True North

Thanks to the Wall Street Journal's article, we now know how Sen. Baucus's legislation hides the total cost of the legislation:

One reason it allegedly "pays for itself" over 10 years is because it would break all 50 state budgets by permanently expanding Medicaid, the joint state-federal program for the poor.

Democrats want to use Medicaid to cover everyone up to at least 133% of the federal poverty level, or about $30,000 for a family of four. Starting in 2014, Mr. Baucus plans to spend $287 billion through 2019, or about one-third of ObamaCare's total spending, to add some 11 million new people to the Medicaid rolls.

About 59 million people are on Medicaid today, which means that a decade from now about a quarter of the total population would be on a program originally sold as help for low-income women, children and the disabled. State budgets would explode, by $37 billion, according to the Congressional Budget Office, because they would no longer be allowed to set eligibility in line with their own decisions about taxes and spending. This is the mother, and father and crazy uncle, of unfunded mandates.

Five years of subsidizing the states' cost of health care isn't much incentive for ruining future budgets. When legislatures figure out that their hands are getting tied and that they'll be getting the blame when they have to raise taxes or cut programs to pay for Sen. Baucus's bill, they won't be keen on the idea:

In some states it is far higher, 39% in Ohio, 27% in Massachusetts, 25% in Michigan, Rhode Island and Pennsylvania. Forcing states to spend more will crowd out other priorities or result in a wave of tax increases, or both, even as Congress also makes major tax hikes inevitable at the national level.

The National Governors Association is furious about Mr. Baucus's Medicaid expansion, and rightly so, given that governors and their legislatures will get stuck with the bill while losing the leeway to manage or reform their budget-busters. NGA President Jim Douglas of Vermont recently said at the National Press Club that the Baucus plan poses a "tremendous financial liability" and doesn't "respect that no one size fits all at the state level." He added: "Unlike the federal government, states can't print money."

I'd call Sen. Baucus's bill insanity but I don't want to insult insane people. This is horrible policymaking. Frankly, Big Sky voters should fire him the next time he's up for re-election.

This clears something up, though. This obviously is why his committee voted against letting people read through this bill. Democrats voting against transparency must've thought it better to keep the public in the dark. They clearly didn't want people finding out the poison pill tucked into their legislation. Unfortunately for them, their attempt failed.

What's more is that Republicans are highlighting the Democrats' bills' biggest shortcomings:

"Health care reform that wreaks fiscal havoc on states and piles debt on our children and grandchildren is not reform at all," Boehner said. "President Obama, Speaker Pelosi and Majority Leader Reid need to scrap this costly government takeover of health care and start over on a responsible health care reform plan our nation can afford."

"State budgets around the country are feeling the squeeze of tough economic times. Unfortunately, after passing a $1,700 per family national energy tax, Democratic leaders in Washington are now trying to ram through a $1 trillion massive federal expansion into health care that will create yet another unfunded mandate on states by permanently expanding Medicaid," said Rogers. "This is yet another example of how out of touch Washington has become and why Congress needs to start over on common-sense, affordable, free market health care solutions."

The Baucus bill imposes a nasty underfunded mandate on states, as do the other Democrats' health care legislation. Sen. Baucus quickly highlighted the fact that his bill wouldn't add a penny to the deficit. Now we know what type of gimmicks he used to accomplish that. It's sad that he didn't accomplish this without burdening the states with massive amounts of unfunded liabilities.

Either way, taxes will be raised as a result of the liabilities imposed on government as a result of the Democrats' legislation. I don't think that people will differentiate between federal tax increases to pay for increased Medicaid spending and state tax increases to pay for increased Medicaid spending. Either way, it's alot of money they'll have to pay for a financially wobbly program.

At the end of the day, I think it's likely that Baucus has added a new group of enemies to his plan, namely state legislators who'll have to deal with the mess he created. If you couple that with middle class people who'll be forced to buy insurance, you've got a massive motivated group of opponents.

It couldn't happen to a nicer guy.

Comments welcome at LFR.