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Budget office estimates health-care law could cost more than $1 trillion

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By Associated Press
Wednesday, May 12, 2010

President Obama's new health-care law could potentially add at least $115 billion more to government health care spending over the next 10 years, if Congress approves all the additional spending called for in the legislation, congressional budget referees said Tuesday.

That would push the 10-year cost of the overhaul above $1 trillion -- an unofficial limit the Obama administration set early on.

The Congressional Budget Office said the added spending includes $10 billion to $20 billion in administrative costs to federal agencies carrying out the law, as well as $34 billion for community health centers and $39 billion for Native American health care.

The costs were not in earlier estimates by the budget office, although Republican lawmakers argued that they should have been. Part of the reason is technical: The additional spending is not mandatory, leaving Congress with discretion about whether to provide the funds in follow-on legislation.

"Congress does not always act on authorizations that are put into legislation by drafters," explained Kenneth Baer, a spokesman for the White House budget agency. "Authorizations for discretionary spending are not expenditures."

Congressional estimators also said they hadn't had enough time to run the numbers. Costs could go higher, because the legislation authorizes several programs without setting specific funding levels.

The health-care law provides coverage to more than 30 million people who are now uninsured, offering tax credits to help purchase health insurance through competitive markets that open for business in 2014. When Congress passed the bill in March, the CBO estimated that the coverage expansion would cost $938 billion over 10 years while reducing the federal deficit by $143 billion.

"If Congress were to approve all of this new discretionary funding authorized in the health-care bill, almost all of the administration's highly touted savings would be made null and void," said Jennifer Hing, spokeswoman for Republicans on the House Appropriations Committee.

But Baer said Obama would demand that added spending be offset with cuts in other domestic programs. "The president made clear he will enforce that with his veto pen," Baer said.


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