The Republican In Name Only (a.k.a. Rino) currently serving as the President of the United States of America has just increased his ten year estimate of the new Medicare drug benefit by another $140 billion just two months after the benefit was signed into law.
Congressional Republicans say privately President Bush "lied through his teeth" over the cost of his prescription drug program and Medicare overhaul that new budget numbers show will cost one-third more than previously estimated.
The increased cost will drive the projected deficit to more than $500 billion this year, GOP aides confirmed today.
This new estimate puts the cost to be at $54 billion per year. Previous estimate had the annual cost rising to $110 blllion per year by 2030. But with the new estimate for the shorter term going up by a third it seems reasonable to expect at least that level of increase in the longer term. So the Medicare drug benefit should rise to approximately $148 billion by 2030 if not much higher as Congress responds to a series of requests for small extensions of the program as the years pass by.
The Congressional Budget Office said in November and again this week that the cost was about $400 billion for the 10-year period 2004 to 2013, the amount originally proposed by Mr. Bush. But White House officials said Thursday that the president's budget would put the cost at $530 billion to $540 billion.
At the same time, the officials said that the overall budget deficit for the current fiscal year would exceed $500 billion.
But the White House is using information from Medicare actuaries to come up with the higher estimate. My guess is that the Medicare actuaries have better data on which to base their estimates. Though wouldn't it have been a good idea to work with that better data to come up more accurate cost estimates before signing into law the biggest increase in entitlements programs in decades?
Historically the cost estimates of the various previous Medicare extensions of benefits have been off by multiples. So Shadegg's lack of surprise shows he's familiar with the historical record of too low estimates of actual Medicare costs.
"I'm not the least bit surprised," said conservative Rep. John Shadegg, R-Ariz., who voted against the Medicare bill in November and who said he had heard that the cost estimate would rise. "Historically, our estimates of what these programs will cost have been so far off as to be meaningless."
Also see my previous post on the Medicare drug benefit: Medicare Drug Benefit: A Strange Sort Of Republican Victory.
|Share |||By Randall Parker at 2004 January 29 08:49 PM Economics Demographic|