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November 10, 2009

An Honest Liberal: Pelosi Care Is "A Costly And Open-Ended Commitment"

The WSJ highlights an article in the New Yorker Magazine in which John Cassidy lets the cat out of the health care bag.

Mr. Cassidy is more honest than the politicians whose dishonesty he supports. "The U.S. government is making a costly and open-ended commitment," he writes. "Let's not pretend that it isn't a big deal, or that it will be self-financing, or that it will work out exactly as planned. It won't. What is really unfolding, I suspect, is the scenario that many conservatives feared. The Obama Administration . . . is creating a new entitlement program, which, once established, will be virtually impossible to rescind."

Take a look at Cassidy's original article and the facts he lays out are even more damning (at least from the perspective of those opposed to Pelosi Care) than what the Journal excerpts.

There are two big (and linked) problems with the current health-care system. It excludes 46.3 million Americans, according to the Census Bureau, and it is inordinately expensive. The proposed reform purports to tackle both of these problems; in fact, it only addresses the first one in any systematic manner. The future cost savings that the Administration and its congressional allies are promising to deliver are based on wishful thinking and sleight of hand. Over time, the reform, as proposed, would almost certainly add substantially to the budget deficit, thereby worsening the long-term fiscal crisis that the country faces.

...Two large items underpin the Administration’s math: five hundred and seventy-two billion dollars of tax increases over ten years, and roughly the same amount of cost savings on Medicare and other existing government health programs. Most of the revenue increase would come from levying a 5.4 per cent surcharge on Americans individuals who earn more than five hundred thousand dollars a year and joint filers that earn more than a million dollars. I am a big supporter of progressive taxation, but at some point it becomes politically unsustainable. If health-care reform goes through, and the Bush tax cuts expire in 2011, top earners will face a marginal tax rate of forty-five per cent at the federal level. Add in state and local taxes, plus Social Security and Medicare payments, and wealthy people in New York, say, would be facing tax rates of about sixty per cent. As sure as night follows day, this would generate more tax evasion and a political backlash. Without a doubt, the next Republican-controlled Congress would reverse the changes.

...What about the proposed cost savings? They, too, are questionable. Most of them consist of reductions in Medicare outlays, which, according to this C.B.O. analysis, would save four hundred and twenty-six billion dollars between 2010 and 2019 compared with current plans. Look a bit more closely, and you find that more than half of the Medicare savings (two hundred and twenty-nine billion dollars) come from cutting payments to providers of services under the regular program; most of the rest (a hundred and seventy billion dollars) come from changing the way payments are set in the Medicare Advantage program. Does anybody really believe that these savings will materialize? For decades now, Congress has been promising to reduce the growth of Medicare outlays, and yet every year they continue to go up. The reasons are straightforward: the population is aging; seniors are politically active; and health-care treatments, particularly for the aging, continue to evolve in complex and costly ways.

Read the whole New Yorker piece, it's really worth the time.

Cassidy lays out the numbers Obama, Pelosi and Reid know exist but don't want to talk about. In reality health care reform is about transferring massive amounts of wealth to their favored constituencies and lying to the American people to do it.

To his credit, Cassidy simply says these costs are worth the benefit of expanding coverage. Obviously, I disagree but at least Cassidy is honest about them (though he does excuse the Democrats 'free lunch' rhetoric).

Liberals have perfected this trick over the years and Republicans have even gotten in on the act recently (Medicare Part D). As Mr. Cassidy says once this is passed, "Even a twenty-first-century Ronald Reagan will have great difficult overturning it."

The next few months are going to be key in determining the future of this country.

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posted by DrewM. at 12:11 PM

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