During its November 19 broadcast, Fox & Friends described the amount by which the Congressional Budget Office (CBO) estimated the Senate's health care bill would reduce the federal deficit as a tax, and co-host Gretchen Carlson later suggested that the projected $127 billion net reduction in the 10-year deficit would come entirely from tax revenues. In fact, the CBO estimate shows that the bill also reduces the deficit through significant changes in spending.
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Fox & Friends misleads on deficit reduction and taxes
Fox News graphic falsely identifies net reduction in deficit as "taxes." During a report on CBO's cost estimate of the Senate's newly released health care bill, Fox & Friends aired the following graphic asserting that the "Cost for Taxpayers" includes the gross cost of expanding coverage plus the value of the projected reduction in deficits, which it described as "Taxes":
Carlson later claims "deficit savings" will be paid for "in taxes." Minutes later, Carlson accurately described the $127 billion as being CBO's estimate of "deficit savings" but went on to falsely suggest that the savings would be paid for entirely "in taxes." From the November 19 edition of Fox News' Fox & Friends:
CARLSON: Meantime, that deficit savings that we were talking about, the $127 billion that we will actually pay for in taxes, could be null and void if the doc fix passes. I know you're saying, because I'm saying today, OK, I can't exactly remember, what is that again? Well, thank goodness we have Caroline Shively, and she's in Washington for us this morning to explain the doctor fix.
CBO found Senate bill's costs would be "more than offset" by spending changes and tax revenues
CBO estimates that cost of bill is "more than offset by the combination" of "spending changes" and "increase[s] in federal revenues." From CBO's November 18 cost estimate of the Senate bill:
According to CBO and JCT's assessment, enacting the Patient Protection and Affordable Care Act would result in a net reduction in federal budget deficits of $130 billion over the 2010--2019 period (see Table 1). In the subsequent decade, the collective effect of its provisions would probably be small reductions in federal budget deficits if all of the provisions continued to be fully implemented. Those estimates are subject to substantial uncertainty.
The estimate includes a projected net cost of $599 billion over 10 years for the proposed expansions in insurance coverage. That net cost itself reflects a gross total of $848 billion in subsidies provided through the exchanges, increased net outlays for Medicaid and the Children's Health Insurance Program (CHIP), and tax credits for small employers; those costs are partly offset by $149 billion in revenues from the excise tax on high-premium insurance plans and $100 billion in net savings from other sources. Over the 2010--2019 period, the net cost of the coverage expansions would be more than offset by the combination of other spending changes that CBO estimates would save $491 billion and other provisions that JCT and CBO estimate would increase federal revenues by $238 billion.