CBS' Cordes falsely suggests health care bills will not reduce deficits after 10 years
Research ››› ››› CHRISTINE SCHWEN
CBS correspondent Nancy Cordes forwarded the Republican suggestion that the House and Senate health care reform bills are a "trillion-dollar scam" because the bills "impos[e] new taxes years before the tax credits would kick in to help Americans buy insurance," and thus would only reduce the deficit in the first decade after enactment. In fact, the Congressional Budget Office (CBO) found that both bills would also reduce the deficit beyond the first 10 years.
Cordes advances Republican talking point about a "catch" in CBO estimates
From the November 24 edition of the CBS Evening News:
CORDES: Concerns run so deep that the most recent CBS News poll shows only 40 percent of Americans approve of the proposed health care plans in Congress; 45 percent disapprove. Polls show one of their main concerns is the price tag, around one trillion dollars over 10 years.
UNIDENTIFIED MALE: It's going to bring up the deficit.
CORDES: That's not true, according to the nonpartisan Congressional Budget Office, which analyzed both health reform bills. It found the Senate bill would not only pay for itself through a raft of cuts and taxes, but would actually reduce the deficit by $130 billion over 10 years. Likewise, the House bill would put $138 billion back into the budget.
HENRY AARON (senior fellow, Brookings Institution): I think what we have is an honest, nonpartisan attempt to evaluate what each bill will cost.
CORDES: But there's a catch, say Republicans. They argue Democrats artificially lowered the cost of reform by imposing new taxes years before the tax credits would kick in to help Americans buy insurance.
SEN. KIT BOND (R-MO): Move over, Bernie Madoff. Tip your hat to a trillion-dollar scam.
CBO: Senate and House bills will continue to reduce the deficit after the first 10 years
CBO expects Senate bill to reduce deficit by as much as $650 billion during decade after 2019. CBO estimated that the bill will continue to reduce the deficit in the second decade following its enactment by "around one-quarter percent of GDP." According to FoxNews.com, this reduction amounts to "as much as $650 billion." CBO also noted that it "has not extrapolated estimates further into the future, because the uncertainties surrounding them are magnified even more," but it said that "the legislation would probably continue to reduce budget deficits." From CBO's cost estimate:
In the decade after 2019, the gross cost of the coverage expansion would probably exceed 1 percent of gross domestic product (GDP), but the added revenues and cost savings would probably be greater. Consequently, CBO expects that the bill, if enacted, would reduce federal budget deficits over the ensuing decade relative to those projected under current law -- with a total effect during that decade that is in a broad range around one-quarter percent of GDP.
CBO has not extrapolated estimates further into the future, because the uncertainties surrounding them are magnified even more. However, in view of the projected net savings during the decade following the 10-year budget window, CBO anticipates that the legislation would probably continue to reduce budget deficits relative to those under current law in subsequent decades, assuming that all of its provisions would continue to be fully implemented. Pursuant to section 311 of S. Con. Res. 70, CBO estimates that enacting the legislation would not cause a net increase in deficits in excess of $5 billion in any of the four 10-year periods beginning after 2019.
CBO also estimated the House bill will result in "slight reductions in federal budget deficits" in the second decade after enactment. From the November 6 CBO estimate:
According to CBO and JCT's assessment, enacting H.R. 3962 would result in a net reduction in federal budget deficits of $109 billion over the 2010-2019 period (see Table 1) [this estimate was later updated to $138 billion over the same period]. In the subsequent decade, the collective effect of its provisions would probably be slight reductions in federal budget deficits. Those estimates are all subject to substantial uncertainty.