CBO, now with Chuck Norris deadliness!

I’m not quite sure when the transformation took place. Were they there all along? Did they just get hired? Did they experience a sudden uptick in their consumption of Holy Ambrosia (AKA Dr. Pepper)? Regardless of the cause, the end result is the same: The CBO (Congressional Budget Office) is officially a BAMFs. They recently delivered a Chuck Norris strength roundhouse kick to the collective face of the Galactic Healthcare bill, and by extension, President Obama.

I took it upon myself to read the 18 page report published by the CBO. As you can imagine, it is about as thrilling a read as the instruction manual to your toaster. Fortunately, I also found this analysis by Keith Hennessy, which is a much easier read.

I’ll start with my impressions from the toaster manual. They begin tamely, by analyzing the effect on private coverage. It starts to really heat up around page 12. Check out these bullet point impacts on the labor market (Emphasis mine):

• Requiring employers to offer health insurance – or pay a fee if they do not – would be likely to reduce employment, though the effect would probably be small.
• Providing new subsidies for health insurance that decline in value as a person’s income rises could discourage some people from working more hours.

The first one is pretty self explanatory. Higher cost of employment = Less employment! The following paragraph states that this would be an “8% increase in the cost of hiring a worker making the minimum wage”. That’s right. All those poor working mothers we’re supposed to feel sorry for are hereby getting the shaft. Thanks, Uncle Sam!

The second one is clearly bad, but how bad? It functions off a principle they call the “implicit tax”. Basically, the subsidies you get for working decrease the more you make. The withdrawal of those benefits increase your costs, effectively “taxing” you the difference. How much is this implicit tax? Roughly 20%, they say. This means that every extra hour you work is effectively “taxed” at an additional 20% rate, because that same hour is causing you to lose healthcare benefits.

Of course our friends at the CBO save the best for last: Budget deficits! This is where Keith Hennessy focuses his article. Rather than throwing numbers at you, here’s a handy graph so you can see it all at once.


From the blog: “The House bill raises $87 B of taxes in 2019, compared to the $151 B net spending increase in that year. The area between the light blue and yellow lines is the deficit impact. Up to 2013, the bill collects more in taxes than it spends, so the bill actually reduces budget deficits in the early years. After 2013, the light blue net spending line is above the yellow tax line, so the bill adds to the deficit. In 2019, the bill increases the deficit by $151 B – $87 B = $64 B. The net of the deficit-reducing and deficit-increasing areas is the $239 B deficit increase over 10 years from the first table above. Again, all of these are CBO and Joint Tax Committee numbers.

Now we turn to the long run, relying on that key CBO paragraph. Here are the key numbers:
The net cost of the coverage provisions would be growing at a rate of more than 8 percent per year in nominal terms between 2017 and 2019; we would anticipate a similar trend in the subsequent decade. … Revenue from the surcharge on high-income individuals would be growing at about 5 percent per year in nominal terms between 2017 and 2019; that component would continue to grow at a slower rate than the cost of the coverage expansion in the following decade.”

What happens when your spending grows faster than your revenue? You get this:

Did you hear that sound? That’s the sound of the CBO curb stomping the Obamacare plan. Of course, there is a simple solution to the entire problem. We can just tax the rich into oblivion! They won’t mind, they’re evil anyway. They certainly would never see such taxes as an incentive to leave America and do business elsewhere.

The plan was terrible because it attacked your liberty. The plan was horrible because it expanded government. Now the plan can be shown to be ridiculously expensive. Think on that, and then ponder this: We were told by our Commander-in-Chief that the plan you saw above had to be passed by August. Be warned if it is tried again: You will need this knowledge to defend your liberty from an ever growing power hungry Federal government, hell bent on mortgaging our futures.