CBO: Repealing Obamacare Would Reduce Federal Spending by $1.4 Trillion Over 10 Years


Saturday February 19th, 2011   •   Posted by David Theroux at 4:36pm PST   •  

In an article at the American Spectator by Philip Klein, he reports on the new report from the Congressional Budget Office (CBO) that shows that repeal of Obamacare (“Patient Protection and Affordable Care Act”) would cut $1.4 trillion from projected federal spending over ten years. In addition, even greater cuts of $732 billion could result if the reductions in Medicare spending included in the Act were adopted separately.

During the health care debate, Democrats were hard pressed to keep up with President Obama’s promise that the legislation would cost “around $900 billion.” So they employed the gimmick of delaying the major spending provisions until 2014 to make the legislation appear cheaper within the CBO’s ten-year budget window, then 2010 through 2019. At the time, I calculated that this tactic deferred 98 percent of the spending to the last six years of that period. Well, now two years have passed, and the CBO’s budget window has shifted to 2012 through 2021—and voilà—the estimate that was $940 billion at the time of passage has suddenly gone up to $1.4 trillion. Keep in mind that this estimate still includes two years (2012 and 2013) prior to full implementation. Clearly, the actual 10-year cost of the major coverage provisions is going to be even higher—likely something closer to $1.8 trillion.

Of course, Democrats are going to focus on the CBO’s other finding— that repealing the health care law would add $210 billion to deficits over this period. But let’s break that down. It’s true that the law also includes $732 billion in spending cuts (primarily for Medicare). Right now, we’re engaged in a bitter debate over how to wring savings out of the federal budget so we can reduce the debt. Well, if the $732 billion in cuts had not been used to pay for a new entitlement, they’d still be available for deficit reduction.

Even so, when all the cuts are taken into account, net spending still goes up by $604 billion under the health care law. The way it archives deficit reduction is through $813 billion in tax hikes. In other words, the law “saves” money only if you think all money is government property to begin with—it certainly doesn’t save the taxpayers who are coughing up the additional $813 billion.




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