Rep. Roskam Op-Ed: Dim Prospects for Debt

In these uncertain economic times, many Americans are asking important questions about the nation’s finances. Why were taxpayers asked to finance a $700 billion bailout of Wall Street – with up to $750 billion more on the way, according to the president?

Is it appropriate for the government to own portions of our biggest banks? And what happens if all this “stimulus” spending doesn’t improve the economy? Even beneath these important questions, there’s another, more fundamental issue that also needs to be addressed: Who will bail out the institution that has been trying desperately to bail out the economy – the federal government?

Let me explain. The Troubled Asset Relief Program bill; various bailouts to financial institutions, such as Fannie Mae and Freddie Mac; and passage of the $792 billion “stimulus” bill designed to improve the economy will lead to a federal deficit for the current fiscal year of nearly $1.8 trillion – more than triple the previous record.

Think that math is daunting? The long-term math is much worse, as the federal government’s impending entitlement obligations will far outstrip the losses of any subprime lender. Medicare faces 75-year obligations of $36 trillion, according to the trustees’ latest report. Add in Social Security, and the total rises to $56 trillion. That amounts to $746 billion – more than the size of the original TARP bill – per year, every year, for three generations.

Of course, these deficits have meaning only if someone is willing to finance them – and in the future, investors may not be inclined to do so. With the global economy in turmoil, investors in recent months have turned to Treasury bonds to guarantee the safety of their investments. Five, 10 or 20 years from now, businesses in a stronger China and India or an aggressive Russia may not want to finance Americans’ pension and health care costs and might choose instead to diversify their portfolios elsewhere.

The results of a loss of confidence in the dollar could be catastrophic. A rapid fall in the dollar would raise the price of imports, sparking inflation fears. Rising interest rates would increase the federal government’s borrowing costs at a time of fiscal stress. Also, higher financing costs for homeowners could depress the nation’s real estate market once again. If you think the mortgage crisis of the past two years was bad, America’s fiscal crisis, left unchecked, could unleash a real estate crash of even greater proportions.

The mortgage crisis has laid bare one truth, unpleasant for politicians to state but accurate nonetheless: Over the past several decades, we as a nation have spent more than we could afford. Doubtless there were abuses within the mortgage industry, and some people likely were misled. But the fact remains that some Americans bought too much house, too much car, too many clothes or supplies for their budgets.

Changing those habits will require collective sacrifice, self-discipline – and yes, no small share of pain – but it is essential for the long-term health and stability of our economy and our nation.

Similarly, the federal government needs to reform its spending obligations to make sure our promises to America’s seniors align with our future economic resources. These actions should look to slow the growth of health care costs and tackle the difficult choices head-on.

Unfortunately, President Obama’s proposed budget actually would increase heath care spending – a poor way to control the explosion in health costs. Moreover, the explosion of federal debt in the budget plan – $3.2 trillion in the next two years alone – will hinder the federal government’s ability to take swift and decisive action reforming entitlement spending.

Some are convinced the best way to slow growth in costs and save Medicare is for the government to spend yet more money and create new health care entitlements. The logic of this reasoning escapes me: After all, who would try to lose weight by eating more? Instead, we should focus first on saving Medicare for seniors and using Medicare as a model to slow the growth of health costs nationwide rather than enacting new budget-busting programs – only for the government to impose controls on patient care a few years from now, when exploding entitlement costs bring the federal budget to its knees.

For good and for ill, the last Congress passed in record time a $700 billion bailout for financial institutions in an attempt to stanch the current economic crisis. I only hope the current Congress will act half as quickly to stop the bleeding on America’s entitlement crisis so future generations won’t end up wondering why we didn’t act when we could.

This post was originally published at The Washington Times.

Rep. Pence Op-Ed: The Morality of Health Care

“What it’s supposed to do for people doesn’t get done in reality.”

The speaker criticizing this government program wasn’t talking about the federal response to Hurricane Katrina, or failing inner-city schools. Instead, the chief operating officer of a Bronx health clinic was criticizing Medicaid, a program that in theory provides health care coverage to more than 50 million Americans.

In his budget blueprint, President Obama promises $1 trillion in new health care spending to expand the Medicaid program — and create a new government health insurance program — with many of the flaws of the current one.

Even as the White House convenes a health “summit” designed to build support for yet more entitlement spending, it’s important to remember that our current entitlements often neglect the poorest and most vulnerable Americans.

Investigations by the New York Times in 2005 confirmed the often-cited problem that a Medicaid insurance card doesn’t guarantee quality care. In fact, it doesn’t guarantee care at all.

The report cited Medicaid as paying $24 to specialists in New York City for an office visit — not nearly enough to cover physicians’ true costs. Not surprisingly, few specialists decide to participate in Medicaid, so patients must wait — and wait and wait — to receive care.

Meanwhile, the New York Medicaid program’s spending ranks highest in the country, likely because 40% of Medicaid spending goes to questionable or fraudulent claims, according to a former state investigator.

The overall picture is one of a dysfunctional Medicaid program struggling to meet the health care needs of the poorest Americans. Yet these systemic problems are rarely mentioned when talking about health care reform.

While Democrats talk about the “moral imperative” of covering all Americans, few words have been spoken for those who have a public insurance card — but no access to care.

Consider the case of Deamonte Driver, a 12-year-old Maryland boy, who died in 2007 when a tooth infection spread to his brain. A simple extraction costing under $100 could have saved his life — if his mother had not had to wait five months for Deamonte and his brother to receive treatment under Medicaid.

Testifying before Congress about this tragedy, a case worker who helped Deamonte’s family criticized a culture “that clearly condones gross underperformance” at both the state and federal levels and has become “accepted and widespread.”

It is a culture that required Deamonte’s mother plus a lawyer, three call center workers and a call center supervisor to schedule a single dental appointment.

It is a culture that lets a dentist in Brooklyn bill Medicaid for many patient visits in the same day, yet turns away a poor teenager three times without even asking her to fill out a Medicaid application.

It is a culture that fails the poorest and most vulnerable in our society and a culture that money alone will not fix.

Democrats and the president have focused on increasing federal Medicaid spending as an economic “stimulus.”

Providing $90 billion in new federal Medicaid spending without reforming the program, as the recent “stimulus” bill did, will not ensure better coordination of beneficiary care, will not create an administrative bureaucracy more responsive to patients and providers, and will not crack down on fraudulent spending that squeezes state and federal budgets alike.

A better way exists, and that is fundamental reform. One building block of reform would focus on a major inequity in the tax code. That code says individuals whose employers can’t afford to provide coverage — like Deamonte Driver’s mother — must use after-tax dollars to purchase health insurance.

That means that many hardworking people least able to afford insurance premiums must pay 30% to 50% more for coverage. Fixing this inequity in our tax code would let more individuals purchase their own policies.

When combined with insurance reforms that provide access to chronically ill people, and reforms that let state Medicaid dollars supplement private insurance premiums, many more people will have quality insurance coverage.

Unfortunately, our Democratic colleagues have blocked states’ efforts to test innovative ideas that would provide the improvements Medicaid needs — reforms designed to ensure coverage people can use, not just an empty promise of care.

Republicans see a better way.

Our party recently formed a task force to craft a proposal that would ensure true reform of our health care system, including proposals to improve the health or lives of those many Americans who need it most.

Our Democrat friends may be well-intentioned. But their plans would expand a failed government culture that has neglected the poor Americans it is supposed to serve. Throwing more taxpayer money at a structurally flawed program is not an audacious hope. It is a false one.

This post was originally published in Investor’s Business Daily.