Budget Battle Begins — Countdown To Defund Obamacare or Government Shutdown? — Videos
TRIFECTA – Defund ObamaCare? Will GOP Efforts Succeed or Fail?
On Obamacare vote, senators will ‘find Jesus’
Obama Criticizes Congress After Vote to Defund ‘Obamacare’
Ted Cruz on Defunding Obamacare – Chris Wallace Interview – Fox News – 9/22/13
Senator Ted Cruz (R-Tx) appeared on Fox News Sunday to defend his push to defund Obamacare, which has landed him in trouble with his own party. Host Chris Wallace pressed Cruz on whether he had gotten the GOP into a fight with no clear strategy or end game, how he intended to get out of it, and if he would actually support the politically unpopular option of a government shutdown.
“Last week’s vote was a tremendous victory,” Cruz said of the House’s passage of a continuing resolution that did not fund Obamacare. “Just a few weeks ago, no pundit in Washington thought it was possible we’d see the vote we saw on Friday…Next week is a time for party unity. Next week, all Senate Republicans, I hope, should come together and support the House bill. In my view, Senate Republicans should stand united to stop Harry Reid from changing the House bill, and in particular from inserting the funding with fifty-one votes.”
But Cruz is in a jam, as he only has enough votes to deny cloture, not to stop Senate Democrats from amending the resolution to include funding for the Affordable Care Act, which means his only way of stopping the funding is to filibuster the very bill he called on the House to pass—leading to a goverment shutdown.
“[Harry Reid] wants to use brute political power to force ObamaCare through with just Democrats, exactly the same way he passed the bill three years ago,” Cruz continued. “If he does that, then Senate Republicans have the tool we always use when the Majority Leader is abusing his power, which is we deny cloture.”
“You say this is brute political power,” a very-unconvinced Wallace said. “It’s Senate Rule 22, which has been around for years. It’s part of the Senate rules, and it says after you allow debate and take cloture, that you can pass an amendment by Senate majority. That’s the rule!”
“You’re right, that is one rule,” Cruz responded. “But there is another rule that says it takes sixty votes to get cloture…If the majority’s going to run the minority over with a train, the minority has the ability to stop them…Any vote for cloture, any vote to allow Harry Reid to add funding for Obamacare with just a fifty-one vote threshold—a vote for cloture is a vote for ObamaCare.”
“If Harry Reid kills this bill in the Senate, I think the House should hold its ground and should begin passing smaller continuing resolutions one department at a time,” Cruz said. “It should start with a continuing resolution focused on the military. Fund the military, send it over, and let’s see if Harry Reid is willing to shut down the military just because he wants to force ObamaCare on the American people.”
Wallace asked Cruz to respond to numerous angry Republican lawmakers, who are lambasting Cruz for talking big on defunding while kicking the onus of the movement back to the House.
“There are lots of folks in Washington that choose to throw rocks,” Cruz replied, “but I’m not going to reciprocate.”
House votes to derail Obamacare, fund government
BREAKING: House Votes to Defund Obamacare
BREAKING: House Speaker Boehner Speaks After ObamaCare Voted Defunded
“The House voted 230-189 along party lines Friday to approve a stopgap spending bill to fund the federal government through mid-December, but it is facing certain defeat in the Senate because it includes language aiming to dismantle President Obama’s health care law.
Without a stopgap spending bill, the federal government will feel the effects of a shutdown when the fiscal year ends on Sept. 30. The bill extends the current rate of government spending at $986 billion a year.
House Republicans attached a provision to defund the Affordable Care Act, a consistent target of congressional Republicans. However, the provision has no chance of approval in the Democratic-controlled Senate and it faces a veto threat from Obama.
Next week, the Senate is expected to begin debate on the spending bill, where Senate Majority Leader Harry Reid, D-Nev., will strip out the health care language and send a bill back to the House that simply extends current spending.
If the Senate runs out the clock on the time for debate, the vote could come as late as next weekend, giving House GOP leaders less than 48 hours to respond.
House Speaker John Boehner, R-Ohio, has not committed to allowing a vote on a spending bill that does not address the health care law. House Republicans will then have three options: reject it, pass it or amend it and send it back to the Senate again.
The effects of a shutdown would not be immediately felt by most Americans. Essential government programs such as air traffic control, Social Security, Medicare and mail delivery would all continue, but national parks and museums would be closed, and agency operations would slow down or stop. The White House and the U.S. Congress would continue to operate as well.
But the political risks are great. The last time the government shut down was during the Clinton administration in a budget battle against Republicans led by then-speaker Newt Gingrich, R-Ga., which resulted in a public backlash against the GOP.
Boehner has said Republicans are not seeking a government shutdown, but eye it as an opportunity to start a broader offensive against the health care law. Republicans are also seeking to delay the implementation of the law for one year in exchange for raising the debt ceiling, the nation’s borrowing limit.”
Rep. Salmon: Defunding Obamacare “the will of the people”
Sen Ted Cruz with Neil Cavuto on Defunding Obamacare
Ted Cruz on Defunding Obamacare, the Grassroots Tsunami, and More on CNN’s State of the Union
DeMint and Beck on Defunding Obamacare
House passes spending bill to defund Obamacare
House Republicans passed their stopgap funding bill Friday to keep government open while terminating the new health care law, setting up a final showdown next week with Senate Democrats and President Obama who have firmly rejected the GOP approach.
The 230-189 vote, which split almost exactly along party lines, is the precursor to the big action next week, when the Democratic majority in the Senate is expected to strip out the health care provisions and send the bill back to the House — where Republicans will have to decide whether they can accept it at that point.
All sides are racing to beat a Sept. 30 deadline, which is when current funding for the federal government runs out. The new measure would fund the government through Dec. 15, essentially at last year’s levels, and would leave the budget sequester cuts in place.
But Republicans on Friday also attached two amendments to the final bill — one to direct how government spending is prioritized in the event the Treasury Department bumps up against its borrowing limit in the coming weeks, and another that strips out funding for President Obama’s signature Affordable Care Act, which would effectively stop its implementation.
“The American people don’t want the government shut down, and they don’t want Obamacare,” said House Speaker John A. Boehner, who rallied with fellow Republicans after the vote in a show of unity that seemed designed to quell speculation about a rebellion within the House Republican Conference.
Republicans said the move was designed to put some Democratic senators on the spot. House Majority Leader Eric Cantor named several who are up for re-election next year, including Louisiana Sen. Mary Landrieu and Alaska Sen. Mark Begich.
Democrats said the bill was an outrage that exposed Republicans’ true intention of trying to force a government shutdown.
“It is a wolf in wolf’s clothing,” said Minority Leader Nancy Pelosi, California Democrat. “Either you don’t know what you’re doing or this is one of the most intentional acts of brutality you’ve cooked up.”
Rep. Nita Lowey, the top Democrat on the House spending committee, said limiting government funding now would immediate consequences, such as preventing federal authorities from being able to help out as Colorado recovers from devastating floods.
Democrats urged the GOP to negotiate with them to raise taxes in order to spend more.
Republicans countered that if they’d wanted to shut down government, they wouldn’t have brought any bill to the floor.
“We are pragmatists. We know we have to pass bills to fund government. Thus this bill,” said House Appropriations Committee Chairman Hal Rogers, Kentucky Republican.
51% Favor Government Shutdown Until Congress Cuts Health Care Funding
President Obama yesterday criticized congressional Republicans for insisting on spending cuts in any budget deal that continues government operations past October 1, saying they risk “economic chaos.” Most voters agree a federal government shutdown would be bad for the economy, but they’re willing to risk one until Democrats and Republicans in Congress agree on ways to cut the budget, including cuts in funding for the new national health care law.
Just 20% of Likely U.S. Voters believe a partial shutdown of the federal government would be good for economy, according to a new Rasmussen Reports national telephone survey. Fifty-six percent (56%) say such a shutdown would be bad for the economy, even though payments for things like Social Security, Medicare and unemployment would continue. Sixteen percent (16%) think it would have no impact. (To see survey question wording, click here.)
But 58% favor a federal budget that cuts spending, while only 16% prefer one that increases spending. Twenty-one percent (21%) support a budget that keeps spending levels about the same.
This helps explain why 53% would rather have a partial government shutdown until Democrats and Republicans can agree on what spending to cut. Thirty-seven percent (37%) would prefer instead that Congress avoid a shutdown by authorizing spending at existing levels as the president has proposed.
Some conservative Republicans in both the House and Senate are refusing to approve a budget unless it slows or stops funding for the health care law, but the president and most congressional Democrats are adamantly opposed to any such cuts. However, 51% of voters favor having a partial government shutdown until Democrats and Republicans agree on what spending for the health care law to cut. Forty percent (40%) would rather avoid a government shutdown by authorizing spending for the health care law at existing levels.
Late last month, 42% of Republicans said threatening to vote against a government funding bill unless it cuts off funds for the health care law will help the GOP. Twenty-eight percent (28%) disagreed, while 14% said it would have no impact. Fifty-two percent (52%) of Democrats and 48% of unaffiliateds thought it would hurt Republicans.
Most voters continue to dislike the health care law, and 54% expect it to increase, not reduce, health care costs. From the beginning of the debate over the law four years ago, voters have consistently said that cost is their number one health care concern.
Under the health care law, uninsured Americas are required to have health insurance by January 1, and failure to do so could result in sizable penalties. Now that the president has delayed implementation of the employer mandate portion of his new national health care law, 56% of voters think he also should delay the requirement that every American buy or obtain health insurance.
The survey of 1,000 Likely Voters was conducted on September 14-15, 2013 by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research, LLC. See methodology.
The president sounded similar dire economic warnings before the so-called sequester automatic budget cuts kicked in March 1, but even after some highly publicized flight delays that were blamed on the sequester, just 24% of voters felt government spending was cut too much. Forty-four percent (44%) said spending wasn’t cut enough. Now, interestingly, the president is proposing continuing federal spending at least in the short term at the lower levels set by the sequester.
Fifty-six percent (56%) of Americans think that when government agencies are forced to cut their budgets, they generally cut popular programs first to make the cuts seem more significant.
Democrats are far more concerned about the prospects of a government shutdown than Republicans and unaffiliated voters are. Seventy-nine percent (79%) of voters in the president’s party think a partial shutdown would be bad for the economy, but just 40% of GOP voters and 48% of those not affiliated with either of the major parties agree. But then 78% of Republicans and 64% of unaffiliateds favor a federal budget that cuts spending, a view shared by just 34% of Democrats.
Sixty-three percent (63%) of Democrats agree with the president and would prefer to avoid a shutdown by authorizing spending at existing levels. Seventy-four percent (74%) of Republicans and 62% of unaffiliated voters would rather have a shutdown until the two sides can agree on what spending to cut.
Similarly, 78% of GOP voters and 57% of unaffiliateds like the idea of a partial shutdown until Democrats and Republicans can agree on what spending for the health care law can be cut. Sixty-nine percent (69%) of Democrats favor instead avoiding a shutdown by authorizing spending for the law at existing levels.
Looking to the future, 80% of GOP voters believe it is more important for their party to stand for what it believes in rather than to work with the president. Right now, 65% of Likely Republican Voters think Republicans in Congress have lost touch with GOP voters from throughout the nation over the last several years, while 59% of Likely Democratic Voters think Democrats in Congress have done a good job of representing their party’s values.
The president and congressional Democrats have tied many of their criticisms of the Republican budget positions to the Tea Party. Just 39% of all voters now have a favorable opinion of the Tea Party, although 78% of Republicans believe it’s at least somewhat important for their leaders in Congress to work with the Tea Party, including 45% who think it’s Very Important.
While voters are more critical of the Tea Party itself, most continue to agree with its small government principles. Sixty-four percent (64%) prefer a smaller government with fewer services and lower taxes over a larger one with more services and higher taxes. Sixty-two percent (62%) think the government should cut spending rather than increase it in reaction to the nation’s economic problems.
Seventy-seven percent (77%) of all likely voters say they have been following recent news stories about the federal budget debate in Congress, with 42% who say they are following Very Closely.
Obamacare Will Increase Health Spending By $7,450 For A Typical Family of Four
Chris Conover, Contributor
It was one of candidate Obama’s most vivid and concrete campaign promises. Forget about high minded (some might say high sounding) but gauzy promises of hope and change. This candidate solemnly pledged on June 5, 2008: “In an Obama administration, we’ll lower premiums by up to $2,500 for a typical family per year….. We’ll do it by the end of my first term as President of the United States.” Unfortunately, the experts working for Medicare’s actuary have (yet again) reported that in its first 10 years, Obamacare will boost healthspending by “roughly $621 billion” above the amounts Americans would have spent without this misguided law.
What this means for a typical family of four
$621 billion is a pretty eye-glazing number. Most readers will find it easier to think about how this number translates to a typical American family—the very family candidate Obama promised would see $2,500 in annual savings as far as the eye could see. So I have taken the latest year-by-year projections, divided by the projected U.S. population to determine the added amount per person and multiplied the result by 4.
Simplistic? Maybe, but so too was the President’s campaign promise. And this approach allows us to see just how badly that promise fell short of the mark. Between 2014 and 2022, the increase in national health spending (which the Medicare actuaries specifically attribute to the law) amounts to $7,450 per family of 4.
Let us hope this family hasn’t already spent or borrowed the $22,500 in savings they might have expected over this same period had they taken candidate Obama’s promise at face value. In truth, no well-informed American ever should have believed this absurd promise. At the time, Factcheck.org charitably deemed this claim as “overly optimistic, misleading and, to some extent, contradicted by one of his own advisers.” TheWashington Post less charitably awarded it Two Pinocchios (“Significant omissions or exaggerations”). Yet rather than learn from his mistakes, President Obama on July 16, 2012 essentially doubled-down on his promise, assuring small business owners “your premiums will go down.” He made this assertion notwithstanding the fact that in three separate reports between April 2010 and June 2012, the Medicare actuaries had demonstrated that the ACA would increase health spending. To its credit, the Washington Post dutifully awarded the 2012 claim Three Pinocchios (“Significant factual error and/or obvious contradictions.”)
The past is not prologue: The burden increases ten-fold in 2014
As it turns out, the average family of 4 has only had to face a relatively modest burden from Obamacare over the past four years—a little over $125. Unfortunately, this year’s average burden ($66) will be 10 times as large in 2014 when Obamacare kicks in for earnest. And it will rise for two years after that, after which it hit a steady-state level of just under $800 a year. Of course, all these figures are in nominal dollars. In terms of today’s purchasing power, this annual amount will rise steadily.
But what happened to the spending slowdown?
Some readers may recall that a few months ago, there were widespread reports of a slow-down in health spending. Not surprisingly, the White House has been quick to claim credit for the slowdown in health spending documented in the health spending projections report, arguing that it “is good for families, jobs and the budget.”
On this blog, Avik Roy pointed out that a) since passage of Obamacare, U.S. health spending actually had risen faster than in OECD countries, whereas prior to the law, the opposite was true. Moreover, to the degree that U.S. health spending was slowing down relative to its own recent past, greater cost-sharing was likely to be the principal explanation. Medicare’s actuarial experts confirm that the lion’s share of the slowdown in health spending could be chalked up to slow growth in the economy and greater cost-sharing. As AEI scholar Jim Capretta pithily puts it:
An important takeaway from these new projections is that the CMS Office of the Actuary finds no evidence to link the 2010 health care law to the recent slowdown in health care cost escalation. Indeed, the authors of the projections make it clear that the slowdown is not out of line with the historical link between health spending growth and economic conditions (emphasis added).
In the interests of fair and honest reporting, perhaps it is time the mainstream media begin using “Affordable” Care Act whenever reference is made to this terribly misguided law. Anyone obviously is welcome to quarrel with the Medicare actuary about their numbers. I myself am hard-put to challenge their central conclusion: Obamacare will not save Americans one penny now or in the future. Perhaps the next time voters encounter a politician making such grandiose claims, they will learn to watch their wallet. Until then, let’s spare strapped Americans from having to find $657 in spare change between their couch cushions next year. Let’s delay this law for a year so that policymakers have time to fix the poorly designed Rube Goldberg device known as Obamacare. For a nation with the most complicated and expensive health system on the planet, making it even more complicated and even more expensive never was a good idea.
 The Medicare actuary first issued a report carefully estimating the cost impact of Obamacare on April 22, 2010. Its annual national health expenditure projections reports for 2010, 2011 and 2012 all have contained tabulations showing that Obamacare will increase health spending over the next 10 years compared to a counterfactual scenario in which the law was never enacted.
House Democrats Raise Big Money Off Republican Push To ‘Defund Obamacare’
The Democratic Congressional Campaign Committee raised more than $840,000 in online contributions since House Speaker John Boehner (R-Ohio) announced last week that Republicans would include a measure to strip funding from the Affordable Care Act in a continuing resolution to fund the federal government.
The House Democratic party committee launched an online petition and blasted its large list of supporters for contributions to fight back against House Republicans immediately after Boehner’s Tuesday announcement.
The DCCC’s blast emails attacked House Republicans’ “extortion tactics” and their “complete cave to Tea Party Republicans.” Supporters were asked to donate $3 to the DCCC’s ObamaCare Rapid Response Fund.
By Sunday morning, two days after Republicans successfully passed a continuing budget resolution that would defund the health care law, the petition had more than 1 million signatures and the committee received 46,000 online donations, according to a DCCC aide. The average donation was $18.
“From the moment John Boehner and House Republicans announced that they would put this country on a path to shutdown — all so they could give insurance companies free rein, our grassroots supporters jumped into action,” DCCC press secretary Emily Bittner said in a statement. “Every time House Republicans demonstrate their priorities — protecting the wealthy, padding health insurance profits and forcing the middle class to pay more — our grassroots steps up.”
In the past two months, Republican groups have done their own fundraising off their push to defund President Barack Obama’s signature health care reform law. The Senate Conservatives Fund, a political action committee tied to Heritage Foundation president and former South Carolina Senator Jim DeMint, had its best off-election year fundraising month ever in August while running its “Don’t Fund Obamacare” website.
This week’s fundraising swell for the DCCC is comparable to two of its best online fundraising spurts in recent memory: the unveiling of the budget presented by Rep. Paul Ryan (R-Wis.), and the week Ryan was announced as Republican presidential candidate Mitt Romney’s running mate.
While the push to defund Obamacare has been a boon to fundraising on both sides, it’s unlikely to go much further. Senate Democrats, who control the chamber, will not approve or even bring a bill to the floor that would defund the health care law, and Obama slammed the effort while threatening a veto. Even Senate Republicans, including the voice of Obamacare opposition Sen. Ted Cruz (R-Texas), have said the measure is going nowhere.
Lower Health Insurance Premiums to Come at Cost of Fewer Choices
By ROBERT PEAR
Federal officials often say that health insurance will cost consumers less than expected under President Obama’shealth care law. But they rarely mention one big reason: many insurers are significantly limiting the choices of doctors and hospitals available to consumers.
From California to Illinois to New Hampshire, and in many states in between, insurers are driving down premiums by restricting the number of providers who will treat patients in their new health plans.
When insurance marketplaces open on Oct. 1, most of those shopping for coverage will be low- and moderate-income people for whom price is paramount. To hold down costs, insurers say, they have created smaller networks of doctors and hospitals than are typically found in commercial insurance. And those health care providers will, in many cases, be paid less than what they have been receiving from commercial insurers.
Some consumer advocates and health care providers are increasingly concerned. Decades of experience with Medicaid, the program for low-income people, show that having an insurance card does not guarantee access to specialists or other providers.
Consumers should be prepared for “much tighter, narrower networks” of doctors and hospitals, said Adam M. Linker, a health policy analyst at the North Carolina Justice Center, a statewide advocacy group.
“That can be positive for consumers if it holds down premiums and drives people to higher-quality providers,” Mr. Linker said. “But there is also a risk because, under some health plans, consumers can end up with astronomical costs if they go to providers outside the network.”
Insurers say that with a smaller array of doctors and hospitals, they can offer lower-cost policies and have more control over the quality of health care providers. They also say that having insurance with a limited network of providers is better than having no coverage at all.
Cigna illustrates the strategy of many insurers. It intends to participate next year in the insurance marketplaces, or exchanges, in Arizona, Colorado, Florida, Tennessee and Texas.
“The networks will be narrower than the networks typically offered to large groups of employees in the commercial market,” said Joseph Mondy, a spokesman for Cigna.
The current concerns echo some of the criticism that sank the Clinton administration’s plan for universal coverage in 1993-94. Republicans said the Clinton proposals threatened to limit patients’ options, their access to care and their choice of doctors.
At the same time, House Republicans are continuing to attack the new health law and are threatening to hold up a spending bill unless money is taken away from the health care program.
In a new study, the Health Research Institute of PricewaterhouseCoopers, the consulting company, says that “insurers passed over major medical centers” when selecting providers in California, Illinois, Indiana, Kentucky and Tennessee, among other states.
“Doing so enables health plans to offer lower premiums,” the study said. “But the use of narrow networks may also lead to higher out-of-pocket expenses, especially if a patient has a complex medical problem that’s being treated at a hospital that has been excluded from their health plan.”
In California, the statewide Blue Shield plan has developed a network specifically for consumers shopping in the insurance exchange.
Juan Carlos Davila, an executive vice president of Blue Shield of California, said the network for its exchange plans had 30,000 doctors, or 53 percent of the 57,000 doctors in its broadest commercial network, and 235 hospitals, or 78 percent of the 302 hospitals in its broadest network.
Mr. Davila said the new network did not include the five medical centers of the University of California or the Cedars-Sinai Medical Center near Beverly Hills.
“We expect to have the broadest and deepest network of any plan in California,” Mr. Davila said. “But not many folks who are uninsured or near the poverty line live in wealthy communities like Beverly Hills.”
Daniel R. Hawkins Jr., a senior vice president of the National Association of Community Health Centers, which represents 9,000 clinics around the country, said: “We serve the very population that will gain coverage — low-income, working class uninsured people.But insurers have shown little interest in including us in their provider networks.”
Dr. Bruce Siegel, the president of America’s Essential Hospitals, formerly known as the National Association of Public Hospitals and Health Systems, said insurers were telling his members: “We don’t want you in our network. We are worried about having your patients, who are sick and have complicated conditions.”
In some cases, Dr. Siegel said, “health plans will cover only selected services at our hospitals, like trauma care, or they offer rock-bottom payment rates.”
In New Hampshire, Anthem Blue Cross and Blue Shield, a unit of WellPoint, one of the nation’s largest insurers, has touched off a furor by excluding 10 of the state’s 26 hospitals from the health plans that it will sell through the insurance exchange.
Christopher R. Dugan, a spokesman for Anthem, said that premiums for this “select provider network” were about 25 percent lower than they would have been for a product using a broad network of doctors and hospitals.
Anthem is the only commercial carrier offering health plans in the New Hampshire exchange.
Peter L. Gosline, the chief executive of Monadnock Community Hospital in Peterborough, N.H., said his hospital had been excluded from the network without any discussions or negotiations.
“Many consumers will have to drive 30 minutes to an hour to reach other doctors and hospitals,” Mr. Gosline said. “It’s very inconvenient for patients, and at times it’s a hardship.”
State Senator Andy Sanborn, a Republican who is chairman of the Senate Commerce Committee, said, “The people of New Hampshire are really upset about this.”
Many physician groups in New Hampshire are owned by hospitals, so when an insurer excludes a hospital from its network, it often excludes the doctors as well.
David Sandor, a vice president of the Health Care Service Corporation, which offers Blue Cross and Blue Shield plans in Illinois, Montana, New Mexico, Oklahoma and Texas, said: “In the health insurance exchange, most individuals will be making choices based on costs. Our exchange products will have smaller provider networks that cost less than bigger plans with a larger selection of doctors and hospitals.”
Premiums will vary across the country, but federal officials said that consumers in many states would be able to buy insurance on the exchange for less than $300 a month — and less than $100 a month per person after taking account of federal subsidies.
“Competition and consumer choice are actually making insurance affordable,” Mr. Obama said recently.
Many insurers are cutting costs by slicing doctors’ fees.
Dr. Barbara L. McAneny, a cancer specialist in Albuquerque, said that insurers in the New Mexico exchange were generally paying doctors at Medicare levels, which she said were “often below our cost of doing business, and definitely below commercial rates.”
Outsiders might expect insurance companies to expand their networks to treat additional patients next year. But many insurers see advantages in narrow networks, saying they can steer patients to less expensive doctors and hospitals that provide high-quality care.
Even though insurers will be forbidden to discriminate against people with pre-existing conditions, they could subtly discourage the enrollment of sicker patients by limiting the size of their provider networks.
“If a health plan has a narrow network that excludes many doctors, that may shoo away patients with expensive pre-existing conditions who have established relationships with doctors,” said Mark E. Rust, the chairman of the national health care practice at Barnes & Thornburg, a law firm. “Some insurers do not want those patients who, for medical reasons, require a broad network of providers.”
Federal Spending by the Numbers, 2013: Government Spending Trends in Graphics, Tables, and Key Points
In 2013, federal spending approached $3.5 trillion and the deficit dropped to “only” $642 billion. Some are using this small improvement in the nation’s fiscal situation to avoid further budget tightening. But as the figures and graphics in this report show, this is the wrong conclusion to draw. Following four years of trillion-dollar deficits, the national debt will still reach nearly $17 trillion and exceed 100 percent of gross domestic product (GDP) at the end of the year. Publicly held debt (the debt borrowed in credit markets, excluding Social Security’s trust fund, for example), is alarmingly high at three-quarters of GDP. Without further spending cuts, it is on track to rise to a level last seen after World War II.
Deficits fell in 2013 because President Obama and Congress raised taxes on all Americans, the economy saw slight improvement which helped to bring in more revenue, and spending cuts from sequestration and spending caps under the Budget Control Act of 2011 took effect.
The nation should not take this short-term and modest deficit improvement as a signal to grow complacent about reining in exploding spending. Though deficits will decline for a few more years, existing spending cuts and tax increases will not prevent them from rising soon, and within a decade exceeding $1 trillion once again. Driving this is federal spending which, despite sequestration cuts, will grow 69 percent by 2023.
The nation’s long-term spending trajectory remains on a fiscal collision course. Total spending has exploded by 40 percent since 2002, even after inflation. Some programs have grown far in excess of that. Defense, however, has been slashed. Social Security, Medicare, Medicaid, and Obamacare are so large and growing that they are on track to overwhelm the federal budget. While the Budget Control Act of 2011 and sequestration are modestly restraining the discretionary budget, mandatory spending—including entitlements—continues growing nearly unabated. Without any changes, mandatory spending, including net interest, will consume three-fourths of the budget in just one decade.
Obamacare will add $1.8 trillion to federal health care spending by 2023. By 2015, health care spending will overtake Social Security as the largest budget item, including Obamacare’s coverage expansion provisions: a massive expansion of Medicaid and subsidies for the new health insurance exchanges.
While mandatory spending is growing out of control and needs reform, there are also plenty of places to cut in the rest of the budget. For example, the Internal Revenue Service spent $4.1 million on a lavish conference in 2010 for 2,609 of its employees in Anaheim, California. Expenses included $50,000 for line-dancing and “Star Trek” parody videos, $135,350 for outside speakers, $64,000 in conference “swag” for the employees, plus free meals, cocktails, and hotel suite upgrades.
Beyond waste, the federal government is too big. Energy spending increased over 2,000 percent since 2002—after adjusting for inflation. Today there are roughly 80 means-tested anti-poverty programs.
Washington must stop kicking the can down the road, or we could soon find ourselves teetering on the edge of a Greece-style meltdown. Instead, lawmakers should eliminate waste, duplication, and inappropriate spending; privatize functions better left to the private sector; and leave areas best managed on a more local level to states and localities. And they should make important changes to the entitlement programs so that they become more affordable and benefits help those with the greatest needs.
It is not too late to solve the impending spending and debt crisis, but the clock is ticking.
The Federal Budget
- Washington will spend nearly $3.5 trillion in 2013 while collecting $2.8 trillion in revenues, resulting in a deficit of $642 billion.
- Over the past 20 years, federal spending grew 63 percent faster than inflation.
- Mandatory spending, including Social Security and means-tested entitlements, doubled after adjusting for inflation. Discretionary spending grew by 49 percent.
- Despite publicly held debt surging to three-fourths the size of the economy (as measured by GDP), net interest costs have fallen as interest rates have dropped to historic lows.
- In 1963, defense spending was 9 percent of GDP and mandatory spending on entitlement programs was 6.1 percent of GDP, one-third lower.
- In 2013, spending on defense is at about 4 percen
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