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Title: Blog by Novelist William S. Frankl, MD

Archive for September, 2010

The 1099 Mess

Monday, September 20th, 2010

The Senate planned to vote on amendments to the White House small business bill that would rescind an ObamaCare mandate that companies track and submit to the IRS all business-to-business transactions over $600 annually. The 1099 reporting footnote was hidden in the ObamaCare bill to raise about $17.1 billion, part of the effort to claim that ObamaCare would reduce the deficit by $100 billion or more.

The Treasury Department’s National Taxpayer Advocate, Nina Olson, indicated the costs would be “disproportionate as compared with any resulting improvements in tax compliance.”

Small businesses will be seriously hit financially in 2013 when the 1099 mandate hits more than 30 million of them. At present, businesses only have to tell the IRS the value of services they purchase from vendors and others. Under the new rules, they’ll need to report the value of goods and merchandise they purchase as well, adding huge accounting and paperwork costs.

For example, let’s take a small trucking company. The company will have to collect hundreds of thousands of receipts from every gas station where its drivers fill up and figure out where it spent more than $600 that year. Then it will also need to match those payments to the stations’ corporate parents.

Now, most Democrats say they didn’t know the provision was in the ObamaCare bill and just how onerous the 1099 provision would be, illustrating how poorly the bill was written. As critics claim, most Members had no idea what they were voting on. Two hundred and thirty-nine House Democrats voted to repeal the 1099 provision last August. The repeal would have passed, but Speaker Pelosi rigged the vote  so that it required a two thirds majority. So she provided Democrats with the cover of a repeal vote without actually repealing it!

Nebraska Republican Senator, Mike Johanns, offered an amendment to scrap the new 1099 rules in toto on September 14. But the White House opposed this claiming it might set a precedent for repealing the whole health bill. Over the weekend, the Treasury Department pronounced the Johanns amendment “not acceptable in its current form.”  The president’s opposition to the repeal illustrated the emptiness of his so-called support for small business, which he touts at every campaign stop.

So, on September 14, Harry Reid kept most of his Democrat senators together in favor of requiring businesses to report to the IRS annual purchases above $600 from any contractor, resulting in a 46-52 loss of the Johanns amendment. This, despite business groups, especially small businesses, having made a vote to repeal a priority because of the huge costs associated with this mandate. Seven Democrats broke from their caucus, including endangered incumbents Michael Bennett (Colorado) and Blanche Lincoln (Arkansas) who knew how damaging to their re-election bids a vote to retain the 1099 provision would be.

It’s clear this will come up again in the next Congress, but the present defeat demonstrates the power of the statists in goverment to defeat even popular measures, especially if pro-business.

Addendum to: Death Panels Won’t Be Necessary—Seniors Just Won’t Get Any Care At All

Monday, September 20th, 2010

As a follow-up to my last post on 9/7, I’d like to present some additional evidence to chronicle the gutting of Medicare that will occur within the next several decades:

ObamaCare cuts $818 billion from Medicare Part A (hospital insurance) from 2014-2023 and 3.2 trillion from 2014-2033. Adding ObamaCare’s cuts for Medicare Part B (physician fees and other services) brings the total cut to $1.05 trillion over the first 10 years and $4.95 trillion over the first 20 years.

These drastic cuts in Medicare payments to doctors, hospitals, and other health care providers that serve America’s seniors were the basis for the Congressional budget office’s official “score”–– repeatedly touted by the presidentand his minions –– that the health reform legislation would reduce the federal deficit. The president never disclosed how that deficit reduction would actually be achieved. Well, you know now.

Today, two thirds of hospitals lose money on Medicare patients. Under ObamaCare it will get much worse. Many hospitals will ultimately shut down or stop serving all Medicare recipients.

The president’s concept of spreading the wealth includes pillaging the Medicare system that serves seniors in favor of others the president’s left-wing vision deems more worthy.

At present, Medicare suffers terrible long-term deficits in unfunded liabilities and needs  fundamental structural reforms. But effectively refusing to pay the doctors and hospitals to provide medical care the program promises to seniors is no way to solve that problem

Hey, Death Panels Won’t Be Necessary

Tuesday, September 7th, 2010

ObamaCare will be mostly paid for in cuts in Medicare. Here’s a sample of these  cuts totaling more than $500 billion, to come:

In 2010:  Medicare will cut reimbursements to inpatient psychiatric hospitals.

In 2011:  Medicare cuts will begin to home health agencies.

Wealthier seniors ($85K/$170K) will pay higher Part D premiums.

Medicare cuts will commence to ambulance services, ambulatory surgery centers, diagnostic labs, and durable medical equipment.

Seniors will be prevented from purchasing power wheelchairs unless they first rent for 13 months.

Long term care hospitals, acute care hospitals and nursing homes will begin to face new Medicare cuts.(FY12)

Medicare Advantage cuts begin. Members will face premium increases, benefit cuts, or both.

In 2012:  Dialysis treatments funded by Medicare will be cut.

Medicare cuts to hospice will be instituted.

In 2013:  Hospitals that serve low-income seniors will face significant  Medicare  cuts.

Just Blame It On George W. Bush

Tuesday, September 7th, 2010

A friend just sent me this e-mail. It’s filled with interesting facts. Read it and consider:

January 3rd 2007 was the day the Democrats took over the US House of Representatives and the US Senate at the start of the 110th Congress. This marked the first time that the Democratic Party controlled a majority in both chambers since the end of the 103rd Congress in 1995.
For those who are listening to the fallacy that everything today is “Bush’s Fault”, think about this:

On January 3rd, 2007, the day the Democrats took over the Senate and the Congress:

The DOW Jones closed at 12,621.77

The GDP for the previous quarter was 3.5%

The unemployment rate was 4.6%
The US deficit was below historic norms as a % of GDP

The USA, based on George W. Bush’s economic policies, had just SET A RECORD of 52 STRAIGHT MONTHS of JOB CREATION!

Then on January 3rd, 2007 Barney Frank took over the House Financial Services Committee and Chris Dodd took over the Senate Banking Committee.

15 months later we experienced a meltdown of US BANKING AND FINANCIAL SERVICES!!!

PS: from 2001 through 2008, George W Bush asked Congress 17 times to increase regulations on Fannie & Freddie – stating current policies with regard to both were financially risky for the US economy.
PPS: Republicans have controlled the Senate for all the increases to employment over the last 18 years (23 million new jobs). Democrats have controlled the Senate for all the decreases to employment over the last 18 years. Democrats have controlled the entire Congress for the last 4 years (loss of 7 million jobs).

William S. Frankl, MD, All Rights Reserved