As the Obama administration continues to plan the biggest expansion of entitlements in American history via health care "reform," comes a report from his own administration that key existing entitlement programs are very nearly insolvent:
The financial outlook for Medicare and Social Security has significantly worsened, as the bad economy and mounting job losses have pushed both programs years closer to insolvency, according to a grim report issued Tuesday by the Obama administration.
The new projection, in an annual report from the programs’ trustees, says that Medicare’s hospital insurance trust fund will be exhausted in 2017, just a year after President Obama would leave office if re-elected to a second term. Last year the trustees said they expected the fund to last until 2019.
The trustees also said that Social Security’s reserves now face depletion in 2037, four years sooner than the previous projection of 2041. The projections assume that there are no changes in current benefits, policies and tax rates. ...
The darker picture facing the two programs will complicate the president’s spending plans and policy ambitions; just Monday, the administration raised its estimate of the federal budget deficit this year to $1.84 trillion, the largest on record.
The time is past when Obama could just shrug this sort of news off as fallout from the prior administration. He owns this deficit. It's his budget. He has responsibility for entitlement reform, especially since his party controls both houses of Congress. Yet, he plans to open the federal tap even wider. It makes no sense.
The Obama administration wants you to believe, as Andrew Biggs observes, that:
... the real culprit is rising per capita health care costs – called "excess cost growth" – which push up spending even if the population doesn't get older. ... Under [this] view, only comprehensive health care reform – meaning, reform of private sector health provision in addition to government health plans – can stop rising prices. ...
[In fact, however,their own data] shows is that aging will be the largest driver of entitlement cost growth out through 2040 and likely beyond. ... Over the next 30 years, population aging is our main entitlements problem and it makes sense to seek solutions that are based on the problem we have, not the problem we want to have. Without downplaying healthcare funding issues, which are significant today and will grow even more so in the future, I can't help but think that some on the left have latched onto this new view because it promotes a policy outcome they happen to favor: increased government control over private sector health care provision for working-age people. I suspect that many of these folks would favor more government control even if health care costs weren't rising.
In other words, we're going to socialize 17% of the economy and it won't solve a damned thing. This has to be the issue of the 2010 election cycle.
Of course, this is precisely what conservatives have been talking about for years. Social Security, Medicare and the like are nothing more than legalized Ponzi schemes, dependent upon political and financial ignorance. May those in power who knew better and enabled these systems to continue unabated suffer the knowledge that they helped bring down a nation.
Posted by: Mike | 05/13/2009 at 08:53 AM