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CBO Director tells White House Obamacare is Unsustainable
June 14, 2010
The director of the Congressional Budget Office, Douglas Elmendorf, is raising new concerns about the viability of President Obama’s health care reforms.
In a presentation entitled, “Health Costs and the Federal Budget” Elmendorf wrote:
“Rising health costs will put tremendous pressure on the federal budget during the next few decades and beyond. In CBO’s judgment, the health legislation enacted earlier this year does not substantially diminish that pressure.” (Emphasis added)
In other words, Obamacare isn’t going to decrease the national deficit; instead it will increase federal spending by $400 billion between 2010 and 2019. Elmendorf goes on to say the legislation “will lead to an increase in discretionary spending, which is not included in the estimates…”
In May, the CBO estimated discretionary spending would “probably exceed $115 billion over the 2010-2019 period.”
Obamacare will likely prove even more costly since it failed to deal with two major health care reform issues according to James Capretta, a Fellow at the Ethics and Public Policy Center.
1.The Medicare Sustainable Growth Rate (or SGR) was just cut by 21%. The Obama Administration says it wants to do away with the reduction, but has no way to finance it. Without the money saved from reimbursement payment cuts, federal spending would increase $250 billion and $400 billion over a decade.
2. More employers are likely to drop job-based coverage in favor of the subsidized state-exchanges Obamacare will create. The CBO estimates only 3 million Americans will be moved into exchanges, but new assessments say the number could be closer to 35 million. That would drive the cost up by another $400 billion over the next 10 years.
No matter what the final cost, one thing is clear according to Elmendorf: “Efforts to reduce costs increase the risk that people would not get some health care they need or would like to receive.”
In other words, the only way the national government can afford Obamacare is by rationing.
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