HEALTH CARE: PHONEY FIGURES BY CBO

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Health Issues

January 21, 2011

Health Care Repeal Won't Add to the Deficit

The Congressional Budget Office (CBO) says repealing the Affordable Care Act (ACA) would increase the deficit by $230 billion over the coming decade and by a modest amount in the decade after that. A close examination of the CBO's work and other evidence leads to the exact opposite conclusion, according to Douglas Holtz-Eakin, former director of the CBO, Joseph Antos, former assistant director at the CBO and James C. Capretta, former associate director at the Office of Management and Budget.
If the CBO is right, 32 million people will be added to the health entitlement rolls at a cost of $938 billion through 2019, and growing faster than the economy or revenues thereafter. How, then, does the ACA magically convert $1 trillion in new spending into painless deficit reduction? Through budget gimmicks, deceptive accounting and implausible assumptions.

* For starters, $1 trillion is a low-ball estimate, covering only six -- not 10 -- years of subsidies that do not begin until 2014.
* Over 10 years of full implementation, it's more like $2.3 trillion.

The deepest spending cuts in the ACA are in Medicare. No doubt Medicare needs real reform, but the ACA's cuts are illusory. Medicare's payments to health care providers would fall below those of Medicaid. The network of hospitals and physicians willing to care for Medicaid patients is notoriously constrained, say Holtz-Eakin, Antos and Capretta.

* About 15 percent of the nation's hospitals would have to stop seeing Medicare patients in just a few years to stem their losses.
* What's worse, ACA's advocates are double-counting this fictional savings, claiming it can pay both for the ACA's entitlements and Medicare solvency too.
* The truth is, these cuts cannot be relied upon to pay for anything.

So, even if the CBO's analysis were flawless, the authors of the ACA guaranteed a misleading bottom line. Their legislative prescriptions were written to create deficit reduction only on paper -- not in reality.
Source: Douglas Holtz-Eakin, Joseph Antos and James C. Capretta, "Health Care Repeal Won't Add to the Deficit," Wall Street Journal, January 19, 2011.
For text:
http://online.wsj.com/article/SB10001424052748703954004576089702354292100.html
For more on Health Issues:
http://www.ncpa.org/sub/dpd/index.php?Article_Category=16
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Rich Galen

The chatter around Your Nation's Capital among the cognoscenti, the intelligentsia, and smarty-pantses over the past 24 hours was: Is there any real meaning to the House vote to repeal Obamacare?

That may not be as poetic as Paul Simon's lyric from his 1966 song Dangling Conversation: We speak of things that matter;
With words that must be said:

"Can analysis be worthwhile;
Is the theater really dead?"

The answer might have been "No. It was all eye wash," but the House Republican Policy Committee followed right on the heels of that vote with a list of programs and policies which, if adopted, would save $2.5 trillion (with a "T") over the next 10 years.

Someone far wiser than I once said that every line in the United States Internal Revenue Code has a constituent. So it is with every dollar which is spent by the Federal government.

Here are some of the big cuts:

A 15 percent reduction in the number of civilian Federal employees. This would be accomplished by attrition rather than outright firings. According to the plan only one employee could be hired for every two who left until the reduction number was met. The Committee doesn't break out the amount which would be saved, but says it is part of the overall $2.29 trillion in discretionary spending cuts over 10 years.It also doesn't say whether it applies just to the Executive Branch, or also would be applied to the Legislative and Judicial Branches.

Some cuts are called for in programs I didn't even know existed. As an example, cutting out the "Hope VI Program" will save $250 million per year. I looked it up for you. According to the HUD.GOV web page: "The HOPE VI Program was developed as a result of recommendations by National Commission on Severely Distressed Public Housing, which was charged with proposing a National Action Plan to eradicate severely distressed public housing."

There. Now you know as much as I do.

Amtrak is heavily subsidized. To the tune of $1.565 billion per year. Let's round down to $1.5 billion per year. I use Amtrak to travel to New York from Washington, DC, but I don't think I'm worth a billion and a half per.

The plan calls for cutting the Federal Travel Budget in half which will save $7.5 billion per year. Again, it is not clear whether this includes Congressional travel, but I have a suggestion: Only allow members of the House and Senate to travel to their home States or Districts six times per year on the public dole. More than that, they have to use campaign funds.