Obama at war with math of health care bill

Jagadeesh Gokhale & Kent Smetters:

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The Congressional Budget Office’s mid-July “score” of the main House health-care bill puts the price tag at about $1 trillion over the next decade; the Blue Dog Democrats managed to shave off only about $100 billion. But ten-year budgets, as even the CBO has warned in the past, are not reliable for assessing entitlement programs. Most of the spending in the House plan is phased in over several years, making the ten-year cost look deceptively small. Extending the budget window by just three years doubles the program’s cost to over $2 trillion.

And that’s just a start. The most comprehensive view of a program’s projected shortfall comes from calculating the present value of all of its future outlays and subtracting any new revenue sources. The House plan has a present-value shortfall of $13.6 trillion. That’s the amount of additional money that must be set aside, in today’s dollars, to put this program on a sustainable course. This estimate optimistically assumes that health-care costs will eventually grow with the general inflation rate (they’re currently growing much faster).

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Opinion Journal also notes the out year deficits in the program.

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The nearby chart shows this Grand Canyon between spending and revenue, including CBO’s long-term predictions. While these are obviously very coarse estimates, there’s also a projection of a $65 billion deficit in the 10th year—and “deficit neutrality in the 10th year is . . . the best proxy for what will happen in the second decade.”

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Voters seem to understand these potential deficits better than the Democrats who are pushing them. That is really what much of the noise at the Town Hall meetings is about, and insulting these people and their intelligence by calling them a mob is not going to change their point of view.