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Former CBO Director Douglas Holtz-Eakin on the costly consequences of the health-care overhaul.
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Happy birthday obamacare that's right today the president's health care a lot turns to.
But you're not gonna find about celebrating his signature legislation.
This administration is buckling down for Monday when the Supreme Court begins hearing arguments over whether the law is constitutional.
Joining me now not.
President of the American action forum.
Which is filed three briefs with the Supreme Court ahead of these hearings he's also a former CBO director Doug welcome back to show great to have you here.
You know I -- you wrote recently that obamacare is a disaster -- three levels economically in terms of the federal budget.
And also in terms of health policies and just to show our viewers a couple of numbers here about the rising cost of obamacare.
Numbers just keep going up every time we think we know what the thing is gonna cost this it's more.
So the latest estimate march 20121.
Point 76 trillion but let.
-- tell you it seems to be getting bigger and bigger at a time we can least afford it what do you say.
Well I completely agree and it's it's one of the reasons that is bad economic policy but people forget that in there are 500 billion dollars in new taxes.
That a law that was 2300 pages along to Begin with now has 101000 pages of regulations.
And it's not you know -- in the federal debt.
Those three things -- you very bad economic policy at a time when we really need to grow faster mom in the budget some -- in them and adding two trillion dollars in spending.
The health implications are very important.
Well presence that's you know hang on just a second on that one more number -- -- show -- here at that I think is really helpful in understanding what could happen to the cost of obamacare.
So take -- look.
At the projected cost of Medicare.
Way back in 1965.
When this thing was past twelve billion dollars.
The 1990 action projected cost was twelve billion sorry.
The 1990 actual costs was a 110 billion so in 1965 we try to see the future we -- -- -- crystal ball we said -- Cost twelve billion in 1998.
Well.
By a factor of ten we're off are we gonna be off on obamacare.
Almost certainly if this law continues -- his written right now we don't see a congress change -- we don't see a Supreme Court invalidated.
Two things will happen on number one it will turn out to be more expensive on its original merits than we anticipated.
And number two congress is inevitably expand entitlement programs.
This law would have.
Failing making 70000 dollars -- 7000 dollars in federal benefits if their employer doesn't offer them insurance if -- do offer them assurance they get nothing.
That's really unfair and you know what a future congress to do they'll say geez let's fix that they'll give -- on the money and the cost this'll what the charts.
-- -- they already as you say -- it's a disaster for health -- reasons to how so.
Well certainly and some of the new.
Pieces of federal bureaucracy are very dangerous the independent payment advisory board is going to.
Before -- to hit targets in spending in -- only they'll be able to do it is to cut off payments.
For very important new therapies and so it's gonna turn into a -- tax on innovation and threaten the US is a leader in medical science.
Health insurance itself is going be much more expensive.
The combination of -- taxes and regulations are driving up costs even now so instead of being 2500 dollars cheaper.
All that health insurance is getting more expensive that's really harming this -- capacity of those who work in small businesses to get access to.
To health insurance and -- care.
You know we have a big reliance on these medications is Jerry and that that's a bad program where we're right -- -- up in the emergency -- so it's hard to really think this is good news to the American health care system.
What you know it's interesting too is that you know we have a system in place to Paper people's medical care it's in the private sector it's financed by private companies out there.
And we're taking it apart -- -- playing with this plan I've fewer and fewer people are gonna sponsor.
Health care for their employees is as you just -- that -- doesn't make any sense financially.
Ask you question though about remember back when this thing passed.
The Democrats were so excited they thought they -- gonna get to brag about it.
I come election time this will be something that they -- change at the end.
Even Bill Clinton way back then when they were talking about putting in health care -- like this is going to be the thing we're gonna be able to say we did for decades and decades to come.
I don't know about that.
It was unpopular when -- passed is even more popular now.
And the intensity with which people dislike it has risen and certainly if you look out and and -- -- America what you see is a majority of Americans.
Want to see it repealed because they do believe it's unconstitutional that they should not be forced to buy a commercial product in which -- not interest ahead.
That's the test for the Supreme Court but.
If the Supreme Court doesn't take that up I think a future congress is gonna look out at the electorate -- say gee we need to do something about this it's not getting more popular.
Not getting more popular but.
It's -- Supreme Court the right place to pull this thing apart I think.
It's anybody's guess whether the attacks on on this on this bill this law -- this legislation now in place for two years.
Can actually be successful.
What I -- you give it next week.
-- comes down to horse race between.
Not genuine constitutionality where we've we filed briefs and we believe the think government's economic hard argument simply do not add up.
Vs precedent and there is precedent for allowing them to use the commerce -- to make -- buy insurance.
You know if justices -- precedent over you know basic constitutionality it may prevail and I say at this point.
Most people are betting that that is the -- likely outcome so.
There's no substitute in democracy for -- people signing representatives to congress that let's say we don't like this and and -- be the last court in which will be judged.
But at the end of the day dad it's not that easy to repeal this I know all the Republican presidential candidates are saying my first day in office that I think I'm gonna go I'm gonna repay.
Well your not -- not are you running.
Not me you you've got then you know -- I'm talking about it is it is not that easy.
You know you need sixty votes in the the US senate's to break off a filibuster.
That's the real hurdle and I don't see -- likely scenario -- for Republicans to get the sixty votes.
That means that in the end.
You have to think about modifying this law piece by piece.
Day by day year by year until the outcome is -- health care system that looks more like the rest the American economy one driven by choice and competition.
That relies on individuals making good decisions.
Well that thanks for your time -- we really appreciate -- this an important subject we are gonna spend a lot of time on next week thank you so much.
