More from the CBO Mid-Session Review
A couple more thoughts from this morning’s release of the CBO August baseline. First, while not doing a full re-estimate of the budgetary impacts of the health care law, the Congressional Budget Office did assert that the health care law would reduce the deficit by $179 billion over the 2011-2020 period. (The supposed increase in deficit savings comes primarily from the addition of $28 billion of additional deficit reduction in fiscal year 2020; there were other technical adjustments made to the baseline as well.)
But, as before, CBO notes that the deficit reduction estimates are “subject to considerable uncertainty,” because they are contingent on the law being implemented as written. And both CBO and the Medicare actuary have said they do NOT think that will happen. In releasing their long-term budget outlook in June, CBO categorized most of the major savings provisions in the health care law as “widely expected” to change, or “difficult to sustain for a long period.” Likewise, earlier this month Medicare’s chief actuary went so far as to encourage individuals to ignore the estimates included in the annual trustees report, and view an alternative scenario instead, because the official estimates included unrealistic savings provisions from the health care law that are likely to be unsustainable.
In that same vein, it’s worth noting that Democrat Rep. Walt Minnick just yesterday agreed with the premise advanced by both CBO and the Medicare actuary. Specifically, on a radio call-in show, “Minnick said he thinks the current [health care] law would likely add to the national debt, because Congress could hold off on funding restrictions to Medicare scheduled to pay for expanded health insurance.”
Finally, in addition to the important revelation that CBO believes the health care law will result in fewer job opportunities, this morning’s report also included this paragraph (page 59 of the PDF), confirming the belief that uncertainty regarding the myriad regulations from the health care law is dampening economic growth:
The creation of new jobs is also being hindered by various uncertainties that firms face and by limitations on access to credit. Most forecasters anticipate only moderate growth in demand for goods and services in the next few years, and businesses could be waiting to see whether the recovery is sustained before they step up their hiring. Businesses are also unsure and concerned about the extent to which they will be affected by the implementation of recently enacted financial and health care legislation and by possible future changes in tax policy and other federal policies. In addition, small businesses continue to report unfavorable credit conditions, which may be restraining hiring at some firms.
It’s yet another in a series of indications that the health “reform” bill is harming the broader economy even as it fails to control skyrocketing health care costs, and shackles the federal government with new unsustainable entitlement obligations.