CBO Quietly Drops Forecast That Obamacare Will Cut The Deficit --Move along, nothing to see

By Eric Painin, Jun. 5, 2014, The Fiscal Times

One of the Obama administration's major selling points in passing the Affordable Care Act in 2010 was a Congressional Budget Office forecast that the controversial legislation would reduce the deficit by more than $120 billion over the coming decade.

The CBO has consistently projected that President Obama's overhaul will reduce the deficit, and the agency estimated that the Republicans’ 2011 effort to repeal the legislation would increase deficits by $210 billion from 2010 to 2021.

In April, the agency quietly signaled that it can no longer make that projection; that the law had been changed and delayed so much that there is no longer a credible way to estimate the long-term effects on the deficit of all elements of the program taken together.

In a little noticed footnote to a report updating estimates of the effects of the insurance coverage provisions of the law, the agency headed by Douglas Elmendorf acknowledged that neither CBO nor the Joint Committee on Taxation could determine precisely how scores of provisions other than the insurance coverage would impact long term government spending.

“CBO and JCT can no longer determine exactly how the provisions of the ACA that are not related to the expansion of health insurance coverage have affected their projections of direct spending and revenues,” the CBO wrote. “The provisions that expanded coverage established entirely new programs or components of programs that can be isolated and reassessed. Isolating the incremental effects of those provisions on previously existing programs and revenues four years after enactment of the ACP is not possible.”

The footnote was first reported this week by Roll Call and is just now gaining the attention of health care policy experts who question the basis of CBO’s retreat from its earlier forecasting.

The CBO’s acknowledgment that there is no longer a credible method for gauging the long term budgetary effects of the huge and complex program for extending health coverage to millions of Americans could become fodder for renewed Republican attacks during the mid-term congressional election campaign.

“From purely an analyst’s perspective, I don’t think I would consider this terribly exciting,” Bill Hoagland, a senior vice president at the Bipartisan Policy Center and a former Senate Republican budget expert, said in an interview Wednesday. “But politically, I think it’s dynamite.”

Hoagland said critics are almost certain to say, “Wait a minute, you told us it would reduce the deficit back in 2010, why can’t you tell us that today?”

After an incredibly rocky launch of the Affordable Care Act last fall, the program has signed up slightly more than 8 million people through the state and federal exchanges, while millions more enrolled through an expansion of the Medicaid program.

Republicans continue to hammer away at the program, on Capitol Hill and on the campaign trail, although the issue has lost some of its intensity after the administration matched or surpassed its sign-up targets for the first year of operation. And while the law remains largely unpopular among the public—45 percent have negative views of Obamacare—the majority would prefer that lawmakers fix it and then focus on other issues.

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