Hidden Spending—23lh., b13.14
Obamacare has raised Americans’ health-insurance premiums , sapped their liberty, caused millions to lose their doctors, and funneled huge amounts of power and money to Washington.
A federal judge recently ruled the Obama administration has been violating Article I of the Constitution by giving insurers monies that Congress never appropriated.
In addition to dumping people into Medicaid, Obamacare functions by having the federal government send billions of dollars in direct payments to insurance companies. The money coming in constitutes revenues, and the money going out constitutes outlays. Under Obamacare, however, the government is obscuring large sums of federal spending by labeling these direct subsidies to insurance companies “tax credits.” Not only is the government hiding billions of dollars in spending, it is counting these hidden expenditures as tax cuts.
The government paid to the for insurer isn’t counted as government spending—it is counted la as money that the government, theoretically, never received, That’s how Obamacare is hiding some $104 billion in federal spending over a decade the portion of Obamacare’s direct payments to insurers that the Congressional Budget Office counts as tax cuts. Calling Obamacare’s direct payments to insurance companics “tax credits” runs contrary to the government’s own definition of tax credits. But Obamacare payments to insurers don’t offset or reduce anyone’s taxes. The GAG also says a tax credit is a tax expenditure and it defines the workings of a tax expenditure as follows: “Rather than transferring funds from the government to the private sector, the U.S. government forgoes some of the receipts that it would have collected, and the beneficiary taxpayers pay lower taxes than they would have had to pay.” But when an insurer receives a direct subsidy under Obamacare, the government does transfer funds to the private sector it doesn’t forgo receipts it would have collected and the beneficiary taxpayer don’t pay lower taxes than they would have had to pay.
In other words, Obamacare’s direct subsidies to insurance companies aren’t tax credits—which means the federal government is underreporting the next decade’s outlays by over a hundred billion dollars and underreporting tax receipts by the same amount.
Republicans seem eager to follow suit. Some have envisioned Obamacare alternatives featuring the same sort of faux “tax credits” because they help the proposals secure good CBO scores. Obamacare subsidies are legitimate tax credits because one could choose to take them as such–that is, one could choose to pay full freight to an insurer and to take a tax credit at the end of the year. To have his subsidy sent directly to an insurance company? The insurance company isn’t getting a tax cut, it’s getting a government payment.
There’s no reason why the government couldn’t provide “free” college tuition via “tax credits,” shifting dollars from the Treasury directly into university coffers, while disguising much of the spending. The list is endless.
source–weekly std-6/6/16, jeffrey anderson