Death by a Thousand Nickel and Dime Cuts

In his televised address to Congress in 2009, President Obama looked Americans in the eyes and vowed that the Affordable Care Act would not add “one dime” to the federal deficit, saying if it did so “either now or in the future,” he would not sign it. Citing skyrocketing healthcare costs as a liability to Medicare and Medicaid’s sustainability, the President said, “Put simply, our healthcare problem is our deficit problem.” [1]

Five years later we’ve only regressed. The Congressional Budget Office released a report on Tuesday, showing the new healthcare law will only exacerbate the deficit, which is barreling toward historic World War II heights. To recoin the President’s remark, our healthcare problem – Obamacare – is now our deficit problem.

“The CBO report seems to take the side of Republicans by saying healthcare costs will continue to rise. It says that increase, combined with new federal subsidies for healthcare under Obamacare, will put new financial burdens on the government that will lead to more debt.

“The pressures stemming from an aging population, rising healthcare costs, and an expansion of federal subsidies for health insurance would cause spending for some of the largest federal programs to increase relative to GDP,” the report stated.

“Federal spending for Social Security and the government’s major health care programs — Medicare, Medicaid, the Children’s Health Insurance Program, and subsidies for health insurance purchased through the exchanges created under the Affordable Care Act — would rise sharply, to a total of 14% of GDP by 2039, twice the 7% average seen over the past 40 years,” it added.” [2]

With 87% of federal-market enrollees opting for plans that provide some type of subsidy and Medicaid enrollment up 11.4% since last October, it’s easy to understand why federal spending-to-GDP ratio for these sectors will double. As the CBO pointed out, this isn’t good news for a debt level – $17.5 trillion – that’s already out of control.

“Currently, the amount of federal debt is exactly 74% of the economy, and if measures aren’t taken to reign in the deficits, the CBO projects that by 2039 the U.S. will see a debt to GDP ratio of 106%. According to the CBO, the rate of debt growth is expanding at an undeniably unsustainable rate.

“Budget deficits are projected to rise steadily and, by 2039, to push federal debt held by the public up to a percentage of GDP seen only once before in U.S. history [just after World War II],” the report states.

“How long the nation could sustain such growth in federal debt is impossible to predict with any confidence. At some point, investors would begin to doubt the government’s willingness or ability to pay its debt obligations, which would require the government to pay much higher interest costs to borrow money. Such a fiscal crisis would present policymakers with extremely difficult choices and would probably have a substantial negative impact on the country,” the report continues.” [3]

This sobering, unsettling path is not the bag of goods America was sold in 2009. Time has shown that Representative Joe Wilson’s spontaneous “You lie” exclamation has more truth than President Obama’s healthcare promises to the nation.

Until Congress – specifically the Senate – gets outraged enough to do something about the egregious law, our nation and its deficit will continue to get nickel and dimed by Obamacare; strapping our children with staggering debt.