From the fact that people are very different it follows that, if we treat them equally, the result must be inequality in their actual position, and that the only way to place them in an equal position would be to treat them differently. Equality before the law and material equality are therefore not only different but are in conflict with each other; and we can achieve either one or the other, but not both at the same time
-- F.A. Hayak
The editorial board of the WSJ continues its deconstruction of the Democrat’s understanding of Obamacare’s financial impact. I was pleased to receive this latest editorial this morning because several of you had forwarded to me several Democrat-Lefty-PolicyWonk views on the AT&T write down. To my good friends on the left, I offer this light instruction in history beginning with the 4th paragraph in the editorial:
Presumably [Obamacare defenders are] familiar with the Financial Standard Accounting Board's 1990 statement No. 106, which requires businesses to immediately restate their earnings in light of their expected future retiree health liabilities. AT&T, Deere & Co., AK Steel, Prudential and Caterpillar, among others, are simply reporting the corporate costs of the Democratic decision to raise taxes on retiree drug benefits to finance ObamaCare.
When the Medicare prescription drug plan was debated in 2003, many feared that companies already offering such coverage would cash out and dump the costs on government. So Congress created a modest subsidy, equal to 28% of the cost of these plans for seniors who would otherwise enroll in Medicare. This subsidy is tax-free, and companies used to be allowed to deduct the full cost of the benefit from their corporate income taxes (beyond the 72% employer portion).
Get it? In 2003 Republicans and the White House caved to Democrats and liberal Republicans and agreed to subsidize businesses out of a real fear that private sector retirees would be dumped onto the public-sector Medicare roles. Guess what’s happening right now even as I write this? Some companies are now contemplating dropping private retiree coverage altogether. As the WSJ article puts it…
The deeper concern—apart from imposing senseless business losses in a still-uncertain economy—is that companies will start terminating private retiree coverage, which in turn will boost government costs. The Employee Benefit Research Institute calculates that the 28% subsidy on average will run taxpayers $665 in 2011 and that the tax dispensation is worth $233. The same plan in Medicare costs $1,209.
Given that Congress has already committed the original sin of creating a drug entitlement that crowds out private coverage, $233 in corporate tax breaks to avoid spending $1,209 seems like a deal. If one out of four retirees is now moved into Medicare, the public fisc will take on huge new liabilities.
Welcome to Obama Land.
Every once in awhile, someone writes so eloquently and truthfully that one concludes that there is no more to write. Thus
wrote Mike Flynn:
The Democrats and the White House are lost in a legislative “fog of war” right now. They are focused on twisting enough arms, offering jobs and negotiating specific “deals” (bribes) to get them to 216 votes. Their attention and energy is focused exclusively on a final vote in the House tonight. No one is looking even one minute beyond that horizon. They are like a general who pours all his reserves into taking a symbolic bridge, never realizing that his lines have already collapsed and his flanks have been turned. They may take the bridge and get to 216 votes. (I’ve learned to never bet against Congressional leadership and an Administration united for a single legislative victory. ) But, they have already lost the war. They have deluded themselves that if they can…just…get…this…bill…passed, the public’s anger and attention will subside, they can put health care ‘behind them’ and they can focus on other ‘popular’ measures that will shore up their election prospects in November.
What they don’t realize is that today’s vote isn’t the end, but just a new beginning in the debate over health care. Buckle up, because if they manage to cobble together enough votes to pass the Senate Health Bill today, we’re set for weeks and perhaps months of a constitutional and political crisis the likes of which we haven’t seen in our lifetimes. . . . A representative democracy cannot long endure a political class that is so out of touch with the populace. In some respects, what happens tonight is almost beside the point. The politics are set. Some Democrats are deluding themselves that they can put this behind them and somehow survive in November. They are most assuredly wrong.
One of my favorite comedy sketches put to World of Warcraft characters.
Priceless
"By the time the vote has taken place, not only I will know what's in it, you'll know what's in it because it's going to be posted and everybody's going to be able to evaluate it on the merits," he said.(my emphasis)
Let me explain how transparency works. A process leading to a vote is transparent if, and only if, people know what’s in a bill BEFORE THE VOTE IS TAKEN. This is a concept foreign to Nancy Pelosi and, evidently, President Obama.
Posts
