Will Obamacare Increase The Deficit? Ctd

By Patrick Appel

Barro counters Blahous:

[Blahous] makes the case that [the Medicare] trust fund solvency is an important political motivator, and a “crisis” around the trust fund in 2016 would create significant downward pressure on Medicare spending. But I’m skeptical. Unlike with Social Security, there is no consensus view in Washington that Medicare taxes should cover the cost of the Medicare program over the long term.

And given the way debates over Medicare usually go, and the political strength of both seniors and the doctors’ lobby, I have great difficulty seeing a manufactured “crisis” over the Medicare trust fund actually leaving to significant cuts in Medicare. I think CBO has had good reasons for ignoring the law and assuming that Medicare payments will continue as scheduled even after the trust fund is empty.

Cohn nods:

We assume that government will keep paying benefits for Medicare even if that means finding money from outside the Trust Fund, because, by law, people are entitled to those benefits. That’s why we call the programs "entitlements.” Conservatives should know this as well as anybody, because this is precisely why we have a long-term deficit problem—we’re on the hook for entitlement benefits that, according to projections, future government revenues will not fully support.