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  • Charging Obamacare to the Federal Credit Card

    Despite the recent focus of Congress and the White House on fiscal responsibility in federal spending, passing Democrat’s health care agenda will add significantly to, not reduce, the federal deficit. Pushing Obamacare through Congress would fly directly in the face of any rhetoric spoken in favor of reducing the deficit.

    The necessity for Congress to raise the debt limit has spurred a nationwide conversation on the enormity of the federal debt and the recklessness of federal spending. Several proposals have been made within Congress to create commissions to suggest legislation to deal with the out-of-control budget. Even external organizations have begun to take on the task of solving America’s impending fiscal crisis. The latest development is the freeze on discretionary spending that President Obama proposed during his State of the Union Address.

    And yet none of this means anything if spending, especially on entitlements, is not controlled. Unfortunately, adopting the Senate’s health care bill which would increase entitlement spending and add tremendously to the deficit. Though the Congressional Budget Office (CBO) initially reported the Senate health care bill would reduce the deficit, a more recent report from CBO confirms that, in actuality, the bill would increase the deficit by more than $200 billion.

    The reason for this discrepancy is that the bill “double-counted” savings from Medicare by claiming that they would both fund other provisions in the bill and increase the solvency of the Medicare program. Senator Jeff Sessions (R-AL) inquired of CBO to clarify. CBO responded that if the savings from Medicare are applied back to the program, the Senate health care bill would add $226 billion to the federal deficit in the next ten years.

    This staggering number is in addition to the other budgetary gimmicks the bill’s authors employed to make it appear fiscally sound. For example, the removal of the “doc fix” legislation from the Senate bill. This legislation would permanently repeal the cuts to physician payment rates under Medicare that Congress already suspends every year. Pretending these cuts won’t occur is pure fantasy—in reality, they will also add over $200 billion to the federal deficit between now and 2019.

    Democrats also manipulated the spending and savings provisions of the bill in order to maximize revenue during the first ten year window while minimizing expenditures. New taxes and other revenue-raising provisions become effective immediately, while expenditures, like the subsidies for the lower and middle class to purchase health insurance, would not occur until years later. This creates a convenient spending cushion to hide the true costliness of the bill.

    Finally, though it may seem perverse, the growing unpopularity of health care reform is causing its price tag to grow as well. First there was the Nebraska deal, where Senate Majority leaders promised Senator Ben Nelson (D-NE) a sweet Medicaid deal if he would vote for the bill. Now all the other states want it, too. According to CBO, this would add $35 billion to the Senate bill.

    Then there was the excise tax on high-cost insurance plans, which had unions hopping mad because many union members would see their health benefits taxed under the plan. So the Senate Majority cut another deal, exempting unions from the tax until 2018. This means about $55 billion of lost revenue, which would either have to be made up elsewhere or—you guessed it—added to the deficit.

    Clearly, our elected officials don’t understand the meaning of “spending problem”. With the amount of United States’ debt held by the public set to reach 100% of the Gross Domestic Product by 2019, it’s time for Congress to look beyond the ten-year window of CBO’s cost estimates and acknowledge the threat that deficit spending on health care has on the fiscal future of America.

    Posted in Ongoing Priorities [slideshow_deploy]

    5 Responses to Charging Obamacare to the Federal Credit Card

    1. Bobbie Jay says:

      Dishonesty is what dishonesty does.

      He stated the cost would NOT take away from medicare and something else…yet he lacks specifying how it will work or be paid for. There is absolutely no substance to this man. He continues to speak "eloquent" but what he speaks is NOTHING COMPARED TO HIS ACTIONS. He hides the work of his administration after he states transparency. I don't recall him ever mentioning HONESTY! As not an honest word he speaks. His actions clearly shows his will to take down this country!

    2. Paul Collins, Menlo says:

      The problem is even worse than this posts suggests (although that's bad enough). For reasons that are lost on me, the CBO (and everyone else) focuses on the costs only within the first 10 years. But Obamacare doesn't expire after 10 years. The CBO estimates that the costs of the Senate bill rise sharply after year 10 with (known) changes in demography. Surely those numbers are relevant too.

      As are these: the Social Security Administration's 2009 Annual Report indicates that the unfunded liability associated with promised future payments (because there is no "trust fund") is $17.5 trillion. Likewise, the Center for Medicare and Medicaid Services' 2009 Annual Report indicates that the unfunded liability associated with Medicare Part A (hospital care) is $34.4 trillion, Medicare Part B (doctors' office visits) accounts for another $37 trillion, and Medicare Part D (George W. Bush's prescription drug benefit) yet another $15.5 trillion. All in, that's $104.3 trillion we've promised on top of the mounting national debt actually incurred to date.

      It is fairly obvious to me that there are only a few options for dealing with the unfunded liability problem, including raising taxes (which, according to Forbes magazine, would require an immediate 81% tax increase for everyone), radically increasing the number of taxpayers (European-style immigration), or defaulting on promised benefits (including the health care rationing that we are told will never EVER occur). Of these options, the latter seems the most likely to occur, yet here we are talking about promising more and more entitlements to more and more people when we all know that it is extremely unlikely that we will honor the promises we already have made.

      So when do we stop kidding ourselves?

    3. Pingback: Must Know Headlines 1.29.2010 — ExposeTheMedia.com

    4. Jeff, Rehoboth says:

      Paul C above said all that needs to be said regarding the facts.

      My opinion is that it's the idea of the entitlement itself that is insidious. This attitude that promises that "we've got a hammock waiting for you" is an alluring big government snare. When the trap fully springs, and that day is not too far off, it will mark our entry into our own Wiemar Republic era.

      We need to stand up and say that as a nation we would have been better off with out Medicare. Don't confuse that with saying that we need to end Medicare right now. It is saying that Big Government's unsustainable promise lulled 2 Generations of Americans to sleep about medical care in their retirement years. Payment on the Ponzi scheme is coming due. (Couching entitlements in insurance terms was the most devilish part of this).

      If you think you're insulated because you've been responsible and saved, think again. When that level of inflation hits, the money you've saved is going to be worth a tenth of what you planned for.

      There seems to be little hope to find the political will in either party to face this head on. As examples: Republicans beat Obama about the face and neck at the prospect of cutting 500M from Medicare. Democrats did the same thing to Bush when he attempted to try to do something on social security.

      Although I agree Obamacare needs to be stopped, it pains me to use the entitlement cudgel to muster the needed support. And yeah, I understand there's big differences between what Obama and Bush were proposing, I'm only pointing out the effectiveness of the weapon.

      Honestly, Paul (from above), I don't think it's that we're kidding ourselves, I think we go suckered by an insidious vision that we can't escape from. Said another way, "the worst consequences often emerge from the best intentions" … (especially nanny-state socialists) … (Goodkind?)

      Honestly, it's going to take a Christ-like politician to fix this. Whatever President that does what needs to be done to get us out of this entitlement fiasco is going to get nailed to a cross (along with the rest of his/her party).

      Cast in that light, I don't see much reason for optimism.

    5. Ben C. Ann Arbor, MI says:

      One concept comes to mind: Cloward-Piven. They must be grinning ear to ear.

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