Coyote Blog

Kevin Drum is reporting, as I predicted, that the Democrats have bought off the remaining votes they needed (with our tax money) and that there will be a successful cloture vote this evening on the health care bill.  Bad news, though I have been prepared for it for a while.  I honestly believe that 90% of this country is going to end up worse off to help out the remaining 10%.  The analogy I often use is that this is just like the crappy public housing we built in the 1960's, except everyone, not just the poor, are going to have to move into it.    The only remaining questions that remain are 1) how long after passage of this bill do Democrats admit they grossly fibbed on the price and start jacking up taxes; and 2) how hard a hit (and how fast) will drug and medical innovation take.  Enjoy.  The only silver lining is that many of the folks who passed this mess are not going to have their jobs a year from now.

Update: Overlawyered has more bad news about the bill's provisions.   A lot more of this will come out as the people are actually allowed to read it.

It has bothered me in an earlier post that I missed several critical tricks the Democrats in Congress are using to understate the cost of their health care bills.  These are important enough that I am re-writing the original post:

I still think all the political to and fro on the health care bill is so much smoke and mirrors.  I still believe this:

It is totally clear to me that Obama and Pelosi will spend any amount of money to pass their key legislative initiatives.  In the case of Waxman-Markey, the marginal price per vote turned out to be about $3.5 billion.  But they didn't even blink at paying this.  That is why I fear that some horrible form of health care "reform" may actually pass.  If it does, the marginal cost per vote may be higher, but I don't think our leaders care.

Too many politicians cojones are on the line now.   They are past caring about cost or unintended consequences or even if the bill achieves their own goals they originally set for it.  They are now driven to pass something, and since it is we taxpayers and not Congress that will individually bear the burden of their mistakes, something is very likely going to pass.

Good editorial today in the WSJ on the myth of government health care cost control:

A field as dynamic and innovative as U.S. medicine, in which costs are largely driven by new technologies and better ways of caring for patients, is rife with complexities and uncertainties. But no one bothered to strike that note of caution when Washington was hopped up on a cost-control gambit that was too painless to be true. The new cost-control apologists concede that there isn't any actual plan for controlling costs: Throw enough speculative policies against the wall, they say, and some breakthrough will stick. Yet Mr. Orszag's no-less-confident predecessors spent decades trying to pull down Medicare spending with little to no success. Technocracy rarely if ever works as intended. Mr. Gawande points to the case study of U.S. farm policy, and if politically sacrosanct agriculture subsidies and rural price-supports are the best to hope for, then what's the worst?

More relevant examples include Medicare's "relative value" payment scale, which was designed in 1985 by the Harvard economist William Hsiao to encourage more primary care. That's this year's rallying cry too. "Diagnosis-related groups" were introduced into Medicare in 1983 to alleviate hospital cost growth, and what a monumental success that turned out to be. With only brief periods of relatively slower growth, nominal Medicare spending has risen on average at an annual rate of 9.6% since 1980. Over the same period total Medicare spending has grown 13-fold, climbing from 1.2% of the economy to 3.2% today.

Congress lacks the stomach for serious cost control in any case. One policy Mr. Orszag favors"”Medicare penalties for hospitals that re-admit certain patients"”is limited to only three conditions in the Senate bill, and the penalties are trivial.

Another"”a putatively independent commission that is supposed to enforce cost cutting"”is barred from going after costs incurred by doctors and hospitals, which leaves out more than half of Medicare spending. Earlier this year Mr. Orszag got into a heated debate with Henry Waxman over such a commission at a dinner party hosted by Connecticut Rep. Rosa DeLauro, precisely because the House baron enjoys the political power that flows from controlling health spending.

Paging Friedrich von Hayek.  The administration constantly whines that none of his critics ever offer an alternative (a patently false statement that seems to play well in the sympathetic press, very parallel to the global warming alarmist charge that skeptics haven't offered an alternative explanation of past warming).

Hmmm. One liberal sage noted in a 2007 paper that "four decades of empirical research" have shown that insulating people through third-party insurance coverage "from the full cost of health care has been responsible for anywhere from 10% to 50% of the large increase in health expenditures." Ultimately, he concluded, increasing cost-sharing would give individuals a direct stake in more prudent purchasing, as opposed to today's invisible health dollars that vanish as more expensive premiums, foregone wages and higher taxes.

Those are the words of Jason Furman, now the White House deputy economic director who seems to have been put into witness protection. Every serious health economist in the country recommends reforming the tax exclusion for employer-sponsored insurance, perhaps by converting it to a deduction or credit. Cost control will never stick unless it is extricated from politics and transferred to individuals to make their own trade-offs.

Such reforms were ruled out by union opposition, so the Senate gestures at them with a 40% excise tax on high-cost insurance plans, on the theory that two wrongs will make a right. But this untargeted tax will simply raise the cost of coverage for all workers in a given pool"”it's too clever by 40%"”while doing nothing to stem the distortions from first-dollar, third-party insurance.

This was simply amazing to me.  For years, I and others have said that putting more health care spending under insurance plans was going exactly the wrong direction, both from an individual choice as well as a system cost perspective.  By eliminating the need or incentive to shop by the consumer of services, prices almost inevitably rise.

Here is a fabulous smoking gun example from my windshield repair today.  I happen to have free windshield replacement in my insurance policy.   I called the insurance company and said I had an auto glass claim.  I was transferred to Safelite Auto Glass, who apparently (very intelligently) have a contract to process claims for my insurance company.  They said I could use any provider, but would I like them to call out someone for me -- if I used their choice, the insurance company would guarantee the work.

Well, what did I care -- I wasn't paying for it -- so I had them make an appointment for me.  Unsurprisingly, it was with Safelite Auto Glass.

I must add here that Safelite did an exceptional job, the guy who showed up at my workplace was friendly and competent.  No complaints at all about the service or workmanship.

Anyway, I got a bill for which I owed zero dollars, which I suppose is heading right this minute for the insurance company.  Before I show it to you, I was curious what I would have paid for this service if it hadn't been insured and I shopped around.  I got just one quote - from the Safelite Auto Glass web site.   This is a bit unrealistic because for a purchase this large, I would have gotten several quotes.  But this was the only quote I needed.  The charge to me if I bought the new glass service with my own money without insurance was$321.05  (click to enlarge).

And this was the bill I signed for the insurance company:

For a total of $710.40.  Same service.  Same car.  Same customer.  Same part.  Probably the same repair guy.  2.2x higher price.

Now, I suppose I might be willing to believe there is some invoice pricing game here and the insurance company may get a discount over invoice, similar to car sales, though I am not sure what their incentive would be for this game -- it should be the opposite.  In fact, we can be nearly positive they are marking up the price to insurance companies given a) the web quote says right up front it is not good for insurance work and b) I have already shown how glass companies give enormous consumer kickbacks for insurance work.

If I had cared, I would have eschewed the offer on the call to have them set up the appointment and shopped around for the best kickback.  All a cross subsidy from those who don't use the insurance to those who do use the insurance.  Talk about a terrible incentive.

I think the conclusion is pretty strong.  Anything we shift to insurance from having individuals pay out of pocket gets substantially more expensive.  And this doesn't even address my changing willingness to live with a small windshield crack and avoid this purchase altogether when I am paying the bills vs. when I am not.

Wow, you mean different individuals actually have different preferences and value procedures in different ways?  Weird!  Who would have ever thought that everyone would not be silently satisfied at whatever one-size-fits-all solution is crafted by Congress and other people who apparently "know best."  The concept seems to throw Kevin Drum for a loop.

If we all paid for minor stuff like this out of pocket, there would not be a problem.  We'd spend or not based on our own preferences.

As a side note, my wife is a worrier.  And she has seen at least three of her friends under-50 in the last year be diagnosed with breast cancer.  No matter what the elites say, for my wife the right answer is to test.  The resulting worry she would have from not testing would dwarf, in terms of quality of life, any downsides of the test.  Which is also why we have paid to have several questionable things biopsied even when doctors said it probably was not necessary.  Know thyself.

Megan McArdle has a great post on the CMS post. Bascially, there is no magic bullet to cut medical costs.  Benefits are going to get cut and costs are going to go up.

I really don't need the report to tell me this.   Here is the common sense answer -- before this administration embarked on the health care fiasco, we all pretty mich knew that Medicaire and Medicaid bankrupt and was going to blow a huge hole (McArdle's term) in the budget.  So, since this bill at its heart is really just an expansion of Medicaire/Medicaid to cover more people, how can we expect it to do anything but blow an even bigger hole in the budget.

By the way, years ago I wrote:

...health care is not like failed Great Society housing programs.  In those housing programs, only the poor got crappy government housing "” the rest of us kept what we had.  Universal health care is different, because it will effectively be like forcing everyone to move into the housing projects.

Now that we know what is in the actual bills, I stand by this prediction.  Here is the poll question I would still like to see:

Would you support a system of government-run universal health care that guaranteed health care access for all Americans, but would result in you personally getting inferior care than you get today in terms of longer wait times, more limited doctor choices, and with a higher probabilities of the government denying you certain procedures or medicines you have access to today.

Perhaps the scariest potential effect of the proposed health care bills is the negative effect they likely will have on innovation.  And if we adopt the bill, we will never know what we have lost.  Unlike budgets, which with near certainty will become overdrawn quickly, we will never be able to point to the health care innovation we didn't have.

I want to quote liberally from a Ronald Bailey post, but I encourage you to read the whole thing:

Yet, the elements of market competition that still manage to survive have had the salubrious effect of driving medical innovation and improving patient health outcomes. A new study by the free market Cato Institute, "Bending the Productivity Curve: Why America Leads the World in Medical Innovation" reports:

...In three of the four general categories of innovation examined in this paper "” basic science, diagnostics, and therapeutics "” the United States has contributed more than any other country, and in some cases, more than all other countries combined. In the last category, business models, we lack the data to say whether the United States has been more or less innovative than other nations; innovation in this area appears weak across nations....

...Harvard University economist Kenneth Rogoff observed:

"[I]f all countries squeezed profits in the health sector the way Europe and Canada do, there would be much less global innovation in medical technology. Today, the whole world benefits freely from advances in health technology that are driven largely by the allure of the profitable U.S. market. If the United States joins other nations in having more socialized medicine, the current pace of technology improvements might well grind to a halt."

In my column, "2005 Medical Care Forever," I suggested this thought experiment:

...what if the United States had nationalized its health care system in 1960? That would be the moral equivalent of freezing (or at least drastically slowing) medical innovation at 1960 levels. The private sector and governments would not now be spending so much more money on health care. There might well have been no organ transplants, no MRIs, no laparoscopic surgery, no cholesterol lowering drugs, hepatitis C vaccine, no in vitro fertilization, no HIV treatments and so forth. Even Canadians and Britons would not be satisfied with receiving the same quality of medical care that they got 45 years ago....

As Rogoff suggests, the nationalized health care systems extolled by progressives have been living off the innovations developed by the "only country without a universal health care system." I wonder how Americans would vote if they were asked if they would be happy freezing medical care at 2005 levels forever?

This is an amazing contortion:

According to Phil Klein of the American Spectator, Christina Romer, head of President Obama's Council of Economic Advisers, had this to say today about the Senate's proposed excise tax on high-end health insurance policies:

"Part of the idea of how that is going to work is precisely because it does empower consumers. It empowers each of us to have an employer-sponsored plan to call our HR office and say, "˜Would you negotiate harder? Would you think about (whether this) is the most efficient plan out there, because I don't want my plan paying an excise tax.' So I think that's something that is very much empowering consumers."

Obama continues to deny that the health insurance mandate which is backed with a penalty to be collected by the IRS is a "tax."  He says "For us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase."  Three responses:

1. Asking people to take individual responsibility for their health care expenses is not a tax.  Asking them to do so via a particular method, in this case the purchase of an insurance policy rather than, say, just paying expenses as they go, is a tax.
2. Obama might argue that since people are getting value for the policy they have to buy, there is not net tax but just a (forced) exchange of value.  But this is the classic technocratic fault, to assume that the central planner's definition of value is the same as every individuals.  But its not.  Many folks don't get value from a policy, which is why they don't buy one today
3. Even if Obama were right in #2, he would still be wrong given the rules embedded in this bill.  Young, healthy people will be forced to subsidize the old and those with pre-existing conditions by the rules imposed on insurance companies.  These rules effectively make it impossible to charge full cost to the old and sick, so that the young and the healthy will have to pay more.  Because the young and the healthy will not see values in policies at the prices they will be paying (given these transfers), they won't value the policy with is EXACTLY why the law has to force them to buy it.  Which is why it is a tax.

John Stoessel via Carpe Diem

Competition is a "discovery procedure," Nobel-prize-winning economist F. A. Hayek taught. Through the competitive market process, we producers and consumers constantly learn things that force us to adjust our behavior if we are to succeed. Central planners fail for two reasons:

First, knowledge about supply, demand, individual preferences and resource availability is scattered -- much of it never articulated -- throughout society. It is not concentrated in a database where a group of planners can access it.

Second, this "data" is dynamic: It changes without notice. No matter how honorable the central planners' intentions, they will fail because they cannot know the needs and wishes of 300 million different people. And if they somehow did know their needs, they wouldn't know them tomorrow.

118, and counting...

House passes health care bill. I wonder if anybody really knows what is in this thing.  I am not much of a political expert, but I don't see how, if the vote was so close in the House, that they are ever going to get this pig through the Senate.  Perhaps go the conference route so they can avoid cloture.

Great idea.  Should have done something with it when you guys were in power.

Yours Truly, on July 16, 2009:

It is totally clear to me that Obama and Pelosi will spend any amount of money to pass their key legislative initiatives.  In the case of Waxman-Markey, the marginal price per vote turned out to be about $3.5 billion.  But they didn't even blink at paying this.  That is why I fear that some horrible form of health care "reform" may actually pass.  If it does, the marginal cost per vote may be higher, but I don't think our leaders care.

Barbara Hollingsworth, 11/4:

The Heritage Foundation's Dennis Smith says that a "manager's amendment" to Pelosi's controversial 1,900 "“page health care bill includes new provisions that will allow back-door payoffs to specific members of Congress, such as more favorable Medicare reimbursements to particular doctors or hospitals and lower taxes on medical device manufacturers in certain congressional districts.

One such earmark - which Smith says "suddenly appeared" after the Energy and Commerce Committee had already completed its work - creates a new $6 billion Medicaid slush fund for nursing homes to be doled out by Health and Human Services Secretary Kathleen Sebelius, with no input from the states, ordinary rulemaking or administrative review.

This is nothing but a blatant attempt to buy off wavering Blue Dog Democrats. Just when you thought this bloated behemoth couldn't get any worse, it does.

Frequent readers know I almost never call statements "a lie."  I try to take the position that reasonable people can disagree without either lying.  I hate all the "Lying liars and the lies they tell their lying supporters" type books.

But I simply can find no other way to explain this statement:

"There isn't anything we could do to satisfy them in this health care bill. Nothing," Senate Majority Leader Harry Reid (D-Nev.) said. "They are so anti-competitive. Why? Because they make more money than any other business in America today. . . .What a sweet deal they have."

I have written about this any number of times, but Carpe Diem also has the numbers at the link - health care insurers are well below average both in profit margin and return on capital, the two most common measures of profitability.  For the last couple of years, most large health care companies have made less than 5% return on sales.

The only other explanation is the neither the House Majority Leader, his staff, President Obama, or Nancy Pelosi and her staff (all of whom have echoed this same meme) have never once spent the 12 seconds going to Google finance or the Wall Street Journal to look the number up.

Nancy Pelosi once said:

I'm very pleased that our Chair of our Democratic Congressional Campaign Committee and member of the leadership will be talking too about the immoral profits being made by the insurance industry and how those profits have increased in the Bush years. We all believe in the profit motive; we all want to reward success.  But having that success come at the expense of America's working families "” have that success come by withholding care, when a person becomes ill, is just not right and we're going to take this issue in a new direction.

Liberal pundit Kevin Drum, who really should know enough to look it up, once said:

It means the health insurance industry is scared that we might actually do something in 2009 and they want to be seen as something other than completely obstructionist. That means only one thing: they've shown fear, and now it's time to bore in for the kill and gut them like trouts. Let's get to it.

It takes eleven pages just to summarize the new 1990-page House government health care bill.  Here is the summary.

The implications for my business is staggering.  I have already mentioned in the previous post that it imposes an 8% tax on wages on my business -- a business where 50% of revenues go to wages and margins are in the 6-7% range.  You do the math.

Worse for us is that nearly all our competitors are ma and pa companies with less than $500,000 in wages a year, meaning that our competitors will be exempt from these taxes, giving them an automatic 4% cost advantage over our company.  Great.

Twelve seconds after this thing passes, I will be on my phone to my attorney to figure out if it is possible to break my company into multiple corporations that all fall under the 500,000 wage limit.  The paperwork and administration for this would be a huge hassle, but it can't be as high as 4% of sales.

Beyond this, I have not seen the detail yet, but the old House bill imposed enormous record-keeping obligations on businesses.  Basically, I would have to know at all times exactly what kind of medical insurance policy every one of my employees has.  Barf.

One of the reasons for substantial variation in the cost of health insurance between the states is the variations in state "must-cover" health insurance mandates.  New York and Massachusetts, both known to have among the most extensive requirements, not coincidentally have the highest average premium costs.

I found this study the other day - it was put together by a health insurance group and is certainly self-serving;  but since it is just a summary of existing law, I don't see any reason why it wouldn't be mostly accurate.

Here is one example table from the report -- it is the type of specialist care that must be covered in each state.  They also have much longer tables on the individual procedures that must be covered:

Gotta make sure that "naturopaths" are covered, don't we?  You can picture the process of specialists marching into state capitals and making their pitch that their profession needs to be covered.

You can get a feeling for what goes on with one example.  One procedure, "Port Wine Stain Elimination," caught my eye.  I assumed this was removal of some type of birthmark, but I was curious and looked it up.  I got this study near the top of the Google search, and in this link you can see the political process of mandates in a nutshell.  Here is the abstract (emphasis added)

background. Port-wine stains are congenital vascular malformations that can be disfiguring and may lead to psychosocial as well as medical complications. The 585-nm pulsed dye laser is very effective in treating port-wine stains. Laser treatment is often viewed by insurance companies as a "cosmetic procedure" and not "medically necessary." Consequently many patients are denied coverage for treatment of their disfiguring birthmarks.

objective. To determine variability of insurance coverage for laser treatment of port-wine stains from state to state. Natural history, progression, and potential complications of port-wine stains arc reviewed and rationale for consistent insurance coverage for laser treatment of port-wine stains is given.

methods. A questionnaire was mailed to 40 dermatologic surgeons in 22 states and the District of Columbia. We reviewed the literature regarding port-wine stains and their potential complications, and health care policy guidelines regarding "medical necessity" and "cosmetic procedures."

results. Insurance coverage for laser treatment of port-wine stains varies from state to state.

conclusion. Based on current health care policy guidelines, laser treatment of port-wine stains should be regarded, and covered, as a medical necessity by all insurance providers.

In other words, the study surveyed a bunch of cosmetic surgeons.  They were asked "should an expensive procedure you provide be covered by insurance."  They all answered "Hell YES!"  Anyone want to bet whether the funding for the study came from the company that makes the laser equipment?

But today, they now have to run to 50 state houses (well, 48 since they have been successful in 2).  In the future, they will just run to Congress.  And we know how good Congress is at saying no to special interests.

Postscript: I would normally assume this is obvious, but after years of blogging I know that I must add that I have nothing against those with port wine stains, I am thrilled that a technology exists today to remove them, but I don't want to pay for it in my policy.

Postscript #2: I am willing to bet that the Venn diagram of the 4 states offering "naturopath" coverage and the 3 states offering "Pastoral Counselors" don't overlap.

Postscript #3: What does a naturopath (whose tools include homeopathy) charge an insurance company for a remedy consisting of at most one molecule of active ingredient in a glass of pure but well shaken water?  Speaking of homeopathy, this is classically funny.

From the AZ Republic, on the yet-again-revived public option:

Health-care legislation heading for the Senate floor will give millions of Americans the option of purchasing government-run insurance coverage, Majority Leader Harry Reid announced Monday, although he stopped short of claiming the 60 votes needed to pass a plan steeped in controversy.  Reid, D-Nev., said individual states would have the choice of opting out of the program. Details of how it would work were still sketchy, but states would get a year after the 2013 phase-in of the new health-care plan to decide whether to participate.

And federal taxes for citizens of opt-out states will be reduced, right?  No way.  This opt-out is a joke.  Its a bit like saying that every individual has the right to opt out of public education in favor of a private school.  Sure they do -- they don't have to attend the public school, but they have to pay for it anyway in their taxes.

Update: Sorry, the AZ Republic has made it almost freaking impossible to excerpt from their online articles without bringing over a load of cr*p code.

I liked TJIC's response to the story of the pregnant woman who could not find any available supplies of the government-provided flu vaccine:

Man, it's a good thing that the flu vaccine isn't being left in the hands of the free market "“ we might have the same horrible production and distribution bottlenecks that we run into with Coke, pizza, books, and pajamas "“ you can't find those things anywhere.

And, hey, on the bright side, socialized medicine is coming!

Since the New York Times has pretty much become the official media outlet of this administration, I presume that this article represents a new trial balloon in selling government health care.  The pitch this time -- its good for small businesses!  (via Maggies Farm)

President Obama, in his Saturday radio address, said the Democrats' health insurance overhaul would help small businesses and stimulate the economy by providing relief from "the crushing costs of health care "” costs that have forced too many small businesses to cut benefits, shed jobs, or shut their doors for good."....

The House speaker, Nancy Pelosi of California, said the sharp rise in premiums for small businesses offered the latest evidence that Congress must act swiftly on health care legislation.

"This underlines the urgent need for health insurance reform, including a public option," she said in an interview. "We need to have competition for the insurance companies to keep premiums down."

I am only now getting through the 1500 pages of this bill (putting me ahead of Ms. Pelosi in reading it, I am sure), but the last House bill would have been a disaster for my company, increasing taxes on wages by up to 8% and imposing a record-keeping burden that was just horrific.

The NYT and the Democrats are apparently trying to set up a mini-class war within bussinesses, snidely saying these companies have more negotiating leverage.  Sure.  But what they have even more of is the leverage to shape federal legislation to their benefit.  However worse a deal my company may get in free insurance markets due to being small is nothing compared to how much worse of a deal we will get from Congress by being small.

If they really wanted to cut costs for small businesses, they would strip out all the national and state coverage mandates for things like aromatherapy that raise costs so much and let me shop for insurance across state lines.  That would be real competition.  Unfortunately, all Pelosi means by competition is throwing Amtrak into the mix to compete with the airlines.  Yeah, that will do the trick.

I am not sure anyone has actually said this, but that has certainly been the implication, right?  Obama & Pelosi spends a lot of time accusing insurance companies of having profits that are too high, so I have to believe his intention is to reap cost savings by cutting into them.

I have blogged about this before, but Carpe Diem also picks up this thread, observing that health insurance companies are #86 on the list of US industries in terms of profit margins, with a ROS of  3.3%.  As Mark Perry points out, this gives them a profit of about $100 per individual policy.  Not really a very promising source of savings, is it?  But it is very scary for any industry that makes more than 3.3% profits, knowing that the Administration thinks they are making too much money and has shown a willingness to slice into profits it thinks to be excessive.

1502 pages.  Enjoy.

Kevin Drum thinks John Shaddeg (who is actually my representative) is crazy because he equates the current health care proposals, which Drum says are just to make sure that everyone has decent health care, to "Soviet gulag health care."  Further, Drum concludes that Democrats in Congress are sane and would never ever engage in such over-the-top loony rhetoric as Mr. Shaddeg

But it's a good example of what I mean when I suggest that today's right-wing lunacy is different from left-wing lunacy of the Bush years.  Sure, there were lefty bloggers who went over the top about Amerika and how the NSA was bringing 1984 to life and so forth, but for the most part you didn't have members of Congress taking to the House floor and joining in.  They largely managed to keep a slightly more even keel.

Wow, that will be blood in the water for Conservative bloggers - I can think of a number of Democratic loonies in Congress but I don't want to do the Republican's job for them.  Instead I wrote:

I have no doubt that you have the best of intentions, and that you only want healthy people and two unicorns in every garage. But you are, no matter how well intentioned, achieving your ends through compulsion. You compel person A to pay for person B's health care. You compel doctors and medical suppliers to provide services at costs or at quality levels they would not have provided otherwise. You compel everyone to get insurance -- and not just insurance, but exactly the insurance with the coverage you want, not what they want.

To folks who cherish individual liberties (and who don't look to the Republican party for much leadership on this or any topic) it is all soviet-style compulsion, no matter how pure your motives.

PS- as a libertarian without a horse in the wars between the Coke and Pepsi party, I find this kind of post hilarious. Team Elephant thinks you guys are insane and they are normal, and you think the opposite. You think that calling their president Hitler is fine while they are wrong to do it to yours, and vice-versa. I will give you a big hint. You guys all sound exactly the same. You all use the same tactics. You both have thoughtful members and loonies, both on the sidelines and in positions of power. You both have honest people and corrupt ones. It's like watching Apple vs. PC ads, except those two actually have some differences.

Update:  This from a later Drum piece is exactly what I was referring to.  I am positive the Republicans think the exact same way about Democrats, in fact I hear them all the time saying "We need to get down and dirty like the Democrats and stop being the ones always following the rules."  Apparently Democrats think the same way:

Is it really true that the Democratic leadership acts like a high school social club while the Republican leadership acts more like the mafia?  Step out of line in GOP-land and they'll make you pay dearly: money, committee assignments, and more will be savagely withdrawn if you vote the wrong way.

Self-awareness seems to be in short supply in Washington.

I think most folks were shocked that the CBO scored the Baucus bill as deficit-neutral.  Well, we are starting to understand why (by the way, these are not criticisms of the CBO, but of the Senate).  So far, three major budget tricks have been identified:

1.  Now-you-see-it-now-you-don't Medicare cuts.  Via Michael Tanner of Cato:

When the Senate Finance Committee released CBO scoring of its health care reform proposal last week, we warned that its claim of reducing future budget deficits was achieved only through dishonestly assuming that Congress will implement a 21% reduction in Medicare payments that is scheduled under current law. We pointed out that Congress has been supposed to make those reductions since 2003, and never has.  Now"”surprise, surprise"”Democrats have introduced a bill to eliminate the scheduled cut, at a cost of $247 billion.  But Democrats cleverly are putting the new spending in a separate bill, so it won't change scoring of health care reform.   Have they no shame?

2.  Transfer of costs off the Federal budget to the states (which the CBO does not score).  Via Glen Reynolds

Gov. Phil Bredesen warned Tuesday that pending federal health care legislation could cost Tennessee far more than the $735 million "best estimate" his administration previously has cited.

The $735 million would stretch over five years, but "in addition, there are huge unknowns for the states in this reform," Gov. Bredesen said, estimating that those costs, if realized, could exceed another $3 billion from 2014 to 2019. . . . "I'm glad they're trying to do it without increasing the federal deficit, that certainly is important," said Gov. Bredesen, a Democrat who has been critical of the plan's impact on states. "But to turn around and increase the state deficits as the way to handle it that does not seem a very appropriate way to do that."

3.  Match 7 years of expenses with 10 years of revenues.  From an earlier post:

Bruce McQuain points out something I think has not gotten enough attention in the health care bill.  The new taxes being proposed start in 2010, but the benefits don't begin until 2013 and are phased in through something like 2018.  That means for any 10-year budget look, there are 10 years of taxes but only 6-7 years of benefits.  And even with this trick, the plan STILL adds a trillion dollars to the deficit, even before the certainly more pessimistic CBO numbers come in.