More spending, higher taxes

The Obama administration inherited a big deficit -- and is adding to it with some big spending. It has taken over some money-losing enterprises and, under the new health care law, is offering subsidies to formerly uninsured Americans.

Somebody will have to pay those bills.

Guess who?

In spite of the health care reform legislation, the average American shouldn't expect relief from the financial burden of medical costs. The U.S. Department of Health and Human Services reported last week that the new law is going to lead to more spending, not less. That's even with the Medicare cuts that the new law optimistically assumes. And the agency's report warns that those Medicare reductions might be unsustainable.

The reform plan, you may recall, was initially sold by the president as a way to reduce health costs, not increase them. Now his own health department says that isn't in the cards.

As for talk of other spending cuts, the Senate Budget Committee reported last week that the government, again under optimistic assumptions, will accumulate nearly $4 trillion in new debts between now and 2015.The new health care plan, senators said, ate up the Medicare cuts -- and anticipated tax revenues that might otherwise have helped reduce the deficit.

The president has created a commission to look at the major budget problem his plans have created and recommend a way out. The clear aim is to put a new tax on the nation's legislative agenda as a way of raising more revenue. Democrats are increasingly touting a value-added tax (VAT), not as a substitute for the income tax, but as a revenue "enhancer."

A VAT is like a national sales tax. It would make everything you buy a little more expensive. It would also take pressure off Congress to deal with the two principal long-term threats to the nation's solvency: health care costs and Social Security. But a VAT would also drive up the price of virtually everything and could undermine economic recovery.

Ultimately, the American people, including the people in the halls of power, must face the hard reality that increased government benefits will require increased taxes of one form or another.

And until we make the hard choices necessary to curb government growth, the sad reality is that taxes are headed way up.