–Republican Leader Calls Health Care Bill A ‘Fiscal Frankenstein’
–Some Budget Experts Say Big Deficit Cuts Are Too ‘Optimistic’
–Senate Prepares For Tough Debate on Corrections Bill

By John Shaw

WASHINGTON (MNI) – When President Obama signed the sweeping health
care legislation into law Tuesday morning, he said the landmark bill
will provide necessary health insurance for millions of Americans who
don’t now have it while also reducing the nation’s future budget
deficits by $1 trillion.

“It is paid for. It’s fiscally responsible and will end a decade
long drag on our economy,” Obama said in the East Room of the White

But many lawmakers and fiscal experts wonder how the new health
bill will affect the nation’s bottom line.

Congressional Republicans continue to challenge the fiscal
assessment by the Congressional Budget Office that the plan would reduce
budget deficits by $143 billion over a decade and more than $1.2
trillion in the second ten years.

Sen. Judd Gregg, the ranking Republican on the Senate Budget
Committee, said Tuesday that if more realistic assumptions are made, the
health care plan would increase budget deficits by $618 billion over the
first ten years and $1.8 trillion over twenty years.

Among other things, Gregg said the CBO estimate does not include
$114 billion in new discretionary spending over the next ten years and
does include $529 billion in Medicare savings which he said are
unrealistic given that the program has unfunded liabilities of $38

Rep. Paul Ryan, the ranking Republican on the House Budget
Committee, has said the plan is a “fiscal Frankenstein” that includes
several new entitlement programs — just as a new commission is
beginning work to help overhaul the massive cost of existing

Former Congressional Budget Office director Douglas Holtz-Eakin, an
aide to John McCain’s presidential campaign, challenged the fiscal
assumptions underlying the plan in a Sunday essay in the New York Times.

“If you strip out all the gimmicks and budgetary games and rework
the calculus … the health care legislation would raise, not lower,
federal deficits, by $562 billion,” he said.

Holtz-Eakin also cited the purported Medicare savings as “perhaps
the most amazing big of unrealistic accounting.”

“But Medicare is already bleeding red ink, and the health care bill
has no reforms that would enable the program to operate more cheaply in
the future. Instead, Congress is likely to continue to regularly
override scheduled cuts in payments to Medicare doctors and other
providers,” he writes.

The Concord Coalition, an independent fiscal watchdog, issued a
report Monday that raises budget concerns.

It said achieving Medicare savings will be difficult and added that
the bill creates cost control strategies and projects that could
work–but are not certain to.

“These may bear fruit at some future point but success is far from
certain. It will require concerted and cooperative efforts by state and
federal officials, hospitals, doctors, insurance companies and millions
of patients. It will also require the political will to make the savings
stick why they begin to pinch,” it said.

The budget group said that while the CBO deficit estimates “offer
some reassurance about the legislation, there is a great deal of
downside risk that these projections will prove to be optimistic.”

“And even is everything goes according to plan, the promised
deficit reduction will be quite modest compared to the trillions of
dollars that current projections indicate the country will add to its
debt in the coming decade,” the budget group said.

** Market News International Washington Bureau: (202) 371-2121 **

[TOPICS: M$U$$$,MFU$$$,MCU$$$]