Don’t take my word for it. The Congressional Budget Office spells it out [PDF]…
Estimated Budgetary Impact of the Amended Chairman’s Mark
According to CBO and JCT’s assessment, enacting the Chairman’s mark, as amended, would result in a net reduction in federal budget deficits of $81 billion over the 2010-2019 period (see Table 1). The estimate includes a projected net cost of $518 billion over 10 years for the proposed expansions in insurance coverage. That net cost itself reflects a gross total of $829 billion in credits and subsidies provided through the exchanges, increased net outlays for Medicaid and the Children’s Health Insurance Program (CHIP), and tax credits for small employers; those costs are partly offset by $201 billion in revenues from the excise tax on high-premium insurance plans and $110 billion in net savings from other sources. The net cost of the coverage expansions would be more than offset by the combination of other spending changes that CBO estimates would save $404 billion over the 10 years and other provisions that JCT and CBO estimate would increase federal revenues by $196 billion over the same period.1 In subsequent years, the collective effect of those provisions would probably be continued reductions in federal budget deficits. Those estimates are all subject to substantial uncertainty.
1 The $196 billion figure includes $180 billion in additional revenues (estimated by JCT) apart from receipts from the excise tax on high-premium insurance plans and $16 billion in additional revenues from certain Medicare and Medicaid provisions (estimated by JCT and CBO).
Ignore for a moment the net cost of $829 billion, instead focus on how the the plan (despite what nearly every media outlet is reporting, it’s not a bill) achieves its reduction in the federal deficit. The numbers are right there…
- $201 billion in revenues from the excise tax – Tax hike for those currently insured
- $110 billion in net savings from other sources – Perhaps these “savings” won’t be passed along to you in the form of increased fees…
- spending changes that CBO estimates would save $404 billion – Medicare cuts, caps, and reimbursement changes, the costs of which will ultimately be borne by Medicare recipients
And my favorite, the footnote…
- $180 billion in additional revenues – New taxes
That my friends is how $829 billion in new federal spending magically reduces the federal deficit..
And of course there’s the little problem of the fact that the plan doesn’t dramatically alter the number of uninsured until 2014…
It continues at the 2015 levels in the out years…
