Spending Addicts

Contrary to popular public opinion, however, the current debt crisis has little to do with the Iraq War so much as profligate congressional spending, according to Government Accountability Office (GAO) Comptroller, David M. Walker. He told a Society of Professional Journalists (SPJ) audience this October that the current fiscal crisis can be largely attributed to “known demographic trends and rising healthcare costs,” and that “the status quo is unacceptable and unsustainable.”

Currently, the GAO estimates that each American citizen carries approximately $170,000 in federal debt, or $440,000 in federal debt per household. As the American population ages, Medicare and Social Security costs will increase, with the GAO forecasting that combined Medicare, Medicaid, and Social Security will exceed 20% of the U.S. gross domestic product (GDP) by 2030. In 2006, Medicare, Medicaid, and Social Security combined accounted for 40% of the federal budget. Up from 1% of the federal budget in 1966, Medicare and Medicaid accounted for 19% of the budget in 2006. Conversely, proportionate defense spending precipitously declined between 1966 and 2006 from 43% of federal expenditures to 20% of federal expenditures.

According to the GAO report, total federal liabilities currently stand at $50.5 trillion dollars. The United States total household net worth is $53.3 trillion dollars, signifying a 95% debt to net worth ratio. In other words, total federal debt currently offsets 95% of the nation’s value. During his speech, Walker likened the current American fiscal circumstances to a “burning platform,” arguing that economic growth was insufficient to rectify the problem, because only double-digit growth for the next 75 years could balance the budget without a reduction in expenditures.

Yet in the wake of disturbing demographic trends and burgeoning federal deficits, some members of Congress insist on further expanding government healthcare costs. The vetoed SCHIP bill would have expanded the program by $35 billion dollars over the next five years, and would have boosted the number of children benefiting from the program from 6.6 million to 10 million. House Speaker Nancy Pelosi (D-CA) told the House of Representatives on October 18, 2007 that “as I listen to the debate today, I hear a lot of subterfuge and distractions, but the fact is that this is a discussion about America’s children…There is no industrialized country in the world that any one respects that does not provide health insurance for its children.” Therefore, she argues, SCHIP is not about socialize medicine, but an ethical obligation to America’s children.

Presidential candidate John Edwards believes that the federal government can sustain universal healthcare. In addition, Edwards told a Chicago audience this September that “You also have to be honest about what health care is going to cost and you have to have a plan to pay for it. My plan will cost $90 to $120 billion and I pay for it by repealing George Bush’s tax cuts on the very wealthiest Americans.” Comptroller Walker also supported for some government-sponsored universal healthcare, if it was limited to “basic” and “essential” healthcare services, used “national evidence-based practice standards,” and stipulated a federal cap on expenditures.

However, Comptroller Walker also noted a conspicuous inverse relationship between American healthcare expenditures and results. According to the international Organization for Economic Co-operation and Development 2006 Factbook, which compares a variety of key factors between 30 industrialized nations, the United States ranks 22 out of 30 nations for life expectancy, and only Mexico and Turkey had worse infant mortality than the United States. The OECD considers infant mortality “reflect the effect of economic and social conditions on the health of mothers and newborns as well as the effectiveness of health systems.” “ The fact that some countries with a high level of health expenditure, such as the United States, do not necessarily exhibit low levels of infant mortality has led to the conclusion that more health spending is not necessarily required to obtain better results,” concludes the OECD.

In the OECD analysis, the United States ranks highest for total public health program expenditures. The OECD reports that American public healthcare programs only account for 45% of total healthcare spending, yet are “well over double the unweighted average of all OECD countries,” because of the abnormally high amount Americans spend on healthcare. Comptroller Walker also spoke of Americans’ obligations to their children at the SPJ conference, arguing that a new American fiscal policy should take into account “intergenerational equity.” “If there’s one thing that could bankrupt America, it’s healthcare,” he argued.

Bethany Stotts is a Staff Writer at Accuracy in Academia.