Washington Democrats Deny Fiscal Facts

The President continues to provide false choices to Americans on the debt and deficit instead of giving them fact-based answers they deserve. Below are the facts on some of the biggest Washington spending items today that affect American taxpayers now. Whether the President wants solutions or campaign issues is up to him.

Fiscal stability

The President’s budgets have done little to restore long-term fiscal discipline. Under his last budget, the federal government would spend $46 trillion over the next 10 years. The deficits his budget would rack up are driven primarily by entitlement and health costs.

Under the CBO’s latest projections, the deficit this year will be $845 billion, despite a 17 percent increase in revenue. The national debt will hit $26.1 trillion in 2023. By the end of his second term, President Obama will have presided over $7 trillion in total deficits (2009-2016).

Failure to rein in future deficits could snowball. CBO estimates interest rates on 10-year Treasury notes will rise to 4.3 percent in 2016 and to 5.2 percent just two years later. Returning to the historical average interest rates of 5.7 percent could raise interest costs by even more. 

Entitlement reform: Medicare, Medicaid and Social Security

Rather than work on a long term plan to solve our entitlement problems, the President chooses to demonize bipartisan ideas. The President pays the problem lip-service, yet fails to take the advice of his fiscal commission advisors and lead the way to entitlement solutions.

Without modernization, Social Security beneficiaries will have their payments automatically and permanently cut by 25 percent in 2033. This means that Americans turning 47 this year will never see full Social Security benefits at retirement. Yet President Obama has not made an effort to improve the Social Security safety net.

Objective data analysis proves that reforms to preserve, protect, and strengthen Medicare, Medicaid, and Social Security must happen now in order to stop a looming fiscal train wreck. In its long-term budget outlook, the CBO warns:

• Medicare, Medicaid, and Social Security will comprise half of all federal spending by 2023.
• Medicare spending will total more than $8 trillion over the next 10 years. In 2013, Medicare’s outlays will increase four percent ($21 billion).
• Medicaid spending will total more than $4.3 trillion over the next 10 years. In 2013, Medicaid will grow six percent ($15 billion).

According to the 2012 Medicare Trustees Report:

• Medicare’s Hospital Insurance (Part A) Trust Fund continues to run annual cash flow deficits. Expenditures have exceeded annual income every year since 2008, and last year’s cash flow deficit was $27.7 billion.
• At this pace, the Part A trust fund will be bankrupt in 2024. The trustees also forecast that, under their worst-case economic scenario, the Part A trust fund could be insolvent as early as 2017.
• Medicare’s 75 year total unfunded liability using the Medicare Chief Actuary’s alternative scenario is $37 trillion.

Over the past four years, President Obama stood firmly in the way of meaningful Medicare reform. In fact, his signature health care law made the program’s fiscal condition worse.

• Medicare’s Trustees have issued an “excess general revenue funding warning” every year since President Obama took office. The President has never complied with the law mandating he send Congress a legislative plan to prevent the shortfall.
• The White House says the partisan health care law is President Obama’s response to the Medicare funding warning. The Medicare Trustees, however, have issued the funding warning in all three reports since the health care law’s enactment.
• President Obama raided more than $700 billion from Medicare and spent it on a health care law Republicans unanimously opposed.
• President Obama claims the health care law’s Medicare cuts make the program more solvent. He also claims the law’s Medicare cuts pay for his new health insurance entitlement. Republicans argue that the Medicare cuts cannot do both without adding to the deficit. Medicare’s Chief Actuary and CBO confirm the President double counted the savings and overstated the program’s long term fiscal health.

The President says America doesn’t have a spending problem. His proposals to solve our biggest fiscal problems are disappointing. And Washington Democrats are just as unserious.

“I am not going to keep cutting the discretionary budget, which by the way is not out of control despite what you hear on Fox News.”  – Sen. Mary Landrieu, Senate Floor Statement, January 29, 2013

“So it is almost a false argument to think of it as a spending problem.”  – Rep. Nancy Pelosi, Fox News Sunday, February 10, 2013

“We don’t have a spending problem.”  – Sen. Tom Harkin, Senate Appropriations Committee Statement, February 14, 2013

It’s time for Washington Democrats to stop the denial and face up to the fiscal facts.