by John M. Curtis
(310) 204-8700

Copyright Aug 4, 2009
All Rights Reserved.

              Promises that President Barack Obama’s national health care plan will not add to the growing federal budget deficit are wishful thinking.  When former President George W. Bush pushed for a Medicare prescription drug plan he also talked of vast savings from the drug industry.  Whatever the savings, the Medicare Part D prescription drug plan costs taxpayers about $50 billion a year.  President Obama and his budget director Peter Orszag claim national health care will save taxpayers billions in long-term costs by emphasizing wellness and preventive care, streamlining delivery systems and controlling inflationary pressures.  If Barack fulfills his dream to cover currently 46 million Americans, it’s not going to be cheap.  All the rosy estimates about how the program will pay for itself or provide a stimulus for a booming economy don’t add up.  Barack’s plan will cost far more than Bush’s.

            Administration officials are busy scrambling, before Congress returns in September, to account for expected astronomical costs.  Conservative estimates are around $10 billion a month, a whopping sum when you consider Washington’s record budget deficits.  Federal Reserve Chairman Ben S. Bernanke has warned recently about the potentially crippling effects of running a nearly $2 trillion budget deficit.  International Monetary Fund, World Bank and foreign governments, including Russia and China, have warned the U.S. against such massive debt.  Recent talk about replacing the dollar as the world’s reserve currency has spooked investors from buying U.S. treasuries, leaving the Fed and U.S. Treasury cash-strapped.  Contrary to White House projections, the Congressional Budget Office predicts a cost of $1 trillion to the federal budget deficit over the next 10 years.

            Current backroom deals with the American Medical Assoc. and Pharmaceutical Research and Manufacturers of America [PhRMA] attempt to assure doctors’ reimbursements and drug industry profits.  PhRMA president, former Louisiana congressman Billy Tauzin, wants Obama to ban foreign drug imports to assure U.S. drug industry profits.  PhRMA insists that foreign-made drugs are dangerous, despite the fact that they’re made to the exact same specs as U.S. drugs.  Bush also caved in to industry pressure to reign-in drug costs, allowing imports to reduce the government’s costs in the Medicare Part D program.  Reducing costs in any national plan must include drug companies who, for too long, have gouged U.S. consumers.  Just as the insurance lobby goes along kicking-and-screaming, the drug industry too must give more than token only  support. 

            U.S. Congress and taxpayers must understand with their eyes wide open that national health care will cost a certain percentage of Gross Domestic Product.  If the Congress can authorize $10 billion a month to pay for Iraq and Afghanistan, they can  allocate the same amount for Barack’s health plan.  More empty promises about reducing the federal budget deficit can’t hide the fact that Barack’s plan will cost the treasury nearly $10 billion a month.  White House projections about Medicare or Medicaid cost savings won’t come close to financing national health care.  Letting Bush’s tax cuts to the wealthy expire won’t pay the whopping sum for national health care.  If the stock market continues to rally, the government should collect more capital gains taxes and reduce  growing budget deficit.  No matter how much the economy growth, paying for health care is still costly.

            White House officials haven’t explained how they’ll to pay for Barack’s plan.  Taxing the wealthy has its limits and won’t account for the billions needed yearly to insure 48 million new beneficiaries.  “From what we’ve seen so far, I don’t look at this as a cost-saving effort,” said Robert Bixby, executive director of the Concord Coalition, a budget watchdog group, questioning how the government plans to pay for national health care without running up bigger deficits and imperiling the economy.  Money saved from scaling down the Iraq War has already been spent ramping up Afghanistan where a new U.S. offensive calls for more troops and greater expenses.  July witnessed Afghanistan’s biggest casualties since 2001, killing 76 U.S. soldiers in a military surge against the Taliban.  More resources in Ahghanistan offset any expecting savings from scaling back the Iraq War.

            White House, Congress and the American people need to accept the nearly $10 billion a year price tag for national health care.  Whatever the expected savings, it’s going to cost roughly the same amount currently paid to fund the Iraq and Afghan wars.  Whether the country likes it or not, there’s a price to pay for national security and an even bigger one for national health care.  When Congress passed Medicare in 1963 under President Lyndon B. Johnson, they implemented a dedicated Medicare tax to fund the costliest government program since Social Security.  National Health Care also promises to carry a whopping price tag and needs a dedicated funding stream.  With federal budget deficits hreatening the overall economy, Barack must find realistic revenue streams to fund his health care program.  There’s simply too much at stake for the country to jump in blindly.

 John M. Curtis writes politically neutral commentary analyzing spin in national and global news.  He's editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.