Washington (CNN) -- Senate Majority Leader Harry Reid on Wednesday unveiled a sweeping health care bill that would expand health insurance coverage to 30 million more Americans at an estimated cost of $849 billion over 10 years.Okay. I'll readily admit to not being an economist of any stripe here, but can someone explain to me how this plan can cost nearly a trillion dollars yet decrease the deficit? I'm just a simple guy, here; when I see that ITEM A costs $X, it's a stretch to say that spending $X will save $Y. By using this logic, couldn't we drop $5 trillion on health care and wipe out the deficit entirely?
Reid and other Senate Democrats cited an analysis by the nonpartisan Congressional Budget Office for the coverage and cost figures. The CBO estimates the proposal would reduce the federal deficit by $130 billion over the next 10 years, through 2019. Any effect on the deficit in the following decade would be "subject to substantial uncertainty," but probably would result in "small reductions in federal budget deficits," according to the CBO.
Here's a knee-slapper:
"We're not going to add a dime to the deficit, in fact, quite the opposite," Reid said. "We'll cut the problems we have with money around here by as much as three-quarters of a trillion dollars."
Huh? You're going to save $750 billion by spending $890 billion? Okay, first,even if this is true it's a losing proposition. Second, this would mean that extending health care to some 30 million people would only cost $140 billion dollars over 10 years; $14 billion a year, or some $84 billion dollars LESS than was lost to fraud last year alone.
No. This does not add up at all. If in fact this monstrosity were going to come even close to breaking even this would be their headlining tactic - yet it's not. Something tells me that this will be a helluva lot closer to Big Dig proportions here - that $890 billion will wind up being the yearly figure rather than the figure for the decade.
And all that stands between this monstrosity passing and fiscal oblivion are the Senate Republicans? It's been nice knowin' ya, folks...
That is all.
9 comments:
The explanation that always entertains me is when they say
".....well... half the money will come from savings from reductions in Waste, Fraud, and abuse."
so... the're going to "pay" for a health care program by spending money that they were'nt supposed to be spending in the first place??? and by some sort of Magic this makes accounting sense?
If I tried to sell that to a client, i'd be laughed out thier office.
...seems to me that one one way or the other, we're still out the money.
......and of course any "new waste fruard and abuse" won't happen.....and even it does, well that's "new spending - not the old waste".
All of this only makes sense in the Alice - in Wonderland world of Government Accounting.
You know.....the one where the Social Secrity funds are in a " lock Box" ... apparently under Al Gore's mattress.
I haven't read the bill, but the obvious way to reduce the deficit is to increase taxes even more than you increase spending.
Exactly, zeeke42. The bill is full of new taxes and fees.
notDilbert, the claim underlying the "waste, fraud, and abuse" line is that if they reduce WF&A by X dollars, they can then turn around & spend those dollars on actual increased services to those that need 'em, and the bottom line comes out the same.
$850B divided by 30M people is around $28K per head. The gubmint can't do anything efficiently.
"can someone explain to me how this plan can cost nearly a trillion dollars yet decrease the deficit?"
You're assuming they're speaking English, but they are really using Govspeak, which has different meanings, most of which are irrational and bear no resemblance to reality.
More than the Senate Republicans, there are a few Democrats and one Independent that are none to happy either.
I don't think we'll see anything passed this year.
Wolf, -
Leaving aside the fact that it would be the first time in the History of Government that someone was able to eliminate WF&A, that theory is like saying " Wow...I didn't get mugged when I went into Boston last night, so now I can go out and spend that money that otherwise would have been stolen on strippers and I'm still even."
As Bob says, it's only a valid trade off in Goverment Accounting Fantasyland.
We are ewedscray.
notDilbert, actually it's a legit form of budgeting. An example:
Suppose you like to play the lottery. You buy $5 worth of tickets a day. Like most lottery players, you rarely win anything, and never enough to pay for what you spend on tickets.
Now, suppose that tomorrow you decide you want a new car. You examine your household budget and decide you can afford a car payment of, oh, $200/month. Off to the car dealer you go and find your dream-mobile. But alas, the payments will come to $300/month.
You go home and sulk for a while, then you realize -- Aha! Your lottery tickets are costing you $140 a month. All you have to do is quit playing the lottery, which you never win anyway, and you'll have that $140 a month to put toward other things. $100 of it will go to the new car payment, and the rest is yours, to do with as you will. You have just done what Red Harry Reid is talking about: paid for your new car partly with savings from reductions in waste elsewhere in your budget.
Note that I don't claim this is how it will actually work with the socialized-medicine bill. I know as well as you do that government rarely succeeds in reducing waste, and even when it does, it rarely realizes the savings it claims it will. I'm simply illustrating how Red Harry claims it will work.
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