Watch this exchange between Senator Ron Johnson (R-WI) and the Secretary of Health and Human Services – Kathleen Sebulius….I think it’s safe to say he’s fairly aggressive and basically rude. The Secretary for HHS does not work in the Office of Management and Budget nor the Congressional Budget Office which would typically discuss the facts surrounding the impact of various programs to the budget. Her job is to implement law – period.
Sen. Ron Johnson (R-Wisc.): “The original estimate for deficit reduction in the first 10 years was $143 billion, correct?”
HHS Secretary Kathleen Sebelius: “Yes–”
Johnson: “So now we, we’ve reduced that $143 billion by $86 billion – by not getting revenue from the CLASS Act – and now $111 billion because we’ve increased the mandatory costs of the exchanges, correct?”
Sebelius: “I’m assuming the numbers are correct. I’m sorry I don’t have them.”
Johnson: “So, when you add those together, that’s $197 billion added to the first 10-year cost estimate of Obamacare, so now we are instead of saving $143 billion, we are adding $54 billion to our deficit, correct?”
Sebelius: “Sir, I –”
Johnson: “We’ll submit that to the record. But, that’s basically true. So instead of saving $143 billion, by this administration’s own figures and budget, we’re now adding $54 billion to our deficit in the first 10 years.”
— Exchange during congressional hearing, March 7, 2012
Glenn Kessler from the WaPo fact checks Senator Johnson’s statements:
When the health care law was passed, the Congressional Budget Office estimated that it would reduce the deficit by $143 billion over ten years. That number has been controversial ever since the estimate was released, and we certainly acknowledge it should be accepted with a large caveat. Such ten-year figures are subject to change, and depend greatly on assumptions that may or may not be sound.
…Johnson should be crediting $20 billion in deficit reduction, not subtracting $111 billion. (The remaining $56 billion increase comes from technical changes made by the Treasury Department in its revenue model, which actually might bring its numbers a bit closer to CBO estimates. In the past, OMB has calculated the tax credit costs lower than CBO.)
That means the recent finding by the CBO that Obamacare will reduce the deficit by $50 billion more than previously thought over the next 10 years only adds further reduces the deficit. Glenn Kessler estimates the deficit through 2021 will be reduced by $163 billion or 16 billion a year. Remember – this is after we have covered another 30 million people and doesn’t even factor in the expected $1.3 trillion reduction in the deficit by 2029. Of course – Republicans want to get rid of it and this video from the Obama administration explains the potential ramifications of such a repeal.
This chart shows both the increase in revenues and costs and the line in the middle shows the impact on the deficit by year. If the line is below zero then it reduces the deficit and if the line is above zero – it increases the deficit. You can see…the estimate is that it reduces the deficit:
Ezra Klein at the Washington Post explains some of the revisions by the CBO that found an additional $50 billion in savings:
The new estimates reflect a couple of factors. The Congressional Budget Office lists them:
- An increase of $168 billion in projected outlays for Medicaid and CHIP;
- A decrease of $97 billion in projected costs for exchange subsidies and related spending;
- A decrease of $20 billion in the cost of tax credits for small employers; and
- An additional $99 billion in net deficit reductions from penalty payments, the excise tax on high-premium insurance plans, and other effects on tax revenues and outlays—with most of those effects reflecting changes in revenues.
Jonathan Cohn at the New Republic digs into the details and rebuts those Republicans who INCORRECTLY say Obamacare now costs double:
To figure out the cost of health care reform, CBO looks at each of the law’s component parts and, for accounting purposes, groups them into different categories. It calls one category “gross cost of coverage expansions” – that’s the amount of money the federal government will spend to help people get insurance, mostly by offering Medicaid to more people or giving people subsidies they can use to help offset the cost of private insurance. Last year, CBO estimated that the gross cost of coverage expansion from 2012 through 2021 would be $1.445 trillion. Now CBO thinks the gross cost will be $1.496 trillion. The number shifted, in part, because the CBO has changed its projections for economic growth. (MSNBC’s Tom Curry has a nice explanation of this.) But, in the context of such a large a budget projection, that’s barely any difference at all.
Like us on Facebook?