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Senate Majority Leader Harry Reid, under pressure from unions to drop a tax on high-end health insurance plans, has been considering raising the payroll tax on those earning more than $250,000 as an alternative means of financing. Aside from all of the arguments against raising the price of labor at a time of double-digit unemployment, there's an important point about the fiscal tradeoffs involved in paying for health care legislation.

Democrats would like to have us believe that because they can wave around estimates by the Congressional Budget Office saying that their legislation would reduce deficits over ten years, that it means the proposals costless. But paying for legislation that ranges from $900 billion to $1.3 trillion has meant some combination of Medicare cuts and tax increases. Aside from the direct consequences of these decisions, a key problem is that all of these cuts and tax increases deprive us of money that would otherwise be available to address our looming entitlement crisis. The reason why the Reid payroll tax hike idea is so telling on this front, is that during the campaign, candidate Obama also proposed raising payroll taxes on those making over $250,000 -- but he was going to use the money to "extend the life of Social Security" without raising the retirement age or cutting benefits.

In other words, instead of raising money to pay for existing entitlements that are bankrupting our country, Democrats are raising money to create a new entitlement.