This article was published by the McAlvany Intelligence Advisor on Monday, June 22, 2015:
Former Speaker of the House Nancy Pelosi (D-Calif.) was one of the first to react to the report just released by the Congressional Budget Office (CBO) on Friday. She was so quick to comment that there was suspicion she had had no chance to read it. When the details behind the report came out, that suspicion was confirmed.
The House member most responsible for garnering the 219 votes needed in the House in March 2010 to pass ObamaCare – the Affordable Care Act, or ACA – is remembered for her comment made during a 20-minute speech just prior to passage:
You’ve heard about the controversies, the process about the bill … but we have to pass the bill so that you can find out what’s in it….
In her reacting to the CBO about how a possible repeal of her precious ObamaCare would allegedly increase the federal deficit over the next ten years, she exclaimed:
Today’s CBO report is very clear. Any way you slice it, repealing the Affordable Care Act will add hundreds of billions of dollars to the deficit.
Once the full 28-page report, titled “Budgetary and Economic Effects of Repealing the Affordable Care Act,” was read, Pelosi’s comments can safely be written off as comments prior to knowledge. The report is so filled with assumptions, estimates, and just plain guesses that its validity as useful for anything more than political fodder for the mainstream media is minimal.
Headlines reveal only that, if ObamaCare is repealed (effective January 1, 2016, the first great assumption), federal deficits will increase by somewhere between $137 billion and $353 billion over the next ten years, depending on a whole host of other assumptions.
Taking the higher number that represents just .00875 percent of the budget of the federal government each year. As W.C. Fields once told a friend who bragged to him that he drank a bottle of scotch every day, Fields responded, “Why, heck, I spill that much!”
And even that number is suspect. As the CBO was careful to note, which Pelosi would have known had she actually read its report,
For many reasons, the budgetary and economic effects of repealing the ACA could differ substantially in either direction from the central estimates present in this report.
The uncertainty is sufficiently great that repealing the ACA could reduce deficits over the 2016-2025 period – or could increase deficits by a substantially larger margin….
It threw a dart into the future dartboard from 2026 on out, noting:
The estimated effects on deficits of repealing the ACA are so large in the decade after 2025 as to make it unlikely that a repeal would reduce deficits during that period, even after considering the great uncertainties involved.
In sum, the report is all but worthless, with two exceptions. The CBO did say that repeal would put about eight million people back to work, or would allow those already working part-time thanks to the ObamaCare cap to work more hours. With repeal of the individual mandate, some would opt to reenter the workforce in order to get employer-paid coverage. This is a tacit admission that those subsidies have successfully reduced the workforce, just like its critics claimed.
The CBO also indicated, albeit indirectly, that repeal of ObamaCare would expand personal freedom: it estimated that repeal would result in between 30 and 35 million American dropping their health insurance coverage – coverage that they are only buying in order to respond to federal mandates and penalties. In other words, millions of Americans would now regain the freedom to spend their own money as they see fit, not as Pelosi’s ObamaCare sees fit.
The CBO admits that the reason deficits would increase would be because taxes built into the 2,000+ page bill to help fund the monstrosity would be terminated, including taxes on medical device makers and high-net-worth individuals:
The ACA also includes many provisions that are estimated to increase federal revenues….
Those with the most significant budgetary impacts increased the Hospital Insurance payroll tax rate for high-income taxpayers, added a surtax on those taxpayers’ net investment income, and imposed annual fees on health insurers.
Note that the CBO falls into the trap of calling tax reductions or eliminations a decrease in federal revenues and not a tax break to beleaguered taxpayers, insurance companies, and medical device innovators.
And then there’s the pending decision by the Supreme Court in King v Burwell that would impact further the many assumptions the CBO made in cobbling together this all but worthless report:
The Supreme Court’s forthcoming ruling about subsidies provided through insurance exchanges constitutes another major source of uncertainty….
The Court could rule that the law does not authorize subsidies in some states. If that happened, [the] CBO and the JCT [Joint Committee on Taxation] would reduce their projections on spending on those subsidies under current law….
For the mainstream media, which has consistently supported federal intrusions like ObamaCare into what are private affairs, the CBO report gave them headlines for those not interested in the facts. NBC News shouted, “ObamaCare Repeal Would Raise Deficit, Cost People Insurance, Report Finds” while CNBC just focused on the deficit: “ACA Repeal Would Increase Deficit.”
In the ongoing war between freedom and statism, the CBO failed to mention that lower taxes on medical device makers and high-income and wealthy individuals would likely improve the delivery of health care to patients as innovations through new investments would not only bring down the cost of that delivery but make it more effective and successful in sustaining and improving lives. It failed to mention that repeal would also bring patients closer to their healthcare providers by removing a demanding, intrusive, and expensive third party from the relationship.
But even if the CBO is right, and the repeal of ObamaCare would increase the deficit, freedom is more precious than prosperity. The founders moved heaven and earth to create a republic with a government limited to certain specific enumerated powers in order to protect individual freedom from an overreaching federal government. Much more than just improved GDP numbers are involved in efforts to repeal a government program that most Americans didn’t want in the first place.
Washington Times: Repealing Obamacare would boost economy, but drive deficits deeper: CBO