White House increases deficit projection; CBO offers slightly better outlook

"The federal government faces exploding deficits and mounting debt over the next decade, White House and congressional budget officials projected Tuesday in competing but similar economic forecasts, " The Associated Press reports. "[W]hile figures released by the White House foresee a cumulative $9 trillion deficit from 2010-2019, $2 trillion more than the administration estimated in May, congressional budget analysts put the 10-year figure at a lower $7.14 trillion" - a difference based on the CBO's "assumption that all the tax cuts put into place in the administration of former President George W. Bush will expire on schedule by 2011 as dictated by current law" compared to "President Barack Obama's budget baseline, however, hews to his proposal to keep the tax cuts in place for families earning less than $250,000 a year," according to the news service (Kuhnhenn, 8/25).

The Washington Post: "Though the deficit figures are actually a bit better than expected, Republicans leapt upon the ugly numbers Tuesday, arguing that a nation so deeply in hock can't afford to a sweeping expansion of health coverage for the uninsured, Obama's top domestic priority. 'Americans are deeply shaken -- and increasingly angered -- by the explosion of spending and debt coming from Washington,' said Rep. Paul Ryan (R-Wisc.), the senior Republican on the House Budget Committee. 'If we continue to pursue this policy of Washington as the answer to every problem, it will cost Americans far more than the obvious burdens of ever-higher taxes, interest rates, inflation, and debt; it will cost us the freedom to run our own lives.' Added Rep. Dave Camp (R-Mich.), the senior Republican on the House Ways and Means Committee: 'If the House Democrats' unaffordable $1 trillion health care bill wasn't dead before, it should be now'" (Montgomery, 8/25).

The New York Times: "Despite the budget shortfall, White House officials said they saw no reason to back away from President Obama's ambitious and costly goal of overhauling the health care system …'I know there are going to be some who say that this report proves that we can't afford health reform,' said Peter R. Orszag, director of the Office of Management and Budget. But he said the opposite was true: the only way to control spiraling Medicare costs, he said, was to get control of overall health care costs by overhauling the system. 'The size of the fiscal gap is precisely why we must enact fiscally well designed health care reform now,' Mr. Orszag said" (Andrews, 8/25).

As part of the mid-year budget review, "The White House… doubled its projected savings from a health overhaul plan now working its way through Congress, saying the proposal could achieve $622 billion in savings over 10 years from Medicare and Medicaid, up from more than $300 billion estimated earlier this year," Dow Jones Newswires/NASDAQ reports. "The mid-session budget report identifies $954 billion over 10 years to pay for health reform, two-thirds of which will come from savings in Medicare and Medicaid" (Johnson, 8/25).

In related news, The Associated Press reports on a study released Tuesday that found the costs for employer-provided health plans are likely to rise more than 10 percent within the next 12 months. "Aon Consulting, a subsidiary of Chicago-based Aon Corp., surveyed about 60 health insurers around the country earlier this year," and found "on average, insurers expect to pay out 10.5 percent more in claims costs in the next year — slightly less than the 10.6 percent increase forecast last year." However, "the expected increase doesn't necessarily mean the premiums employees pay will grow at the same clip. Actual increases for each insurer or plan can vary by such factors as plan design, geography or the general health of the people covered" (Murphy, 8/25).

http://www.kaiserhealthnews.org