United Liberty

The Congressional Budget Office has released it’s estimate for the latest version of ObamaCare:

The Democratic health care bill would cost $940 billion over 10 years and cut the federal deficit over the next two decades – figures that should help ease the worries of fiscal hawks who have been reluctant about supporting the sweeping measure.

The bill would reduce the deficit by about $130 billion in the first 10 years, and by $1.2 trillion over the second 10 years. It will expand coverage to 95 percent of Americans, according to Congressional Budget Office figures released Thursday by House Democrats.

The numbers allow Democrats to push ahead with a vote Sunday, even as Speaker Nancy Pelosi (D-Calif.) continues to search for the 216 votes needed for passage.

“We’re on track for a Sunday vote,” Majority Leader Steny Hoyer (D-Md.) told reporters.

Of course, if you believe that these numbers are even close to what the actual cost of this program is going to be, or that the deficit savings are anything but mythical, I’ve got a bridge to sell you.

But, this means the process moves forward. The next step will be to see what the House Rules Committee decides to do.

UPDATE:  Below is a copy of the actual analysis from the CBO.

Doug Elmendorf, head of the Congressional Budget Office, is warning that lawmakers must change course on fiscal policy:

In a presentation delivered before the National Association for Business Economics, Mr. Elmendorf noted that the choices needed to address the medium and long-term budget deficit will be “larger and more fundamental” than in the past.

“U.S. fiscal policy is on an unsustainable path that can’t be resolved through minor tinkering,” he said. “The problem posed by the federal budget deficit not at its current level but on this trajectory… poses a growing risk to the recovery.”
[…]
In addition, the debt held by the public with current tax policies extended would soar to 90% of GDP by 2020, Mr. Elmendorf said, making the U.S. public debt load one of the world’s highest.

“The U.S. is entering unfamiliar territory in its level of public debt,” said Mr. Elmendorf. “It will be larger over the next decade than it’s been in half a century… and also unfamiliar by the standards of other developed countries.” The choice is not whether to change course from current policy, he noted, but “how quickly and in what way.” President Barack Obama has already declared a spending freeze on discretionary, nonessential outlays, but that only amounts to roughly 17% of total spending. Much of the rest of federal spending is for entitlement programs including Social Security, Medicare and Medicaid, defense spending and interest payments on the federal debt.

The size of U.S. entitlement programs has grown sharply since 1970, from 3.8% of GDP to 8.2% as of 2007, and is expected to hit 11.1% of GDP by 2020 thanks to an aging population of Baby Boomers and fewer workers in the system to help pay for their benefits.

The Treasury has released the 2009 Financial Report Of The U.S. Government, which is full of facts, charts and figures on the fiscal health of the country. Let me tell you, if you even have the slightest understand of basic economics, this report should trouble you.

I’ve pulled a couple of the charts to give you an idea of how screwed we really are. Let me be clear in saying that I am not blaming this on the current administration. They are, however, doing nothing to deal with the problem. In fact, they are doing what previous administrations have done…building on past fiscal irresponsibility with more fiscal irresponsibility.

This first graph shows that without major policy changes, debt as a percentage of gross domestic product (GDP) will exceed 200% in the next 35 years. It gets even worse as you can see below. Part of the reason is demonstrated in the next chart.

As you can see here (click to enlarge for better detail), interest on the national debt becomes more of a problem than entitlements, which is what many fiscal conservatives often talk about. This is a financial burden that cannot be solved by simply raising taxes, because with that economic growth is put at risk.

Over the last few decades, annual government spending as a percentage of GDP has been around 20%. However, In the next 20 years, spending as a percentage of GDP will hit 30% and it will just continue to grow.

Here is a look, thanks to Matt Welch over at Reason, at government spending over the long-term. The standard of government spending, until the last couple years, has been 20% of gross domestic product (GDP).

Thanks to booming entitlement spending, specifically in Medicare and Medicaid, the future does not look bright for taxpayers.

During the debate over health care, stimulus programs and generally more government spending, it’s easy to overlook the long-term economic issues. CNN Money highlights the fiscal issues presented by Medicare and Social Security, though not the long-term unfunded liabilities, and the cost of bailouts that are ticking time bombs for the country:

The first is the debt held by the public. That’s money owed to those who have bought U.S. Treasurys, most notably big bond mutual funds and foreign governments. Debt held by the public today is roughly $8 trillion and rising.

The second number is the money the federal government owes to government trust funds, such as those for Medicare and Social Security. The government has used revenue collected for those programs to cover other outlays. Currently, the debt to the trust funds is approaching $5 trillion.

The two combined is the total gross debt that’s accounted for. But deficit hawks also worry about what’s not on the books.
[…]
“Our budget doesn’t have Fannie Mae and Freddie Mac on it, even though it’s owned lock, stock and barrel by the American taxpayer,” said Rudolph Penner, a former director of the Congressional Budget Office (CBO) during a conference held by the Peterson-Pew Commission on Budget Reform.

Last year, the CBO did start to account for both companies as if they were federal agencies on the budget. But the White House Budget Office only includes some potential costs because the future of the two companies is still under consideration. Last week, a Republican congressman introduced a bill that would require the two agencies be put on the budget.

Just after a budget deficit of $1.4 billion and starting off the new fiscal year $292 billion in the red, President Barack Obama is planning to spend more money with the false hope of pulling us out of the recession:

President Barack Obama outlined new multibillion-dollar stimulus and jobs proposals Tuesday, saying the nation must continue to “spend our way out of this recession” until more Americans are back at work.

Without giving a price tag, Obama proposed a package of new spending for highway, bridge and other infrastructure projects, deeper tax breaks for small businesses and tax incentives to encourage people to make their homes more energy efficient.
[…]
He called for more government spending on infrastructure projects such as roads, bridges and water projects and for new tax breaks for consumers who invest in energy-efficient retrofits in their homes. This could be what some administration officials have called a “Cash for Caulkers” program modeled on the now-expired Cash for Clunkers program of tax rebates for people who turned in old cars for more fuel-efficient models.

I was talking to a small business owner last night about. He said tax breaks for small business owners are a necessity. I tend to agree, however, any tax cuts for business need to be broad, not just directed at small business.