Peter Roff: Keeping tax rates where they are under current law is the right thing to do. Allowing them to go up, as Obama intends, will further depress an economy that’s already flat on its back. Taking more money out of the private sector- which already isn’t hiring, innovating or expanding- is a recipe for disaster.

DS: So should Republicans campaign on spending cuts to offset what CBO says?

PR: It’s a false argument for two reasons:

• It’s current law- to pay for something that is current law is absurd. Under current law, you bring in X taxes. They believe that if tax rates go up, it will bring in an additional figure: Y. So when they talk about a $3.5 trillion dollar hole, what that really means is it’s X+Y-Y, Y being the hole. They are getting X now, even in a static analysis. If you leave current law where it is, they will get X next year. They expect to spend X+Y, so they want to tax at X+Y. If they spend at X+Y, and only tax at X, there will be the hole.

DS: What is reasonable spending reform unrelated to the tax rates?

PR: Cut off the stimulus. Repeal ObamaCare, and replace it with a patient-centered, market-oriented system. Cut the federal work force across the board, including non-military Defense Department positions (i.e. cutting civilian defense employees). The American public is concerned about federal spending in ways they have never been before. But the real issue is bringing growth back to the American economy. How do you do that? You put an end to economic uncertainty. People have to know what the cost of hiring will be and what their taxes and regulatory costs will be. And THAT’S what you have to stimulate the economy. Encourage the American people to engage in economically-productive activity, rather than punish them.

Regarding the Congressional Budget Office score and other budget concerns:

Rep. Paul Ryan (R-WI) pointed was on Fox yesterday morning, and he pointed out some flaws in the CBO’s score of the House bill. They include accusations that the bill double-counts Medicare cuts, double-counts taxes, and doesn’t include the Doc Fix which, according to CBO in a report released after the bill’s score, would raise the deficit:

You asked about the total budgetary impact of enacting the reconciliation proposal (the amendment to H.R. 4872), the Senate-passed health bill (H.R. 3590), and the Medicare Physicians Payment Reform Act of 2009 (H.R. 3961). CBO estimates that enacting all three pieces of legislation would add $59 billion to budget deficits over the 2010–2019 period.

Under current law, Medicare’s payment rates for physicians’ services will be reduced by about 21 percent in April 2010 and by an average of about 2 percent per year for the rest of the decade. H.R. 3961 would increase those payment rates by 1.2 percent in 2010 and would restructure the sustainable growth rate mechanism beginning in 2011. Those changes would result in significantly higher payment rates for physicians than those that would result under current law. CBO estimates that enacting H.R. 3961, by itself, would cost about $208 billion over the 2010–2019 period. (That estimate reflects the enactment of two short-term extension acts, which lowered the cost in 2010 by about $2 billion compared with CBO’s estimate of November 4, 2009.)…

CBO estimates that enacting H.R. 3961 together with those two bills would add $59 billion to budget deficits over the 2010–2019 period. That amount is about $10 billion less than the figure that would result from summing the effects of enacting the bills separately. The $10 billion difference occurs primarily because H.R. 3590 and the reconciliation proposal would modify how the government’s payments to Medicare Advantage plans are set.

Secondly, the CBO score assumes the following:

CBO has not extrapolated estimates further into the future because the uncertainties surrounding them are magnified even more. However, in view of the projected net savings during the decade following the 10-year budget window, CBO anticipates that the reconciliation proposal would probably continue to reduce budget deficits relative to those under current law in subsequent decades, assuming that all of its provisions would continue to be fully implemented.

What are some of these provisions? They include hundreds of billions of dollars in Medicare cuts that Democrats will immediately move into covering the “Donut Hole.” So, as Ryan noted, the numbers are both double-counted and, furthermore, should we really believe Democrats are going to cut Medicare?

Secondly, the CBO never says the bill will save $1.3 trillion in the second decade, despite what Speaker Pelosi (D-CA) and President Obama are claiming. If you read the letter sent to Pelosi, the CBO says the savings might, if things go really, really well, end up being equal to, or less than, a one-half of one percent of GDP in savings. Unless Democrats are expecting a $130 trillion GDP for America, their numbers are wrong.

Last, but certainly not least, according to The Washington Examiner’s Byrok York, the bill includes the CLASS Act, which is a long-term care program that the CBO accounts for in its analysis. The problem? The CLASS Act is unaffordable in the long run, but the CBO only counts the intake of money, not the expenditures. Furthermore, it includes the Democrats’ student loan modifications, which is where much of the savings for the bill will come from. (Both of these points are explained in some detail here.) So, to summarize, the bill takes in a lot of money, but does not spend much of it for years. These and other budgetary concerns are analyzed quite well here, and by the Senate Budget Committee’s minority staff here.

I need to clarify, by the way, that I am not criticizing the CBO. They analyze what they are given by politicians, and so their numbers are sometimes necessarily incorrect. Blame the politicians- on both sides, yes, but in this case, the Democrats- for gaming the system so dishonestly. Furthermore, the CBO letter is a preliminary letter, which means its analysis is necessarily vague and has many suppositions. As Daniel Foster notes at The Corner, the final one is supposed to be out this weekend.

More bureaucracy and cost for Americans:

According to The Washington Examiner, the bill to be voted on would increase the number of IRS employees by over 16,000. So let me get this straight- we need more IRS employees? Well, I suppose they were doing such a good job with Geithner, Rangel, Daschle and the rest…

It gets worse, however. According to Americans for Tax Reform, the following occur in the bill:

• The number of new tax increases in the healthcare bill: 19
• The number of tax increases that unquestionably violate President Obama’s “firm pledge” not to raise “any form” of taxes on families making less than $250,000:  7
• The tax increase over the first decade if the healthcare bill becomes law: $497 billion
• The top federal tax rate on wages and self-employment earnings under this bill: 43.4%
• The annual tax hike for every man, woman, and child in America: $165
• The top federal tax rate on early distributions from HSAs under this bill: 59.6%

Next, according to Republican Representative Kevin Brady (R-TX) (H/T to the Examiner):

In addition to more complicated tax returns, families and small businesses will be forced to reveal further tax information to the IRS, provide proof of ‘government approved’ health care and submit detailed sales information to comply with new excise taxes.

Thirdly, there are a number of tax increases in the bill. Hundreds of billions of dollars worth, in fact, and they would hit those making less than $250,000 in some cases. Once again, the president is violating his pledge to not hit lower-income Americans. For some reason, Democrats continue to want to reduce the budget by increasing taxes. Or, to put it another way, they believe that hurting the economic growth of America is the way to go.

Fun Fact: Caterpillar will have its costs increased by $100 million in the first year of ObamaCare.

Special Deals- Remember, President Obama doesn’t care about the process

Senator Tom Coburn (R-OK) made a Profile In Courage statement Thursday that should send chills down the backs of every Democrat who changes from a “No” vote to a “Yes” vote in the House tomorrow. He threatened to- brace yourselves- hold them accountable, as well as those Democrats who accept deals for their “Yes” votes. Check out the video of Coburn’s statement here.

Unfortunately, some Democrats haven’t paid attention, it seems. Fox News reports a number of states getting special deals, including North Dakota, where last year’s “Yes” vote Earl Pomeroy is from. However, Pomeroy has a tough race this year, and is rumored to be concerned about the abortion elements of the House vote. Is he being bribed with the North Dakota assistance? Considering his is the only state with a loophole regarding the nationalization of the student loan industry (the bank in North Dakota is the only state-run bank in the nation), and he was named Chairman of the Social Security Subcommittee after the Rangel dust-up…I’d say it’s possible. (Full disclosure: my uncle is Pomeroy’s Chief of Staff, which is why I am saying it’s possible, not definite. My uncle wouldn’t work for a bought-and-paid-for Congressman, as my uncle is an honest guy.) The exemption may be pulled, however, as Democratic North Dakota Senator Kent Conrad is asking for it to be eliminated to avoid controversy.

Other deals noted by Fox include:

• Retains $300 million in extra Medicaid aid for Louisiana, which had helped win support for the Senate health bill from Sen. Mary Landrieu, D-La. The state is still struggling to recover from Hurricane Katrina.
• Keeps $100 million included in the Senate bill that is expected to go for a public hospital in Connecticut sought by Dodd, who is retiring.
• Preserves language won by Baucus permitting many of the 2,900 residents of Libby, Mont., to qualify for Medicare benefits. Some of them have asbestos-related diseases from a now-shuttered mine.
• Provides an additional $8.5 billion over the next decade for 11 states and the District of Columbia to help them pay for the more generous Medicaid assistance they have been providing low-income residents. These states are Arizona, Delaware, Hawaii, Maine, Massachusetts, Minnesota, New York, Pennsylvania, Vermont, Washington and Wisconsin.
• Maintains a Senate-approved provision giving extra money for hospitals and doctors in North and South Dakota, Montana and Wyoming.

Another possible deal is noted by the House Republican Conference on their website, where water regulation changes are being accused of acting as a quid-pro-quo. Is it true? We cannot be certain, but the water legislation comes dangerously close to two California Democrats’ support for the bill.

I guess I don’t understand- Americans are against the bill, against the process…and still Democrats can’t get the message?

In Short:

When it comes down to it, this bill is including the deals typically denigrated by Americans as normal in Congress; it raises the deficit significantly, at an estimated cost of over two trillion dollars; raises taxes on Americans; and continues the over-regulation of American health care. These and other reasons are why we need to keep pushing this over the next 22 hours, convincing our fellow Americans to tell their Democratic representatives to vote against the bill. Here is a partial list of people to call, and here is a lengthier one.

As a conservative, I am very much against governments playing favorites through subsidies, bailouts etc. However, we must accept the reality that TARP passed. As such, I would note the following: the big banks have paid back a large portion of their borrowed funds. It is the government-owned companies (General Motors, Chrysler, Fannie Mae and Freddie Mac) which are failing to pay back what they owe.

I managed to find the CBO letter, which was sent to Senator Charles Grassley (R-IA) yesterday. According to the letter (Emphasis mine):

What is the overlap between firms that would pay the proposed fee and firms that generated losses for the TARP? For the most part, the firms paying the fee would not be those that are directly responsible for losses realized by the TARP. Some firms subject to the fee are expected to generate such losses, including the American International Group, GMAC Financial Services, and CIT Group (which filed for bankruptcy protection on November 1, 2009). However, the fee would not apply to firms in the automotive industry, which account for $47 billion of the program’s estimated total cost of $99 billion. Other firms that would be subject to the fee have either paid back all of the funds received from the TARP or are current on their repayment schedule and unlikely to generate losses from their participation in the program. However, all of the institutions that might be covered by the fee benefited to varying degrees from the program’s contribution toward stabilizing the nation’s financial system and overall economy.

In defending the tax, Think Progress- which had the link to the letter- made some excellent points rebutting conservative arguments cheering the CBO’s conclusions. They include, but are not limited to, the fact that the letter states smaller banks would have a leg up on their larger competitors because the tax does not go after them, and that the tax’s cost could be offset by lower employee compensation. (Read: executives could be paid less.) Additionally, something I noticed was that CBO said the economic impact would be minimal.

Think Progress and other liberal people and organizations will pounce upon the points noted above, and others, but when it comes down to it, the tax will not hurt the business’ executives, the “if we had to be honest” target of the tax-supporting Democrats. They will hurt, as the CBO said, consumers, investors and employees. It’s economics 101. Unfortunately, Democrats fail to understand this.

Ed Morrissey was kind enough to extrapolate this basic concept to other government policy proposals Democrats sometimes don’t understand- I’ll let him explain them:

Let’s make sure we extrapolate this for everyone onto other public policies, while we’re at it:

• Increasing the minimum wage forces businesses to pay more for labor.  Either they hire fewer people or they raise prices — which undermines the buying power of those who make the least amount of money.
• A carbon tax or cap-and-trade bill will force energy producers to either raise prices to its customers or scale back power production, which will force businesses to either raise prices or cut back production, which will mean more cost or more scarcity for consumers — both of which are inflationary.
• Higher fees on insurers, medical-device manufacturers, and other goods and services in the health-care industry mean higher prices for consumers in the form of increased premiums or in greater scarcity as suppliers fail to come to market.

Imposing higher costs on business means higher costs for consumers.  It means fewer jobs, less consumer choice, less innovation, and economic decline.  I’d be surprised if the CBO analysis itself doesn’t end with the word duh in the last sentence.

To summarize this post:

What Democrats should be saying after this letter was publicized:

What Republicans (and the CBO) are saying to Democrats about their intent regarding the tax after the CBO letter:

Other conservatives are attacking the mandate by reminding us that the Congressional Budget Office had multiple issues with the idea during the Clinton health care reform efforts.

Also, good times for Democratic Members of Congress and their trial lawyer buddies. Apparently, the latter worked really hard to make sure their industry wouldn’t get tagged in the health care reform efforts, and Democrats appeased them. Of course, former Vermont Governor Howard Dean made clear this would happen months ago. Unfortunately for Democrats, the CBO used real numbers and evidence to show tort reform would save the public $54 billion over ten years. (Conservatives, this is where we write, call, e-mail and fax our Senate and House Members of Congress to tell them they are not representing us…)

For fun- H/T to Ed Morrissey at Hot Air- here are some lobbying numbers from the law industry. Surprisingly, Republicans have averaged around 25% of lobbying efforts from lawyers since 1990. I didn’t expect it to be that high.

Congress.org has five interesting provisions about the bill, as well as a link to the bill itself.

CNN has an article, a political analysis of sorts as well as a link to the bill.

NRTL blasts the bill, according to Politico.

AP, NYT, and NPR compare the House and Senate bills.

Remember- this bill does not include the more-than-quarter-trillion dollar “Doc Fix” bill that failed in the Senate a month ago. So whatever the Congressional Budget Office says…add that to it. The current CBO score is $849 billion, which includes Medicare cuts and raising some taxes, and will reduce the debt by $127 billion. So, in reality, the debt will increase by $118 billion, unless the government and CBO estimates are underestimates, which is generally the case.

Either way, the CBO score is great momentum for Senator Reid (D-NV) with fiscally conservative Democrats- who may ignore the “Doc Fix” numbers for the final vote on the Senate bill- and bad for those of us opposed to many of the Democratic health reform concepts. Fortunately or unfortunately, depending on how you look at it, abortion is covered in the bill and there is a public option. This is bad because they are bad ideas, but good because it will allow moderate Democrats to oppose the bill if abortion and the public option are included, as some have said they will do. Whatever else happens, let’s at least hope the public option and abortion are eliminated. Contact your Senators.

One last note: this is the preliminary CBO score Democrats are all excited about. The final one is supposed to be out today.

Question: who cares? Anti-trust laws are a good thing, and should be enforced down the line. Democrats ARE conducting a brazen, partisan attack on insurance companies, but this time the end may justify the means.