I Warned About This Trick Earlier

When reading the original House health care bill, it struck me that the new taxes on employers and such began immediately, but benefits were phased in between 2012 and 2017.  Apparently, this same thing is being done in the Baucus Bill, and I have learned that this is specifically aimed at gaming the CBO numbers.  Since journalism majors were such in large part because they didn't want to do any math, this ploy will likely work with the media, who will print the CBO findings but will be uninterested or incapable of deconstructing the numbers games.  From the Gormogons via TJIC:

What the CBO does not highlight, however, is that Sen. Baucus cooked the books. Under the Baucus plan, revenue enhancement (taxes) goes into effect immediately. Coverage does not kick in for two and one-half years. So, to make the numbers work, Sen. Baucus has to collect ten years of revenue to cover seven and one-half years of cost.

'Puter thought the whole thing smelled a little fishy, so he gave Sleestak and abacus, a quill and some parchment and set him on the CBO math. Using the above numbers, Sleestak calculates that projected revenues will generate $910 billion over 10 years. Outflows will be $829 billion over 7.5 years. Based on Sleestak's math, that's an average yearly inflow of $91 billion and an average yearly outflow of $110.5 billion, or a average annual deficit of $19.5 billion each year the benefits are actually paid.

TJIC rightly asks how this kind of game is any different from the one played by Madoff.  The only difference is that folks had the right to say "no" to Madoff whereas we will not have this ability with Congress.

  • http://www.itsaboutmakingbabies.com/ Brad K.

    Actually, I foresee the general campaign slogan for the mid-term elections: "I pledge to dismantle ObamaCare!" Talk about tax reduction as a campaign slogan, this next election should be a pretty effective way to undue ObamaCare supporters, and might actually result in addressing the worst excesses. It might even result in impeaching Obama for his abuse of office, something the current Congress will never do.

  • Spartan79

    Actually, this may be a silver lining in the dark cloud that this monstrosity of a "health-care reform" bill represents. Once the benefits are bestowed on recipients, they will be all but impossible to claw back. But if the taxes and fees and penalties kick in first, particularly if they go into effect in 2010, then the outrage and revulsion ignited by those increases may allow a new congress elected in 2010 to repeal the entire mess before any permanent damage is done to our economy.

  • Link

    There's more angles to this. As proposed, Healthcare is a big entitlement to be paid for by the top 5% earners. This could be bearable, but we could double taxes on the top 5% earners and not close the $800 billion permanent structural deficit we already have.

    Federal tax receipts have been 18-19% of GDP for the last 50 years, no matter the particular tax regime in place at the time. This is a remarkable fact ... almost a law of nature. It's telling us what we have to manage our federal budget to this level. Instead, our government has often spent 20% to 21%, which is bearable.

    We're now boosting federal spending into the high 20s. This is unsustainable. Unless we cut spending, we should expect much higher tax rates and very aggressive IRS collections. This will of course kill growth, and only make the actual results worse.

    We have too many people in this country who think that "money is all ours, collectively" -- that the economic pizza pie just gets magically delivered to our door each day. It doesn't work that way. When you stop paying the delivery boy, he'll stop coming. Unless you order him to do so with threat of force ... but that's a different way to run things than we're used to.

  • Tudorman

    Fox is reporting this story, although not with the succinctness you exhibit.

    http://www.foxnews.com/politics/2009/10/10/obamas-health-plan-offers-medicare-cuts-tax-increases-benefits-later/

  • tomw

    This is no problem. They will just turn off coverage for 2.5 out of every ten years. Just don't get sick during that time, and you'll be OK...!

    tom

  • http://JPatriot.com JPatriot

    Well done, Coyote! JPatriot salutes you. Your systematic analysis unveils the ruse of administration-designed health care reform as a "good" for Americans. The facts show that this rather thinly veiled program is designed solely to increase the power of the federal government through taxation and will clearly result in long term damage to our country and economy. Baucus, Madame Speaker and the President have a determined agenda and all of us must shout "NO" loudly and repeatedly. JPatriot.com is the electronic Commons awakening and mobilizing the citizens of America that our country might be saved from disaster. Let's all work together recognizing our differences and the things we agree on. The opposition is seeking to divide us. Don't let it happen. Sincerely JPatriot

  • morganovich

    it's OK. unfunded mandates don't count toward the deficit...

    if the US government used GAAP accounting, the last time they would have reported a balanced budget was under Eisenhower.

    how is it that the same government subjecting our companies to GAAP, sarbox, and all manner of other crap seems to be able to get away with not adopting such policies themselves?

    if you include medicare, medicaid, and social security liabilities, every man, woman, and child in the US is $250,000 in government debt.

    that's $1 million per family of 4. let's do some quick math - at 5% interest, debt service on $1 million is $50,000/year. that's pretty much spot on median household income. paying down principal is impossible, even before tax.

    talk about a bad mortgage...

  • Thom Moses

    There was another ponzi scheme like this one, where they collect money ahead and put in in a "lock box" so it would be there for your retirement. That would be Social Security & Medicare. Last time I checked it was somehow missing some 17 Trillion dollars, some of that is the difference between the Federal Debt and what they actually borowed.