Anatomy of a fraud on the public--Obamacare
Image by Getty Images via @daylifeSuppose someone - say, the president of 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 a savings of $230 billion over the next 10 years: We increase spending by $540 billion while we increase taxes by $770 billion.There is more.
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 repeal raises it - by $230 billion. Why, the Congressional Budget Office says exactly that.
Very true. And very convincing. Until you realize where that number comes from. Explains CBO Director Douglas Elmendorf 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 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 10-year projection would capture 10 years of revenue. With 10 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 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 entitlement to long-term care reduces the deficit over the next 10 years. By $70 billion, no less. How is this possible? By collecting premiums now, and paying out no benefits for the first 10 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 '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" (for the Community Living Assistance Services and Supports Act).
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Between Krauthammer and Paul Ryan we are finally seeing the scam the Democrats have put together to try to make rationed health care look affordable. It is not affordable and it will drive up the cost of health care by a minimum of $770 billion over the 10 years because most of the taxes being levied are on the health care business and those who use it. Even that will not be enough for the ravenous monster. Those fees will have to go up more in the second 10 years to cover the shortfall that results from having to then fully fund the benefit in all 10 years.
As Ryan points out there are other accounting gimmicks and our right fraud in the numbers including double counting and so called reductions that will never happen. The more people learn about this mess the less they are going to like it.
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