Wednesday, June 22, 2011

Medicare, we hardly knew ye - Testifying before Congress, two Medicare trustees declared that an unreformed program means "ending Medicare as we know it." So, by all means, do nothing.


CBO, June 22 said...

Funny, "do nothing" is what the CBO just advised on Wednesday:
"One long-term budget scenario used in this analysis, the extended-baseline scenario, adheres closely to current law. Under this scenario, the expiration of the tax cuts enacted since 2001 and most recently extended in 2010, the growing reach of the alternative minimum tax, the tax provisions of the recent health care legislation, and the way in which the tax system interacts with economic growth would result in steadily higher revenues relative to GDP. Revenues would reach 23 percent of GDP by 2035—much higher than has typically been seen in recent decades—and would grow to larger percentages thereafter. At the same time, under this scenario, government spending on everything other than the major mandatory health care programs, Social Security, and interest on federal debt—activities such as national defense and a wide variety of domestic programs—would decline to the lowest percentage of GDP since before World War II."

Eric said...

Um, that's not what I read here:

"The extended-baseline scenario adheres closely to current law, following CBO’s 10-year baseline budget projections through 2021 and then extending the baseline concept for the rest of the long-term projection period. Under that scenario, revenues would reach 23 percent of GDP by 2035—much higher than has typically been seen in recent decades—and larger percentages thereafter. Nevertheless, annual spending would be greater, and federal debt held by the public would grow from an estimated 69 percent of GDP this year to 84 percent by 2035. (At the end of 2008, that debt was equal to 40 percent of GDP.)"

So even with atypically high revenues of 23% GDP, overspending will continue to expand debt.

Unless, that is, you believe that spending would decline which WOULD happen if Congress does nothing by allowing the Medicare "Doc Fix" to take place. This has (almost) never happened and the accumulation of kicking the can down the road means the doc fix would be an automatic 23% cut in Medicare payments.

Nobody - even the credulous CBO - believes this will happen.

Anonymous said...

Silly poster! It's Thursday. We only cite the CBO on Mondays, Fridays, and whenever they say bad stuff 'bout the Democrats.