KeithHennessey.com

The House bill would take Medicare savings need for Medicare solvency and spend them on a new entitlement.

I sent an email to flag@whitehouse.gov this morning about seemingly fishy statements being made about health care reform.

Because the proposed new health spending would grow faster than the proposed new income tax increases, the House health bill would increase the long-term deficit. Since the President has said he would not sign a bill that increases the long-term deficit, the bill is dead in its current form. Any tax increase that would grow more slowly than the proposed new spending faces the same irreconcilable problem. The only way to solve this problem and meet the President’s long-term goal is to cut other health spending or tax employer-provided health insurance.

Of the original $700 B of TARP funding, CBO estimates that $439 B of the original $700 B has been spent, $280 B of that will be repaid and $159 B will not be repaid and will be a cost to the taxpayer. When you include the costs of FDIC actions and the bailouts of Fannie Mae and Freddie Mac, the expected cost to the taxpayer rises to about $553 B.

Congressional Budget Office Director Doug Elmendorf is doing a great job informing the economic policy debate in a rigorous and unbiased matter. He and the CBO staff face a test similar to that faced by CBO under Dr. Reischauer during debate on the Clinton Health Plan. They have so far withstood the pressure with aplomb, but the real pressure is just beginning.

President Obama: If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what.”
CBO: “10 million individuals who would be covered through an employer’s plan under current law would not have access to that coverage under the draft [Kennedy-Dodd] legislation because some employers would choose not to offer it.”

CBO says a part of the Kennedy-Dodd bill would cost more than $1.3 trillion over 10 years and insure 16 million more people. When the policy is in full effect in 2015, half the people who would receive subsidies already have private health insurance, and taxpayers would pay more than $9,000 per newly insured person.