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The tax-and-spend health care plan

October 9, 2009 | By Amanda Reinecker

Earlier this week, the Congressional Budget Office released its preliminary cost estimate for the health plan put forward by Senator Max Baucus (D-MT). The plan would cost $829 billion over ten years but still reduce the deficit by $81 billion.

The White House and liberals in Congress say the report confirms President Obama's promise that big-government reforms "will help bring our deficits under control in the long term."  The leftist media jumped on board, heralding the CBO's numbers as a "green light" for Obamacare.

Does it sound too good to be true? There's a good reason why: Heritage health policy expert Nina Owcharenko points out that the report is far from rosy.

  • Just a preliminary analysis. The CBO makes very clear that its analysis is based on Sen. Baucus' plain-English draft proposal. It is not based on final legislative language, so the cost estimates are subject to drastic change.
  • Real cost may be far higher. The $829 billion ten-year cost could easily underestimate the real burden. "Virtually all cost estimates of government programs underestimate the true cost," she argues. Just look at programs like Medicare, which came in about eight times more expensive than early projections.
  • 'Paid for' with new taxes. How do you turn $829 billion in spending into an $81 billion deficit reduction? In part by raising taxes. Individuals who choose not to purchase government-approved health coverage and employers who opt not to provide coverage to their employees will face heavy taxes. And new taxes on insurance companies will simply be passed on to consumers in the form of higher premiums.
  • 'Paid for' with unlikely cuts. The other way the Left would pay for this bill is by cutting Medicare. How likely are these cuts? Not very, Owcharenko says: "Traditionally, such cuts rarely come to fruition. Special interests lobby to stop any real cuts from occurring after the bill is passed."
  • Leaves millions uninsured. Despite spending $829 billion or more specifically to provide insurance to those without it, 26 million people will still lack coverage. Of those who do receive government coverage, approximately half of them will be dumped into Medicaid -- "a program sorely in need of reform itself."

"In short, the news from CBO is not good news for the American taxpayers," writes Heritage health policy analyst Dennis Smith.

The secret plan to pass Obamacare

The CBO's appealing estimates help smooth the way for the sneaky and complex legislative procedures the Left plans to use to pass Obamacare.

Heritage Senate Relations expert Brian Darling unveils the Left's "secret plan," warning that it would "railroad the bill through the Senate using a very unusual closed door procedure to craft the bill with no input from the American people."

Sen. Jim Bunning (R-KY) has offered one way to ensure the proposal sees the light of day. He's proposed legislation requiring a 72-hour waiting period and an official cost estimate before the Senate considers any legislation.

"If Obama's promises to the American people about ethics and transparency mean anything," writes Heritage's Conn Carroll, "then he should insist on a full CBO scoring of health care" prior to any decision. Anything else would be unfair to the American people, especially when such a decision so directly affects each of us.

Congress partly to blame for 'czars'

When faced with controversial issues, Congress often turns to The Heritage Foundation for advice. Heritage scholar Matthew Spalding, for example, testified this week before the Senate Judiciary Committee about the constitutionality of the President's "czars" and their implications for Congressional oversight.

In his testimony, which was covered widely in the media, Spalding says it's unclear whether the "czars" are simple advisers or whether they're de facto department heads. This lack of clarity, he argues, raises serious concerns about their role and whether they are protected from Congressional oversight by executive privilege.

The proliferation of "czars" stems in large part from Congress' own bad decisions, argues Spalding, director of Heritage's B. Kenneth Simon Center for American Studies:

President Obama's attempt to centralize control over administrative agencies is therefore nothing new, nor is it peculiar to one of the two major parties in America. It is a symptom of a much more serious sickness -- the fact that Congress has transferred a great deal of its authority to administrative agencies, and neglected to put anyone in charge of the whole structure. This entire framework is in tension with the original Constitution, but the Constitution nevertheless can give us some basic principles for thinking about the question of "czars" in the White House.

Spalding singles out last year's TARP bailout program as "a perfect example" of Congress giving away large amounts of authority to the executive branch:

Unbounded delegations allowed the Secretary of the Treasury to spend up to $700 billion at will to purchase "troubled" assets of any financial institution. Lo and behold, the United States is now a majority owner of General Motors and there is a Car Czar.

In an interview with the Washington Times, Spalding again points the finger at lawmakers, warning that Congress "needs to be more careful in the types of legislative discretion it gives, which in many cases gave rise to the creation of these czars in the first place."

Other Heritage work of note

  • It's a basic rule practiced by millions of Americans every day: don't spend money you don't have. Unfortunately, Congress doesn't seem to understand this simple formula, argues Heritage Vice President Stuart Butler. Congress has already pledged to spend $50 trillion it doesn't have on government programs like Social Security. That's $185,000 for every person in the country.

    And health care "reform" would only make things worse. President Obama has pledged to cover the cost of reform in part by extracting "savings" from Medicare. But Butler points out that "'paying for' new coverage partly with Medicare savings is like reducing your MasterCard payments so you can cover the first few minimum payments on your new Visa card and head off to Bloomies." It just doesn't work.
  • New York Governor David Patterson is disenfranchising military voters, writes Heritage legal scholar Hans von Spakovsky. The U.S. Election Assistance Commission recommends mailing absentee ballots to military voters at least 45 days before they're due, but Paterson has scheduled a special election to replace Rep. John McHugh (R-NY), who became Secretary of the Army, with just 35 days to spare. This is unacceptable, von Spakovsky writes. "Officials nationwide should be ensuring that military voters are given a realistic opportunity to vote -- not disenfranchising them for partisan advantage."
  • Since its 1979 revolution, Iran has "bedeviled American presidents and presented us with mostly bad choices," writes Heritage President Ed Feulner. Today, the problem is Iran's secret nuclear facilities and, as the situation usually goes with Iran, there are no easy answers. Iran is the leading sponsor of terrorism, which is why we absolutely cannot let them obtain nuclear weapons. Therefore, we must join with other countries to deter a nuclear Iran, levy tougher sanctions and prepare for military action as a last resort. We need a long-term and effective strategy, since "the Iran problem won't dissipate overnight."
  • General Stanley McChrystal, the American commander in Afghanistan, recently provoked controversy for publicly arguing for increasing our troop deployment in central Asia. "The American people are better off" thanks to his outspokenness, especially considering the high stakes, writes Heritage expert Lisa Curtis. "There are ways for senior officials to make their positions clear, without undermining the authority of the president. General McChrystal has done just that."

In other news

  • President Barack Obama has won the 2009 Nobel Peace Prize for giving the world "hope for a better future," as well as his efforts in foreign diplomacy, although critics argue he has yet to score a major foreign policy success. President Obama is the third sitting President to win the prestigious award, following Theodore Roosevelt and Woodrow Wilson.
  • The Census Bureau hired over 200 criminals to conduct door-to-door canvassing, the Government Accountability Office reports. Over the years, the Census Bureau has faced increased skepticism about the accuracy of its sampling, and this will only add fuel to the fire.
  • As the US Dollar faces increased global skepticism, Republican politicians highlight its decline as evidence of waning US power.

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Amanda Reinecker is a writer for MyHeritage.org—a website for members and supporters of The Heritage Foundation. Nathaniel Ward, the Editor of MyHeritage.org, contributed to this report.