Face Facts About Paying for Reform

During last week's health-care summit, President Barack Obama pointed out a fatal flaw in the most recent major expansion of a federal entitlement: When a Republican-controlled Congress and the president (George W. Bush at the time) pushed through a prescription drug benefit for Medicare recipients in 2003, they neglected to include a means for paying for it.

Unfortunately, the current president and a now Democratic-controlled Congress appear determined to make the same mistake.

The president, in pushing the Senate's version of health-care reform, insisted again this week that the plan not only would be fully funded but would actually reduce the federal deficit.

To arrive at the conclusion, however, is to believe in a seemingly miraculous revival of fiscal discipline in Washington. Although not impossible, it's far from likely.

The first problem is almost immediate. Medicare payments to physicians are scheduled to drop by 22 percent in April. Congress, however, is almost certain to delay those cuts, as it has for the past 13 years. The Senate version of health reform doesn't take that eventuality into account, even though it likely will add about $250 billion in costs in a decade.

A second, and even bigger, problem wouldn't be felt for eight years.

That's when the president (who will be out of office by that time) is counting on a future administration and Congress to slap a new tax on so-called Cadillac insurance plans. If that future revenue doesn't materialize, then the fiscal projection for the current proposal quickly turns to red in outlying years. Why wait eight years to levy the tax? Because Congress' current leadership balked at the plan, out of deference to union leaders who objected to the hit their members would take. If Congress isn't willing to create the tax now, what evidence is there that future leaders will buy into it?

The promise of fiscal responsibility is based on yet another faulty assumption: that Congress won't expand the new entitlement in the future, or at least not without adoption of offsetting tax increases or budget cuts. Does anyone who's watched Washington at work in the past 40 years or so believe that will happen?

The president and congressional leaders are adamant that health-care reform is a vital piece of securing the nation's economic future. But certainly no less important is confronting the nation's burgeoning debt — now at $12.5 trillion. If health reform is mandatory, then paying for it should be as well.

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