Republicans vs. Democrats on Reducing the Deficit
A few nuggets for this afternoon’s debate on deficit reduction:
- The Obama campaign platform asserted that “the additional revenue needed to…help people who cannot afford health insurance is more than covered by allowing the Bush tax cuts to expire for people making more than $250,000 per year.” Therefore, the $518.5 billion in tax increases included in the Senate bill—including tax increases on medical industries that “would be largely passed through to consumers in the form of higher premiums for private coverage”—should not be necessary.
- In an October 2008 speech, then-Senator Obama attacked his presidential opponent by stating that “Senator McCain would pay for part of his [health care] plan by making drastic cuts in Medicare…even though Medicare is already facing a looming shortfall.” How are the Medicare proposals the President is now endorsing different from the “drastic cuts in Medicare” he opposed during the campaign?
- Again, it’s important to recall that his health care campaign platform stated that “The Obama plan will cost between $50-65 billion a year when fully phased in.” However, CBO scored the Obama/Senate plan as spending $199 billion on insurance subsidies in 2019 – and this total is BEFORE the increased spending in the proposals the White House unveiled earlier this week (and which have yet to be fully scored) are included. If the cost of the Obama health plan has more than tripled in the 18 months between his presidential campaign and today, how much more will federal costs explode if and when the bill is actually enacted?
- What do Democrats plan to do about the Medicare physician payment “doc fix?” The White House’s budget proposed not paying for the $371 billion cost to provide a permanent “doc fix” change. This unpaid-for spending would more than eradicate all the bill’s deficit reductions in the first ten years—and according to a Heritage Foundation analysis would cost more than $1 trillion in the longer term. In addition to imposing new burdens on America’s children and grandchildren, why should senior citizens be forced to pay one-quarter of this $371 billion cost—nearly $100 billion—in higher Part B premiums because Democrats in Congress and the Administration refuse to pay for this new spending?
- The Congressional Budget Office has raised significant doubts about whether the bill’s purported deficit reduction can in fact be achieved. CBO noted that the Medicare savings provisions “might be difficult to sustain over a long period of time” and that “it is unclear whether such a reduction in the [Medicare] growth rate could be achieved, and if so, whether it would be accomplished through greater efficiencies…or would reduce access to care.” Even if the rosy assumptions in the legislation prove accurate, CBO notes that the Senate bill’s cumulative deficit reduction “would represent a small share of the [federal government’s] total deficits” under current law.
- Likewise, the Administration’s own actuaries believe that the bill’s deficit savings “may be unrealistic,” asserting that 20 percent of hospital providers would become unprofitable within the bill’s first 10 years and questioning whether these providers “might end their participation in the [Medicare] program, possibly jeopardizing access to care for beneficiaries.”
- CBO has also confirmed that the federal budgetary commitment to health care would RISE by about $200 billion in the Senate bill’s first decade.
- In 2005, Republicans proposed reducing Medicare’s projected growth in spending by about $22 billion as part of a Deficit Reduction Act intended to reduce budgetary shortfalls. Not a single Democrat in either chamber, including then-Senator Obama, voted for the legislation—and many Democrats called the Medicare proposals “immoral.” How do the Medicare savings proposals in this year’s legislation—which would reduce program spending by hundreds of billions of dollars, instead of the “mere” $22 billion in the 2005 measure, differ from the “immoral” cuts to Medicare Democrats previously criticized?