Tuesday, June 30, 2015

CBO: Because of Our Massive Uncertainty on the ACA's Myriad of Impacts, We Have No Clue What a Repeal Would to do the Deficit

Yet Most Media Reports Lead Readers to Believe Impacts Would be Catastrophic

[I was on the Armstrong & Getty Radio Program this morning 
discussing this and other stories.  That audio can be heard here.]

Earlier this month, in anticipation of the Supreme Court's decision in the King case, the Congressional Budget Office (CBO) released its latest report on the impacts the health reform law.  In this 24-page release the question addressed was, what a repeal of Obamacare do to the federal deficit.  The CBO concluded, in part that, "the uncertainty is sufficiently great that repealing the ACA could in fact reduce deficits over that period—or could increase deficits by a substantially larger margin than the agencies have estimated."

Ultimately, the CBO estimated that the net increase in the federal deficit would be $137 billion when evaluating all of 2016 to 2025.  However, the CBO also expects deficits to total $7.2 trillion over those same years.  That is, the government's report concludes that it cannot accurately project whether a repeal of PPACA would increase, reduce or have no impact on federal deficits.  But, when compelled to give one answer, their best guess is that it would increase the deficit by 1.9%. Stated alternatively it would increase our national debt by 0.75% - well within their margin of error.

Here are the top six headlines generated by a Google news search at 7:30 AM PST on June 29, 2015 for the words: "ACA repeal deficit CBO"

A reading of these headlines leads one to believe that a repeal would clearly and decisively be a horror. Two of the stories even seize upon the incorrect $353 billion number.  When in reality the actual impact is not something the CBO was nearly so certain of and, in any case, would be $137 billion - not $353 billion.

Here is how Investor's Business Daily more accurately summarized the story:
ObamaCare advocates tout a new Congressional Budget Office report saying that ObamaCare's repeal would boost the deficit. But read the actual report. It tells a far different, more disturbing tale about this law. ...  
Actually, given that the CBO expects deficits to total $7.2 trillion over those same years, the increase is more like a rounding error than a blowout.
But what the CBO's latest analysis does is provide three more reasons ObamaCare is a bad deal for the American public. 
  • It's bad for the economy. President Obama sold ObamaCare as a major boost to the economy. But the CBO says ObamaCare is hurting the economy and that its repeal would boost the nation's GDP by 0.7% from 2021 to 2025. Based on the CBO's own GDP forecasts, that translates into $886 billion. When you account for these economic effects, ObamaCare's impact on the deficit shrinks to just $137 billion.  
  • It relies on phony accounting. The only way the CBO can claim that ObamaCare would reduce the deficit by any amount is by assuming — as it must — that the roughly $800 billion in Medicare provider cuts all take effect. But that's a fantasy. The Medicare Board of Trustees says these payment cuts aren't realistic over the long term. And Obama just signed a law repealing Congress' last attempt to impose deep cuts to doctors. 
  • Past forecasts have been wildly wrong. Back in 2011, the CBO said ObamaCare would cut the 2016-21 deficit a total of $109 billion. Now it says it will boost deficits by $109 billion over those same years, once you factor in the harm ObamaCare will do to the economy. 
To its credit, the CBO admits its latest forecast should be taken with heaping grains of salt. "All of the resulting estimates," it notes right upfront, "are subject to substantial uncertainty." ...