Monday, October 17, 2011
CBO Says Obamacare “Savings” Were A Myth
In Most Quarters That’s Called A Lie
By Dell Hill
Get ready for a long list of excuses why this happened, but Democrats who prepared and stuffed Obamacare down our throats, lied when they said the health care monstrosity would save $210 billion dollars. We knew it was a lie at the time and the Congressional Budget Office proved it today.
Forbes contributor, Avik Roy, a Senior Fellow in health care policy at the Manhattan Institute for Policy Research, filed this report this morning.
“I have obtained a copy of an email that the Congressional Budget Office just sent to “interested Hill staff,” stating that, “beginning immediately, legislation to repeal the CLASS provisions in current law would be estimated as having no budgetary impact.” This clears the way for CLASS to be quickly repealed by Congress, because Congress won’t have to find offsetting budget cuts for CLASS’ mythical “savings.”
CLASS, you will recall, is the Obamacare long-term care entitlement that was known by all parties to be a fiscal time bomb, due to a structure that is designed to create an adverse selection death spiral in which only sick people use the program, driving up premiums and making them unaffordable and/or requiring a taxpayer bailout.
This news also has strategic importance for overall repeal of Obamacare. As I discussed on Friday, the CBO scored the Patient Protection and Affordable Care Act as reducing the deficit by $210 billion in the years 2012-2021. $86 billion of these savings comes from CLASS, because the program takes in premiums for five years, before it pays out claims, thereby making the program appear to be “deficit-reducing” in the near term.
As a result of the new CBO score, PPACA’s alleged deficit savings are now $124 billion in the 2012-2021 timeframe, a meaningfully more manageable number, given that the reconciliation process will need to be used to repeal the law under a Republican President. Even this number is fudgy, as I describe in detail in this post, but the CBO’s view is of significant importance in Congress.”
Read the referenced Email and this entire report from Forbes by clicking right here.
The Congressional Budget Office (CBO) is a politically neutral group with the primary job of scoring proposed legislation to determine it’s cost and overall financial impact. For instance, when a President tells the world that his proposal “will cost” a certain amount of money, it’s up to CBO to verify that cost. If the President declared his proposal to be “deficit neutral”, that means it won’t add to the federal deficit. It’s the CBO’s job to investigate and substantiate that claim.
One of the major problems the CBO has it trying to score legislation that has errors in the data presented. CBO can’t change those numbers; it has to determine its score based on the information contained in the bill. It doesn’t take a math wizard to figure out that bad numbers worked into the proposal will skew the CBO results and give the impression that the legislation will do one thing, but the end result will be another.
That’s exactly what’s happened here; just as it was pointed out during the debate concerning Obamacare. The numbers were fudged by people aware of what it would take to have the CBO show an overall saving, when they knew those savings would never happen. At the time, there was absolutely nothing the CBO could do...But, with this report, it appears the CBO has struck back - pointing out how simple it would be to repeal Obamacare (with a Republican President, of course), because no loss would be involved, requiring off-setting budget cuts.
The only real question left is: Did the Democrats lie about their unwanted health care legislation or are they lying now, when they deny their earlier lies?
Posted by Dell at 1:26 PM