The CBO came out today and landed a full-palmed bitch slap on Democrat Senate leader Harry Reid, saying that – despite budget tricks like raising taxes for four years before implementing “reform” and counting on $600 billion in Medicare cuts that will likely never be made – Reid’s attempt at government run health care will add to the deficit over the next ten years.
Reid said yesterday that the Senate’s health care bill will lower the deficit $130 billion in the first 10 years. The CBO says it will increase the deficit by $89 billion in that time period.
Failed President Obama has said he will not sign any bill that increases the deficit, even “one dime.”
Under current law, including the new rule, Medicare’s payment rates for physicians’ services will be reduced by about 21 percent in January 2010, and CBO estimates those payment rates will be reduced by about 2 percent annually for several subsequent years. H.R. 3961 would increase those payment rates by 1.2 percent in 2010 and restructure the SGR beginning in 2011. Those changes would result in significantly higher payment rates for physicians than those that would result under current law. CBO estimates that enacting H.R. 3961, by itself, would cost $210 billion over the 2010–2019 period.
H.R. 3962, the Affordable Health Care for America Act, would establish a mandate for most legal residents of the United States to obtain health insurance, set up insurance “exchanges” through which certain individuals could receive federal subsidies toward the purchase of such insurance, and make numerous other changes in the health insurance system, in federal health care programs, and in the federal tax code. CBO and the staff of the Joint Committee on Taxation estimate that enacting H.R. 3962, by itself, would reduce federal budget deficits by $109 billion over the 2010–2019 period through its effects on direct spending and revenues.
CBO estimates that enacting both H.R. 3961 and H.R. 3962 would add $89 billion to budget deficits over the 2010–2019 period. That amount is about $12 billion less than the sum of the effects of enacting the bills separately. The $12 billion difference results from two types of interactions. The higher payment rates for physicians’ services under H.R. 3961 would increase the net cost of provisions in H.R. 3962 by about $3 billion. However, that difference would be more than offset by the effect of a change under H.R. 3962 in how payment rates for Medicare Advantage plans are set. That change would reduce the effect of the changes made by H.R. 3961 to Medicare’s payments for physicians’ services in the fee-for-service sector on payment rates for Medicare Advantage plans. As a result, the estimated increase in payments to Medicare Advantage plans would be $15 billion smaller if both bills were enacted than under H.R. 3961 alone.
If you liked the budget busting deficit explosion during the first 10 years, you’ll love the budget busting deficit explosion from year 11 onward!
The agency estimates that the two bills together would cost about $32 billion more in 2019 than H.R. 3962 alone and that the combination of the two bills would increase the budget deficit in 2019 by $23 billion relative to current law. Those increments would grow during the following decade. As stated in its October 29, 2009, letter to Congressman Charles B. Rangel, “CBO expects that [H.R. 3962] would slightly reduce federal budget deficits in that decade relative to those projected under current law—with a total effect during that decade that is in a broad range between zero and one-quarter percent of GDP [gross domestic product].” If both H.R. 3961 and H.R. 3962 were enacted, CBO expects that federal budget deficits during the decade following the 10-year budget window would increase relative to those projected under current law— with a total effect during that decade that is in a broad range between zero and one-quarter percent of GDP.
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