In his November 12 Washington Post column, George Will asserted that "[g]old increasingly looks to investors to be a more reliable store of value than governments' bonds are, especially U.S. bonds as the U.S. government threatens to pile a mammoth health-care entitlement onto the nation's Ponzi welfare state, increasing the nation's debt and borrowing." However, Will's suggestion that health care reform will “increas[e] the nation's debt and borrowing” is undermined by the conclusion of the Congressional Budget Office (CBO) that health care reform bills in the House and the Senate will reduce federal deficits over 10 years and are expected to continue to yield savings beyond 2019.
Will baselessly claimed health care reform plans will increase U.S. “debt and borrowing”
Published
Will falsely suggested health care reform is not paid for
From Will's November 12 Washington Post column:
Last month, India purchased 200 tons of gold at $1,045 an ounce, before the price topped $1,108 on Monday. China, too, may increasingly diversify from paper -- i.e., bonds -- into gold, the price of which, some experienced investors believe, could soar to $2,500 an ounce in three to five years. One reason for all this is U.S. behavior.
India's 2008 gross domestic product was $1.2 trillion, so its $6.7 billion purchase was small beer. It may, however, be a large portent: Gold increasingly looks to investors to be a more reliable store of value than governments' bonds are, especially U.S. bonds as the U.S. government threatens to pile a mammoth health-care entitlement onto the nation's Ponzi welfare state, increasing the nation's debt and borrowing.
In fact, CBO found that House bill coverage costs are “more than offset”
Will ignored CBO's finding that bill would result in “a net reduction in federal budget deficits of $109 billion over the 2010-2019 period.” CBO stated in a November 6 estimate that “CBO and the staff of JCT now estimate that, on balance, the direct spending and revenue effects of enacting H.R. 3962, incorporating the manager's amendment, would yield a net reduction in federal budget deficits of $109 billion over the 2010-2019 period.” From CBO's cost estimate:
CBO expects continued savings from House bill after first 10 years. According to CBO, the House bill is expected to continue reducing deficits beyond the 10-year budget window that ends in 2019. From CBO's October 29 preliminary analysis of the House bill:
All told, H.R. 3962 would reduce the federal deficit by $9 billion in 2019, CBO and JCT estimate. After that, the added revenues and cost savings are projected to grow slightly more rapidly than the cost of the coverage expansions. In the decade after 2019, the gross cost of the coverage expansions would probably exceed 1 percent of gross domestic product (GDP), but the added revenues and cost savings would probably be greater. Consequently, CBO expects that the legislation would slightly reduce federal budget deficits in that decade relative to those projected under current law-with a total effect during that decade that is in a broad range between zero and one-quarter percent of GDP. The imprecision of that calculation reflects the even greater degree of uncertainty that attends to it, compared with CBO's 10-year budget estimates, and the effects of the bill could fall outside of that range.
Senate Finance Committee bill also projected to reduce deficits
CBO found that the legislation would reduce the deficit by $81 billion over 10 years. As of November 12, the Senate has not released its final health care reform bill. However, an October 7 CBO analysis found that the Senate Finance Committee's health care reform bill “would result in a net reduction in federal budget deficits of $81 billion over the 2010-2019 period”:
According to CBO and JCT's assessment, enacting the Chairman's mark, as amended, would result in a net reduction in federal budget deficits of $81 billion over the 2010-2019 period (see Table 1). The estimate includes a projected net cost of $518 billion over 10 years for the proposed expansions in insurance coverage. That net cost itself reflects a gross total of $829 billion in credits and subsidies provided through the exchanges, increased net outlays for Medicaid and the Children's Health Insurance Program (CHIP), and tax credits for small employers; those costs are partly offset by $201 billion in revenues from the excise tax on high-premium insurance plans and $110 billion in net savings from other sources. The net cost of the coverage expansions would be more than offset by the combination of other spending changes that CBO estimates would save $404 billion over the 10 years and other provisions that JCT and CBO estimate would increase federal revenues by $196 billion over the same period.1 In subsequent years, the collective effect of those provisions would probably be continued reductions in federal budget deficits. Those estimates are all subject to substantial uncertainty.
CBO expects Senate Finance bill to continue to reduce deficits beyond 2019. From CBO's October 7 analysis:
All told, the proposal would reduce the federal deficit by $12 billion in 2019, CBO and JCT estimate. After that, the added revenues and cost savings are projected to grow more rapidly than the cost of the coverage expansion. Consequently, CBO expects that the proposal, if enacted, would reduce federal budget deficits over the ensuing decade relative to those projected under current law -- with a total effect during that decade that is in a broad range between one-quarter percent and one-half percent of GDP. The imprecision of that calculation reflects the even greater degree of uncertainty that attends to it, compared with CBO's 10-year budget estimates.