Debunking the Administration's Claims About the Cost of Obamacare

Representative Paul Ryan of Wisconsin's 1st Congressional District served as the lead-off batter for the GOP at President Obama's Healthcare Summit last week, and he hit it out of the park.  While the President continues to lie about the true cost of his healthcare plan, Rep. Ryan did an outstanding job explaining how the President's numbers simply do not add up:

"The bill has ten years of tax increases and ten years of Medicare cuts to pay for six years of spending. The true ten year cost when subsidies kick-in? $2.3 trillion. . . Does this legislative effort bend the health care cost curve?  It does – but in the wrong direction. It bends the cost curve up, not down.  Essentially, this bill chases ever higher spending with ever higher taxes. The taxes never catch up, resulting in ever higher deficits."

Despite the President's relentless focus on his health care plan, the American people are not buying it.  The lastest polling from Rasmussen shows that 52% of American's oppose the President's plan, while only 44% favor it.  Of the 52% who are oppposed, 43% say that they strongly oppose the plan, while only 22% of those in favor of the President's healthcare agenda say that they strongly support it. 

The American people are much smarter than the President appears to believe.  They understand that you cannot create a vast new government entitlement program without spending a vast amount of money--money that we simply do not have.  The President seems to be telling us to "pay no attention to that man behind the curtain" while the great and powerful Oz uses smoke and mirrors to disguise the insanely high cost of his healthcare agenda.
 
Take the time to listen to Rep. Ryan's complete opening remarks, and pay attention as the camera occasionally flashes to the President's face.  Notice that pained, pinched expression?  It is the expression of a man confronted by the truth, and the truth hurts.
 

How much is $100 Million?

First of all, I know that this is an old video, and some of you may have seen it already, but it provides a good visual reference point when trying to wrap your head around really big numbers.  The video refers to the $100 Million in budget cuts that President Obama promised last year when he was pushing Congress to pass his so-called "stimulus package."  I like not only the way this guy explains the numbers, but also the general piled-up nature of his apartment.  A man who thinks about the budget obviously has to give up time that would otherwise be devoted to housework.

More on the Budget

In an excellent article prepared for The Heritage Foundation, Brian M. Riedl provides yet more detail about the unsustainable levels of spending proposed by President Obama in in 2011 Federal budget.

The article points out that in FY 2007 during the Bush Administration, the Federal budget deficit was a (relatively) modest $162 Billion.  Only during FY 2008 and 2009 did the Bush deficits skyrocket as a result of measures taken in response to the recession and the banking crisis.  Now that the recession appears to be over and the massive stimulus and bailout spending is no longer needed, the Federal deficit should return to pre-recession levels, right?  Wrong!  Under the Obama spending plan, deficits remain at staggering levels through 2020, with almost all (90%) of the deficits resulting from increased spending.  Even when compared with President Obama's budget from last year for FY 2010, the FY 2011 budget reflects $2 Trillion in additional deficits through 2020 (see table).

President Obama must act to curb these massive spending increases and to reign in uncontrolled entitlement spending.  Every year that passes without these issues being addressed just sends our nation deeper into a financial hole.

The Obama Budget

Yesterday, President Obama presented his fiscal year 2011 budget to Congress.  Since then, every news organization and every pundit on every side have tried to parse the text to determine what it all means.  For certain, when The New York Times, which never wastes an opportunity to serve as cheerleader for Team Obama, calls the President's spending and debt levels unsustainable, they certainly must be so.

Shall we consider the numbers?  Here are a few to ponder:

• A deficit in the Federal budget of $1,270,000,000,000 (that is $1.27 Trillion) for the coming year, which is on top of the deficit of $1.56 Trillion during President Obama's first year in office.
• According to the President's own projections, after a short period of leveling off from 2014 to 2018, the Federal budget deficit will begin another cycle of dramatic increases beginning in 2019.
• The President's projected budget deficits over the next ten years cumulatively total $8.53 Trillion (and remember, these are just the deficits, not the total national debt).
• Total Federal revenues for FY 2011 will exceed $2.57 Trillion, an increase of 18.6% over Federal revenues for the preceding year.

In the President's remarks, linked above, he blames George W. Bush for the budget problems, continuing a trend that is growing old.  For example, he placed part of the blame for the current budget deficit on the passage of Medicare Part D (the drug benefit) during the Bush Administration.  However, he conveniently leaves out the fact that Part D was strongly supported by BOTH parties in Congress and that the version favored by the Democrats was actually much more costly than the version that was ultimately adopted.  And if Part D entitlement is to blame for a large part of the Federal budget shortfall, then why doesn't President Obama simply urge the repeal of the benefit?  The current budget belongs to President Obama, not President Bush, and he needs to take the blame for his own runaway spending rather than blaming it on the previous Administration.  And just so you know, I am not now, nor have I ever been, a supporter of the free-spending of President Bush and Congressional Republicans when they controlled the budget.  The same rules apply to all, and there is plenty of blame to go around.

We should not lose sight, either, that all of the numbers being pushed around by the Administration and others regarding the budget fail to consider the consequences of Federal unfunded budget liabilities, which add Trillions and Trillions more to the national debt.  According to David Walker, former Comptroller General of the United States, the current national debt figure of $12.3 Trillion that is quoted by politicians and news sources should actually be $45 to $50 Trillion more to account for unfunded liabilities from Medicare, Social Security and other Federal programs.  And you can also add to the bottom line the $6 Trillion or so that taxpayers are on the hook for as a result of the Fannie Mae/Freddie Mac takeovers.

Our government cannot continue to bury us under mountains of debt.  If the current trend continues, we will become a client state of China, to whom we owe all of that money.  (Do you think the Chinese know this fact?  I'm betting they do.)  Someone must step up and speak the truth:  entitlement spending must be brought under control.  We must stop borrowing our way out of economic hard times.  Creation of a massive new entitlement program in the form of Obamacare cannot be justified in the face of our current budget crisis.