Medicare IS the Default Crisis
The Hill reported on a press conference held by several Senate Democrats this morning encouraging the President NOT to address Medicare as part of an agreement to raise the debt ceiling. Sen. Harkin said that “our message is simply: Take Medicare off the table. Let’s solve the default crisis.” Sen. Harkin went on to claim that “the health care reform law’s investments in preventive care…should be given a chance to work.”
There are several problems with these statements. First, Medicare is ALREADY contributing to the debt and deficits. According to the Medicare trustees report, the Medicare Hospital Insurance Trust Fund suffered its greatest deficit EVER this past year. Over the four years of the Obama Administration, Medicare is projected to lose a whopping $104.5 billion – and the program is NEVER projected to return to balance. All those losses are forcing Medicare to sell the paper IOUs in its trust fund, which are the only things keeping the program afloat. In short, Medicare’s deficits are forcing the Treasury to incur more debt – meaning Medicare is one of the prime reasons we face a debt crisis in the first place.
Furthermore, the idea that Obamacare’s $15 billion “slush fund” for things like jungle gyms and bike paths will reduce health care spending follows the Biden-esque logic that we’ve got to spend money to keep from going bankrupt. However, the Congressional Budget Office and others have repudiated the notion that preventive care efforts – including new federal “stimulus” spending on these types of questionable projects – can materially reduce health care spending or federal deficits.
With the program NEVER scheduled to return to balance, Medicare is one of the key drivers of federal debt and deficits. It’s a logical place to start the conversation about reforming entitlements in conjunction with a debt limit increase. But eliminating Obamacare’s $15 billion prevention “slush fund” wouldn’t be a bad way to reduce federal spending either.