Peter Orzag, Obama's Budget Director in 2009, Lauds "Cadillac Plan" Tax Chicanery As More "Viable" Than Other Possibilities

So Obama cannot claim he didn't know. Peter Orzag talks about Obamcare phasing out the health care exemption, through the deceptive means of indexing the "Cadillac Plan" threshold to slow-growing CPI rather than fast-moving (and accurate) rate of medical inflation.

He also states that they went about phasing out the health care exemption because certain people -- unnamed, but he means Obama -- had demagogued McCain's honest discussion of ending the exemption (replacing it with a tax credit), and, as Orzag says, to now embrace an honest plan like McCain's would be "awkward."

So instead they lied.

So this is what happened:

In the 2008 campaign, McCain took the gutsy step of arguing in favor of repealing the health care exemption -- gusty, because while most Pointy Heads agreed this would make the best policy, most people just say "You're gonna tax my health insurance?!"

And note McCain offered a $10,000 or so tax credit in the deal -- so that most people would not experience any negative tax consequences from the change in the law.

Obama ran against this and demagogued McCain on the issue. He promised he would not tax your health insurance.

As soon as he's elected, Obama begins scheming as to how he can tax people's health insurance -- this time, not bothering to offer the $10,000 tax credit, which would make people net-neutral on the deal. He wants to tax them more. So no tax credit.

And since he just got done demagoguing the issue, he has to do it secretly. So he gets together with Orzag and Gruber to repeal the exemption over the course of years, as the "Cadillac Plan" threshold fails to keep pace with actual inflation.

So where are we now? Well, according to Gruber, we are 20 years away from all plans being taxed at 40% rate, which means that most employers won't offer them, and will just dump people on to the government exchanges.

They'll give people some cash in lieu of health care-- which will be taxed (unlike the health care benefits, making the middle class triple losers on the deal).

And the MSM is embargoing this, instead choosing to talk about Kim Kardashian's asshole.



Thanks to MorgenR.

