ObamaCare Helping Deficit Balloon
Remember when the lefties tried claiming that ObamaCare would reduce the deficit? That fiction is now being debunked.
The 2010 law does generate both savings and revenue. But much of that money will flow into the Medicare hospitalization trust fund — and, under law, the money must be used to pay years of additional benefits to those who are already insured. That means those savings would not be available to pay for expanding coverage for the uninsured.
“Does the health-care act worsen the deficit? The answer, I think, is clearly that it does,” Blahous, a senior research fellow at George Mason University’s Mercatus Center, said in an interview. “If one asserts that this law extends the solvency of Medicare, then one is affirming that this law adds to the deficit. Because the expansion of the Medicare trust fund and the creation of the new subsidies together create more spending than existed under prior law.”
The lefties want to count the “savings” twice…
Blahous acknowledged that his analysis departs from budget conventions, which, he said, make sense for the most part. He said that in this case, however, those rules do not fully illuminate the financial impact of the health-care law, since they permit what conservative critics have dubbed a “double counting” of proposed Medicare savings.
Medicare is financed in part through a trust fund that receives revenue from payroll taxes. Before Obama’s health-care act passed, the trust fund was projected to be drained by 2017 (later updated to 2016). Absent the health-care law, Blahous writes, Medicare would have been forced to enact a sharp reduction in benefit payments in the middle of this decade, or “other Medicare savings would have had to be found.”
Enter the health-care law, which provides about $575 billion in Medicare savings — enough to automatically extend the life of the trust fund through 2029, according to estimates at the time, and avoid a sharp cut in benefits.
But in cost estimates by the nonpartisan CBO, those savings also offset a dramatic expansion of Medicaid under the law, as well as new subsidies for uninsured people to purchase coverage.
This is like reducing your household spending by $100 a month, and claiming that you can both add that $100 to your savings account and at the same time use that $100 to pay off bills. It can’t go both places. Even Medicare officials admit this:
CBO and Medicare actuaries acknowledge the double-counting issue. “In practice, the improved [trust fund] financing cannot be simultaneously used to finance other federal outlays (such as the coverage expansions) and to extend the trust fund, despite the appearance of this result from” traditional budget rules, Medicare actuary Rick Foster wrote last year.
And in 2010, the CBO wrote that, absent the Medicare savings, the law would increase deficits by $226 billion through 2019 — instead of decreasing them by the commonly cited $132 billion.
So why are the lefties still lying — yes, I said lying — about this? Lust for power. ObamaCare is the first step on the way to socialized medicine, which would give the government immense powers over people’s health, and that’s exactly what the lefties want. So they’ll grasp any straw they can to save it.