Policy

Congress Quietly Repeals More of Obamacare

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At the end of 2019, Congress repealed three significant tax components of the Affordable Care Act, a.k.a. Obamacare. Each of them had been included in the initial legislation to raise the revenue required to pay for the new spending the law called for.

The biggest of the three was the so-called Cadillac tax, which was expected to raise about $197 billion over the next decade. Congress also nixed the law's health insurance tax, projected to raise $150 billion over 10 years, and the medical device tax, projected to raise $25.5 billion. All three taxes were eliminated as part of a $1.4 trillion year-end budget bill that President Donald Trump signed at the last possible minute in order to keep the government open.

The repeal of these taxes was predictable. Implementation of the Cadillac tax had already been delayed, thanks to pressure from unions, among others, who worried that it would hit their high-priced health benefits. The health insurance and medical device taxes both faced opposition from the industries for which they were named.

What's the problem with the repeal of a bunch of taxes no one ever really liked? That's probably what the lawmakers who voted to end the taxes were thinking too. The main effect will be to increase the deficit by a little more than $373 billion over the next decade—and, in the process, to further weaken a central argument made by supporters of the legislation.

Obamacare was passed on a promise that it would be deficit-neutral or even reduce the deficit slightly. The Congressional Budget Office estimated that the law would reduce the deficit during its first decade, provided that all of its provisions were enacted as the statute called for. As The New York Times noted last summer, the Cadillac tax "was expected to be a key cost-containment provision in President Barack Obama's signature health law and one of the main ways it was supposed to pay for itself."

There are obvious lessons here about what we might expect from various plans to "pay for" Medicare for All now being touted by various Democratic presidential hopefuls. If nothing else, this episode is a reminder of how Washington works: First, Congress passes a law setting up an expensive new program along with (if we're lucky) a system to pay for it. Years later, amid a bipartisan spending binge, those taxes are repealed while the rest of the program remains on the books. The public barely notices, and the lawmakers involved shrug and move on.

The result is legislation that is fiscally ruinous, but also more popular than it would be if taxpayers were actually made to foot the bill.

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  1. This legislative monstrosity needs to have a stake driven through it’s black heart.

    1. And yet the Heffalumps did not when they had the power. Thanks to commies McKain and Collins and Murkowski. Too bad those two bitches are still sucking air.

      1. Enough about Collins please. She tried to act like a statesman. Unfortunately, the D’s were all playing for keeps, and willing to cheat bigtime to win.

        And going forward, keep in mind that however much you might not like “moderate Republicans”, if the alternative is “progressive Democrat”, you better get yourself to the polls and at least support the lesser of two evils. Blanking a ballot just lets the bad guys win.

    2. Absolutely, I was one of the 5.5 million that had their plan cancelled. Need to get rid of the badly misnamed essential services clause. The clause bought and paid for by the insurance lobby to force everyone to buy everything.

      1. That is a complete and utter falsehood. Are you paid by someone? If you ACA coverage got canceled it’s because you didn’t pay.

        1. ObamaCare forced cancellation of most high deductible catastrophic health insurance plans.

          1. But…If you like your policy something something!!

        2. A lot of us were forced off our private plans, and offered garbage ACA plans instead that offered less coverage, with much higher deductibles, and for over double the money.

          1. Happened to me, too.

    3. A Republican Congress almost did until John “RINO” McCain voted against the repeal of ObamaCare.

      Starve the beast!

      1. Now Romney can take up the mantle of the Republican Who Screws Republicans.

        1. …And Americans.

    4. Did you know that federal taxes do not fund federal spending?
      Did you know that federal tax dollars are destroyed upon receipt?
      Did you know that even if all federal tax collections fell to $0, the federal government could continue spending, forever?
      It’s known as Monetary Sovereignty.

  2. “Obamacare was passed on a promise that it would be deficit-neutral or even reduce the deficit slightly”

    Technically true, but who believed it?

    1. Everyone who voted for Obama.

      1. I doubt they believed it, either. They just didn’t care.

      2. Everybody who believes in free healthcare.

        Of course, if you’ve seen the free healthcare proposals, you know that it’s supposed to be more or less revenue neutral because this country spends 3 trillion dollars (or whatever) on healthcare and if the government raises taxes by 3 trillion dollars and uses it to pay for all the healthcare, it’s 3 trillion dollars worth of health care either way. Which is like saying that between me and my neighbor we have 100,000 dollars worth of vehicles so if I steal his motorcycle we’ll still have 100,000 dollars worth of vehicles between the two of us so what’s the problem?

        1. I find the notion that “private” health care is inefficient (and let’s please ignore all the government interference in our “free market” system) … yet, if we turn everything over to government, it will suddenly become more efficient, because we have a single provider (yet no one seems to be willing to point to an example of government doing something more efficient than a private entity — probably because no such example exists).

          1. (Darn lack of edit!) That is, I find the notion that “private” health insurance to be inefficient compared to what government might do to be very funny.

            1. The proponents believe it will be more efficient because it doesn’t waste money on profits for the wealthy. And even if it isn’t more efficient, it’s more moral and just because it doesn’t waste money on profits for the wealthy. Instead it wastes money paying government workers to sit on their collective asses and do nothing. And that’s moral and just because the money isn’t being wasted on the wealthy.

    2. The stupid Americans to whom Gruber said were necessary to get it passed.

      1. As if that crap he pulled a Nakatomi Tower wasn’t enough.

    3. That is the fault of current legislation, not the bill.

      1. BS — My premiums went up 2-TIMES their previous amount BEFORE the “current legislation” was even put in. Now I find out even with the doubling of price AND a plan to RIP-OFF the taxpayers for Billions; THE BILL is a perfect example of how communism makes our healthcare suck so bad!

        1. Everyone who voted for Obamacare in in the first place should be shot as a communist traitor.

    4. Technically false.

      Democrats lie about everything.

      1. all politicians lie… that is the first rule of the game

        1. Some live in a swamp of lies and delusions. Other’s only lie once in a while. for example; Rand Paul.

  3. Wait, Congress repealed more provisions of a law that raises the deficit? Are you sure this wasn’t somehow Trump’s fault? I’m pretty sure it was Trump’s fault. I know for a fact this mess can at least be blamed on the Republicans – namely, John McCain. Why anybody believes the GOP is a party of principles after their failure to repeal Obamacare when they raised so much money campaigning on that very issue for years is beyond me.

    1. Well Trump signed it, so yeah.

    2. Does anyone believe the GOP is a party of principles? Sure, they’ve got principles, they’re nice and shiny because they put them on display during campaign season, but have never actually used them.

      We’ve got two major parties. One has principles, but has to lie about what they are, because people would be terrified if they admitted what they were really devoted to. (The mask is starting to slip, though.)

      The other proclaims popular principles it doesn’t really believe in.

      We got Trump because Republican voters thought he *might* believe in some of them, and knew for a fact the other candidates didn’t.

      Well, I think Trump probably doesn’t believe in most of those principles, but at least understands that a bait and switch isn’t sustainable, at some point you have to deliver on some of your promises. A concept that absolutely horrifies the Republican establishment.

      1. There are some people here that still believe Republicans are the Party of Principles. I was somewhat hopeful they might do some good when they elected Reagan but I was disabused of that when they followed up with Bush, which was when I left the GOP for the LP. And then the LP nominated Bob Freaking Barr and I was done with them, too.

        1. I was done with them before Barr. Browne basically treated the nomination as an opportunity to tour the country and have a good time, (In retrospect, should have seen that coming given the advice in his book.) and then corrupted the LP to do it a second time.

          But it was really the realization that campaign ‘deform’ had reached the point where going third party was legally futile that caused me to jump ship.

          1. So let the LP nominate a real hard-core libertarian who will alienate just about every voter in the country by wearing a rubber boot on his head or saying he will stop issuing social security checks tomorrow while letting international passengers just walk off the plane into the United States.

            1. That will probably be just as effective, if not a little more, than what the LP has done so far, actually….

      2. To be fair, the GOP tried to repeal ObamaCare until John “RINO” McCain voted against the repeal.

  4. So, having a hard time telling if the author is really for the ACA or not. Reason was dead set against it when it was being drafted and passed. Now it seems it was a great thing……

    Killing the ACA part by part is better than not killing it at all. Let’s hope they keep going on it.

    1. “I care about the deficit!” is the new “Both sides!”

  5. First, Congress passes a law setting up an expensive new program along with (if we’re lucky) a system to pay for it.

    We’re lucky if they create more taxes? Uh…no.

    When they create an expensive new program, we’re unlucky, period.

    1. “eyeroller” – and a perfect screen name for the post…. 1000+

  6. Haa anyone seen Lovecon1929 lately?

  7. Fuck this time change by the way.

    1. Time hasn’t changed, merely your perception of it has.

      /obnoxious physics guy

  8. The Fed should cut and the Fed should stimulate,” Trump told reporters on Friday, reviving some of his long-standing complaints about the central bank.

    Kudlow on Friday spurned calls for the wide-ranging approach that some economists have urged.

    “We don’t want to willy-nilly throw $300-$400 billion, with a thousand-dollar check to every American,” Kudlow said in a Bloomberg Television interview. “We are in the camp that wants timely and targeted micro-measures.”

    Targeted as in “making sure only rich bankers get the stimulus”. Fuck these mfers.

    1. When the economy is faltering because the interruption of the supply chains means stuff’s in short supply, I can’t see where stimulating on the consumption side is going to do anything but boost inflation. Lowering interest rates to get people to borrow and spend more isn’t going to help when there’s nothing to buy because factories can’t get necessary materials. Lowering interest rates to get businesses to borrow and spend on moving factories out of China might be good, but I don’t know that it’s going to do much good in the short term, i.e., before the election.

      And if we’re headed for negative interest rates – have we ever been there before? I have a pretty good idea the stock market is in bubble territory – among other signs, Warren Buffett is heavily into cash – so where’s all this money going to go? Strange times.

      1. Well, I guess you’ve never been in debt. Buying shit is the last thing on your mind. You’re just trying to pay the bills.

        1. I’ve been in debt plenty – I’ve just never been stupid enough to try to borrow my way out of debt. So what the hell has paying my bills got to do with interest rates or stimulating the economy?

      2. “And if we’re headed for negative interest rates – have we ever been there before? ”

        There was a brief time in 2007 when the yield on treasuries was negative. People were actually willing to lose a fraction of a percent on their money in order to ensure it didn’t evaporate.

    2. … And to think the Federal Reserve and Fiat printing wouldn’t even exist if it wasn’t for those pesky Democratic Bills enacted because a SINGLE irresponsible bank in NYC crashed. Why allow just a NYC bank to crash when the [WE] foundation can use those same ideas and crash the entire nation. (i.e. Within 10-years of the Federal Reserve Act was the Great Depression).

  9. How can killing a tax that had been delayed indefinitely increase the deficit? That’s like quitting after you’ve been fired?

    1. Because the deficit projection was based on the assumption that the law would go into effect on schedule.

      1. Shorter: Because the government had been lying.

        Everyone knew that the taxes would disappear.

  10. These taxes were bad policy. ObamaCare was bad policy in total. However, the free stuff aspects of Obamacare are popular, because a large number of voters like the idea of free stuff, so it is hard to take on whole. So you get nibbling around the edges which makes these enormous, comprehensive laws incoherent. This is why it never should have been passed in the first place.

    1. …But bills that turn success into a consequence, laziness into a reward, psychotic behavior into subsidy checks, and empowers sexism, racism and identity politics — is the cool-kids cream crop of the new left.

  11. Maybe we could amend the constitution so that any time a tax included in a law is reduced in any way, it automatically repeals the law, all related regulations, and ends the pensions of all politicians who voted for it.

    1. Then a tax would never be reduced again.

    2. I liked someone else’s plan on this; If the proposed stance can’t even get 50% of the citizens to show up and vote for it — it’s not important enough to keep.

      1. I’d be cool with a national referendum, but actually making that happen would probably take a constitutional amendment.

  12. In other news, the sun rose today, Trump lied about something and a Democrat running for President promised “free” stuff paid for by the “rich”

  13. “…The public barely notices, and the lawmakers involved shrug and move on.”

    In a cooler era, Jonathan Gruber would be tarred and feathered.

    But he gets to go on doing whatever he does.

  14. ObamaCare was/is unconstitutional.

    There is no power in the US Constitution that gives Congress the power to force Americans to buy a product or service.

    1. Unless it’s a penaltax, of course.

      John Roberts may be the least principled on the Court.

      1. Right, as-if a power to charge(i.e. tax) thwarts all contractual terms all by itself… It was such a bogus ruling…

        They just as well of written the summary to say, “Because we can charge you money; we can do whatever we want.”

      2. Roberts is the head of the FISA court.

        He should be impeached.

    2. Once the odious 14th amendment was re-interpreted to make everything “equal”, Congress was empowered to do almost anything.
      If the government can make everything equal, there is no liberty.

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  16. Obamacare was passed on a promise that it would be deficit-neutral or even reduce the deficit slightly.

    It was NEVER going to be that way, NEVER. Everyone knew it, even Obama knew it. Come on.

    1. But the “sheeple” didn’t know — they were too busy playing/classifying people by sex, color, productivity-rate and defending the lies as fast as Obama could puke them out onto the sheeple.

    2. The whole reason it was “deficit neutral” during the 10 year CBO outlook was that they put a bunch of the spending provisions into the 11th year. It takes a whole lot of mendacity to ignore that point.

  17. O-Care was passed on lies. Please, dude…

      1. those are my favorite.

        1. From DS9………..
          Bashir: Out of all the stories you told me, which ones were true and which ones weren’t?
          Garak: My dear doctor, they all were true.
          Bashir: Even the lies?
          Garak: Especially the lies.

  18. Why are we blaming the congress that killed the taxes instead of the congress that orchestrated the original farce?

    1. Because Suderman isn’t [WE].

  19. The ACA repealers are now responsible for the deaths of every corona virus stricken Americans. There might be 40 local deaths by the end of Christmas 2025.

  20. As The New York Times noted last summer, the Cadillac tax “was expected to be a key cost-containment provision in President Barack Obama’s signature health law and one of the main ways it was supposed to pay for itself.”

    Ha. My Cadillac health insurance plan was canceled the year Obamacare was passed, in expectation. The replacement ACA-compatible plan was really crappy.

    I wonder how the people doing the projections factored in all the Cadillac plans that would no longer exist when they estimated the revenue from the Cadillac tax.

    1. That’s the funny thing about predicting tax revenue. It assumes that, all things being equal, the tax in question doesn’t change a thing.

      Ironically enough, though, taxes always changes things, because they never happen in a vacuum.

      1. It’s the assumption underlying all Democratic policies. It’s very odd. I don’t think it’s dishonesty, I really think there is just something missing in their heads. They think they can intervene in a system and the system won’t adjust to their intervention.

        The latest is Bernie’s tax on high frequency trading. It only occurs in the first place because the trades are friction free. Introduce even a small cost, and they would evaporate instantaneously. I think such a tax is good policy on the grounds of driving the siphoning of value by those with privileged access out of the markets. But it won’t raise money.

    2. Did you know that federal taxes do not fund federal spending?
      Did you know that federal tax dollars are destroyed upon receipt?
      Did you know that even if all federal tax collections fell to $0, the federal government could continue spending, forever?
      It’s known as Monetary Sovereignty.

      1. Monetary or not — All that FREE Government produce, labor and property comes out of the citizenry. Money is just a representation of that so trying to pretend they aren’t related at all is just lunacy.

  21. Deficits don’t matter, so who cares.

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  23. Why do you need taxes to pay for something that’s free? It’s free, goddammit, FREE!!

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  25. The debt Henny Pennys have been claiming the federal debt is “fiscally ruinous” and a “ticking time bomb” for over 80 years.

    See: https://mythfighter.com/2020/02/26/omg-its-february-14-2020-and-the-national-debt-is-still-a-ticking-time-bomb/

    They do not want you to understand that unlike state and local governments, the U.S. federal government cannot run short of U.S. dollars.

    It creates new dollars, ad hoc, every time it pays a bill.

    The federal debt has risen more than 50,000% in the past 80 years and that “ticking time bomb” still is ticking and the government has not been “ruined.”

    Question: How many more years of failed predictions before the public catches on to the libertarian scam?

    Federal taxpayers never fund federal spending and never pay for the federal debt. Never.

    1. How long can we do this, though, before we get hit by hyperinflation?

      As it is, we’re suffering from noticeable inflation, which makes saving that much more difficult, as well as planning for the future.

      And, ultimately, it’s a way to tax Americans, without actually having to pass a tax, because our prices gradually go up, all because government can’t get their spending under control.

      1. A good example to tell is the well built 1968 John Deere 4020 sold brand new for $5500 today being 50-years old and worn out sells for $5500. Inflation of the USD is outpacing the wear on tractors.

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