Obamacare: A Tax in Reform’s Clothing

Conservatives have spent much of the past week trying to explain exactly why Obamacare is going to bust the budget. We’ve done our best to highlight the unrealistic assumptions , the budgetary gimmicks , and the downright dirty tricks contained in the bill that make it a sur

But Democrats dogmatically kept pointing to the CBO report, conveniently ignoring Republicans critique of that very score.

Fine. There is more than one way to skin a cat. Okay, with PETA out in force these days, perhaps that’s not the best metaphor. How about, there is more than one way to pet a puppy. There, that works.

It’s time to go with Plan B. And frankly, we didn’t want to have to go there, but Democrats have forced our hand.  Even if you set aside reality and believe that Obamacare doesn’t add to the deficit, let’s look more closely at how it “accomplishes” that feat.

In the words of the CBO ,

CBO anticipates that enacting H.R. 2 would probably yield, for the 2012-2021 period, a reduction in revenues in the neighborhood of $770 billion and a reduction in outlays in the vicinity of $540 billion, plus or minus the effects of forthcoming

CBO Director Douglas Elmendorf is a world-class economist, but he’s not exactly known for readable prose. So what exactly does the above statement mean? It means that Obamacare doesn’t lower the deficit by cutting costs, it lowers the deficit (if you believe the assumptions) by collecting more revenues.

Harvard economist Gregory Mankiw explains how ridiculous this is on his blog:

I have a plan to reduce the budget deficit.  The essence of the plan is the federal government writing me a check for $1 billion.  The plan will be financed by $3 billion of tax increases.  According to my back-of-the envelope calculations, giving me that $1 billion will reduce the budget deficit by $2 billion.

Now, you may be tempted to say that giving me that $1 billion will not really reduce the budget deficit.  Rather, you might say, it is the tax increases, which have nothing to do with my handout, that are reducing the budget deficit.  But if you are tempted by that kind of sloppy thinking, you have not been following the debate over healthcare reform.

Conservative columnist Charles Krauthammer engages in a similar critique in today’s Washington Post:

Suppose someone – say, the president of United States – proposed the following: We are drowning in debt. More than $14 trillion right now. I’ve got a great idea for deficit reduction. It will yield a savings of $230 billion over the next 10 years: We increase spending by $540 billion while we increase taxes by $770 billion.

He’d be laughed out of town. And yet, this is precisely what the Democrats are claiming as a virtue of Obamacare.

Obamacare doesn’t reduce help to reduce the deficit at all. Spending hundreds of billions of dollars and then subsequently taxing Americans hundreds of billions of dollars more, isn’t a plan to reduce the deficit.  It’s a hidden tax being sold on the premise that we’re actually reforming a broken healthcare system.

We’ve long known Obamacare used gimmicks to appear to reduce the deficit, now we know Obamacare itself is a gimmick to raise taxes.

by Brandon Greife, Political Director of the College Republican National Committee

Crossposted from: http://speakout.crnc.org/blog/2011/01/21/obamacare-a-tax-in-reforms-clothing/