begin an immediate public relations blitz aimed at turning around Americans' opinion of the health-care bill.

I think that supports my speculation that the Democrats want to lose in November.  Every time the President has given a speech on the subject, he, his party, and his policy, sink in the polls. 

Comments

[Sam]

This is all assuming (1) there IS a federal government to spend all this and enforce this law, and (2) that there are enough cops and IRS agents to force people to do all these things.

This seems to make the assumption that it will be impossible for Congress to revoke any of this, which may be a valid assumption, since the GOP has never had the courage, votes or brains to eliminate a SINGLE program implemented by the Dems, including such stinkers as the Department of Education, Department of Energy, and National Endowment for the Arts.

But it also assumes that there won't be more states to join Idaho in passing laws nullifying this fraud; yes, 44 state Attorney Generals apparently have a lawsuit all ready to go against the feds, but do they have the troops to protect the process servers?

Which brings me back to #1: the Federal Government seems to have effectively voted itself out of existence by making the Constitution null and void. The Constitution, after all, is a contract, and if one party is dealing in bad faith and not living up to the terms of the Contract, then the contract cannot remain in force. So Congress HAS no legitimate power to try and force the States (or the people of the States) to do anything - either with Health Care or anything else. And when they can't bribe people (no money, right? except if they borrow it - and what did this just do to the credit rating?) and can't threaten to shoot or imprison people (after all, soldiers, cops, and jailers need to be paid) to make them do what they say, then they aren't any different than your local street corner preacher urging people to do the right thing. Funny, but all these guys with guns demand that someone pay them for their time and effort.

[Chris]

Buy health care insurance or be fined ? Hmmmn.. So the Amish and Menonite farmers next door to me in Lancaster County, Pennsylvania are going to have IRS agents hiding in the corn fields to arrest them when they don't buy insurance ??!!

[sourpuss]

Nope, not the Amish. They've been excluded, based on the same "religious conscience" objection that allows them to opt out of Social Security and Medicare. True fact.

[Hal (GT)]

Best thing to do know on an individual basis I think is to get out of debt asap and perhaps then out of dodge if we can't reverse this thing.

[Miranda Flint]

Or we could all become Amish, apparently!

[Guard]

And these things will continue to pass and there is not a thing any of us can do to stop it...

[Stan Gibilisco]

Guard,eventually, no one will be able to buy or sell anything without "the mark." I take the Book of Revelations seriously if not literally. But how do you know that destiny does not contain a far different scenario than the continued expansion of left-wing government in America? Even if you are right about our powerlessness over fate, how to you claim to have a handle on the details?

Maybe in fact the Republicans will gain such a majority that they can emasculate, if not repeal, this bill -- and then what? I have no clue. I suspect a Republican takeover of the U.S. House after the upcoming election. As for whether or not I have any control, I'll plod along to the polls and vote anyway.

Ken, you suggest, "I am not sure that this isn't their plan. Pass this one last gargantuan entitlement, and then go safely to sleep in the minority; leave Republicans to forage in the bleak financial landscape." Well, if that's their mentality, they have a collective sort of manic-depression, I guess. Manic now, depressed later. If they really believe they'll lose the majority forever (which I doubt would happen; maybe a repeat of 1994 and a comeback 15 or 20 years later), how do they know that the Republicans might forage around successfully enough to bring about another age of economic health, as Reagan did after he beat Carter?

I suspect a Republican takeover of the house in November 2010, the senate in November 2012, and the Presidency in November 2012. By this latter date, I imagine that the commercial real estate bust will have taken place or be well underway, and although some Dems will try to blame Bush II for that, most of the American people will target the remaining Dems, and the President, with their wrath.

Too bad we can't get a strong enough Libertarian voting base to give the United States a three-party system.

[Stan Gibilisco]

Miranda, I love your suggestion about becoming Amish. Truly, you have struck a stroke of genius. I might well actually do something like that -- become a Christian Scientist, maybe. Survival of the cynics!

[Guard]

I never claimed to have a "hold on the details" Stan...but, I do see the "Signs." and they are not good. See, this goes so beyond politics...it is our society that is NOT willing to change and our politics are a reflection of the greedy and immoral society we live in. I see it everyday as you do: no discipline instilled anymore...no living with in one's means. You all want to point fingers at some bogeyman in DC, instead you fail to see underlying currents that led, yes led to their power on both sides of the isle. The business people of today and their greed is dispicable to say the least and we as consumers feed this dispicable greed. You all continue to miss the life boat and think that you are going to save a sinking Titanic. I talk to a lot of people about this and they just don't get it and as was prophesized, they probably never will...this blog and others are evidence of that.