Real bite from ObamaCare in Decade 1: $820 billion

posted at 1:45 pm on July 29, 2009 by Ed Morrissey

The White House has tried to hit back against the CBO for scoring its health-care proposal in the House as a $239 billion bomb to the federal deficit over the next ten years.  The administration got some help from an unlikely source, who also challenges the total.  Chuck Blahous, a Bush-era economic adviser, writes today that people got the CBO report wrong — and that the total hit will be more than three times what the CBO projected:

Nearly lost in all of the publicity about the Congressional Budget Office’s finding that proposed health care legislation would worsen the current-law deficit by $239 billion over the next 10 years is something far more troubling: The proposed legislation would actually worsen the imbalance in federal health care programs by more than $800 billion over the next 10 years — and far more thereafter.

CBO’s analysis shows quite clearly that the proposed changes to federal health care commitments would worsen the deficit by $1.042 trillion, with proposed health care savings netting only $219 billion. The net effect of these health care “reforms,” therefore, is to dig the financial hole in federal health care programs deeper — not by $239 billion but by $820 billion over the next decade.

Worse yet, by the 10th year of the analysis, the additional annual costs of the proposed health care changes would be more than four times the expected savings — worsening the imbalance by more than $150 billion in the 10th year alone. Thus, the more than $800 billion gap would only grow larger over time, with no end in sight. …

The oft-cited finding that these bills as a whole would add “only” $239 billion to the deficit over 10 years is based on the Joint Committee on Taxation’s accompanying analysis of provisions to increase unrelated income taxes by $581 billion during the same time period.

Whatever the merit of these other income tax increases, they have nothing to do with health care reform or with “bending the cost curve.” They are, rather, being proposed to offset part of the true $820 billion deficit impact of proposed federal health care expansion.

The difference between the two numbers is not the fault of the CBO.  They provided scoring for the entire package, and the mix of revenues and spending calculate to a $239 billion deficit in the first decade.  Ten years later, it comes to a $205 billion deficit in one year alone.  But as Blahous points out, that also comes from tax increases that take $87 billion a year out of the economy and into the hands of bureaucrats, a curve that amounts to almost $600 billion in confiscations in Decade One, and even more in Decade Two — at least according to the flawed static tax analyses used by everyone in the Beltway.

When we talk about the overall bite that this bill takes, we should put it in Blahous’ terms: $820,000,000,000 between 2013-2019 — which won’t even pay for the program.

Update: I adjusted the first paragraph to more accurately reflect Blahous’ argument that people missed a key part of the report, not that CBO scored the bill incorrectly.


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I think I’m going to be sick!!!

FontanaConservative on July 29, 2009 at 1:49 PM

But push it through without reading it anyway.

Daggett on July 29, 2009 at 1:51 PM

Yikes!

cmsinaz on July 29, 2009 at 1:52 PM

All those zeros are making me dizzy.

txag92 on July 29, 2009 at 1:52 PM

FontanaConservative on July 29, 2009 at 1:49 PM

Better not get sick over this. It wont be covered.

FontanaConservative on July 29, 2009 at 1:52 PM

I feel a great disturbance in the economy, as if a million wallets suddenly cried out in terror, and were suddenly silenced.

Bishop on July 29, 2009 at 1:52 PM

Accurate numbers from this administration? The same administration as Turbo Tax Tim? You have a better chance of getting Michelle Obama in sleeves.

Wolftech on July 29, 2009 at 1:53 PM

Will there be a country left by decade end?

Rosetta Stone: Speak Chinese in 3 months.

portlandon on July 29, 2009 at 1:53 PM

You can bet that Anal Rape is not included as a covered item since the administration is trying to force it upon the American public en masse.

CMonster on July 29, 2009 at 1:53 PM

The proposed legislation would actually worsen the imbalance in federal health care programs by more than $800 billion over the next 10 years — and far more thereafter.

While Obama promotes the uninsured, the letter-writers, there is clearly a forgotten man in this whole episode. There is a man or woman, with a family, who may have a small maintenance or home improvement business. They have a child or two they’d like to put through college someday. These are honest folks, pay their taxes and struggle to make ends meet. Now their going to be taxed, forced into a program that may not meet their needs 20% of the time. They’ll be 80% satisfied, but the other times, they’ll be increasingly frustrated, put off, and put to death by papercuts–bureaucracy and red tape. One of the kids may have asthma. Who’s looking out for these people, these are the ones who are going to pay for this, but are they talking, and if they are, is anyone listening?

ted c on July 29, 2009 at 1:54 PM

Bishop at 1:52 — you win the gold prize comment for this thread! Thanks for bringing me a smile even in the face of this very depressing news.

jwolf on July 29, 2009 at 1:55 PM

To expect Congress to use real world figures is insane. Our government won’t be able to sustain itself without massive tax hikes and or limitations on care.

Yes, we’re screwed.

larvcom on July 29, 2009 at 1:55 PM

I have one of the most important questions of the age…

Will diet soda be taxed at the same rate as the full sugar sodas?

CMonster on July 29, 2009 at 1:56 PM

Let them eat cupcake!

eforhan on July 29, 2009 at 1:56 PM

R-r-r-r-acists!

flyawaybird on July 29, 2009 at 1:57 PM

But AnninCa said government is more efficient……

Vashta.Nerada on July 29, 2009 at 1:57 PM

Yes and estimates in 1965, provided evidence that Medicare would cost $1 billion this year, so Democrats rammed it through, ignoring Republicans.

How’s that billion dollar estimate working out?

NoDonkey on July 29, 2009 at 1:57 PM

Our government won’t be able to sustain itself without massive tax hikes and or limitations on care.

What crazy world do you live in? Reducing the military budget to $100 million a year would provide the extra funding.

Bishop on July 29, 2009 at 1:58 PM

I feel a great disturbance in the economy, as if a million wallets suddenly cried out in terror, and were suddenly silenced.

Bishop on July 29, 2009 at 1:52 PM

QOTD

Rogue on July 29, 2009 at 1:59 PM

we’re headed toward a cliff… slam on the GAS!

gatorboy on July 29, 2009 at 2:00 PM

Folks: I have no idea how I’m on The Won’s email list but TOTUS, er POTUS, just sent me this.
*******************************************

Dear Friend,

If you’re like most Americans, there’s nothing more important to you about health care than peace of mind.

Given the status quo, that’s understandable. The current system often denies insurance due to pre-existing conditions, charges steep out-of-pocket fees – and sometimes isn’t there at all if you become seriously ill.

It’s time to fix our unsustainable insurance system and create a new foundation for health care security. That means guaranteeing your health care security and stability with eight basic consumer protections:
• No discrimination for pre-existing conditions
• No exorbitant out-of-pocket expenses, deductibles or co-pays
• No cost-sharing for preventive care
• No dropping of coverage if you become seriously ill
• No gender discrimination
• No annual or lifetime caps on coverage
• Extended coverage for young adults
• Guaranteed insurance renewal so long as premiums are paid
Learn more about these consumer protections at Whitehouse.gov.

Over the next month there is going to be an avalanche of misinformation and scare tactics from those seeking to perpetuate the status quo. But we know the cost of doing nothing is too high. Health care costs will double over the next decade, millions more will become uninsured, and state and local governments will go bankrupt.

It’s time to act and reform health insurance, drive down costs and guarantee the health care security and stability of every American family. You can help by putting these core principles of reform in the hands of your friends, your family, and the rest of your social network.

Thank you,
Barack Obama
*************************************************

I can’t wait for the press conference. I just love to hear him speak. /////sarc

ted c on July 29, 2009 at 2:00 PM

Maybe Blahous, Orszag, and Elmendorf need to review these discrepencies over a beer, at the White House picnic table. This could be a powerful teaching moment on how to blow a few trillion dollars in a few short weeks.

NickelAndDime on July 29, 2009 at 2:00 PM

Chump (sucka) change.

Dr.Cwac.Cwac on July 29, 2009 at 2:00 PM

only 4 of the 7 blue dogs caved so far.. what a joke

gatorboy on July 29, 2009 at 2:01 PM

tHE LATEST TERM ON FORMULAS TO CALCULATE JOBS IS “MURKY”.
THE SAME THING WAS SAID ABOUT THE PRINT ON O’S BIRTH CERTIFICATE.

lasertex on July 29, 2009 at 2:02 PM

Thank you,
Barack Obama
*************************************************

That email is a fraud. NO WAY that barack the narcisist would ever just sign something as ‘barack obama’

gatorboy on July 29, 2009 at 2:02 PM

Yes and estimates in 1965, provided evidence that Medicare would cost $1 billion this year, so Democrats rammed it through, ignoring Republicans.

How’s that billion dollar estimate working out?

NoDonkey on July 29, 2009 at 1:57 PM

I know that question is rhetorical, but just for the record,

As it stands, Medicare is in an operating deficit in 2009 with premiums coming in at $14 billion and outlays totaling $348 billion.

Vashta.Nerada on July 29, 2009 at 2:03 PM

Folks: I have no idea how I’m on The Won’s email list but TOTUS, er POTUS, just sent me this.

I learned the hard way that you automatically get on the filthy liar’s e-mail list when you send e-mail to the White House.

highhopes on July 29, 2009 at 2:04 PM

Democrats need to be beaten like a Pinata full of Godiva chocolates and gold coins over this.

By the next session of Congress, Democrats should be hiding underneath their beds and unable to show their faces in public.

NoDonkey on July 29, 2009 at 2:04 PM

dude, i’m tellin’ ya.

here’s where it came from.

President Barack Obama [info@messages.whitehouse.gov]

ted c on July 29, 2009 at 2:05 PM

Dumb America doesnt understand big numbers. Saying 1 billion to them is the same as saying 100 billion. 1 trillion is just a number to dumb america. It means nothing to them. Why should this upset them?

Aquateen Hungerforce on July 29, 2009 at 2:09 PM

Our government won’t be able to sustain itself without massive tax hikes and or limitations on care.
What crazy world do you live in? Reducing the military budget to $100 million a year would provide the extra funding.

Bishop on July 29, 2009 at 1:58 PM

Silly me, what was I thinking, the One will just gaze at our enemies and they’ll be our best friends. Why on Al Gore’s green earth would we need a military?

larvcom on July 29, 2009 at 2:10 PM

Democrats need to be beaten like a Pinata full of Godiva chocolates and gold coins over this. NoDonkey on July 29, 2009 at 2:04 PM

If only we had a big enough stick, maybe we could get some of our coin back.

Lily on July 29, 2009 at 2:10 PM

SECOND LOOK AT GOING BROKE!!!

Weebork on July 29, 2009 at 2:10 PM

ugh

blatantblue on July 29, 2009 at 2:11 PM

CMonster on July 29, 2009 at 1:53 PM

BARNEY FRANK HAS A SMILE ON HIS FACE EVERYDAY

lasertex on July 29, 2009 at 2:12 PM

Dumb America doesnt understand big numbers. Saying 1 billion to them is the same as saying 100 billion. 1 trillion is just a number to dumb america. It means nothing to them. Why should this upset them?

Aquateen Hungerforce on July 29, 2009 at 2:09 PM

Quality education paying dividends.

CMonster on July 29, 2009 at 2:13 PM

oh my gosh.

Mommypundit on July 29, 2009 at 2:13 PM

If this passes, the long term effects may not have a chance to be felt because forcing this monstrosity on an unwilling public will be the tipping point, civil unrest will turn ugly, and our historical way of solving political disputes may go by the wayside. Cap and trade isn’t as intrusively personal, Porkulus was just what we are used to in the corrupt Beltway, but this will affect our quality of life in a major personal way. There will be tremendous blowback. I only hope it is restricted to voting patterns.

a capella on July 29, 2009 at 2:13 PM

lasertex on July 29, 2009 at 2:12 PM

Because he is gay he likes being anally raped?

Stay classy.

Aquateen Hungerforce on July 29, 2009 at 2:13 PM

CMonster on July 29, 2009 at 2:13 PM

Seriously. I’ve begun to wonder if the destruction of education (via government intrusion) wasn’t a masterful ploy of keep the plebes dumb and easily controlled.

I’m seriously considering wearing a tin-foil hat.

Aquateen Hungerforce on July 29, 2009 at 2:15 PM

Scr*w all the motherf*ccers that voted these jackasses into office. It’s easy, One vote the wrong way and your toast.

lasertex on July 29, 2009 at 2:16 PM

Aquateen Hungerforce on July 29, 2009 at 2:13 PM

Barney is gay?

lasertex on July 29, 2009 at 2:19 PM

ted c on July 29, 2009 at 2:00 PM

That reads like an Alinsky guide to destroying health insurance.

Count to 10 on July 29, 2009 at 2:21 PM

Seriously. I’ve begun to wonder if the destruction of education (via government intrusion) wasn’t a masterful ploy of keep the plebes dumb and easily controlled.

I’m seriously considering wearing a tin-foil hat.

Aquateen Hungerforce on July 29, 2009 at 2:15 PM

I don’t think you need the tinfoil. Socialists believe in neo-feudalism, where the masses are ignorant proletarians that must be led through life, and elites. The middle class must be destroyed. Socialists swarm to education. Ergo, you may not be far off.

Vashta.Nerada on July 29, 2009 at 2:22 PM

http://www.usdebtclock.org/

izoneguy on July 29, 2009 at 2:22 PM

I feel a great disturbance in the economy, as if a million wallets suddenly cried out in terror, and were suddenly silenced.

Bishop on July 29, 2009 at 1:52 PM

100,000,000 wallets – learn how to do things off the grid.

izoneguy on July 29, 2009 at 2:23 PM

izoneguy on July 29, 2009 at 2:22 PM

That number is going up faster than my score on Donkey Kong :)

Wolftech on July 29, 2009 at 2:24 PM

I don’t think you need the tinfoil. Socialists believe in neo-feudalism, where the masses are ignorant proletarians that must be led through life, and elites. The middle class must be destroyed. Socialists swarm to education. Ergo, you may not be far off.

Vashta.Nerada on July 29, 2009 at 2:22 PM

It was a calculated strategy…part of the “long march through the institutions” which was posited by Antonio Gramsci.

He was an Italian Marxist university professor who realized that Europeans of his era simply would not vote in Socialist governments and revolution had failed.

So he called for the “long march”, which meant having the Left take over education, media, popular culture so that, over a period of time, they would be “re-educated”.

It has, unfortunately, worked splendidly.

guntotinglibertarian on July 29, 2009 at 2:28 PM

izoneguy on July 29, 2009 at 2:22 PM

That number is going up faster than my score on Donkey Kong :)

Wolftech on July 29, 2009 at 2:24 PM

Even video games that try to make a point of using ridiculously large numbers never touch a trillion. I’ve seen ten-million and heard about 2-billion, but that’s it.
***
The unfunded liabilities are the really freaky numbers.

Count to 10 on July 29, 2009 at 2:29 PM

As Barry would say, “Hey, it’s only money!”

GarandFan on July 29, 2009 at 2:32 PM

I can’t wait to hear the Bristol VA town hall meeting today…

NOT!

More lies is all I will hear…

ladyingray on July 29, 2009 at 2:32 PM

Wolftech on July 29, 2009 at 2:24 PM

have you seen the documentary ‘King of Kong’? good stuff. perfect viewing to get your mind off of Lord Barack the 1st.

Ghoul aid on July 29, 2009 at 2:33 PM

Ghoul aid on July 29, 2009 at 2:33 PM

That is a good documentary. I really enjoyed it.

lorien1973 on July 29, 2009 at 2:33 PM

It has, unfortunately, worked splendidly.

guntotinglibertarian on July 29, 2009 at 2:28 PM

I don’t think it’s going to work well in the US, all this socialism BS.

The Europeans accepted supranationalism and the socialist territory that came with it after WWII — being shell shocked from 30 years of slaughter in WWI, the intermission civil wars, and WWII. “Anything to avoid war.”

I believe Americans will get a taste of it, but it will leave a sour aftertaste. We have a different mentality than they did after all their wars. Maybe I’m naive, though.

blatantblue on July 29, 2009 at 2:34 PM

Then again people voted Obama in
IDK

I just think we will reject it like a bad kidney

blatantblue on July 29, 2009 at 2:38 PM

Speaking of kidneys

Obama’s policies are certainly very cirrhotic

blatantblue on July 29, 2009 at 2:39 PM

I need two days and two lawyers to understand $820 BILLION.

“Yea”

mankai on July 29, 2009 at 2:54 PM

Does this revised analysis use dynamic scoring or does it assume that the collected tax receipts will always matched what was planned?

If it’s using the CBO numbers then I believe it’s not using dynamic scoring which means the deficit will be even higher, since the government never collects as much it thinks it will when it raises taxes. Taxpayers will find ways to avoid or reduce their liability because THEY’RE NOT STUPID. Dems have never learned this fact BECAUSE THEY ARE STUPID.

PackerBronco on July 29, 2009 at 2:56 PM

Speaking of kidneys

Obama’s policies are certainly very cirrhotic

blatantblue on July 29, 2009 at 2:39 PM

While initially intoxicating his supporters.

mankai on July 29, 2009 at 2:56 PM

Here’s something that a lot of people are not addressing. This plan will be paid by the wealthiest of individuals – those who make over $500K. However, isn’t it a fact that when the tax rates went down in 2002, the tax revenue for the Federal government increased? Even Charlie Gibson pointed this out in an interview with Sen. Barack Obama. Does anyone think the wealtiest people will not go back to the same gamesmanship that they played when the tax rate was higher?
So, the wealthiest will pay less than they pay now overall and the rest will be burdened upon the middle class.

djaymick on July 29, 2009 at 3:03 PM

How is this helpful to the administration?

rlwo2008 on July 29, 2009 at 3:18 PM

Aquateen Hungerforce on July 29, 2009 at 2:13 PM

I though it was just an act to stay in Congress

lasertex on July 29, 2009 at 3:29 PM

My name is (not) Cylor, and I’m here to ask you a question:

IS A MAN NOT ENTITLED TO THE SWEAT OF HIS BROW?

NO, SAYS THE MAN IN CONGRESS, IT BELONGS TO THE GUEST WORKERS.

NO, SAYS THE MAN AT MSNBC, IT BELONGS TO THE ONE.

NO, SAYS THE MAN IN THE WHITE HOUSE, IT BELONGS TO ME.

(Apologies if anyone has ever done this bit before, here. But it seemed a fitting time for it.)

Cylor on July 29, 2009 at 3:31 PM

It is NOT appropriate for the Federal Government to make ANY efforts whatsoever to make health care affordable for those who lack coverage, nor to provide a “safety net.”

We are NOT our brother’s keeper. The free market will create the lowest possible price for health care products and services, as it does for every other good, if it’s allowed to function. But freedom is the only right we have in this area, the freedom to seek medical care and the freedom of some to provide it.

The Feds should help every American by simply GETTING OUT OF THE WAY.

JDPerren on July 29, 2009 at 6:42 PM

Proof in one day ! :~)

A person would have to be smoking crack to believe any of these chart projections. A better rule of thumb is to triple whatever the worse government projection is. However when it comes to health care the record is even worse.

Massachusetts costs have already tripled in three years and Medicare went from a projected cost of 9 billion to 66 billion in 30 years.

This is minimum a several trillion dollar fiasco.

patrick neid on July 28, 2009 at 11:44 AM

patrick neid on July 29, 2009 at 8:22 PM