by Chidem Kurdas
Yesterday at a news conference President Obama laid out his view of the healthcare bill being hammered out in Congressional committees. One could question many of his statements—although the members of the press picked to ask questions did not. So as not to write a post of inordinate length, I’m will focus on just one point.
Mr. Obama says that savings will take care of about two-thirds of the cost of the new entitlement program. “The remaining one-third is what the argument has been about of late,” he says. For the sake of the argument, let’s stay with that.
The one-third of the money is to come, in one form or another, from the rich—or those so defined. The President says he’s OK with the House proposal to add a surcharge to families with a joint income of a million dollars. He emphasizes how important it is that the middle class not be saddled with this additional burden.
“While they’re currently working through proposals to finance the remaining costs, I continue to insist that health reform not be paid for on the backs of middle-class families,” he said.
At the same time, he says he’s concerned about budget deficits. Those federal deficits – the exact amounts are a tad unclear, but what’s a few trillion dollars between friends – stretch indefinitely into the future and will certainly lead to tax increases.
Now here’s the thing. There’s a limit to how much you can soak the rich before they cease being rich or move to the Bahamas. You hit them for the medical entitlement, there’s less left for all other purposes. One obvious source of tax revenue has already been spoken for.
Who’s going to pay all the other extra bills arriving from Uncle Sam? The middle class, of course.
As deficits blossom and foreign lenders get antsy, tax hikes will fall on the middle class more so than would be the case if higher income families hadn’t already been shaken down for an extra entitlement. The surcharge on the rich simply means that the rest of us will have to shoulder more of the overall burden down the pike. One way or another, we’re paying.