CBO Looks at Republican Budget Proposal

The Republican party has attempted to put forth some counter-proposals to Democratic legislative initiatives.  One of these is the “Roadmap for America’s Future Act”, which includes reforms to the Social Security, Medicare and other programs.  The Congressional Budget Office has examined the effects of this Act on spending and the deficit.  (CBO Letter) The primary health-related provisions include reducing certain Medicare payments; limiting medical malpractice awards; competitive bidding for Medicare Advantage plans;  making high-income Medicare beneficiaries pay a premium for the drug benefit and making more beneficiaries pay a Part B premium; eventually voucherizing the Medicare program, limiting growth in the value of the voucher and giving a smaller voucher to high income beneficiaries;  increasing the Medicare eligibility age over time; limiting Medicaid spending growth; and repealing the current employment-based insurance tax exclusion and replacing it with a tax credit.

CBO found that federal health spending would be significantly reduced under the Act’s proposals, as would national health expenditures.  In addition, there would likely be some unquantified decrease in the number of people with health care coverage.  The overall proposal , if implemented would result in far lower federal spending and deficits, and 70% higher per person GDP, than the current fiscal projection from CBO.  In fact, the current projection is so bad that the country essentially implodes around 2050.  Given that situation, something like the America’s Future Act almost has to be considered.  The impact of controlling federal spending and the deficit and debt is far higher GDP growth, which directly corresponds to Americans’ quality of life.  Much of the spending reduction is related to the health reforms.  We need a serious debate about measures similar to those proposed in this Act if we are really going to get our federal fiscal house in order.  That should probably be a priority over expanding insurance coverage.