Right-Wing Bloggers Falsely Claim CBO Found That Health Care Repeal Would Save $1.4 trillion

Blog ››› ››› ADAM SHAH

Today, Congressional Budget Office director Douglas Elmendorf sent a letter to House Speaker John Boehner (R-OH) estimating that the bill to repeal the health care reform "would cause a net increase in federal budget deficits of $210 billion over the 2012-2021 period." You might think this might stop people from claiming that health care reform repeal is fiscally responsible. But that doesn't account for the dishonesty of the right-wing blogosphere.

Several headlines on conservative blogs are shouting some variant of: "CBO Says Repealing ObamaCare Would SAVE 1.4 TRILLION DOLLARS Over 10 Years"

Where are they getting this? Well, the blogs quote this passage from Elmendorf's letter outlining some of the effects of H.R. 2, the health care reform repeal bill:

The enacted legislation contained a set of provisions designed to expand health insurance coverage that was estimated to increase federal deficits. The costs of those coverage expansions--which include the cost of the subsidies to be provided through the exchanges, increased outlays for Medicaid and the Children's Health Insurance Program (CHIP), and tax credits for certain small employers--will be partially offset by revenues from the excise tax on high-premium insurance plans and net savings from other coverage-related effects. By repealing those coverage provisions of PPACA and the Reconciliation Act, over the 2012-2021 period H.R. 2 would yield gross savings of $1,390 billion and net savings (after accounting for the offsets just mentioned) of $1,042 billion. [emphasis added by NRO]

But that was just one paragraph in Elmendorf's letter. The next two paragraphs of the letter explained that other provisions in the repeal bill would "increase direct spending in the next decade by $732 billion" and "would reduce revenues by an estimated $520 billion over the 2012-2021 period":

PPACA and the Reconciliation Act also included a number of other provisions related to health care that were estimated to reduce net federal outlays (primarily for Medicare). By repealing those provisions, H.R. 2 would increase other direct spending in the next decade by $732 billion.

The enacted legislation will increase federal revenues (apart from the effect of provisions related to insurance coverage), mostly by increasing the Hospital Insurance payroll tax and imposing fees on certain manufacturers and insurers. Repealing those provisions would reduce revenues by an estimated $520 billion over the 2012-2021 period.

Elmendorf then summarizes:

H.R. 2 would, on net, increase federal deficits over the next decade because the net savings from eliminating the coverage provisions would be more than offset by the combination of other spending increases and revenue reductions.

In total, CBO and JCT estimate that H.R. 2 would reduce outlays by about $604 billion and reduce revenues by about $813 billion over the 2012-2021 period (see Table 2).

So, CBO is not saying, in any way shape or form, that the health care reform law repeal will save the government money. CBO is saying that certain provisions would save the government money, but that those provisions are more than offset by other provisions that would cost the government money.

Posted In
Economy, Budget, Health Care, Health Care Reform
Network/Outlet
National Review Online
Show/Publication
Ace of Spades, Weasel Zippers
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