“Deficit neutral” is one of the “requirements” that a lot of people are saying they need in a health care reform package. Our own Kay Hagan insists she won’t vote on any package that would increase the deficit. That sounds great, until you stop and think about what it really means. December’s Townhall Magazine (paper version only) has an article (More Taxes? Fork It Over, p.44) that really opened my eyes to the whole thing. “Deficit neutrality, of course, is the wrong target. The bill should be spending neutral — that is, it shouldn’t raise spending on net. Health care reform should not be an excuse for growing government. If health care reform is enacted and is deficit neutral, then Obama clearly intends for a huge tax increase to be the core of the financing for the bill…. legislation developing in the Senate includes hundreds of billions of dollars in tax hikes. The House health care reform bill includes $583 billion in tax increases over 10 years and yet would still increase the deficit by $239 billion.” (emphasis added)
The idea of deficit neutrality is a red herring, designed to confuse normal people and convince us that a massive reform of over a sixth of our economy is really quite fine, if only it doesn’t increase the national debt.