Will the Affordable Care Act be starved for funds?

July 2, 2012

Millions of uninsured Americans will now have access to healthcare as a result of the Supreme Court’s decision last Thursday to uphold the Affordable Care Act. This is a big step forward for the nation, but it raises questions about funding. The nation is already starved for revenue and is supposed to cut $1.2 trillion from the federal budget over the next eight years through the sequestration process.

Under sequestration, one or more of the three major areas of the budget – defense spending, Medicare or Medicaid – need to be cut. Congress is now trying to have President Obama show where these cuts will be made. But the Daily Caller is reporting that the president doesn’t intend to implement sequestration for the military:

President Barack Obama’s White House has told at least one defense contractor not to worry – sequestration isn’t really going to happen.

According to House Armed Services Committee Chairman Buck McKeon, Office of Management and Budget (OMB) Acting Director Jeffrey Zients told Lockheed Martin CEO Bob Stevens not to worry about the potential sequester.

Sequestration cuts are set to automatically take place following the failure of the deficit-reduction super committee.

The Congressional Budget Office has the big picture on the budget:

Although the deficit is starting to shrink, it remains very large by historical standards. How much and how quickly it declines will depend in part on how well the economy performs over the next few years.

The White House has been using very hopeful estimates for the growth of the economy and federal tax receipts. It is also estimating that federal spending will decline from 24.3 percent of GDP in 2012 to 22.1 percent in 2017. There appears to be a lot of economic optimism at the White House:

Republicans have vowed to repeal Obamacare if they retake control of the White House and Congress. Even if Democrats remain in control of the U.S. Senate and White House, where will they find the funds to expand healthcare if they are unwilling to cut military spending? Will the necessary funds just be borrowed from the bond market? The federal government is once again faced with a limit on borrowing, which is expected to come early next year. Americans’ appetite for endless increases in the debt ceiling is waning.

Will Congress choose more healthcare for Americans, more military or more debt?


statehealthfacts.org: States Getting an Early Start on the Medicaid Expansion, April 2010 – May 2012

NCSL: State Actions to Address Health Insurance Exchanges

Yahoo News: Louisiana Gov. Bobby Jindal refuses to implement Obamacare despite Supreme Court ruling

Stateline: Governors React Nationwide to High Court Health Ruling

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