Yesterday CBS News' Political Hotseat reported that repealing Obamacare would increase the deficit by roughly $230 billion through 2021, according to a preliminary analysis of the legislation by the nonpartisan Congressional Budget Office (CBO). Well, there are a few things they left out of the equation. The Congressional Budge Office is nonpartisan, but it is not a research group--it is a group that simply processes the numbers they are given. They do not investigate the validity of the numbers.
For instance, why would the deficit be increased if Obamacare was repealed? Well, Obamacare makes severe cuts to Medicare and then counts those cuts as savings as it spends the money on Medicaid. There are a number of obvious and less-than-obvious tax increases that are built into Obamacare which will not happen if the bill is repealed. The article at CBS points out:
"The March health care legislation contained a set of provisions designed to expand health insurance coverage, which CBO and [Joint Committee on Taxation] estimated would have a gross cost of about $930 billion and a net cost (after accounting for certain related changes in outlays and revenues) of about $780 billion over the 2012-2019 period. Repealing that legislation would eliminate such costs. But [the health care legislation] also included a number of provisions to reduce federal outlays (primarily for Medicare) and to increase federal revenues (mostly by increasing the Hospital Insurance payroll tax and imposing fees on certain manufacturers and insurers); in March, CBO and JCT estimated that those provisions unrelated to insurance coverage would, on balance, reduce direct spending by about $500 billion and increase revenues by about $410 billion over the 2012-2019 period. If that legislation was repealed, such reductions in spending and increases in revenues would not occur. Thus, H.R. 2 would, on net, increase federal deficits over that period."
The thing to keep in mind here is common sense. As reported at Right Wing Granny on December 29, there are already questions as to whether the estimated costs of certain provisions of Obamacare are accurate. How can adding millions of people to health insurance rolls and government subsidizing their premiums not cost money?
The Heritage Foundation posted an article yesterday about the CBO estimates. The article points out that the CBO report included this disclaimer:
"Current law now includes a number of policies that might be difficult to sustain over a long period of time. ... If those provisions would have subsequently been modified or implemented incompletely, then the budgetary effects of repealing [the law] and the relevant provisions of the Reconciliation Act could be quite different--but CBO cannot forecast future changes in law or assume such changes in its estimates."
The article also reports:
"Then, Obamacare creates a new subsidy program for the middle class to purchase insurance. CBO predicts that 19 million Americans will benefit from this generous new entitlement program. But this doesn't take into account Obamacare's huge incentives for employers to drop their insurance programs and allow employees to instead purchase taxpayer-subsidized coverage. Former CBO director Doug Holtz-Eakin points out that both businesses and their employees stand to seriously benefit by dropping employer coverage and instead relying on taxpayer-subsidized health care. These incentives, combined with the various new insurance rules that will increase premiums on employer plans, will cause the cost of the subsidy program to greatly exceed expectations."
The thing to remember here is that Obamacare will probably not be repealed until there is a Republican in the White House. As the fight intensifies, as it will, the thing to remember is that part of what is being reported as the cost of repealing Obamacare is the loss of revenue from the new taxes that are included in the bill. The bill also includes funding for thousands of new IRS agents. Wouldn't that increase the deficit? The bill sees that as reducing the deficit because of the increase in taxes collected. This is very stange accounting.
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