Sunday, 09 January 2011

Will Repealing ObamaCare Bust the Budget?

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John BoehnerPrior to the passage of the Patient Protection and Affordable Care Act, known colloquially as ObamaCare, the Congressional Budget Office issued an analysis of the bill stating that it would result in a reduction in federal deficits of $143 billion between 2010 and 2019. This projected deficit reduction was never very convincing. It relied on politically untenable cuts in Medicare and Medicaid physician reimbursement — cuts that have already been forestalled for another year by Congress and the President. It counted as savings minor reductions in enormous future outlays. It was skewed because the tax increases in the bill began almost immediately while much of the spending — including, for example, a long-term at-home healthcare benefit that the CBO projected would “add to future federal budget deficits in a large and growing fashion” — will not commence for several years. And it did not include $115 billion in probable additional spending because of the speed with which the bill was rammed through Congress. (Most of these matters were raised by Richard Foster, chief Medicare actuary, in a pair of reports, one during the congressional debate on the bill and one last August.)

Having projected highly unlikely deficit reductions as a result of ObamaCare, the CBO is now suggesting that repealing the disastrous law, as the Republican-controlled House of Representatives is currently considering, would therefore increase the deficit by a like amount. Moreover, since the CBO is now considering an additional two years into the future (through 2021), the office is now projecting that repeal will increase the deficit by $230 billion. In addition, the CBO says that 32 million fewer people will have health insurance in 2019 if the law is repealed; but this, too, is purely based on the ObamaCare law’s estimate that 32 million more people will be insured at that time.

House Speaker John Boehner, writes the New York Times, “flatly rejected the report, saying it was based largely on chicanery by Democrats.” “CBO can only provide a score based on the assumptions that are given to them,” Boehner said. “And if you go back and look at the health care bill and the assumptions that were given to them, you see all of the double-counting that went on.”

Wisconsin Rep. Paul Ryan, Chairman of the House Budget Committee, echoed Boehner’s sentiments, telling the National Press Club that “the books have been severely cooked” by the Democrats who wrote the bill. Ryan argued that the law “double counts” Medicare savings, the long-term care program revenue, and Social Security revenue. All told, he said, ObamaCare would lead to “a $701 billion hole — deficit.” House Republicans released a report backing up their contentions on January 6.

CBO Director Douglas Elmendorf, in a blog on the CBO's report, points out the various uncertainties involved in making projections. One of them, he says, is the potential for reduced spending on implementation and enforcement of ObamaCare: “By CBO’s estimates, repeal of the health care legislation would probably reduce the appropriations needed by the Internal Revenue Service by between $5 billion and $10 billion over 10 years. Similar savings would accrue to the Department of Health and Human Services.” This would, of course, redound to Americans’ benefit in multiple ways.

Elmendorf also notes that CBO estimates “reflect an assumption that the provisions of current law would otherwise remain unchanged throughout the projection period.” “However,” he adds, “current law now includes a number of policies that might be difficult to sustain over a long period of time.” If, therefore, certain ObamaCare policies had to be modified, the resulting assumed savings under that law might very well vanish or even turn into deficits, and then repeal’s effects on the budget wouldn’t look so bad by comparison.

Furthermore, in a letter to Capitol Hill staffers, CBO Associate Director Edward “Sandy” Davis explained that the projected $230 billion deficit from repealing ObamaCare was calculated by subtracting an estimated $770 billion in lost revenue from an estimated $540 billion in reduced outlays. In other words, ObamaCare imposes $770 billion in additional taxes on Americans over the next decade and spends $540 billion more than otherwise would be spent. What’s not to like about repeal?

Unless major programs such as Social Security and Medicare are slashed, the federal government is going to be enduring massive deficits whether or not ObamaCare is repealed. The savings that ObamaCare will allegedly bring about, particularly a decade hence, are minuscule anyway; and the dangers it poses to our healthcare system and personal liberty are enormous. It needs to go.

Rep. Steve King (R-Iowa), one of the earliest proponents of ObamaCare repeal, put it best:

I suggest that we pull ObamaCare out by the roots — root and branch; lock, stock and barrel — eradicate it completely, and leave not one vestige of its DNA left behind, because it is a malignant tumor into the spirit of America’s vitality and constitutionality. And if it’s allowed to have any particle left, it will regrow again, it will metastasize like a tumor, and grow back, and it will consume the liberty and the vigor of the American people. We must pull it out by the roots. This Congress has been elected to do so.

With the next election now nearly two years away, let’s hope they don’t forget that.

Photo: House Speaker John Boehner

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