The Taxman Cometh!

To those who voted for CHANGE, YOU GOT IT. And it looks SCARY!!

In less than six months, on January 1, 2011, the largest tax hikes in the history of America will take effect.

They will hit families and small businesses in three great waves.

On January 1, 2011, here’s what happens... (read it to the end, so you see all three waves)...



1. First Wave:


Expiration of 2001 and 2003 Tax Relief

In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families.

These will all expire on January 1, 2011.

Personal income tax rates will rise.

The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed).

The lowest rate will rise from 10 to 15 percent.

All the rates in between will also rise.

Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates.

The full list of marginal rate hikes is below:

The 10% bracket rises to an expanded 15%
The 25% bracket rises to 28%
The 28% bracket rises to 31%
The 33% bracket rises to 36%
The 35% bracket rises to 39.6%

Higher taxes on marriage and family.

The "marriage penalty" (narrower tax brackets for married couples) will return from the first dollar of income.

The child tax credit will be cut in half from $1000 to $500 per child.

The standard deduction will no longer be doubled for married couples relative to the single level.

The dependent care and adoption tax credits will be cut.

The return of the Death Tax.
This year only, there is no death tax. (It’s a quirk!) For those dying on or after January 1, 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes, a business, a retirement account, could easily pass along a death tax bill to their loved ones. Think of the farmers who don’t make much money, but their land, which they purchased years ago with after-tax dollars, is now worth a lot of money. Their children will have to sell the farm, which may be their livelihood, just to pay the estate tax if they don’t have the cash sitting around to pay the tax. Think about your own family’s assets. Maybe your family owns real estate, or a business that doesn’t make much money, but the building and equipment are worth $1 million. Upon their death, you can inherit the $1 million business tax free, but if they own a home, stock, cash worth $500K on top of the $1 million business, then you will owe the government $275,000 cash! That’s 55% of the value of the assets over $1 million! Do you have that kind of cash sitting around waiting to pay the estate tax?

Higher tax rates on savers and investors.The capital gains tax will rise from 15 percent this year to 20 percent in 2011.

The dividends tax will rise from 15 percent this year to 39.6 percent in 2011.

These rates will rise another 3.8 percent in 2013.



2. Second Wave:Obamacare


There are over twenty new or higher taxes in Obamacare. Several will first go into effect on January 1, 2011. They include:

The "Medicine Cabinet Tax"

Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).

The "Special Needs Kids Tax"

This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2500 (Currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.

There are thousands of families with special needs children in the United States , and many of them use FSAs to pay for special needs education.

Tuition rates at one leading school that teaches special needs children in Washington , D.C. ( National Child Research Center ) can easily exceed $14,000 per year.

Under tax rules, FSA dollars can not be used to pay for this type of special needs education.


The HSA (Health Savings Account) Withdrawal Tax Hike.This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.




3. Third Wave:

The Alternative Minimum Tax (AMT) and Employer Tax Hikes

When Americans prepare to file their tax returns in January of 2011, they'll be in for a nasty surprise-the AMT won't be held harmless, and many tax relief provisions will have expired.

The major items include:


The AMT will ensnare over 28 million families, up from 4 million last year.

According to the left-leaning Tax Policy Center , Congress' failure to index the AMT will lead to an explosion of AMT taxpaying families-rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers.


Small business expensing will be slashed and 50% expensing will disappear.

Small businesses can normally expense (rather than slowly-deduct, or "depreciate") equipment purchases up to $250,000.

This will be cut all the way down to $25,000. Larger businesses can currently expense half of their purchases of equipment.

In January of 2011, all of it will have to be "depreciated."


Taxes will be raised on all types of businesses.

There are literally scores of tax hikes on business that will take place. The biggest is the loss of the "research and experimentation tax credit," but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs.


Tax Benefits for Education and Teaching Reduced.

The deduction for tuition and fees will not be available.

Tax credits for education will be limited.

Teachers will no longer be able to deduct classroom expenses.

Coverdell Education Savings Accounts will be cut.

Employer-provided educational assistance is curtailed.

The student loan interest deduction will be disallowed for hundreds of thousands of families.


Charitable Contributions from IRAs no longer allowed.

Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA.

This contribution also counts toward an annual "required minimum distribution." This ability will no longer be there.



PDF Version Read more: <;; http://www.atr.org/six-months-untilbr-largest-tax-hikes-a5171#%23ixzz0sY8waPq1


And worse yet?


Now, your insurance will be INCOME on your W2's!

One of the surprises we'll find come next year, is what follows - - a little "surprise" that 99% of us had no idea was included in the "new and improved" healthcare legislation . . . the dupes, er, dopes, who backed this administration will be astonished!

Starting in 2011, (next year folks), your W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are given by the company. It does not matter if that's a private concern or governmental body of some sort.

If you're retired? So what... your gross will go up by the amount of insurance you get.

You will be required to pay taxes on a large sum of money that you have never seen. Take your tax form you just finished and see what $15,000 or $20,000 additional gross does to your tax debt. That's what you'll pay next year.

For many, it also puts you into a new higher bracket so it's even worse.

This is how the government is going to buy insurance for the 15% that don't have insurance and it's only part of the tax increases.

Not believing this??? Here is a research of the summaries.....

On page 25 of 29: TITLE IX REVENUE PROVISIONS- SUBTITLE A: REVENUE OFFSET PROVISIONS-(sec. 9001,
as modified by sec. 10901) Sec.9002 "requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer sponsored group health coverage that is excludable from the employees gross income."

- Joan Pryde is the senior tax editor for the Kiplinger letters.
- Go to Kiplingers and read about 13 tax changes that could affect you. Number 3 is what is above.

Obama's Two-Faced Stance on Healthcare for Illegals

During Barack Obama's address to Congress on September 9, 2009, South Carolina Republican Congressman Joe Wilson made news after shouting "You lie!" when the President said the Administration's healthcare plan would not cover illegal aliens.

Wilson's outburst drew heavy and sustained criticism from the liberal press and their hypocritical allies in Congress. (No one in the media bothered to mention the fact that Obama had just moments before Wilson's comment accused his opponent of lying about the Obamacare plan.) But the fundamental question remains. Did Obama seek to cover illegal aliens with his healthcare reform proposals? Actually he later said that illegal aliens will not only be ineligible to receive taxpayer funded subsidies for healthcare, they will not even be able purchase health insurance with their own funds in the government-created marketplace.

Congressman Wilson may have been ill-mannered but I have no doubt that he is correct.
First, there is no mechanism in the health reform bill to check the bona fides of every applicant for taxpayer funded subsidies for healthcare so any illegal who wishes can simply apply. Second, if Obama succeeds in granting amnesty to the 12-20 million illegal aliens despite overwhelming public opposition, he will have converted them all to legal immigrants. Then in the next step all he needs to do is throw out the long standing federal policy and give taxpayer subsidies to legal immigrants who are not citizens.

This Obama two-step deceit on healthcare for illegals is a prime example of his perfidy and his presidential policy deception. It's deja vu all over again as Chicago-style, Alinskyite politics again raises its ugly head. So Obama really is a liar and there is nothing he says or does that we should put any trust in.

Healthcare without Taxes and Fees

A word search of the 1,990-page House healthcare bill (H.R. 3962) reveals that the term “tax” is used 87 times; “taxable” is used 62 times; and “excise tax,” 10 times. Other terms of interest, to tax your mind, are as follows: Term Number of uses “Taxes” 15 times“Fee” 59 times"Penalty” 113 times“Require” 118 times“Must” 58 times“Shall” 3,424 times

Health Care Reform - What's Really in the Bill?

As liberals rush ObamaCare through Congress, let's review the disparity between promises and text. Joe Wilson's declaration "You lie!" is ringing truer with each passing day.

Barack Obama promised "transparency" and giving the public five days to read the bill, but Senator Jim Bunning's (R-KY) amendment to require the bill, along with a final Congressional Budget Office score, to be posted online 72 hours before the vote, was defeated. Rep. Brian Baird (D-WA) and Rep. Greg Walden (R-OR) have been trying to get the House to agree to post the bill 72 hours before the vote, but while most Republicans have signed on, the Nancy Pelosi leadership is unwilling.

The Democrats still hope to rush the bill through unread. The 1,100-page Stimulus bill was posted online only 13 hours before the vote, and the 1,200-page Cap and Trade bill was posted only 15 hours before the vote.

Obama promised that the health-care bill would not cover illegal aliens, but Senator Chuck Grassley's (R-IA) amendment to require immigrants to prove their identity with a photo I.D. was rejected.

Obama promised that if you like your current health insurance you won't have to change it, but Senator John Cornyn's (R-TX) amendment to assure present insurance owners that they won't have to change their coverage, and that they can keep the coverage they have with their current employer without government driving up cost, was defeated.

Obama's appointment of 34 czars includes a Health Care Czar, but Senator John Ensign's (R-NV) amendment to require any health care czar to be subject to the constitutional Senate confirmation process was defeated. Obama's new Regulatory Czar, Cass Sunstein, defends removing organs from terminally ill patients and from deceased persons even though they did not consent to be organ donors.

Obama promised that "under our plan, no federal dollars will be used to fund abortions," and his Press Secretary Robert Gibbs tried to divert attention from this bold lie by obfuscating the Hyde Amendment. But the Hyde Amendment is not a law; it's a one-year-at-a-time rider that applies only to current Medicaid programs, and would not apply to the health-care law.

The Democrats five times (twice in Senate committees, three times in House committees) defeated amendments to prohibit the health-care plan from spending federal money or requiring health insurance plans to cover abortions. They also defeated Senator Orrin Hatch's (R-UT) amendment to respect the conscience rights of health-care workers who do not want to perform abortions because of moral or religious objections.

One amendment that did pass was Senator Maria Cantwell's (D-WA) amendment that gives the Secretary of Health and Human Services the power to define cost-effective care for each medical condition and to punish doctors who treat high-cost patients with complex conditions. That has been Obama's goal from the beginning and will inevitably lead to the "death panels" Sarah Palin warned about.

Former Senator Tom Daschle, who was scheduled to be Health and Human Services Secretary or Health Care Czar until he had to bow out, said that the law should be written in generalities so the bureaucrats can fill in the details. Dr. Ezekiel Emanuel, brother of Chief of Staff Rahm Emanuel and a key Obama health care adviser, may be behind the Stimulus legislation that will send "embedded clinical-decision support" to doctors via computer to warn them about what is "appropriate" and "cost-effective," backed up by the threat to impose financial penalties on doctors who are not "meaningful users."

The Democrats' health-care "reform" carries a trillion-dollar price tag, will vastly increase the national debt hanging over our children and grandchildren, impose socialist control over one-sixth of our economy, and force us to obey totalitarian dictates. The mandate on employers to provide health insurance will result in lower wages and fewer jobs.

The mandate on individuals to buy health insurance or pay a penalty, even threatening jail for those who fail to conform, amounts to a massive tax increase on individuals and families whose health insurance may lack all the new federally specified requirements.

Obama's "spread the wealth around" policy is evident in the big expansion of Medicaid combined with large cuts in Medicare. Former Health and Human Services Secretary Michael Leavitt says that the combination of mandates to buy insurance, guaranteed issue, and community rating amounts to massive income distribution that is hidden from public view and not even debated.

Finally, we are subject to the deviousness of what House Minority Leader John Boehner (R-OH) calls the 70 phantom amendments that were added in secret after the bill was voted out by the committee.

Obama Fails to Win Nobel Economics Prize

Surprise! Surprise! In a decision as shocking as Friday's surprise peace prize win, President Obama failed to win the Nobel Memorial Prize in Economic Sciences Monday.
While few observers think Obama has done anything for world peace in the nearly nine months he's been in office, the same clearly can't be said for economics.
The president has worked tirelessly since even before his inauguration to wrest control of the U.S. economy from failed free markets, and the evil CEOs who profit from them, and to turn it over to wise, fair and benevolent bureaucrats.
From his $787 billion stimulus package, to the cap and tax bill, to the seizures of General Motors and Chrysler, to the un-dead healthcare "reform" act, Obama has dominated the U.S., and therefore the global, economy as few figures have in recent years.
Yet the Nobel panel chose instead to award the prize to two obscure academics, -- Elinor Ostrom and Oliver Williamson -- one noted for her work on managing collective resources, and the other for his work on transaction costs.
Obama is a major disappointment. The President has sold America and Americans down the river. Frankly how anyone can believe in anything he proposes to be anything other than the continued marginalization of American Freedoms, Progress, and economic independence through misguided policies that reward the few at the expense of everyone else is beyond me. Obama works for the interests of the elite at the expense of the people. The only prize he deserves is Political Shill of the year--an award he may qualify for again and again.

Lies, Damn Lies, and Subtle Disingenuosness

You lie? No. Barack Obama doesn't lie. He's too subtle for that. He ... well, you judge.

Herewith three examples within a single speech -- the now-famous Obama-Wilson "you lie" address to Congress on health care -- of Obama's relationship with truth.

(1) "I will not sign (a plan)," he solemnly pledged, "if it adds one dime to the deficit, now or in the future. Period."

Wonderful. The president seems serious, veto-ready, determined to hold the line. Until, notes Harvard economist Greg Mankiw, you get to Obama's very next sentence: "And to prove that I'm serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don't materialize."

This apparent strengthening of the pledge brilliantly and deceptively undermines it. What Obama suggests is that his plan will require mandatory spending cuts if the current rosy projections prove false. But there's absolutely nothing automatic about such cuts. Every Congress is sovereign. Nothing enacted today will force a future Congress or a future president to make any cuts in any spending, mandatory or not.

Just look at the supposedly automatic Medicare cuts contained in the Sustainable Growth Rate formula enacted to constrain out-of-control Medicare spending. Every year since 2003, Congress has waived the cuts.

Mankiw puts the Obama bait-and-switch in plain language. "Translation: I promise to fix the problem. And if I do not fix the problem now, I will fix it later, or some future president will, after I am long gone. I promise he will. Absolutely, positively, I am committed to that future president fixing the problem. You can count on it. Would I lie to you?"

(2) And then there's the famous contretemps about health insurance for illegal immigrants. Obama said they would not be insured. Well, all four committee-passed bills in Congress allow illegal immigrants to take part in the proposed Health Insurance Exchange.

But more importantly, the problem is that laws are not self-enforcing. If they were, we'd have no illegal immigrants because, as I understand it, it's illegal to enter the United States illegally. We have laws against burglary, too. But we also provide for cops and jails on the assumption that most burglars don't voluntarily turn themselves in.

When Republicans proposed requiring proof of citizenship, the Democrats twice voted that down in committee. Indeed, after Rep. Joe Wilson's "You lie!" shout-out, the Senate Finance Committee revisited the language of its bill to prevent illegal immigrants from getting any federal benefits. Why would the Finance Committee fix a nonexistent problem?

(3) Obama said he would largely solve the insoluble cost problem of Obamacare by eliminating "hundreds of billions of dollars in waste and fraud" from Medicare.

That's not a lie. That's not even deception. That's just an insult to our intelligence. Waste, fraud and abuse -- Meg Greenfield once called this phrase "the dread big three" -- as the all-purpose piggy bank for budget savings has been a joke since Jimmy Carter first used it in 1977.

Moreover, if half a trillion is waiting to be squeezed painlessly out of Medicare, why wait for health care reform? If, as Obama repeatedly insists, Medicare overspending is breaking the budget, why hasn't he gotten started on the painless billions in "waste and fraud" savings?

Obama doesn't lie. He merely elides, gliding from one dubious assertion to another. This has been the story throughout his whole health care crusade. Its original premise was that our current financial crisis was rooted in neglect of three things -- energy, education and health care. That transparent attempt to exploit Emanuel's Law -- a crisis is a terrible thing to waste -- failed for health care because no one is stupid enough to believe that the 2008 financial collapse was caused by a lack of universal health care.

So on to the next gambit: selling health care reform as a cure for the deficit. When that was exploded by the Congressional Budget Office's demonstration of staggering Obamacare deficits, Obama tried a new tack: selling his plan as revenue-neutral insurance reform -- until the revenue neutrality is exposed as phony future cuts and chimerical waste and fraud.

Obama doesn't lie. He implies, he misdirects, he misleads -- so fluidly and incessantly that he risks transmuting eloquence into mere slickness.

Slickness wasn't fatal to "Slick Willie" Clinton because he possessed a winning, near irresistible charm. Obama's persona is more cool, distant, imperial. The charming scoundrel can get away with endless deception; the righteous redeemer cannot.

Dr. Krauthammer Speaks

Dr. Krauthammer is an M.D. and a lawyer and is paralyzed from the neck down. He is a fiscal conservative and has received a Pulitzer Prize for writing. He is a frequent contributor to Fox News and writes weekly for the Washington Post.

In a recent talk he held his audience spell bound. He is forthright and careful in his analysis and never resorts to emotions or personal insults. He is neither a fear monger nor an extremist in his comments and views. . A friend went to hear him speak and the following is a 1st hand report of what he said. The ramifications for us, our children, and their children are staggering. Even two Democrats at my friend’s table agreed with everything Krauthammer said!
Summary of Dr. Krauthammer’s comments:

1. Mr. Obama is a very intellectual, charming individual. He is not to be underestimated. He is a cool customer who doesn't show his emotions. It's very hard to know what's behind the mask. The taking down of the Clinton dynasty by a political neophyte was an amazing accomplishment. The Clintons still do not understand what hit them. Obama was in the perfect place at the perfect time.

2. Obama has political skills comparable to Reagan and Clinton. He has a way of making you think he's on your side, agreeing with your position, while doing the opposite. Pay no attention to what he SAYS;
rather, watch what he DOES!

3. Obama has a ruthless quest for power. He did not come to Washington to make something out of himself, but rather to change everything, including dismantling capitalism. He can’t be straightforward on his ambitions, as the public would not go along. He has a heavy hand, and wants to level the playing field with income redistribution and punishment to the achievers of society. He would like to model the USA to Great Britain or Canada.

4. His three main goals are federal government control of ENERGY, PUBLIC EDUCATION and HEALTH CARE. He doesn't care about the auto or financial services industries, but got control of them as an early bonus. Cap and trade will add costs to everything and stifle growth. Free college education
fir everyone is his goal. Most scary is his healthcare program, because if you make it free or low cost and add 46,000,000 people to a Medicare-type single-payer system, the costs will go through the roof. The only way to control costs is with massive rationing of services, like in Canada.
5. He has surrounded himself with mostly far-left academic sycophants. No one around
him has ever even run a candy store. But they are going to try and run the auto, financial, banking, energy, education, health care, and other industries. This obviously can’t work in the long run. Obama is not a socialist; rather he's a far-left secular progressive bent on nothing short of revolution. He ran as a moderate, but will govern from the hard left. Again, watch what he does, not what he says.

6. Obama doesn’t really see himself as President of the United States, but more as a ruler over the world. He sees himself above it all, trying to orchestrate and coordinate various countries and
their agendas. He sees moral equivalency in all cultures. His apology tour in Germany and England was a prime example of how he sees America, as an imperialist nation that has been arrogant, rather than a great noble nation that has at times made errors. This is the first President ever who has chastised our allies and appeased our enemies!

7. He is now handing out goodies. He hopes that the bill (and pain) will not come due until after
he is reelected in 2012. He would like to blame all problems from the past on Bush, and on whoever is his successor in the future. He has a huge ego and Dr. Krauthammer believes he is a narcissist.

8. The current level of spending is irresponsible and outrageous. We are spending trillions that we don’t
have. This could lead to hyperinflation, depression or worse. No country has ever spent itself into prosperity.
9. The media is giving Obama, Reid, and Pelosi a pass because they love their agenda. But eventually the bill will come due and people will realize the huge bailouts didn’t work, nor
will the stimulus package. These were trillion-dollar payoffs to Obama’s allies, unions and the Congress to placate the left, so he can get support for #4 above.

10. The election was over in mid-September when Lehman brothers failed, fear and panic swept in, we had an unpopular President and the war was grinding on indefinitely without a clear outcome. The people were in pain, and the mantra of change caused people to act emotionally. Any Democrat would have won this election; it was surprising it was as close as it was.

11. In 2012, if the unemployment rate is over 10%, Republicans will be swept back into power. If it's less than 8%, the Democrats continue to roll. If it's between 8-10%, it will be a dogfight. It will all be about the economy.
I hope this gets you really thinking about what's happening in Washington and Congress. According to Krauthammer, there is a left-wing revolution going on and he encourages us to keep the faith and join the loyal resistance. The work will be hard, but we’re right on most issues and we must reclaim our country, before it's too late.
Do yourself a long term favor; send this to all who will listen to an intelligent assessment of the big picture. All our futures and children's futures depend on our good understanding of what is really going on in D.C. and our action pursuant to that understanding!! It really is up to each of us to take individual action!! Start with educating your friends and neighbors!!!

Health Care Expansion

President Barack Obama
The White House
1600 Pennsylvania Avenue
Washington, D.C. 20500
July 4, 2009

Dear Mr. President:

Today is Independence Day. We Americans have always valued our independence which is why I take note of this date. The value we place on independence applies to health care today as much as it did on other matters when the Declaration of Independence was signed.

Many Americans are concerned that the proposed health care expansion will make a bad situation worse when it comes to the national debt and the projected multi-year deficits. Most people believe that health care costs need to be constrained and the uninsured need some short-term help with their insurance premiums. However, the reform revenue and cost estimates are another matter entirely. The cost of adding the uninsured and those with pre-existing conditions is certain to be underestimated and obviously will increase rather than reduce the overall costs of health care in America. More thought needs to be given to promoting HSAs and catastrophic health insurance as the best alternative for those who cannot afford more expensive plans.

Critics say the public health care insurance alternative, which is being promoted as a way to drive down costs, will force private insurers out of business. This criticism has the ring of truth and therefore is another major concern about a public program. Finally, I needn't remind you of the unfunded liability or insolvency of another public health insurance plan, Medicare. The cost of Medicaid has also ballooned to unanticipated levels. These programs deserve to be fixed before any new program is entertained.

Instead of another potentially insolvent public program, why not simply establish realistic cost goals and guidelines for drug companies, doctors, and hospitals that would achieve the same objective as competition from a public-funded program? Hospitals and drug companies have already come forward with plans to reduce costs by a substantial amount. Perhaps doctors will also step up with similar concessions. We do, of course, need to keep in mind that adequate drug company profits are needed to drive research on new drugs and attract investors. Similarly, adequate compensation for doctors, after their long and arduous training, is an important factor in determining the quality of the health care we receive.

The Public is appropriately skeptical about how health care reform will be funded. They have heard similar fairy tales too many times before. Government estimates are rarely worth the paper they are written on. I know, I used to be a government cost analyst. All too often political appointees overrule legitimate cost estimates because they do not support the programs they favor.

Social Security and Medicare are good examples of programs that have grown beyond their means. Congress has added new benefits and new recipients without commensurate increases in the contribution rate and base necessary to cover the additional costs. Although faulty estimates of revenue and expense may have been a factor, the Congress has never had the political will to take the steps necessary assure full funding of the programs it enacts.

It’s time to remove Social Security and Medicare from the political arena by establishing a Board of Trustees with full authority to increase the contribution rate and base as necessary to both eliminate the unfunded liabilities of both programs over time and assure their long term viability. Congress should chip in a significant amount from the general revenues of the Treasury. This amount could be based on a CBO estimate of the amount needed to make up for the portion of the current unfunded obligation or liability that is attributable to past failures of Congress to properly fund these programs. Congress should not be able to overturn the Board’s decisions except by a 60% vote in both houses.

I suggest a novel approach regarding the funding of the proposed health care reforms. Once we have a sound estimate of the cost based on demographic, actuarial, and other studies, we need to clearly identify the specific sources of revenue that will be dedicated to cover the cost of the reforms. Then let’s limit the maximum cost and scope of the reform program to the actual amount those specific revenue sources produce. (Politically-motivated estimates are certain to be unreliable.) This approach would relieve some of the skepticism about government cost and revenue estimates. The Public could heave a collective sigh of relief knowing that for once the scope of a program would be limited to the actual amount of its earmarked sources of revenue. The funds available could be adjusted throughout the year based on the latest monthly estimate of costs and revenues.

Adjusting the cost to actual revenue could be done by establishing a priority list based on the family income of those who are receiving government subsidized coverage under the new reform program. In times of revenue shortfall, the subsidies for those on the cusp with the highest family income would be reduced or eliminated. These folks would be on notice that they have to be planning for that possibility. In any event, the objective should be to create incentives for people to get off the subsidy rolls and work toward self sufficiency.

Finally, we need to provide the appropriate incentives for the current uninsured to wean themselves from any new government subsidies and to open HSAs as soon as they are able. If promised cost reductions are actually achieved, that should make it easier for them to do so. These subsidies are a form of welfare and should be clearly labeled as such so that all recipients will know that they are imposing their health care costs on their more productive neighbors. They also should be put on notice that they will be expected to seek the education and job training to enable them to fund their own health care plans. Any new government subsidies should never be allowed to become entitlements. We will never be able to control health care costs if a significant number of the participants view health care as a free good or an entitlement. Limiting the available funding to the actual earmarked revenues would be one way to avoid that problem. Steep out-of-pocket co-pays is another.

Finally, it appears that what is being proposed will create a three tier system of health care insurance. At the top of the pyramid is Congress. Second are what I call sub-seniors and third, the seniors and aging baby boomers who are at the bottom of the totem pole. I understand that the already inadequate Medicare funding may be further reduced by $400 billion and the health care for seniors strictly rationed rationed. Many will view the latter as a sort of inverse euthanasia in which seniors are required to endure treatable medical problems and associated pain rather than receive the care they deserve. This sounds like a proposal to deprive one group of citizens of the care they need, so another group can be served. Does this represent equal treatment under the law? Is this the beginning of a "duty to die" program for the elderly?

Promising cost reductions while at the same time adding new coverage for those with pre-existing conditions and those without coverage sounds implausible on the face of it. Let’s not promise more than can be delivered.

Respectfully submitted,

Ultima