The Wall Street Journal points out that ten-year cost estimates of health care “reform” greatly understate the eventual cost of a government takeover. Explains the Journal:
In a July 26 letter, CBO director Douglas Elmendorf notes that the net costs of new spending will increase at more than 8% per year between 2019 and 2029, while new revenue would only grow at about 5%. “In sum,” he writes, “relative to current law, the proposal would probably generate substantial increases in federal budget deficits during the decade beyond the current 10-year budget window.” (The House bill has changed somewhat in the meantime, but not enough to alter these numbers much.)
The nearby chart shows this Grand Canyon between spending and revenue, including CBO’s long-term predictions. While these are obviously very coarse estimates, there’s also a projection of a $65 billion deficit in the 10th year-and “deficit neutrality in the 10th year is . . . the best proxy for what will happen in the second decade.”
That’s not our outlook. That’s what White House budget director Peter Orszag told the House Budget Committee in June. He added that “If you’re not falling off a cliff at the end of your projection window, that is your best assurance that the long-term trajectory is also stable.” The House bill falls off a cliff.
And the CBO score almost surely understates this deficit chasm because CBO uses static revenue analysis-assuming that higher taxes won’t change behavior. But long experience shows that higher rates rarely yield the revenues that they project.
As for the spending, when has a new entitlement ever come in under budget? True, the 2003 prescription drug benefit has, but those surprise savings derived from the private insurance design and competition that Democrats opposed and now want to kill. The better model for ObamaCare is the original estimate for Medicare spending when it was passed in 1965, and what has happened since.
First, the Congressional Budget Office only carries its estimates out ten years. Costs keep rising thereafter. Second, virtually every estimate of the cost of a new social program has been too low–way too low. Third, once Congress begins the process of nationalizing the health care system, it isn’t likely to stop.
The battle over health care reform is ultimately a fight over whether government will remain limited in any meaningful way.