National Debt May Increase by $2 Trillion in 2009
The Washington Post reports that the national debt may increase by $2 trillion during 2009. From the article:
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RSC Blog
Governors Against a Free Lunch
Please take 5 minutes to read this inspiring piece from two of our nation’s leading governors about the true costs of government bailouts. |
Romney to Detroit: Change Direction, No Bailout
Former Massachusetts Governor and Republican Presidential candidate Mitt Romney has an excellent op/ed on a potential auto-bailout in today’s NY Times. Romney, the son of George Romney, the former head of American Motors, writes: “IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed. Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course - the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.” Check out the rest of Gov. Romney’s excellent prescription for Detroit here. |
Baucus Health Plan Exposes Democrat Hypocrisy…
Last Wednesday, Senate Finance Committee Chairman Max Baucus (D-MT) issued a 98-page report outlining his proposals for reforming the health care system. Although his introduction stated that the platform “is not intended to be a legislative proposal,” Baucus did state his hope that the ideas raised would become a starting point for discussions on comprehensive health care reform during the 111th Congress. In reviewing the report’s contents, some conservatives may note several glaring contradictions present within its pages:
The RSC will monitor additional developments related to this proposal, and release a full analysis of the plan later this week. |
…While Proposing More New Spending, Little Cost Contol
Many conservatives may be concerned by the substance of the health reform proposal recently released by Senate Finance Committee Chairman Baucus. Similar in many respects to the less-detailed plan offered by President-elect Obama, the platform would expand the role of government in health care in significant, and historic, ways:
Just as worrisome to many conservatives are the lack of true cost-containment measures present in the Baucus proposal. Two of the plan’s prime savings targets—an expansion of the Medicaid drug rebate and one-sided cuts to Medicare Advantage plans—constitute little more than government-imposed price controls, which some conservatives may believe both ineffective and detrimental to new innovation. Some conservatives may believe that the true answer to reforming health care and slowing the growth of costs lies in harnessing innovation and competition. Implementing, rather than repealing, the Medicare premium support program would allow insurers to compete directly with Medicare to treat seniors in the most cost-effective manner. Additional means-testing for current entitlements would ensure that scarce government resources will go to those most in need of assistance—meaning that Warren Buffett and George Soros should not pay the same prescription drug premium as a senior making $20,000 per year. These efforts, coupled with initiatives to streamline costly state benefit mandates and other regulations, would expand coverage by slowing the growth of health costs, helping to ensure the future viability of our current entitlement programs. |
British U-Turn Illustrates Problems with Comparative Effectiveness
On November 4, the British Department of Health announced a reversal of a ban on “top-up” payments within the National Health Service (NHS). Previously patients who wished to use their own money to purchase drugs not deemed cost-effective by the NHS needed to forfeit their right to basic NHS care. The Government’s reversal will allow patients purchasing their own therapies to maintain their right to NHS care under certain conditions. In addition, the report proposed to raise the National Institute on Clinical Effectiveness’ (NICE) cost-effectiveness threshold for certain drug therapies, potentially allowing British patients access to some cancer drugs which the NHS had previously refused to pay. Conservatives may view both these developments as illustrative of the premise that comparative effectiveness research may not yield the potential savings its adherents claim. Practical political concerns, sparked by an outcry from the British public over rationed health care, prompted the Government’s reversal of measures designed to save NHS funds. Given that efforts to tie Medicare reimbursement and coverage decisions are likely to prompt the same response from the American public as it did in Britain, some conservatives may argue that market-based reforms to Medicare, rather than government-imposed rationing, would have a more beneficial and long-lasting effect at slowing the growth of health care costs. The RSC has written a Policy Brief with more information on comparative effectiveness research that can be found here. |
Senate Punts on Costly Resources Bill
Today, Senate Majority Leader Harry Reid (D-NV) announced that he would not bring up legislation containing more than 150 separate natural resources bills during the lame duck session of Congress. The combined measures would have created new federal land designations and blocked domestic energy production on millions of acres at an estimated cost of $4 billion. The bill would have blocked oil and gas leasing and mining patents on nearly 3 million acres by designating them as wildernesses, national wild and scenic rivers, or national heritage areas. As a result, the legislation would severely limit our Nation’s ability to produce its own energy resources by taking about 8.8 trillion cubic feet of natural gas and 300 million barrels of oil out of production, according to the Bureau of Land Management. According to the Heritage Foundation, the domestic energy resources blocked off by this bill would be equal to our domestic natural gas production for 15 years. While the announcement is a temporary victory, the Senate will likely make another attempt to pass the legislation early in the next Congress. According to Sen. Reid’s statement, the legislation “would be the first or second thing we do when we come back in January.” For more information on the Omnibus Lands Bill, please see this statement from Sen. Tom Coburn (the main Senate opponent of the legislation) and this Web Memo, prepared by the Heritage Foundation. |
Obama and Missile Defense
Check out this thoughtful, if scary, piece in The Wall Street Journal about President-Elect Obama’s post-election folly on missile defense, Poland, and Russia. |
Medicare Forces People to Accept Costly Benefits
Earlier this month, several individuals filed a ground-breaking lawsuit against the Department of Health and Human Services and the Social Security Administration. The suit would force both agencies to develop a process to allow individuals to renounce their eligibility for Medicare Part A, which governs hospital care. Under current regulations, while Part B (outpatient and physician care) and Part D (prescription drug coverage) are optional programs, individuals cannot waive participation in Medicare Part A once they apply for Social Security benefits. The plaintiffs’ proposed remedy echoes legislation (H.R. 7148) recently introduced by RSC Member Sam Johnson, which would grant individuals an explicit right to opt-out of Medicare should they choose to provide for their health care without relying on public funding. Many conservatives may question the absurdity of the government’s position—spending taxpayer dollars to defend itself against individuals who want to forfeit their right to Medicare benefits, which would only save taxpayers money. At a time when Medicare faces unfunded obligations totaling $86 trillion, many conservatives may believe that the government’s time and money would be much better spent finding solutions to America’s entitlement obligations, rather than forcing individuals to accept benefits they don’t want—and costing taxpayers billions in the process. |
Medicaid Fraud Will Not Be Addressed By Bailout
Last month, the New York Times highlighted the case of Staten Island University Hospital, an institution with a history of questionable billing practices—and now one of the largest fraud settlements against a single hospital. This week the hospital agreed to return nearly $90 million to respond to claims of overbilling government programs as a result of two whistle-blower lawsuits and actions by federal prosecutors. The lawsuits and charges alleged among other things that the hospital deliberately inflated bed and patient counts in order to obtain reimbursements from Medicare and Medicaid, and come after the hospital had reached two previous settlements—one in 1999 resulting in $45 million in Medicaid repayments, and another in 2005 resulting in $76.5 returned to Medicaid—with state authorities regarding fraudulent billing activity. Many conservatives may not be surprised by these repeated instances of fraud and graft within the program, given that a former New York state Medicaid investigator estimated that 40% of all Medicaid payments were fraudulent or questionable in nature. However, this episode may only strengthen conservative concerns that a proposed “temporary” increase in federal Medicaid matching funds (HR 5268) would do nothing to combat this fraud and abuse before spending additional federal dollars. Indeed, given that a single hospital has settled more than $200 million in fraud claims, some conservatives may wonder whether, if the Medicaid program had appropriate anti-fraud efforts in place, an additional $10-15 billion “bailout” for states would even be needed at all. Also on Medicaid, last week the Centers for Medicare and Medicaid Services released the first annual Medicaid actuarial report, which included long-term projections for Medicaid spending. According to the report, Medicaid spending is scheduled to double in the next nine years, reaching nearly $674 billion in both state and federal spending by 2017 and consuming a rising share of both national GDP and the federal budget. Many conservatives may view these figures as further evidence of the need for comprehensive entitlement reform to slow the skyrocketing growth in health costs, and believe that a temporary bailout would be counter-productive to the program’s long-term stability. The RSC has released a one-pager highlighting the need for comprehensive Medicaid reform that can be found here. |