bankrupt the federal government.' Therefore, it is imperative that health care should not become just another government entitlement increasing the deficit. In a summary of the Congressional Budget Office's report, director Robert Reischauer states, . . . the C.B.O. concludes that the Health Security Act would establish both a federal entitlement to health benefits and a system of mandatory payments to finance those benefits. The C.B.O. also believes that the financial transactions of the health alliances should be included in the federal government's accounts and the premium payments should be shown as governmental receipts rather than offsets to spending. (6)
Obviously, the administration's financing as proposed in the Health security Act would establish another federal entitlement program similar to Social Security, and it would have the same potential to raise the national debt.
Further, the administration's estimates regarding deficit reduction are economically unsound. The Clinton Administration estimates that their current proposal would reduce the national deficit by about $60 billion before the year 2000. Conversely, Reischauer predicted in his analysis summary to Congress that the deficit would increase by more than $70 billion between 1995 and 2000. This is a difference of more than $130 billion (4). He called the administration's plan a 'tax and spend extravaganza which would add 25% to the federal budget by 1998' (Duffy, Johnson, and Thompson 23). Obviously, the administration has been using rose-colored calculators because their numbers just don't add up. Deficit reduction figures are not the only discrepancy. Figures relating to funding health care are no less inconsistent.
The first funding discrepancy in the administration's proposal is the estimated revenue from an increased tax on tobacco products. In truth, many non-smokers would have to begin to puff for the administration's numbers to work. In fact, Senator Warren Rudman ran the numbers on his home computer. He discovered that the estimated funds will be available if the cost of cigarettes is raised to $4 a package and 80% of the American people smoke (qtd. in Tsongas). Obviously, 80% of America does not currently smoke. Taxes on tobacco products should be included in financing health reform, but it is important to use realistic figures.
Secondly, employer mandates will not be as fiscally successful as indicated by the administration. Employer mandates, the key to paying for President Clinton's universal coverage, will cost employers $70 billion a year in new spending (U.S. Health 55). In effect, Clinton requires employers to cover their workers through high insurance premiums which cross-subsidize coverage for the poor and unemployed (Dentzer, 'Will'). This 17% increase in premium costs will require the federal government to spend $35 billion more than estimated to subsidize small businesses over the next five years. In addition, the premium hike will force employers to spend 14% more than Clinton estimated. Economist John Sheils predicts that by 1998 subsidies will total $75 billion. Considering that the current cost of uncompensated health care in this country is $16 billion, 'You're spending $5 to save $1,' says Sheils (qtd. in Duffy, Johnson, and Thompson 22).
Instead, health care reform must embrace individual mandates. Unlike the Clintons, Represent
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