The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) released a report today on the effects of the Senate-Passed Health Bill:
CBO and JCT now estimate that, on balance, the direct (mandatory) spending and revenue effects of enacting H.R. 3590 as passed by the Senate would yield a net reduction in federal deficits of $118 billion over the 2010–2019 period. (Direct spending—as distinguished from discretionary spending—is spending that stems from legislation other than appropriation acts.) In our earlier estimate, the budgetary impact was a net reduction in deficits of $132 billion.
While there remain some aspects of this bill that I’m not thrilled about, compared to the House bill, this is great news as democrats move forward on passing landmark health care reform legislation. Of course, the hope is that this can be further improved through reconciliation.
Compare this to a “Roadmap to America’s Future” put forward by the GOPs “budget-guy”, Rep. Paul Ryan (R-WI), back in January. The only thing that this is a “Roadmap” to is fiscal disaster. According to a report yesterday by the Center on Budget and Policy Priorities (CBPP), his radical priorities would provide the
largest tax cuts in history for [the] wealthy, [would] raise middle class taxes, [end] guaranteed Medicare, [privatize] Social Security [and erode] health care.
Now that’s change that I can’t believe in! This would have the net opposite effect on health care, compared to the democrat’s plan, and lead to skyrocketing premiums and more uninsured Americans.
Republicans have been hailing this plan, based on a CBO analysis, saying that it would zero out the deficit and actually balance it by 2063. Oh yeah, it would also provide a viable health care alternative to the ones passed by democrats in the House and Senate. The problem is that the analysis was based on assumed revenue projections from Rep. Ryan’s own staff. As CBPP explains:
Assertions that the Ryan plan is fiscally responsible rest on a serious misunderstanding of a Congressional Budget Office (CBO) analysis of the plan. CBO only partially analyzed the Ryan plan. Contrary to some media reports, CBO has not prepared an actual cost estimate of it. CBO generally does not produce estimates of the effects of proposed changes in tax policies; that is the responsibility of the Joint Committee on Taxation. In its analysis of the Ryan plan, CBO did not attempt to measure the revenue losses that Rep. Ryan’s proposals would generate.
The non-partisan Tax Center actually analyzed projected revenues, while the CBO used projected revenue numbers prepared by Ryan’s staff, and paints a starkly different (dire) picture:
[The Tax Policy Center] estimate[s] that the budget deficit under the Ryan plan would reach about 7 percent of GDP and the debt would grow to 90 percent of GDP by 2020. TPC estimates that revenues under the Ryan plan would average 16.3 percent of GDP over the period from 2011 through 2020.
In contrast, following the specifications provided by Rep. Ryan’s staff, the CBO analysis assumed that revenues over the same period would average 18.4 percent of GDP. That difference amounts to a loss of almost $4 trillion in revenues over the next decade. As a result of these lower revenues, federal interest costs would also be much higher than those shown in the CBO analysis.
Extrapolating TPC’s revenue estimates beyond 2020 shows that the Ryan plan would fail to stem the rising tide of debt for years to come. The debt would continue to grow in relation to the size of the economy for at least 40 more years — reaching over 175 percent of GDP by 2050. (See Figure 1.) Even by 2080, the debt would still equal about 100 percent of GDP.
All I can say is WOW! The implications of this explosion in debt are profound and should scare the heck out of all Americans. The CBPP concludes that the “Roadmap” would “leave the federal budget in dire straits for decades” and push the federal debt to “unsustainable levels far in excess of 100 percent of GDP.” Given Ryan’s status as “rising star” within the GOP, one can only imagine the implications of a return of the GOP to majority status – oh, the nightmares.
Shifting gears back to the heath care reform aspects of this “Roadmap,” compared to both the Senate and House-passed bills, this “Roadmap” not only leads to fiscal ruin, but also destroys our health care system by increasing health care costs and leading to more Americans without coverage. As the CBPP notes,
the Ryan proposal thus would sharply reduce or eliminate all major forms of health insurance that spread risk by pooling healthy and less-healthy people together on a large scale. It would do so without taking significant action to create viable new pooling arrangements. Most Americans — including the poor and the elderly — would largely be left to purchase insurance on their own with a voucher or tax credit in an insurance market that would remain largely unreformed. In particular, insurance companies could continue to charge people much higher premiums based on age, gender, or health status.
No thanks! The “Roadmap” actually looks to expand high-risk pools to drive down costs. Clearly, pooling folks who are in poor health with others who are in poor health is more effective.
So compared to the democratic plan, this “Roadmap” actually erodes our health care system and has the added benefit of ballooning deficits. Genius!