Too Much For Too Little

TOO MUCH FOR TOO LITTLE
Congressional Budget Office Scoring Spells Trouble For Democrats' Government-Run Health Care Plan
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CBO: KENNEDY GOVERNMENT-RUN HEALTH CARE PLAN CREATES $1+ TRILLION DEFICIT AND LEAVES OVER 36 MILLION AMERICANS UNINSURED

CBO Concludes Kennedy Plan Increases Federal Deficit By $1 Trillion And CountingOver Next Decade. "[E]nacting the proposal would result in a net increase in federal budget deficits of about $1.0 trillion over the 2010-2019 period. ... It is important to note, however, that those figures do not represent a formal or complete cost estimate for the draft legislation ... Moreover, because expanded eligibility for the Medicaid program may be added at a later date, those figures are not likely to represent the impact that more comprehen sive proposals--which might include a significant expansion of Medicaid or other options for subsidizing coverage for those with income below 150 percent of the federal poverty level--would have both on the federal budget and on the extent of insurance coverage." (Douglas W. Elmendorf, Congressional Budget Office Director, Letter to Senator Edward M. Kennedy, 6/15/09)

CBO Left Out "Key Provisions" They Could Not Take Into Account. "There are several features of the proposal that CBO and the JCT staff have not yet reflected in their budget estimates. The most significant features of the proposal that have not yet been estimated would do the following ... Require insurers to offer dependent coverage for children of policyholders who are less than 27 years of age ... Delegate authority to a Medical Advisory Council to establish minimum requirements for covered health benefits and to determine the level of coverage that individuals would need to obtain in order to qualify as having insurance . .. Require insurers to maintain a minimum level of medical claims paid relative to premium revenues (otherwise known as a "medical loss ratio"), or to repay certain amounts to policyholders; the HHS Secretary would have the authority to set the minimum medical loss ratio." (Douglas W. Elmendorf, Congressional Budget Office Director, Letter to Senator Edward M. Kennedy, 6/15/09)

Democrats' Plan Fails To Insure 36 Million Americans. "The analysis says that the number of uninsured Americans, now estimated at around 50 million, would decrease to about 36 million once the bill was fully implemented." ("CBO: Senate Bill $1 Trillion Over 10 Years," The Associated Press, 6/15/09)

HOW WILL THEY PAY FOR IT?

OMB Director Peter Orszag Said Health Care Reform Must Be Deficit Neutral. Orszag: "Let's be very clear. We've always said health care reform has to be deficit neutral over a five- or 10-year window and much better than that over the long term ... So we are committed to making sure health care reform is self-financing and also brings down costs over time, both for families and for the federal government." ("Obama Budget Chief, Economy Almost Bottomed Out," The Associated Press, 5/17/09)

And House Speaker Nancy Pelosi Said Tax Increases Are On The Table. MSNBC's ED SCHULTZ: "You've mentioned being able to pay for it. Are you willing to raise taxes to pay for it?" SPEAKER PELOSI: "Everything is on the table. Everything." (MSNBC's "The Ed Show," 6/10/09)

WELCOME TO THE DEMOCRATS' "TABLE" OF TAX INCREASES

LIMITING TAX DEDUCTIONS: Obama Wants To Limit Tax Deductions For Health Care. "Congress still hasn't figured out how to pay for a health overhaul that could cost $1.2 trillion to $1.5 trillion or even more over a decade. Mr. Obama has put forward some ideas ... includin g limiting some tax deductions ..." ("Obama Pleads for Action on Health Care," The Associated Press, 6/6/09)

TARGETING HEALTH CARE BENEFITS: Sen. Kent Conrad (D-ND) Wants To Limit Tax Exclusion For Health Care. Conrad: "[S]o we're going to have to consider some limitation perhaps on the tax exclusion for health care insurance, perhaps cutting it off at $17,000 of tax exclusion a year per family."(MSNBC's "The Ed Show," 6/11/09)

ADDITIONAL SURCHARGE ON INCOME TAXES: Congressman Pete Stark (D-CA) Suggests Tax Surcharge To Pay For Government-Run Health Care. "Rep. Pete Stark ... called Thursday for a two percent income tax surcharge to pay for the health insurance program he predicted Congress and President Obama would enact later this year ... Rep. Stark opposes paying for health care by taxing employees for employer-paid health coverage, or by ending the income tax ded uctions that employers now take for the cost of providing health insurance to their employees. He said, 'If you wanted me to bet how would I pay for this, I would tell you not to bet against a surtax' ... According to Stark, when it comes down to paying for health care reform, it'll be, 'Swallow hard, take the tough vote.'" ("House Health Panel Chair: Tax Surcharge Likely," San FranciscoChronicle, 6/12/09)

NEW TAXES ON SUGAR-SWEETENED DRINKS: Sen. Max Baucus (D-MT) Proposing Excise Tax On Sugary Drinks. "The proposal would impose a Federal excise tax per 12 ounces of sugar-sweetened beverage. Sugar-sweetened beverages under the proposal would include a variety of carbonated and un-carbonated beverages, such as non-diet sof t drinks, fruit and vegetable drinks, functional drinks such as energy and sports drinks, iced teas and iced coffees, and flavored milk and dairy drinks." ("Financing Comprehensive Health Care Reform: Proposed Health System Savings and Revenue Options," Senate Finance Committee, 5/20/09)

HIGHER TAXES ON ALCOHOLIC BEVERAGES: Baucus Proposing Higher Excise Taxes On Alcohol. "The [Senate Finance] Committee is proposing to increase the tax on alcohol, and eliminate the current tax variances between beer, wine and alcohol. The committee also proposed levying the first federal tax on sugary beverages. That would apply to soft drinks, fruit and vegetable drinks, energy and sports drinks, iced teas, iced coffees and flavored milk and dairy drinks. It wouldn't apply to drinks sweetened with non-caloric sweeteners." (Janet Adamy, "New Taxes Loom To Pay For Health-Care Overhaul," The Wall Street Journal, 5/19/09)

NEW TAXES ON SALTY FOODS: Democrats Float Idea Of Starting Tax On Salty Foods. "In recent months, the administration and Congress have floated ideas to ... tax salty foods ..." (Kimberly A. Strassel, "Democrats And The Health Tax Taboo", The Wall Street Journal, 6/12/09)

HIGHER TAXES ON CIGARETTES: Baucus Considering Higher Excise Taxes On Cigarettes. "There appeared to be a bubble of support ... for taxing bad behavior, including a $2 tax on a pack of cigarettes ..."(Carrie Budoff Brown, "Smokers, Drinkers To Carry Tax Burden ," Politico, 5/13/09)

NEW TAXES ON ENERGY: Conrad Open To Paying For Health Care Through Energy Taxes. "The Senate's lead Democrat on the budget signaled Sunday he's open to imposing new energy taxes to pay for healthcare reform, a priority for President Obama and House Speaker Nancy Pelosi (D-Calif.). Sen. Kent Conrad (D-N.D.), the chairman of the Senate Budget Committee said energy taxes is an 'option' for funding healthcare reform." (Walter Alarkon, "Conrad Open To Energy Taxes For Health Care," The Hill, 3/29/09)

NEW EUROPEAN-STYLE NATIONAL SALES TAX: Democrats Considering Plan To Bring A European-Style National Sales Tax To The US To Fund A Health Industry Take-Over. "With budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, someWashington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax. Common around the world, including in Europe, such a tax -- called a value-added tax, or VAT -- has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity." (Lori Montgomery, "Once Considered Unthinkable, U.S. Sales Tax Gets Fresh Look," The Washington Post, 5/27/09)