An Entitlement Certain to Grow

James Capretta / January 07, 2010

One of the main arguments President Barack Obama and other Democrats have made on behalf of the health care bills that have passed the House and the Senate is that they would reduce the federal budget deficit in the coming decade and in the years following as well. Their claim is backed up by the official cost estimates provided by the Congressional Budget Office that show modest improvements in the budget outlook through 2019 if the bills become law. But there are important reasons to be very skeptical that a final health care bill will improve the nation’s budget outlook, both in the short and the long term.

For starters, neither bill addresses the impending cut in the fees paid to physicians under the Medicare program. There is bipartisan opposition to these cuts, but the cost of fixing the problem would exceed $200 billion over 10 years. Consequently, congressional Democrats aren’t providing a permanent solution in the health care bills; they are in effect understating the cost of the reform program they have promised to deliver. If the so-called “doc fix” were included in the accounting, the health care reform effort would no longer be a deficit reducer at all. (more…)