Yesterday the independent scorekeeper for Congressional spending proposals, the Congressional Budget Office (CBO), dropped a bombshell on Obamacare. The core of President Obama's case for his health care plan has been his claim that it will "bend the curve" on rising health costs thereby eventually lowering our nation's exploding deficits. In a Senate Budget Committee hearing yesterday, chairman Kent Conrad (D-ND) asked CBO director Douglas Elmendorf point blank: "I'm going to really put you on the spot. From what you have seen from the products of the committees that have reported, do you see a successful effort being mounted to bend the long-term cost curve?"
Elmendorf responded: "No, Mr. Chairman. On the contrary, the legislation significantly expands the federal responsibility for health care costs."
The independent verdict on Obamacare is in: Instead of saving the federal government from fiscal catastrophe, the health reform measures being drafted by congressional Democrats would worsen an already bleak budget outlook, increasing deficit projections and driving the nation more deeply into debt. This runaway spending, coupled with the Democrats plans to raise taxes, will kill our struggling economy and leave us with double digit unemployment for years to come.
Trillion Dollar Deficits: In his blog yesterday, CBO director Elmendorf laid out the economic impact of Obama's never ending trillion dollar deficits: "Large budget deficits would reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn would depress economic growth in the United States. Over time, accumulating debt would cause substantial harm to the economy."
Employment Tax: Both the House and Senate bills help pay for their new spending by instituting an employer mandate to buy health insurance that, as CBO director Elmendorf explained earlier this week is really just a job killing employment tax: "f employers who did not offer insurance were required to pay a fee, employees' wages and other forms of compensation would generally decline by the amount of that fee from what they would otherwise have been."
French Levels of Taxation: The House's main vehicle for paying for their $1.3 trillion bill is a surtax on higher income Americans that, when coupled with state and local taxes, raises the top rate higher than economic competitor's like Germany and Japan, and even higher than France. And that is just the opening bid. If health care savings do not materialize, as the CBO says they will not, the House bill gives Obama the unilateral authority to raise the surtax even higher.
The White House reads polls. They know that confidence in Obama's $787 billion stimulus package, like the economy it was supposed to stimulate, has tanked. Just 38% of Americans are confident the stimulus will turn around the economy. That is why President Obama continues to pressure both the House and Senate to pass his health plan before the August recess. But moderates in Congress are beginning to push back. Rep. Mike Ross (D-AR) has promised to keep the current bill off of the House floor until the runaway spending and taxation are addressed: "I don't like the idea of raising taxes in the worst economic crisis since World War II."