Home news

HBC Publications

Setting the Record Straight

Democrats’ Health Care Law is a Fiscal Train Wreck

f t # e
Washington, Jan 6, 2011 | comments

Our dispute is not with the hard-working, non-partisan professionals at the Congressional Budget Office. CBO scores what is put in front of them – and what Democrats put in front of them last year was legislation packed with smoke and mirrors to hide the impact of trillions of dollars in new spending. Nothing has changed about the flawed assumptions underlying CBO’s score – only the dates have changed. Undoing the Democrats’ massive new entitlement is essential to our fiscal health.


Claim:
In his letter to Speaker Boehner, CBO director Elmendorf writes that the Democrats’ new health care law “would reduce budget deficits over the 2010-2019 period and in subsequent years; consequently, we expect that repealing that legislation would increase budget deficits.”

Response: The same budget gimmicks that allowed the Democrats to get a CBO score last spring saying that their massive entitlement expansion would somehow reduce the deficit are still in place today.  Nothing has changed about the underlying legislation.

Claims of deficit reduction are still excluding the $115 billion needed to implement the law. The Democrats are still double-counting $521 billion from Social Security payroll taxes, CLASS Act premiums, and Medicare cuts. The score still doesn’t account for the costly “doc-fix” provision that Democrats stripped out of the bill and passed separately. 

CBO’s score of the GOP’s promised repeal of the Democrats’ costly new law is still taking all of these gimmicks into account.  Just as we disagreed with the underlying assumptions used to score the original legislation, we disagree with the underlying assumptions used to score the repeal of that same legislation.  There’s no new math at play here. 



Claim:
But now CBO says that the Democrats’ new law will reduce deficits by even more than before -- $230 billion as opposed to $145 billion.

Response: The original score was based on a 2010-2019 estimate.  The repeal is based on a 2012-2021 estimate.  Thus, the scoring window has been moved two years forward. CBO’s estimates for the years beyond 2019 are based on the same smoke-and-mirrors budgetary gimmicks that produced the initial estimate. Again, nothing has changed about the underlying flawed assumptions. Only the dates have changed. 

While the out years contain more fake deficit reduction, they also contain very real spending increases as the bill’s new subsidies and its expansion of Medicaid to childless adults continue to generate enormous costs. Moving past 2019 begins to give us a clearer picture of the total 10-year price tag of the bill – it will almost certainly be larger than $1 trillion, and will likely be closer to $2.6 trillion once a full 10 years of new costs are taken into account. 



Claim:
You can’t pick and choose which CBO scores you agree with.

Response: CBO must score what’s put in front of them.  Our disagreement is not with the non-partisan professionals at CBO but with the Democrats who employed smoke-and-mirrors gimmicks to attain a score that would show a deficit reduction.


To Learn More:

 

This document was prepared by the Majority staff of the Committee on the Budget, U.S. House of Representatives. It has not been approved by the full committee and may not reflect the views of individual committee members.

 

f t # e