Contact FreedomWorks

400 North Capitol Street, NW
Suite 765
Washington, DC 20001

  • Toll Free 1.888.564.6273
  • Local 202.783.3870

Blog

    Repealing ObamaCare will not increase the deficit

    As the 112th Congress approaches a vote on legislation that would repeal in its entirety the ObamaCare health care law, many of the lawmakers who worked to pass the legislation are now crying foul.  On Tuesday, former-House Speaker turned House Minority Leader Nancy Pelosi (D-Cali.) claimed that the repeal of the Democrats' reform would do, “very serious violence to the national debt and deficit.”


    Interesting how different the Minority Leader's tone seems now that she is no longer in power.  We must remember that this is the same woman who, in her four years as Speaker of the House, increased the national debt from $8.67 trillion to $14.01 trillion.  Under her direction, Congress has added a staggering $5.34 trillion to the debt; that's more than a trillion dollars per year.  Even in the face of such facts, Leader Pelosi has the gall to claim, "Deficit reduction has been a high priority for us. It is our mantra, pay-as-you-go.”


    But the former-Speaker's hypocrisy is beside the point.  The truth of the matter is that repealing the unwanted, intrusive, unaffordable monstrosity that is the health care law will not increase the national deficit.  In fact it will have the opposite effect.  A repeal of ObamaCare would be the first step towards restoring fiscal sanity in our nation's Capitol.  As the Conn Carroll of the Heritage Foundation recently noted:



    Only someone so out of touch with reality that they could claim that “deficit reduction” has been their “highest priority” while simultaneously adding more than $1 trillion a year to the debt could possibly claim that repealing Obamacare would add to the debt. But that is exactly what Pelosi wants us to believe.


    Despite the Congressional Budget Office's (CBO) report that ObamaCare could reduce the deficit by $124 billion over its first 10 years of implementation, most objective onlookers believe that it will actually increase the national debt and deficit by quite a bit more.  Carroll notes that even the Director of the CBO Doug Elmendorf seems to think that his organizations estimates were off.  Elmendorf writes:



    CBO’s cost estimate noted that the legislation maintains and puts into effect a number of policies that might be difficult to sustain over a long period of time.


    In his piece for Heritage, Carroll observes:



    Elmendorf then goes on to identify a number of specific Obamacare policies, such as arbitrary reductions in the growth rate for Medicare spending, that anyone who follows health care policy knows will be impossible to actually implement.


    Before the health care legislation was passed, FreedomWorks Vice President of Public Policy Max Pappas and I examined some of the budget trickery that then-Speaker Pelosi and Senate Majority Leader Harry Reid (D-Nev.) used in order to manipulate CBO calculations and achieve the "deficit neutral" cost estimate that they so desperately desired.  At the time, we observed that--despite the Democrats' claims that their government takeover of the healthcare system would cost less than $900 billion--the total cost of the bill is actually much higher.  We said that when they made such assertions, Democrats' failed to explain the elaborate budget gimmicks that they had strategically placed within the bill to produce such a cost estimate.  We noted that among other tricks, the Democrats willfully ignored the following aspects of the reform legislation when claiming to have achieved deficit neutral reform:



    The withholding of benefits:  According to the Heritage Foundation:


    "The Senate bill is cleverly designed to gather revenues (higher taxes, fees, and other offsets) over the full 10 year window but delays paying out the major benefits, like subsidies, until the last 6 years. So, the 2010-2019 estimate is not a full cost estimate of all provisions fully implemented and will certainly add significantly to the true cost of the bill."


    Although the total cost of reform is unknowable, it has been estimated that the cost of the bill is somewhere around $2.5 trillion over 10 years of full implementation (2014-2023).


    The deceitful "Doc Fix" that could not pass through the Senate:  Introduced by Senator Debbie Stabenow (D-Mich.), S. 1776, the Medicare Physician Fairness Act of 2009, would have spent an additional $247 billion in taxpayer money on reimbursements for physicians through Medicare. In part, the Reid bill owes its deficit neutral status to the reduction of $200 billion in physician reimbursements through Medicare that exist within the legislation. The savings in the Reid plan are almost the exact equivalent of the cost of S. 1776. The passage of S. 1776 would have negated reductions in Reid's legislation without adding to the perceived cost of reform. This deception helps to explain why the Reid proposal was estimated to cost less than a trillion dollars and also why it was estimated to reduce the deficit.


    With the defeat of S. 1776 by a bipartisan majority, the price of the $247  billion doc-fix will have to be added to the cost of Senator Reid's bill. The CBO examined what would happen if the cost of the doc-fix bill in the House-- H.R. 3961-- was added to the cost of the House bill. It estimated that combining the two would "add $89 billion to budget deficits over the 2010–2019 period.


    The CLASS Act: Senator Reid's bill includes the creation of a government healthcare program for individuals with disabilities called the Community Living Assistance Services and Supports Act, or CLASS Act.  At first, the premiums collected for the new entitlement will raise revenues for the federal government.  The benefits paid out will be lower than the premiums taken in. This gives the impression that the Act lowers the deficit. It does not. The CBO points out that after 10 years the program would, "lead to net outlays when benefits exceed premiums" and, thus, it would add billions to the deficit over time.


    Underestimates: Historically, such attempts to estimate the price of government programs have fallen woefully short of the actual cost of legislation. For example, in 1967 House Ways and Means analysts estimated Medicare would cost $12 billion in 1990. They were wrong--by a staggering factor of 10. The actual spending in 1990 was $110 billion. If the current CBO estimates are off by a similar margin, the Reid bill could end up being a multi-trillion dollar piece of legislation.


    Because Leaders Reid and Pelosi included such deceitful trickery in the legislation that was eventually passed by the Democratic majority in Congress and signed into law by President Obama, the bill itself will actually cost the American people a great deal more than the original cost estimates indicated.  Repealing such an onerous law will not increase the deficit and add to the public debt.  It will do the exact opposite.  It will prevent the implementation of one of the most harmful and intrusive laws in recently history. 


    The time to act is now.  Please contact your representative and let him know that you want to see the repeal of ObamaCare law and all of the destructive regulations that it includes.  Click here to access the FreedomWorks Repeal ObamaCare War Room.