by Rep. Cliff Stearns (FL)
Western civilization is deeply indebted to ancient Greece where the city-states contributed so much toward the development of democracy, art, poetry, science, and philosophy.
But, modern Greece serves as an example of run-away profligacy with its unsustainable entitlements. The crisis followed the revelation by government officials that Greece’s budget deficit was 14 percent of gross domestic product (GDP). This resulted in the downgrading of that nation’s debt and growing international fears of a default.
According to the Congressional Budget Office, the U.S. federal budget deficit was nearly 10 percent of GDP last year and President Obama and the leadership in Congress is pushing the federal deficit and federal borrowing hirer. Our nation is clearly on the path of Greece and the adoption of the recent health care bill will only hasten the future budget meltdown.
The Senate version of health care legislation just enacted continues to spend far more than we can afford and at a rate faster than anyone could have imagined. The bill itself is replete with budget gimmicks to game the system and to show that it will not add to the deficit.
The facts show the plan will add to the deficit. In fact, future Congresses likely will repeal some of these Medicare and hospital cuts, as well as some of those taxes.
The President indicated that he would veto any health care bill that created a dime, or even a penny of deficit. Clearly this was a disingenuous pledge because I have gone through the scoring on the Senate health care bill, and it will create a higher deficit.
First of all, there are 10 years of taxes to pay for six years of benefits. That's just one of the gimmicks employed, backloading the spending. Many of the taxes will start immediately, yet the health exchange does not begin until 2014. What happens to the deficit in 2020? Health care costs will push it up.
The “doc fix” is another example of fiscal chicanery. The bill contains a 21 percent cut in the sustainable growth rate (SGR), or the Medicare reimbursement rate for physicians. In addition to the 21-percent cut, there is also a two-percent cut every year for the rest of the decade.
However, the House already has passed H.R. 3961, the doc fix, which would prevent these reductions. The original House version of health care legislation included this fix, but the bill approved does not. So that’s $208 billion in bogus saving in the bill.
Similarly, the bill includes $156 billion to the hospital market basket, the reimbursement formula to calculate hospital payments. Can we realistically expect to provide a negative cost increase to hospitals? As with the Medicare cuts, this reduction should prove elusive.
As for the tax increases, there is the tax on “Cadillac” healthcare plans that is projected to take in $32 billion. This tax impacts union members, and the enactment keeps being delayed and the dollar threshold for the tax rises. It is totally conceivable that union pressure on Congress will result in the repeal of this tax.
Another budgetary tick in the bill is the creation of the Community Living Assistance Services and Support (CLASS) program, which will help participants pay for assisted living services. A new entitlement, it is projected to take in $70.2 billion over the first 10 years, again creating the allusion of deficit reduction.
However, after 10 years of surpluses, CLASS will begin to pay out more than it takes in until collapsing from insolvency. Senator Kent Conrad (D-ND) likened the program to “a Ponzi scheme of the first order, the kind of thing that Berrnie Madoff would have been proud of.”
The bill charges the Independent Payment Advisory Board with cutting $15 billion from Medicare. This unelected board’s cuts are automatic, unless three-fifths of the Senate votes to prevent them. What are they going to cut?
Finally, there are direct costs associated with the bill that were not included because they would be subject to future appropriations. Among these costs are the $10 billion to hire more than 16,000 IRS agents to enforce the mandates on every American. Then there is $55 billion for new bureaucracies to run this government expansion of health care.
The savings, the taxes, and the spending cuts in this bill are not credible. As a deficit reduction scheme, it is designed to fail. This measure will increase the deficit, and it will imperil the fiscal stability of our nation.