Willie Wonka and the Health Care Bill

Do you like fantasy stories?

Here's one for you.

The Democrats told the Congressional Budget Office that employers are going to raise everybody's wages after health care reform passes. Why? Because employers are going to save so much money on the lower health insurance premiums that result from the wonderful, amazing, marvelous, giant health care reform bill.

Have you heard? It spits golden coins into everybody's pockets. It's magical!

Last week, President Obama told an audience in Ohio that employers would see enormous reductions in the health care premiums they pay for their employees.

"Your employer, it's estimated, would see premiums fall by as much as 3,000 percent," the president said, "which means they could give you a raise."

Later the White House said the president misspoke. He meant to say premiums would fall by as much as 3,000 dollars, not 3,000 percent.

But the president and all the Democrats continue to tell the story that employers will take the money they save on premiums and hand it out in wage increases.

Everybody loves a good fairy tale.

Do you think the Democrats might be indulging in a wild flight of fantasy and wishful thinking?

Lucky for them, the Congressional Budget Office isn't allowed to say so.

Officially, the CBO has to take the lawmakers at their word. If they assert that someday they're going to cut Medicare and put a 40 percent tax on union health benefits, the Congressional Budget Office has to score the bill as if they'll really do it.

And if the lawmakers say employers will raise wages, and payroll tax revenue will increase, then the Congressional Budget Office has to score the bill on the assumption that employers will raise wages and payroll tax revenue will increase.

"According to reports from the Congressional Budget Office and the Joint Committee on Taxation, part of the deficit savings over the next 10 years stems from increased Social Security revenues generated by the Cadillac tax," Politico reported Thursday.

It makes Alice in Wonderland look like a documentary.

Are you wondering how the Cadillac tax, which is the nickname for a tax on high-cost health insurance plans, increases Social Security revenues?

Social Security revenues come from a tax on wages.

So the only way the Cadillac tax can increase Social Security revenues is if it results in more jobs or higher wages.

Even the Democrats don't claim that taxing health insurance plans will create jobs, but they stand by their story that taxing health insurance plans will raise wages.

They're asserting -- even bragging -- that union members and others who currently have excellent health plans will lose them thanks to the new tax that's intended to make them unaffordable, but that's okay because employers will buy cheaper insurance plans for their employees and give them the difference in wage increases.

And this will increase the take from Social Security payroll taxes!

And that will lower the deficit!

And there's a unicorn in Michelle Obama's garden, and it's eating the lettuce!

Not to spoil a good story, but a few things stand in the way of these happy hikes. Employers are looking at higher taxes starting in 2011 when the Bush tax cuts expire. They're looking at new and higher taxes on capital gains and other investment income. They may be looking at higher energy costs due to the Democrats' proposed regulations on carbon dioxide emissions and there's always the chance that health insurance premiums won't go down at all and may even go up.

And you know what that means.

It's a conspiracy by the Birthers to bring down the president!

Isn't story time fun?

Incidentally, the vaunted deficit-reduction of the health care reform package was discredited by the Congressional Budget Office on Friday. Turns out the "doc fix," which was taken out of the bill and put into a separate bill, costs $208 billion over ten years and wipes out the professed deficit savings, leaving the health care bill $59 billion underwater.

That's why the Democrats took it out of the bill. Nobody likes the truth, the whole truth and nothing but the truth to mess up a good story.

If you're not familiar with the "doc fix," it's an annual remedy for an earlier law that drastically cuts reimbursements to doctors who treat Medicare patients. The lower reimbursement rate makes the budget deficit look smaller on paper, but if Congress ever tried to put those lower reimbursements into effect, doctors would stop accepting new Medicare patients and might even stop seeing current patients.

Try as it might, the government can't force doctors to lose money, and it can't force insurance companies to lose money, and it can't force individuals to spend any of their own money buying health insurance policies.

All the government can do is whine and threaten and call everybody 'selfish' for refusing to shoulder their 'fair share' of other people's expenses.

Meanwhile, the government's costs for the new health care entitlement will go up, and up, and up.

And the deficit will go up, and up, and up.

And the taxes on people who hire people will go up, and up, and up.

And unemployment will go up, and up, and up.

This is a story without a happy ending.

Especially if you're a Democrat running for re-election.

Then, just when you thought it couldn't get any worse, President Obama said he backs a "framework" for immigration reform that would require all Americans to have biometric national ID cards in order to work in this country, while providing a path to citizenship for immigrants who are in the country illegally.

By sheer coincidence, the House will be voting on the health care bill Sunday just as tens of thousands of people march on Washington for immigrants' rights. Someday soon, taxpayer-subsidized health insurance could be one of those rights.

The end.

Of the story, and likely of the Democratic majorities, and probably of President Obama's hopes for a second term or any 'achievements' in what's left of the first one. The end of the malignant daydream of utopian America, where everyone has a 'right' to be supported by other people, where the government decides who deserves to be subsidized and who deserves to pay the bill.

And we all lived happily ever after.


Copyright 2010

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