Friday, March 30, 2012

The ides of march—budgets and health care

Mike Simpson

Rep. Mike Simpson, a Republican, represents Idaho's 2nd Congressional District, which includes Blaine County.


This week the Supreme Court is considering the constitutionality of President Obama's health care bill, and the decision will have consequences far beyond just the future direction of our health care system. If the individual mandate is struck down, it would be a major blow to the power of the federal government to use the Commerce Clause or the Necessary and Proper Clause to require Americans to act in certain ways. If it is upheld, it would be a significant victory for those who believe the federal government can do virtually anything apart from what is specifically constitutionally barred.

While the Supreme Court deliberations grab the headlines, something else happened this month that will have major implications on health care and its impact on Americans and the ever-growing national debt. The nonpartisan Congressional Budget Office released an updated analysis of the cost of the health care law using the most current budget data, and the findings are disheartening. When the bill was signed into law in 2010, it was estimated that an increased burden on Medicaid and taxpayer-funded health insurance subsidies would cost taxpayers $938 billion over 10 years. The new updated estimate this month finds the real cost to be nearly $1.8 trillion between now and 2022. This is a punch to the gut for members of Congress working to reduce the debt. In short, it just got almost $1 trillion more difficult to tackle the debt, and the costs of the health care bill are only expected to rise.

To put $1 trillion in perspective, let's look at a widely supported government agency, NASA. NASA receives roughly $18 billion dollars of funding every year. To save a trillion dollars, you would have to completely defund NASA 56 times over. With this example, you can see why it is so hard to cut $1 trillion out of the discretionary budget. Given that most economists agree that we need to find $4 trillion to $6 trillion to really stabilize the debt and put us on a path to eventually erase it completely, even eliminating NASA 56 times doesn't make a dent. The reality is that eliminating the debt can't be done immediately, and it can't be done with only spending cuts. While cuts are an important part of it, we need to institute real, long-term, structural reform of our mandatory spending programs that are on auto-pilot and growing by the day.

The system is unsustainable. A couple turning 65 today probably paid more than $109,000 into Medicare in their lives but will receive on average of more than $343,000 in benefits. Meanwhile, starting this year, 10,000 Americans will enroll in Medicare every day for the next 20 years. Our children and grandchildren have little hope of seeing any benefits themselves under our current system.

Along with real reform of Medicare, Congress must find the courage to reform, not just patch, our outdated tax code. We need to simplify the code and streamline regulations while closing loop-holes, creating the economic growth necessary to reduce the deficit. With these reforms in place, we can actually reduce tax rates for all individuals and businesses, and still have funds left over to reduce the debt. It is crucial that any savings from tax reform not be used to simply implement more spending. The tax code should be a simple system intended to raise the necessary revenue for appropriate government functions, not a complex system through which the government directs social behavior and forces certain outcomes.

This week, Congress is considering these issues and will vote on the House Republican budget offered by Chairman Paul Ryan. It is a bold and tough reform proposal that deals with the issues of our auto-pilot programs head on. The Medicare reforms are tough but fair and offer anyone the option of keeping their current benefits if they so choose. Despite demagoguery from Democrats and the White House, the Ryan plan has proved to be durable and is gaining support. While it won't receive bipartisan backing this year, it signifies the intention of Republicans to fix our debt problem. I am proud of my colleagues for offering this plan despite political experts' claims that it will hurt the party in an election year.

The Simpson-Bowles approach is another proposal that I strongly support because it puts everything on the table, leaving no sacred cows untouched. And while the news that Obama's health care bill will cost taxpayers an extra $1 trillion is discouraging, it should make Congress bolder in the fight to reduce the size of government, fix our outdated tax code and reform our bloated mandatory programs. The public is way ahead of Congress on this, and Congress must catch up and begin making the same tough decisions and sacrifices that American families are making every day.

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