Suppose someone — say, the president of the United States — proposed the following: We are drowning in debt. More than $14 trillion right now. I’ve got a great idea for deficit reduction. It will yield savings of $230 billion over the next 10 years: We increase spending by $540 billion while we increase taxes by $770 billion.
He’d be laughed out of town. And yet, this is precisely what the Democrats are claiming as a virtue of Obamacare. During the debate over Republican attempts to repeal it, one of the Democrats’ major talking points has been that Obamacare reduces the deficit — and therefore its repeal raises it — by $230 billion. Why, the Congressional Budget Office says exactly that.
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Very true, and very convincing. Until you realize where that number comes from. CBO director Douglas Elmendorf explains in his “preliminary analysis of H.R. 2” (the Republican health-care repeal): “CBO anticipates that enacting H.R. 2 would probably yield, for the 2012-2021 period, a reduction in revenues in the neighborhood of $770 billion and a reduction in outlays in the vicinity of $540 billion.”
As National Affairs editor Yuval Levin pointed out when mining this remarkable nugget, this is a hell of a way to do deficit reduction: a radical increase in spending, topped by an even more radical increase in new taxes.
Of course, the very numbers that yield this $230 billion “deficit reduction” are phony to begin with. The CBO is required to accept every assumption, promise (of future spending cuts, for example), and chronological gimmick that Congress gives it. All the CBO then does is perform the calculation and spit out the result.
In fact, the whole Obamacare bill was gamed to produce a favorable CBO number. Most glaringly, the new entitlement it creates — government-subsidized health insurance for 32 million Americans — doesn’t kick in until 2014. That was deliberately designed so any projection for this decade would only cover six years of expenditures — while that same ten-year projection would capture ten years of revenue. With ten years of money inflow versus six years of outflow, the result is a positive — i.e., deficit-reducing — number. Surprise.
If you think that’s audacious, consider this: Obamacare does not create just one new entitlement (health insurance for everyone); it actually creates a second — long-term-care insurance. With an aging population, and with long-term care becoming extraordinarily expensive, this promises to be the biggest budget buster in the history of the welfare state.
And yet, in the CBO calculation, this new entitlement to long-term care reduces the deficit over the next ten years. By $70 billion, no less. How is this possible? By collecting premiums now, and paying out no benefits for the first ten years. Presto: a (temporary) surplus. As former CBO director Douglas Holtz-Eakin and scholars Joseph Antos and James Capretta note, “Only in Washington could the creation of a reckless entitlement program be used as [an] ‘offset’ to grease the way for another entitlement.” I would note additionally that only in Washington could such a neat little swindle be titled the “CLASS Act” (the Community Living Assistance Services and Supports Act).
That a health-care reform law of such enormous size and consequence, revolutionizing one-sixth of the U.S. economy, could be sold on such flimflammery is astonishing, even by Washington standards. What should Republicans do?
Make the case. Explain the phony numbers, boring as the exercise may be. Better still, hold hearings and let the CBO director, whose integrity is beyond reproach, explain the numbers himself.
To be sure, the effect on the deficit is not the only criterion by which to judge Obamacare. But the tossing around of such clearly misleading bumper-sticker numbers calls into question the trustworthiness of other happy claims about Obamacare. Such as the repeated promise that everyone who likes his current health insurance will be able to keep it. Sure, but only if your employer continues to offer it. In fact, millions of workers will find themselves adrift because their employers will have every incentive to dump them onto the public rolls.
This does not absolve the Republicans from producing a health-care replacement. They will and should be judged by how well their alternative addresses the needs of the uninsured and the anxieties of the currently insured. But amending an insanely complicated, contradictory, incoherent, and arbitrary 2,000-page bill that will generate tens of thousands of pages of regulations is a complete nonstarter. Everything begins with repeal.
This is not news, Mr. K, Paul Ryan has been pointing out these exact issues this for over a year. I do agree, the Repubs need to keep hammering home the details of this swindle until even the media can't ignore it anymore.
The Bernie Maydorfs in Congress and the Obama Administration who produced this health care reform fraud need to be exposed. Someone needs to run ads that explain this simple truth to the American public.
Very, very well said: when Krauthammer is at his best, he is very good indeed.
Now, if he would only recognize that extending current tax rates -- or even an outright tax cut -- isn't the same as a spending hike...
Assuming a static economy, a tax cut and a spending increase both increase the deficit, one by shrinking revenue, the other by raising expenditures.
But the money that is being taxed is ours to begin with, and the government's debt problems have NOTHING to do with too little taxation and EVERYTHING to do with too much spending.
For once, Dr. K has got it wrong. You don't repeal all of Ocare -- just the spending. You keep the $770 billion in taxes -- thereby, reducing the deficit by that amount. Or, better yet, raise taxes $14 trillion, thereby completely eliminating the deficit in one fell swoop. OR EVEN BETTER, raise them $28 trill, and then we can get the surplus back in tax rebates, which will cover the taxes we paid in order to pay off the deficit!
I'm amazed no one else has thought of this. I feel a Nobel prize, or a Democratic presidential nomination, coming on. Or at least an gig on the NY Times as a columnist on economics.
The secondary reason that the AHA must be repealed is that it is a sham built on lies and deceit. Anyone with the comprehension of a 5th grader understands the ruse, except those who engage in a “willing suspension of disbelief”.
The essential reason to repeal this abomination is to remind the federal government that they are accountable to the COTUS and the American people: that they are not free to force any legislation down our throats; that there are very strict limitations on their authority; and we will not tolerate the usurpation of authorities not delegated.
This administration must be taught that it has no Constitutional authority to ‘fundamentally transform the USA’; to redistribute wealth; to implement some misguided concept of ‘social justice’; to wantonly confiscate corporations to repay campaign contributions; or any other authority not specifically delineated in the COTUS.
We don’t elect a federal government to satisfy political party objectives; we elect a federal government to meet their Constitutionally defined responsibilities within their strictly limited Constitutional authorities-and to ‘preserve, protect, and defend the COTUS: only this and nothing more.
Many have been saying this same thing for months. Maybe, just maybe, it will get some traction in the MSM (wishful thinking). If we, the great unwashed were allowed to keep our books in the same manner as Congress does, what kind of mess would we be in? While I am not a CPA nor a policy wonk, what options are available to score legislation in a manner consistent with GAAP? Until baseline budgeting and some type of realistic scoring of bills is allowed, we will always end up in the ditch.
Krauthammer predicted very early that Obama/Reid/Pelosi would get their health care bill passed, in some damaging form, and as far as I recall did not waver from that prediction during the ups and downs of its journey to passage. I'd be curious to know what he thinks the chances are for repeal.
Krauthammer is the master of bringing light to mushrooms....even when they would rather roll in their preferred environment. Now, if he could get the "cost" definition right.
"Make the case. Explain the phony numbers, boring as the exercise may be. Better still, hold hearings and let the CBO director, whose integrity is beyond reproach, explain the numbers himself."
That is the very least that should be done. Dr. K also makes a good argument for getting rid of the CBO or at the very least reforming it so that it reflects reality. If everyone knows its numbers are bogus why do we even bother?
Very nicely written, Mr.
Krauthammer. I am so glad to see our media begin to refute the amending of ObamaCare publicly.
Unfortunately, I feel the general public's eyes begin to gloss over when figures are discussed in the depth required to prove the erroneous, and purposefully misleading, claims by Democrats. It is a debate that will be won or lost with "bumper sticker" slogans.
Currently, we still have the advantage with public opinion, but a lull in the vocal effort to keep the flaws and sinister intent of ObamaCare before the public can only embolden it's supporters.
I was unable to clearly infer your position on the "partial repeal" scenario, but personally believe that that would fall under the "amending it" proposals and also must be defeated soundly. Any attempted "fixes" will severely jeopardize the legal challenges that have begun, and would provide Democrats with cover and the ability to claim success with ObamaCare, rather than needing to defend it's flaws and passage.
Again, thank you for promoting a much need public counter to the Dems faulty arguments.
What a historic opportunity America had to see that all of our citizens had health care. We were sold out by Obama and all of his lies. Because of his lies and refusal to
televise the entire health care debate on C-SPAN as he promised the American people we ended up with a 2700 page piece of pork! No back room deals.......please no earmarks please......what happened to the public option/single payer? Because of Obama's lies like not posting it on the Internet for five days before signing it into law many on the left and right don't want it. You would think just this once Obama could have stopped pandering to special interest groups but no! We were cheated out of an opportunity that it is
unlikely we will ever see again! I wish the guilty parties would step forward and then step down...never going to happen. Again it is America that lost and someone had their pockets lined. Will this ever stop? Obama how much did you get paid to sell your soul? Let not us forget everyone that voted for this! Thank you Republicans for standing up for the poor people who need Americas help! Once again the Democrats have proven they have no interest in protecting the poor. As always let me know what you think I am at work External Link and yes please keep those jokes coming! Which reminds me this coming year, both Groundhog Day and the State of the Union Address occur on the same day. As the BBC has pointed out:"It is an ironic juxtaposition of events; one involves a meaningless ritual in which Americans look to a creature of little intelligence for prognostication, while the other involves a groundhog."
I thank Mr Krauthammer for reviewing the facts of financing ObamaCare. But, all of these facts were known more than a year ago when the Senate hammered out the details. Many NRO writers spilled much ink to get the facts out. While the bill was passed in a legal manner, its immorality is almost criminal. And as many conservatives have warned, the bill could wreck both the public and private finances of this nation.
The Progressives meme will be simple: this is a great bill. They can get away with it for the simple reason that full implementation will take the better part of this decade. However, some unintended consequences are already making waves. Layoffs at hospitals and clinics are beginning; many if not most Medicare supplimental plans are being closed; and employers of large firms are beginning to factor in the additional costs to labor.
But the real fight will be between the House and Senate GOP. The House will continue to offer repeals and replacement bills. The GOP Senate will temper things and say that only small amdendments and changes are needed. Of course, Reid will not allow any of the House's bills to move forward. But, it is imperative that the GOP remain united around repeal. This fight will get very ugly before it is over.
The CBO projects that the deficit numbers for the second decade of the Health reform plan will in fact improve from the first decade. They do not make official projections that far in the future, but that is indeed the projected trend. Conservatives will dismiss this because it does not fit their worldview. External Link
To show how bogus the Congressional assumptions as fed to the CBO are; I currently own and run my own business, and buy my own individual family health insurance policy. My income is right around 100k. CBO assumes that I will continue to make that amount and buy my own insurance after Obamacare fully kicks in in 2014. However, by that time, at current rate of increase, my premium will be $22,000/year for a policy with a $10,000 deductible. In other words, I will be spending $32,000 for insurance and out of pocket health care expenses.
OR, I can sell off the business, start drawing on investment income, and make sure my taxable adjusted gross income stays at or below 400% of poverty, or about $60k/year for two people. If I do that, I'm eligible for the subsidized health insurance exchange, and the government picks up all but $6,000 of my medical expenses. By the time I figure in the extra income tax I'm liable for if I keep working, I end up dollars ahead to quit. And if we can't repeal this obscenity, that's exactly what I intend to do.
Of course, the CBO's static scoring assumes that I'm so stupid, I'll keep working at a 100% plus marginal income tax rate.
I agree that the farcical deficit-reducing effects of this bill need to be hammered home as part of the effort to repeal this monstrosity, but by fighting the bill solely on these terms plays into the socialist-democrat's hands. The question cannot and should not be limited to whether this bill reduces the deficit or helps reduce health-care costs. The core issue is whether the federal government has the power to enact such broad legislation.
What scares me is that many newly elected representatives are arguing for repeal and REPLACE. No matter what the replacement purports to be, it still starts us down the same road, and would still be an abomination of federal power.
"The benefits phase in slowly as do the revenues. Krauthammer's six years of benefits/ten years of revenue canard would mean that, once fully phased in, the costs dramatically exceed the revenue. That isn't the case. The law's effect deficit-reduction effect increases over the last ten years.
Health care analysts have pointed this out over and over. Yet conservatives like Krauthammer keep repeating these debunked claims. Either Krauthammer lives so deep within the right's misinformation feedback loop that he has never heard any refutation of his false claims, or else he simply doesn't care what's true."
Read what the actual truth of the matter is here: External Link
Only by collapsing our republic and our economy can we save it.
It's not that we don't observe this phenomena, its that we fail to see the larger picture;
How can we possibly create a new world order until we disperse with this nasty old capitalism in the first place?
I'm certain any of you reasonable acolytes agree, this greed we exhibit as a nation, our unbridled squandering of natural resources, has caused us unending guilt which can only be assuaged by destroying everything we hold near and dear - I'm considering sponsoring the first annual "lemming run" off the nearest cliff in my county. We've had countless souls volunteered - although they don't seem to be the same liberal elitists who scream and wail, "Yes! this is precisely how you can help!"
Thank God we have been blessed with this man, this administration, and this mindset.
Is there any way that the new House could have Obamacare rescored with the realistic and actual numbers offered to the CBO? Seems to me that even a minor change to the law might require rescoring.
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