An Opening for Republicans? Obama’s “Deficit Neutral” Health Care Reform Will Cost Twice As Much, Just As We Figured It Would

Back in 2009, when President Obama took advantage of Democrat control of the House and Senate and pushed through so-called healthcare reform, he assured the American people that the plan would be paid for and wouldn’t add to future deficits.  There were many people, especially those like myself who are familiar with health care costs and how health insurance works, were quite skeptical.  The plan did nothing to address rising healthcare costs.  Instead, it was nothing more than the opportunity Democrats had been waiting for get health insurers to change their rules for coverage and to get government-subsidized health insurance in the hands of Americans.  But to quote a popular line from “Thomas and Friends,” one of my toddler’s favorite shows, “then there was trouble.”

First, the administration can’t even get their act together regarding the mandate in the plan.  The White House said it isn’t a tax, but someone from within the administration testified on Capital Hill that it is.  Then, the CLASS act, which was a plan to tackle long term care, came under fire.  And for good reason–one of the accounting gimmicks used to make CLASS work was to make people pay premiums for the plan for years before the plan actually came into play.  Congress voted to remove it from Obamacare.

But the ultimate slight-of-hand used in getting the bill passed was to convince people the reform act would not add to future deficits, and in turn, to the national debt.  President Obama assured us that the plan would cost about $900 billion, and that the cost would be offset by money taken from Medicare savings and from revenue grabbed from insurers, medical device makers, etc.  Like Theo Huxtable in the episode of “The Cosby Show” when Bill tried to tell him it’s expensive to live on his own, President Obama deflected criticism by saying “noooo problem!”  What wasn’t apparent to average americans is that the cost projection used included years during which the plan would barely be implemented.

Now, the CBO has released projections on how much Obamacare will actually cost over the next 10 years, when fully in place.  The cost?  $1.76 trillion over the next decade.  And that number is expected to increase to $2 trillion next year.

On the one hand, the CBO also predicts that the government will increase revenue from taxes and penalties over those years so that *may* offset the additional costs.  But most people realize that while cost estimates typically run lower than actual, revenue estimates also tend to run lower, because as new taxes kick in, people tend to change their habits, which leads to lower revenues taken in by the government.  People will find ways to avoid paying additional taxes.

What we have here is another government implented program that is going to run over budget and need bailing out at some point in the future.  Maybe around that time people will finally realize that government can’t be trusted to be good stewards of our money.

Related link:
Obamacare to cost $1.76 trillion over 10 years

Dems Say They Just Want to Go Back to pre-Bush Tax Rates. Don’t Be Fooled.

For years now, Democrats have been lobbying to have the current tax rates pushed back up to where they were before Bush II cut the rates.  The top marginal rate, now 35%, would go up to 39.6% for individuals earning more than $200,000 per year and families earning more than $250,000 per year.  Claims such as the rich need to pay their “fair share” (a term that is an undefined value, but effective in getting folks riled up), or that the rich have benefitted for long enough and need to pay up, are always used to try and bolster the argument.  I support the idea of raising the marginal rates for EVERYONE to where they were before the Bush tax rate cuts, and have said so many times.  But I discovered that, under further review, Democrats are attempting to go even further in their quest to turn high income earners into bigger cash cows for the government.

What most people don’t realize–and Dems aren’t going to hip folks to it–is that once the healthcare reform plan (“Obamacare”) goes into full effect, the tax rates for $200k/$250k earners will be more than they were pre-Bush.  How?  I’m glad you asked.

Baked into Obamacare are a number of tax rate increases designed to raise revenue to pay for the bill.  The number of taxes built in varies depending on which source you use, but there were two that jumped out at me.

First, there is a new 3.8% surtax on investment income for the over $200k/$250k crowd.  Currently, the tax rate on capital gains (profit made from an investment) and dividends (cash received for owning stock in a company) is at 15%.  The new surtax will push that rate up to 18.3%.  When the argument is made to go back up to the pre-Bush rate, which was 20%, there is no mention of the surtax.  If Democrats have their way, the rate for capital gains and dividends would be at least 23.5%.

Next, there is the 0.9% Medicare surtax, also for the $200k/$250k people.  Currently, 1.45% of everyone’s income is deducted to pay for Medicare.  Unlike Social Security, there is no cap on taxable income, so everything the person makes in income is taxed at the 1.45% rate.  However, with the new surtax, income over the $200k/$250k threshold will see a 0.9% tax increase, making the new tax rate 2.35%.  Instead of raising the top rate 4.6% to get it back to pre-Bush levels, the increase would actually be 5.5%.

A different discussion for another day is the laundry list of other taxes built in, such as the tanning tax, the medical device tax, the health insurers tax, ect.  The bottom line is, these taxes make the “we just want to go back to pre-Bush rates” argument nothing more than political foolery.  And, as usual, most of the masses fall for it.

Related articles

• Stephen Moore: A 62% Top Tax Rate? (online.wsj.com)
• Democrat’s Push for 63% Tax Rate!! (uncommonsensecal.com)
• Dem plan for millionaire surtax intended to soften GOP (thehill.com)
• Coming Soon: 62% Income Tax Rate (southpacgroup.wordpress.com)
• Let’s not kid ourselves about the Medicare crisis (cbsnews.com)

Palin’s Map or when crosshairs aren’t really crosshairs

Interesting article on Townhall from Neal Boortz.  Whether or not you like him as a host, he actually makes an interesting comparison.  While members in the Palin camp say that the marks on her infamous Facebook map were not crosshairs (and Boortz backs this up), there are other maps that do depict bullseyes with politicians as targets–and they were created by Democrats:

OK … just what map are we talking about here? Several months ago during the heat of the 2008 midterm elections Sarah Palin put Giffords on her “target list” of Democrats in vulnerable districts who voted for ObamaCare. The list included a map featuring what the media and those on the left are calling telescopic sight images placed over vulnerable districts. Somehow, the liberals have construed that to mean that Sarah Palin literally wanted to “target” Giffords to be shot.

Very interesting start to the Republican takeover

The fun has begun. The 112th Congress has been sworn in, signaling the start of what folks on the right hope is a successful effort to take over DC in 2012. But things are getting off to a very wacky start.
First, the decision was made to hold a vote to repeal the healthcare reform bill, aka “Obamacare.” The chance of this going through is somewhere between zero and minus ten percent. But as is the case when the new team takes power, they have to make an immediate splash, and this is it.
But, wait! Hold the phone!
Shortly after the votes were held, its discovered that 2 members who participated in votes had not been sworn in with the rest of the House members, rendering their votes invalid. To their credit, House Dems didn’t use the opportunuty to call for a re-vote. But who forgets to come into the chamber for the swear-in? (Both members were out in the lobby with constituents and said the oath, but rules say they basically have to be in the chamber.)
On top of all that, after changing the rules for how bills are debated and amended, they then bypassed their own new rules.
This is going to be interesting to watch.