The Right Prescription
Baucus Blunders
Before this is over, the mean-spirited Montana senator will be dubbed Mad Max.
(Page 2 of 3)
Higher Taxes, Higher Deficits
The Baucus bill provides for $350 billion in new taxes, all focused on health care, which, again, will raise health costs. This includes taxes on prescription drugs and “medical devices” including condoms, tampons, contact lenses, contact lens solution, hearing aids, home pregnancy tests, and blood glucose monitors to control diabetes. Last year when asking for our votes Democrats promised us they would not raise taxes “in any form” on people earning less than $250,000 per year. They were just going to rob from “the rich” to pay for merry making by the rest of us. They apparently do not know that condoms, tampons, contact lenses and hearing aids are used by people making less than $250,000 per hear, some of whom have diabetes. Or maybe they were lying. There is no honor among thieves.
In a letter to Baucus, Democrat Senators Amy Klobuchar, Evan Bayh, and Al Franken, including Republican Richard Lugar, write regarding the medical devices tax:
Recent independent estimates indicate that this tax could translate into an annual income tax surcharge of between 10% and 30% on medical device manufacturers. The amount of capital that these companies would have available to reinvest n product development and innovation would be threatened, dramatically reducing both the number of jobs in the industry and the types of devices available to patients….[W]e are concerned that this tax will stifle technological innovations that can improve patient outcomes and lower health costs.
Amen. So true. They can really think when they want to.
Workers who do not obtain the government mandated health insurance plan will have to pay a special tax of $750 to $950, or $1,500 to $3,800 per family, depending on income, another violation of the pledge not to raise taxes on the middle class. Employers not providing the government required health insurance will have to pay an additional tax of $400 per worker, as specified above.
Anyone, including Blue Dog Democrats, who took the Americans for Tax Reform Pledge not to raise taxes cannot vote for this bill without breaking faith with voters. For those Blue Dogs who refused to take the Pledge, now you can see what they had in mind.
CBO scores the Baucus bill as not increasing the deficit. But this is a fantasy, because the CBO fails to consider how the Baucus taxes will change behavior. The score assumes that most of the increased tax revenues, $215 billion, will come from the tax on high cost health plans. But employers will negotiate with their unions to avoid that tax, and it will not generate nearly that much. The rest of the tax revenues would come from working people and their employers, and they will fall short as well.
On the spending side, the government notoriously estimated in 1965 that Medicare would cost $12 billion in 1990. When 1990 came around, it actually cost $110 billion, 9 times as much.
Medicare Cuts
Senator Baucus provides for almost $400 billion in Medicare cuts in his bill. This includes $123 billion in cuts to Medicare Advantage. Almost one-fourth of seniors, about 10 million, have chosen the private insurance options in Medicare Advantage for their Medicare coverage because they get better benefits than through standard Medicare. (Note: I published an article over 20 years ago in The Yale Law and Policy Review proposing what has become Medicare Advantage). The insurance company Humana quite rightly wrote in a letter to its policyholders recently that because of these cuts, “millions of seniors and disabled individuals could lose many of the important benefits and services that make Medicare Advantage plans so valuable.”
That understates the case, because with over $100 billion in cuts for such plans, seniors will lose a lot of the benefits they enjoy from Medicare Advantage today. Reflecting the outright fascism that is always just below the surface with “liberal” Democrats, Baucus complained to the Centers for Medicare and Medicaid Services (CMS) about this Humana letter. CMS ordered Humana to cease and desist, lamely claiming in old Soviet style fashion that the letter was “misleading and confusing,” and opening a federal investigation threatening “compliance and enforcement actions.”
The Wall Street Journal reported yesterday, “Nearly half of Humana’s yearly revenue comes from Medicare Advantage” and “Humana could be fined or booted from Medicare Advantage altogether” just for exercising its free speech to tell the truth. But Baucus in a press release lauded this CMS action, saying:
It is wholly inappropriate for insurance companies to mislead seniors regarding any subject — particularly on a subject as important to them, and to the nation, as health care reform….The…bill we released last week strengthens Medicare and does not cut benefits covered under the Medicare program….
But besides the cuts to Medicare Advantage, the Baucus bill includes almost $200 billion in additional Medicare cuts involving, as CBO explained, “[p]ermanent reductions in the annual updates to Medicare’s payment rates” to doctors and hospitals for the services they provide to seniors. That will result in cutbacks by doctors and hospitals in the services they provide to seniors, the start of the health care rationing in the bill. The Baucus bill also creates a Medicare Commission of unelected bureaucrats with the power to adopt still more Medicare cuts in the future.
About the Author
Peter Ferrara is Director of Entitlement and Budget Policy at the Heartland Institute, General Counsel of the American Civil Rights Union, Senior Fellow at the National Center for Policy Analysis, and Senior Policy Advisor on Entitlements and Budget Policy at the National Tax Limitation Foundation. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under President George H.W. Bush.
Letter to the Editor View all comments (39) | Leave a comment
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Melvin| 9.23.09 @ 7:25AM
The Baucus bill is pretty much like anything else the government does, they take a pile of dog squeeze, put whipping cream and a cherry on top and tell us, "here have some desert, it won't cost a thing."
Then we ask the government, "Why does this desert taste so bad?" The response from the government is, "Here let us put a little more whipping cream on top and then it will taste much better."
Notary Sojac| 9.23.09 @ 12:17PM
Then the Republicans take out half the the dog squeeze and ask me for a contribution based on the great job they're doing.
Tim| 9.23.09 @ 4:25PM
"Reform" means changing the dog's diet.
Pingback| 9.23.09 @ 7:30AM
Baucus Blunders … or, “How to craft a healthcare bill that NOBODY could possibly supp links to this page. Here’s an excerpt:
JP| 9.23.09 @ 7:50AM
Perhaps this is Mad Max's way of killing ObamaCare. Yesterday, the Senate Finance Committee had to call a number of its staffers to conference to go over the byzantium complexity of how the surtax on expensive health insurance would be calculated. Not even the staffers (the very ones who wrote the bill) could give the committee a straight, articulate answer. And that was just one item.
How are the lawmakers going to amend a bill they don't fully understand? Already there are numerous contradictory statements coming out of the Senate. And key Senators like Jay Rockefeller are demanding explicit language on insitituting a public option. Otherwise, he says he will vote against it.
As many a 5 Senators may join the GOP in not allowing this monstrosity out of debate. If that's the case, ObamaCare is dead. If they can vote cloture, the bill then must go to reconcilliation, where the process will begin all over. If they can reconcile, the Senate must begin again debate over the final draft. Again, there is a very good possibility for a filibuster. Otherwise, Reid would have to use the nuclear option. I don't think that is going to happen. Reid is behind in the polls big time and forced reconcilliation would be the end of his career.
Pingback| 9.23.09 @ 8:03AM
Twitter Trackbacks for The American Spectator : Baucus Blunders [spectator.org] on T links to this page. Here’s an excerpt:
2Anglico| 9.23.09 @ 8:58AM
This whole health care frenzy has been a beautiful thing. Max Baucus, ultra-liberal/leftist, has come out from under his sheep's clothing. A rabid wolf has been exposed. The ball is in your court, Montana voters.
owyheewine| 9.23.09 @ 10:51AM
The Baucus bill may be a blessing in disguise, because with all of the warts, it shows, by supposedly paying for all of the folly, how expensive these universal insurance bills are. As more people figure out that free insurance is not free, support has got to plummet.
kurt| 9.23.09 @ 9:39PM
This assumes that human nature is not human, and that the next vote will not help the human deliver himself from human nature.
Kurt| 9.23.09 @ 9:42PM
I meant to write 'the next vote will help the human deliver himself from human nature. Scratch the not.
Gill O’Teen ✝✡| 9.23.09 @ 2:12PM
Notary Sojac, your 12:17PM post should have made me laugh, but instead it brought a tear to my eye. I fear that yet once again, next year, I will have to choose from the least of offered evils. I firmly believe that we must rid ourselves of all the kommies serving in government positions, this includes every elected dumbocrat as well as all their RINO psychophants. But what will I do if, like in last year’s presidential contest, my choice is between only such vermin? Well, like not enough of us, I fell for the argument that if I didn’t vote for john-boy, we’d get a Beavis buddy who would make us remember peanut vendor’s glorious reign fondly. So I voted for john-boy and the nightmare continues. I’m not sure, but I think the golden calf just surrendered to the Aborigines at the UN. It’s so hard for this stroke victim to separate the wheat from the chaff of his words. Maybe there is no wheat.
Gill O’Teen ✝✡
gill.Oteen07041776@gmail.com
Don’t Tread on Me!!
Kurt| 9.23.09 @ 9:44PM
Indeed, the lesser of two evils is still evil!
Hardius| 9.23.09 @ 3:40PM
Am I the only one who thinks that the lobbyist are the problem that needs to be addressed first. They outnumber our elected officials in Congress 6 to 1. With that kind of pressure, bribes, graft, and kickbacks how can we even pretend that there is a chance for a wholesome outcome. If we do not force Congress to ban lobbyist from Washington D.C., the corruption that overwhelms our nation will never abate no matter which party is in control.
c. j. acworth| 9.23.09 @ 5:41PM
Hardius;
I doubt it is possible to get rid of lobbyists. As long as congress insists on trying to tax and regulate every aspect of the economy, those affected will do all in thier power to influence the ones doing the regulating.
Kurt| 9.23.09 @ 9:30PM
No Hardius, the problem is not lobbyists; rather it is people who either believe they can get something for nothing-and tempararily do-and the people that want to believe their time will come and they too will get something for nothing. They then keep voting the incumbents in, the incumbents then do what the financiers of their election campaign ask. It ain't the lobbyist, nor the politician, rather it is the voter or the non voter. In other words: It's you and me and our company.
Michael L. Hauschild| 9.23.09 @ 4:57PM
This is the Presidents bill; Baucus is just the stealth vehicle. By the time it gets out of the Senate under nuclear propulsion it will go to the joint committee and there become a rubberstamp of exactly what the extreme liberal left wants.
The House version will be “moderate” (after all they must have some semblance of bi-partisanship and give cover to the Blue Dogs) but it will be totally striped in the joint committee. The joint committee version will be sent to the House and Senate and voted on. They have the votes; elections have consequences. The only consolation is that the next election will produce majorities to enable impeachment.
Don’t believe the fix is in? They just voted in Baucus’s committee not to let the public view the final markup. They will vote on this and we will not be able to see what is in it.
You are supping on cake
The arrogance of these buffoons is all encompassing.
Kurt| 9.23.09 @ 9:35PM
Arrogance indeed! It leads to hubris and ensuing folly.
Klabautermann| 9.23.09 @ 7:29PM
The despot is not a man. It is the . . . correct, realistic, exact plan . . . that will provide your solution once the problem has been posed clearly. . . . This plan has been drawn up well away from . . . the cries of the electorate or the laments of society’s victims. It has been drawn up by serene and lucid minds." - Le Corbusier
We are nearing the final stages of the health care debate in congress. Still nothing can be said about "the plan" with any certainty. At the time that the president delivered his message to congress there were five congressional committees developing health plans. One committee had produced a bill over one thousand pages long. Assuming the president has his own version, what he calls "my plan," that makes six separate plans. Yet the president said, "If you misrepresent what’s in this plan, we will call you out." Perhaps this statement was more appropriate to a barroom than the halls of congress.
The president pointed out that, "the claim made not just by radio and cable talk show hosts, but by prominent politicians, that “we plan to set up panels of bureaucrats with the power to kill off senior citizens." He asserted that, "It is a lie, plain and simple." The president was correct. This is a lie, "plain and simple." Yet who were the talk show hosts and prominent politicians who said there would be, "panels of bureaucrats with the power to kill off senior citizens." There are none. Governor Sarah Palin did mention "death panels." Will there be "death panels?" We only have to point to Barbara Wagner, a beneficiary of Oregon’s "Death with Dignity Law." When faced with a $4,000 per month cancer treatment expenditure as opposed to a one time $50 expenditure, the state of Oregon chose the latter, sending her an unsigned letter. The state, of necessity, must make these decisions.
The president claimed that, "No one would be forced to choose" his plan, yet he asserted that, "Individuals will be required to carry basic health insurance." You will not be forced to enroll in his plan but you will be required to participate.
The president said, "we’ve seen scare tactics." Perhaps he was referring to his mention of "the man from Illinois who lost his coverage in the middle of chemotherapy . . .and died because of it." Or his statement that without his plan, "More families will go bankrupt. More businesses will close. And more will die as a result."
The president promised that, "I will not sign a plan that adds one dime to our deficits," and again, "The plan will not add to our deficit." This might sound very convincing to a class of college freshmen, especially to that large percentage of them who do not even know who the first president of the United States was. However, for those of us who are familiar with how government works, this is laughable. The president admits that the plan will cost $900 billion over 10 years. Much of the savings is to be recouped from the existing health care system which is "full of waste and abuse." Since he was elected, how much money has been saved by the elimination of waste and abuse. The president announced, with much fanfare, a project to eliminate $100 million from the federal budget.
Why to desire for bipartisanship? If this is such a good bill why not exclude the Republicans and take all the credit.
Kurt| 9.23.09 @ 9:52PM
Because why take all of the credit if somewhere, someone can or will accuse you of not 'playing fair.' For in the Obama world, it matters not that you F someone, as long as you talk nice and people believe that you are playing fair. bi-partisan is the golden rule of the 'global elite.' "Look at them, falling into our hands." OK Rockefeller. deny this! They love our bickering.
NJCat| 9.23.09 @ 9:49PM
Not surprised that Humana put an ad at the topo of this article. The blather coming out of the far right is nothing but a cleaver ruse by the insurance companies to protect what they got. If we can just eliminate the insurers and malpractice lawyers from the health insurance economy - we would reduce costs by at least 30%. (eg. each and every OBGYN in the northeast pays over $200K per year for malpractice insurance.) If we're serious about getting health care under 10% of GDP, thats where we start!
Kurt| 9.23.09 @ 10:11PM
No NJCat, truth be known we can't fix this until a majority understand that the only fix is no fix. In other words, numbers and statistics and brand new plans with the latest regulations mean nothing as long as the lemmings believe their GO(d)vernment can help them, and that their representative will help them to get ahead of their peers. God helps those who help themselves, government helps themselves. Is everything perfectly crystal clear?
Yosemeti Sam| 9.23.09 @ 10:58PM
LOL.
What we've got here is a - failure to land
a Moby Dick of health care reform.
Proceed, captain BHO - to your whaling
destiny; joining captains Clintons; not
to mention the aiding and abetting crew. LOL
DaveinPhoenix| 9.24.09 @ 12:20AM
So much for moving to Montana
Robert Rosencrans| 9.24.09 @ 5:52AM
Senator Baucus is like Dr. Frankenstein, bringing up the dead, then letting it loose upon a population to wreak havoc. Soon there will be pitchforks in the hands of the angry rabble as they storm the castle.
Richard Baker| 9.24.09 @ 4:14PM
Has this puke forgotten that a private company is allowed to speak? Sic Semper Tyrannis.
Brian K | 9.30.09 @ 6:17AM
Excellent article. It deals with many of the issues raised in the HCR reform debate. We have some of these issues in greater depth at takebackmedicine.org
On the issue of Baucus gag order of Humana see http://www.takebackmedicine.or.....26bb31d586
Brian K | 9.30.09 @ 6:17AM
See also
With regard to the AMT like aspect of taxes on "cadillac plans" see http://www.takebackmedicine.org/?p=756
and regarding violation of the no tax under $250K see also http://www.takebackmedicine.org/?p=1520
Please feel free t leave comments and links to additional information
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