Republicans Cast Doubt on Obama Administration on Financial Reform

The GOP is calling out the Obama Administration and Democrats in Congress on the Financial Industry reform. The news comes on the heels of the announcement that the new health care entitlement will burden the system.

“Just think about some of the things Americans have been told,” Senate Minority Leader Mitch McConnell, R-Kentucky, said on Thursday. “As a senator, the current President railed against deficits and debt. He said America has a debt problem and that it was a failure of leadership not to address it. Yet last year his administration released a budget that doubles the debt in five years and triples it in 10. The debt has increased over $2 trillion since he took office. And in February, the federal government ran the largest monthly deficit in history.”

“There’s a lot of skepticism” among the American people about what Washington is promising these days, a senior GOP leadership aide tells ABC News.

A report by the Chief Actuary of Medicare and Medicaid Richard Foster reveals forecasts a rocky and uncertain path to that end :

Increased demand for services from so many new patients is expected to tax “existing providers resources and could lead to price increases, cost-shifting, and/or changes in providers’ willingness to treat patients with low-reimbursement health coverage.” And provisions in the law meant to get federal health spending into the black would be “outweighed by the increased costs” until beyond 2020.

Among the new revenue streams under the new law, Foster projects the IRS will collect $120 billion in “penalties paid by individuals who choose to remain uninsured and employers who opt not to offer coverage.”

“Overall national health expenditures under the health reform act would increase by a total of $311 billion (0.9 percent) during calendar years 2010-2019,” Foster writes. He raises concern that the funding for a national high-risk pool would run out by 2011, “resulting in substantial premium increases to the program” that “would limit further participation.”

But the GOP aide sees Foster’s report as “a third-party validator” of Republican claims that the president’s promises about health care reform are simply not true. He added the third-party validator for Democratic claims about the stimulus bill are the monthly statistics from the Bureau of Labor Statistics showing that unemployment remains at 9.7%, though the Obama administration had said at one point that by now the stimulus would mean unemployment was below 8%.

Republicans now see the  increase in health care reform program costs as the unintended consequences that the Democrats ignore. They say Liberals are not credible in the cost of the financial reform.

The aide said Republicans had a lot of material when it comes to “the things Democrats have said when they promise and pitch these big bills.”

And now, with financial regulatory reform, Democrats are addressing “another huge segment of the economy.” That’s why McConnell has been saying “show us in the bill where it says ‘there’s no bailout,’” the aide says. “Show us the iron-clad guarantee that there will be no pay offs to creditors.”

The Senate Democratic bill establishes a $50 billion fund – paid for by big banks – that would be used to liquidate a company’s assets in the event that the company is teetering near collapse and threatens the economy.

Read it all.

The Note by Jake Tapper, ABC News

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