Democrats and the CBO's ObamaCare numbers

During ObamaCare debates, past and present, Democrats point to the estimates of the Congressional Budget office which show that enacting Health Care Reform gives the U.S. $143 billion in savings over the first ten years (starting in early 2010), and repealing ObamaCare would 'wipe-out' these very savings.

The crucial thing to understand is that the CBO is just a calculator: It only adds and subtracts the numbers Congress gives it. For example, a bill -- to be called ObamaCare -- that has $857 billion in expenses over the first ten years; approximately $500 billion in tax increases, in addition to approximately $500 billion in Medicare cuts over the same period, will give you a savings of $143 billion. This is what the CBO tells you. However, the CBO will not be there to make sure that the planned Medicare cuts indeed take place or that the tax increases will be enacted.

Therefore, Democrats are ignorant about the workings of the CBO or are -- more likely -- blatantly misleading the public when they point to the CBO' estimates of costs and 'savings.' These very Democrats voted multiple times -- after ObamaCare passed -- to push back until 2012 the 21% cut in pay for Medicare doctors which, according to ObamaCare, should have taken place in early 2010. The initial goal of letting the 21% cut take place was one of ObamaCare's money saving moves ($15 billion annually, according to this Reuters report). However, these ‘savings' (approximately $150 billion over ten years if the cuts never takes place), were dumped off the bus as a step one to go around ObamaCare, yet Democrats still wave the $143 billion in ‘saving' that the law will bring over the first ten years starting a year ago.

The 21% cut that was pushed back for a total of two years (thus $30 billion in savings is already gone), is just one of many Medicare cuts that ObamaCare will not be able to follow through, certainly not for extended periods of time, as estimated by the Medicare Actuary; you know, the guy who actually does analyze what cuts can or cannot take place in Medicare, and does not just glaze at the numbers as the CBO does as a Texas Instrument device of thirty years ago. For good reason did Medicare, as of now, land up to cost 9 times -- or whatever exact amount -- more than what the CBO estimated back in the 1960's. Simple, the CBO is a calculator; not an enforcer.

A good piece tarnished by this bit of historical revisionism at the end: “more than what the CBO estimated back in the 1960’s.”

The CBO was created in 1974. The Medicare mis-estimators were in the Social Security Administration. In terms of economic forecasting, CBO actually has a better track record than OMB, but the writer is correct that it’s a GIGO system. The $143 “savings” is an artifact of assumptions already proven to be false.

BREAKING: CBO Says Repealing ObamaCare Would Reduce Net Spending by $540 Billion

The Congressional Budget Office, in an email to Capitol Hill staffers obtained by the Spectator, has said that repealing the national health care law would reduce net spending by $540 billion in the ten year period from 2012 through 2021. That number represents the cost of the new provisions, minus Medicare cuts. Repealing the bill would also eliminate $770 billion in taxes. It's the tax hikes in the health care law (along with the Medicare cuts) which accounts for the $230 billion in deficit reduction.

Full email, from Edward "Sandy" Davis, CBO's Associate Director for Legislative Affairs, below.

To interested Hill staff:

CBO and the staff of the Joint Committee on Taxation (JCT) have not yet developed a detailed estimate of the budgetary impact of H.R. 2, the Repealing the Job-Killing Health Care Law Act, which would repeal the major health care legislation enacted in March 2010. Yesterday, we released a preliminary analysis of that legislation indicating that, over the 2012-2021 period, the effect of enacting H.R. 2 on the federal budget as a result of changes in direct spending and revenues is likely to be an increase in deficits in the vicinity of $230 billion, plus or minus the effects of forthcoming technical and economic changes to CBO’s and JCT’s projections for that period.
We have been asked to provide the revenue and direct spending components of that total. Extrapolating the estimated budgetary effects of the original health care legislation and accounting for the effects of subsequent legislation, CBO anticipates that enacting H.R. 2 would probably yield, for the 2012-2021 period, a reduction in revenues in the neighborhood of $770 billion and a reduction in outlays in the vicinity of $540 billion, plus or minus the effects of forthcoming technical and economic changes to CBO’s and JCT’s projections.
CBO will post a Director’s blog with this information on the CBO website shortly. Please let me know if you have any questions.
Sandy
Edward "Sandy" Davis
Associate Director for Legislative Affairs
Congressional Budget Office

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