Thursday, December 8, 2011
"...America’s most serious budgetary problem is Medicare..."
"Its spending has been growing faster than the economy for years, a key reason why total US health spending as a share of gross domestic product is double that of countries such as the UK.
Back in 1997 Republicans and Democrats joined together to implement a programme that would permanently restrain the growth of Medicare spending.
...as soon as it began to bite in 2003, Congress intervened to prevent doctors’ fees from being cut. It has continued to do so every year since. This annual exercise is known in Washington as the “doc-fix”.
But the original law remains in force. If it were simply allowed to take effect without congressional interference, payment to doctors for Medicare services would be cut by 30 per cent on January 1.
...if Congress would just rebase the SGR formula to this year, and allow it to operate from now on, it would save about $300bn over the next 10 years, plus another $50bn in debt service.
...a tax provision called “the alternative minimum tax” ...has also been subject to an annual congressional fix to keep it from affecting too many taxpayers.
...The so-called Bush tax cuts are now scheduled to expire at the end of next year. The Congressional Budget Office estimates that allowing them to expire on schedule, as well as foregoing another minimum tax fix, will raise revenues by almost $4,000bn through to 2021, plus saving almost $700bn in debt service.
...the joint select committee on deficit reduction announced that it could not agree on a viable alternative, thus leaving in place a $1,200bn spending cut beginning in 2013.
Thus we see that laws already in force would reduce projected deficits by approximately $5,500bn over the next 10 years, plus another $1,000bn in debt service savings.
...neither Congress nor the White House has shown any inclination to allow the laws on the books to take effect.
...no new laws are needed to get the US on a stable fiscal course."
Treasury department and White House official
Ronald Reagan and George H.W. Bush administrations