Saturday, November 21, 2009

Harry Reid says his health care bill is "fully paid for"

To hear Harry Reid tell it, the 2074 page Senate health care reform bill approaching the debate phase, is already paid for:

Reid bases his ridiculous talking points on the Congressional Budget Office cost estimate which falls under the President's $900 billion threshold.  The Heritage Foundation disputes this number:
To put it charitably, the truth is more complicated. The bill depends on budget gimmicks and unrealistic assumptions and projected savings to reach this goal over the 10 year budget window.

And David M. Dixon at the Washington Times reminds us that the government almost always underestimates costs:
But cost projections are notoriously unreliable, and history is filled with examples of federal programs - especially in health care - that cost far more than originally predicted.
In 1965, the House Ways and Means Committee estimated that the hospital insurance program of Medicare - the federal health care program for the elderly and disabled - would cost $9 billion by 1990. The actual cost that year was $67 billion.
In 1967, the House Ways and Means Committee said the entire Medicare program would cost $12 billion in 1990. The actual cost in 1990 was $98 billion.

In 1987, Congress projected that Medicaid - the joint federal-state health care program for the poor - would make special relief payments to hospitals of less than $1 billion in 1992. Actual cost: $17 billion.

The list goes on. The 1993 cost of Medicare's home care benefit was projected in 1988 to be $4 billion, but ended up at $10 billion. The State Children's Health Insurance Program (SCHIP), which was created in 1997 and projected to cost $5 billion per year, has had to be supplemented with hundreds of millions of dollars annually by Congress.

Now consider our nation's financial footing on which this entire house of cards rests.

In 1969 federal revenue from social insurance taxes was 4.1% of the gross domestic product (GDP) and the corresponding outlays for Social Security, Medicare and Medicaid totaled 3.7% of GDP.  By 2008 federal revenue from social insurance taxes had climbed to 6.3% of GDP, but spending for Social Security, Medicare and Medicaid skyrocketed to a total of almost 9% of GDP. (From CBO).

The government health care programs we have now are in the red.  So how are we paying for them?  We all know the answer:  DEBT.  In 1969 the U.S. national debt was around $353 billion.  By 2008, it had grown to $10 trillion, and last week, it exceeded our "debt ceiling" (whatever that means) of $12 trillion.  Our interest payments alone exceeded $1 billion per day in fiscal 2009.

What could possibly go wrong?

1 comment:

  1. So the examples you cite means that the CBO, ON AVERAGE, misses their estimate by a factor of 9! So whatever the CBO projects as the cost, you can multiply it by 9... This bill will kill Grandma and Grandpa with cuts in health care services, as well as kill the kids and grandkids with debt... No wonder the democrats are celebrating today...