NEW CBO ANALYSIS RAISES THE COST OF THE HEALTH CARE LAW TO MORE THAN $1 TRILLION, FURTHER DEMONSTRATING IT IS FISCALLY UNSUSTAINABLE
(May 14, 2010) Today, Congressman Dan Lipinski (IL-3) reacted to a new analysis by the Congressional Budget Office that doubles its previous estimate of discretionary spending in the health care reform bill passed in March to more than $115 billion over ten years, pushing the bill's total price tag past $1 trillion.
"One reason I resisted the pressure and voted against the health care bill in March is that it is not fiscally sustainable over the long term and will only add to our national debt," Congressman Lipinski said. "But this latest report by the Congressional Budget Office shows that the situation is even worse than it appeared to be just two months ago. The CBO now estimates that discretionary spending under the bill will total at least $115 billion and possibly as much as $125 billion over 10 years. That is double its previous estimate. The more we know about this new health care law, the clearer it becomes that it will only add to America's already overwhelming debt."
Even before the CBO issued its report, claims that the health care bill would reduce the deficit could not withstand scrutiny. These claims were based on treating as deficit reduction over $70 billion in premiums that will be paid into the newly created CLASS Act program, despite the fact that the program would be fiscally unsustainable even if its premiums were not funneled out of the trust fund. Similarly, $29 billion in increased Social Security receipts was counted toward deficit reduction although it ought to remain in the Social Security Trust Fund. In addition, the deficit-reduction claim assumes that in later years, the growth in federal subsidies will suddenly be allowed to decline, and that the tax on middle-class insurance plans - which Congressman Lipinski and many others already oppose - will be expanded. Finally, the bill does not address this year's scheduled 21 percent cut in Medicare reimbursements to doctors, which will cost more than $300 billion to fix over the next 10 years.
These items alone wipe out the bill's purported savings, and the CBO's new estimates plunge it further into the red. What's more, even the new analysis may not capture all the spending that will occur under the health care bill. The CBO notes that the bill's discretionary costs fall into three categories. The $115 billion figure includes only spending in the first two. It does not include spending in the third category, covering grants and other programs "for which no specific funding levels are identified in the legislation," but for which the bill authorizes the appropriation of "such sums as may be necessary." Hence, the CBO may still be underestimating the real cost.
"When it comes to the new health care law, the devil is in the details," Congressman Lipinski said. "And the details clearly show that it is unaffordable for our nation."
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