CBO: Health-care reform bill cuts deficit by $130 billion/10 years

[jriley1349]

The just-released non-partisian Congressional Budget Office analysis of the reconciliation bill being considered before congress indicates that comprehensive health care reform will cost the federal government $940 billion over a ten-year period, but will increase revenue and cut other costs by a greater amount, leading to a reduction of $130 billion in the federal deficit over the same period.

Stated another way, this bill costs around $94 billion/year, in a ~4 trillion budget. It projects that it will cut the deficit by $1.2 trillion over a 20 year period.

The report also indicates that the bill extends Medicare's solvency by at least 9 years and reduces the rate of its growth by 1.4 percent, while closing the doughnut hole for seniors, meaning there will no longer be a gap in coverage of medication. The CBO also estimated it would extend coverage to 32 million additional people.

... that's more deficit reduction than either the House or Senate bill, and more coverage than the Senate bill.

In July 2004, the same CBO concluded that the Medicare Part D bill would "increase mandatory outlays by $407 billion for fiscal years 2004 to 2013 and would raise federal revenues by $7 billion over that period." And, "would increase deficits--or reduce surpluses--by $394 billion over the 2004-2013 period" In other words, it was a vote to add about $400 billion to the deficit in the first 10 years, and trillions more in the decades after that.
http://www.cbo.gov/doc.cfm?index=5668&type=0&sequence=1

Just for the record: Let it be said that the Repubs who voted for Medicare Part D, which the CBO projects will INCREASE the deficit by $400 billion.....are opposing this health reform bill - which DECREASES the deficit by $130 billion in 10 years (and "maybe" $1.2 trillion in 20 years).

And the same Repubs are attributing their opposition (in large part) to "fiscal responsibility."

[darrels joy]

has a total cost of $940 billion

[jriley1349]

Originally Posted by darrels joy

has a total cost of $940 billion

That was stated in the first paragraph.... also stated in the first paragragh:

...leading to a reduction of $130 billion in the federal deficit over the same period

A handy comparison chart of features put up by Wall Street Journal:

http://online.wsj.com/public/resourc..._20090912.html

[darrels joy]

irrevelant, data from September 2009

[jriley1349]

Read it again...the date below the title is: March 18, 2010

and....

the far right column on the table is labeled:

President Obama's Plan -- Feb. 22, 2010

...which is what the CBO scored today.

http://online.wsj.com/public/resourc..._20090912.html

[darrels joy]

We still pay the cost to the government to give us more government and pay for insurance for some people.

We don't like many aspects of this bill. The cost is only part of the problem.

[darrels joy]

Immigration Proposal Will Blow Out All HCR Cost Estimates


Chuck Schumer and Lindsey Graham have put forth the outlines of an immigration plan, which has been endorsed by Obama as the basis for immigration reform.

While there is no legislative text, as described by Schumer and Graham, the key is that illegal aliens automatically would gain legal status if they followed certain steps:

For the 11 million immigrants already in this country illegally, we would provide a tough but fair path forward. They would be required to admit they broke the law and to pay their debt to society by performing community service and paying fines and back taxes. These people would be required to pass background checks and be proficient in English before going to the back of the line of prospective immigrants to earn the opportunity to work toward lawful permanent residence.

Assuming the eventual legislation followed this path, the key point is that illegal aliens automatically would be turned into legal aliens from the moment they enter the system. They may have to wait for "lawful permanent residence" but they would not be here illegally anymore.

There are tremendous implications of this automatic change in status for the pending health care bill, which appears headed for a vote Sunday.

The Senate health care bill, which is the foundation of Obamacare, treats legal aliens on par with citizens when it comes to the health care exchanges.

The key phrase is "an alien lawfully present in the United States," which bestows upon such person all the benefits of the exchanges as a "qualified individual" (emphasis mine):

Sec. 1312(f)(3) ACCESS LIMITED TO LAWFUL RESIDENTS.—
If an individual is not, or is not reasonably expected to be for the entire period for which enrollment is sought, a citizen or national of the United States or an alien lawfully present in the United States, the individual shall not be treated as a qualified individual and may not be covered under a qualified health plan in the individual market that is offered through an Exchange. [pg. 161]

This same term, "an alien lawfully present in the United States," is the term used in section 1401 providing tax credits (emphasis mine):

(2) LAWFULLY PRESENT.—For purposes of this section, an individual shall be treated as lawfully present only if the individual is, and is reasonably expected to be for the entire period of enrollment for which the credit under this section is being claimed, a citizen or national of the United States or an alien lawfully present in the United States. [pg. 253]

Similar language applies to the "reduced cost sharing provisions" of section 1402 (pg. 266).

The CBO cost estimates (which themselves are based on falsely rosy assumptions) do not take into account the more than 10 million people who will fully participate in the exchanges and receive subsidies (depending upon income) automatically if the Schumer-Graham proposal became law.

The Schumer-Graham proposal, which is endorsed by Obama, is just another warning sign that the CBO cost estimates are pure fantasy.

Buyer beware.

http://legalinsurrection.blogspot.co...w-out-all.html

This will add 10 MILLION people to the number covered with health care. I don't want to pay for them!

Joy

[darrels joy]

Jim Clyburn Explains It All
Then again, if the CBO can't do its job, the Democrats who are leading this effort can certainly try. Blogger Tom Elia notes that in an interview on MSNBC's "The Daily Rundown," Jim Clyburn--the No. 3 House Democrat, behind Steny Pelosi and Nancy Hoyer--explained exactly how ObamaCare is going to save the taxpayer money. Elia has the video, and the exchange starts at 1:30, but we thought it worth transcribing:

Chuck Todd: Can you explain how you get a trillion dollars in deficit reduction? I mean, the CBO didn't make it very clear. Do you feel like you understand how it is this bill somehow reduces the deficit by a trillion dollars in those out years?fficeffice" />>>

Clyburn: I think I do. What we are squeezing out of this system--remember, Medicare is a big part of this. We're extending the life of Medicare by nine years, and if you're taking the waste, fraud and abuse out of this, the savings that you get there will come as things grow. Savings will grow. You look at the community health centers. Savings will grow more in out years than in the first few years. So I believe--well, that's my assessment, and that's the way I'm explaining it to members. I hope I'm right.
>>
Savannah Guthrie: But Congressman, you know, speaking of actually the first 10 years, I think when ordinary Americans look at this and they hear this is a bill that will cost $940 billion but will reduce the deficit $138 billion, they don't understand how those two things go together. Can you just explain how you have to spend almost a trillion dollars to save $138 billion?>>

Clyburn: Well, because--sure. If you look at, as I said, the kind of savings that you build into the system, what it will save the federal government when you get people into these private insurance plans--the cost-shifting, all of that, out of the system. So if you got 32 million people coming onto insurance plans, that's 32 million people coming out of emergency rooms; that's 32 billion [sic] people that you don't have to pay for in all the cost-shifting that takes place in the system. When my wife had bypass surgery, I looked on her bill. We paid $15 for one aspirin. Then that takes all of that out of the system, and that's how you get that kind of savings, when you multiply that by the number of people that are getting primary care out of emergency rooms, you won't be doing that. That's the kind of stuff.>>

Heck, who needs the CBO? It's all so clear now!

[darrels joy]

CBO report: Debt will rise to 90% of GDP

David M. Dickson

President Obama's fiscal 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than the administration projected, and raise the federal debt to 90 percent of the nation's economic output by 2020, the Congressional Budget Office reported Thursday.

In its 2011 budget, which the White House Office of Management and Budget (OMB) released Feb. 1, the administration projected a 10-year deficit total of $8.53 trillion. After looking it over, CBO said in its final analysis, released Thursday, that the president's budget would generate a combined $9.75 trillion in deficits over the next decade.

"An additional $1.2 trillion in debt dumped on [GDP] to our children makes a huge difference," said Brian Riedl, a budget analyst at the conservative Heritage Foundation. "That represents an additional debt of $10,000 per household above and beyond the federal debt they are already carrying."

The federal public debt, which was $6.3 trillion ($56,000 per household) when Mr. Obama entered office amid an economic crisis, totals $8.2 trillion ($72,000 per household) today, and it's headed toward $20.3 trillion (more than $170,000 per household) in 2020, according to CBO's deficit estimates.

That figure would equal 90 percent of the estimated gross domestic product in 2020, up from 40 percent at the end of fiscal 2008. By comparison, America's debt-to-GDP ratio peaked at 109 percent at the end of World War II, while the ratio for economically troubled Greece hit 115 percent last year.

"That level of debt is extremely problematic, particularly given the upward debt path beyond the 10-year budget window," said Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget.

For countries with debt-to-GDP ratios "above 90 percent, median growth rates fall by 1 percent, and average growth falls considerably more," according to a recent research paper by economists Kenneth S. Rogoff of Harvard and Carmen M. Reinhart of the University of Maryland.

CBO projected the 2011 deficit will be $1.34 trillion, not much different from the administration's estimate of $1.27 trillion. However, CBO's estimate of the 2020 deficit at $1.25 trillion significantly exceeds the administration's $1 trillion estimate.

"The biggest part of the deficit difference is lower tax revenue due to the different economic assumptions," said James R. Horney, a federal-budget analyst at the liberal Center on Budget and Policy Priorities. "The administration assumes GDP and incomes will be higher, and that translates into higher revenues than CBO expects. Relatively small differences in economic assumptions can add up to big differences over 10 years."

While Ms. MacGuineas agreed that "economic forecasts have a large impact on budgetary projections," she cautioned that such differing assumptions, often called the "rosy scenario," could account for just $350 billion of the 10-year, $1.2 trillion difference between the White House and CBO.

The president has established a fiscal commission to propose actions to reach his goal of balancing the budget by 2015, except for net interest payments, which CBO projects to total $520 billion that year. The president's budget, however, will generate a $793 billion deficit in 2015, according to CBO.

"The proposed budget is woefully insufficient to achieve the president's goal or the important fiscal goal of stabilizing the debt at a reasonable level in the medium and long term," Ms. MacGuineas said.

The CBO and the administration expect the deficit for fiscal 2010, which ends Sept. 30, to approximate $1.5 trillion and exceed 10 percent of GDP, the first time that threshold will have been reached since World War II.

Before last year's deficit reached an eye-popping 9.9 percent of GDP, the biggest postwar deficit was 6 percent of GDP in fiscal 1983.

In addition to the free-spending fiscal policy the U.S. government will pursue, monetary policy will remain loose in the near term, Federal Reserve Chairman Ben S. Bernanke told a congressional committee Thursday.

Citing still-fragile economic conditions and noting the low level of inflation, Mr. Bernanke told the House Financial Services Committee that the Fed would maintain historically low short-term interest rates for the time being.

Tightening would not begin until the "expansion matures," he said, though he did not provide a specific timetable for ratcheting up interest rates.

Indicative of the economy's ongoing fragility, especially in the labor market, was the fact that first-time claims for unemployment benefits were still a relatively high 442,000 last week, the Labor Department reported Thursday. The number was a decline of 14,000 over the previous week's seasonally adjusted number.

Economists disagree over the propriety of running a $1.5 trillion deficit this year as the economy shifts into recovery mode. But they generally agree that budget deficits should proceed along a consistent, downward path as the expansion matures. Most economists, therefore, fear the prospect of rising deficits in the latter part of this decade, long after steady economic growth has returned and unemployment has plunged.

In a worrisome development, CBO projects that federal budget deficits, after dropping sharply, then will begin to rise continuously from 4.1 percent of GDP in 2014 to 5.6 percent in 2020.

For the 2016-20 period, CBO estimates that deficits will average more than 5 percent of GDP, even while assuming the economy will be near full employment, with an average jobless rate of 5 percent during that same five-year period.

One economist concerned about unsustainable fiscal policy in the out years is OMB Director Peter R. Orszag.

"Deficits in the, let's say, 5 percent of GDP range would lead to rising debt-to-GDP ratios in a manner that would ultimately not be sustainable," Mr. Orszag acknowledged to reporters on March 20, 2009, two months after the administration entered office.

http://www.washingtontimes.com/news/...-of-gdp/print/

[darrels joy]

...
In this case, a picture may be worth a thousand million billion trillion quadrillion words:



The worst deficit under a Republican Congress was $400 billion in FY2004.

It’s also worth noting that the last budget produced by a Republican Congress spent $2.77 trillion (FY2007), and had a deficit of less than half of that peak. While Republican Congresses added almost $800 billion in annual spending to the budget in six years — an indefensible expansion — that pales in comparison to the $1.1 trillion added by Democratic Congresses in just three years. Under those conditions, the massive budget deficits shown in the CBO’s graph are simply unavoidable, and the best of the next ten years is double the worst of the Republican Congress from 2001-7.
...

http://hotair.com/archives/2010/03/2...in-nine-years/