Archive | June, 2010

The National Debt and Health Care: What You Need To Know

Posted on 17 June 2010

Advocates of the new health care law claim it will reduce both health care premiums and the federal budget deficit. But these claims don’t square with the facts. Here’s how Congress’ new health care law will impact your family:

Increase the $14 Trillion National Debt

Congressional Budget Office (CBO) director Doug Elmendorf made news recently when he warned about the pressure that rising health care costs put on the federal budget. His conclusion? “In CBO’s judgment, the health legislation enacted earlier this year does not substantially diminish that pressure.”

These are strong words from the always-measured CBO director. And due to budget gimmicks that Congress used when writing the health care law, the news about health care and our federal deficit may be even worse. When all gimmicks are accounted for, former director of the CBO Douglas Holtz-Eakin calculated that the health care bill will increase budget deficits by $562 billion in the next ten years.

Raise Taxes

Starting in 2011, the new health care law will levy over $100 billion in new medical taxes & fees, according to Congress’ Joint Committee on Taxation (pdf). A report from Medicare’s actuary projects that consumers will ultimately pay these fees through more expensive medical devices (think: pacemakers and specialty wheelchairs), health care premiums, and prescription drugs.

Put Your Benefits at Risk

Authorities ranging from the government’s Medicare actuary to the authors of the President’s health care regulations have acknowledged that millions of Americans will lose their current health coverage under the new health care law.

Decrease Your Retirement Security

Over 37 million retired Americans depend on programs like Medicare and Medicare Advantage to provide health care into their old age. But the new health care law makes their retirement less secure. Over $500 billion has been cut from Medicare, in the form of lower reimbursements for medical providers and lower payments to Medicare Advantage plans.

Medicare’s actuary has warned that the lower provider reimbursements are unrealistic, and could create a shortage of care for seniors. And the consequences of the Medicare Advantage cuts are already here – increased prices and decreased benefits going forward.

Already $13 Trillion in the Hole, Congress Set to Expand National Debt by Billions More

Posted on 16 June 2010

The “Defeat the Debt” Campaign Launches Television Blitz in Washington, D.C. Featuring Ads Showing Uncle Sam Digging a Deep Hole, Children Pledging Allegiance to Pay America’s Debt

Washington, D.C. – Hot on the heels of the national debt surpassing $13 trillion, Congress is considering billions in deficit spending that would only add to that burden.

In response, Defeat the Debt launched an advertising campaign in Washington, D.C. These advertisements come after a Gallup poll showed that the national debt is tied with terrorism as the issue of most concern.

The advertisements can be viewed at DefeatTheDebt.com. The first features Uncle Sam digging himself into an ever-deeper hole as a child looks on and asks him to stop. The second shows a classroom full of children pledging allegiance to “America’s debt and the Chinese government that lends us money, and to the interest, for which we pay, compoundable, with higher taxes and lower pay until the day we die.”

“The government can’t keep spending money it doesn’t have,” said Rick Berman, executive director of Defeat the Debt. “If we continue on this unsustainable path we’ll soon be too deep in the hole to escape.”

The latest request consists of:

  • $50 billion to bail out state governments and public union employees
  • $23 billion to bail out local school districts
  • Billions more to extend unemployment benefits

“The Congressional Budget Office predicts that by 2020 annual interest payments on the debt alone will be $900 billion,” Berman concluded.

This is the latest installment of a $10 million education campaign by Defeat the Debt to raise awareness about the unsustainable nature of the national debt.

For more information, visit DefeatTheDebt.com. To arrange an interview, please call Sonny Bunch at 202.463.7650

DefeatTheDebt.com is a project of the Employment Policies Institute and aims to highlight the threat posed by the unsustainable borrowing and spending of the federal government. To learn more about the debt, visit DefeatTheDebt.com.

Congress keeps digging a $15 trillion hole

Posted on 15 June 2010

The High Cost of $13 Trillion

Posted on 08 June 2010

Our national debt, now $13 trillion, is not just a burden on our children’s future. It is a burden on our own.

A new report from the Congressional Budget Office shows that we’ve run a $941 billion deficit in the first eight months of FY 2010 (see chart below).

There are consequences for this sort of deficit spending; according to recent article from CNN Money, it means slower economic growth and higher interest payments.

These are not abstract consequences for someone else to deal with:

  • If our economy is growing slowly, it means that fewer goods are being produced and purchased than would be otherwise. This translates to fewer jobs to fill, and fewer paychecks to go around – a big deal when there are still 15 million Americans unemployed.
  • If interest payments rise, it means bigger bills to pay each month. The interest rates on mortgages, credit cards, and just about any other kind of loan are affected by the rate on US Treasuries. If investors demand a higher interest rate to compensate for the larger risk of lending to a country that’s $13 trillion in debt, we’ll all end up paying the price.

All of this worry would be for naught if the government – still recovering from a recession – was set to return to a sustainable fiscal path. But the director of the Congressional Budget Office, Doug Elmendorf, has told us just the opposite – we’re on an unsustainable fiscal path that’s projected to get worse under current policy.

The new health care law threatens to drive our debt even higher, and cuts popular programs like Medicare Advantage to pay for all the new spending.

The consequences of a $13 trillion national debt are deadly serious, and we’re not going to be able to wait for our kids to deal with them – our representatives in Congress need to take action to stop spending, and they need to do it now.