ObamaCare: A raid on Medicare and Social Security?

posted at 12:25 am on November 16, 2009 by Karl
printer-friendly

Senate Maj. Ldr. Harry Reid intended to introduce his version of ObamaCare for the Senate floor this week, but the New York Times is telling us: “don’t count the days.” As has often been the case, the problem has been getting favorable numbers from the Congressional Budget Office:

About 11 p.m. last Tuesday, the budget office sent Mr. Reid 11 pages of questions about his legislation. On Wednesday afternoon Mr. Reid’s staff met with budget office officials. And the back-and-forth continues.

But Mr. Reid has already received some substantial analysis of his measure, and if the numbers had been what he wanted, he would have released a bill by now.

Instead, he has repeatedly gone back to the budget office with variations of the legislation, trying to figure out how to limit the overall cost of the bill while increasing the number of people who would gain health coverage.

Mr. Reid has put forward a proposal to increase the Medicare payroll tax on wealthy taxpayers, in part to help reduce a proposed tax on high-price health insurance plans, which is opposed by organized labor interests.

But the tax on high-price insurance plans is one of the few proposals still included in the legislation that the Congressional Budget Office has said would help slow the growth of the nation’s health care costs. So Mr. Reid must choose between following the recommendation of experts on health economics and angering a crucial Democratic constituency.

Left unreported is the effect of the two taxes. The intended effect of tax on so-called “Cadillac” health insurance policies is to get people to adjust their compensation, shifting the ratio away from coverage toward wages (whether employees would actually end up with higher wages is debatable). The CBO accounting of the Baucus poposal made clear that its supposed deficit reduction depended on skimming the new Social Security taxes, perhaps the clearest example of “raiding the trust fund” on record.

Reid apparently hopes to appease Big Labor by reducing the effect of the “Cadillac” tax, but plans to do so by increasing the Medicare payroll tax. That looks suspiciously like Reid is planning to siphon funds ostensibly collected for Medicare to fund healthcare for non-seniors — i.e., a raid on the Medicare trust fund. Seniors have consistently been one of the groups most opposed to ObamaCare. Reid’s willingness to raid their safety net will only increase that opposition.

Blowback

You must be logged in to post a comment.