Imagine that you have $500 in your left pocket. You shift it to your right pocket. Can you now buy $1,000 worth of merchandise at your favorite store?
Of course not!
#ad#Now, a politician tries the same experiment, only with 1 billion times as much money. Can he transfer $500 billion from one pocket to the other and then finance $1 trillion worth of goodies?
What’s the difference? He’s Barack Obama.
While creative accounting is nothing new in Washington, D.C., Obamacare’s books are cooked better than most. And for those who had hoped that the Obama administration would change Washington’s ways, details of the Democrats’ $500 billion accounting fraud must be particularly painful.
Health and Human Services secretary Kathleen Sebelius appeared at a March 3 congressional hearing on Obamacare. One member of the House Energy and Commerce Subcommittee on Health asked her how the administration could use a half-trillion dollars in Medicare cuts to finance this new entitlement (left pocket) while simultaneously husbanding those same funds for future Medicare beneficiaries (right pocket).
“Your law cuts $500 billion in Medicare,” Rep. John Shimkus (R., Ill.) reminded Sebelius. “Then you’re also using the same $500 billion to say you’re funding health care [reform]. Your own actuary says you can’t do both.”
“So,” the eight-term congressman continued, “are you using it [the $500 billion] to save Medicare, or are you using it to fund health-care reform? Which one?”
Secretary Sebelius confessed: “Both.”
“So, you’re double-counting,” Shimkus replied.
“We knew that they were double-counting Medicare savings since the bill was introduced,” Shimkus told me. “It took a year, but we finally got someone from the administration to agree that they were double-counting. It is sad that it has taken so long to get to the truth.”
Rep. Joe Barton (R., Texas) told the New York Post: “The more we dig into the new health-care law, the more we see how devious the Obama administration was in deceiving Congress and the public about the expense of it.”
Now that the Obama administration has admitted this wrongdoing — which I identified almost exactly a year ago — it faces several serious problems:
First, flames have engulfed Democrats’ claims that Obamacare could give 30 million uninsured people health coverage and reduce the deficit. So long as it magically turned $500 billion into $1 trillion, such hocus-pocus might have worked. With this lie exposed, the administration’s deceit and cynicism are laid bare before a watchful world, and its benefits-for-less-than-nothing formula is revealed as a legislative unicorn.
Second, where will the administration find $500 billion to return to Medicare’s leaky coffers? As Baby Boomers retire in swelling numbers, they increasingly will demand Medicare services. This $500 billion hole in Medicare’s balance sheet somehow must be plugged. Federal Reserve chairman Ben Bernanke’s printing press nears exhaustion. So, quantitatively easing out of this quandary is no option.
Third, the best way to uncook the books would be to repeal Obamacare and return this swiped money to where it belongs. The pro-repeal arguments pile up almost as high as the 1,040 HHS waivers that help the well-connected flee this fiasco. The fact that Obamacare relies on accounting that would trigger well-deserved fraud indictments on Wall Street is yet another reason why this stinking mess should be sealed in a 55-gallon drum and buried deep inside Yucca Mountain.
— New York commentator Deroy Murdock is a nationally syndicated columnist with the Scripps Howard News Service and a media fellow with the Hoover Institution on War, Revolution, and Peace at Stanford University.