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Subscribe to RSSFrom msnbc.com's Tom Curry: The day after the Congressional Budget Office released its new estimate of a $1.5 trillion budget deficit for this fiscal year, CBO chief Douglas Elmendorf told the Senate Budget Committee that health care is the biggest driver of the budget problem.
Responding to a question from Sen. Rob Portman, R-Ohio, who asked him to identify the single largest fiscal challenge facing the United States, Elmendorf said, "the part of the spending that is growing very rapidly, and much faster than GDP, is spending on the government's large health care programs, both because of the aging of the population … and because of rising health spending."
He added, "The crucial underlying factor here … is the rising number of older Americans, relative to working Americans, and the rising cost of health care, relative to other things in the economy."
This should come as no surprise, Elmendorf said. "Those fundamental forces have been foreseen for decades and, I think, are inexorable under current policies."
The CBO's budget estimate released Wednesday projected that over the next several years, Medicare spending will grow at an average annual rate of nearly 7 percent, while Medicaid will grow at an average annual rate of 9 percent – even while the nation's economy itself is growing at a rate of less than 3 percent a year.
(Medicaid is the government's insurance program for poor people of all ages, but the elderly and disabled account for 70 percent of its outlays.)
He also said that a sudden onset of investor skittishness about the federal government's creditworthiness could cause an interest rate shock.
"The swings in sentiment that drive fiscal crises are not usually telegraphed very well ahead of time. They often occur very suddenly," Elmendorf told Portman.
"It's very difficult to predict what will happen if there's a sudden shift of sentiment against buying U.S. Treasury debt."
Elmendorf stuck to the CBO forecast that the health care law Congress passed last year will reduce future deficits. He repeated CBO's previous estimate said repeal of the law would add $230 billion to future deficits over the next several years.
At the hearing Elmendorf also gave a word of praise to the soon-to-be-ending $814 stimulus program, calling it "an important boost to output and employment."
The stimulus has gotten little attention in President Obama's State of the Union speech or in the budget debate in recent days.
In response to Sen. Bill Nelson, D- Fla., Elmendorf said "The waning of the effects of the Recovery Act … is one of the reasons that the economy isn't growing more rapidly over the next few years in our projection."
Nelson said people don't appreciate the stimulus because most of the money wasn't in the form of bridges and other visible infrastructure, but in "a massive infusion of money" to state governments "that people don't ordinarily see -- such as Medicaid spending as well as education."
But Elmendorf then brought the conversation back to the topic of the moment: the debt -- pointing out to Nelson that the stimulus had the unhealthy effect of adding to the debt.
"The large accumulation of debt to pay for the Recovery Act and the automatic stabilizers (such as unemployment insurance)… in the past few years has pushed debt to GDP up in a way that creates damage and risks."
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The increasing cost of health care isn't just a problem for the Government. It is a problem for those who have health insurance unrelated to government plans. My health insurance premiums have risen at least 15% every year and sometimes as much as 28% long before the Affordable Health Care Act was signed into law. It is a bigger problem for government because medicare is for 65 and older, the older we get, the less healthy we are. Medicaid covers the disabled, children and the poor.
There are no easy answers but there are good solutions and there are bad ones that would harm the elderly and the least among us. We can solve the problem but both sides must work together to do it; stop the bickering, and just do it afterall, it's what we taxpayers pay legislators to do.
Jody,
Outside of the mandate to purchase insurance, the biggest problem I find in the HCL is that there are no regulations, especially dealing with the amount of profit that an insurance company can make.
Regulate the cost of premiums. Don't allow them to go up over 3% per year. That is still profit, but not at the 15% you felt, or the 30% some others have felt.
Since the average profit for insurance companies is 3 to 5%, that is not an answer.
Keeping the cost down by preventive medicines and malpractice reforms would both be more helpful than pretending the insurance companies are to blame for rising costs.
Does this mean we may finally get to see what the Republicans plan is?
*holding my breath* lol
Big Bear - the argument AGAINST the HCL is that there are TOO MANY regulations.
I agree with you, though, that premiums should NOT exceed 3% a year. That is diametrically opposite of the business model that most Health care companies operate under.
I DO think that the Health Care Law has set up a situation where the healthcare delivery model will change from a business-centric focus to a health-based focus. It will take time and hopefully we will see that model change in our lifetime.
What about gas prices? What price should gas not exceed? Everyone needs gas, right?
Groceries? Limit the prices on those too? Everyone needs groceries, right?
What do you people do for a living? Should we finally put the clamps on that and reduce your pay, you know, just so what ever product or service you sell is "affordable"?
Government service employees? What should the limit on those prices be?
Yeah Buzz, the rents just too d*mn high! Gotta get us some price controls!
So the biggest challenge we face are the problems and costs of two government entitlement programs that the government can not manage the health care costs of.
And Obama's answer is to create a third, much bigger government entitlement program that does nothing realistic to address the cost of healthcare.
That's Progressive!
And why should this insanity not be repealed?
The stimulus was a "massive infusion of money" to state governments "that people don't ordinarily see -- such as Medicad spending as well as education"
Stimulus went to Medicade and teachers...
......yea, that created all the jobs ........that weren't created.
And FR libbies still argue stimulus worked?
I keep telling you, bob, that I really hope Obama never tells them they can fly.
Think how many would be injured jumping off their roofs.
On another thread, a poster named Landoran posted an article that revealed all of the plagiarized parts of Obama's SOTU. The response in light of the clear evidence?
That is not true.
Ah, well, as the great and obama himself says: WTF.
bob-1805084
Bob, you must understand why No Jo thinks the stimulas did not work, her blow hole governor used the money for his state coffers, instead of what it was ment for, so to her and everybody in New jersey the stimulas failed.
But to the rest of us except in texas we know the stimulas worked, road projects and Bridges. Bob what makes me really laugh is New Jersey Governor Blow Hole cancled a major infastructure project costing New Jersey thousand of Jobs, Now refuses to give the start up funds (270 million) back, but yesterday he has asked the feds for 53 million to cover snow removal. everytime i here from this guy the more he makes me laugh, he is also trying to get business away from Illinois because of our income tax increase, but again it makes me laugh that there income and corporate tax is still higher than illinois even with out tax increase, again what a major blow hole.
Hey no joe,
I saw an article this morning on the same stuff by Andrew Malcolm of the Los Angeles Times/NRO.
Funny, it reminded me of a speech I read by MLK where King talked about the audaciousness of faith... wonder where audacity of hope came from?
Great comments as usual no joe - see ya in the FR funnies.
Jeff,
Don't really care about your fetish.
My comments were from a quote above.
Bottom line - The Stimulus wasn't targeted or timed to ever create any jobs. The money went to state and local governments to prop up the government employees, Medicaid, whatever, Wall Sreet cronies, unions, whatever, big business cronies like GE that got $45 Million despite making $1.56 Billion in 2009 and laying off 18,000 American jobs, whatever, whatever....
......whatever it didn't work. Nobody's baby but Obama's... he was in charge, he asked for it, he spent it.
My wonder has always been what they would actually do - after watching Obama taking chicken droppings, mixing it with mayonaise, onion, celery, etc, putting it between two pieces of bread and telling them it was chicken salad.....
Afterall, they have swallowed everything else....would they.....
bob-1805084
......whatever it didn't work. Nobody's baby but Obama's... he was in charge, he asked for it, he spent it.
As a construction estimator i can tell you, it did work, as a construction estimator that saw the bubble bursting, and the layoffs in the construction industry i can tell you it worked. as a construction estimator that was running out of Jobs to bid, i can tell you it worked, the company i work for now was saved because of stimulas work,
I think its matter of opinion and how the stimulas affect some, for me it kept me working when i knew the layoff was coming, when the stimulas work was awarded i got layed off because other than the stimulas there was nothing out there to bid on. I'm sworried right now because we are falling in to the same situtation 2 years ago, there is nothing to bid on, public, private, government, state and local projects are drying up AGAIN.
it also depends on how the money was spent by the state governors, Illinois was in deep do do but instead of filling the state coffers and paid bills, Governor Quinn used it to keep people working.
Jeff,
It sounds like it didn't work, even by your perspective/definition. There were no new jobs created, no stimulated economy, it simply delayed your predicament.
I am very sorry for your situation and I honestly hope you keep working.
But with the uncertainity created by all the governments new regulations, HCR costs, the debt, the destruction of the energy industry and energy costs starting to take off, .......... all things caused by the government, it is very scary.
Please read National Review Online, articles from Real Clear Politics, as well as the think for me progress crap. Read Thomas Sowell, Larry Kudlow, Walter Williams, and decide for yourself. Then convince your friends.
Liberalism sounds great, just doesn't work. I hope you discover that soon.
Good luck Jeff, and thanks for your comments.
OK, everybody STOP AGING! Right this minute. 50 is the new 40, and so forth.
According to my wife, she stopped aging 11 years ago. I can't believe that I am still married to a 20 something year old:)
Y' got MY jealousy receptors snapping, crackling and popping, BB.
Maybe, the elderly can just be sent out on ice flows to die, or dropped off along a lonely stretch of road in the woods like some folk do with unwanted puppies!
Gotta do something with the old and disabled who add to the deficit!
....Will we loose all empathy with this reduce the deficit business!
Big Bear - you are STILL married to a 20-year old???
Lucky guy.
@!$%# it, if I get to stay this age forever, I'm cool with that.
Pietro,
According to my wife she is 20 something, and has been that way for 11 years now:)
I am lucky though, found someone that I can spend the rest of my life with.
What I am really looking for is the "fountain of youth". I wanna drink that water, but only if I get to take all of the knowledge I have now with me to a younger age.
Isn't it wonderful that hindsight is 20/20:)
Big Bear, I got that. Congrats to you and your STILL 20-year old wife. You are a lucky dude.
I am guessing, just like at my house, more spending means more debt.
There's an easy answer: Soylent Green!
As Rep. GRAYSON said of the RE-peat-the-lie-to-the-PUBLIC-ans' health care strategy for the nation's elderly, "DIE, and please die quickly."
How'd he do with his reelection campaign? He back in D.C.?
Rumor is that msnbc has a prime time slot that just opened up.
How odd that you carry this story, but neglect this one
http://www.google.com/hostednews/ap/article/ALeqM5hCT4GhKaleCpy570YTLr9p7nq54Q?docId=7a1abd4a6937454f90aa34acf72c9870
Here is something that I bet nobody knew- the cuts to Medicare are going to provide coverage to young uninsured workers.
Nothing quite like stealing from your granny, is there?
By the way, Elmendorfer had quite a lot to say, in the way of warning that the deficit MUST be cut, as the situation was dire.
How on earth did you miss that part of his testimony?
It's the headline on the Politico story.
Pinch me will ya Buzz? I could of sworn this I'm on First Read...
How is citing a Politico story any different than the Media Matters or Think Progress stories often cited as fact here? At least Politico is down the middle in its reporting.
I give up, FRR- I still can't get you-know-who to tell me who pays for the uninsured when they hit the ol' ER.
For starters, we don't berate our hosts/moderators in the process...
Little something called courtesy - goes a long way...
A lesson in courtesy from Redhead, of all people.
Next up: Charlie Sheen will give us a lesson on gentlemanly behavior.
Ya beat me to it, Captain! Talk about oxymoron's.
nojonobo
But isn't that "just his opinion" as when he insists that repealing the Affordable Care Act will increase the deficit?
Senator Nelson people didn't like the increased federal aid you wanted for your home state during the health care debate either.
If I would have know that at 20 I would be 61 I would have taken better care of myself.
I do not know the actual percentage, but consider the number of people shot every year, and we allow guns to be sold virtually unregulated, which injuries cost the taxpayer, then look at the number of motorcycle injuries incurred every year, which also costs the taxpayers because the motorcyclists do not wear helmets or protective clothing and, in some/many cases do not have to have insurance, then there are drivers who seem to think that driving while putting on makeup, texting, combing their hair, reading, etc., does not matter until they cause an accident, usually with injuries, some life threatening, and the uninsured who have medical problems not of their making, and one can readily see why medical insurance has gotten so high. Someone has to pay for all the rest, whether or not it is fair.
And here all the Liberals have been telling us it's the war(s) and all those tax breaks for the "rich" have been causing the problem.
And didn't Obama and the Democrats pass some kind of legislation last year that was supposed to keep the costs of health care down? What ever happened to that?
"And didn't Obama and the Democrats pass some kind of legislation last year that was supposed to keep the costs of health care down? What ever happened to that?"
Perhaps you are mistaken. Public Option did not pass....
And what do you call 230 billion dollars or did you just miss that in the article?
No, it was in all the papers, you remember. Something about a trillion dollars that we'd all have to chip in, and it would keep the costs down. Obama promised us it would keep the costs down. And if you can't trust Obama, who can you trust?
So what's the deal with Elmendorf blowing the whistle on all this stuff? Is he just another crazy Rightwinger?
JoAnnaSmith1
And here all the Liberals have been telling us it's the war(s) and all those tax breaks for the "rich" have been causing the problem.
And didn't Obama and the Democrats pass some kind of legislation last year that was supposed to keep the costs of health care down? What ever happened to that?
First of all joanna, the wars and tax cuts took us from a operating surplus to deficts, the problem with the rising cost of health care is the same reason why SS will be broke, baby boomers. as the artical said, we are moving into a time when we have more retiries than working people, because baby boomers are retiring.
i believe that the rising cost for health care is tied into Illegals being able to get free health care at the emergency room as will as the large number of uninsured. once HCR is in full gear, the cost for the uninsured will go way down, if people don't want to buy in, then they loose the right to show up at the emergency room for free care, no matter what happened to them.
Elmendorf stuck to the CBO forecast that the health care law Congress passed last year will reduce future deficits. He repeated CBO's previous estimate said repeal of the law would add $230 billion to future deficits over the next several years.
At the hearing Elmendorf also gave a word of praise to the soon-to-be-ending $814 stimulus program, calling it "an important boost to output and employment."
sorry Joanna but the CBO is still saying that the HCR will reduce our deficts, sorry charlie!!!!!
Do Man,
Not to totally disagree with you, but when you look at the original report of the CBO on the HCL, it states that there would be a $145 billion dollar deficit. Given the fact that according to them it would increase to $230 under the Republican repeal, leads me to believe that the increase will only be $85 billion, the entire increase does not get to go to the Repeal, as there is already an expected deficit of $145 billion.
But that could rise, as has their estimates today.
But either way, it is too much money adding to our debt.
I'm certain that Mr. Elmendorf's endoresment of how wonderful the government is at creating jobs is a comfort to the newly 454,000 unemployed:
http://www.bloomberg.com/news/2011-01-27/initial-jobless-claims-in-u-s-rose-51-000-last-week-to-454-000.html
Tell us, did Mr. Elmendorf do lunch right after the hearing?
These are certainly remarkable statements to make, especially when the evidence doesn't quite match the rhetoric. Of course Mr. Elmendorf directly says the current health care programs the government runs are pressing the deficits to record levels, and yet to the Left, that is not evidence that maybe the government shouldn't be starting yet another health care program, which is the Mother of all Entitlements programs, because, you know, they're just not that good at it.
And of course we have BCBS attempting to raise their rates in Calfornia by 59%, and that doesn't register with the Left that maybe what the government is doing isn't quite working?
Source: http://money.cnn.com/2011/01/07/news/companies/California_blue_shield_rate_hike/index.htm
Health care bill is a mess, 600 plus loop holes for the obama gang and the bribes that were used to get it to pass. Who will pay for those loop holes. Wall Street, Bankers, of course not. The middle class will take yet another poorly run Federal program right up the shute. The stealling of money from medicare to pay for part of this is crazy. Taxing home sales is insane. They need to do a fulll disclosure on this mess before anyone with reason will bite into it. Repeal it and start over. Tort reform, Universal care for all, including congress who has to use it, 100% coverage for all. Pay as you go, meaning a straight tax for this program, no hiden taxes, smoke and mirror crap. This health care bill will kill the middle class.
I say get rid of the middle man. Outlaw all of the health insurance and deal directly with the doctors (just like the good old days).
Do Man
I say get rid of the middle man. Outlaw all of the health insurance and deal directly with the doctors (just like the good old days).
that cool, so what will happen is the doctor will charge you the full amount, what your health care provider saves you is the full amount, now typically you pay a percentage of the complete cost with out the health care provider instead of paying 20% plus a deductable on a 20 thousand dollar bill, you will get the whole bill, your perscritption drugs wil no longer have a co-pay but if this is what you want, fine, drop you health ins,
you will no longer get free exams, co-pay for your perscriptions, MRIs will be billed to you at the full cost.
Jeff what happens is called free market capitalism prices will adjust to what the market can bear.
Heres an idea. everyone pays according to how much they use. Sickly people have always been poor. Nothing is gonna change that. Outlandish, fear driven insanity trying to put off dying is the result of a fear based society.
In other words- it did absolutely NOTHING to add to economic growth. Hence it was a boondoggle of debt and little else. But a highly successful one at least!
And to stay on topic with the healthcare issue- exactly how is it we think funding ACA by cutting Medicare & Medicaid funding while those costs continue to sky rocket is going to SAVE money? Robbing Peter to pay Paul is bad enough, robbing Peter while he's going bankrupt certainly isn't going to fix anything.
Suzy: Without the stimulus unemployment would have been at least 11 or 12 % if not more and it could have taken 20 years to recover from it, they did keep the country from crashing on the rocks below, only no one wants to give credit for this, the world economy was collapsing, and it did so far manage to turn it around, now they are going to try to ramp it up to bring back jobs!!!
Remember when Obama took office the car companies were crashing, the banks were to the real estate, small business etc. all of Europe was in trouble, the whole world economies were crashing, giv the President credit, when he first took office they were losing 800,000 jobs per month!!!
I guess my issue comes in with the promise that the stimulus would provide shovel ready jobs to rebuild infrastructure, etc, and unemployment wouldn't rise above 8%. Many economists felt it would actually prolong the recession. I don't know that there is any way to judge whether the last part is true or not because obviously the stimulus money was spent and we can't go backward to undo that, but I think we know the results of the first 2 promises made by the fact that unemployment hovered near 10% for more than a year and is just starting to fall closer to 9%. And we are continually hearing the call for "investment" in infrastructure to create shovel ready jobs... The auto industry bailout will amount to little more than a temporary band aid as the root cause of their financial trouble is unsustainable legacy costs. The bank bailout had some merit but was a bloated pig with too little regulation to prevent the very fat cats who caused the collapse to amass huge personal profits at the tax payers expense. So while there are some positives that came from the action, I think that the money could have done us a lot more good had it been used for what we were promised, not protecting government jobs
One thing they are not factoring in is that the older population will be much smaller in the next twenty years, if they take the average age of the oldest baby boomers, and if it comes to half, or more they will probable have more money than they are projecting, in even five or ten years, If they start to put in place a 401- k, system, to not replace SS , and medicare but to allow them to lower, it some in the future, it would be beneficial to all!!!
They need to got to single payer, as soon as possible to really bring costs under control!!!
"Maybe, the elderly can just be sent out on ice flows to die, or dropped off along a lonely stretch of road in the woods like some folk do with unwanted puppies!"
I do wonder if there has been a study of the percentage of healthcare costs that are spent on heroic measures as part of end of life care. It seems to me that there should be a national conversation about how to proceed with such a huge cohort that will be entering this stage in the next few decades.
nojonobo
But isn't that "just his opinion" as when he insists that repealing the Affordable Care Act will increase the deficit?
WTF??? These douche bags in Washington created this whole health care mess by taking BRIBES from the insurance company's..allowing them to do what they want ...they didn't allow the people to have access to the insurance pools ! My health care is 500.00 a month and it includes nothing ....it should be 145.00 everything included ...My RX# 1 is 230.00 in cuba the same Rx is 2.00 ..Rx #2 is 69.00 in cuba same RX same maker 45 cents .
So as I say, I wake up every morning, thankful that I have exceptional health insurance coverage I found through wise health insurance for my family because it gives me peace of mind knowing that my family can count on me to deliver their health care needs.