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.
The Department of Labor announced today the economy shed another 190 thousand jobs in October, pushing the unemployment rate to 10.2 percent and the running Obama jobs deficit to 5.7 million. Earlier in the week the Obama Administration released figures purporting to show the Obama stimulus had saved or created 640,000 thousand jobs. Only in Washington can jobs be saved by the thousands while being lost by the millions.
So far in his term in office, employment has dropped by about 3.5 million jobs, yet Obama repeatedly promised he would create 3.5 million jobs if only we would elect him President and give him control over the nation’s economic policies beginning with the enactment of a massive economic stimulus package. The President’s jobs promise means total employment should be at least 138.6 million by 2010, leaving him with a total deficit to close between now and December of 2010 of 7.7 million jobs. By his own standard, these results attest that Obama’s policies are failing.
Fortunately, the economy’s natural recuperative powers spurred by powerful, effective stimulus from the Federal Reserve mean the recession may be ending in the sense that overall output and incomes are stabilizing and the recovery may be on the horizon. Last week’s report that the economy grew at 3.5 percent at an annualized rate was certainly good news, though efforts by the Obama Administration to spin this as suggesting the stimulus legislation was working were nonsensical.
Even assuming the recovery is finally at hand, however, job losses are likely to continue for many months, and even Christina Romer, Obama’s Chairman of the Council of Economic Advisers, admits the unemployment rate is “unlikely to end 2010 much below” the current level of 10 percent.
If Chairman Romer’s predictions prove accurate, and they’re likely more than a little optimistic, all we may have to show for President Obama’s 3.5 million jobs creation promise is another $787 billion in national debt.