Will Obamacare Really Ease the Debt Crisis?

Michael Medved

3/24/2010 12:01:00 AM - Michael Medved

If you’re deeply, dangerously in debt, how can it make sense to take on an extravagant new long-term commitment, even if you claim you’ve cut back other expenses to “pay for it?” That’s the underlying question about Obamacare that jubilant Democrats refuse to acknowledge.

Opponents of the sweeping health-care overhaul spent most of their time challenging the feeble arguments that allowed the administration to manipulate figures from the Congressional Budget Office to suggest that their reforms actually reduced the deficit. With a dubious combination of complicated new taxes and severe Medicare cutbacks, the president insisted that the costly new program (running to at least $950 billion over ten years) would be paid for – and more. The Democrats claimed that Obamacare would reduce red ink by an average of some $20 billion a year over the next decade --- in other words, trimming the current devastating deficit by as much 1.6%! These sunny (and silly) calculations led speaker Pelosi to enthuse: “The real question isn’t how we can afford to do it. The real question is how can we afford not to do it?”

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In other words, the president and his supporters assert that they’ve discovered nearly a trillion dollars in fresh savings from spending reductions and new revenue sources. In their logic, that makes their $950 billion health reform eminently affordable.

But this logic ignores the underlying budgetary crisis. Even if all of the promised cost savings and tax increases yielded all the money the Democrats predicted (a hugely improbable outcome), and even if they didn’t spend nearly all the additional cash on a new entitlement, they’d still make a relatively small dent in the deficit. If they applied all the “new” money to balancing the books and spent not a cent on new programs, they’d still reduce the predicted deficits for the next decade by less than 10% -- keeping the big government spend-a-thon on its record-shattering, bankruptcy-threatening path (with deficits remaining at their best more than double the worst red-ink under President Bush).

Meanwhile, none of the lemming-like partisans who marched with the President over the fiscal cliff ever bothered to acknowledge that finding spending cuts and tax hikes to finance Obamacare makes it vastly harder – a trillion dollars harder, in fact – to find more new sources to pay down the debt or to shore up Medicare. The accepted figure on Medicare’s unfunded commitments amounts to an almost unimaginable 38 trillion dollars. With that looming train wreck, one would think that any dollars that cost-cutters could wring out of the collapsing program would go to protecting the system’s overall viability, not to new commitments.

A sense of perspective gives the lie to the ludicrous claim that Obamacare counts as “affordable” reform, or some sort of miraculous budgetary bargain. Even those who believe in the messianic powers of Mr. Obama can’t suggest a logical basis for an expensive new program helping to trim deficits. Insuring 30 million more Americans isn’t free. New spending of $950 billion (at the absolute minimum) hardly counts as affordable in any sense of the word when the overall budget remains unsustainably unbalanced. The gimmicks, rosy projections, and benefit cuts placed on the table to sell Obamacare will make it all the harder (if not impossible) to find future sources of saving and revenue to keep the government’s rickety finances from cataclysmic and nation-threatening implosion.