None of these taxes touches the lives of every American as closely as the individual mandate to purchase health insurance. For the first time in American history, Obamacare forces all Americans to purchase a product or face sanction from the Internal Revenue Service. This is clearly a tax, as pointed out by ABC News’ George Stephanopoulos during a September 20th interview with the President himself. In an exchange that can only be described as “Clintonesque” Stephanopoulos pressed President Obama to admit his individual mandate was a tax. But President Obama refused to acknowledge reality and denied it. Stephanopoulos was forced to read the definition of “tax” straight from Merriam Webster’s Dictionary. But even then Obama refused to come clean: “George, the fact that you looked up Merriam’s Dictionary, the definition of tax increase, indicates to me that you’re stretching a little bit right now. … Nobody considers that a tax increase.” Well nobody but President Barack Obama’s Justice Department.

The New York Times confirmed Friday that in preparation for defending constitutionality of the Obamacare individual mandate in court, an Obama Justice Department legal brief argues that the penalty used to enforce the mandate is “a valid exercise” of Congress’s power to impose taxes. Mr. Obama’s own Justice Department further repudiates the President’s earlier statement by noting that the penalty is imposed and collected under the Internal Revenue Code, people must report it on their tax returns, and that the Congressional Budget Office estimates that it will cost Americans $4 billion a year. Yale Law School professor Jack Balkin told a meeting of progressive activists last month that President Obama “has not been honest with the American people about the nature of this bill. This bill is a tax.”

The fact that the Obama administration and their allies are now admitting the individual mandate is a tax betrays their very real fear that the Supreme Court could find Obamacare’s individual mandate unconstitutional. In the bill itself, Congress identified the Commerce Clause as the source of their authority to force all Americans to buy health insurance. But as our legal team has made eminently clear, the mandate does not purport to regulate or prohibit commerce of any kind. To the contrary, it purports to “regulate”—and penalize—inactivity. If the Supreme Court allows the Obamacare individual mandate to stand, then Congress could do anything it wanted. They could: require us to buy a new Chevy Impala each year to support the government-supported auto industry; require us to buy war bonds to pay for the Iraq and Afghan wars; or force us to eat our vegetables.

But even if the Obama administration is now admitting the individual mandate is a tax, that still does not make the law constitutional. Rather than operating as a tax on income, the mandate is a tax on the person and is, therefore, a capitation tax. Therefore the 16th Amendment’s grant of power to Congress to assess an income tax does not apply. The Constitution does allow Congress to assess a capitation tax, but that requires the tax be assessed evenly based op population. That is not how the Obamacare mandate works. It exempts and carves out far too many exceptions to past muster as a capitation tax. The Obamacare mandate is still unprecedented and unconstitutional.

But perhaps more importantly, what does the episode say about the integrity of the White House? The President went on national television and insisted in unequivocal terms that his individual mandate was not a tax. Now his administration is saying the exact opposite. At what point do the American people lose all faith in this President’s word?

Thanks to a new tax that takes effect tomorrow, some small-business owners will get a first-hand look at Obamacare’s impact.

“The first present we get under this new health care law takes effect this week — and that is the tanning tax,” lawyer and small-business advocate Karen Harned said yesterday at The Bloggers Briefing, hosted by The Heritage Foundation.

The tax will hit small-business owners particularly hard, said Harned, who directs the Small Business Legal Center of the National Federation of Independent Business.

Approximately 19,000 “mom and pop” small businesses might be affected by the new tax — and those businesses will likely spend an average of more than $74 an hour to comply with federal tax paperwork burdens, according to a factsheet distributed by the NFIB.

“It’s really not about the big guys,” Harned said. “It’s about the little guys, and we really do think small-business owners got the short end of the stick by far with this law.”

The tanning tax is only a tiny part of the health care bill — a mere 26 lines in the 906-page law. Of far more concern is the individual mandate to buy health insurance.

“We believe the individual mandate, in particular, is unconstitutional,” Harned said. “Quite frankly, we view this as not just a health care issue anymore. I do not think it’s a stretch to say, if the government can require you to buy insurance simply because you’re alive, then, if they want a healthier society, they could require you to buy a gym membership. If they want a cleaner society, they could require you to buy a car every five years.”

That’s why, Harned said, the NFIB on May 14 joined 20 states in their lawsuit against the federal government challenging the constitutionality of Obamacare. She has high expectations for the case.

“We are hopeful this is a case the Supreme Court will take on to address the fundamental issue of what is the scope of Congress’ power to regulate all of us,” she said.

Cross-posted on the Washington Examiner’s Opinion Zone.

The White House knows its signature health care legislation is still deeply unpopular with the American people, which is why it has been desperate to speed up implementation as much as legally possible. But many of the law’s new costs and limitations are still scheduled to kick into effect years down the line, when Congress hopes voters aren’t paying attention anymore.

A new Foundry video illustrates the health care implementation timeline (pdf) researched by the Heritage health care team.

Think you can keep your current plan? Think seniors and the disadvantaged will get a fair shot at the care they want and need? Watch and find out. For more information on the side effects of Obamacare, visit the Side Effects blog.

“We have to pass the bill so that you can find out what is in it,” Speaker Nancy Pelosi (D-CA) told us just weeks before Congress passed President Barack Obama’s health care plan. Well, the nation’s post-passage Obamacare education continued yesterday when the Congressional Budget Office (CBO) confirmed that the federal government will have to spend an additional $115 billion implementing the law, bringing the total estimated cost to over $1 trillion. The estimate had been requested before passage of the bill by Rep. Jerry Lewis (R-CA), but the CBO was too overwhelmed with the Democrats’ other constant revisions to the law to get back to Lewis before the final vote.

This is by far not the only nasty little surprise that has come back to bite Obamacare after passage. Shortly after it became law, U.S. employers began reporting hundreds of millions if dollars in losses thanks to tax changes in the bill. AT&T and Verizon alone pegged their Obamacare tax losses at around $1 billion each. At first, Democrats in Congress were outraged by the announcements and threatened to hold hearings persecuting these companies. But then the Democrats not only found out the companies were obligated by law to report their Obamacare related losses, but that the losses were a signal these companies might have to dump their employees’ and retirees’ health care coverage all together.

Then the Obama administration’s own Centers for Medicare and Medicaid Services (CMS) released its final cost projections for Obamacare, finding that, contrary to White House claims, the legislation will increase national health care spending by $311 billion over the next decade. The CMS report also revealed that: 1) 18 million Americans will pay $33 billion in penalties for failing to comply with Obamacare’s individual mandate and still receive no health care; 2) U.S. employers will pay $87 billion in employer mandate penalties; 3) 14 million Americans will lose their current employer-based health coverage; 4) 7.4 million seniors will lose their current Medicare Advantage benefits; 5) 15% of all Medicare providers will be made unprofitable, thus “jeopardizing access to care for beneficiaries.”

Facing this onslaught of reality, the Obama administration has swooped into full spin mode, devoting the Weekly Presidential Address to explaining the “real benefits” Obamacare is “already delivering” to Americans. HHS Secretary Kathleen Sebelius then sent letters to House and Senate leaders touting her “progress” in implementing the law. And then last night White House aides Nancy-Ann DeParle and Stephanie Cutter briefed the House Democratic Caucus on the “tangible benefits” of the law. The sales pitch for all three events was the same: 1) “adults” age 26 and younger can be added to their parents’ plan (never mind that this drives up their parents’ health care costs); 2) new high-risk pools for Americans with pre-existing conditions (never mind that 19 states have rejected working with HHS since Obamacare massively underfunded the pools); 3) supplementing insurance for early retirees (never mind that the Medicare Advantage cuts and tax changes mentioned above are a big reason why seniors will need supplemental coverage).

Democrats know that Americans simply are not buying what they are selling. Rep. Louise Slaughter (D-NY) tells Politico: “It’s just like trying to explain the Encyclopedia Britannica.” And John Spratt (D-SC) adds: “You need to know what you’re talking about and this is extremely complex. It’s really difficult to remember, ‘was this in this bill, or was this in the bill Senate side.’” Maybe Spratt should have figured out what was and wasn’t in the bill before he voted for it.

Since the left can’t even figure out what is in the bill they are trying to defend, the latest Rasmussen Reports shows that 63% of likely voters now believe it will increase the federal deficit, and 56% now favor repeal. Not waiting for this November’s elections to change the leadership in Congress, states are leading the way on the road to repeal. According to The Washington Post 33 states have mounted legal and legislative challenges to the new law. Clint Bolick, litigation director of the Goldwater Institute, tells the Post: “This is going to be a long, protracted war of attrition and we haven’t even seen the first wave of regulations yet. … The initial challenges to McCain-Feingold were rejected. But since then, litigators found the vulnerabilities. Likewise, here I think you’re going to see a thousand flowers bloom in terms of lawsuits. I’m hoping that this will die a death of a thousand cuts.”

2010: Physician Medicare payments decrease 21% effective March 1, 2010

2011: “Annual Fee” tax on health insurance, allocated according to share of total premiums. Begins at $2 billion in 2011, then increases to $4 billion in 2012, $7 billion in 2013, $9 billion in the years 2014, 2015, and 2016, and eventually $10 billion for 2017 and every year thereafter. Two insurers in Nebraska and one in Michigan are exempt from this tax.

2012: Medicare payment penalties for hospitals with the highest readmission rates for selected conditions.

2013: Medicare tax increased from 2.9% to 3.8% for incomes over $250,000 (joint filers) or $200,000 (all others). (This is stated as an increase of 0.9 percentage points, to only the employee’s share of the FICA tax.)

2014: Individual mandate begins: Tax penalties for not having insurance begin at $95 or 0.5% of income, whichever is higher, rising to $495 or 1% of income in 2015 and $750 or 2% of income thereafter (indexed for inflation after 2016). These penalties are per adult, half that amount per child, to a maximum of three times the per-adult amount per family. The penalty is capped at the national average premium for the “bronze” plan.

2015: Establishment of Independent Medicare Advisory Board (IMAB) to recommend cuts in Medicare benefits; these cuts will go into effect automatically unless Congress passes, and the President signs, an override bill.

2016: Individual mandate penalty rises to $750 per adult ($375 per child), maximum $2,250 per family, or 2% of family income, whichever is higher (capped at the national average premium for the “bronze” plan). After 2016, the penalty will be increased each year to adjust for inflation.

2017: Itemized deduction for out-of-pocket medical expenses is limited to expenses over 10% of AGI for those over age 65.

A recent study by the Urban Institute, a prominent liberal think tank, lists “the biggest losers” should congressional health care legislation fail to become law. Interestingly enough, this is oddly similar to an earlier Heritage Foundation assessment of the “biggest losers”—if the liberal bills do become law. Here, we outline how Urban’s biggest losers would actually be worse off under Obamacare than under the current system:

Self-employed people – Because the self-employed are at a significant disadvantage due to current regulations preventing them from buying group health insurance, one might think the ability to buy at controlled prices through the “exchanges” set up under the Senate bill would be of great benefit. However, the self-employed would lose many options currently available, such as low-priced catastrophic insurance, and health savings accounts paired with high-deductible, low-premium insurance. Furthermore, moderate-income self-employed people who can’t afford the high-priced comprehensive health plans offered through the exchanges and aren’t eligible for subsidies would not only lose their insurance, but would pay a penalty for remaining uninsured.

Workers in small firms, including those offered employer-sponsored insurance (ESI) – Several million workers currently receiving insurance through an employer would lose their coverage under the Senate bill. Faced with increasing insurance premiums, plus the elimination of “no-frills” health plans as “acceptable coverage”, many employers will find it cheaper to pay the tax penalty than to provide insurance. This is especially so for those with less than 50 employees, who will be exempt from the penalty but not from the new regulations on insurance if they choose to provide it. The result will leave workers with the legal obligation to either buy the government mandated high-premium comprehensive insurance out of their own pockets using after-tax dollars, or pay the new penalty for remaining uninsured.

Non-elderly people working part-time and people working full-time but for only part of the year – Employers of people in these categories will be exempt from providing them insurance, but the people themselves will not be exempt from the requirement to obtain the government-specific comprehensive insurance on their own. Lower-premium catastrophic insurance will not satisfy the requirement. Persons in these categories will be required to either buy the government specified high-premium comprehensive insurance out of their own pockets using after-tax dollars, or pay the penalty for remaining uninsured.

People who have or had significant health problems - In order to raise revenue, the Senate health bill includes a tax on medical devices, prescription drugs, and high-cost insurance plans. Though these taxes are aimed at the companies that provide high-cost medical necessities, as economists know, these taxes would be passed along to the patients, increasing expenses for those with costly illness and the premiums of health plans that cover them. What is more, the Senate bill, as well as the President’s latest proposal, combines an individual mandate with a guaranteed issue requirement, meaning that companies cannot turn people away from enrollment. The powerful economic incentives that are hardwired into this flawed arrangement will encourage the young and healthy to avoid purchasing insurance until they “need” it, paying the “cheaper” mandate penalty instead. There would be even greater risk segmentation in the insurance markets than we have today, as the insurance pools would attract disproportionately larger numbers of older and sicker enrollees. This would further raise premiums for those who need insurance to pay for significant health problems.

Older working-age adults and early retirees – Heritage analysis shows that older working age adults and early retirees, specifically those aged 45-64, will be hit with new taxes despite President Obama’s promise not to raise taxes on households earning less than $250,000 per year. Households headed by individuals aged 45-64 who deduct medical expenses on their 1040 tax form, those who ought to be helped by a health care reform bill, would see a tax increase of about $200 on average. The higher the medical expenses faced by these families the higher the tax increase they would face. While some would face a very small increase, others would be hit with a heavy new penalty for having medical expenses.

People with low incomes - Low-income families are uniquely vulnerable under the Senate health bill. Heritage research shows that the Senate bill creates incentives for employers to avoid hiring members of low-income families. The employer mandate would require employers with 50 or more employees to offer insurance to all employees or pay a penalty of $750 per worker. However, if the employer does offer insurance, they would still pay a fine – but only if they hire workers from low-income families! If the employee’s portion of the cost exceeds 9.8 percent of the employee’s family income, and that employee is eligible to receive a premium subsidy (“affordability credit”), the employer would be slapped with a $3,000 penalty. This is based on family income, so employers would be better off hiring workers with few dependents or with other sources of income, rather than those with a single source of income and several dependents. In other words, employers would be punished for hiring the members of society who need jobs the most.

Kathryn Nix and Guinevere Nell contributed to this post.

The Senate bill would have disastrous effects on the economy and federal spending. CDA shows that the bill:

– Increases the federal deficit and national debt. The Congressional Budget Office shows deficit neutrality for the Senate bill—however, this is based on static analysis which ignores the effects new taxes and an individual and employer mandate would have on economic growth. These provisions would decrease investment in the economy, resulting in lower wages and salaries. This means less taxable income, lowering federal revenues and growing the debt. Increased borrowing puts upward pressure on interest rates causing some private sector productive investment opportunities to be foregone. This also increases the interest owed on the national debt, such that the government would pay, on average, $20 billion more in interest between 2010 and 2020. By the end of the decade, CDA estimates the publicly held debt would be $755 billion dollars more than under current law.

– Increases insurance premiums. Mandates in the Senate bill would require health plans to offer more generous coverage, increasing the cost of insurance. Increased spending on premiums, accompanied by increased medical spending, would create upward pressure on prices. This would further increase government spending, since offering the current levels of care covered by Medicaid and the proposed subsidies would cost significantly more. Another choice would be to ration provider payments even more severely.

– Increases unemployment. The bill also places new taxes on “the rich”—or, in more realistic terms, small businesses and those who create jobs. CDA’s dynamic analysis of the bill shows that an average 690,000 jobs per year would be lost due to the effects described above.

Americans have recently voiced that Congress’ top legislative priority should be restoring jobs and the economy. Instead, congressional leaders have focused their agenda on passing the Senate health care bill, which would have the opposite effect of killing jobs growth, suppressing economic growth, and adding to the nation’s already unsustainable levels of federal spending.

You might have seen this week a stunning demonstration of political condescension on the health care front. In remarks at the 2010 Legislative Conference for the National Association of Counties, House Speaker Nancy Pelosi said, “But we have to pass the bill so that you can find out what is in it, away from the fog of controversy.”

This revealing comment reinforces a patriarchal (or in Pelosi’s case matriarchal) attitude Congress has taken with the American public: What lurks within the House and Senate health care bills will be revealed in the fullness of time, and it’s really good for us if we only knew better.

Ordinary Americans have had a common-sense resistance to Washington’s feverish attempt to overhaul one-sixth of the U.S. economy. But Congressional leadership has ignored the public’s concerns and instead clung to the idea that if they simply ram the bill through the legislative process — using unprecedented tactical maneuvers that may not even pass the parliamentarian’s smell test—Americans will finally understand and embrace ObamaCare.

When it’s law, then Americans can finally grasp the “goodness” of what’s in the 2,700-plus-page Senate bill, which is the most likely legislative vehicle that Congress will push to President Barack Obama’s desk. The problem for Pelosi and congressional Democrats is that Americans have been reading these bills, and they don’t like what they’re reading.

The more the public learns about the taxes, individual mandates, taxpayer-funded abortion coverage, and the potential breakdown of the private health insurance market, the less jazzed they are about ObamaCare. But politicians have blithely waved away little details like reading the actual bill and instead said “trust us”—at a time when public trust for Congress is at an all-time low during Obama’s presidency.

This whole dynamic helps explain why Obama and congressional leadership are insistent on another artificial deadline of March 18 for final passage of ObamaCare. They know that members of Congress, particularly those in the House, could see another wave of townhall protests when they go on a two-week recess starting March 26. That’s because the American people do know what’s in these bills. Popular discussion and debate—that “fog of controversy”—has helped to enlighten them.

Although Obama is billing the White House gathering as an opportunity for Republicans to air their ideas for reform, Democrats do not expect it to reveal much common ground and are showing little willingness to abandon the basic outline of legislation that the House and Senate have approved.

The real target of today’s summit are the 38 Democrats in the House who voted against Obamacare the first time. While Obamacare passed the House 220-215, Speaker Nancy Pelosi (D-CA) told reporters yesterday she is not sure if she has the votes this time around. The passing of Rep. John Murtha (D-PA) and the retirements of Reps. Robert Wexler (D-FL) and Neil Abercrombie (D-HI) have cost her three votes, and the inclusion of taxpayer-funded abortions in the Senate and White House plans will cost the vote of the only Republican to vote for the plan the first time around, Rep. Joseph Cao (R-LA), as well as Rep. Bart Stupak (D-MI) and 15 to 20 additional pro-life Democrats.

That means the White House must convince a sizeable chunk of conservative Democrats to switch their votes. Brown University political scientist James Monroe says that is the true purpose of today’s event: “House Democrats have told Obama, ‘Move the needle on public opinion,’ and that’s what this is about.” So how does President Obama plan to “move the needle” on the public’s view of his plan? By pushing the same old tired talking points he has been trying to sell them for over a year now. But the public’s opinion of President Obama’s plan has steadily declined as they have learned more about it. That’s for good reason: they intuitively know his claims cannot be true. Specifically, the President says his plan will “make insurance more affordable,” “set up a new competitive health insurance market,” and “put our budget and economy on a more stable path by reducing the deficit.”

But as Heritage fellow Bob Moffit amply details, each of these claims are demonstrably false. The Senate bill actually increases health insurance premiums and raises taxes on the middle class by $629 billion over ten years. It destroys what little there is left of a real competitive health insurance marketplace by instituting new price controls and standard benefit packages that will turn health insurance companies into public utilities. And the plan is so riddled with deceptive budget gimmicks that the White House’s non-CBO scored $950 billion price tag actually comes to $2.5 trillion once an honest accounting has been applied.

The stakes for today’s summit are high. According to a new Gallup poll, if President Obama fails to win any conservative support, Americans by a 49% to 42% margin will oppose rather than support Congress passing a health care bill. And what if President Obama decides to go it alone and pass major social welfare legislation with a bare majority? By an even larger 52% to 39% margin, Americans oppose passage of Obamacare with only 50 Senators in support (Vice President Joe Biden casting the 51st vote). And those opposed are more likely to feel strongly about their opinion than those in favor, 25% to 11%.

Back in 2005, then- Sen. Barack Obama said: “You know, the Founders designed this system, as frustrating it is, to make sure that there’s a broad consensus before the country moves forward.” Let’s hope the President heeds his own advice, and after today’s summit fails, he starts over.

In anticipation of the February 25^th health care summit with members of Congress, the President released his proposal for pricey, government-run health care. The White House estimates the cost of the proposal to be $950 billion over a decade, decreasing the federal deficit. However, health policy expert James Capretta, a former senior official of the Office of Management and Budget (OMB), shows in a recent paper that this is not only inaccurate, but far from reality.

Capretta’s research shows that ten full years of implementation of the President’s proposal would cost closer to $2.5 trillion, with the strong likelihood of far exceeding this amount. Here’s how:

• The President’s proposal ignores “doc fix” legislation, which would cost roughly $200 billion over ten years. As Capretta notes, it is ironic that the President does not account for this provision, but includes several other Medicare provisions in his proposal.

• Non-coverage spending would add about $90 billion to the cost of the bill.

• Cost estimates for the President’s plan should apply to the ten year window from 2011 to 2020—not to 2019. This would add approximately $200 billion more to the cost of the bill.

• The President’s plan includes the CLASS Act, premiums from which are double-counted. Fixing this adds $72 billion to the cost of the bill.

• The true ten year window of the bill, including spending reductions, new revenues, and new spending, is 2014 to 2023. During this period, the Senate bill would cost $2.3 trillion. Adding the President’s additional provisions, at $75 billion, as well as the aforementioned provisions, arrives at a grand total of over $2.5 billion.

According to Capretta, the newly created entitlement programs created by the bill are likely to expand over time to include more Americans. In addition, spending cuts to current entitlement programs have little chance of coming to fruition, as these cuts would put several institutions in financial trouble. Capretta’s full analysis can be read here.