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1 Gerald Prante, If Medicare Cuts Proposed in Baucus Plan Are to Be Believed, Long-Term Deficit Outlook Is Favorable 1 (2009)

handle is hein.taxfoundation/ffbjfxz0001 and id is 1 raw text is: FISCAL FACT If Medicare Cuts Proposed in Baucus Plan Are To Be Believed, Long-Term Deficit Outlook Is Favorable Over Twenty Years, Baucus Plan Is Deficit-Neutral Even Without Excise Tax on Cadillac Health Insurance Plans By Gerald Prante Introduction Passage by the Finance Committee yesterday of Chairman Max Baucus's health care proposal came after receiving a boost from the Congressional Budget Office, which analyzed the plan and reported that it would be deficit-neutral over ten years with $81 billion to spare. One feature of the CBO report is its estimate of savings, i.e., cuts in current health spending, mostly Medicare. The cuts are far more substantial than some may have expected, and they might constitute a hurdle in themselves to future bills. Cuts in Medicare and other health programs ratchet up quickly in the CBO score, reaching $93 billion in 2019 alone and totaling $404 billion between FY 2010 and 2019. Assuming those Medicare cuts continue growing at the same rate after 2019, they could reach a total of $1.8 trillion over the next ten-year period, 2020-2029. In other words, if Congress were considering a 20-year budget window instead of ten years, Chairman Baucus's proposed excise tax on Cadillac health plans would not be necessary to pay for the plan. Even without those revenues, the spending cuts would probably be sufficient to cut the deficit. (The other smaller tax hikes and revenue raisers would remain.) October 2009 No. 195 TA FOUNDATION