Zeev's Turnips Talk Politics (ZTTP)

[EZ2]

Will Health Care Reform Pay Its Own Way? Wrong Question


<<< let's let our KIDS clean up the mess >>>

The biggest risk to the projections probably isn’t math; it’s politics. All bets are off if Congress loses its nerve when it comes to implementing some of the law’s tougher tax increases or cuts in Medicare or Medicaid payments. That’s not impossible. Atlantic Monthly economics writer Megan McArdle predicts, “At least one of the [law’s] major funding sources, and possibly all of them, will be substantively repealed.” Still, neither McArdle nor Holtz-Eakin—nor the law’s supporters, for that matter—knows any more about how future Congresses will behave than does the CBO.

Suppose, though, that all the CBO assumptions are true. Suppose Congress stays the course on all the tax hikes, fees, penalties and cost cuts through 2019 and beyond, and health care reform indeed cuts the deficit by $124 billion (a drop in the deep quarry of our national debt). What will that really mean? In terms of fiscal cash flow, it means Congress will have come up with more than $1 trillion of tax hikes and spending cuts, and then spent $940 billion of it on expanding health insurance. Yes, we’ll have a new and arguably better health care system. But we’ll still have the horrific deficits with which we started the year, and will already have fired a trillion dollars’ worth of our most readily available deficit-cutting ammunition.

http://www.thefiscaltimes.com/Issues/Health-Care/2010/04/06/The-Risk-to-Health-Care-Reform-Is-Not-Cost.aspx