CBO estimates HCR repeal will add $230B to deficit: Are they right?

American Spectator’s Phil Klein, with a little help from House Budget Committee Chairman Paul Ryan, clarifies a report issued today from the CBO – cheered by Democrats – that a repeal of ObamaCare will add $230 billion to the deficit:

Liberals are touting a new report by the Congressional Budget Office estimating that repealing the national health care law would add $145 billion to the deficit from 2012 to 2019, and $230 billion through 2021. These estimates should come as no surprise, because, aside from a few technical changes and updates, they are based on CBO projections from when the health care care law passed last March. These projections reflected the Democrats’ use of a number of accounting gimmicks, without which, the CBO separately acknowledged the law would actually run up deficits. As Paul Ryan notes, the reality is that the national health care law is a “fiscal train wreck.” The CBO deficit reduction number does not factor in double counting of Medicare savings and other revenue sources, and it doesn’t include $115 billion in costs needed to implement the law. Also, even if you take the CBO numbers at face value, what it boils down to is that over the next several decades, the federal government is raising taxes and cutting Medicare to pay for trillions in new spending. Increasing federal obligations is not an effective tool for long-term fiscal health, because any savings (or revenues) claimed by the new law would no longer be available for shoring up entitlements.

National Review deputy managing editor Kevin D. Williamson adds:

This discussion, as framed by [staunch ObamaCare proponent Ezra] Klein, also rewards the Democrats for engaging in dishonest parliamentary shenanigans. As Klein well knows and the CBO reminds us, the Medicare “doc fix” was spun off into a separate bill specifically in order to keep some costs from being counted on Obamacare’s tab. As Cato’s Michael Tanner notes, “In a letter to Congressman Paul Ryan (RWI), the Congressional Budget Office confirms that if the costs of repealing the payment reductions, known as the “doc-fix,” as reflected in HR 3961, were to be included in the cost of health care reform, the legislation would actually increase budget deficits by $59 billion over 10 years.” This is a cheap accounting gimmick, conveniently excluded from the discussion. But it certainly is convenient to be able to account for the costs of Obamacare without having to account for the cost of bribing the doctors, and the congressmen who are most sensitive to them, to accept it. That is, of course, far from the only cost-shifting mechanism at work.

More broadly speaking, what the Obamacare-reduces-the-deficit argument neglects is this: Repeal is not the end of the story. Repeal need not be followed by . . . the void. If we want to reduce the federal deficit by $100 billion over ten years, there are lots of ways to cut $10 billion a year from spending. The federal government in 2004 estimated that it spent $10 billion a year on services for illegal aliens. Cut it. Done. Color me skeptical that we have to spend nearly $1 trillion over a decade to get $10 billion a year in spending cuts. If I’m reading the budget right, HUD spent $45 billion in 2007. And Republicans have some very good ideas for health-care reform that also will reduce federal outlays, thereby reducing the deficit. It is not as though the choice is Obamacare or nothing.

Treating the CBO ten-year estimate as though it is the alpha and the omega of the Obamacare-deficit discussion is a debater’s trick, one that we should not fall for. We have a good deal of history and experience on our side, and good reason for skepticism — if only we had a word for a political philosophy grounded in history, experience, and skepticism, in standing athwart history . . .

He’s right.  Democrats are loving the estimate from the CBO today because they think the suggestion that it will allegedly “add to the deficit” will make Republicans – barely in control of the House for a day – look like hypocrites on the issues of  spending cuts and deficit reduction, which many freshman and returning members of Congress ran on as part of their (re)election platform.    Let’s just assume for grins and giggles that the CBO’s is right, and that the repeal of ObamaCare actually would add $230 billion to the deficit.  I’ll take it – when you consider what NOT repealing it will add to it.


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