OBAMA: Now there are also those who claim that our reform efforts would insure illegal immigrants. This too is false. The reforms I'm proposing would not apply to those who are here illegally.
WILSON: You lie.
OBAMA: That's not true. From an exchange during President Obama's speech before a joint session of Congress September 9, 2009
Was Joe Wilson (R) right? Did Obama (D) lie? Decide for yourself.
"Raul Grijalva, an Arizona Democrat, said Hispanic lawmakers got a pledge from leaders to defeat any Republican attempt to insert language to bar undocumented immigrants from exchanges." From Bloomberg article "Democrats Seek Votes on Health-Care as Delay Possible (Update1)" the day before the US House passed healthcare "re-form" legislation HR 3962 by a vote of 210-205.
Representative Wilson's rudeness during President Obama's speech to Congress on healthcare "re-form" drew attention to the messenger. But what about Wilson's message? President Obama promised his healthcare "re-forms" wouldn't apply to illegal aliens, so why was it so important to Hispanic lawmakers that D-leaders pledge to defeat any language that barred illegal aliens from the health insurance exchanges?
On November 7, 2009, the House passed the largest expansion of the nation’s healthcare system since the 1965 creation of Medicare.[1] The Congressional Budget Office estimate for HR 3962 (CBO estimate pdf) predicted:
"According to CBO and JCT’s assessment, enacting H.R. 3962 would result in a net reduction in federal budget deficits of $109 billion over the 2010–2019 period (see Table 1). In the subsequent decade, the collective effect of its provisions would probably be slight reductions in federal budget deficits. Those estimates are all subject to substantial uncertainty.
"The estimate includes a projected net cost of $891 billion over 10 years for the proposed expansions in insurance coverage. That net cost itself reflects a gross total of $1,052 billion in subsidies provided through the exchanges (and related spending), increased net outlays for Medicaid and the Children’s Health Insurance Program (CHIP), and tax credits for small employers; those costs are partly offset by $167 billion in collections of penalties paid by individuals and employers."
Statistics and Illegal Alien Demographics
Only in Washington, D.C. can a bill projected to cost more than $1 trillion over 10 years be considered to reduce the budget deficit over the same time period by $109 billion. To do the equivalent on a small scale, you'd have to plan to buy a yacht while you're millions of dollars in debt, buy a speedboat instead, and then tell your family you're saving lots of money because you didn't buy the yacht.
Notice also how the CBO estimate (see Table 3 of estimate) counts $168 billion in penalties paid by individuals and employers as income. House Ways and Means Committee Member Dave Camp (R) released a letter (pdf) from the non-partisan Joint Committee on Taxation (JCT) confirming that failure to comply with the mandate in HR 3962 for individuals to buy health insurance would land people in jail. People who do not maintain “acceptable health insurance coverage” and do not to pay the bill’s new individual mandate tax (generally 2.5% of income), are subject to numerous civil and criminal penalties, including criminal fines of up to $250,000 and imprisonment of up to five years.
The CBO is so certain that this onerous bill will oppress people and that many will try to avoid complying with it, that its budget estimate includes future penalties. Adding penalties as income to the estimate lets the CBO pretend HR 3962 costs even less than everyone knows it will. Congress is depending on people breaking the law, so they made it painful enough to force many people to break it. This lets the CBO publicize that the inevitable penalties collected are not an increase in taxes.
If Congress makes it illegal to breathe and collects penalties when people do what it takes to survive, they could subsidize lots of programs while bragging that taxes were low.
Magic and misdirection while the crowd cheers for more.
Federal bureaucrats also plan for illegal aliens to help pay for the extra costs through FICA taxes. The 2009 Annual Report by the Board of Trustees for Social Security and Medicare uses illegal aliens in their estimates of the future costs of Social Security and Medicare.[2] The federal government has no incentive to stop illegal border crossings because it depends on enough people crossing the border illegally to help pay for Medicare and Social Security. Actuaries count illegal aliens favorably in their calculations of future program costs.[3]
Paying Off the AMA
Is Obama lying about anything else?
The AMA usually opposes changes in the status quo. But this time the AMA supports healthcare "re-form" because it was bought off (pdf) with promises of change to the Medicare Sustainable Growth Rate (SGR) payment system for physicians. Without a change to current law, SGR Medicare payments to doctors are scheduled to be cut 21.5 percent as of January 1, 2010, and by an additional 5.5 percent each year from 2011 through 2014, with another small reduction in 2015.[4] Typically, Congress--under both D and R leadership--routinely prevents the cuts from taking effect for a year or two at a time. But House and Senate leaders have always left intact the underlying requirement to keep doctor payment below the rate of GDP growth.[5]
To get AMA support, healthcare "re-formers" promised to end for the next ten years the annual question of whether the SGR Medicare payment cuts will go into effect . To do that, "re-formers" must commit to spending an additional $247 billion on healthcare. The problem for "re-formers" is this impacts the perceived cost of healthcare "re-form." President Obama had initially targeted the cost for "re-form" at $900 billion over 10 years. Adding the $247 billion to the healthcare "re-form" legislation obviously puts the cost at over trillion dollars.
Healthcare "re-formers" tried to hide the bribe to the AMA. They didn't want it tabulated in the CBO estimate for what healthcare "re-form" legislation would cost. A separate $247 billion Senate measure, S.1776, the Stabenow bill, would have imposed a 10-year freeze on mandated cuts in Medicare payments to doctors. Rs defeated S.1776 on October 21, 2009, signaling the House that it would have to bury some of that money in the House version of healthcare "re-form": HR 3962.
On November 7, 2009, the House passed an amendment to HR 3962, HR 3961, which did just that. HR 3961, the Medicare Physician Payment Reform Act of 2009, amends title XVIII of the Social Security Act to reform the Medicare SGR payment system. HR 3962 exceeds the $900 billion cost target by approximately $200 billion: the CBO estimates it will cost $1.1 trillion over 10 years.
As for the Senate, Alexander Bolton writes in The Hill:
"A senior Democratic senator who spoke on condition of anonymity said the defeat of Stabenow’s bill could have reverberations, but only if Democratic leaders fail to assure doctors groups that that they will find another way to avert cuts in their Medicare reimbursements, which are mandated by a 1997 budget law."
Candidate Obama vowed he'd be open with the American people (video). President Obama has not kept his promise, making backroom deals with the AMA and planning for continued use of taxpayer resources for illegal aliens.
Wilson told Obama: "You lie."
Is it true? You decide.
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[1] HR 3962 was 1990 pages (pdf) before amendments were added. The Senate is considering a similar bill.
[2] The Social Security Act requires that the Board, among other duties, report annually to the Congress on the actuarial (financial) status of the OASI and DI Trust Funds. The 2009 annual report, "THE 2009 ANNUAL REPORT OF THE BOARD OF TRUSTEES OF THE FEDERAL OLD-AGE AND SURVIVORS INSURANCE AND FEDERAL DISABILITY INSURANCE TRUST FUNDS" is the 69th such report.
The Board of Trustees was established under the Social Security Act to oversee the financial operations of the OASI and DI Trust Funds. The Deputy Commissioner of the Social Security Administration (SSA) is designated as Secretary of the Board. The Board is composed of six members:
- Four members serve by virtue of their positions in the Federal Government: the Secretary of the Treasury, who is the Managing Trustee; the Secretary of Labor; the Secretary of Health and Human Services; and the Commissioner of Social Security.
- The other two positions, which are currently vacant, are for members of the public, to be appointed by the President, subject to confirmation by the Senate.
[3] THE 2009 ANNUAL REPORT OF THE BOARD OF TRUSTEES OF THE FEDERAL OLD-AGE AND SURVIVORS INSURANCE AND FEDERAL DISABILITY INSURANCE TRUST FUNDS, V. ASSUMPTIONS AND METHODS UNDERLYING ACTUARIAL ESTIMATES, at http://www.ssa.gov/OACT/TR/2009/trTOC.html (November 10, 2009)
In the "2009 OASDI Trustees Report," illegal immigration is considered as "Other Immigration," in contrast to legal immigration. In Section V ASSUMPTIONS AND METHODS UNDERLYING ACTUARIAL ESTIMATES, Part 3 Immigration Assumptions, illegal immigration helps the calculation by adding to the number of taxpayers paying Social Security and Medicare taxes:
"Other immigration consists of immigrants who enter the Social Security area in a given year and stay to the end of that year without having LPR status, such as undocumented immigrants and temporary foreign workers and students.
...
"Combining the annual legal immigration and emigration assumptions results in ultimate net legal immigration of 750,000 persons per year under the intermediate alternative. For the low-cost and high-cost scenarios, ultimate annual net legal immigration is 960,000 persons and 560,000 persons, respectively.
"The number of other immigrants residing in the Social Security area population is estimated to have been about 9.7 million persons as of January 1, 2000, increasing to about 12.8 million persons as of January 1, 2006. This other-immigrant population is highly mobile and far more likely to leave the Social Security area than is the native-born or legal-immigrant population. The average number of persons entering the other-immigrant population in the period 2000 through 2006 is estimated to have been about 1.5 million per year. During the same period, the number of other immigrants who left the Social Security area or adjusted status to become LPRs is estimated to have averaged about 960,000 per year. Thus, annual net other immigration during this time period is estimated to have averaged approximately 540,000 persons.
"For the intermediate assumptions, annual other immigration is assumed to continue at the level of 1.5 million persons throughout the projection period. For the low- and high-cost scenarios, future annual other immigration is assumed to average 1.8 million persons and 1.2 million persons, respectively.
"Emigration from the other-immigrant population includes those who leave the Social Security area and those who adjust status to become LPRs. The annual number of other immigrants who leave the Social Security area is estimated based on modeled departures, disaggregated into two groups, for the period 2000-06. The first departing group is set at fixed annual numbers of departures, by age and sex, which remain constant throughout the projection period. This first group is directly related to the number of other immigrants that are assumed to have recently entered the Social Security area. The second departing group is calculated by applying a set of annual departure rates, by age and sex, to the other-immigrant population in the Social Security area. In addition, the annual number of other immigrants who adjust status to become LPRs is assumed to ultimately be 500,000 for the intermediate assumptions. This level is one third of the annual number of other immigrants assumed to enter the Social Security area. For the low- and high-cost scenarios, ultimate annual numbers adjusting status to LPR are assumed to average 600,000 persons and 400,000 persons, respectively.
"Under the assumptions and methods described above, the size of the other-immigrant population is projected to grow substantially. This growth reflects the excess of annual other immigration over the combined annual numbers of emigrants and deaths that occur within the other-immigrant population.
"Net other immigration decreased from a level averaging over 590,000 per year in the period 2000 through 2003, to about 465,000 in 2006, reflecting an increase in the number of other immigrants adjusting to LPR status as a result of the effort to reduce the backlog of applications for LPR status. By 2010, when the backlog of applications is expected to be eliminated, net other immigration is projected to be about 440,000 persons per year. After 2010, net other immigration is projected to decline steadily to about 275,000 in 2063 and to remain fairly stable thereafter. The decline in net other immigration is attributable to the increasing number of other immigrants residing in the Social Security area. This results in an increase in the numbers who emigrate out of the area based on the rates of departure described above. All other components of other immigration and emigration are set at fixed levels after 2010, and thus do not contribute toward any change in net other immigration. The average annual level of net other immigration over the 75-year projection period is about 315,000 persons. Net other immigration is estimated to average about 410,000 persons per year under the low-cost assumptions and 220,000 persons per year under the high-cost assumptions.
"The total level of net immigration (legal and other combined) is estimated to average 1,065,000 persons per year during the 75-year projection period under the intermediate assumptions. For the low-cost assumptions, total net immigration is estimated to average 1,370,000 persons per year. Under the high-cost assumptions, total net immigration is estimated to average 785,000 persons per year.
"Demographers express a wide range of views about the future course of immigration for the United States. Some, like the 2007 Technical Panel mentioned in the previous section, believe that immigration will increase substantially in the future. Others believe that potential immigrants may be attracted to other countries or that the U.S. borders could be tightened in the future."
[4] 2009 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, May 12, 2009, p. 22, at http://www.cms.hhs.gov/reportstrustfunds/downloads/tr2009.pdf (September 24, 2009).
[5] The Baucus Health Bill: A Medicare Physician Payment Shell Game, by Dennis G Smith, September 25, 2009, at http://www.heritage.org/Research/healthcare/wm2629.cfm (November 10, 2009)
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