Editor's Note: This column originally appeared in the October issue of Townhall Magazine.
The United States may be suffering through the weakest economic recovery since World War II, but the economy is, in fact, recovering, albeit very slowly. And as a result of that recovery, federal deficits are falling. From a high of $1.4 trillion in 2009, to a low of $469 billion in 2015, for a brief time our federal government’s deficit problem was at least heading in the right direction.
But after 2015, our deficits will rise again. And they are set to rise forevermore until we either default on our debts or cut federal spending. And, contrary to President Obama’s specific promises, Obamacare will be one of the main drivers of our federal government’s deficit spending for years to come.
According to the Congressional Budget Office’s latest estimates, federal spending is set to grow by $2.3 trillion over the next 10 years, an annual increase of 5.2 percent. And health care spending is the major cause of that growth.
Annual spending on the federal government’s three largest health care programs (Medicare, Medicaid, and Obamacare) is set to rise by more than 85 percent over the next 10 years. By 2024, government health care spending will take up 5.9 percent of the entire economy and our federal deficit will be almost $1 trillion. Contrast that with 1974, when government health care spending took up just 1 percent of gross domestic product and our deficit was only $6 billion.
Obamacare’s impact on our nation’s bottom line is stark. The CBO projects that government health care spending will jump by 9 percent in 2014, thanks largely to Obamacare’s massive Medicaid expansion. Spending for Obamacare health insur- ance subsidies will start to trickle out in 2014 as well, coming in at $17 billion. But in just three short years, that number will reach over $100 billion and it will grow steadily after that.
And as scary as those numbers are, they are almost assuredly overly optimistic. According to the CBO’s model, two of the programs that the health insurance industry demanded be part of the original legislation, the reinsurance and risk corridor programs, are supposed to reduce the deficit by $10 billion for the first three years of Obamacare’s implementation.
But, as described in more detail on page 36 (“Obamacare’s Illegal Insurance Company Bailout”), health insurance company executives know those estimates are pure fantasy. They know that health insurance companies will be demanding far more cash from these programs than they will be putting in.
And guess who Obama wants to pick up the tab? You, of course.
Despite the fact that no Congress has ever appropriated funds for the programs (not even the Congress that passed Obamacare), the Department of Health and Human Services has announced that they will bail the health insurance companies out anyway. Unless Republicans in Congress specifically forbid HHS from making the payments, the bailout will begin next summer, and will add about $1 billion to the deficit every year.
Unfortunately, higher deficits are not the only malady Obamacare is inflicting on the country. It is also a proven job killer. And on page 42 (“Obamacare’s Job Killing Employer Mandate”) Townhall’s Kara Jones explores why.
Nobody in Obama’s White House had any private sector experience when Obamacare was written, and it shows. When the cost of anything goes up, people will use less of it. In this case that “it” is labor, and Obamacare’s employer mandate simply makes it more expensive to hire new people.
And don’t buy for a second any Democratic claims that Obamacare is a good deal for women. As Julie Borowski shows on page 48 (“Obamacare’s War on Women”) Obamacare makes life more difficult for millions of American women in a number of crucial ways.
It has now been a year since the Obamacare exchanges first went online. And instead of getting more popular, Obamacare has only become more despised. The latest Kaiser Health Tracking Poll found more Americans than ever, 54 percent, view Obamacare unfavorably, while support for the law ticked down to just 37 percent.
Obama will not be in office forever. The next president, Democrat or Republican, will want to make major changes to this fundamentally flawed legislation. Conservatives need to come up with a realistic game plan to make sure those changes shrink the size and scope of the federal government instead of expanding it. •