The Congressional Budget Office late Friday afternoon added a “clarification” to its estimate released on how much repeal of health care reform would cost the government. The bottom line was an increase in the ten-year budget deficit of $230 billion.
In a clarification on his blog offered in response to “questions,” CBO chief Douglas Elmendorf said repeal would reduce revenue by $770 billion over the next ten years and reduce outlays by $540 billion. This got me thinking. Would repeal actually reduce revenue by $770 billion? I don’t recall a massive tax increase in the original bill.
Then I remembered: The reform legislation contained about $500 million of “revenue” from eliminating extra payments for Medicare Advantage, increasing the efficiency of the fee-for-service Medicare program, and instituting a mechanism — the Independent Payments Advisory Board — that would lower outlays if overall spending ran out of control. In other words, they were spending cuts. Shouldn’t repeal of these measures be properly categorized as increased outlays, not decreased revenues?
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So, here’s a better way to understand the fiscal implications of H.R. 2, the Repeal of the Job-Destroying Health Care Act, better known as the Affordable Care Act or simply health care reform to its proponents. By voting for repeal, Republicans (I’m assuming it will be a party-line or close to party-line vote) will be voting for a ten-year reduction in taxes of approximately $270 billion; a ten-year reduction in outlays of approximately $40 billion; and a ten-year increase in Medicare spending of approximately $500 billion.
The Republicans dubbed their new House rules “cut-go,” to distinguish them from the Democratic rules they replaced, which were called “pay-go” because you had to pay for every new program you passed. Seems to me a better name for H.R. 2 is “cut-grow.” It cuts benefits for the uninsured while growing the inefficient parts of Medicare.
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Merrill Goozner is an award-winning journalist and author of "The $800 Million Pill: The Truth Behind the Cost of New Drugs" who writes regularly at Gooznews.com.
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