Fix Health Care Policy

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Then: In his September 9, 2009, speech to a joint session of Congress, President Obama declared, “I will not sign a plan that adds one dime to our deficits—either now or in the future.”

Now: Over the next 75 years, the Affordable Care Act—Obamacare—will add an estimated $6.2 trillion to the primary deficit under the most realistic outlook on federal spending, according to a new report by the Government Accountability Office (GAO), the nonpartisan fiscal watchdog of Congress. The primary deficit, as noted by the GAO, is the difference between federal revenues and non-interest spending.

Senator Jeff Sessions (R–AL), who commissioned the study, released its findings this morning at a Senate Budget Committee hearing. The GAO report examines the long-term impact of Obamacare on the nation’s fiscal health.

Projections of spending and deficits and debt, as the GAO analysts observe, are often calculated under the “Baseline Extended Simulation,” which assumes that current law will “continue unchanged.” These projections can also be calculated under an “Alternative Simulation,” which assumes “historical trends and policy preferences continue.” Different assumptions lead to very different results.

Read the rest on The Foundry…

Tags: $6.2 trillion, budget, debt, deficit, GAO, long-term impact, ObamaCare

Heritage’s new chart series, “Medicare at Risk: Visualizing the Need for Reform,” shows that, without the necessary structural reform, Medicare’s finances will have devastating consequences on the federal budget, not to mention taxpayers and seniors alike.

Medicare’s Impact on the Budget. Medicare spending is rising faster than any other part of the federal budget, and it’s a major driver of runaway deficit spending in the not-so-distant future. Retiring baby boomers and rising health care costs will cause Medicare’s shortfall to contribute to 81 percent of federal deficits by 2040. Clearly, the federal deficit cannot be contained without addressing Medicare’s structural problems.

Medicare’s Impact on Taxpayers. Medicare spending isn’t just busting the federal budget; its also consuming more of household budgets. In 1970, average Medicare spending per American household was $129. In 2021—just nine years from now—spending per household will be a whopping $7,987. Unless there is significant reform to deal with these rising costs, Americans will be faced with automatic benefit cuts or steep tax increases. The Medicare Part A payroll tax would have to increase by 84 percent just to make Part A alone solvent.

Read the rest on The Foundry…

Tags: budget, charts, debt, economy, impact, Medicare at risk, slideshow, taxpayers

When now-House Minority Leader Nancy Pelosi (D–CA) was sworn in as Speaker on January 4, 2007, the national debt stood at $8.67 trillion. By the time Pelosi surrendered the gavel to Speaker John Boehner (R–OH) yesterday, the national debt stood at $14.01 trillion. At $5.34 trillion, that means Speaker Pelosi added more than $1 trillion in debt per year during her tenure as Speaker. And yet she has the audacity to tell reporters Tuesday: “Deficit reduction has been a high priority for us. It is our mantra, pay-as-you-go.”

Only someone so out of touch with reality that they could claim that “deficit reduction” has been their “highest priority” while simultaneously adding more than $1 trillion a year to the debt could possibly claim that repealing Obamacare would add to the debt. But that is exactly what Pelosi wants us to believe. Also on Tuesday she claimed that repealing Obamacare would do “very serious violence to the national debt and deficit.” Nothing could be further from the truth.

While the CBO did produce a report projecting that Obamacare could produce $124 billion of savings over its first 10 years, no honest and intelligent person believes that that score will ever become reality. Not even the CBO. CBO Director Doug Elmendorf wrote: “CBO’s cost estimate noted that the legislation maintains and puts into effect a number of policies that might be difficult to sustain over a long period of time.” Elmendorf then goes on to identify a number of specific Obamacare policies, such as arbitrary reductions in the growth rate for Medicare spending, that anyone who follows health care policy knows will be impossible to actually implement.  (Read the rest at The Foundry…)

Tags: CBO cost estimates, debt, deficit, Nancy Pelosi, repeal Obamacare

My fellow conservatives,

The people have spoken. Reckless spending, stifling regulations, ever-rising taxes, endless debt and the looming government takeover of health care have brought this nation to a tipping point. Not surprisingly, the American people have now taken matters into their own hands.

How we got to that tipping point is clear. For too long, Washington’s preening elites have assumed that they knew best and that government was in itself the all-purpose solution to every perceived problem.

But the American people have a collective wisdom, and they expressed it yesterday. They took a stand and decided on a new direction because continuing down the path we’re currently on would mean the end of the American Dream.

They repudiated “change” that denies our character and tradition, and called instead for an American Renewal that taps our values. The message that came out of this election, I can assure you, was heard around the world. Everyone now knows that Americans remain a strong and free people, unbowed by adversity and unwilling to exchange their birthright of liberty for a perpetual stew of bureaucratic rule and government dependency.

But let’s be clear, now we must all get to work. The new Congress has a choice: answer the call of renewal or betray the hopes of the American people. It is time for conservatives to be conservative, and not backslide.

We here at The Heritage Foundation are inspired by your commitment to America’s principles, and bolstered by your demand for practical, conservative solutions to our common problems. We and our 700,000 members will work day and night to make sure Washington has heard you, too, for now the real work begins. (more…)

Tags: debt, get to work, government takeover, reckless spending, repeal Obamacare

It seems the President’s spending habits have finally caught up with him, threatening to kill a government overhaul of health care. Though President Obama and congressional Democrats continue to insist that health care reform is on the horizon, the increasing national concern over the rising public debt presents an undeniable obstacle.

James Capretta, a Fellow at the Ethics and Public Policy Center, outlines why this is the case in a recent article for Kaiser Health News. First of all, President Obama is responsible for raising the debt to unprecedented levels. Capretta explains, “From 1789 through 2008, the U.S. government borrowed a total of $5.8 trillion. In 2009, the federal budget deficit exceeded $1.4 trillion. The administration now expects the 2010 deficit to break that record, topping $1.6 trillion. And in 2011, it would only fall to about $1.3 trillion. Thus, in just three years, the debt will have jumped an astonishing $4.2 trillion.”

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Tags: budget deficit, debt, health insurance, James Capretta, ObamaCare

Senator Reid seems comfortable with clandestine negotiations in order to ensure passage of any type of health reform. This course, aside from being politically dubious and whimsical, is fiscally reckless, and with its passage, will continue to add to the debt that will straddle future generations with a significant amount of fiscal stress.

As with the previous health reform bills, the assumptions and parameters the Congressional Budget Office must use will likely score this new bill as deficit neutral. Yet, the price tag for the overall bill will not changed, and will include massive expansions of Medicare and Medicaid making the long-term fiscal outlook in the US dismal at best.

Now, Congress wants to also raise the debt limit to finance more spending—including any type of health reform. Existing healthcare entitlement spending is already on an unsustainable course, however, and the intergenerational fiscal imbalance will only worsen, where future generations will face substantially higher net lifetime tax rates, permanently lower federal government purchases and transfers, or some combination of the two policy changes.

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Tags: debt, economy, health insurance, new taxes, ObamaCare, Sen. Harry Reid, spending

If you are one of the few Americans who still subscribes, your morning newspaper probably has a headline like this: Democrats Reach Deal on Health Plan. Don’t believe it. Majority Leader Harry Reid (D-NV) is still light years away from producing the 60 votes necessary to pass Obamacare out of the Senate. And the few details that have leaked out about this new “broad agreement” only reveal just how desperate Reid is to get any bill on to President Obama’s desk by the New Year.

Of course, there is no good policy reason why the Senate should be rushing the reorganization of one-sixth of our nation’s economy through their chamber. As leftist columnist E.J. Dionne has frankly admitted, the December deadline is a purely political invention, created for the sole purpose of enabling President Barack Obama to point to at least one accomplishment during his State of the Union speech in January. Details of the agreement have not been made public, and Senate Democrats are refusing to make them public until they hear back from the Congressional Budget Office (CBO). But judging from what little has been selectively leaked to the public, this idea deserves to die:

Doubling Down on Debt: Medicare is already bankrupting our country. In 2007 alone, Medicare was forced to draw $179 billion from the general revenues of the U.S. Treasury. According to the latest Medicare trustees report, the program already faces $36 tril­lion dollar long-term budget shortfall. Medicare’s annual drain on our resources is set to skyrocket in 2011 when the first wave of baby boomers retire. The new Senate deal would only make this problem worse by expanding Medicare eligibility to people without insurance between the ages of 55 and 64.

Death Sentence for Hospitals: The Reid Health Bill already delivers a huge blow to our nation’s hospitals by cutting Medicare reimbursements to hospitals by hundreds of billions of dollars. Moving millions of more Americans to Medicare would cut into hospital revenues even further. That is why both the American Hospital Association and the Federation of American Hospitals sent alerts yesterday urging their members to oppose the new Senate deal.

A Government Run Health Care Coup: You might think that leftists who have been dreaming about single payer, government run health care for years would be upset about the new Senate deal. They are not. The existing Medicaid expansions in the bill, and the new Senate deal Medicare expansions, are just a continuation of the left’s health care agenda since the defeat of Hillarycare: Slowly expand existing government programs so that all private health care is strangled out of existence. So instead of fighting to preserve the public option, leftist activist Chris Bowers urges readers to fight “to expand the Medicare buy-in to all Americans between the age of 55 and 64 (inclusive).” Progressive health care guru Ezra Klein says the new deal is better than the public option because “it seed[s] health-care reform with scalable experiments.”

When President Barack Obama gave one of his first national health care addresses in June, he instructed Congress: “As we move forward on health care reform, it is not sufficient for us simply to add more people to Medicare or Medicaid.” But after months of debate in Congress, that is all Obamacare has turned out to be.

Tags: American Hospital Association, debt, Federation of American Hospitals, Medicare, ObamaCare, single-payer system

House Speaker Nancy Pelosi and the House Democratic leadership are frantically trying to find enough votes to pass their giant 2,032 page health care legislation this weekend. But before Speaker Pelosi and liberals in Congress pass their big bill, the American taxpayers should be fully aware of the full price tag of this monster.

As Heritage analysts noted earlier in the week, the Congressional Budget Office released its preliminary score of the bill (H.R. 3962) but too many in the media have not been reporting its true cost. The true cost is not the net spending on only the coverage related provisions ($897 billion) but rather the total gross spending for the coverage provisions ($1.05 trillion) as well as any additional spending in the bill (approximately $217 billion). That would raise the plan’s price tag to about $1.5 trillion when including the roughly $210 billion cost of the “doc fix” is included. The “doc fix” refers to the undoing of the flawed Medicare payment update formula, which Congress created but has routinely stopped from being enforced. Under current law, that formula would result in a 20 percent reduction in doctors’ pay under the Medicare program. (more…)

Tags: debt, deficit, Medicare, Nancy Pelosi, Obama Health Care Plan, spending, tax, trillion

The new House health care bill (H.R. 3962) unveiled by Speaker Nancy Pelosi (D-CA) yesterday clocks in at 1,990 pages and about 400,000 words. As written, the bill purports to cost only $1.05 trillion over the first ten years and is paid for by over $700 billion in tax increases and cuts to Medicare Advantage and Medicare prescription drug payments. But as troubling as those numbers are, the scariest thing about the bill is the solid foundation it lays for a complete government take over of the health care sector of our economy.

The Washington Post describes the bill as “creating an expensive new entitlement program (subsidies to purchase health insurance) and dramatically expanding an existing one (Medicaid).” This is true by itself, but the Post later dismissively adds: “If you’ve noticed that we haven’t talked about the public option in the House bill, that’s not an oversight. For all the fury over the issue, it doesn’t matter that much; the CBO estimates that the government-run plan would actually have slightly higher premiums.” This is a breathtakingly naive statement by the Post and demonstrates that they have not yet fully grasped how all the different elements of the bill are designed to interact to produce President Barack Obama’s desired outcome. (more…)

Tags: 3962, Barack Obama, CBO, debt, deficit, entitlement, government takeover, Medicaid, Medicare, Medicare Advantage, Nancy Pelosi, Obama Health Care Plan, tax increases