The Heritage Foundation - Leadership for America

Congress wants America to believe its new promises to control spending even as it reneges on its old promises and spends more than ever.

The “new” promise within health care reform bills is to reduce Medicare spending by hundreds of billions of dollars. Yet simultaneously, Congress is reversing 1997 legislation that claimed it would reduce Medicare spending.

The latest example of hypocrisy is known in Washington as the “doc fix,” (shorthand for fixing payment rates to doctors) and it’s scheduled for a House of Representatives vote next week.

Doctors have a valid complaint that government underpayments make it unprofitable to see Medicare patients. But throwing more borrowed money at the problem makes things worse because it moves Medicare and the rest of the federal budget deeper into bankruptcy.

The cost estimate for the doc fix varies from $210- to $245-billion. But it’s actually far larger. A study by Texas A&M scholars and a former Medicare trustee (published by the Heritage Foundation) shows the doc fix legislation “increases Medicare’s unfunded obligation by $1.9 trillion using the 75-year horizon and by $4.1 trillion in the long term.”

This is on top of news that October’s federal deficit was $176-billion. That’s for a single month. Next year’s deficit is projected to surpass the $1.4-trillion record set this year.

Washington’s attitude is summed up well by one of today’s headlines, “After spending binge, White House says it will focus on deficits.”

“After.” Discipline is always put off until tomorrow.

The “doc fix” is accompanied by promises of “PAYGO” (pay-as-you-go) rules to require new spending to be offset—and full of the same loopholes Congress historically has exploited.

The doc fix itself was created by 1997 legislation that promised to curtail spending by future reductions in Medicare payment rates to doctors. Once the deadline arrived, Congress and the President pushed it back. It’s already been pushed back for seven years in a row. The House next week will vote on an extra ten-year pushback.

But there’s no new revenue source and no spending offsets for the extra costs of this. And Congress and President Obama have exempted this $250-billion from his promise not to add one dime to the deficit in healthcare legislation.

It’s a “King’s X” to their pledge. Time out. Fingers crossed.

Hope exists that fiscally-responsible House members will reject the doc fix next week in a bipartisan way. One bright ray came when the Senate last month rejected the doc fix on a 47-53 procedural vote. This time around, the Senate has set a good example for the rest of Washington to follow.