Gallup: Americans worried about Obamacare

According to a new Gallup Poll, Americans aren't buying into the hype on Obamacare:

One week after the passage of historic new healthcare legislation, Americans remain worried about the bill's effect on costs -- both for the nation as a whole and for them personally. A majority of Americans say healthcare costs in the U.S. and the federal budget deficit will get worse as a result of the bill. Half of Americans believe that healthcare costs for themselves and their families will get worse.

I'm quite frankly surprised it is still doing this poorly in the polls. I expected all the victory celebrations to make Americans feel good about the health care medicine they've just been prescribed. This should put a little more steel into the backbone of the national Republicans--with the emphasis on "should."

HT: WorldwideStandard.com

Choosing your poison: Another benefit of Obamacare

Another practitioner of the dismal science spouting doom and gloom. Apparently Robert Samuelson, an economics writer for Newsweek and the Washington Post, hasn't gotten that memo about all the money Obamacare is going to save us and thinks it could end up pushing us over the financial cliff:

When historians recount the momentous events of recent weeks, they will note a curious coincidence. On March 15, Moody's Investors Service--the bond rating agency--published a paper warning that the exploding U.S. government debt could cause a downgrade of Treasury bonds. Just six days later, the House of Representatives passed President Obama's health care legislation costing $900 billion or so over a decade and worsening an already-bleak budget outlook.

...For two years, Obama and members of Congress have angrily blamed the shortsightedness and selfishness of bankers and rating agencies for causing the recent financial crisis. The president and his supporters, the historians will note, were equally shortsighted and self-centered -- though their quest was for political glory, not financial gain.

Let's be clear. A "budget crisis" is not some minor accounting exercise. It's a wrenching political, social and economic upheaval. Large deficits and rising debt -- the accumulation of past deficits -- spook investors, leading to higher interest rates on government loans. The higher rates expand the budget deficit and further unnerve investors. To reverse this calamitous cycle, the government has to cut spending deeply or raise taxes sharply. Lower spending and higher taxes in turn depress the economy and lead to higher unemployment. Not pretty.

Is the guy just not checking his box at the office? Read the rest here.

HT: Bluegrass Bulliten

More money saving ideas from Obamacare

Mark Steyn takes note of another provision hidden in Obamacare: a stiff tax on corporate drug plans for retirees. The last time we created an entitlement was the 2003 drug benefit that gave companies a 28 percent tax break for such plans. But with the new tax, much of that benefit goes away:

If you impose a sudden 35 percent tax on something, are you likely to get as much of it? Go on, take a wild guess. On the day President Obama signed Obamacare into law, Verizon sent an e-mail to all its employees warning that the company’s costs “will increase in the short term.” And in the medium term? Well, U.S. corporations that are able to do so will get out of their prescription-drug plans and toss their retirees onto the Medicare pile. So far just three companies -- Deere, Caterpillar, and Valero Energy -- have calculated that the loss of the deduction will add a combined $265 million to their costs. There are an additional 3,500 businesses presently claiming the break. The cost to taxpayers of that 28 percent benefit is about $665 per person. The cost to taxpayers of equivalent Medicare coverage is about $1,200 per person. So we’re roughly doubling the cost of covering an estimated 5 million retirees.

Just keep saying to yourself: "This is saving us money, This is saving us money..."

Will Obamacare lead to new, hidden taxes?

Ever since the passage of Obamacare, columnist Charles Krauthammer has been warning that the only way to fund it will be value added tax (VAT). A value added tax is basically a hidden sales tax: you wouldn't know it was there except by the fact that the price of a product is higher. Unlike a sales tax, it is not taken as a percentage of the purchase price the customer pays, but is taken previously, through a tax on the different steps of production that put it into your hands.

According to Krauthammer, Obama's deficit reduction commission, which will render its findings (as one would expect) after the November elections, is headed inexorably toward recommending a VAT. It is, he argues, a necessary aspect of a socialist system like the one Obama is foisting on the country:

We are now $8 trillion in debt. The Congressional Budget Office projects that another $12 trillion will be added over the next decade. Obamacare, when stripped of its budgetary gimmicks — the unfunded $200 billion-plus doctor fix, the double counting of Medicare cuts, the 10-6 sleight-of-hand (counting 10 years of revenue and only 6 years of outflows) — is at minimum a $2 trillion new entitlement.

With the passage of Obamacare, creating a vast new middle-class entitlement, a national sales tax of the kind near-universal in Europe is inevitable.

We are now $8 trillion in debt. The Congressional Budget Office projects that another $12 trillion will be added over the next decade. Obamacare, when stripped of its budgetary gimmicks — the unfunded $200 billion-plus doctor fix, the double counting of Medicare cuts, the 10-6 sleight-of-hand (counting 10 years of revenue and only 6 years of outflows) — is at minimum a $2 trillion new entitlement.

It will vastly increase the debt. But even if it were revenue-neutral, Obamacare pre-empts and appropriates for itself the best and easiest means of reducing the existing deficit. Obamacare's $500 billion of cuts in Medicare and $600 billion in tax hikes are no longer available for deficit reduction. They are siphoned off for the new entitlement of insuring the uninsured.

This is fiscally disastrous because, as President Obama himself explained last year in unveiling his grand transformational policies, our unsustainable fiscal path requires control of entitlement spending, the most ruinous of which is out-of-control health care costs.

...It radically expands Medicaid (adding 15 million new recipients/dependents) and shamelessly raids Medicare by spending on a new entitlement the $500 billion in cuts and the yield from the Medicare tax hikes.

Obama knows that the debt bomb is looming, that Moody's is warning that the Treasury's AAA rating is in jeopardy, that we are headed for a run on the dollar and/or hyperinflation if nothing is done.

Krauthammer observes that all European countries who have socialized health care have such a tax.

Is Krauthammer right? I guess we'll find out in November. After the debate is over.

Dog who attacked police cars sent to rehab

The therapeutic culture has now officially spilled over its banks.

Why the Cheney endorsement doesn't necessarily help Trey Grayson.

Trey Grayson has gotten the endorsement of Dick Cheney, an establishment Republican who is, of course, directly connected with the fiscally profligate Bush administration. Rand Paul has the endorsement of Sarah Palin.

In a year in which it is fashionable to be running against the establishment (particularly in a Republican primary), which do you think redounds more to the respective candidates' benefit?

The answer should be obvious.

Politicians say the darndest things: More on how much health care costs when it's free

It takes some nerve to claim that a massive new federal entitlement is going to save the taxpayers money, but anything goes in Washington when it comes to political rhetoric. Everyone is talking about how the CBO is claiming that the President's new health care plan is going to save $1.3 trillion. No joke.

But here is Fred Barnes explaining this whole process of claiming how thrifty you are going to be when you pass entitlement legislation and how taxpayers end up buried underneath the bills when the big federal program gets a good head of steam:

Take Medicare, enacted in 1965. The initial projection was it would cost $9 billion a year by 1990. The actual figure for 1990 turned out to be $67 billion. According to the Congressional Budget Office, the baseline for Medicare in 2010 is $521.3 billion, which includes $55.3 billion for the prescription drug benefit approved in 2003.

Or take one part of Medicare, the End Stage Renal Disease program (ESRD) that entitles every sufferer, regardless of age, access to dialysis. It was created in 1972 and its spending for 1974 was projected at $100 million. The real cost was $229 million. In 2007, ESRD cost $23.9 billion, nearly 6 percent of Medicare’s overall spending that year.

Or take Medicaid’s program of “disproportionate share hospital” payments. Passed on 1987, it was projected to cost less than $1 billion in 1992. Its actual cost in 1992: $17 billion. The program’s cost would still be ballooning if it hadn’t been brought under control by the Balanced Budget Act of 1997.

These faulty projections are not exceptions to the rule. They are the rule. The projection for the first year (1948) of the National Health Service in Britain was 260 pounds, far below the real cost of 359 pounds. The under-projections have continued to miss the actual demand for health services.

In Massachusetts, the universal coverage plan was predicted to cost $472 million in 2008, but the price tag turned out to be $628 million. Now Governor Deval Patrick wants to cap insurance rate increases to less than 5 percent annually, which would force insurance companies to cut payments to providers or quit the program. In 1994, Tennessee sought to control Medicaid spending with a new program called TennCare. By 2004, costs had more than tripled.

Read the rest here.

Former CBO head on the cost of the health care bill

There are those who really believe that we can have more available health care more cheaply without any diminution of quality. And the government is going to accomplish this. Yeah, right. And the evidence for this is that the Congressional Budget Office says so. Here is a former director of the CBO in the New York Times pointing out this magic is done:

Last Thursday, the Congressional Budget Office reported that health care reform legislation would, over the next 10 years, cost about $950 billion, but because it would raise some revenues and lower some costs, it would also lower federal deficits by $138 billion. In other words, a bill that would set up two new entitlement spending programs — health insurance subsidies and long-term health care benefits — would actually improve the nation’s bottom line.

Could this really be true? How can the budget office give a green light to a bill that commits the federal government to spending nearly $1 trillion more over the next 10 years?

The answer, unfortunately, is that the budget office 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.

In reality, if you strip out all the gimmicks and budgetary games and rework the calculus, a wholly different picture emerges: The health care reform legislation would raise, not lower, federal deficits, by $562 billion.

~Former CBO Director Douglas Holz-Eakins (and currently president of the American Action Forum).

HT: Carpe Diem

Did the health care bill violate the Constitution?

Where I come from the same bill, in the same form, must be passed by both chambers before it goes to the chief executive for his signature, at which point it becomes law. In my 20 years in my own state legislature, I've never seen anything different. And yet the President is signing today the health care legislation in a form in which it has not been passed by the Senate.

This is quite literally preposterous.

Here is the Constitutional language on the matter:

Every Bill which shall have passed the House of Representatives and the Senate, shall, before it become a Law, be presented to the President of the United States; If he approve he shall sign it, but if not he shall return it, with his Objections to that House in which it shall have originated, who shall enter the Objections at large on their Journal, and proceed to reconsider it. If after such Reconsideration two thirds of that House shall agree to pass the Bill, it shall be sent, together with the Objections, to the other House, by which it shall likewise be reconsidered, and if approved by two thirds of that House, it shall become a Law. But in all such Cases the Votes of both Houses shall be determined by Yeas and Nays, and the Names of the Persons voting for and against the Bill shall be entered on the Journal of each House respectively. If any Bill shall not be returned by the President within ten Days (Sundays excepted) after it shall have been presented to him, the Same shall be a Law, in like Manner as if he had signed it, unless the Congress by their Adjournment prevent its Return, in which Case it shall not be a Law.

The question is: if one chamber passes a piece of legislation in one form, and it is not approved in the same form by the other chamber, is it the same law? It only seems common sense that it is not, and to pass the law with only one chamber consenting is an abuse of the process. I can't imagine that this would pass a court challenge.

What hath Congress wrought?

The Wall Street Journal yesterday on the ramifications of the government's Health Care Heist:

This week's votes don't end our health-care debates. By making medical care a subsidiary of Washington, they guarantee such debates will never end. And by ramming the vote through Congress on a narrow partisan majority, and against so much popular opposition, Democrats have taken responsibility for what comes next—to insurance premiums, government spending, doctor shortages and the quality of care. They are now the rulers of American medicine.

Good point. A lot of people have been blathering on about how this was just like Medicare and Social Security, except, well, it's not. These pieces of legislation passed with bipartisan support, and therefore it was in the interest of both parties that they succeed--or be seen as succeeding. Not so Obamacare. It is no in the political interest of one of the two major parties that it be seen as a failure and no danger that it will be seen as responsible for it. This can't bode well for the legislation.

While the subsidies don't start until 2014, many of the new taxes and insurance mandates will take effect within six months. The first result will be turmoil in the insurance industry, as small insurers in particular find it impossible to make money under the new rules. A wave of consolidation is likely, and so are higher premiums as insurers absorb the cost of new benefits and the mandate to take all comers.

So there goes affordability. And there there is the matter of Bart Stupak:

We have never understood why pro-lifers consider abortion funding more morally significant than the rationing of care for cancer patients or at the end of life that will inevitably result from this bill. But in any case Democratic pro-lifers sold themselves for a song, as they usually do.

And most people think the health care industry didn't want this. If that is so, it is hard to figure out why they helped bring it about:

We also can't mark this day without noting that it couldn't have happened without the complicity of America's biggest health-care lobbies, including Big Pharma, the American Medical Association, the American Hospital Association, the Federation of American Hospitals, the Business Roundtable and such individual companies as Wal-Mart. They hope to get more customers, or to reduce their own costs, but in the end they have merely made themselves more vulnerable to the gilded clutches of the political class.

The crocodile will eat them too--even if they get eaten last. So now it we'll have to see what happens at the polls:

While the passage of ObamaCare marks a liberal triumph, its impact will play out over many years. We fought this bill so vigorously because we have studied government health care in other countries, and the results include much higher taxes, slower economic growth and worse medical care. As for the politics, the first verdict arrives in November.

Read the rest here.

Is a trade imbalance with China the real problem?

Here is Don Boudreaux responds to Jeremy Warner on suggestions that we should place a "surcharge" on Chinese imports (As Mark Perry points out, what this really amounts to is not a surcharge on imports, but a tax on consumers):

You write as if the alleged trade imbalances between the U.S. and China are real. They are not. The Chinese sell Americans goods; we pay with dollars; the Chinese then use many of these dollars to buy IOUs issued by Uncle Sam. Although the result is a measured U.S. current-account deficit with China, there’s no more any economically meaningful “imbalance” in such a result than there would be if, say, Texans lent a lot more of their dollars to Uncle Sam.

Talk of imbalances in trade diverts attention from the real problem: Uncle Sam’s gargantuan debt. That fast-accumulating debt is a huge problem. It is caused, though, not by trade with China but, rather, by Washington’s lack of fiscal discipline. [emphasis mine]

But that won't stop the politicians from blaming it all on China, rather than themselves.

HT: Carpe Diem

The coming Medicare catastrophe: Further evidence of what happens when health care is "free"

A health care problem in its own backyard the Obama administration could have addressed but didn't because it was too busy trying to take over the health care industry:

HT: Mercatus Center