Wallace: CBO “says the real price tag is $1.05 trillion”

Wallace reported only on CBO's estimate of bill's gross cost, rather than its net cost. Wallace stated of the bill: “Democrats say the total price tag is $894 billion -- that's under President Obama's ceiling. But the nonpartisan Congressional Budget Office says the real price tag is $1.05 trillion.” Wallace also showed a graphic presenting cost estimates that exclude the bill's Medicare savings and high-income surcharge provisions:

But Wallace ignored CBO's conclusion that bill offsets coverage costs, reduces deficit

CBO: Bill “would result in a net reduction in federal budget deficits of $104 billion.” CBO stated that the cost of the coverage expansions that Wallace reported “would be more than offset by the combination of other spending changes, which CBO estimates would save $426 billion, and receipts resulting from the income tax surcharge on high-income individuals and other provisions, which [the Joint Committee on Taxation] and CBO estimate would increase federal revenues by $572 billion” over 10 years.

From CBO's October 29 analysis of the House bill:

Estimated Budgetary Impact of H.R. 3962

According to CBO and JCT's assessment, enacting H.R. 3962 would result in a net reduction in federal budget deficits of $104 billion over the 2010--2019 period (see Table 1). 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.

The estimate includes a projected net cost of $894 billion over 10 years for the proposed expansions in insurance coverage. That net cost itself reflects a gross total of $1,055 billion in subsidies provided through the exchanges (and related spending), 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 $167 billion in collections of penalties paid by individuals and employers. On balance, other effects on revenues and outlays associated with the coverage provisions add $6 billion to their total cost.

Over the 2010--2019 period, the net cost of the coverage expansions would be more than offset by the combination of other spending changes, which CBO estimates would save $426 billion, and receipts resulting from the income tax surcharge on high-income individuals and other provisions, which JCT and CBO estimate would increase federal revenues by $572 billion over that period. [CBO, 10/29/09]

CBO expects House bill to continue to reduce deficits beyond 2019. CBO stated in its analysis that after 2019, the added revenues and cost savings are projected to grow slightly more rapidly than the cost of the coverage expansions. CBO further stated that “CBO expects that the legislation would slightly reduce federal budget deficits in that decade relative to those projected under current law -- with a total effect during that decade that is in a broad range between zero and one-quarter percent of GDP.”