Investor’s Business Daily
November 16, 2012
A Congressional Budget Office report on ways to reduce the deficit, released last week to help guide budget negotiators in the upcoming “grand bargain” talks, contains one eye-opening item.
It turns out that the single biggest pot of potential deficit savings available to lawmakers is … ObamaCare.
In its list of “options to reduce mandatory spending” and cut the deficit, the CBO says that repealing ObamaCare’s massive insurance subsidies would cut federal spending by $150 billion in 2020 alone. Repealing the individual mandate would save another $40 billion that year, the CBO says “No other single spending cut proposal on the CBO’s list — and no tax hikes under serious consideration in Washington — comes close.”
For example, raising Medicare’s eligibility age to 67 would cut just $30 billion in spending in 2020, as would boosting Social Security’s retirement age. Trimming initial Social Security benefits would also save a comparatively modest $30 billion that year.
Imposing a Medicare Part D drug rebate on manufacturers — an idea favored by Democrats — would save just $15 billion. And cutting initial Social Security disability benefits by 15% would trim $10 billion.
The CBO report underscores the enormous cost of Obama’s health reform plan.
ObamaCare will add $1.7 trillion in federal spending over the next 10 years, according to the CBO, with annual increase climbing at 6%.
And those cost projections are almost certain to be too low, which has been the case with every other new federal health care program. Medicare’s budget, for example, came in 50% higher than expected in its first year alone, and just a couple years later, Congress was holding hearings on Medicare’s cost problems.
The CBO report contains other eye-opening facts about the terrible state of the nation’s fiscal house.
According to the report, spending just on interest and “entitlement” programs — Social Security, Medicare, Medicaid, ObamaCare, welfare — will consume about 17% of the economy eight years from now, up from 12% eight years ago.
And the picture only gets worse as time goes on. As the CBO put it, “unless the laws governing those (entitlement) programs are changed … deficits will be much larger in the future than they have tended to be in the past.”
That’s particularly true of federal health programs, since “per capita spending on health care is likely to continue to grow faster” than the economy as a whole, the CBO found, and because ObamaCare “will substantially increase the number of people who receive federal assistance in obtaining health care.”
The Hill reported this week that some budget cutters are eyeing ObamaCare’s insurance subsidies for budget savings, which it notes, extend to families with incomes all the way up to $90,000 a year. And since nobody is getting those subsidies yet, cutting them wouldn’t mean taking anything away from anybody.
But the Hill goes on to point out that Democrats are unlikely to approve such cuts, nor would Obama.
If they refuse, it means that budget negotiators will be scrambling to trim deficits through tax hikes and tweaks to programs like Social Security, Medicare and Medicaid, while turning a blind eye to an entitlement program that hasn’t even started yet, but that provides the single biggest source of deficit cuts available.