shaping the new financial architecture…

Medicare, right now, has a $38 trillion unfunded liability

Posted in progress by Kitty on February 28, 2010

Rep. Paul Ryan made the opening statement for Republicans at the White House health care summit last week… openly discussing the costs and funding models for reform is critical.

Here is what Rep. Ryan said in the video above…

“Mr. President, you said health care reform is budget reform. You’re right. We agree with that.

Medicare, right now, has a $38 trillion unfunded liability.

That’s $38 trillion in empty promises to my parents’ generation, our generation, our kids’ generation.

Medicaid’s growing at 21 percent each year.

It’s suffocating states’ budgets.

It’s adding trillions in obligations that we have no means to pay for it… If you take a look at the CBO analysis, analysis from your chief actuary…this bill does not control costs.

This bill does not reduce deficits.

Instead, this bill adds a new health care entitlement at a time when we have no idea how to pay for the entitlements we already have.

What has been placed in front of [the CBO] is a bill that is full of gimmicks and smoke-and-mirrors.

Now, what do I mean when I say that?

Well, first off, the bill has 10 years of tax increases, about half a trillion dollars, with 10 years of Medicare cuts, about half a trillion dollars, to pay for six years of spending.

Now, what’s the true 10-year cost of this bill in 10 years?

That’s $2.3 trillion.

It does couple of other things.

It takes $52 billion in higher Social Security tax revenues and counts them as offsets.

But that’s really reserved for Social Security.

So either we’re double-counting them or we don’t intend on paying those Social Security benefits.

It takes $72 billion and claims money from the CLASS Act.

That’s the long-term care insurance program.

It takes the money from premiums that are designed for that benefit and instead counts them as offsets.

The Senate Budget Committee chairman said that this is a Ponzi scheme that would make Bernie Madoff proud…

You can’t say that you’re using this money to either extend Medicare solvency and also offset the cost of this new program.

That’s double counting.”

(Hattip ZeroHedge)

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