Obamacare Sends Deficits Off Cliff

Heritage Foundation

This Morning Bell is the second in a five-part week-long series (read Monday’s on out-of-pocket costs) on how Obamacare will affect you.

“I will not sign a plan that adds one dime to our deficits – either now or in the future. Period.” President Barack Obama promised this to the American people in his health care address before a Joint Session of Congress on September 9th. Problem is, no one believes him. The Congressional Budget Office has issued reports on the Senate Health Committee bill (HELP), the House Tri-Committee Bill (HR 3200), and the Senate Finance Committee bill (Baucus bill). According to the CBO, the HELP bill would add $600 billion to the deficit in just the first ten years, HR 3200 would add $239 billion to the deficit in just the first ten years, and the Baucus bill claims to reduce the deficit by $81 billion.

But nobody believes that the Baucus bill will accomplish what it claims to do. As the Washington Post reported:


The cost difference stems from the fact that the House measure is honest enough to include the full 10-year cost of the so-called “doc fix” — $245 billion to reverse scheduled cuts in Medicare payments to physicians — although not fiscally responsible enough to pay for it. The Senate just patches the problem for one year and pretends that doctors take a 25 percent cut in reimbursements the following year and then stay at that low level forever. No one believes that will happen, so the money is going to have to be scrounged up later or else add more to the deficit.


The Washington Post is right: claims that the Baucus bill reduces the deficit are a complete fraud since there is simply no way Congress is going to cut doctor pay by 25% in one year. But all of these bills are deeply dishonest about their true costs in a more fundamental way.

Look at these charts on spending levels in the HR 3200 and the Baucus bill over time. Notice how in both bills the increased revenues (a.k.a. tax hikes) take place immediately but the increased spending doesn’t really ramp up until 2013. In other words, in order to game the CBO scoring system (explained by former CBO Director Donald Marron here), Democrats have packed ten years of taxing, but only six years of spending, into the CBO’s ten-year budgeting window.

So what happens to the deficit in those years after the CBO budget window? Rep. Jason Altmire (D-PA), a member of the Democratic Blue Dog Coalition explains: “Every year, you lose ground. It’s likely after 10 years, we fall off a cliff.”

Falling off a cliff. That is the verdict from members of his own party on what Obamacare will actually do to the federal deficit.

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