Obama Promises Donors He Will Continue Doomed ObamaCare Effort If Re-elected

June 1, 2012

WASHINGTON, DC – President Barack Obama is confiding to Democratic donors that he may have to revisit the health-care issue in a second term, a position at odds with his publicly expressed confidence that the U.S. Supreme Court will uphold the Affordable Care Act, according to three Democratic activists.

A Tea Party activist outside the Supreme Court hearings on the constitutional challenges to the 2010 health care overhaul law. Photographer: Luke Sharrett/The New York Times via Redux
Obama Needs More Time to Redo Health Care

As he previewed his agenda for donors at a May 14 fundraiser, Obama said he may be forced to try to revise parts of his health-care plan, depending on how the court rules later this month, said one activist, who requested anonymity to discuss the president’s comments. Guests at the $35,800-a-plate dinner in the Manhattan apartment of Blackstone Group LP (BX) President Tony James were asked to check their smart phones and BlackBerries at the door.

The president has made similar remarks, usually in response to questions, at other fundraising events since the Supreme Court heard arguments in the case during the last week of March, according to two other activists, who also requested anonymity.

Obama’s answers, which begin with the president repeating his contention that the high court will uphold the law, have led some contributors to conclude the White House is making contingency plans should the justices strike down parts of the law, which would give Republicans a powerful talking point about one of his signature issues.

A challenge by 26 states centers on the law’s requirement that individuals purchase health insurance or face a penalty.
Outside Groups

While Obama is discussing with wealthy donors the prospect of a rebuke from the court, administration officials are coordinating with health-care-reform groups on how to manage their public response in the aftermath of the decision.

“While I won’t discuss in detail the president’s private conversations, I can say that your reporting, attributed to unnamed sources, inaccurately reflects the president’s views,” Jay Carney, Obama’s spokesman, said in an e-mail.

On April 3, Obama professed “enormous confidence” the law is constitutional and “the court is going to exercise its jurisprudence carefully,” in response to a question at the Associated Press’s annual meeting. A day earlier, he said the Supreme Court would have to take “an unprecedented, extraordinary step” to throw out “a law that was passed by a strong majority” in Congress.

Yet a planning memo, including a reminder that it’s important “to continue projecting confidence that the court will uphold the law,” was discussed at a May 29 meeting hosted by a group called Protect Your Care, attended by officials from the White House and Department of Health and Human Services, said one of the attendees, who requested anonymity to discuss a private meeting.
Staging Events

“The best way to demonstrate public outrage or public celebration about the decision is to stage an event that shows average people actually responding to the news,” according to the memo, e-mailed on May 16 by an official at the Herndon Alliance, a coalition of groups that backs the health-care overhaul.

“The White House is obviously very involved in this stuff,” said Bob Crittenden, executive director of the Herndon Alliance. “Some of the groups we work with have very close connections with the White House.”

Nick Papas, a White House spokesman, and Anton Gunn, director of external affairs at Health and Human Services, make regular appearances at the Protect Your Care meetings, which are held every other week.
Private Meetings

Last week, Gunn and Hilary Haycock from the White House attended, along with representatives from Families USA, Health Care for America Now, the Center for American Progress and labor organizations including the Service Employees International Union and American Federation of State, County and Municipal Employees.

“There’s a really strong feeling that getting out there and trying to do contingency planning out in public is not a very smart thing to do,” said Crittenden, also a professor of medicine at the University of Washington. “What we really want to do is to make sure that everyone is prepared to talk about the law when it comes up.”

Based on the tone of the justices’ questions to the lawyers arguing the case, some of the law’s supporters are concerned that the court will strike down the requirement that uninsured individuals purchase health insurance or else pay a fine.

Overturning Mandate

“The odds are that it’s slightly more likely to overturn the individual mandate,” said Richard Kirsch, a senior fellow at the Roosevelt Institute and the former campaign manager for Health Care for America Now, a group that fought for the overhaul. After the court makes its ruling, “one of the battles will be to define what’s happened.”

Even if the mandate is removed, supporters of the law should organize media events to have “people who continue to benefit from the law to tell their stories,” said Kirsch, author of “Fighting for Our Health: The Epic Battle to Make Health Care a Right in the United States.”

Public opinion is divided on the different parts of the law, said Bob Blendon, an associate dean at the Harvard School of Public Health.

“Nobody wants the whole bill thrown out,” he said. “Nobody wants the bill as it is. The majority would be happy if the mandate disappeared.”

While Republicans, including Mitt Romney, their presumptive presidential nominee, would “gain a little” if the mandate is removed, they may be forced to offer another plan to cover those with pre-existing conditions, Blendon said. “If the bill is upheld, it’s a real boost for the president.”

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White House Claims Opponents Are Using “New Math” – But Obamacare Will Add At Least $340 Billion To Budget Over Next Decade

April 10, 2012

WASHINGTON, DC – President Obama’s landmark health-care initiative, long touted as a means to control costs, will actually add more than $340 billion to the nation’s budget woes over the next decade, according to a new study by a Republican member of the board that oversees Medicare financing.

The study is set to be released Tuesday by Charles Blahous, a conservative policy analyst whom Obama approved in 2010 as the GOP trustee for Medicare and Social Security. His analysis challenges the conventional wisdom that the health-care law, which calls for an expensive expansion of coverage for the uninsured beginning in 2014, will nonetheless reduce deficits by raising taxes and cutting payments to Medicare providers.

The 2010 law does generate both savings and revenue. But much of that money will flow into the Medicare hospitalization trust fund — and, under law, the money must be used to pay years of additional benefits to those who are already insured. That means those savings would not be available to pay for expanding coverage for the uninsured.

“Does the health-care act worsen the deficit? The answer, I think, is clearly that it does,” Blahous, a senior research fellow at George Mason University’s Mercatus Center, said in an interview. “If one asserts that this law extends the solvency of Medicare, then one is affirming that this law adds to the deficit. Because the expansion of the Medicare trust fund and the creation of the new subsidies together create more spending than existed under prior law.”

Administration officials dismissed the study, arguing that it departs from bipartisan budget rules used to measure every major deficit-reduction effort for the past four decades — including the blueprint offered last month by House Budget Committee Chairman Paul Ryan (R-Wis.).

“Opponents of reform are using ‘new math’ while they attempt to refight the political battles of the past,” a White House budget official said, speaking on the condition of anonymity because the report was not publicly available. “The fact of the matter is, the Congressional Budget Office and independent experts concluded that the health-reform law will reduce the deficit. That was true the day the bill was signed into law, and it’s true today.”

Blahous acknowledged that his analysis departs from budget conventions, which, he said, make sense for the most part. He said that in this case, however, those rules do not fully illuminate the financial impact of the health-care law, since they permit what conservative critics have dubbed a “double counting” of proposed Medicare savings.

Medicare is financed in part through a trust fund that receives revenue from payroll taxes. Before Obama’s health-care act passed, the trust fund was projected to be drained by 2017 (later updated to 2016). Absent the health-care law, Blahous writes, Medicare would have been forced to enact a sharp reduction in benefit payments in the middle of this decade, or “other Medicare savings would have had to be found.”

Enter the health-care law, which provides about $575 billion in Medicare savings — enough to automatically extend the life of the trust fund through 2029, according to estimates at the time, and avoid a sharp cut in benefits.

But in cost estimates by the nonpartisan CBO, those savings also offset a dramatic expansion of Medicaid under the law, as well as new subsidies for uninsured people to purchase coverage.

CBO and Medicare actuaries acknowledge the double-counting issue. “In practice, the improved [trust fund] financing cannot be simultaneously used to finance other federal outlays (such as the coverage expansions) and to extend the trust fund, despite the appearance of this result from” traditional budget rules, Medicare actuary Rick Foster wrote last year.

And in 2010, the CBO wrote that, absent the Medicare savings, the law would increase deficits by $226 billion through 2019 — instead of decreasing them by the commonly cited $132 billion.

In arriving at his deficit figure of $340 billion, Blahous updates the numbers through 2021 and subtracts savings that would have come from another provision of the law: the CLASS Act, a long-term-care program that was supposed to have generated as much as $86 billion in new revenue through 2021. The administration acknowledged last year that the CLASS Act is unworkable and suspended efforts to implement it.

“This isn’t just a persnickety point about the intricacies of budget law,” Blahous said. “If Medicare were going insolvent in 2016, you’d better believe right now there would be more pressure on lawmakers to do something about it. . . . It’s essential that there be a full public understanding of the most economically significant federal law in years.”

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$500 Million Quietly Diverted To IRS To Impliment Doomed Obamacare Law

April 9, 2012

WASHINGTON, DC – The Obama administration is quietly diverting roughly $500 million to the IRS to help implement the president’s healthcare law.

The money is only part of the IRS’s total implementation spending, and it is being provided outside the normal appropriations process. The tax agency is responsible for several key provisions of the new law, including the unpopular individual mandate.

Republican lawmakers have tried to cut off funding to implement the healthcare law, at least until after the Supreme Court decides whether to strike it down. That ruling is expected by June, and oral arguments last week indicated the justices might well overturn at least the individual mandate, if not the whole law.

“While President Obama and his Senate allies continue to spend more tax dollars implementing an unpopular and unworkable law that may very well be struck down as unconstitutional in a matter of months, I’ll continue to stand with the American people who want to repeal this law and replace it with something that will actually address the cost of healthcare,” said Rep. Denny Rehberg (R-Mont.), who chairs the House Appropriations subcommittee for healthcare and is in a closely contested Senate race this year.

The Obama administration has plowed ahead despite the legal and political challenges.

It has moved aggressively to get important policies in place. And, according to a review of budget documents and figures provided by congressional staff, the administration is also burning through implementation funding provided in the healthcare law.

The law contains dozens of targeted appropriations to implement specific provisions. It also gave the Department of Health and Human Services (HHS) a $1 billion implementation fund, to use as it sees fit. Republicans have called it a “slush fund.”

HHS plans to drain the entire fund by September — before the presidential election, and more than a year before most of the healthcare law takes effect. Roughly half of that money will ultimately go to the IRS.

HHS has transferred almost $200 million to the IRS over the past two years and plans to transfer more than $300 million this year, according to figures provided by a congressional aide.

The Government Accountability Office has said the transfers are perfectly legal and consistent with how agencies have used general implementation funds in the past. The $1 billion fund was set aside for “federal” implementation activities, the GAO said, and can therefore be used by any agency — not just HHS, where the money is housed.

Still, significant transfers to the IRS and other agencies leave less money for HHS, and the department needs to draw on the $1 billion fund for some of its biggest tasks.

The healthcare law directs HHS to set up a federal insurance exchange — a new marketplace for individuals and small businesses to buy coverage — in any state that doesn’t establish its own. But it didn’t provide any money for the federal exchange, forcing HHS to cobble together funding by using some of the $1 billion fund and steering money away from other accounts.

The transfers also allow the IRS to make the healthcare law a smaller part of its public budget figures. For example, the tax agency requested $8 million next year to implement the individual mandate, and said the money would not pay for any new employees.

An IRS spokeswoman would not say how much money has been spent so far implementing the individual mandate.

Republicans charged during the legislative debate over healthcare that the IRS would be hiring hundreds of new agents to enforce the mandate and throwing people in jail because they don’t have insurance.

However, the mandate is just one part of the IRS’s responsibilities.

The healthcare law includes a slew of new taxes and fees, some of which are already in effect. The tax agency wants to hire more than 300 new employees next year to cover those tax changes, such as the new fees on drug companies and insurance policies.

The IRS will also administer the most expensive piece of the new law — subsidies to help low-income people pay for insurance, which are structured as tax credits. The agency asked Congress to fund another 537 new employees dedicated to administering the new subsidies.

The Republican-led House last year passed an amendment, 246-182, sponsored by Rep. Jo Ann Emerson (R-Mo.) that would have prevented the IRS from hiring new personnel or initiating any other measures to mandate that people purchase health insurance. The measure, strongly opposed by the Obama administration, was subsequently dropped from a larger bill that averted a government shutdown.

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Obama Sends Warning To “Unelected” US Supreme Court Judges Over His Doomed Health Care Plan – Obamacare

April 3, 2012

WASHINGTON, DC – US President Barack Obama on Monday challenged the “unelected” Supreme Court not to take the “extraordinary” and “unprecedented” step of overturning his landmark health reform law.

Though Obama said he was confident the court would uphold the law, the centerpiece of his political legacy, he appeared to be previewing campaign trail arguments should the nine justices strike the legislation down.

In a highly combative salvo, Obama also staunchly defended the anchor of the law — a requirement that all Americans buy health insurance — as key to giving millions of people access to treatment for the first time.

“Ultimately, I am confident that the Supreme Court will not take what would be an unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a democratically elected Congress,” Obama said.

Pointed comments from Supreme Court justices last week during three days of compelling hearings have convinced many commentators that the court, expected to rule in June, will declare the law, dubbed ObamaCare, unconstitutional.

Such a move would electrify the White House race, puncture Obama’s claims to be a reformer in the grand political tradition, and throw the US health care industry into chaos.

Obama noted that for years, conservatives had been arguing that the “unelected” Supreme Court should not adopt an activist approach by making rather than interpreting law, and held up the health legislation as an example.

“I am pretty confident that this court will recognize that and not take that step,” Obama said during a press conference in the White House Rose Garden with the leaders of Canada and Mexico in his first comments on last week’s hearings.

Obama’s comments will be seen as a warning shot to the court, one of the three branches of the US government, and could draw complaints from critics that he is trying to influence the deliberations.

The health care case is the most closely watched Supreme Court deliberation since a divided bench handed the 2000 presidential election to George W. Bush over Al Gore, and could have far reaching political implications.

Obama also argued there was a “human element” to the health care battle, as well as legal and political dimensions.

He said that without the law, passed after a fierce battle with Republicans in 2010, several million children would not have health care, and millions more adults with pre-existing conditions would also be deprived of treatment.

Opponents of the health care law argue that the government has overreached its powers by requiring all Americans to purchase health insurance.

But supporters say that the government is within its rights to regulate the health industry as it has the power to oversee commerce across state borders.

Without the mandate, they say, the costs of insuring an extra 32 million Americans would be prohibitive to the private health insurance industry.

The Affordable Care Act is highly polarizing in US politics as the election approaches and Obama is yet to get a political dividend for the huge expenditure of political capital required to pass the legislation.

If the court upholds the law, and he wins reelection in November, the legislation will likely stand for years, as it will be fully implemented by 2014, two years before his second term draws to a close.

But Republicans running to replace him in the November 6 election have all vowed to repeal ObamaCare.

“I think it’s important… to remind people that this is not an abstract argument,” Obama said.

“The law that’s already in place has already given 2.5 million young people health care that wouldn’t otherwise have it.

“There are tens of thousands of adults with preexisting conditions who have health care right now because of this law.”

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Additional $17 Trillion Funding Gap Found In Doomed Obamacare Law

March 31, 2012

WASHINGTON, DC – Senate Republican staffers continue to look though the 2010 health care reform law to see what’s in it, and their latest discovery is a massive $17 trillion funding gap.

“The more we learn about the bill, the more we learn it is even more unaffordable than was suspected,” said Alabama Sen. Jeff Sessions, the Republicans’ budget chief in the Senate.

“The bill has to be removed from the books because we don’t have the money,” he said.

The hidden shortfall between new spending and new taxes was revealed just after Supreme Court justices grilled the law’s supporters about its compliance with the Constitution’s limits on government activity. If the court doesn’t strike down the law, it will force taxpayers to find another $17 trillion to pay for the increased spending.

The $17 trillion in extra promises was revealed by an analysis of the law’s long-term requirements. The additional obligations, when combined with existing Medicare and Medicaid funding shortfalls, leave taxpayers on the hook for an extra $82 trillion in health care obligations over the next 75 years.

The federal government has an additional $17 trillion unfunded gap in other obligations, including Social Security, bringing the total shortfall to $99 trillion.

That shortfall is different from existing debt. The federal government already owes $15 trillion in debt, including $5 trillion in funds borrowed during Obama’s term in office.

That $99 trillion in unfunded future expenses is more more than six years of wealth generated by the United States, which now produces just over $15 trillion of value per year.

The $99 trillion funding gap is equal to almost 30 years of the the current federal budget, which was $3.36 trillion for 2011.

Currently, the Social Security system faces $7 trillion shortfall between spending and taxes over the next 75 years, according to the Government Accountability Office.

Also, Medicare will is underfunded by $38 trillion, and Medicaid will consume another $20 trillion of the taxpayer’s wealth beyond what is budgeted, according to estimates prepared by the actuarial office at the Centers for Medicare and Medicaid Services.

The short-term cost of the Obamacare law is $2.6 trillion, almost triple the $900 billion cost promised by Obama and his Democratic allies, said Sessions.

The extra $17 trillion gap was discovered by applying standard federal estimates and models to the law’s spending obligations, Sessions said.

For example, Session’s examination of the health care law’s “premium support” program shows a funding gap $12 billion wider that predicted.

The same review also showed the law added another $5 trillion in unfunded obligations for the Medicaid program.

“President Obama told the American people that his health law would cost $900 billion over ten years and that it would not add ‘one dime’ to the debt… this health law adds an entirely new obligation—one we cannot pay for—and puts the entire financing of the United States government in jeopardy,” Sessions said in a floor speech.

“We don’t have the money… We have to reduce the [obligations] that we have.”

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