Preliminary Comments on Health Reform Proposal
Earlier today, the director of the Congressional Budget Office (CBO) posted a summary of the “preliminary analysis of the House Democrats health reform proposal on his Director’s Blog with a link to the more detailed 10-page analysis. Following is from the blog:
“Yesterday CBO released a preliminary analysis, conducted with the staff of the Joint Committee on Taxation (JCT), of H.R. 3200, the America’s Affordable Health Choices Act of 2009, as introduced by several House committees on July 14. Earlier this week, CBO released a preliminary report on the health insurance coverage provisions of the bill; this latest report added analysis of the other provisions.
“According to CBO’s and JCT’s assessment, enacting H.R. 3200 would result in a net increase in the federal budget deficit of $239 billion over the 2010-2019 period. That estimate reflects a projected 10-year cost of the bill’s insurance coverage provisions of $1,042 billion, partly offset by net spending changes that CBO estimates would save $219 billion over the same period, and by revenue provisions that JCT estimates would increase federal revenues by about $583 billion over those 10 years.
“By the end of the 10-year period, in 2019, the coverage provisions would add $202 billion to the federal deficit, CBO and JCT estimate. That increase would be partially offset by net cost savings of $50 billion and additional revenues of $86 billion, resulting in a net increase in the deficit of an estimated $65 billion.
“The figures released yesterday do not represent a complete cost estimate for the legislation. In particular, the estimated impact of the provisions related to health insurance coverage is based on specifications provided by the committee staff, rather than on a detailed analysis of the legislative language. (The estimates for other spending provisions reflect the specific legislative language. JCT has separately published its estimates of the effects of revenue provisions contained in H.R. 3200.) In addition, the figures do not include certain costs that the government would incur to administer the proposed changes and the impact of the bill’s provisions on other federal programs, and they do not reflect any modifications or amendments made after the bill was introduced. Nevertheless, this analysis reflects the major net budgetary effects of H.R. 3200.”
On Tuesday of this week, Pete Sepp, Vice President of Policy and Communications for the National Taxpayers Union said a preliminary analysis of the healthcare reform proposal showed the plan “suffers from rosy revenue assumptions and stale savings provisions.” In addition, Sepp said:
“With their new health care plan House Democratic leaders seem to have abandoned the 'borrow now, spend now, pay later' philosophy for a mantra that is just as dangerous to our economy: 'tax now, spend now, and tax again.' Aside from the disastrous impact of the new income surtaxes, more may be in store for America's small businesses and entrepreneurs if the savings from the health care bill don't materialize. The two initial rates of surtax will double if savings targets aren't met.
“Whatever else happens, the maximum combined federal tax rate in the U.S. will surpass those in France, Ireland, Italy, Switzerland, and the United Kingdom. Our rate will tie or even exceed that which burdens citizens in the People's Republic of China. The highest rate on dividend income would triple once the Bush tax cuts expire, and the rate on capital gains would reach a 15-year high. Forget about a bull market anytime soon.
[ . . . ]
“Never before have five innocuous words strung together -- 'America's Affordable Health Choices Act' -- meant something so contradictory. George Orwell is spinning in his grave.”
Dr. David Gratzer, a senior fellow at the Manhattan Institute, writes that "a Medicare-style public option in healthcare would kill private insurance," which is posted at U.S. News & World Report. Also at USN&WR, Mary Kate Cary writes the "White House (is) talking out of both sides of its mouth in blind rush for healthcare reform." Finally, Diane Furchgott-Roth, an adjunct fellow at the Manhattan Institute, writes about "a very unhealthy health bill" for Real Clear Markets on Thursday, July 16.