CBO Discovers ObamaCare Costs a Lot of Money
A new report on the economic impact of the law and its repeal.
The Supreme Court’s upcoming decision in King v. Burwell has everyone guessing as to what the future holds for ObamaCare. The GOP is looking for ways to protect the six million-plus Americans who could wind up losing their insurance subsidies if the High Court strikes down the Obama administration’s lawless distribution of them. The law was explicitly written to limit subsidies to state-run exchanges only. But when only 16 states and the District of Columbia established their own exchanges, Barack Obama rewrote the law to dole out subsidies on the federal exchange in the other 34 states.
Republican senators seem more amenable to continuing subsidies in some form for the time being to prevent a wave of people from losing their insurance. In the House, Ways and Means Chairman Paul Ryan is suggesting a block grant program that would allow states to spend chunks of cash however they see fit to cover consumers. Another proposal by Rep. Paul Gosar of Arizona is the Premium Reduction and Insurance Market Reform Act, which would bring an end to federal subsidies as well as eliminate age rating restrictions and benefit mandates.
Unfortunately, the Supreme Court had the chance to bring an end to Obama’s unholy monster before and failed. On the off chance that the justices now uphold the letter of the law and the subsidies are struck down, the law itself could fold because those illegal federal subsidies are essentially propping it up in 34 states.
In an interesting twist of fate, a recently released report from the Congressional Budget Office and the Joint Committee on Taxation indicates that the country may be better off if ObamaCare were to go away.
The report itself is part of a mandate passed by the House requiring the CBO and the JCT to assess the economic impact of any bills that would change budget policy.
The assessment in the case of a possible repeal of ObamaCare was that Gross Domestic Product would see a 0.7% boost in the years 2016-2025, putting an additional $1,400 in the pocket of each American household per year. Employment and investment in capital stocks would also see an increase.
Initial findings from the CBO-JCT report noted that the repeal of ObamaCare would increase federal budget deficits by $353 billion over the next decade. Leftists have been clinging to this figure as proof that a world without ObamaCare would lead to fiscal disaster.
This is laughable in the extreme. First off, since when do Democrats care whether or not there’s a budget deficit? See their 2009-2010 spending spree. Second, the CBO has determined that total deficit spending for that time frame will be $7.2 trillion, making the ObamaCare contribution nearly inconsequential. And third, that number doesn’t even tell the whole story.
The report goes on to point out that, without ObamaCare, economic output would rise, bringing the actual budget deficit due to ObamaCare down to $137 billion. Additionally, the taxes ObamaCare has foisted on the country — on medical devices, investment income, drug manufacturers, so-called “Cadillac insurance plans” — would all go away. The long-term impact of this would actually mean higher federal revenues since companies and individuals would be free to make investments in the economy with the money that would have otherwise gone to supporting an ever-growing bureaucracy.
The CBO-JCT numbers are fleeting, to be sure. Any budgetary estimate that tracks out five or 10 years has to make assumptions that rarely come to pass and cannot anticipate unforeseen economic circumstances. But the Obama administration swore by the CBO’s estimates when those numbers swung in its favor. It’s interesting to see that this institution now sees that the very law it believed workable just a few years ago is now a burden on the American economy. No matter how the Supreme Court decides, ObamaCare has to go away.
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