Republican Doubts Obama’s Claim That Health Care Reform Will Not Boost Budget Deficit

September 10, 2009 - 11:39 AM
President Barack Obama probably won't be able to keep his pledge that health care reform will not add to the federal deficit, Sen. Judd Gregg (R-N.H.), the ranking Republican on the Senate Budget Committee, told CNSNews.com.
Capitol Hill (CNSNews.com) – President Barack Obama probably won’t be able to keep his pledge that health care reform will not add to the federal deficit, Sen. Judd Gregg (R-N.H.), the ranking Republican on the Senate Budget Committee, told CNSNews.com.
 
During his address to a joint session of Congress Wednesday night, the president repeated his pledge that health care legislation will be deficit neutral, despite estimates to the contrary by the Congressional Budget Office.
 
“I will not sign it if it adds one dime to the deficit, now or in the future, period. And to prove that I’m serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don’t materialize,” Obama said in his prime-time speech.
 
“Now, part of the reason I faced a trillion-dollar deficit when I walked in the door of the White House is because too many initiatives over the last decade were not paid for -- from the Iraq war to tax breaks for the wealthy. I will not make that same mistake with health care.”
 
Gregg has his doubts about the fiscal stability of the Democrats’ proposed health care plan.
 
“Deficit neutrality is possible through massive tax increases and significant cuts in Medicare,” Gregg told CNSNews.com. “But almost as important as deficit neutrality is expansion of the federal government. What you’re talking about here, at least in the Senate bill as passed out of the health committee, is a $2-trillion increase in the size of the government. What he’s talking about is a $1-trillion increase in the size of the government.
 
“Those are all huge numbers,” Gregg continued. “I think we have to be a little concerned here that we have a federal government that’s too large, where the debt is too large, and the likelihood of paying for something like this through tax increases or cuts in Medicare are slim, so I suspect it will end up on the debt.”
 
The Congressional Budget Office estimates that H.R. 3200, the House health care reform bill, would add another $239 billion to the federal deficit over the next 10 years – and “would probably generate substantial increases in federal budget deficits” thereafter.  (The $239 billion is the approximate 10-year cost of adjusting Medicare reimbursement rates so physicians don't face big annual pay cuts.)
 
But Sen. Sherod Brown (D-Ohio) believes there should be no problem in keeping the health plan deficit neutral.
 
“It can absolutely be deficit neutral. The president’s provision that we do budget cuts if it’s not really will guarantee that,” Brown told CNSNews.com after the president’s address to Congress.
 
Obama stressed in his speech to Congress that the nation’s health care problem and deficit problem are one and the same: “Our health care system is placing an unsustainable burden on taxpayers,” Obama said. “When health care costs grow at the rate they have, it puts greater pressure on programs like Medicare and Medicaid. If we do nothing to slow these skyrocketing costs, we will eventually be spending more on Medicare and Medicaid than every other government program combined.”
 
Obama said the plan he supports does not cut Medicare for seniors.
 
“The only thing this plan would eliminate is the hundreds of billions of dollars in waste and fraud, as well as unwarranted subsidies in Medicare that go to insurance companies -- subsidies that do everything to pad their profits but don't improve the care of seniors,” Obama said. “And we will also create an independent commission of doctors and medical experts charged with identifying more waste in the years ahead.”