Q & A with Paul Van de Water: Debunking False Claims About Health Reform's Impact on Jobs and the Deficit
In this podcast, we’ll discuss myths about health reform’s impact on jobs and the deficit. I’m Shannon Spillane and I’m joined by Paul Van de Water, Senior Fellow here at the Center.
Paul, during the debate over the Affordable Care Act last spring, the nonpartisan, highly-regarded Congressional Budget Office – known as CBO,issued a report that showed the Affordable Care Act would reduce the deficit, by $143 billion in its first ten years, and by a significant, additional amount after that.
That’s right, Shannon. And, CBO has said so several times, most recently in a letter to Speaker of the House John Boehner just two weeks ago.
But critics continue to charge that the CBO estimate is wrong because health reform relies on several budgetary gimmicks.
These claims of budgetary gimmickry are false. I worked at CBO for 18 years, so I know a budget gimmick when I see one. And these are no gimmicks.
One claim we often hear is that Congress backloaded the laws costs to make it appear fiscally responsible. That is, they say, its biggest spending increases don’t take effect for four years – so the bill uses ten years of revenue increases to pay for only six years of significant spending. Can you explain why that claim is incorrect?
Sure. It’s true that some of the provisions that save or raise money kick in before spending on things like tax credits to help make insurance more affordable. But there are also major revenue increases that don’t take effect until later—for example, the law’s excise tax on high-cost insurance plans.
And let’s be clear. If this were a gimmick, the law would appear fiscally responsible in the first decade, but the hidden costs would pop up down the road. That’s how gimmicks work. But that’s not the case here. CBO found that the law reduces deficits even more in the law’s second ten years than it does in the first.
House Republican leaders say that the Affordable Care Act will destroy jobs by making it more expensive for employers to provide insurance for their employees. Is there any truth to this?
No, it’s completely wrong. CBO also looked at this issue and they found that health reform is unlikely to raise most businesses’ health insurance premiums -- in fact for most firms, premiums are likely to go down.
What CBO did say is that some people who are currently working primarily because they need their health insurance might choose to retire early or work a little less.
But that has nothing to do with firms hiring fewer people. Opponents of reform who claim that will happen are not only wrong but are misleading the public.
Paul, what’s the bottom line?
Two key points. First, in attacking the CBO estimate of health reform’s costs and making false claims about the law’s impact on jobs, opponents of reform are perpetuating myths and deliberately confusing the public. Health reform will reduce the deficit and will not kill jobs.
Second, at a time when the nation faces serious long-term fiscal challenges, it’s extremely troubling to see Congressional leaders rejecting CBO analyses they find politically inconvenient and promoting their own partisan estimates.