CBO on the Health Care Bill: More Spending, More Tax Revenue


Last week, the Congressional Budget Office released its summer update, a report that includes some information pertinent to the new health care law—including one data point that we didn't have before. In the past, when the CBO scored the health care bill, it had always mixed the new revenue and new spending calculations into a single element: the total effect on the deficit. But as Keith Hennessey points out, the new report breaks out the tax and revenue effects for the first time. The result—a lot more entitlement spending, and a big hike in tax revenues—is not exactly surprising. But it is clarifying:

Taking into account all of the provisions related to healt

Information that could have been brought to my attention YESTERDAY!

h care and revenues, the two pieces of legislation were estimated to increase mandatory outlays by $401 billion and raise revenues by $525 billion.

As Hennessey says, it would have been nice to have had this information months ago:

Imagine two scenarios of a lawmaker who was on the fence last March. He or she is a Blue Dog Democrat, or a Democrat from a fiscally conservative red district, and is deeply concerned that the legislation may be fiscally responsible.  He is presented with two different statements from CBO:

1. "CBO says these bills will reduce the budget deficit by $124 billion over the next decade."

2."CBO says these bills will increase federal entitlement spending by $401 billion over the next decade, and will increase taxes by $525 billion over that same time period, for a net deficit reduction of $124 billion."

These are very different statements. Both are true. CBO said only the first when Members were looking to understand the fiscal impacts of this legislation.

Throughout the debate, Democratic legislators and other supporters of the bill told the public that the health care bill would save money. But in the sense that saving money meant spending less, that was never true. The bill increases entitlement spending by quite a bit—$401 billion, we now know. The way it supposedly cuts the deficit is by raising even more new tax revenue than it spends.

Update: It turns out that that the summer report was not the first time we saw these figures; CBO broke out this information three days prior to the passage of the bill. The revenue and outlay figures still stand, as does the broader point about the way the bill was discussed in terms of deficit effects rather than revenues and outlays. But like Hennessey, I overlooked the table in the original report.

NEXT: And by Experts He Means Lobbyists

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  1. You left out the part where the non-partisan CBO spun its analysis to grease the skids for passage of a Democrat bill.

  2. If I ever come up with a terminal disease, I am going to make it my mission in life to hunt down every fucking douchebag who ever posted on an internet forum how we needed to pass Obamacare to bend the cost curve. And my killing spree will include and begin with every reporter or op ed writer who said as much.

    1. Wait, what about all those people who said we need the government as a player in the market to keep the other parties “honest”?

    2. Shit man, you don’t need to have a terminal illness to do that.

      And if you want to get technical, you kinda do have a terminal disease called life. As far as I know, every person not alive today who has lived has died.

      1. True. But the disease sort sets a time table on it. That makes it easier to go on my killing spree. Yeah, I will die eventually no matter what. But I really don’t want to wait around 50 years in a prison for it to happen.

      2. As far as I know, every person not alive today who has lived has died.

        So far…

  3. Even in the highly unlikely event that the $124 billion dollar claim is true (never mind that that’s a laughable pittance when you’re talking about probably $10 trillion of debt over that time period), this wasn’t the real lie that these scumbags put forth.

    The real lie was their claim that this bill was going to lower the general cost of health care for individuals. So folks, how much money are you or your employer paying in health care now compared to eight months ago? I’ll bet your premiums are going up, fast.

  4. “CBO says these bills will reduce the budget deficit by $124 billion over the next decade.”

    Ha! I didn’t say “Simon says”!

    1. Win.

      Oh and Suderman, win on the pic and alt text.

  5. The CBO report is still bunk because there is no way it is going to reduce the deficit.

    No government entity, the CBO or any other has ever accurately predicted the future spending levels of any entitlement program. Medicare costs astronomically more than what it was predicted to at it’s inception.

    This new entitlement will be no different if it isn’t stopped.

    1. Exactly.

      What is needed is a government projection multiplier to derive a closer estimate to eventual real costs.

      y * m * p

      Where y = years out, m = multiplier, and p = projected yearly cost

  6. If high taxes are the key to prosperity (as liberals seem to think) we’re gonna be some prosperous MFs.

    1. If by “we” you mean the ruling class and various apparatchiks, then you are right.

  7. But I really don’t want to wait around 50 years in a prison for it to happen.

    This is easily avoided; happens all the time.

    1. True. I also don’t want to hasten my death either.

      1. Look who wants to have his murderous rampage and live to eat cake too!

        1. No. I would only go on a murderous rampage if I knew I was dying soon anyway. Since I don’t know that, I won’t be killing anyone despite the wealth of people who really do need killing.

          1. hmmm, a dying death squad.

  8. “First, we’ll need to spend more money. And then, we’ll need to spend more money. After that, we’re gonna hafta spend a whole bunch more money. And then maybe we can see where we stand. But I’m I’m pretty sure we’re gonna need to spend a little more, just in case.”

  9. Here’s the good news-


  10. When I was young they said, “Deficits don’t matter.” Now they say, budgets don’t matter. So we beat on nonpartisanly, boats against the current

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