Ten days ago, I wrote that Sen. Baucus was trying to hide the true costs of his legislation. It’s reassuring to read that Keith Hennessey is making the same points from a different perspective. In my post, I cited this commentary/analysis from the WSJ:

About 59 million people are on Medicaid today, which means that a decade from now about a quarter of the total population would be on a program originally sold as help for low-income women, children and the disabled. State budgets would explode, by $37 billion, according to the Congressional Budget Office, because they would no longer be allowed to set eligibility in line with their own decisions about taxes and spending. This is the mother, and father and crazy uncle—of unfunded mandates.

Here’s what Mr. Hennessey asks in his post:

Congress needs to ask CBO, “Would these bills result in an increase or decrease in total health spending, and in total health insurance spending, relative to current law?” CBO analyses have so far looked only at subcomponents of the population. Policymakers need the answer for the country as a whole. They also need to understand the effects on public and private health spending combined, and on public and private health insurance spending combined. Don’t just focus on government spending. That’s too narrow.

In addition to the previously mentioned post, I also highlight the legislation’s hidden costs this way:

That paragraph briefly touches on expanding Medicaid without talking about the impact that will have on states’ budgets. Simply put, that provision will explode state budgets and trigger massive tax increases nationwide. Those massive tax increases will kill entrepreneurial activity and job growth.

Keeping the legislation deficit neutral from a federal standpoint is worthless if the report doesn’t speak to the huge burden that will be put on the states through the biggest unfunded mandate in history. I’ll bet that people won’t care whether the taxes that will get raised will happen as a result of their state raising taxes to pay for the “substantial expansion” of Medicaid or if the tax increases come from the federal government. I’ll bet that they’ll only care that they’re getting hit with more taxes that they can’t afford.

I wrote last night that the CBO report gave Democrats a brief headline victory that would quickly turn into a net negative within a week. I believe that because they’ll take major political hits when people read that the deficit neutrality isn’t possible without $404,000,000,000 in Medicare cuts, without the federal government dumping the biggest underfunded mandate in history into the states’ laps and when they learn that there are a multitude of tax increases in this bill.

It’s also worth highlighting that, after all that spending and after all those costly provisions, the bill doesn’t significantly reduce the number of uninsured. That means that there’s precious little appeal to the bill.

I’d further suggest that deficit neutrality isn’t a high priority if major tax increases are needed to close that deficit. I’d further posit that this bill’s appeal will drop the minute people hear that there’s even a tax increase on the manufacture of medical devices. I’ll bet that people whose lives have been saved by a Medtronics product won’t think highly of that tax increase.

In fact, I won’t just bet on that, I’ll bet the proverbial ranch that the people whose lives were saved by a Medtronics product will oppose that tax increase provision.

UPDATE: King asks a number of great questions in this post.

Technorati: Mandates, Unfunded Mandates, Excise Tax, Cadillac Plans, Unions, Medtronics, Medicaid, Medicare, Budget Cuts, Uninsured, Budget Deficits, CBO, Max Baucus, Democrats

Cross-posted at California Conservative