Committee for a Responsible Federal Budget

Healthcare Savings Likely to be Eclipsed by Stimulus Extensions

Forbes had a piece Monday by Alex Brill and Amy Roden of the American Enterprise Institute about the potential for stimulus programs to expand the debt.

Brill and Roden argue that the savings from health care reform will not do much to reduce the debt because many of the stimulus funds will be extended. The health care bill’s projected $81 billion savings over ten years is dwarfed by the $140 billion a year they estimate Congress will spend making parts of the stimulus bill permanent. The article points out:

“Less than two weeks after ARRA was enacted, the Obama administration released its Fiscal Year 2010 Budget, which proposed to make five major components of the stimulus bill permanent, at a cost of $94 billion per year.”

CRFB has warned repeatedly that stimulus funds should be temporary. Any ongoing spending should be agreed upon in the normal legislative process and all costs should be offset.

As Brill and Roden note:

“While there is no question that rising health care costs pose a serious threat to our fiscal outlook, the health care proposals being debated in Congress will do little (if anything) to solve the problem.”