Tag: unfunded mandate

Reid Health Bill Perpetuates the $1.5 Trillion Fraud

Senate Majority Leader Harry Reid (D-NV) has finally unveiled his massive 2,074-page health care bill.  The Congressional Budget Office reports that the insurance-expansion provisions would cost the feds $848 billion over 10 years.  To raise those funds, the bill would tax wages, medical devices, prescription drugs, sick people, health insurance premiums (twice), HSAs, FSAs, HRAs, and – why not? – cosmetic surgery.  The remainder would supposedly come from $491 billion of Medicare cuts, even though Medicare’s chief actuary says such cuts are “unrealistic” and “doubtful.”  But don’t worry.  Somehow, this thing’s gonna reduce the deficit.

Of course, that $848 billion only accounts for part of the federal government’s share of the tab.  There is other new federal spending.  My read is that the CBO estimates $998 billion of total new federal spending – though I’ll be waiting for former CBO director Donald Marron to provide a more authoritative tally.

And then there are costs that Reid and his comrades have pushed off the federal budget.  For example, the $25 billion unfunded mandate that Reid would impose on states.  Total so far: just over $1 trillion.

But the biggest hidden cost is that of the private-sector mandates.  In both the Clinton health plan and the Massachusetts health plan, the private-sector mandates –- the legal requirements that individuals and employers purchase health insurance –- accounted for 60 percent of total costs.  That suggests that if the Reid bill’s cost to federal and state governments is $1 trillion, then the total cost is probably $2.5 trillion, and Harry Reid – like House Speaker Nancy Pelosi – is hiding $1.5 trillion of the cost of his bill.

Without a cost estimate of the private-sector mandates, Reid has not yet satisfied the request made by eight Democratic senators for a “complete CBO score” of the bill 72 hours prior to floor consideration.

Fortunately, by law, the CBO must eventually score the private-sector mandates.  When that happens, the CBO will reveal costs that the bills’ authors are trying to hide. When that happens, the CBO will present the new federal spending on page 1, new state spending maybe on page 10, and the cost of the private-sector mandates on page 20 or something.  Democrats will tout the figure on page 1.  But the bill’s total cost will the sum of those three figures -– a sum that will reveal the costs that the bill’s authors have been hiding.

The House passed its bill without a complete CBO score.  The Senate should not follow suit.

I’ve written previously about this massive fraud here, here, here, and here.

(Cross-posted at Politico’s Health Care Arena.)

Baucus Bill Would Cost More than $2 Trillion

Sen. Max Baucus’s (D-MT) health care overhaul would cost more than $2 trillion.  It would expand the deficit.  But he has carefully and methodically hidden those facts – so well that he has completely hoodwinked nearly all the major media.

The media are reporting that the Baucus bill would reduce the deficit by $81 billion over 10 years.  Wrong.

The Baucus bill assumes that Congress will allow the “sustainable growth rate” cuts in Medicare’s physician payments to occur beginning in 2012.  Yet Congress has routinely and repeatedly blocked those cuts, making Baucus’s assumption preposterous.  The CBO handled the issue delicately, but essentially said, “Sure, provided that the sun rises in the west in 2012, then yes, this bill would reduce the deficit.”

That means Baucus will come up at least $200 billion short on the revenue side, making his bill a budget-buster.

The media are reporting that the Baucus bill would cost just $829 billion over 10 years.  Wrong.

As Donald Marron observes, that number omits as much as $75 billion in new federal spending.  It also omits a $33 billion unfunded mandate on state governments.

But the worst part is that the Congressional Budget Office’s preliminary cost estimate omits the cost of the private sector mandates in the Baucus bill.  In Massachusetts, those costs accounted for 60 percent of the total cost of reform.  That suggests the actual cost of the Baucus bill – $829 billion plus $75 billion plus $33 billion, times 2.5 – is well over $2 trillion.

Yet the CBO score pretends those costs aren’t even there.  It’s like a mystery novel that’s missing the last 50 pages.  And the media aren’t even curious.

In the words of Brad DeLong, why, oh why, can’t we have a better press corps?

Cross-posted at Politico’s Health Care Arena.