WASHINGTON — President Barack Obama’s health care overhaul will shrink rather than increase the nation’s huge federal deficits over the next decade, Congress’ nonpartisan budget scorekeepers said Tuesday, supporting Obama’s contention in a major election-year dispute with Republicans.
About 3 million fewer uninsured people will gain health coverage because of last month’s Supreme Court ruling granting states more leeway, and that will cut the federal costs by $84 billion, the Congressional Budget Office said in the biggest changes from earlier estimates.
Republicans have insisted that “Obamacare” will actually raise deficits — by “trillions,” according to presidential candidate Mitt Romney. But that’s not so, the budget office said.
The office gave no updated estimate for total deficit reductions from the law, approved by Congress and signed by Obama in 2010. But it did estimate that Republican legislation to repeal the overhaul — passed recently by the House — would itself boost the deficit by $109 billion from 2013 to 2022.
“Repealing the (health care law) will lead to an increase in budget deficits over the coming decade, though a smaller one than previously reported,” budget office director Douglas Elmendorf said in a letter to House Speaker John Boehner, R-Ohio.
The law’s mix of spending cuts and tax increases would more than offset new spending to cover uninsured people, Elmendorf explained.
Tuesday’s budget projections were the first since the Supreme Court upheld most of the law last month but gave states the option of rejecting a planned expansion of Medicaid for their low-income residents. As a consequence, the budget office said the law will cover fewer uninsured people.
Thirty million uninsured people will be covered by 2022, or about 3 million fewer than projected this spring before the court ruling, the report said.
As a result, taxpayers will save about $84 billion from 2012 to 2022. That brings the total cost of expanding coverage down to $1.2 trillion, from about $1.3 trillion in the previous estimate.
The Congressional Budget Office has consistently projected that Obama’s overhaul will reduce the deficit, although previous estimates aren’t strictly comparable with Tuesday’s report because of changes in the law and other factors.
At the time it was approved in 2010, CBO estimated the law would reduce the deficit by $143 billion from 2010 to 2019. And CBO estimated that last year’s Republican repeal legislation would increase deficits by $210 billion from 2010 to 2021.
That may sound like a lot of money, but it’s actually a hair-thin margin at a time when federal deficits are expected to average around $1 trillion a year for the foreseeable future.
When the law is fully in effect, 92 percent of citizens and legal residents are estimated to have coverage, as compared to 81 percent now.
Democrats hailed Tuesday’s estimates as vindication for the president. “This confirms what we’ve been saying all along: the Affordable Care Act saves lots of money,” said Senate Majority Leader Harry Reid, D-Nev.
Actually, the government will spend more. It just won’t go onto the national credit card because the healthcare law will be paid for with a combination of spending cuts and tax increases.
Republicans said they remain unswervingly committed to repealing what they dismiss as “Obamacare.” When combined with other budget-cutting measures, GOP leaders say that repeal will ultimately reduce deficits. Romney says if elected he will begin to dismantle the law his first day in office.
Medicaid has been one big question hanging over the future of Obama’s law since the Supreme Court ruled.
Some GOP-led states, such as Texas and Florida, say they will not go forward with the expansion. Others are uncommitted, awaiting the voters’ verdict on Obama in November.
Although the federal government would bear all of the initial cost of that expansion, many states would have to open their Medicaid programs to low-income childless adults for the first time.
CBO analysts did not try to predict which specific states would jump in and which would turn down the Medicaid expansion. Instead, they assumed that many states would eventually cut deals with the federal government to expand their programs to some degree.
As a result, the budget office estimates that more than 80 percent of the low-income uninsured people eligible under the law live in states that partially or fully expand their programs.
The big coverage expansion under the law doesn’t start until 2014, with middle-class uninsured people signing up for subsidized private plans and more low-income people picked up through Medicaid.
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Associated Press writer Laurie Kellman contributed to this report.
A healthier America will be a stronger America.
A fraud committed on the citizens by the President, backed up by the Supreme Court. Sad.
Don’t like non partisan factual analysis, huh?
Your proof?
Obama’s own words.
Perry, Scott and Jindal are all looking at re-election and this GOP-led hysterical flight of fancy is not gonna do them any good at all. Once the actual figure’s and process’s are finalized, this ACA s is going to both improve healthcare a lot as well as put a huge dent in the current ‘Death Panel’ crowd’s statement’s that ‘Big Government’ is going to determine how long we live once we hit some theoretical age limit. Please, how many folk’s over 55 does the GOP and the Tea Party think fell off the potato truck this morning ? The ACA is going to take time to be fully worked out, just as Medicare took time. And the more time that the ACA is given, and not constantly backstabbed, the quicker it’s going to both work and start keeping cost’s under control. And that’s the aim of the ACA isin’t it or are we all supposed to be so dumb as to be lead around by the nose by people who are determined to blow smoke up our collective skirt’s to the point of surrendering our common sense jst because ‘they’ say so ? Me, I look for the fact’s and evidence, not the hysteric’s and party favor’s.
You are right, but unfortunately Mike there are too many lemmings out there who only get their information from one source. It seems that one of the new by laws of the new Republican Party is too march lock-step with the rest of the herd and not be an independent and critical thinker. Just do what we say, and vote and think like we tell you. Not a good way to function in a representative democracy.
All spending can shrink the deficit if you raise enough taxes to cover it. Propagandists could show that the Iraq War reduced the deficit if we only raised taxes to cover the cost. These types of stories prey on ignorance.
This new report also shows that the taxes on small businesses will increase by $4 billion more and individuals $1 billion more than previously estimated. By the way, this report shows the cost is now $1.2 trillion for Obamacare, if you believe that, I have a bridge I’d like to show you.In addition, the CBO estimated that repealing the law would save us $990 billion. I am not sure why the AP failed to mention this little tidbit.
We cut taxes during the wars. In addition we were told by the Bush administration that the tax cuts would be deficit neutral. That was almost 2 trillion dollars ago.
The facts show that Obama has increased the deficit less than any president in recent memory even after the stimulus. This is what responsible governance looks like neighbors.
Has this office ever made one correct prediction? What did they say Social Security would cost us?
On another note. Wasn’t there an article just the other day saying that the SC ruling did not mean that States could lower the bar on coverage? And still the BDN posts this, ”
About 3 million fewer uninsured people will gain health coverage because of last month’s Supreme Court ruling granting states more leeway, and that will cut the federal costs by $84 billion, the Congressional Budget Office said in the biggest changes from earlier estimates.”
which says just the opposite and then tries to give Obama credit for deficit reduction that we know will not happen?
I really don’t see the downside. More people insured and a huge budget savings. What’s not to like?
Hard to argue with the facts. I’m sure Romney will still try. His true colors become clearer every day for those who chose to see.