Wednesday, December 7, 2011

Harry Reid Talks about Obamacare — and Admits It Will INCREASE the Deficit

In his opening comments on the floor this morning, Majority Leader Reid decided to spend some time talking about “Obamacare” – yes, he actually used that “disparaging” term.  The Majority Leader claimed that the law extended the life of the Medicare Trust Fund by 12 years.  There’s a little bit of a logic gap in the Leader’s comments; after all, if Obamacare extended the life of the Medicare trust fund by twelve years, as Sen. Reid claims, then why did the President’s Chief of Staff, Bill Daley, say in July that Medicare “will run out of money in five years if we don’t do something?”

Of course, the real problem with Sen. Reid’s claim is it’s based on an accounting gimmick: Medicare actuary Foster has written that the Medicare provisions in the law “cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions under the PPACA) and to extend the [Medicare] trust fund, despite the appearance of this result from the respective accounting conventions.”  In other words, you can’t spend the same money once to create Obamacare and a second time to preserve Medicare.  That’s not class warfare – that’s math.

If Leader Reid wants to use Obamacare’s Medicare savings provisions to extend the life of the Medicare trust fund – and not to fund the new entitlements created by the law – the Congressional Budget Office previously estimated what the fiscal impact would be:  “A net increase in federal deficits of $260 billion” through 2019.