The men and women charged with figuring out how to reduce federal deficits and debt got some more bad news this morning: the numbers keep getting worse.That was the news from the nonpartisan Congressional Budget Office, which for the first time took into consideration the new health care law, heralded by President Obama and Democrats for reducing deficits in the long run.
The new report doesn’t contradict that. It simply points out that any long-term savings from the health-care law, such as from Medicare savings, aren’t enough to turn deficits around.
Moreover, the report casts doubt on whether Congress will stick to the tougher aspects of the law. If it doesn’t — for instance, if it doesn’t cut Medicare payments to doctors — the fiscal picture will be far worse.
First, the numbers: debt held by the public will rise from 62% of the economy to 79% over the next 25 years. If assumptions are made about what Congress is likely to do — for instance, maintain some tax cuts and avoid Medicare cuts to doctors — that percentage increase to 185% of the economy in 2035.
CBO Director Douglas Elmendorf told President Obama’s fiscal commission that heatlh care costs remain the primary problem. The health care law passed earlier this year, he said, “made a dent in the problem but did not substantially diminish that challenge.”
The 18-member bipartisan fiscal commission is charged with proposing changes that would reduce the federal budget deficit — now $1.5 trillion — and the cumulative national debt — now $13.1 trillion. Congress is supposed to vote on any recommendations it makes, but it takes 14 of 18 members to make any.
Therein lies the rub. If the first few meetings of the commission offer any clues, Democrats appointed by House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid may offer the biggest roadblock to action. Several of them have persistently defended continued stimulus spending to create jobs over any action now to reduce spending or raise taxes.
The third public commission meeting this morning got a bit heated when Rep. Jan Schakowsky, D-Ill., accused Elmendorf of being “irresponsible” by presuming in the report what a future Congress might do — even though the presumptions are based on the actions of past Congresses. Senate Finance Committee Chairman Max Baucus, D-Mont., also questioned CBO’s actions, if not its motives.
What has become clear in the commission’s early going is that Democrats don’t want to give up on stimulus, at least until unemployment rates hovering near 10% come down.
“We have deficits, but to me the biggest deficit we have is the jobs deficit,” said Rep. Xavier Becerra, D-Calif.
Senate Majority Whip Dick Durbin, D-Ill., was so pessimistic he even questioned the commission’s chances of reaching substantive agreements after Election Day.
“I don’t know if it’s politically possible, when I look around the table,” he said.
