The following is part of the "Virtual Summit on Fiscal and Economic Responsibility for People Who Did Not Wreck The Economy."
Before the White House deficit commission meets for the first time tomorrow, the two co-chairs Erskine Bowles and Alan Simpson gave a preview on Fox News Sunday.
It wasn't pretty.
They claim to be leading a "just-the-facts" dialogue, yet they seem unaware of the fact that we just passed the biggest deficit reduction bill in history, known as "health care reform."
Both Bowles and Simpson stressed they would be relying on official numbers from the Congressional Budget Office and government actuaries. But Simpson, unprompted, made this bizarre comment:
Somebody said, well, is the new health care bill off the table? I said, nothing is off the table, absolutely nothing.
Uh, the proper response to that question is: "Absolutely, because it would be pretty stupid to put on the table legislation that the Congressional Budget Office just estimated would cut the deficit by over $1 trillion."
If the co-chair of the deficit commission fails to understand health care, he fails to understand the deficit.
As economist Mark Thoma noted, in rebutting Fed chairman Ben Bernanke's deficit hysteria about the Baby Boomer population bulge: "The CBO has argued persuasively ... that demographics is not the main problem. In addition, Social Security can be fixed relatively easy. It is health care costs rising independent of the aging of the population that must be addressed."
And as health care expert Atul Gawande explained in The New Yorker, the new health reform law will be testing out practically every cost-control idea that has been discussed:
It creates a center to generate innovations in paying for and organizing care. It creates an independent Medicare advisory commission, which would sort through all the pilot results and make recommendations that would automatically take effect unless Congress blocks them. It also takes a decisive step in changing how insurance companies deal with the costs of health care. ... Which of these programs will work? We can't know. That's why the Congressional Budget Office doesn't credit any of them with substantial savings. The package relies on taxes and short-term payment cuts to providers in order to pay for subsidies. But, in the end, it contains a test of almost every approach that leading health-care experts have suggested...
And that's why Paul Krugman said the cost savings are likely to be even better than estimated:
...there's good reason to believe that all such estimates are too pessimistic. There are many cost-saving efforts in the proposed reform, but nobody knows how well any one of these efforts will work. And as a result, official estimates don't give the plan much credit for any of them. What the actuary and the budget office do is a bit like looking at an oil company's prospecting efforts, concluding that any individual test hole it drills will probably come up dry, and predicting as a consequence that the company won't find any oil at all -- when the odds are, in fact, that some of the test holes will pan out, and produce big payoffs. Realistically, health reform is likely to do much better at controlling costs than any of the official projections suggest.
Neither Bowles or Simpson even acknowledged that we have taken this major step toward reducing deficits in the long-term. Worse, Simpson grotesquely implied that the health reform law has made the fiscal picture worse.
A disturbing preview to tomorrow's opening session.
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http://news.yahoo.com/s/ap/20100423/ap_on_bi_ge/us_health_care_law_costs;_ylt=Av3ZBzS5NQb8WEBazpB2ENes0NUE;_ylu=X3oDMTNvaDA5c2s2BGFzc2V0A2FwLzIwMTAwNDIzL3VzX2hlYWx0aF9jYXJlX2xhd19jb3N0cwRjY29kZQNtb3N0cG9wdWxhcgRjcG9zAzEEcG9zAzIEcHQDaG9tZV9jb2tlBHNlYwN5bl90b3Bfc3RvcnkEc2xrA3JlcG9ydGhlYWx0aA--
http://biggovernment.com/jhoft/2010/04/27/breaking-dems-hid-damning-health-care-report-from-public-until-a-month-after-vote/
Rather than save 135 billion over ten years, this bill will more than likely add at least 1 trillion to the debt.
The 10 year-6 year talking point is false and outdated. The final bill increases the Medicare payroll tax on the wealthy starting in 2012, not immediately, while some of the law's benefits (Medicaid expansion, closing donut hole, family insurance for young adults) kick in before then.
Anyone who says that health care will save us money is either misinformed or lying. The same source for your numbers, the CBO has released memos describing how they avoided cost analysis like the one proposed by Rockefeller.
Since you have written on this subject multiple times, I would think that you should know this by now. What do you have to gain by perpetuating a misconception?
You are allowed to attempt to make the argument that we should go broke, but you cannot simply pretend that these costs don't exist.
With 30M more people, a defined benefit program, and a fixed number of providers, the laws of economics take over and healthcare inflation takes over. I do not know a single credible healthcare finance expert that believes this will reduce expenditures.
So instead, we have a tax increase, we have a new entitlement, we have 10 years of taxes and 6 years of service, we have a medicare system headed for collapse and a social security system that has now moved into deficit spending. Our politicians are cowards whose complete disregard for our children continue with an orgy of spending to buy votes. Throw the bums out (both parties).
Centers for Medicare and Medicaid Services (CMS) = CMS reports that under new law, overall national health expenditures will increase by $311 billion. CMS reports that about 14 million Americans will end up losing their current employer-sponsored coverage. writes CMS, “We show a negligible financial impact over the next 10 years for the other provisions intended to help control future health care cost growth” (p.13). Bottom Line: A health care law that will be costly to taxpayers, burden businesses, and create more problems than it solves.
The disconnect is astonishing.
Paaaatience.