Earlier this month there was tremendous press attention to new data indicating that enrollment in the Affordable Care Act (ACA)’s health insurance exchanges had surpassed 7 million. The White House took a victory lap while much of the press, desperate to write something positive after months of reporting on website glitches and insurance plan cancellations, characterized the milestone as good political news for ACA supporters. Our national discussion, however, is missing the truly significant story here; what is unfolding before our eyes is a colossal fiscal disaster, poised to haunt legislators and taxpayers for decades to come.
It is quite possible that the ACA is shaping up as the greatest act of fiscal irresponsibility ever committed by federal legislators. Nothing immediately comes to mind as comparable to it. Certainly no tax legislation is, because tax rates rise and fall frequently, such that one Congress’s tax cut can be (and often is) undone by a later tax increase. The same is true for legislation affecting appropriated spending programs. But the ACA is a commitment to permanently subsidize comprehensive health insurance for millions who could not otherwise afford it, which the federal government has no viable plan to finance. Moreover, experience shows that it is very difficult to scale back such spending once large numbers of Americans have been made dependent on it.
Let’s walk through the salient features of this unfolding fiscal disaster:
An Expansion of Spending Commitments Comparable to Enacting Social Security, Medicare or Medicaid: Our biggest fiscal problems today stem from Medicare, Medicaid and Social Security costs rising well beyond original projections. The ACA was enacted even though these longstanding financing challenges have still not been met, and represents an additional expansion of federal commitments comparable to these other programs’ creations. CBO now estimates that the gross costs of the ACA’s coverage expansion will be $92 billion in FY2015, or about 0.5% of our total GDP of roughly $18 trillion. This far exceeds, even relative to today’s larger economy, the initial costs associated with the entirety of Social Security and Medicaid, and is comparable to the startup costs for all original parts of Medicare combined. Consider this: just five years after enactment the ACA will absorb more of our total economic output than Social Security did fully sixteen years after it was enacted.
More at Economics21
via Glenn
Charles’ first illustration is a gem!
It shows two arrows, one pointing backwards, the other forward.
On the backward-facing arrow it reads: Looking Back: Savings have not been enforced.
On the forward arrow it reads: Looking Forward: Assuming savings will be enforced.
Well, that summarizes all of Obama’s thirty-some adjustments to O’care to date.
Whenever he hears a big constituency squawk loud enough, he waives something.
He has waived all sorts of things necessary for O’care to pay for itself.
Those things might cost votes when he needed votes!
Who’s to say Dems will have the will to enforce all those old things as well as all the newer ones starting now as time goes on and their constituents squawk to them?
Will they suspend Long-Term care provisions, like Obama did?
Will they impose the Individual/Employer mandates or let them die like Obama has done?
Will they make the Medicare Advantage cuts Obama lacked the will to make?
Or, will O’Care fall of its own weight?
They can always blame the Republicans for wishing this failure into reality.
On this their rationale appears to be this:
Clap your hands!
Or Tinkerbelle dies!