Archives: March, 2010

ObamaCare’s $28 Billion Medicaid Gimmick

In a recent oped, I explain that the Democrats’ health care legislation:

would set in motion political forces that would make additional spending inevitable. It would create new constituencies for government spending, hook existing constituencies on even more government spending, and promise implausible cuts in existing subsidies to constituencies that are highly organized and vocal. For example, the Obama plan assumes that Congress will cut future subsidies to private insurers, hospitals, doctors, home health agencies, and others who provide health care to the elderly. Yet those constituencies form a nearly unstoppable political force; Obama adviser Tom Daschle calls it the “patient-provider pincer movement.” They will come back to Congress, year after year, until Congress reinstates their subsidies.

Keith Hennessey provides an example that demonstrates how this is a deliberate strategy to hide the true cost of the legislation:

The reconciliation bill would therefore create a new Medicaid (not Medicare) “primary care doctor payment cliff,” beginning after 2014.  Just as Congress is under unbearable pressure now from doctors to prevent Medicare payments to doctors from being cut, the reconciliation bill would create exactly the same thing in Medicaid, beginning January 1, 2015.

If you assume Congress will not allow that newly created Medicaid funding cliff to bite beginning in 2015, they will spend an additional $29 B in the first decade, beginning in 2015.

This is an intentional gimmick designed to reduce by $29 B the scored cost of the reconciliation bill.

Does any serious student of Congress believe this legislation would cost only $1.2 trillion?  Or would reduce the deficit?

The Rule of Law vs. Calvinball

At National Review’s The Corner, Daniel Foster quotes Rep. Alcee Hastings (D-FL) on how Congress gets things done:

There ain’t no rules here, we’re trying to accomplish something…All this talk about rules…When the deal goes down…we make ‘em up as we go along.

A clip on YouTube provides part of the quote:

Hastings provides a helpful reminder that a constitution, rules of legislative procedure, and budgetary rules are not enough to ensure the rule of law.  Those who seek to amass power – and even those who seek to disperse it – will nevertheless be tempted to treat government like a game of Calvinball:

The debate over the Obama health plan is a case in point.  Press reports indicate that House Democrats will not “deem” the Obama health plan to have passed the House, but will instead hold an actual vote on it.  That’s good news.  But it hardly washes clean the sins of those who wrote and shepherded the Obama health plan through Congress.  As I document elsewhere, it took more than the usual amount of underhandedness to bring ObamaCare this far.

ObamaCare’s Actual Price Tag

My oped at FoxNews.com explains just how well Democrats have hidden the full cost of the Obama health plan:

To hear Democrats tell it, the CBO projects the legislation would cost a mere $940 billion over the next 10 years….the actual cost of the bill is nearly $3 trillion….

Yet this legislation would set in motion political forces that would make additional spending inevitable. It would create new constituencies for government spending, hook existing constituencies on even more government spending, and promise implausible cuts in existing subsidies to constituencies that are highly organized and vocal…

When Congress inevitably fails to implement the Obama plan’s spending cuts, and expands its subsidies to more and more people, the cost of this legislation will grow beyond $3 trillion.

The CBO did an admirable job of projecting the cost of this legislation as written. But the text of the legislation does not reflect the reality it would create.

Giving the Obama health plan the effect of law will not make those costs disappear.

ObamaCare Cost-Estimate Watch, Day #275

The sun has now set and risen again a total of 275 times since it first shone down on the Obama health plan.  Barring some unforseen snag, the House of Representatives will hold the final vote on that legislation around 6pm EDT today.

It will do so without ever laying eyes on a complete cost estimateBy design, the official Congressional Budget Office cost estimates are incomplete, omitting one category of costs that likely totals $1.5 trillion, and fraudulently concealing other costs.

The most incredible part is that the media have shown zero interest in exposing the largest category of hidden costs: the private-sector mandates, which likely total $1.5 trillion.  But perhaps the media will report on such costs in the future.  The surest way would be for Congress to require the CBO to include them in its official cost estimates.

Barring some unforseen snag, the House of Representatives will hold the final vote on that legislation around 6pm EDT today.  Barring some unforseen snag, the House of Representatives will hold the final vote on that legislation around 6pm EDT today.  Barring some unforseen snag, the House of Representatives will hold the final vote on that legislation around 6pm EDT today.

Former CBO Director: ObamaCare Would Add $562 Billion to Federal Deficits

In The New York Times, former Congressional Budget Office director Douglas Holtz-Eakin strips away the budget gimmicks that Democrats use to hide the cost of the Obama health plan:

Removing the unrealistic annual Medicare savings ($463 billion) and the stolen annual revenues from Social Security and long-term care insurance ($123 billion), and adding in the annual spending that so far is not accounted for ($114 billion) quickly generates additional deficits of $562 billion in the first 10 years. And the nation would be on the hook for two more entitlement programs rapidly expanding as far as the eye can see.

The bottom line is that Congress would spend a lot more; steal funds from education, Social Security and long-term care to cover the gap; and promise that future Congresses will make up for it by taxing more and spending less.

What could possibly go wrong? Best line: the CBO “is required to take written legislation at face value and not second-guess the plausibility of what it is handed. So fantasy in, fantasy out.” (The Congressional Budget Fantasy Office has a nice ring to it.)

Holtz-Eakin is currently president of the American Action Forum.

Yglesias Is Baffled

Progressive blogger Matthew Yglesias says he is baffled by my previous post here about whether urban sprawl is the result of individual choice or government regulation. Ben Adler, a Newsweek blogger, weighs in as well.

You can read my detailed response to Yglesias on the Antiplanner blog. In a nutshell, Yglesias claims that my argument is a “complicated counterfactual hypothetical about whether or not most people would still prefer to live in large single-family homes even in the absence of regulatory restrictions.” In fact, my argument is that the government regulation that he claims forces people to live in urban sprawl does not even exist.

As near as I can tell, Yglesias has lived his entire life in New York City, Massachusetts, and the DC area, all of which have had highly prescriptive land-use regulation during most of Yglesias’ life. So he might be excused for thinking everywhere else is just like that. In fact, most of the country has never had such regulation. Instead, what regulation exists, in the form of zoning, has been entirely responsive to the market.

As a libertarian, I have repeatedly challenged progressives like Yglesias to join me in supporting the abolition of all zoning codes and other forms of government land-use regulation. Instead of accepting my invitation, Yglesias and Adler would rather pretend I am a hypocrite for supporting such regulation.

Innovation: the Most Important Kind of Health Care Reform

In the Orange County Register, I explain how ObamaCare would stifle innovations in health insurance and medical delivery:

Economist Glen Whitman and physician Raymond Raad found that, when it comes to basic medical sciences, diagnostics (e.g., MRIs and CT scanners), and therapeutics (e.g., ACE inhibitors and statins), the United States often produces more medical innovations than all other nations.

America’s health insurance markets are not following suit, despite the ready availability of innovations that can improve the delivery of care, insure the “young invincibles,” and provide secure coverage for the sick. Bringing those innovations to consumers requires tearing down regulatory barriers to competition — the very barriers that the Obama plan would stack higher.

Such innovations include comparative-effectiveness research, coordinated care, insurance policies that persuade the “young invincibles” to purchase coverage, and health insurance that comes with a total-satisfaction guarantee.