Budget Buster

A few others have noticed the body blow dealt by the CBO to ObamaCare. The key graph from the CBO’s letter to Rep. Dave Camp:

Looking ahead to the decade beyond 2019, CBO tries to evaluate the rate at which the budgetary impact of each of those broad categories would be likely to change over time. The net cost of the coverage provisions would be growing at a rate of more than 8 percent per year in nominal terms between 2017 and 2019; we would anticipate a similar trend in the subsequent decade. The reductions in direct spending would also be larger in the second decade than in the first, and they would represent an increasing share of spending on Medicare over that period; however, they would be much smaller at the end of the 10-year budget window than the cost of the coverage provisions, so they would not be likely to keep pace in dollar terms with the rising cost of the coverage expansion. Revenue from the surcharge on high-income individuals would be growing at about 5 percent per year in nominal terms between 2017 and 2019; that component would continue to grow at a slower rate than the cost of the coverage expansion in the following decade. In sum, relative to current law, the proposal would probably generate substantial increases in federal budget deficits during the decade beyond the current 10-year budget window.

Translation: ObamaCare, far from reducing health-care costs and the deficit, increases them — dramatically and with no funding source identified to pay for the expansion. As Yuval Levin puts it: “This makes the ongoing mad dash to find a way to make the bill look deficit neutral within a 10-year budget window seem silly.” We would in fact be setting off a time bomb within the already imploding federal budget.

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Budget Buster

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