Republicans are Proven Right (Again) on Obamacare’s True Cost

One of the more interesting “debates” over Obamacare was the impact that it was going to have on the deficit. Democrats, including President Obama, were absolutely insistent that it was going to save the federal government money over time.

“[Obamacare] is a net reduction of our deficit,” the president said at the Clinton Global Initiative in September. “The irony of those who are talking about repealing Obamacare because it’s so wildly expensive is if they actually repealed the law, it would add to the deficit.”

Republicans thought this was a bunch of hooey wrapped in budgeting tricks. There was simply no way that an enormous expansion of Medicaid—which is already growing out of control—in addition to providing government-subsidized insurance could be anywhere close to budget neutral, much less save money.

Democrats would repeatedly point to scoring done by the Congressional Budget Office that showed the bill would reduce the deficit. And they were right, when the law passed in March 2010 the CBO found that it would reduce deficits by more than $100 billion in the first decade.

Republicans were happy to concede that in the fantasy world in which that scoring took place – where hundreds of billions in cuts to Medicare and hundreds of billions in additional taxes went happily into effect – Obamacare may reduce the deficit. But in reality there was simply no way those unpopular provisions would ever take effect as written. There was no way that Congress could swallow cutting $500 billion out of Medicare when Republicans couldn’t even get a few commonsense reforms passed to make the program more sustainable. There was no way that employers—in a recession no less—would swallow a $117 billion in penalties for not offering their employees a government-approved health plan. Ditto for the $111 billion in taxes for families who buy ultra-high quality insurance plans or the millions expected from the individual mandate.

When you cut out all the higher taxes and raids on Medicare the true cost of the law became plain to see. Indeed, the CBO reported in February that the price tag was more than $2 trillion in the next decade alone.

But as the argument rages on in op-ed pages across America the CBO very quietly fired the latest salvo in this battle of ideas, and this time it favors Republicans. The Fiscal Times reports:

One of the Obama administration’s major selling points in passing the Affordable Care Act in 2010 was a Congressional Budget Office forecast that the controversial legislation would reduce the deficit by more than $120 billion over the coming decade.

In April, the agency quietly signaled that it can no longer make that projection; that the law had been changed and delayed so much that there is no longer a credible way to estimate the long-term effects on the deficit of all elements of the program taken together.

In a little noticed footnote to a report updating estimates of the effects of the insurance coverage provisions of the law, the agency headed by Douglas Elmendorf acknowledged that neither CBO nor the Joint Committee on Taxation could determine precisely how scores of provisions other than the insurance coverage would impact long term government spending.”

That is rather a long way of saying that Republicans are right. The CBO’s estimate was based on the assumption that the law would be implemented as written, but Republicans, who have been duped in this way before, knew that cuts and taxes have a tendency to fall in the face of displeasure from the masses. Rather than admit the Obama Administration’s unilateral (and likely illegal) decisions to delay portions of the law are likely to push the impact into the red, the CBO merely threw up their hands and said it’s too complex a calculation.

“The ACA’s financing provisions were assumed to be effective so as to get a favorable score our of CBO upon enactment, but no one is keeping track of whether they’re being enforced,” Charles Blahous, a public trustee for Social Security and Medicare tells Roll Call. “We receive occasional updates on the gross costs of the law, but non on whether the previously projected savings provisions are producing what was originally projected.”

Rather than lose the argument outright, this White House would rather hide the data necessary to settle it. It’s not surprising, it’s just disappointing.