Repealing ObamaCare “first step toward restoring fiscal sanity”

posted at 12:15 pm on January 19, 2011 by Ed Morrissey

As Republicans in the House fight to repeal ObamaCare, the administration and its allies have fought back by claiming that ending the health-care law will increase the deficit.  They point to final CBO scoring which showed a slight reduction in deficits over the first ten years of the program.  Today, two former CBO officials and a former OMB official rebut that argument, claiming that the use of budgetary gimmicks in the final CBO scoring and one assumption in particular covers up the fact that ObamaCare will balloon the deficit rapidly rather than shrink it.  Repeal, they write in the Wall Street Journal, is the “logical first step” in ending the deficit:

Federal finances are buckling under the weight of unaffordable entitlement programs. So what is the primary aim of the ACA? Open-ended entitlement expansion: to more people at greater expense than anytime since the 1960′s. If CBO is right, 32 million people will be added to the health entitlement rolls, at a cost of $938 billion through 2019, and growing faster than the economy or revenues thereafter.

How, then, does the ACA magically convert $1 trillion in new spending into painless deficit reduction? It’s all about budget gimmicks, deceptive accounting, and implausible assumptions used to create the false impression of fiscal discipline.

For starters, that $1 trillion price is a low-ball estimate, covering only six – not ten – years of subsidies that don’t begin until 2014. The uninsured were clearly less of a priority than the deception of making the law look less expensive than it really is over its first decade. Over ten years of full implementation, it’s more like $2.3 trillion. …

The fantasy of deficit reduction from the ACA is also built on a $410 billion tax increase over the coming decade, and a flood of revenue in the years after built on cynically replicating the flawed AMT-style revenue creep. New Medicare taxes initially apply only to individuals with incomes over $200,000 and couples with incomes above $250,000. But those income thresholds do not rise with inflation, so more and more families will pay them each year. Similarly, the new “Cadillac tax” on expensive insurance applies to premiums for family coverage above $27,500 in 2018, but that threshold will rise with general inflation, not medical costs. It’s particularly noteworthy that this tax is instrumental to the claim of deficit reduction in the second decade, but it is so controversial that Barack Obama was never willing to collect it himself. Overall, CBO says the ACA’s tax hikes will reach 1.2 percent of GDP in 2035, or a whopping $180 billion annually in today’s terms.

So, even if CBO’s analysis were flawless, the authors of the ACA guaranteed a misleading bottom line. Their legislative prescriptions were written to create deficit reduction only on paper — not in reality.

All of this came out in the debate over ObamaCare over the last two years, so none of this is exactly new.  In fact, the White House argument has mainly been that a repeal would roll back the hundreds of billions of dollars in taxes included in the bill, which will make the deficit worse.  But that premise relies on the static tax analysis conducted by Congress and the CBO on taxes such as the so-called “Cadillac plan” tax.  Instead of actually collecting those taxes, employers and insurance companies will simply eliminate them, and restructure plans to avoid the penalties.  That will solve one problem, that of overuse of medical resources, but leave the government short on its revenue estimate by nearly $260 billion over ten years — and that’s just one example.

One cannot reform entitlement spending by adding more entitlements and expanding those already in existence.  ObamaCare does both.  If anyone thinks that this somehow results in deficit reduction over the long term, they haven’t paid attention to the trajectories of Medicare and Social Security over the last few decades.

Update: Title should have read “Repealing ObamaCare.”  I’ve fixed it, and my apologies for letting my 2012 Freudian slip show.


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Restoring sanity, heh.

thebrokenrattle on January 19, 2011 at 12:16 PM

The GOP’s next step should be revising the rules for CBO scoring. We need to end the practice of rigging cost estimates. As it stands, no CBO estimate has value, because the next party to ask for a CBO can get a different answer.

hawksruleva on January 19, 2011 at 12:17 PM

Repealing Obama “first step toward restoring fiscal sanity”


YES!!!!

Rovin on January 19, 2011 at 12:17 PM

What a headline.

The Mega Independent on January 19, 2011 at 12:18 PM

The Repeal Obamacare movement won’t get very far because it’s missing a key component of successful public policy formation: Slogan t-shirts.

Cicero43 on January 19, 2011 at 12:18 PM

If anyone thinks that this somehow results in deficit reduction over the long term, they haven’t paid attention to the trajectories of Medicare and Social Security over the last few decades.

‘la,la,la,la,la I can’t hear you’
-dems

cmsinaz on January 19, 2011 at 12:18 PM

I say repeal everything.

Akzed on January 19, 2011 at 12:22 PM

The GOP’s next step should be revising the rules for CBO scoring. We need to end the practice of rigging cost estimates. As it stands, no CBO estimate has value, because the next party to ask for a CBO can get a different answer.

hawksruleva on January 19, 2011 at 12:17 PM

How about we just get rid of the CBO all together? They are nothing more than a propaganda machine with calculators that serve the party in power. They are supposed to be independent, but they’re not.

Knucklehead on January 19, 2011 at 12:25 PM

Wonder what Debbie Wasserman Schultz will have to say about this?

ctmom on January 19, 2011 at 12:26 PM

Can we repeal Obama? I didn’t know that was on the agenda but I’m all for it.

fossten on January 19, 2011 at 12:26 PM

Freudian slip much?

BobMbx on January 19, 2011 at 12:28 PM

Repealing Obamacare will be agoodfirst step too!

ctmom on January 19, 2011 at 12:30 PM

For starters, that $1 trillion price is a low-ball estimate, covering only six – not ten – years of subsidies that don’t begin until 2014. The uninsured were clearly less of a priority than the deception of making the law look less expensive than it really is over its first decade. Over ten years of full implementation, it’s more like $2.3 trillion.

$2.3 Trillion… if we’re lucky.

mankai on January 19, 2011 at 12:32 PM

Doctors coats for everyone!

portlandon on January 19, 2011 at 12:34 PM

I like the headline.

KingGold on January 19, 2011 at 12:35 PM

Repealing Obama?

How did that get past the censors?

Has this been picked up by HuffPo and Daily Kos?

BuckeyeSam on January 19, 2011 at 12:37 PM

B-b-b-but what about those 129 million with pre-existing conditions?????

*sigh*

capejasmine on January 19, 2011 at 12:37 PM

Doctors coats for everyone!

portlandon on January 19, 2011 at 12:34 PM

With the slogan “Together We Thrive”!

BuckeyeSam on January 19, 2011 at 12:39 PM

Not sure what ‘fiscal sanity’ means anymore. Sometimes I think I remember that it once partially existed. Never sure though if was reality or something I dreamt.

jeanie on January 19, 2011 at 12:39 PM

Repealing Obama “first step toward restoring fiscal sanity”

YES!!!!

Rovin on January 19, 2011 at 12:17 PM

+Zillions!

cntrlfrk on January 19, 2011 at 12:40 PM

Doctors coats for everyone!

portlandon on January 19, 2011 at 12:34 PM
With the slogan “Together We Thrive”!

BuckeyeSam on January 19, 2011 at 12:39 PM

Yes!!!

cmsinaz on January 19, 2011 at 12:40 PM

Deficit saved or deleted..

Unfortunately, averting disaster just isn’t glamorous.
Especially when many don’t foresee the disaster.

tomg51 on January 19, 2011 at 12:40 PM

B-b-b-but what about those 129 million with pre-existing conditions?????

*sigh*

capejasmine on January 19, 2011 at 12:37 PM

Those stats are worse than the stats about medical-care expenses causing so many bankruptcies when the problem was the overwhelming portion of the debt of those filing consisted of home mortgage and consumer debt.

Being a Democrat means never having to tell the truth.

BuckeyeSam on January 19, 2011 at 12:42 PM

OT:

“PHILADELPHIA (CBS) – A West Philadelphia doctor, his wife and eight other suspects are now under arrest following a grand jury investigation.

Sources say Dr. Kermit Gosnell, 69, faces eight counts of murder in the deaths of a woman following a botched abortion at his office, along with the deaths of seven other babies who, prosecutors allege, were born alive following illegal late-term abortions and then were killed by severing their spinal cords with a pair of scissors.”

http://philadelphia.cbslocal.com/2011/01/19/philly-doctor-facing-8-counts-of-murder/

Asher on January 19, 2011 at 12:42 PM

With the slogan “Together We Thrive”!

BuckeyeSam on January 19, 2011 at 12:39 PM

Yes indeed, from t-shirts to bus stop benches.

Knucklehead on January 19, 2011 at 12:43 PM

Asher on January 19, 2011 at 12:42 PM

just heard that on the radio…

*shudder*

cmsinaz on January 19, 2011 at 12:43 PM

Who is the hippie in the lab coat? Wouldn’t let that dirtbag anywhere near me.

james23 on January 19, 2011 at 12:44 PM

Asher on January 19, 2011 at 12:42 PM

In another state, this doctor would be honored.

Electrongod on January 19, 2011 at 12:45 PM

WHY OBAMA IS SCARY SKINNY – HE HAS WORMS

http://conservativeblogscentral.blogspot.com/2011/01/why-obama-is-scary-skinny-he-has-worms.html

Why is Obama so skinny, well the National Enquirer thinks “he’s secretly battling stomach parasites!’

Nearly Nobody on January 19, 2011 at 12:46 PM

Asher on January 19, 2011 at 12:42 PM

Philadelphia, Get to Know Us!

james23 on January 19, 2011 at 12:46 PM

Yes indeed, from t-shirts to bus stop benches.

Knucklehead on January 19, 2011 at 12:43 PM

*shaking the head*

ughhhhhhh

cmsinaz on January 19, 2011 at 12:46 PM

“I am aware that abortion is a hot-button topic,” said Philadelphia District Attorney Seth Williams. “But as district attorney, my job is to carry out the law. A doctor who knowingly and systematically mistreats female patients to the point that one of them dies in his so-called care, commits murder under the law. A doctor who cuts into the necks severing the spinal cords of living, breathing babies, who would survive with proper medical attention, is committing murder under the law.”

Disgusting that he has to explain this.

mankai on January 19, 2011 at 12:49 PM

It will go a long step towards restoring trust.

If the Congress continues to fight this bill we know they are fighting for us. If Congress stops fighting, they will suffer a loss of confidence they have never yet experienced. They dont have to win, but they have to do battle. Otherwise, they are expendable

This bill is unreal. If it stands, we are screwed. The unions will get screwed later, when their older population has moved on to Medicare, are no longer providing the dues, and find their Cadillacs taken away at last. By then, the Senators will also have moved on the green pastures and there will be no recourse for the suckers who thought they were gettig special treatment.

The system is self defeating, because it sinks enterprise, hogs the wealth, and then destroys the wealth which is simply a pile of printed notes which retain value only if there is thriving enterprise backing up the printed paper

When the US dropped the gold standard, it replaced the gold with the enterprise standard, and this the Left does not wish to understand

Enterprise which is not free has minimal value

entagor on January 19, 2011 at 12:53 PM

But what about all those jobs that Obamacare created? I mean, Pelosi said it was really a jobs bill after all……

search4truth on January 19, 2011 at 12:55 PM

Repeal Obamacare………….SAVE GRANNY!!!

PappyD61 on January 19, 2011 at 12:56 PM

Asher on January 19, 2011 at 12:42 PM

The doctor attended Obama Pennsylvania rally during the 2008 campaign when Obama spoke about his daughters being “punished with a baby.”

All the same, is the doctor’s handiwork a procedure that must be covered under all HHS-compliant insurance policies?

BuckeyeSam on January 19, 2011 at 1:05 PM

The GOP’s next step should be revising the rules for CBO scoring. We need to end the practice of rigging cost estimates. As it stands, no CBO estimate has value, because the next party to ask for a CBO can get a different answer.

hawksruleva on January 19, 2011 at 12:17 PM

Unfortunately, the CBO can only score what is put in front of it. What the GOP majority should do is enact new House rules that require revenue periods to match spending periods in all new legislation.

The Democrats knew exactly what they were doing when the wrote this bill, in order to get a CBO score that they could claim would result in a reduced deficit over 10 years. And that score is exactly why they were able to get a handful of Blue Dogs to vote for it.

rockmom on January 19, 2011 at 1:08 PM

Disgusting that he has to explain this.

mankai on January 19, 2011 at 12:49 PM

Maybe we can sever his spinal cord with a pair of scissors. After all, he us just a glob of cells.

Mirimichi on January 19, 2011 at 1:12 PM

So where are the Republicans hammering this stuff into public consciousness? The Left is already taking the game to them, anticipating, playing offense. Once again, we’re soft-shoeing it, trying not to “make waves.” The pitifulness never ends. I saw yesterday Bill Frist, that rock of conservatism, cautioning against repeal.

rrpjr on January 19, 2011 at 1:13 PM

Another cost problem is the assumption that medical records could all be accessed online and smoothly-operating databases would be in place inside four years. A ten-year window is more likely, and that’s only if no one gets wind of the enormous privacy concerns the whole thing would create.

All you have to know is what happened to the DHS attempts at integration and upgrades and its eventual abandonment of billions of dollars of attempt and nearly a decade to know that the “online access of medical records” is a boondoggle of the highest order.

winoceros on January 19, 2011 at 1:16 PM

I missed the original headline! That makes me sad.

Trust is broken with the CBO. What they say is no less political than any other part of the government.

There is simply no way to monitor what the government is asking us to spend on anything. There probably never was but now the fig leaf is gone.

petunia on January 19, 2011 at 1:43 PM

Anyone who actually believes that this monstrosity of a bill is close to revenue neutral either flunked elementary economics or were never required to take it. Maybe this also demonstrates the “quality” of our education system.

duff65 on January 19, 2011 at 2:19 PM

One cannot reduce the deficitreform entitlement spending by adding more entitlements and expanding those already in existence.

FIFY

BacaDog on January 19, 2011 at 2:23 PM

Together We Thrive Without Death Panels

Geochelone on January 19, 2011 at 2:51 PM

Hey, I first proposed the repeal act be renamed the “Restoring Sanity” act. I demand compensation!!!

darclon on January 19, 2011 at 2:52 PM

Wonder what Debbie Wasserman Schultz will have to say about this?

ctmom on January 19, 2011 at 12:26 PM

Every time I see that loon on TV, I just want to tie her into a barber’s chair and shampoo her hair.

slickwillie2001 on January 19, 2011 at 3:56 PM

Second step is voting against raising the debt limit.

It is a symbolic vote to cut Congress’ credit card. Painful cuts must be made today and will only get more painful over time. The last Congress spent wildly and met with great approval of our President. Time to let the President know the new Congress has as its #1 priority cutting spending.

Angry Dumbo on January 20, 2011 at 9:46 AM