The Baucus Bill: Obamacare’s Budget Bomb – by John Ellis


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When the Congressional Budget Office estimated that the Baucus bill’s $829 billion in new spending would be more than offset by large cuts in Medicare and new taxes, many observers were skeptical: how likely were those cuts and new taxes to materialize given the considerable political difficulties that enacting them would encounter? But while that skepticism was entirely justified, it missed a much more fundamental argument against the CBO’s scoring of Baucus, as well as the scoring it will likely do for the Reid and Pelosi bills.

The context within which all of this takes place is that Medicare is headed for insolvency, and that the nation is running a ruinously large deficit. Cuts in Medicare were always going to be needed to deal with that program’s looming bankruptcy, and the political difficulty of making them guaranteed that they could never be large enough to solve the problem. As to the deficit, a search for new sources of revenue was always on the cards, and there too the political difficulty of enacting tax increases would also rule out anything large enough to solve that problem. And so in a context of impending Medicare insolvency and a massive deficit, whatever Medicare cuts and new taxes might turn out to be politically feasible, they were already spoken for.

The Medicare funding crisis and the deficit have a prior claim on them, and for that reason they can’t be thought of as offsets to the Baucus bill’s spending at all. Baucus claimed them for his bill’s balance sheet, but the mere fact that he put them there doesn’t make it right to do so.

Think of it this way: imagine that your household is living beyond its means and has run up a very large debt. You think up some ways of cutting your household expenses and earning some more money so that you can accumulate cash to pay off your debt and begin to live within your budget.

But now your spouse sees that new pile of cash and wants to go out and buy a fancy new car with it. What Max Baucus is doing is exactly that: he’s blowing the cash we need to make Medicare solvent and pay down the deficit on even more entitlement spending. The bill that Nancy Pelosi unveiled today (November 29) does the same thing, and the CBO will probably score that one in the same misleading way too.

All that matters here is that the Baucus bill wants to spend nearly a trillion dollars more on a new entitlement while we can’t pay for the ones we have already on the books, and that it wants to add a very large sum (all $827 billion of it, and much more if, as always in the past, these estimates turn out to be too low) to a deficit that is already frightening. The Pelosi bill does much the same thing, as will Harry Reid’s bill. When we understand them in this way, all these bills are the height of fiscal irresponsibility, and if President Obama signs anything like them, his pledge not to increase the deficit by one dime will turn out to have been his biggest deception of the American people to date.

  • Arius

    America is bankrupt. The Washington regime is digging its own grave.

  • tommyrot

    This is just another example of the practice (Democrat and Republican), to spend as if there is no tomorrow, and, of course, by so doing there will be no tomorrow. A friend in Washington has told me that the attitude there is “It's all gone to hell – let's get what we can while we can.” I believe him.

  • USMCSniper

    In a recent column in the Los Angeles Times, Michael Tanner and Michael Cannon wrote:

    Simply saying that people have health insurance is meaningless. Many countries provide universal insurance but deny critical procedures to patients who need them. Britain’s Department of Health reported in 2006 that at any given time, nearly 900,000 Britons are waiting for admission to National Health Service hospitals and shortages force the cancellation of more than 50,000 operations each year. In Sweden, the wait for heart surgery can be as long as 25 weeks, and the average wait for hip replacement surgery is more than a year.

    Many of these individuals suffer chronic pain, and judging by the numbers, some will probably die awaiting treatment. In a 2005 ruling of the Canadian Supreme Court, Chief Justice Beverly McLachlin wrote that “access to a waiting list is not access to healthcare.”

    Interestingly enough, in Canada, where by law they cannot pay for private medical treatment, the only option for those who must either have an operation or die is often to travel to America.

    Of course, once our system is as socialistic as is theirs, that will no longer be an option.

    Speaking of our friendly neighbors to the north, Canada is currently looking at massive changes in their system.

    First, the citizens are in an uproar due to long waiting lists. Second, the costs of the system are completely out of control.

    Is this really what we want? Are we so anxious to blame a not-guilty party — the free enterprise system — that we will throw away still another freedom, the freedom to care for ourselves and our loved ones the way we see fit, not the way some faceless bureaucrat sees fit?

    Do we want our children getting the same “expert and loving” medical care as did our wounded vets at Walter Reed and in similar government-run hospitals?

    Would we really rather see everyone suffer through this kind of healthcare mandated for all? Except the politicians, of course.

    Senator Hillary will never have to wait in line. Governor Romney will never be told, “Sorry, no CAT scan for you until every poor person can get one.”

    The solution is actually quite simple. Get the government out of our healthcare system and let the free market, private charity, and loving-kindness do what it once did: Provide us with a healthcare system that really works.

  • Carterthewriter

    Neither party has a representive that demonstrate any compassion in this area for they will not address the real problems for it would cost them quite a bit of the perks they enjoy.

    The VA Health program only marginally survives because so many non-profit programs fill the void and even then, not enough is being done for our veterans.

    Why they can't fix this problem first, is beyond comprehension. .

  • USMCSniper

    The health care bill recently unveiled by Speaker Nancy Pelosi is over 1,900 pages for a reason. It is much easier to dispense goodies to favored interest groups if they are surrounded by a lot of legislative legalese. For example, check out this juicy morsel to the trial lawyers (page 1431-1433 of the bill):

    Section 2531, entitled “Medical Liability Alternatives,” establishes an incentive program for states to adopt and implement alternatives to medical liability litigation. [But]…… a state is not eligible for the incentive payments if that state puts a law on the books that limits attorneys’ fees or imposes caps on damages.

    So, you can’t try to seek alternatives to lawsuits if you’ve actually done something to implement alternatives to lawsuits. Brilliant! The trial lawyers must be very happy today!

  • gxm

    “The best way to destroy the capitalist system is to debauch the currency.”

    “The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation.”

    “A lie told often enough becomes the truth.”

    - Vladimir Ilyich Lenin

    Got the message yet?

    Under current circumstances the best health care is first to stay as healthy as possible through good diet, vitamin supplements and exercise and second to buy gold and ammo. Make no mistake these folks are Marxists and they are driving for the end game. Marxists are like a plague of locust except they don’t just destroy vegetation. They destroy everything they touch. The lights are going dim, the band is playing the next to the last dance and the party is just about over. There is a train wreck just up around the next bend.

  • Carterthewriter

    I appreciate your excellant statement, I just hope more would realize what a sad state this country is in and as a veteran, I no longer trust the medical services provided by the VA, a government run mess that reeks of corruption and greedy overpaid administrators.

    I remember a time when we were all free and trusted each other.

  • gxm

    I am a veteran also. We have long been a nation of laws so it is hard to contemplate and accept what is happening. The Constitution and its philosophical basis have been undermined by a long slow process but it sure looks like we are close to the end point. I often discuss the possibility with friends that these political differences will be solved the way they were in the 1860’s. I hope not but I see the possibility. It won’t of course be an exact repeat more like a conflict with suburban and rural areas against urban centers. As Mark Twain said: “History doesn't repeat itself, but it does rhyme.” There is a chance a turnaround can begin on 11/04/2010. I keep hoping and I stand by my oath to “support and defend”. I trust that at least 95% of active military and veterans will do the same.

  • Carterthewriter

    Thanks. What does disturb me quite a bit is the lack of support the various veteran organizations have given regarding this government's attempt take-over our freedoms.

    I am a member of the AmVets yet they didn't even fight a ban on smoking in their clubs here in Ohio. They do subvert the law whenever they can, but that is not the way it should be done. In this state, (Ohio) the law was suppose to exempt veteran clubs, but you know how the legislators work and it certainly isn't for us. They make a lot of money banning things, then justifying taxing it out of business. Next, will be certain foods we eat while making smoking pot legal for monetary gain. It makes no sense.except for the obvious reason; money.