SalemNews.com, Salem, MA

November 6, 2013

Anderson: Paying the piper on Obamacare

Barbara Anderson
The Salem News

---- — So, there I was on Oct. 31, handing little chocolate bars to children on my porch, then going back to my computer to order books from Amazon before it started collecting the Massachusetts sales tax on Nov. 1. I wanted “Rush Revere and the Brave Pilgrims” for my grandchildren and the new Krauthammer book for myself; then I added two inexpensive paperbacks from the wish list that I use when I need to increase my order to get free shipping.

Amazon recently increased the amount one has to spend for free shipping, so I probably won’t be using it as much now that I won’t get my taxpayer-activist satisfaction from avoiding the sales tax. That’s the bright side of the state taxing my Amazon purchase: more business for the local bookstores. The dark side is the money will be wasted.

In fact, it isn’t really needed. I saw Gov. Deval Patrick on “Meet the Press” last Sunday, talking about appearing with President Obama in Boston to compare Obamacare with Romneycare. Patrick assured the national audience that “now we have virtually universal coverage ... It has not broken the budget.”

Easy to say, when in your first term you increased the sales tax rate from 5 percent to 6.25 percent. And yet ... a Monday RedMassGroup posting reminded us of a 2011 news item from the Boston Globe: “Gov. Deval Patrick approved a record $9.6 billion last July for the state’s health insurance program for the poor — sufficient, he assumed, to last a year. But the program’s costs quickly outpaced expectations, forcing the governor to approve an additional $329 million in October and then seek $258 million more, which lawmakers approved last week. And even that may not last, with six months remaining in the budget year ... With Massachusetts confronting an estimated $1.5 billion shortfall in the coming budget year, Patrick has said he is committed to financing the program, known as MassHealth ...”

So, the governor passed another tax package that increased the gas tax, tobacco tax, and created a new tax on computer sales (since repealed), not to mention further automatic inflation-adjusted gas tax hikes that are presently being protested with an initiative petition. These were sold as necessary new revenues to cover transportation spending that apparently has been pushed aside in favor of paying the highest health insurance costs in the nation and record Medicaid spending.

He didn’t mention any of this during the joint appearance with Obama, just babbled through the Democrats’ ongoing embarrassment about the disastrous rollout of Obamacare by noting unhelpfully that “the Affordable Care Act is not a website.” Didn’t mention that it IS a cancellation of millions of existing policies that Barack Obama told Americans they could keep.

Mitt Romney also appeared on “Meet the Press” and was much more focused. He told host David Gregory, “There’s no question in my mind but had the president been truthful and told the American people that millions would lose their insurance and millions more would see their premiums skyrocket — had he told them that at the time it was going through Washington, there would have been such a huge cry against it, it would not have passed.

“Whether you like the model of Obamacare or not, the fact that the president sold it on a basis that was not true has undermined the foundation of his second term. I think it’s rotting it away.”

Fine, let it rot. We can look forward to rebuilding the country as soon as we get a new president. But things will get a lot worse before they get better.

The problem with health care that led to the creation of Obamacare is that its cost will continue to increase as more of us get older — unless the Obamacare insurance cancellations and predictable inability of the government to manage big projects kills us off earlier than had been expected.

Let’s look at another health care problem, of which we were reminded at a recent State House hearing before the Public Service Committee. To his credit, Gov. Patrick has been working to address the costs of state and municipal employee health insurance, among the highest in the states and, according to Secretary of Administration and Finance Glen Shor, “more generous than 90 percent of employers in the commonwealth.”

The governor’s new bill, HB 59, would change public employees’ eligibility requirements for retiree health benefits that are creating a $45 billion-$50 billion unfunded liability over 30 years. The combined pension and healthcare liabilities are the states’ version of the national debt — and all of them are unsustainable. Nevertheless, the public employee unions are strongly opposed to the reforms.

Well, the piper will be paid when the chickens come home to roost. In Massachusetts, property taxes are limited by Proposition 21/2, but the Massachusetts Taxpayers Foundation testified that employee benefit costs “are growing faster than municipal revenues.”

At all levels of government, the choices are grim. Tax increases to cover the government debt would drive the economy into depression. One alternative, major service cuts, could cause civil unrest. The other alternative, reform with better management of priorities, is becoming hard to imagine.

Barbara Anderson of Marblehead is president of Citizens for Limited Taxation and a Salem News columnist.