A new study by Chuck Blahous, public trustee for Medicare and Social Security, blows to smithereens the claim that the Affordable Care Act (aka ObamaCare) will cut the deficit. According to Blahous, President Obama’s health care law unambiguously worsens the nation’s already unsustainable fiscal path. Among its key findings are these:
· Even under an optimistic scenario, the health care law will add more than $1.15 trillion to federal spending over the next decade.
· The law will add more than $340 billion and as much as $530 billion to federal deficits over the same period, and increasing amounts thereafter.
· To ensure the health care law doesn’t worsen the nation’s fiscal outlook, two-thirds of the subsidies must be repealed or other fiscal offsets found before benefits begin in 2014.
The Obama administration is employing intellectually shallow arguments to counter the findings of the study. “Opponents of reform are using ‘new math’ while they attempt to refight the political battles of the past,” an anonymous White House budget official told the Washington Post. “The fact of the matter is, the Congressional Budget Office and independent experts concluded that the health-reform law will reduce the deficit. That was true the day the bill was signed into law, and it’s true today.”
That is because the Obama administration relies on what’s known as double counting, something even the CBO admits. The Post story, as well as this analysis by Yuval Levin, explains the matter in detail. So does Richard Foster, chief actuary of Medicare, who in 2010 wrote, “In practice, the improved [Medicare trust fund] financing cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions) and to extend the trust fund, despite the appearance of this result from the respective accounting conventions.” What Foster was telegraphing is that while he was bound by accounting rules to double count, he knows it provides a terribly misleading picture of the fiscal effects of the Affordable Care Act. That is quite an admission by a man who works for the president.
The conclusion by Blahous is, from the Obama administration’s perspective, brutally straightforward:
Taken as a whole, the enactment of the ACA has substantially worsened a dire federal fiscal outlook. The ACA both increases a federal commitment to health care spending that was already unsustainable under prior law and would exacerbate projected federal deficits relative to prior law. This is an unambiguous conclusion, as it would result regardless of the degree of future success attained in upholding various cost-saving provisions now embedded in the law.
Once again, reality is blowing apart the imaginary world created by Obama. More and more, it seems, the various claims made by the president should begin with these four words: “Once upon a time.”