The Sebelius Thugocracy: "They're more subtle than this in Caracas".

In other administrations you would expect news like this to turn up in a parking garage somewhere delivered by an anonymous "Deep Throat." Not so in the Obama administration, where thugocracy reigns supreme; we find this news in the Wall Street Journal instead:

'As a consequence of us getting 30 million additional people health care, at the margins that's going to increase our costs—we knew that," President Obama said at his press conference Friday in response to a question about rising health spending.

That wasn't how he sold the plan, but, anyway, that's a truism. Here's another: The White House was always going to blame insurance companies for any cost increases, even when its own policies cause them.

Witness Kathleen Sebelius's Thursday letter to America's Health Insurance Plans, the industry trade group—a thuggish message even by her standards. The Health and Human Services secretary wrote that some insurers have been attributing part of their 2011 premium increases to ObamaCare and warned that "there will be zero tolerance for this type of misinformation and unjustified rate increases."

Zero tolerance for expressing an opinion, or offering an explanation to policyholders? They're more subtle than this in Caracas.

What Ms. Sebelius really means is that the government will prohibit insurers from doing business if reality is not politically convenient for Democrats. ObamaCare includes a slew of mandated benefits for next year, such as allowing children to remain on their parents' plans until age 26 and "free" preventative care (i.e., no direct out-of-pocket cost sharing for consumers). The tone of Ms. Sebelius's letter suggests that she doesn't understand that money is exchanged for goods and services, and that if Congress mandates new benefits, premiums will rise.

No wonder the economy is in the crapper with this group of thugs threatening business at every turn.  As if the Obama health care agenda hasn't gone out of its' way to make life miserable for insurers already; insurers are now prevented from explaining the consequences of this outrageous law to their customers.  I guess they should write a letter explaining they are all money grubbing whores hoping to profit off the misery of the American people in justification for rate increases necessitated by the health care law.

Shhh, don't look now but the 1099 insurrection is underway:

You might not have seen it reported, but the Senate will vote this morning on whether to repeal part of ObamaCare that it passed only months ago. The White House is opposed, but this fight is likely to be the first of many as Americans discover—as Nancy Pelosi once famously predicted—what's in the bill.

The Senate will 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. Democrats tucked the 1099 reporting footnote into the bill to raise an estimated $17.1 billion, part of the effort to claim that ObamaCare reduces the deficit by $100 billion or so.

Much like the rest of the miraculous deficit reducing powers of the health care law, the onerous provision requiring business to file truckloads of 1099's would produce the $17.1 billion Dems claimed only in a mythical beltway fantasy land.  Instead it will bury business and the IRS in paperwork and increased costs.

The provision is such a failure that even the White House is quietly backing its removal from their grotesque law.  They're not backing the repeal of the provision, however, for fear that would set repeal fever in motion:

Most Democrats now claim they were blindsided and didn't understand the implications of the 1099 provision—which is typical of the slapdash, destructive way the bill was written and passed. As the critics claimed, most Members had no idea what they were voting on. Some 239 House Democrats voted to dump the 1099 provision in August, and the repeal would have passed except Speaker Pelosi rigged the vote procedurally so it needed a two-thirds majority. She thus gave Democrats the cover of a repeal vote without actually repealing it.

In the Senate today, Nebraska Republican Mike Johanns will offer his amendment to scrap the new 1099 rules altogether. But the White House is opposing this because it fears it would set a precedent for repealing the larger health bill. Over the weekend the Treasury Department pronounced the Johanns amendment "not acceptable in its current form."

Yesterday the White House endorsed a competing proposal from Florida Democrat Bill Nelson that would increase the 1099 threshold to $5,000 and exempt businesses with fewer than 25 workers. Yet this is little more than a rearguard action in favor of the status quo; the Nelson amendment leaves the basic architecture unchanged while making the problem more complex.

Businesses would still have to track all purchases, not knowing in advance which contractors will exceed $5,000 at the end of the year. It also creates a marginal barrier to job creation—for a smaller firm, hiring a 26th employee would be extremely costly. The Nelson amendment also includes new taxes on domestic oil production, as every Democratic bill now seems to do.

If this weren't all so dire, it would almost be comical the lengths this administration will go to throw barriers onto business for job creation.  No doubt some administration official will take it upon themselves to pen a letter to business threatening them to keep quiet about why they have zero incentive to hire new people.  Never fear America, we have the new improved empathetic Obama to "stand in the hot sun" with us - in unemployment lines presumably - as he "feels our pain."

UPDATE:  Wyblog reports Senate Dems refuse to repeal the 1099 reporting requirement:

The Barack Obama Death to Small Business Tax Reporting Act of 2010 will stand.

Senate Democrats successfully defeated an amendment offered by Senator Mike Johanns (R-Neb) that would have repealed an Obamacare provision which requires all businesses to file Form 1099 with the IRS for every vendor that sells them more than $600 in goods.

Death to small business seems to be their middle name.

More on this at Memeorandum