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How Many Times Does It Have to Be Said? Health Reform Reduces the Deficit

January 7, 2011 at 5:43 PM

In March 2010, as Congress was enacting the health reform law (the Affordable Care Act), the Congressional Budget Office estimated that it would reduce the deficit by $143 billion over the 2010-2019 period and by the equivalent of about $1.3 trillion over the following decade.  While the law will extend coverage to over 30 million uninsured Americans and provide important consumer protections to tens of millions of Americans with coverage, it will more than pay for these coverage expansions by specific spending reductions for Medicare, Medicaid, and other programs and by additional tax revenues.  In August 2010, as part of its mid-year budget update, CBO found no reason to make any substantial change in its earlier estimate.

Yesterday, in a letter to Speaker Boehner, CBO reaffirmed that the budgetary effects of health reform will be similar to what it projected ten months ago.  The House Republican proposal to repeal the Affordable Care Act would increase the deficit by roughly $145 billion over the 2012-2019 period and by about $230 billion through 2021, according to the new CBO letter.

Speaker John Boehner, Majority Leader Eric Cantor, and Budget Committee Chairman Paul Ryan continue to assert that the CBO estimates are wrong because the health reform law relies on budgetary gimmicks.  They also claim that health reform will “kill jobs.”  In a new paper, I summarize why these charges are bogus.  Independent evidence provides no support for either argument.  At a time when the nation faces serious long-term fiscal challenges, the sight of congressional leaders rejecting CBO estimates they find politically inconvenient and promoting their own partisan estimates instead has far-reaching, and disturbing, implications.


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