November 19, 2009
"It is important though to recognize if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the U.S. economy in a way that could actually lead to a double-dip recession."
- President Barack Obama, interview quoted by Reuters, November 18, 2009
While some may attempt to assert that Speaker Pelosi's government takeover of health care is fiscally responsible, even President Obama has finally recognized that its provisions could put the health of the American economy at risk:
- This week the House is expected to consider legislation providing for permanent increases in the Medicare Sustainable Growth Rate (SGR) mechanism for physician reimbursement. Because the Democrat bill is not paid for, CBO scores H.R. 3961 as increasing the deficit by at least $210 billion.
- In the longer term, an independent analysis of official data conducted by former Medicare public trustee Tom Saving found that a permanent reversal of these current-law reductions, if not paid for by appropriate offsets in spending, could increase Medicare's unfunded obligations by up to $1.9 trillion over a 75-year period.
- Despite offering a "responsible" budget that would more than double the national debt to over $24 trillion, President Obama has finally recognized that further increasing federal deficits-as H.R. 3961 would do-could erode economic confidence, resulting in unemployment levels even higher than the current rate of 10.2 percent, a 26-year high.
- America's largest foreign creditor has already expressed strong concern about runaway federal spending and deficits. Treasury Secretary Geithner's claims of the United States' fiscal rectitude were publicly mocked by an audience during his visit to China earlier this year, and the New York Times ran a front-page article this Sunday noting significant Chinese skepticism about Democrats' government takeover of health care, as "Chinese officials expect that they will help finance whatever Congress and the White House settle on." Many may wonder the extent to which passing an unpaid-for "doc fix" adding up to $1.9 trillion in long-term obligations to the federal fisc will further undermine international confidence in the dollar-jeopardizing the American economy and jobs.
- Many may also note that passage of stand-alone SGR legislation is intended to ease the passage of Democrats' government takeover of health care-which itself contains job-killing tax increases that could choke any nascent economic recovery. According to a model developed by President Obama's chief economic advisor, the tax increases in the Pelosi health care bill (H.R. 3962) would demolish or destroy up to 5 million jobs.
While many Members may support SGR reform that is fully paid for, many may also oppose any attempt to increase the deficit by hundreds of billions of dollars in a way that could jeopardize millions of American jobs as part of Democrats' unpopular government takeover of health care.
For additional information, contact:
The House Republican Conference Policy Office