Don’t Bet On It, Sen. Baucus
When I read this statement from Chairman Max Baucus, I had to vehemently disagree:
The Finance Committee bill brings lot of momentum for regular order, the CBO report, saying we actually have a budget surplus and we are bending the cost curve in the right direction. I think all of those dynamics are going to encourage the Senate to want to pass a bill under regular order, not reconciliation, which is fraught with so many perils, more perils than trying to get 60 votes,” he said.
I wrote here that the CBO report wasn’t reliable:
The income that the bill expects from the excise tax on “insurance plans with relatively high premiums” will be negligible because that provision will be killed by the unions. There’s a better chance that I’ll get struck by lightning twice while holding a winning lottery ticket than there is of that excise tax making it into the final bill.
Comparatively speaking, the CBO’s report looks is more questionable today than it was when it was released. The unions are fighting mad about the excise tax on so-called Cadillac policies. Insurance companies are fighting mad, too, because the guaranteed group of new, healthy customers won’t materialize.
Let’s take a look at the taxes that CBO was counting heavily on. The excise tax on Cadillac policies was projected to generate $201,000,000,000. The tax on medical device manufacturers was projected to generate another $121,000,000,000. Next, let’s factor in the projected $404,000,000,000 of Medicare cuts. That’s $726,000,000,000 worth of revenues and cuts that CBO was counting on for deficit reductions that won’t happen.
CBO projected deficit reductions of $81,000,000,000 with the taxes and budget cuts.
First, let’s factor in Sen. Klobuchar’s bill that would eliminate the tax increase on medical device manufacturers. Next, let’s factor in the Finance Committee entered into the record that the excise tax would cause insurance companies to effectively eliminate Cadillac policies. That’s $322,000,000,000 of revenue disappeared, more than eliminating the mirage of $81,000,000,000 in deficit reductions. Coupling the $241,000,000,000 with $404,000,000,000 in Medicare means that the Baucus bill will INCREASE the deficit by $645,000,000,000 over 10 years.
That’s before factoring in information from this Kevin Hassett article:
The analysis by the Joint Committee on Taxation concluded that tax payments would indeed rise. And it found that the middle class would be stuck with the tab.
87 Percent
The report projected that the excise tax would raise about $52 billion in 2019. Of that, about $8.9 billion would come from taxpayers with incomes of less than $50,000; about $19.4 billion from taxpayers with incomes between $50,000 and $100,000; and about $17.4 billion from taxpayers with incomes between $100,000 and $200,000.
As damaging as that information is, this information is worse:
For all the rhetoric, the plan is quite easy to sketch, thanks in part to an analysis by the congressional Joint Committee on Taxation. So here goes: Under the health-care plan advanced by Senate Finance Committee Chairman Max Baucus, lower- and middle-class people who have insurance today are going to be taxed and squeezed in order to cover people who don’t.
In other words, this bill is almost as big of a target-rich environment as the other bills. I wrote here that Baucuscare was filled with targets, starting with the medicare cuts, the middle class tax increase on Cadillac plan health insurance and the unfunded mandates contained in the Medicaid expansion to the medical device manufacturers.
None of these things help President Obama’s credibility, especially what he said on the campaign trail last year:
“And if you’re a family making less than $250,000 a year, my plan won’t raise your taxes one penny, not your income taxes, not your payroll taxes, not your capital gains taxes, not any of your taxes.”
NOT ANY??? It’s true that that campaign promise outlived his other broken campaign promises, but that isn’t a high bar to clear. Starting almost immediately, the Democrats’ bills will come under attack. Then there’s the New Jersey and Virginia elections the first Tuesday in November. If Republicans sweep those elections, alot of Blue Dogs will be more than a little hesitant to vote for another massively unpopular bill.
Is there SOME momentum? That’s reasonable. Is there enough momentum to pass the type of bill that Speaker Pelosi and other progressives want. I’d bet against it.
Technorati Tags: Reform, Excise Tax, Tax Increases, Unfunded Mandates, Finance Committee, Max Baucus, Uninsured, CBO, Speaker Pelosi, Harry Reid, Joint Committee On Taxation, Democrats
Cross-posted at LetFreedomRingBlog