The White House and its congressional allies are trying to suggest that the latest Congressional Budget Office (CBO) cost estimate proves that their health-care plan is fiscally responsible.
But, in fact, the latest CBO projections confirm — again — that the President’s health plan would pile more another unfinanced entitlement program on top of the unaffordable ones already on the federal books.
According to CBO, the new entitlement spending in the plan would cost $216 billion by 2019, and then increase by 8 percent every year thereafter. In other words, the President’s plan would stand up another health entitlement program that will grow much faster than the nation’s economy or revenue base. The changes the Democrats would make to the Senate-passed bill would make the entitlement program even more expensive.
Over a full ten years of implementation, the cost of the new entitlement spending would reach $2.5 trillion, at least, not $1 trillion as advertised by the White House.
The President and his congressional allies have suggested that the offsets they are pushing will more than cover this massive spending increase. But even a modest amount of scrutiny reveals these supposed offsets are nothing more than gimmicks and implausible assumptions.
For starters, the plan doesn’t count $371 billion in spending for physician fees under the Medicare program. The President and Congressional Democrats want to spend this money, for sure. They just don’t want it counted against the health bill. That’s because they want to reserve all of the Medicare cuts in the bill as offsets for another entitlement instead of using them to pay for the problem that everyone knows needs fixing. The President says he shouldn’t have to pay for the “doc fix.” But why not? Never before did congress move to add the cost of a permanent fix to the national debt. But that is exactly what the President now wants to do. When the cost of the “doc fix” is properly included in the accounting, all of the claimed deficit reduction from the President’s health plan vanishes.
Then there’s the “Cadillac” tax on high-cost insurance plans. Because of union pressure, the President pushed the tax back to 2018, well passed the point when he will have left office. But once in place, he now would allow the threshold used to determine “high-cost” to rise only with the CPI, beginning in 2020. That means a very large segment of the middle class would get hit with the tax as the years passed. The President has shown that he is unwilling to actually collect this tax. But he wants us to believe we can count on a huge revenue jump over the long-run because his successors will have more stomach for it than he does.
Similarly, to jury-rig “long-term deficit reduction,” the latest plan would first increase the premium assistance subsidies paid to low and moderate wage families above the levels in the Senate-passed bill, but then index their value to something below the growth in premiums to give the appearance of deficit reduction in the decade after 2019.
There’s no “bending of the cost-curve” here. It’s sleight of hand that, if actually implemented, would force millions of low-income families to pay ever higher premiums every year. The Democrats don’t want to talk about that. They just want to pretend they have been serious with fiscal discipline.
The other gimmicks remain in the plan as well. The double-counting of premiums for a long-term care insurance programs an offset for the health entitlement spending. The assumption that congress will allow Medicare reimbursement rates to fall so low that one in five hospitals and nursing homes might be forced to stop taking Medicare patients. And the expectation that somehow congress can hand out generous new subsidies to those getting insurance through the exchanges, even though many tens of millions of others with the same resources would get no additional help for their job-based coverage.
The bottom line here has been clear for months. The bill being pushed by the President would take what’s already a very bleak budget outlook and make it much, much worse.
Cross-posted at The Corner.
Liberals are up in arms because Sen. Jim Bunning (R-KY) is blocking a bill that would extend unemployment benefits, extend health insurance subsidies (COBRA), extend highway funding, increase Medicare reimbursement rates for physicians (Doc Fix), extend a temporary “flood insurance” program and continue aid for small business programs. The bill, H.R. 4691, was introduced and passed the House on February 25th by a voice vote. When the bill came up in the Senate, Sen. Bunning objected and requested a vote to offset the estimated $10 billion cost of this bill over the next month. With the two words “I object” Sen. Bunning may save taxpayers $10 billion and Sen. Bunning has provided America a stark example of how Members of Congress refuse to pay for new spending initiatives.
Bunning said of the bill “if we can’t find $10 billion to pay for it, we’re not going to pay for anything.” A month ago, Congress passed something called pay-as-you-go (PAYGO) budgeting when they increased the the statutory limit of allowable national debt to $14.29 trillion, a $1.9 trillion increase. The current PAYGO rules are loaded with exceptions and loopholes, yet many saw the new PAYGO rules as a step in the right direction to restrain some out of control spending. The problem is that Congress seems to waive the PAYGO rule rather than offset one cent of new spending.
Brian Riedl has written for The Heritage Foundation about the loopholes and problems with past versions of PAYGO:
When PAYGO was a law from 1991 through 2002, it was never enforced. Over those 12 years, Congress enacted $700 billion in non-offset entitlement expansions and tax cuts, and then cancelled every single required spending cut that would have enforced the law. As a result, entitlement spending actually grew faster after PAYGO’s implementation.
Evidently that trend continues today, because in H.R. 4691, Congress waives the new version of PAYGO. The bill explicitly declares the new spending an emergency and the relevant language is as follows:
(b) Emergency Designation for Congressional Enforcement- This Act, with the exception of section 5, is designated as an emergency for purposes of pay-as-you-go principles. In the Senate, this Act is designated as an emergency requirement pursuant to section 403(a) of S. Con. Res. 13 (111th Congress), the concurrent resolution on the budget for fiscal year 2010.
(c) Emergency Designation for Statutory PAYGO- This Act, with the exception of section 5, is designated as an emergency requirement pursuant to section 4(g) of the Statutory Pay-As-You-Go Act of 2010 (Public Law 111-139; 2 U.S.C. 933(g)).
Basically, liberals in Congress love the idea of PAYGO, yet they refuse to enforce the statutory requirements that all new spending be offset. They do this by designating all new spending as an “Emergency Designation.” This is feel good politics at its worst, because the left can claim they are for PAYGO, yet PAYGO has yet to restrain any spending. Furthermore, the vote on PAYGO in the House helped pave the way for a $1.9 trillion increase in the debt limit. Therefore one can argue that PAYGO actually increased spending in the Congress.
Senator Bunning has proposed an offset of spending to pay for the one month extension of benefits consisting of “the unobligated amounts appropriated or made available under divisions A of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 115). $10,267,000,000 is rescinded on a pro rata basis.” Sen. Bunning is asking that the Obama Administration cut $10 billion of unspent Stimulus monies out of a $787 billion dollar proposal to continue to pay benefits to unemployed Americans.
Liberals would have you believe that Sen. Bunning is causing Americans to be furloughed from jobs and to have empty unemployment extension checks. Maybe they should look in the mirror and find ways to pay for this new spending. America is carrying over $12 trillion in debt and Americans should be thanking the one Senator who is educating this nation as to the out of control new spending coming from the federal government at a time when this same Congress refuses pay for it.