http://www.cbpp.org/cms/index.cfm?fa=view&id=1258
I had a dialogue with a wonderful aunt earlier on facebook, I figured I'd include it here too, with an additional thought or two :) The question I responded to was about spending cuts. Responding to an article I came across about the American Public desiring compromise, but, NOT spending cuts proposed so far.....a wonderful family member suggested spending cuts were fine, just not for social programs; cut subsidies for the rich etc. One problem, perhaps among others, not nearly enough federal dollars spent on these "subsidies" to make a difference. Now, related to this, the cost of Obamacare; whatever compromise of Fiscal Cliff deal is reached in the foreseeable future, probably won't be the final deal - in fact - it will probably the "too rosy" an arrangement to really work. The cost of Obamacare is almost certain to be more than predicted or assumed. Mr. Foster already spelled out pitfalls to this - assumptions that were NOT terribly likely to work out, or prove to be correct.
Sounds good in principle, but there is not nearly enough Fed spending here to be helpful for avoiding the Fiscal Cliff. Most Federal dollars are spent on entitlements :SS, Medicare, Medicaid, Military, Benefits for Retirees, and veterans, etc. As of 2012 we are STILL looking at a close to a Trillion Dollar Deficit according to the most recent CBO projections I have seen. The so-called "safety net" programs have to be touched and/or modified in some way if we are going to get our debt trajectory in an acceptable condition. And, whatever they come up with now is a "Dream Case" scenario. Obamacare is going to be much more expensive that originally "scored" (the Doc Fix alone is a problem) so more cuts will be required later when the assumptions behind Medicare don't work. (Foster laid out some real concerns about some assumptions...some of which are almost certain NOT to "hold" or pan out.
This will actually get worse before it gets better. The "Doc Fix" - which was NOT included in Obamacare has not been worked out yet; this alone which is will cost tens, if not hundreds of Billions of dollars. The official information is right below on this....but the short version...this is about a reportedly 300 Billion Dollar cost that is not accounted for in Obamacare. (as reportedly estimated by the CBO) http://www.washingtonpost.com/blogs/wonkblog/post/faq-the-doc-fix/2011/11/22/gIQAnv6wkN_blog.html
"You asked about the total budgetary impact of enacting the reconciliation proposal (the amendment to H.R. 4872), the Senate-passed health bill (H.R. 3590), and the Medicare Physicians Payment Reform Act of 2009 (H.R. 3961). CBO estimates that enacting all three pieces of legislation would add $59 billion to budget deficits over the 2010–2019 period.
Under current law, Medicare’s payment rates for physicians’ services will be reduced by about 21 percent in April 2010 and by an average of about 2 percent per year for the rest of the decade. H.R. 3961 would increase those payment rates by 1.2 percent in 2010 and would restructure the sustainable growth rate mechanism beginning in 2011. Those changes would result in significantly higher payment rates for physicians than those that would result under current law. CBO estimates that enacting H.R. 3961, by itself, would cost about $208 billion over the 2010–2019 period. (That estimate reflects the enactment of two short-term extension acts, which lowered the cost in 2010 by about $2 billion compared with CBO’s estimate of November 4, 2009.)…
CBO estimates that enacting H.R. 3961 together with those two bills would add $59 billion to budget deficits over the 2010–2019 period. That amount is about $10 billion less than the figure that would result from summing the effects of enacting the bills separately. The $10 billion difference occurs primarily because H.R. 3590 and the reconciliation proposal would modify how the government’s payments to Medicare Advantage plans are set."
Here is some data from the CBO for the 2012 fiscal year projected deficit.....CBO’s Current-Law Baseline
"CBO projects a $1.1 trillion federal budget deficit for fiscal year 2012 if current laws remain unchanged. Measured as a share of the nation’s output (gross domestic product, or GDP), that shortfall of 7.0 percent is nearly 2 percentage points below the deficit recorded in 2011, but still higher than any deficit between 1947 and 2008. Over the next few years, projected deficits in CBO’s baseline decline markedly, dropping to under $200 billion and averaging 1.5 percent of GDP over the 2013–2022 period." The whole page from the CBO is linked above. Some notable assumptions which may or may not actually work.
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