Obamacare will boost the deficit by $131 billion, according to a new report from Senate GOP staff that cuts away at White House claims that the health-care law would lower spending.
The Congressional Budget Office has scored the health-care law several times over the years, most recently in 2012, when it estimated Obamacare would reduce deficits by $109 billion over 10 years. According to Senate Republicans, when that 10-year window is shifted to cover 2015-2024, the CBO’s estimated savings would grow to $180 billion.
But that projection didn’t include the many changes to the health-care law over the last several years. Exemptions from the individual and employer mandates, expanded spending on broken Obamacare exchanges, and Obamacare’s cuts to employment, per the CBO itself, have all added to the cost of the law.
When the version of Obamacare that’s actually been enacted into law is scored, the effect of the federal budget deficit is vastly different from the effect of the law as it was written. Republican staff for the Senate Budget Committee calculated a $300 billion swing since the CBO’s last numbers– making Obamacare a net deficit booster instead.
The biggest culprit: lower employment. The CBO projected earlier this year that Obamacare will result in lower employment by the equivalent of 2.5 million full-time jobs over the next ten years.
Not only will lost jobs and lower hours harm workers (unless you ask Nancy Pelosi), but it takes a hit on the tax revenue Obamacare was supposed to raise. Budget Committee GOP staff found that the employment changes would results in $280 billion lost in tax revenue through 2024.
Slower growth in Medicare and Medicaid costs, as calculated by the CBO, means Obamacare will be savings $132 billion less, according to the report. The trend, which the committee notes “pre-dates the passage of the health-care law,” will cut Obamacare-related savings to $847 billion, down from $979 billion under the extrapolation of the latest CBO figures.
The updates include some brighter spots for Obamacare supporters– the coverage provisions of the law are expected to cost less. The Obama administration’s exemptions for the individual and employer mandates, as well as “lower initial enrollment in exchange-based coverage,” will decrease spending on Obamacare’s coverage provisions, reducing deficits by $83 billion, according to the report.
And that’s in an even better scenario than the White House could previously tout under CBO projections. The GOP report shifted the timetable, tacking on two years since the last CBO report to keep a 10-year window to analyze the law.
This report, by comparison, includes more years when direct Obamacare taxes are active and upping their deficit-reducing totals by several billion as well.
Even with the advantages, that brings Obamacare’s grand total to $131 billion tacked onto the deficit after all, lending credence to those who have long argued the health-care law would cost much more than the White House promised. Rasmussen Reports found earlier this year that half of all Americans believe Obamacare will up the deficit.