Freedom Line Blog

We all know that driving with one foot on the gas and the other  on the brake  just slows you down.  And that dieting by day while binging by night will negate your weight loss efforts.

Similarly, spending billions of taxpayer dollars to “stimulate” the economy and job growth, while simultaneously proposing tax increases that would stymie investments in new jobs, won’t help us get our economy back on track.

Unfortunately, that is just the proposal before the U.S. Congress, in the form of the so-called Baucus/Levin American Jobs and Closing Tax Loopholes Act. What’s doubly unfortunate is the rush by some Congressional leaders to hastily pass this legislation without any public debate.

Among the provisions in the bill is a tax increase on “carried interest,” which is the profit from a successful investment. Carried interest earnings are often used to spur further investment, and don’t fairly constitute regular job income because the return on investment isn’t guaranteed like a paycheck is. The proposed increase would take the tax from the current capital gains tax level of 15% (20% in 2011) to a punishing 40%.  Consequently, investment partnerships would not invest as much as they do now.

Even some Senate Democrats recognize the folly in discouraging job-creating investments with this sort of tax increase. Four Democrats—Patty Murray (WA), Mark Warner (VA), Bob Casey (PA), and Jeanne Shaheen (NH)—along with Scott Brown (R-MA) have said that taxing venture firms at higher rates would merely hurt job creation and “could not occur at a worse time.”

There are additional reasons the carried-interest tax hike is a bad idea:

• While President Obama has admitted that small businesses are responsible for 70 percent of the nation’s net new jobs in the last decade, this legislation would translate to an $11.2 billion tax increase on some of those same small businesses.   How can this be an engine of job creation?

• The tax hike would also discourage investment and take away money used to start, grow and rescue companies.

• Under such high tax rates, the United States would be at a severe global disadvantage in terms of attracting investment.  The winners would be countries such as India, China, and the U.K., with carried interest tax rates of 0%, 10% and 18%, respectively.  Why drive jobs and businesses to overseas competitors?

Senator Max Baucus (D-MT) and Representative Sander Levin (D-MI) just introduced their ill-advised legislation on May 20, yet they are driving for quick passage.  This rush only serves to deprive everyday constituents of the ability to weigh in with their elected representatives on the legislation.

Is it any wonder that with such stealth legislating, millions of Americans are losing their confidence and trust in Congress’s ability to boost the economy?

As the Center for Individual Freedom sees it, this is another case of government “help” we can’t afford.

From the chatter on the Internet and in the newsrooms you’d think Maine Senator Olympia Snowe’s vote in favor of the Baucus health care “reform” bill out of committee is newsworthy. According to the Associated Press, Snowe’s “Yes” turns a starkly divided blue-red, 13-10 vote into a 14-9 “bi-partisan” shocker. To wit:

But Snowe’s decision gave the vote a significance that transcends partisan divisions. For months, congressional Republicans have been virtually unanimous in denouncing the Democratic bills as an unwarranted expansion of government influence.”

So, even though “for months” congressional Republicans have been “virtually unanimous” in criticizing Democrats’ plans to overhaul American health care, one Senate Republican voting “aye,” constitutes a landmark in bi-partisanship?  Hardly.  Even Snowe acknowledges that she’s only voting for this version of the health care bill, and remains undecided about the inevitable modified version(s) still to be written. 

The real story here is how Snowe managed to dominate an event that would have had exactly the same effect had she been fly fishing today. Snowe’s vote isn’t about switching sides in a policy debate, or answering history’s call. It’s about solidifying her standing as a moderate to be negotiated with when Democrats need Republican cover for passing liberal legislation. Although Baucus failed to get a true bi-partisan bill out his committee, he did succeed in snaring a token R. One hopes an enterprising reporter at one of the Washington dailies will keep a close eye on the next few Appropriations bills to see how much Maine just benefited from its Senator selling her (qualified) support.

Despite expressing “concerns” about the Baucus “health care reform” bill, Senator Olympia Snowe (R-Maine) announced she will vote “yes” today in the Senate Finance Committee.

“Health Care Bill Gets Green Light in Cost Analysis”

That is the gift proponents of government-run health care received this morning in the form of a New York Times headline.  That headline, however, along with its accompanying story about the Congressional Budget Office’s preliminary cost analysis of the Baucus bill, is about as deceptive as the ObamaCare sales job Washington politicians have been employing for months.

CBO’s preliminary cost analysis is just that – a preliminary estimate based on a theoretical framework of ideas approved by the Senate Finance Committee.  It’s preliminary because the actual bill hasn’t been written yet, much less been combined with at least five other, more expensive versions of “reform” circulating in the House and Senate.  As Chris Frates of Politico.com noted yesterday:

While the media and lawmakers often shorthand a CBO letter as a ‘score’ or ‘cost estimate,’ today’s CBO letter is neither. Because the bill is still in ‘conceptual,’ or layman’s terms, CBO’s letter today was a ‘preliminary analysis.’  For it to be an official cost estimate, the bill has to be translated into legislative language.

“And CBO goes to great pains in its letter to make the distinction:

“‘CBO and JCT’s analysis is preliminary in large part because the Chairman’s mark, as amended, has not yet been embodied in legislative language,’ the letter says.”

In other words, is anyone prepared to believe that the most recent CBO cost estimate will even come close to resembling reality once the Baucus bill is combined with the budget-busting provisions of the various other versions of ObamaCare?  After Reid and Pelosi are through with their parliamentary tricks outlined here and here?

Yet liberals and the mainstream media today are giddy with excitement.  Why?  Because regardless of the fact that the CBO letter means nothing in the grand scheme of things, something at which the CBO itself hints, for the first time in this debate they have something – anything – that supports their dream of government-run health care.   Reality be damned. 

Our guess is that the large majority of Americans are still not ready to join their party.  Even taken at face value, CBO’s preliminary claim that the Baucus bill will actually reduce the budget deficit by $81 billion over 10 years simply means that the legislation raises taxes on businesses and individuals and cuts benefits only slightly more than it increases spending, while still leaving 25 million people uninsured.  And the more expensive the final bill gets – don’t believe for a moment that it won’t get more expensive – the greater the tax increases and benefit cuts will become in order to square with the President’s pledge to not sign a bill that adds “one dime” to the deficit.

Isn’t “change” grand?

The Congressional Budget Office has released its preliminary cost estimate for the Baucus Bill.  Here is the link.  The CBO estimates the total cost over ten years will be $829 billion.

UPDATE:

Most of the actual expenditures and mandates do not take effect until 2013-14.  In other words, CBO’s 10-year preliminary cost estimate only accounts for six or seven years worth of the expensive provisions.

This time, the committee voted against the “moderate” Schumer version of the public option.  The vote was 10-13, with Senators Baucus (MT), Lincoln (AR), and Conrad (ND) voting against government-run health care.

This looks like the death knell of the public option in the Senate, as Senator Schumer and Chairman Baucus both admit that a bill with a public option has no chance of passing the Senate with 60 votes.  However, there are some reports that Senate Democrats might use the budget reconciliation process to push through a public option, requiring only 50 votes.

Call your Senators and tell them to vote “No” on a government-run public option that would result in anywhere from 80-120 million Americans losing their insurance.  Here is the number: 202-224-3121.

Minutes ago the Senate Finance Committee voted against Senator Jay Rockefeller’s (WV) version of a government-run public option.  The vote was a surprising victory for free-market advocates.  The Rockefeller amendment failed 8-15, with Senators Baucus (MT), Conrad (ND), Lincoln (AR), Nelson (FL), and Carper (DE) voting against the public option.

Call your Senators and tell them to vote “No” on a government-run public option that would result in anywhere from 80-120 million Americans losing their insurance. Here is the number: 202-224-3121.

Apparently, Max Baucus, Chairman of the Senate Finance Committee and the New Wizard* of ObamaCare has decided that it is bad form to tax condoms, but really good form to tax insulin pumps and hearing aids and power wheelchairs.

Worried about perceptions that ObamaCare will tax the middle class (it still will, and we will be telling you we told you so for decades), Baucus seemingly decided to exempt consumer items of $100 or less from his previously proposed tax on medical devices.

There are no middle-class people who are deaf, diabetic and lame?  What did they do to get screwed?

Do these people really think we are that stupid?  Do they think that by applying the tax to the medical device companies, you won’t know it’s going to be passed to you?  There’s no one that stupid.  Plenty of people docile enough to let it happen, but not so stupid as to not understand this.

*Note that we are using Wizard as a coded expletive rather than Imperial Wizard, which is a better coded expletive, in this context, but would be mischaracterized and get us charged with saying bad stuff and inciting violence.

It appears that Senate Finance Committee Chairman Max Baucus failed to get the White House memo about tax increases not being tax increases prior to drafting his latest version of ObamaCare.

During yesterday’s now-infamous exchange with ABC’s George Stephanopoulos, President Obama insisted that the provision in Baucus’ bill that taxes families up to $3,800 annually for failing to get health insurance (aka the “individual mandate”) is not a tax increase and therefore does not violate his oft-repeated campaign promise not to raise taxes on the middle class.

Hat tip to Chris Frates and Mike Allen of Politico for pointing out that the first sentence of Page 29 of the Baucus bill reads: “The consequence for not maintaining insurance would be an excise tax.”

But that’s not all. According to Frates and Allen:

And the rest of the bill is clear that the Finance Committee does, in fact, consider it a tax: ‘The excise tax would be assessed through the tax code and applied as an additional amount of Federal tax owed.’

So who’s lying now?

Here’s a hint: The President and his Administration are trying the same sleight of hand trick with regard to Cap-and-Trade … oops, Cap-and-Tax.

The Senate Finance Committee has posted all 564 proposed amendments to Chairman Baucus and President Obama’s health care bill.

• Summary of 180 amendments concerning the delivery system for health care  — here.

                    Actual text of above amendments — here.

• Summary of the 284 amendments dealing with “exapanding coverage” — here.

                    Actual text of above amendments — here.

• Summary of the 100 amendments dealing with financing — here.

                    Actual text of above amendments — here. 

The bill contains 204 instances of the word tax(es), 36 occurrences of the word fine(s), 26 instances of the word shall, and 69 occurrences of the word must.  This version of the visualization omits the “current law” language in the bill.

Click here for the full visualization.

Here is a nifty visualization (by frequency of words) of Senator Baucus’ “America’s Healthy Future Act of 2009.”

From FoxNews.com:

Families who fail to get health insurance could be fined up to $3,800 under a health care reform plan proposed by a top Senate negotiator. 

Sen. Max Baucus, D-Mont., who as chairman of the Senate Finance Committee is leading talks among the “Gang of Six” senators to hammer out a bipartisan compromise, offered what he described on Tuesday as a “framework” and not a “final product.” 

But the detailed proposal comes just days ahead of a self-imposed Sept. 15 deadline for such a deal. Baucus is pushing his committee members hard to hammer out a bill, and those details come as strong suggestions. 

The framework, a copy of which was obtained by FOX News, includes what amounts to a no-choice option. It would make health insurance mandatory, like auto insurance. 

Read the full article here.