Government sees Healthcare benefits swamping economy

Government sees Healthcare benefits swamping economy

The United States will find little relief from its bleak long-term fiscal outlook so long as growing federal healthcare and retirement programs gobble up more and more of the country’s resources, said a new economic report issued on Wednesday.

The findings by the non-partisan Congressional Budget Office came as the Obama administration and Congress were struggling to find ways to make ends meet amid $1.5 trillion annual budget deficits and a national debt that, at $14.3 trillion, is seen as posing a danger to the nation.

“The aging of the population and the rising cost of health care would cause spending on the major mandatory healthcare programs and Social Security to grow from roughly 10 percent of GDP today to about 15 percent of GDP 25 years from now,” CBO said in an annual report.

By comparison, CBO noted, total federal spending, excluding interest payments on the debt, has averaged about 18.5 percent of GDP over the past 40 years.

Government sees Healthcare benefits swamping economy”CBO’s new long-term budget outlook again highlights the urgency of reaching agreement on a bipartisan and comprehensive long-term deficit and debt reduction plan,” Senate Budget Committee Chairman Kent Conrad said. He has been calling for about $4 trillion in long-term savings through a mix of spending cuts and tax increases.

Vice President Joe Biden and a bipartisan group of six lawmakers were to continue their negotiations on Wednesday on how to achieve enough in deficit reductions to clear the way for Congress to raise U.S. borrowing authority.

Republicans in Congress have called for a major revamp of the Medicare healthcare program for the elderly — one that would basically privatize it with government vouchers to help cover some of the costs.

House Budget Committee Chairman Paul Ryan, the author of the Republican Medicare plan, said the CBO report underscored that the United States was headed to an “economic crisis” that “is actively hurting job creation today, as businesses hold back on expansion out of concerns that we are headed for a future of massive tax increases and higher interest rates.”

But there has been a political backlash against Ryan’s Medicare plan, as it is projected to cost seniors about $6,000 more in healthcare costs annually.

Democrats, including President Barack Obama, acknowledge the need for some Medicare reforms. But in deficit-reduction talks that Biden has led since May, Democrats have put more emphasis on a combination of cutting or freezing other domestic programs coupled with select tax increases on the wealthy.

SOME OPTIMISM FOR SHORT-TERM

Read the rest Reuters.

CBO Budget Outlook By The Numbers

THE NUMBERS DON’T LIE, OBAMA’S LACK OF FISCAL LEADERSHIP  HAS US HEADED TOWARD A CLIFF

$11,300:
Negative Effect Of Debt On Gross National Product Per Person In 2035. (“CBO’s 2011 Long-Term Budget Outlook,” Congressional Budget Office, 6/22/11)
2060:
Year Federal Spending Will Reach 50 Percent Of GDP. (“CBO’s 2011 Long-Term Budget Outlook,” Congressional Budget Office, 6/22/11)
2037:
Year That Federal Debt Will Reach 200 Percent Of GDP. (“CBO’s 2011 Long-Term Budget Outlook,” Congressional Budget Office, 6/22/11)
101%:
Federal Debt Held By The Public As Share Of GDP In 2021. (“CBO’s 2011 Long-Term Budget Outlook,” Congressional Budget Office, 6/22/11)
70%:
Federal Debt Held By The Public As Share Of GDP By End Of The Year. (“CBO’s 2011 Long-Term Budget Outlook,” Congressional Budget Office, 6/22/11)
25.9%:
Federal Spending As A Share Of GDP By 2021. (“CBO’s 2011 Long-Term Budget Outlook,” Congressional Budget Office, 6/22/11)
18%:
Amount GNP Would Be Lowered Due To Debt’s Effect On Economic Growth By 2035. (“CBO’s 2011 Long-Term Budget Outlook,” Congressional Budget Office, 6/22/11)
8.4%:
Average Unemployment Rate Projected For 2012. (“CBO’s 2011 Long-Term Budget Outlook,” Congressional Budget Office, 6/22/11)
4.4%:
Share Of GDP That Interest On The Debt Will Consume In 2021. (“CBO’s 2011 Long-Term Budget Outlook,” Congressional Budget Office, 6/22/11)
The CBO’s Report Understates The Long-Term Budget Problem Because They Do Not “Include The Impact Of Higher Tax Rates On People’s Incentives To Work And Save.” “CBO’s projections in most of this report understate the severity of the long-term budget problem because they do not incorporate the negative effects that additional federal debt would have on the economy, nor do they include the impact of higher tax rates on people’s incentives to work and save.” (“CBO’s 2011 Long-Term Budget Outlook,” Congressional Budget Office, 6/22/11)
CBO Director Douglas Elmendorf: Growing Debt Increases Risk Of “Sudden Fiscal Crisis.” “Growing debt also would increase the probability of a sudden fiscal crisis, during which investors would lose confidence in the government’s ability to manage its budget and the government would thereby lose its ability to borrow at affordable rates.” (Douglas Elmendorf, “CBO’s 2011 Long-Term Budget Outlook,”Congressional Budget Office “Director’s Blog”,6/22/11)
A Product Of The RNC Research Department
June 22, 2011
View This Briefing As A PDF

 

About the Author

Politisite delivers the latest Breaking Political News, Debate Coverage, Election Results, Commentary and Analysis. We provide in-depth news with special reports and interactive political coverage. Politisite was a pioneer in internet political news gathering and dissemination. Politisite came live in early 1998 and become the first internet only news source to cover local, state, and national political campaigns, debates and elections. Before there were the terms Blog, Blogger, New Media, or Crowd-sourcing, Politisite was developing what has become the standard in political news coverage, long before most political sites were even conceived. The Name ‘Politisite” simply means Political Website.

Author Archive Page

Post a Comment