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CBO Once Again Tells GOP Obamacare Repeal Will Increase National Debt

June 23, 2015

For all of the disputes and controversies over the Affordable Care Act, one thing has been consistent. The nonpartisan Congressional Budget Office (CBO) has repeatedly forecast that Obamacare would reduce the national debt. Nevertheless, when CBO told Congress in July 2012 that a repeal of Obamacare would raise the national debt by $109 billion over the ensuing decade, House Majority Leader Eric Cantor denounced the agency's supposed "budget gimmickry." Former Speaker and 2012 GOP White House hopeful Newt Gingrich went even further, declaring "if you are serious about real health reform, you must abolish the Congressional Budget Office because it lies."
Now with the Republicans in control of both houses of Congress and their man Keith Hall installed as its director, CBO has once told GOP leaders what they don't want to hear. On the eve of the Supreme Court's monumental ruling in King v. Burwell, CBO has again announced that the repeal of Obamacare will cost Uncle Sam hundreds of billions of dollars.

As Vox explained, just how much red ink the GOP would unleash depends on whether you take into account the supposed "macroeconomic feedback" of the "dynamic scoring" model House Republicans mandated the agency use:

Repealing Obamacare would increase the deficit by at least $137 billion or as much as $353 billion, a new Congressional Budget Office report published Friday finds.
The report, requested by Senate Republicans, uses two methods to measure the economic effects of Obamacare -- one that looks at the provisions of the law itself, and one that looks at how the act's effects will ripple through the economy.

It's no mystery why Obamacare's repeal increases deficits. Over 10 years, its $879 billion price tag to cover millions of Americans is more than offset by $1.15 trillion in new revenues and savings from cuts in payments to insurance companies, hospitals and others. By the end of 2016, 19 million more people would be left uninsured as a result of the ACA's repeal even as deficits increased.
As for the "dynamic scoring" Republicans have begged for to cover up the Treasury-hemorrhaging impact of their various tax schemes appear, the impact is fairly straight-forward as well. CBO has long predicted that the availability of Obamacare would allow some workers to retire early, work-part-time or even their own businesses. Unsurprisingly, the GOP has misrepresented the end of "job lock" as "job-killing." (As former CBO Director Douglas Elmendorf explained, "Other people are generally happy for them and do not describe them as having "lost their jobs.") But the repeal of Obamacare would mean that those 2.3 million people would remain in the workforce, thereby paying more taxes and reducing the annual budget deficit. That's why the "dynamic" score show less reduction in the national debt than the traditional "static" model.
Regardless, as Vox rightly concluded, "No matter how CBO scores it, Obamacare reduces the deficit."


About

Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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