CBO says health care repeal would deepen deficit

Republicans have announced the first item on their agenda, which is to repeal the Obama administration's health care overhaul bill passed last year.
Washington Post Staff Writer
Friday, January 7, 2011; 12:00 AM

Rescinding the federal law to overhaul the health-care system, the first objective of House Republicans who ascended to power this week, would ratchet up the federal deficit by about $230 billion over the next decade and leave 32 million more Americans uninsured, according to congressional budget analysts.

The rough estimate by the Congressional Budget Office also predicts that most Americans would pay more for private health insurance if the law were repealed. The 10-page forecast was delivered Thursday to House Speaker John A. Boehner (R-Ohio), installed a day earlier to shepherd the new GOP majority. He immediately dismissed it.

The CBO's assessment, arriving as Republicans have mobilized to make the law's repeal the first major House vote of the new Congress, touches on a sensitive area for the GOP. Republicans are vowing to take tough measures to reduce the deficit, although they already have exempted the health-care measure from rules requiring that any spending increases be accompanied by offsetting reductions so that the net effect on the deficit is null.

The CBO's analysis provided an early glimpse of the brute force politics spreading across Capitol Hill and beyond in the new era of divided government. The broad changes to the health-care system, pushed through Congress by Democrats who controlled both the House and the Senate until this week, are among President Obama's proudest domestic accomplishments -- and now a central target of the GOP. On Thursday, congressional Democrats and their allies seized the budget analysts' prediction as ammunition. "It's plain and simple: We can't afford to increase the deficit by nearly a quarter of a trillion dollars, especially with the very first substantive vote of the 112th Congress," said Senate Finance Committee Chairman Max Baucus (D-Montana).

With equal speed, Boehner and other House Republicans repudiated the forecast of the nonpartisan CBO, saying that its analysts had relied on flawed assumptions they had been provided by Democrats. "CBO is entitled to their opinion," Boehner declared at his first news conference as speaker.

Specifically, the CBO, in what it called a preliminary analysis, said that the law's repeal would cost $145 billion by 2019 and $230 billion by 2021, then swell after that, because various money-saving and revenue-raising provisions would be undone. The 32 million uninsured Americans refers to the number predicted to gain coverage under the law.

House Republicans countered with their own report, containing their portrayal of the financial effects of keeping the law intact. The report, filled with the incendiary language the GOP has adopted to discuss the law, is entitled: "Obama-care: A budget-busting, job-killing health care law" and features on its cover a gate padlocked with a thick chain.

The GOP report contests the CBO's assessment that the law would lower the deficit. And it picks apart aspects of the law that Republicans especially dislike, including a requirement that many employers offer their workers health coverage or incur a fine, and tax reporting requirements.

Meanwhile, David Cutler, a Harvard health economist who was an influential health-care adviser to Obama's 2008 presidential campaign, plans Friday to release a paper predicting harmful effects of repealing the law on health insurance prices and on jobs.

The dueling appraisals reprise the partisan acrimony that surrounded the law's passage last March. Some aspects have taken effect already, including provisions designed to let young adults stay longer on their families' coverage, help people who are sick find insurance and encourage older Americans to get more preventive care.

The heart of the law takes effect in 2014. For the first time, most people will be required to carry health insurance. More people will qualify for Medicaid, a public insurance program for people with relatively low incomes. And states are to open health-care marketplaces, called exchanges, intended to make it easier for people to buy coverage on their own or in small groups -- most with help from new federal insurance subsidies.

In their zeal to abolish the law, House Republicans have said they intend to offer their own recipe to replace it. They have not defined the specifics but are trying to portray themselves as more than obstructionists of Democratic thinking.

As a result, the House Rules Committee has drafted a resolution to be put to a vote on Wednesday, after the main vote on repealing the law, that would direct four House committees to produce legislation to replace it.

The resolution sets out a dozen broad goals that align with long-standing GOP preferences for changes to the health-care system. Among them are "increased competition and choice" in insurance, changes to the medical liability system, and giving states more freedom over the shape of Medicaid. One item -- to "provide people with preexisting conditions access to affordable coverage" -- appears to refer to an idea the GOP historically has liked: high-risk pools, which are part of the new law.

The common wisdom is that the House will have ample votes to approve its legislation to repeal the law - but that the idea then will die in the Senate before it has a chance to reach the White House, where Obama would be certain to veto it.

In light of those prospects, Boehner was asked at his news conference whether he thought the vote Wednesday will be a waste of time.

"No, I do not," the new speaker replied. "I believe it's our responsibility to do what we said we were going to do. And I think it's pretty clear to the American people that the best health-care system in the world is going to go down the drain if we don't act."

Staff writer Paul Kane contributed to this report.

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